Recruiting & Staffing Industry Legal Updates

Dear All

CLRA Emerging Trends

The Summary Record of Discussion of the 44th Session of the Standing Labour Committee held on 17th October, 2011 at New Delhi under the Chairmanship of Shri Mallikarjun Kharge, Union Minister of Labour and Employment, Government of India records the CLRA Emerging trends . The national level tripartite meeting was attended by senior level functionaries of Central Trade Union Organizations, Employers‟ Organizations, State Governments and Central Ministries and Departments.

Shri Mallikarjun Kharge, Union Minister of Labour and Employment on the demand of Trade Unions to amend the Contract Labour Act, 1970 to provide for automatic absorption of contract labour in the event of prohibition of employment of contract labour and opposition by the employers‟ organizations, Shri Kharge said that the ministry has been making efforts to protect the interests of all stakeholders and trying to extend the same benefits to contract workers which are otherwise available to permanent workers.

Views from the Employers side:

In the Meeting Shri R. Venkatanarayanan, Confederation of Indian Industry invited the attention of the delegates to the Global Financial Downturn. He stressed upon the necessity to invest more in order to generate more employment opportunities. He said that the issue of contract labour requires further discussion and law should be strictly followed. He said that regular employees and contract labourers cannot be paid the same due to many considerations such as training, experience etc, and a „flexibility premium‟ is the way out. He mentioned that the rationalization of labour laws should be done and as far as possible third party verification and self-certification by the employers should be applicable. He further stated that employment generation and skill development are linked to each other and CII is working towards setting up of several skill centers for skill development of the disadvantaged rural youth. But he believed that much more needs to be done to enhance the employment situation of the country. Therefore, skill training should to be imparted both to the rural and urban youth covering both employment and self employment.

Shri Michael Dias, Federation of Indian Chambers of Commerce and Industry suggested rationalization of labour laws in the context of unorganized sector. In his view, the issues pertaining to contract labour needs to be addressed in-depth, possibly after receiving the report from V.V.Giri National Labour Institute. In this regard, he fully supported and endorsed that a complete data on contract labour be made available and urged the need for a white paper to be brought out by the Ministry of Labour and Employment at the earliest. He considered the issues of enhancing employability and employment as critical ones which needed serious attention from all stakeholders and should be a part of agenda at the next ILC.

But there were opposite views from:

Shri S. K. Rathore, All India Secretary, Bhartiya Mazdoor Sangh stressed the need for amendment of contract labour laws and emphasized that the explicit purpose of engaging contract labour is to provide less wages and poor service conditions, leading to sheer exploitation. He expressed his concern over permanent jobs being converted into contractual job even in PSU‟s and Government Departments. Therefore, there is a need for immediate amendment of the Contract Labour (Regulation and Abolition) Act in order to prevent all types of exploitation. He also focused on issues pertaining to women working in Anganwadi, ASHA and mid-day meal workers etc. who are facing gender discrimination and working under exploitative conditions. He also highlighted the issue of wide variation in minimum wages from state to state and sector to sector which has resulted in large scale migration. He expressed that the need to fix a National Minimum Wage to combat uneven income disparity.

Shri Srinageshwar, Council of Indian Employers reflected on the similarity in the condition of workers engaged in various sectors and on the issue of Contract Labour. He reiterated that the western models for improving the conditions of contract labour could not be transmitted to India rather there should be focus on direct impact of employment generation. While pointing out at the content of the Impact Study Report, he considered it to be important to engage in a discussion in a tripartite forum and come out with a concrete decision. He also focused on the competitiveness of the industry with simultaneous flexibility that cannot be underestimated either by the government or trade unions. He further stated that the employers train a huge number of trainees in their premises who become a source of huge pool of trained manpower for the industry either locally or outside. This should be recognized and the employer should be incentivized by the government for undertaking these initiatives.

Shri Janardhan Singh Sigriwal, Labour Minister, Govt. of Bihar expressed his concern on the issue of poor working conditions of Contract Laborers. The increasing tendency towards outsourcing of Contract Labour has led to the hiring of more Contract Labour in comparison to regular workers. Moreover, globalization has led to migration of workers outside India who are subjected to all kinds of exploitation by placement agencies. He quoted examples of migrant workers from Bihar who recently returned from Libya and were devoid of any social security. Therefore, he stressed the need for a law to protect the interests of international migrant workers. He also emphasized the need for skill development as skill and knowledge is considered as motivating power for economic and social development. He stressed the need for establishment of more and more industrial training institutes to boost the supply of skilled manpower to meet the projected demand of 50 crore skill manpower by 2022 as per estimates of National Kaushal Vikas Mission.

