Can a Contract Worker Claim Permanency After 240 Days with Different Contractors?

Dear all,

In my company, there are two contractors, A and B. XY is a contract labor employed by contractor A. He worked for up to six months (from January to June) for A, and his service was terminated. Afterward, he joined contractor B and worked from July to December in the same company. He worked for more than 240 days in the company under two different contractors. Now, my question is, can XY claim for permanency? Please suggest legally.

Waiting for suggestions from Malik sir and Madhu.

Thanks,
Sachin

Dear Mr. Sachin,

In my opinion, the concept of 240 days is not applicable to the contract workers; it is only applicable to casual workers. However, it is noted that your organization is not providing any kind of reimbursement directly to the contract workers.

Regards,
Akshay.

Hi,

You can engage the contract labor in non-core areas to avoid problems. Furthermore, if they exceed 240 days in a year, they are entitled to Earned Leaves as per the Factories Act. It is advisable that they do not surpass 240 days in a calendar year to prevent issues. However, you should have registration to engage the contract labor.

Secondly, the contractor should have a license to engage the contract labor and should have separate ESI and PF code numbers for coverage, etc. This would greatly assist us.

Sudheer Reddy
9866234587

Dear Sachin,

A and B are two separate employers. XY is not your employee; they were an employee of A for 6 months and B for 6 months. Firstly, they have not completed 240 days with any contractor.

Dear, if they complete even 2 years with one contractor, they will claim permanency with the contractor, not with your company. When hiring a contractor, you should register them, and the contractor should obtain a license. They should have separate PF and ESI codes.

Thank you,
J. S. Malik

Dear MallikSir,

I heard that if a contract laborer completes 240 days, he gains permanency. Could you please shed some more light on this for me?

Regards,
Rajeev Dixit

Dear Rajiv,

No, not at all. First thing, he is not your employee; if he claims permanency, it will be with the contractor, not with the company. Dear, if you are hiring contract labor without proper registration and a license, then the contractor's employee becomes your employee, and they can claim permanency. If you have proper records, then let them work for 2 years; they will be the contractor's employee, not yours.

Thank you,

J. S. Malik

Dear Friends,

I would like to add here that the nature of work is an important factor in deciding 240 days if an employee is engaged by two contractors but they are operating in the same workplace and performing the same nature of job simultaneously and uninterruptedly, then the principal employer will be in trouble. For example, if one contractor finished his contract from January to June, and the next contractor is engaged in the same operation from July to December, then there is a problem in proving that these employees are not engaged in operations of an intermittent nature.

Contract labor should only be engaged in intermittent tasks; you cannot employ them in continuous operations that are integral parts of regular operations.

It is presumed that if two contractors are working on two separate operations with different natures of jobs and places of work, then no question arises because the company may hire many contractors, and contractors can hire employees where the principal employer has no liability in that case. This is a basic difference.

Regards,
Badlu

Dear Sachin,

The Supreme Court of India first distinguished between core and non-core areas of business for permanency. For example, a security guard or a cook in the canteen of a factory manufacturing paints cannot claim permanency on the grounds of 240 days. Further, now you will also have to understand the process.

1. The Appropriate Authority will first have to issue a notification abolishing the engagement of contract labor in a particular area, class, type, or industry under the Contract Labor Act.
2. Once this is issued, no contract labor can be engaged by organizations in which the notification is applicable.
3. It is now the sole discretion of the organization on whether they would recruit new workers from the market or offer permanency to the existing contract labor, and the existing contract labor have no legal right to permanency.

Regards,
SC

Dear Friends,

The concept of 240 days applies even to contract workers if the contract agreement is deemed sham, and if the supervision of the contract workers is carried out by the principal employer. If they are engaged intermittently, the 240-day rule does not apply. The calculation is based on 240 days of continuous work in the previous year. It is essential to ensure that contract labor is not engaged in regular or routine tasks.

G.K. Manjunath

Hi, I am working in a PSU. We are hired on a 3-year contract basis. Now, we are completing 3 years, but management has not yet given any letter for regularizing our job. Please tell us what action can be taken to get into regular job status in this company.

Hi, I am working in a PSU. We were hired on a 3-year contract basis. Now, we are completing 3 years, but the management has not yet provided any letter to regularize our jobs. Please advise on the actions that can be taken to transition to a regular position within this company.

Some were appointed for a 3-year contract period, while others were informed that after the initial 3 years, they would be on the company's payroll.

Kindly let me know what steps need to be taken in this regard.

Looking forward to your response.

Regards,
Jedson.P

Dear Sir, what about the EL? Is the principal employer liable to distribute encashment of the EL against the bill of the contractor if there are some workers working on the manufacturing plant for more than 240 days on the contractor's payroll?

There is no issue with contractual labor working for 240 days if you can prove that they are engaged through a contractor and supervised by the contractor.

Dear All,

The clause of 240 days is given in the ID Act, where it states that if a workman works for 240 days in a year, the provisions of Lay-Off and Retrenchment will be applicable to him/her, under the ID Act.

Further to my earlier post, till date I have not come across any legislation that can grant permanency to a contract/casual worker.

Regards,
SC

No contract employee can stake a claim for permanency against the Principal Employer just because of having worked for 240 days in a year in the establishment.

In the case of appointments on a fixed-term contract basis, the employee has no right to demand an extension on the expiry of the contract.