CGIT - Limitations - whether the refusal of PE not to compensate the contractors is right or no? - CiteHR
Umakanthan53
Labour Law & Hr Consultant
PL Kanthan
Proprietor

Cite.Co is a repository of information created by your industry peers and experienced seniors sharing their experience and insights.
Join Us and help by adding your inputs. Contributions From Other Members Follow Below...
Dear Patrons, As everyone is aware, Payment of Bonus Act was amended in 2015 giving retrospective effect from 1.4.2014.
Principal Employer (PE) is to include in their tender estimate the bonus element at the rate of Rs.11.21 per day of a worker i.e. 8.33% on Rs.3500/pa as per the pre-amended bonus act.
One of the PSU as PE refused to compensate the contractors the diff. of Bonus amount between 8.33% on Rs.3500 Vs. 8.33% on MW as per Amended act, for the work orders running wef 2013 and also for the work orders issued prior to publication of Amended Bonus Act.
For this the Contractors approached the offices of Dy Labour Commissioner and conciliation proceedings were held with ALC(C). On the refusal of PE, the conciliation proceedings ended in failure and P.O. referred the matter to MoL, GoI.
Min.of Labour referred the matter to CGIT to adjudicate "whether the refusal of PE not to compensate the contractors is right or not."
Now the basic query is: Whether CGIT is a proper forum to entertain this case, as the case being between PE & its Contractors. What I understand is CGIT is to intervene/adjudicate the matter related to "Workmen" only. OR the contractors need to file Civil Suite (which is time consuming). Secondly, whether the contractors need to opt for Arbitration Proceedings (as provided in the work order conditions). If Arbn. Proceedings, then it will be applicable for each work orders independently not collectively, but the matter is of Policy decision to be applied for all such work orders.
copy of such referals are attached. Kindly throw your views on the matter.
Rgds
PL Kanthan


Attached Files
Membership is required for download. Create An Account First
File Type: pdf NOTICE.pdf (856.2 KB, 15 views)
File Type: pdf Notice from L C.pdf (715.6 KB, 13 views)
File Type: pdf Failure Report.pdf (3.87 MB, 15 views)

Mr. P. L. KANTHAN,
Kindly go through the definition of the term "industrial dispute" u/s 2(k) of the ID Act, 1947. There can be industrial dispute between employer and employer too in so far as it relates to conditions of labour of any person. Is not payment of bonus a condition of service?
Therefore, the CGIT is certainly competent to adjudicate the dispute between a principal employer and the contractor engaged by him regarding the conditions of service of the contract labor.

Dear Sir,
Thank you very much for your advise/input in a nutt shell.
Another issue :
Can PE, being PSU(NPCIL), include a condition in their NIT that PE will not compensate the contractor for National Public Holidays, such as Republic Day, Independence Day & Gandhi Jayanti, in all its tender including tenders calling for M/Power deputation of 8 hr/day work converted or termed as "1 Task" for the purpose of Billing ?
Similarly, can they backout from compensating the contractors for Election Day, which is declared Paid Holiday, for their work orders including for M/P requirement. This condition is not mentioned in the tender and is not predicted by either party at any time. Can be regular election or by-election.
Can Contractors file a claim in CGIT directly against PE for these too.
Kindly advise.
Regards
PL Kanthan

Dear Kanthan,
Whenever a contract for service is entered into between two parties, each will naturally try to maximize his gains. Every prospective contractee may his own estimation of the man power required to accomplish a particular task within a particular time frame with the expected standards of execution, arrive at the tentative minimum cost of the work and based on such parameters only fix the maximum tender value. Every prospective contractor participating in the tender would have his own estimation based on the possibility of economy of operation to attain the expected standard of accomplishment at the end and arrive at the value of his minimum bid. In so far as engagement of contract labor in such a contract for service is concerned, if the prospective principal employer explicitly refuses to include certain legal costs of labor like extra wages for working on holidays, wages for compulsory holidays declared by the operation of any special law, in the first place it would not be ethical to do so. But the prospective contractor can not sue for this or initiate any legal action for no contractual relationship has emerged between them at this stage. At the most what he can do is to raise his bid amount or back out from the tender - that's all.

Dear Sir,
Thanks for your reply on Paid Holidays & Election Day.
There exists Contractual Relations between the so called PSU & Contractors on all the Work Orders issued since end of 2018 in which the following issues cropped-up :
1. Unlike for 3 National Public Holidays - (26 Jan, 15 Aug. & 2nd Oct), for Compensation on Election Day (declared by Election Commisson of India as Paid Holiday), it is not mentioned in the NIT by the PSU.
However in a period of 1 year, 2 such elections had taken place and another 2 are looming around. For these also contractors had to pay to the workers engaged by PSU through contract. The contracts are not works contract but pure manpowr contracts termed differently.
Query:
Can being PSU wilfully defy the Fundamental Rights in not compensating for such National Holidays & declared Paid Holidays(as and when occurs) and whether CGIT can entertain this matter?
Thanks
PL Kanthan

Mr.Kanthan,
In the circumstances you narrated, neither it is fair nor legal on the part of the PE to deny wages for such public holidays. Certainly, the CGIT will take cognizance of such dispute.

Please Login To Add Reply






About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2020 Cite.Co™