..To be continued>>>

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants



Pls also see :https://www.citehr.com/285737-legal-...-industry.html

Dear All,

In continuation of the Summary Record of Discussion of the 44th Session of the Standing Labour Committee held on 17th October 2011 at New Delhi under the Chairmanship of Shri Mallikarjun Kharge, Union Minister of Labour and Employment, Government of India, the national level tripartite meeting was attended by senior level functionaries of Central Trade Union Organizations, Employers' Organizations, State Governments, and Central Ministries and Departments. This part addresses many important issues relevant to CLRA which were discussed.

Shri Sudarshan Sareen, Vice President of All India Manufacturers' Organization, raised an important question regarding the permanency of workers in seasonal industries and pointed out the difficulty of making such workers permanent due to the seasonal nature of their occupation. Another issue he addressed was the equal pay for regular and contract workers. In this context, he opined that an increase in the quality of production would ultimately lead to an increase in wages for some regular workers, potentially creating a wage discrepancy between regular and contract laborers.

Shri Chandrashekhar Sahu, Labour Minister of the Government of Chhattisgarh, highlighted the efforts of the State Government to improve the conditions of contract labor. He informed the house that the state government has begun paying wages to contract laborers through banking institutions. Approximately 60 percent of contract laborers in the industry are now receiving their wages through banks, and the government plans to link the remaining 40 percent of workers to the banking system in the near future. He also mentioned that the Chhattisgarh government is working on registering contract labor by issuing them with identity cards detailing their nature of work and working hours.

Shri B. N. Bachegowda, Labour Minister of the Government of Karnataka, emphasized the following points:

(i) Issuance of a circular to all Officers and Senior Labour Inspectors to implement the Contract Labour (Regulation & Abolition) Act, 1970, and (Karnataka) Rules, 1974 diligently.

(ii) Notification specifying wage rates, holidays, hours of work, and other conditions of service for workmen employed by a contractor performing the same or similar work as those directly employed by the principal employer.

(iii) The constitution and functioning of the Karnataka State Contract Labour Advisory Board since 1991.

(iv) The need for an amendment to the Act/Rules to facilitate payments to contract workers through banks.

To be continued...

With Regards,

V. Sounder Rajan

Advocates, Notaries & Legal Consultants

"Patriotism is your conviction that this country is superior to all others because you were born in it." - George Bernard Shaw

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Dear All,

Sub: Typical Arbitration Clause

The Recruiters' agreement with the Client would require the inclusion of an Arbitration clause. This will help them to recover their dues.

Arbitration by itself means referring the dispute between the Client and the Agency to an Arbitral Panel instead of rushing to the Court. This saves time and money. The typical clause can be like this:

"In the event of any dispute, difference, or question arising out of or in respect of this agreement or the commission of any breach of any terms thereof or of compensation payable thereof or claim made by either of the parties against the other in any manner whatsoever in connection with it, the same shall be referred to a Sole Arbitrator to be selected and appointed by mutual agreement as provided in the Arbitration and Conciliation Act 1996 and Rules framed therein. The decision or award so given by the Single Arbitrator shall be final and binding on the parties. Initially, the costs of the arbitration shall be borne equally by both parties, and the award shall tax the costs of the Arbitration the party against whom the Award is passed."

The advantage of having a Sole arbitrator is to reduce costs. Please see the Arbitration and Conciliation Act 1996 for more details on the process and take specialist professional legal advice before finalizing the Template depending upon your Business needs.

Recruiting Entities need to have their Client Agreements legally vetted locally so that their recruitment fee is not denied. After all, they sweat for it.

Rajan Associates

Dear All,

There is a telephonic query from a Recruiting Company on the need for introducing an Arbitration clause in the Recruiting Agreement.

The Recruiting Industry is burdened with the problem of chasing payments from the Clients and has become a perennial issue. The reward for the effort, which is the essence of the Staffing Industry, is taken away, and these unpaid invoices become bad debts. Many Recruiters just forget these payments. Smart Clients take advantage of the absence of legal protection in the Recruiting Agreement.

The suggested solution for this is to include an Arbitration clause. This will help the Industry to have some hold on the Client in recovering the dues.

The advantage of including this clause is it will result in a protective step being initiated in accordance with this clause when there is a default without incurring heavy costs of Court Fees by invoking the Arbitration Court's help by requesting the Court to issue a direction to the Client pending the Arbitration proceedings. This will ultimately protect the recovery process of outstanding invoices.

