We are based at Udupi and under cashew processing industry. Is it mandate to pay every year EL encasement to daily wage workers (on roll / contractor roll) Please help to share the details
From India, Kakinada
Labour Law & Hr Consultant


Dear Koteswar,

I think that the cashew processing unit where such daily-wage based contract labor are engaged must be a factory coming under the purview of the Factories Act,1948. Therefore, the Annual Leave With Wages prescribed u/s 79 of the Act would accrue after completion of 240 days service in every block of preceding 12 months period despite being contract labor on daily wage basis. According to the provision of sec.79, it is encashable on termination of employment only.

However, widely followed industry practice to my knowledge is that people surrender it annually for cash benefit. You may also follow suit. But ensure the actual disbursement by the contractor on proper vouchers then and there in view of the principal employer's vicarious liabity u/s 21(4) of the CLRA Act 1970.

From India, Salem

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