Can We Legally Hire Drivers on a "No Work, No Pay" Basis? Seeking Advice on Contract Terms and Legal Implications

Dear All,

Kindly clarify whether a company can hire employees on a contract basis with a clause "no work, no pay." To be more specific, my company supplies drivers to the client on monthly charges with a one-year agreement. Although we have a clause in the agreement which states that either party must give one month's notice or money in lieu of canceling the agreement before time, many times clients do not honor the same and abruptly discontinue the services. Consequently, we end up paying the driver's salary without any work and incur losses.

My questions are:

1) Can we hire these drivers with a condition that in such a situation, they will not be paid anything until we have new work for them?

2) What are the legal implications of this? In such a case, how can their PF, ESI, and bonus be managed?

3) What other arrangements can we make with them within the purview of the law?

Thanks and awaiting your earliest response.

Regards,

Dear,

Drivers will come within the purview of the blue-collared workforce. There is no prohibition on asking them to report when they have work. Such drivers are classified as acting drivers. You can have a condition to that effect, and the contract should state so. The daily wages paid should match the minimum wage of that particular category notified in the relevant state. ESI and PF deductions can be based on actual days worked. This can be done if they agree to the transition from "full-time drivers" to "acting drivers."

In your case, it looks like having lost the contract, you need time to deploy them to a new principal employer. For this, you need their agreement or consent. Being blue-collared, they will not wait; either they will find a new job or litigate. Please be careful. The other option is to give them retrenchment compensation, say, 15 days' salary for every year of service plus one month's pay and complete their F&F.

With Regards,

Advocates, Notaries, and Legal Consultants for the Staffing and Recruiting Industry

E-mail: rajanassociates@eth.net

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