The Recruiting Industry should make a beginning if the clause is already not there in their Template. This is critical for Business and reduces the risk and will aid in timely collection of dues.

rajanlawfirm

Please see https://www.citehr.com/285737-legal-...#ixzz1tigXYRNt

Dear All

CLRA Emerging Trends-IV

In continuation of the Summary Record of Discussion of the 44th Session of the Standing Labour Committee held on 17th October, 2011 at New Delhi under the Chairmanship of Shri Mallikarjun Kharge, Union Minister of Labour and Employment, Government of India. The national level tripartite meeting was attended by senior level functionaries of Central Trade Union Organizations, Employers‟ Organizations, State Governments and Central Ministries and Departments.This part also has many important issues relevant to CLRA which were discussed.The need for amendment to Contract Labour Act, was raised by Shri S.P. Tiwari, General Secretary, Trade Union Coordination Centre.

Shri S.P. Tiwari, General Secretary, Trade Union Coordination Centre while reflecting on the job losses and employment situation, reiterated that during the global downturn, jobloss was 22 lakh and there was a need to provide jobs to 38 lakh people affected by downturn including the newly entered people in the labour market. Some important suggestions given by him included the monitoring of the RSBY scheme, amendment of Contract Labour Act, initiatives for irrigation, seed supply, crop insurance, food grains storage, etc. He also suggested for at least 3% allocation of budget for welfare of unorganized workers, uniform social security programmes and involvement of central trade unions in skill development initiatives

Shri Sharad S. Patil, Council of Indian Employers stated the following among other points raised by him:

(i) Referring to a study conducted by OECD providing that the flexibility in labour laws result in more employment generation, he suggested that the central govt. should take up similar study to explore the rigidities of laws.

Ms. Manali Shah, Self Employed Women‟s Association Ms. Manali Shah, Self Employed Women‟s Association on the Contract Labour Act, she stated that outsourced workers are not included in it therefore she demanded for their inclusion in the Act.

Shri Swapan Mukherji, General Secretary, All India Central Council of Trade Unions referring to the his other suggestion given by him included immediate action for amendments to Contract Labour (AR) Act and also equal remuneration for equal work.

Shri Madhu Sudhan Baidya, Labour Commissioner, Govt. of Andaman & Nicobar Islands raised the following points:

(i) The Contract Labour (Regulation & Abolition) Act, 1970 and Rules made there under is effectively enforced in letter and spirit with available inspectorate staff.

(ii) The Andaman & Nicobar Contract Labour Advisory Board is to be revived shortly.

(iii) To make payments to contract workers through bank is an issue which needs amendment.

..To be continued>>>

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants

“Give the world the best that you have, and the best will come back to you.”

Madeline Bridges

Dear Friends

CLRA Changing Trends

In continuation of the Summary Record of Discussion of the 44th Session of the Standing Labour Committee held on 17th October, 2011 at New Delhi under the Chairmanship of Shri Mallikarjun Kharge, Union Minister of Labour and Employment, Government of India. The national level tripartite meeting was attended by senior level functionaries of Central Trade Union Organizations, Employers‟ Organizations, State Governments and Central Ministries and Departments.This part also has many important issues relevant to CLRA which were discussed.

The thrust for changes to Contract Labour Act, was discussed in the context of equal pay and other benefits to contract labour as given to direct regular employees.If implemented it will have a cascading effect on the Staffing Industry.The Principal Employers will chose not to entrust the work to Contractors.

Dr. Kavita Gupta, Principal Secretary, Govt. of Maharashtra stated that the State Government had taken necessary action regarding the payment of wages to the contract labours through cheques. She also pointed out that the state has introduced the Labour Management System.

Shri Mihir. R. Chandra, United Trades Union Congress while reflecting on the needs of the informal sector suggested steps to reduce the gap between training capacities and training needs, setting up of vocational training at school level and reemployment for retrenched employees. He mentioned that since the term “Rationalization of Labour Laws” is very vague, focus should be on the implementation of labour laws. Some of the other suggestions that he gave included equal pay and other benefits to contract labour as given to direct regular employees.

Shri Govind Rao Adik, General Secretary, National Front of Indian Trade Unions (DHN) stated that globalization has brought about many challenges for labour force and outsourcing has also impacted stable employment situation adversely. He expressed his concern over non- implementation of policy decisions taken in the 42nd and 43rd national Conference. Moreover, global downturn had resulted in job losses and he urged that subsequent steps should be taken by the government to provide job opportunities to people who have lost their jobs in the downturn. Inspite of innumerable laws made in the country, he reported, some laws are still not implemented. Therefore, he called for an urgent implementation of laws and policies pertaining to the benefit of workers

...To be continued>>>

With Regards

V.Sounder Rajan

The talent for being happy is appreciating and liking what you have, instead of what you don't have.

