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Anonymous
If a contract term of a contractor under the Principal Employer comes to an end, and if the employees of the contractor joins the new contractor under the same Principal Employer in a term which is equal or better, is the retrenchment compensation payable by the first contractor to these employees?
From India, Mumbai
umakanthan53
6016

I would like to request the poster to go through the definition of the term " retrenchment " u/s 2 (oo) of the I.D Act,1947.
If the definition is analyzed juxtaposing the four exceptions mentioned therein viz., (1) voluntary retirement (2) retirement on superannuation as per the contract of employment (3) non-renewal of the contract of employment between the employer and the workman concerned and (4) termination of the services of a workman on the ground of continued ill-health, retrenchment would include any action taken by the employer which results in the abrupt termination of the employment of a workman employed by him for whatever reasons other than by way of disciplinary action as well as the excluded ones. A workman becomes a "contract labor" only when his services are lent by his employer to another in pursuance of any contract for service between them. Therefore, the contract of service between the contractor and the so-called contract labor remains as it is and in case of abrupt termination of the employment by the contractor for any reason other than those mentioned above, it is retrenchment and the question of paying retrenchment compensation would arise automatically. If a particular contract for service with a principal employer gets completed, the contractor can divert his contract labor to any other subsisting contract elsewhere. If he fails to do so and calls it quits, certainly he has the liability to pay retrenchment compensation. On the contrary, if any workman is specifically employed by the contractor for a fixed term which is coterminous with any particular contract for service undertaken by him, he need not pay retrenchment compensation to the concerned workman rendered jobless on the completion of the contract because it comes under the exception of non-renewal of the existing contract of employment between them.

From India, Salem
PRABHAT RANJAN MOHANTY
581

In the matter Mr. Umakanthan can well explain of it.
But in my understanding no retrenchment no compensation: if be the following condtions
1. Retrenchment compensation is not applicable, if the terms of a contract comes to an end or on expiry of licence or workmen abdoned his service/resignation or death"
2. It does not matter good or bad employer where workman works after his term is over with you. The retrenchment compensation attracts if the workman has removed by the contractor/employer and having conteneous service during the period of employment.

From India, Mumbai
vani-manukonda
If the contract is terminated between the principal employer and the employer and the workmen are hired by another contractor whom the principal employer has hired to perform similar job duties, and there is a continuity in service , then the out going employer need not pay retrenchment due to the reason that there is a continuity of the workmen with same principal employer with the same skills and at the same wages or even more
From India, Bengaluru
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