Can an educational Institute i.e. conducting Vocational Courses - come under the Companies Act? If so, should employees at least 50% need to be on the payroll? Does a pandemic situation allow it to migrate all its employees to Contract then? Please guide and advise - your help is highly appreciated.

I am a Payroll employee since Jan 2020 at an Educational institute with PF, Gratuity benefits. Now the Management wants to migrate us into Contract for a period of 1 yr due to Pandemic wherein Revenue source has only been course fees. The contract letter contents informed me for eg :-

I am earning Rs 100 p.m -but it is not mentioned as they verbally informed us that 30% pay cut for 2021-2022 ( Rs 30 will not be given at all).

It mentions Rs 70 is what I will earn out of which
Rs 30 - would be given on a monthly basis (no definite time has always been delayed in the past year as well)
Rs 40 - would be based on revenue collection i.e. fees collected from students who are solely dependent on the same, otherwise, the management is not liable to pay me this as well.

In such a scenario, should I accept a Contract letter?

On my own analysis of the situation - I have declined to accept it
1. It has to mention Rs 100 as my original salary and Rs 30 is not being met due to a financial crisis.
2. It has to mention that all employees are not being put on the payroll. (I can't believe this as per the companies act, some need to be on the payroll.)

I would seek advisors' review on this case and to enlighten me further to take further steps and stance towards the management.

thanks in advance.

From India, Mumbai

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hello HR’s - I am awaiting your valuable inputs on this and I need to either accept the contract or take up the matter with the labour court. PLEASE HELP
From India, Mumbai
Educational Institutions can be registered under the Companies Act,2013 but that has no application to employees employed therein.

The practice of converting regular employees to contract employees unilaterally by the employer is illegal.

Whatever the salary fixed in the contract of employment should be paid minus legal deductions like employee's share of contribution to EPF. The proposed cut in salary if any amounts to change in the terms and conditions which require the acceptance of the employee.

If you are in dire necessity of this job, of course you can accept the offer. Otherwise, you can simply reject it in toto, it is up to your choice.

From India, Salem
There is no connection between the work done (vocational guidance) and whether it is under company act (for which it needs to be a company). You need to specify what the structure of your employer is.

There is also no requirement under any law that there has to be a certain number of fixed employees. Contracted employees and service providers is the accepted norms today.

You need to evaluate the option before you.

If you refuse to accept the new format, they are free to terminate you. Retrenchment compensation for you will be a month's pay, which is nothing. The employer can easily retrench in view of the current economic scenario. I do not think there are more than 300 employees and therefore restrictions under Industrial Dispute Act on retrenchment will not apply.

If you do accept the changes, then well, what you earn depends on the students. It makes more sense if you are a trainer and if your performance ensures students sign up. In the end, it is an economic decision. And the courts are unlikely to help you, specially in the short term.

From India, Mumbai

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