Pls see https://www.citehr.com/285737-legal-...-industry.html

Dear All,

We are concluding the Summary Record of Discussion of the 44th Session of the Standing Labour Committee held on 17th October 2011 at New Delhi under the Chairmanship of Shri Mallikarjun Kharge, Union Minister of Labour and Employment, Government of India, and its relevance to CLRA.

As already indicated, the Summary Record of Discussion of the 44th Session of the Standing Labour Committee held on 17th October 2011 at New Delhi, the major stress has been on the need to overhaul the CLRA.

Shri Indranil Sengupta, Additional Secretary, Govt. of West Bengal, emphasized the following points:

(i) The evils of retrenchment, lock-out, wage-cut, evasion of statutory contributions and dues are continuing to affect industrial relations. There is no universal coverage of social security in a fruitful and effective manner. Minimum wages and other essential terms of employment are violated more often than not.

(iv) There is no single document declaring a Labour Policy of the Government of India. A labour policy at the national level may set the right direction for bringing parity in approaches of the States as well as different stakeholders like Government, employers, and the workers.

(v) There is a need for legal support for the workers.

(vi) National floor level Minimum wages should also be made enforceable as the bottom line throughout the country.

In his concluding remarks, Dr. Mrutyunjay Sarangi, Secretary, Ministry of Labour and Employment, congratulated the participants for their constructive suggestions in the area of skill development, employment generation, contract labour, minimum wages, and other issues related to the world of work. He highlighted that the work of the Ministry of Labour and Employment is vast in nature, which not only deals with the development aspects but also the regulatory aspects of the labour force. Finally, he stated that the success of various schemes of the Ministry depends heavily on the active participation of not only the social partners but also all the State Governments.

Shri Mallikarjun Kharge, Union Minister of Labour and Employment, in his concluding remarks, congratulated all the delegates for their active participation and valuable suggestions. He mentioned that the views of the stakeholders play a very important role in the decision-making of the Ministry and the inputs received from the speakers would definitely play a crucial role. He further stated that every year a sizeable number of workers get added to the labour force and if the Government does not take the challenge of imparting relevant skills to them, then the country might face a very difficult situation. Therefore, he reiterated that the involvement of trade unions and public-private partnership models will play a very crucial role. He also welcomed State Governments' participation for the effective implementation of various schemes. He further highlighted the sustainability of enterprises for achieving inclusive growth.

Shri Kharge informed the house that based on the general consensus, the three agenda items selected for discussion in the forthcoming 44th ILC are:

(i) Minimum Wages,

(ii) Social Security, and

(iii) Employability and Employment.

On account of the positive indications given by the 44th Session of the Standing Labour Committee, let all of us optimistically await the changes to the CLRA in 2012.

With Regards,

V. Sounder Rajan

Please see https://www.citehr.com/285737-legal-...-industry.html

Dear All

We are highlighting the GOVERNMENT OF MAHARASHTRA has issued a REVISED DRAFT LABOUR POLICY 2011

Salient features:

Seamless Implementation of Labour Laws in Organized And Unorganized Sector: LMS (Mahashramm) creating a facilitating environment to both labour and employers

The Labour department, through its Labour Management System (LMS) ‘Mahashramm’ would ensure seamless implementation of labour laws by:

•Mandating employers to file online returns, thereby enabling concurrent online monitoring on labour law compliances and reducing the need for inspections, thereby creating a win-win situation for both employers and workers.

•The labour office, through Labour Management System, shall monitor the implementation of labour laws in various shops-cum-establishments/factories.

Automatic alerts will inform labour machinery on non-compliance of labour laws and visits of labour machinery would be focused only on such non-complying units after they are given reasonable opportunity to rectify.

•Giving facility to the employers to submit applications of licenses, renewal of licenses, registrations, renewal of registrations, exemptions etc. online, thereby creating a winning environment for industries and businesses as well.

•All software’s to monitor compliances and deliver services have been tested and standardized. ‘mahashramm.gov.in’ website has been launched giving the services and monitoring dashboards. The Thane pilot of LMS has been completed successfully and the LMS shall be rolled out to the entire State.

Financial Inclusion to All Workers

To provide financial inclusion to all workers in organized and unorganized sector (except

Domestic workers and agricultural workers)

•The Labour Department through amendments in the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 Maharashtra Gratuity Rules, 1972, the Maharashtra Workmen’s Minimum House Rent Allowance Act, 1983 has mandated various payments to labour through cheque/bank account only. The same shall be enforced effectively in both organized and unorganized sectors by registering all the employers and the workers under the Labour Management System, ‘Mahashramm’ Project.

