I have a query regarding the payment of wages to contractor labor. For a short period, the factory closed production. The company employed the contractor labor for production, and due to some issues, production stopped and may resume after some days. The company declared a holiday for the labor. So, my question is: do we still need to pay the labor even if there is no production? If yes, please refer to the relevant point where this is mentioned and specify how much we have to pay. The company management has decided on a 'no work, no pay' policy.
From India, undefined
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2From India, undefined
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If the contract is genuine, the PE can simply terminate the contract due to the temporary closure of the establishment. As such, he need not pay any compensation or wages to the contract labor.
From India, Salem
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From India, Salem
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No Work, No Pay Policy During Temporary Shutdown
As there is no such clause in the contract, the company is shutting down for a short period. Production is expected to resume within 10-15 days with the same labor (Contractor). I think for this, we don't want to terminate the contract. I want to know whether the company can legally implement a "no work, no pay" policy or if there is any provision to deduct wages partially and pay some part.
Relevant Legal Considerations
I found some relevant points under the "Payment of Wages Act" regarding the deduction of wages and under the "Industrial Dispute Act" regarding compensation for layoffs, but it's still not clear.
From India, undefined
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As there is no such clause in the contract, the company is shutting down for a short period. Production is expected to resume within 10-15 days with the same labor (Contractor). I think for this, we don't want to terminate the contract. I want to know whether the company can legally implement a "no work, no pay" policy or if there is any provision to deduct wages partially and pay some part.
Relevant Legal Considerations
I found some relevant points under the "Payment of Wages Act" regarding the deduction of wages and under the "Industrial Dispute Act" regarding compensation for layoffs, but it's still not clear.
From India, undefined
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Dear Shukla, In the contract labor system of engagement, there is no contract of service between the Principal Employer and the contract labor, and as such, you are not bound to ensure continuous employment nor to pay any compensation for your inability to provide employment. Regardless of the length of the spell of no work, no payment is made based on the doctrine of "No work, No wages." However, if your financial capacity allows, you may consider paying some compensation akin to a layoff scenario through the contractor. Please let me know if you need any further clarification or information. Thank you.
From India, Salem
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From India, Salem
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Payment of wages GN.doc