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Dear All,,
Dear Team member , our company has retirement age of 60, now some of our employees are getting retire but management want to continue their service by hiring them as consultant.
kindly advice what are thing should be kept in mind and if possible pls provide me a format of offer letter which will have clause of consultant.
Regards
Sanjay
From India, Pune
Hi,
After the retirement the employees can be retained as consultant on retainer ship basis for a period of one year which can be extended from time to time. There has to be an agreement to that effect on a stamp paper. Such agreement contains several terms and conditions. I have a Model draft of this agreement but is not typed on computer. But I can mail it to you if you want as you are from Pune.
S.M. Paranjape, Advocate
From India, Pune
Dear Paranjape,
Thanks for your kind suggestion regarding draft agreemt/offer letter to the consultants, and experience employees retaining in the same organisation a very good suggestion. Now the question is arises can we take them as a consultant? if we take them as a consultant will they attract ESI scheme or any other statutory obligations?
Regards,
RNSwamy
From India, Mumbai
Hi,
When they are consultants on retainer ship they are not entitled to benefits under ESI,PF Act or for that matter to the benefits of any labor legislation. It is however to be noted that such retainer ship contract can be put to judicial scrutiny and the court can lift the vail to see the truth. The court should not come to conclusion that the contract is sham and bogus. Therefore the terms of contract should be proper.
S.M. Paranjape, Advocate
From India, Pune
Hi Mr. Sanjay Yadav, I tried your web site but couldn’t. Please contact me on my mobile 9850083760. S.M. Paranjape, Advocate
From India, Pune
Dear Sanjay,
We also employ ex-defence personal as advisor's on retainer basis for a period of one year which is extended on mutual consent. I am enclosing the draft, see if it is useful and I hope its solves your purpose.
Regards
Suresh
From United States,

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Dear Paranjape,
The definition of Employee under section 2(9) of the ESI act 1948 reads Employee means any person employed for wages in or in conncetion with the work of a factory or an establishment to which act applies,
A consultant is one who gives professional advice. In the instant case the consultant is not entrusted with the work of rendering professional advice to the company.on the other hand it reveals the existance of master and servant relation ship and his reporting to particualr office to render full time service to the company. The designation of consultant does not reflect the nature of the services to be rendered by the person and the nomenclature given to the retainer ship fee. As such it is clear that the consultant engaged by the company on a retainer ship basis shall be straight away fall within the definition of employee under the ESI Act, as long as their retainer ship fee less than Rs. Ten thousand or less per month.
Regards,
RNSwamy
From India, Mumbai
Dear Mr. RNSwamy
I have gone through the clause but still there is a doubt as till now i have not come across any of the case which state that you have to deduct ESI for consultant.
even though during ESI inspection the concern authority haven't asked any detail about the consultant.
can you pls put some like by way of a case if any.
Regards
Sanjay
From India, Pune
Hello
I am in agreement with Mr Narayanswamy. A consultant, if his remuneration is fixed on a monthly basis would fall under the definition of employee. However, if we can specify his remuneration for the year and pay as and when he raises a bill, then he would not fall under the defin ition of employee.This can also help him in Income Tax . He may hve register for service tax and we used to foillow this practice. Service tax is much less compared to Income tax.
Siva
From India, Chennai
Hi Mr. R.N. Swami,
You are right. I am not contending that the idea is full proof. Pl. refer to by earlier comment. The relationship can be put to judicial scrutini. Courts can lift the vail. Terms should be drafted very carefully.
The companies retain these retired persons as an 'expert' in particular work in which they are experienced.
S.M. Paranjape, Advocate
From India, Pune
After the retirement the employees can be retained as consultant on retainer ship basis for a period of one year which can be extended from time to time. There has to be an agreement to that effect on a stamp paper. Such agreement contains several terms and conditions. I have a Model draft of this agreement but is not typed on computer. But I can mail it to you if you want as you are from Pune.
S.M. Paranjape, Advocate[/quote]
Respected Paranjpe Sir
please mail me the format of consultant appointment and retainership appointment on
Thank you
Regards
Pari
From India, Mumbai
Dear Mr. Sanjay, it is very good for us, we can make appointment letter for a consultant employees. Regards Shiv 9305839058
From India, New Delhi
Dear Mr.Swamy /Mr.Paranjape,
This is the reason why companies hire 'advisors' as consultants and they are paid consultancy fee. If it's above 20k a flat 10.3% is deducted and in case the monthly fee is 10k then deduction has to be on monthly as the annual comes to 1.2lakh. There has to be a well defined reason as to why consultants are hired. To avoid PF and othere benefits, many companies adopt this method but how many consultants would you take in?
In hospitals, many doctors are on the rolls while all leading specialists and visiting surgeons will be 'Consultants'. They have to work in different hospitals in a day.
So it is the duty of the HR to explain the management, the importance and the rules of this section. I have also seen that employing them as consultants and offering them manager position is going on, which is against the very grains of Sec.194J of IT Act.
Regards
Chandru
chennai
From India, Madras
Hi,
I am looking for a format of offer cum appointment letter used by the recruitment consultancy for their employees.
Please try to figure it out and mail the same.
Regards,
Himali
HR.

From India, Pune
Dear Sir, Does the consultant offer or retainership letter have to be issued on legal stamp paper? if yes, on which stamp paper? Rs. 50/100? Thank you. Regards, William
From India, Mumbai
Hiring a consultant is a great way of a getting a professional on board with your company .
Here is a link of an article that discusses the benefits of hiring a consultant and knowing which employees would be eligible to be consultants as per the guidelines laid down by the Labour department.
The article also has downloadble contract template which you can use .
Here is the link - Hiring a Consultant v/s an Employee: What You Need to Know
From India, Mumbai



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