Madhu.T.K
Industrial Relations And Labour Laws
Pritesh80
Contractor

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Hello, I am a housekeeping contractor for a reputed company in mumbai. The company is terminationg my contract after 5 yrs. I am supposed to pay gratuity to the employees working for that company through me. Here is my problem - The company was paying me Rs. 275.00 behind every employee per month that works for them. Most employees have worked for the whole 5 yrs. My profit behind every employee = 275 x 12 (months) x 5 (yrs) = 16,500.00 - 3,800 Bonus (coming from my pocket for Diwali) = approx 13,000.00 (My profit behind every employee after 5 yrs) Gratutity payment per terminating employee = 15/26 x 3800 (basic +da) x 5 (yrs) = 10,961.00 So basically after a whole 5 yrs doing all the work as a contractor I make a profit of 13,000 - 10,961 = 2,039.00 behind every employee. I requested the company to pay the gratuities after showinng them these numbers because they never accounted for them in my monthly profit behind every employee. They brushed me off and said that they are not liable under the Gratuity Act to pay any gratuities. I feel totally exploited by the company. Now some people are saying that I also have to pay 'Retrenchment benefit' which is equal to gratuity. I dont even know what that is. If that is added to the gratuity payment, I made a loss of some 8 thousand behind every employee after 5 yrs. Please please guide me to what can be done Thank you in advance.
Hey guys...I know this is a rare issue...but you are my only resource to ask questions...can anyone pls investigate for me?
Legally the principal employer is not suppose to pay you anything besides the bill raised by you from time to time. It was a mistake committed by you right when you entered into a contract with the company. You should have overlooked the whole episode, the annual increment, the bonus and the gratuity in addition to the EPF/ ESI liabilities to bear. At least, when you renewed your contract you could have revised the charges. As pointed out by your friends, you are bound to pay retrenchment compensation also. Well, how many employees do you employ? If you employ less than 10 employees the Act may not be applicable to you. Similarly if your employment strength is below 50 section 25 F relating to retrenchment compensation shall also be avoided. Regards, Madhu.T.K
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