•No frill zero balance bank account of all labourers in organized and unorganized sector will be opened to provide them financial inclusion through the ‘Mahashramm’ project.

•Network of 24,000 business correspondents will be created under the ‘Mahashramm’ project to enable easy withdrawal facilities to the labourers within a radius of 2 km. from their workplace.

Strategy to Create a Win-Win Environment for Industry and Labour and enable Economic Growth, as well as Attract Investment.

In each policy element discussed below, the Labour department has carefully ensured that a win-win environment for the industry and labour is created:

•Service delivery levels have been defined in the citizen’s charters which have been worked out after mapping 400 processes and sub processes and doing the business process re-engineering for these processes to improve efficiency and cut short delivery time lines and minimize errors.

•Services and their delivery levels are linked up with the citizens’ charter in the Mahashramm portal to generate automatic alerts in case of failures to meet the defined delivery levels.

•The employers, through ‘Mahashramm’ project and ‘Mahashramm’ portal ‘www.mahashramm.gov.in’ will be able to submit online license applications, renewal of licenses applications, registration applications, renewal of registration applications, exemption applications and any other applications required to be submitted online.

•The trade unions through ‘Mahashramm’ will be given facility of online registration.

•Other services would be available online, including registration of certifying surgeons, submission of labour NOC applications etc.

•Mathadi Act Amendment and an enforceable code of conduct for the trade unions have been proposed to facilitate industries without compromising on labour protection and welfare.

>>>>>to be continued

With Regards

V.Sounder Rajan

Advocate -Labour & HR & Consumer Law Consultant -Chennai

"The credit belongs to the man who is actually in the arena, who strives valiantly; who knows the great enthusiasms, the great devotions, and spends himself in a worthy cause; who, at best, knows the triumph of high achievement; and who, at worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who know neither victory nor defeat."

-Theodore Roosevelt

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Dear All,

Section 9C was introduced in the Industrial Disputes Act Industrial Disputes (Amendment) Act, 2010 (No. 24 of 2010). A Grievance Redressal Machinery has been introduced by the insertion of Section 9C. We are inquiring whether Section 9C comes into effect after the issue of a Notification; Section 9C comes into effect.

We find that the wording used in Section 9C is self-operative, as seen below, and a further Notification may become superfluous as the provision is clear:

Setting up of Grievance Redressal Machinery

9C. (1) Every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal Committee for the resolution of disputes arising out of individual grievances.

(2) The Grievance Redressal Committee shall consist of an equal number of members from the employer and the workmen.

(3) The chairperson of the Grievance Redressal Committee shall be selected from the employer and from among the workmen alternatively on a rotation basis every year.

(4) The total number of members of the Grievance Redressal Committee shall not exceed more than six:

Provided that there shall be, as far as practicable, one woman member if the Grievance Redressal Committee has two members, and in case the number of members is more than two, the number of women members may be increased proportionately.

(5) Notwithstanding anything contained in this section, the setting up of Grievance Redressal Committee shall not affect the right of the workman to raise an industrial dispute on the same matter under the provisions of this Act.

(6) The Grievance Redressal Committee may complete its proceedings within thirty days on receipt of a written application by or on behalf of the aggrieved party.

(7) The workman who is aggrieved at the decision of the Grievance Redressal Committee may prefer an appeal to the employer against the decision of the Grievance Redressal Committee, and the employer shall, within one month from the date of receipt of such appeal, dispose of the same and send a copy of his decision to the concerned workman.

Further, Section 9C has already been Notified.

Rajan Associates

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Dear All

Sub: Changes in Section 1(6) of the Payment of Wages Act-

Recently, the Government of India issued a Notification S.O. No.2260(E) dated 20th September, 2012 by which Section 1(6) of the Payment of Wages Act has been amended. The monthly ceiling on the wages is now Rs.18,000/- per month.

What is the effect of the amendment?

By this change, the payment of Wages Act provisions does not apply to those drawing Rs.18,000/- per month and above. Those below the ceiling alone will have the benefit of the provisions of the Payment of Wages Act.

Similar to what is done now by the Central Govt when the ceiling was increased the Andhra High Court in the matter of The Singareni Collieries ... vs The Singareni Collieries Company decided on 7 th July, 2011, the HON'BLE SRI JUSTICE K.C.BHANU has held as follows:

“Therefore, when the Central Government issued a Gazette notification extending all the provisions of the Act to all classes of persons, it can be made applicable to all the persons working in the first respondent company irrespective of their wages. While substituting the present provision under Section 1(6) of the Act, the statement of objects and reasons of the Amendment Act 1947 of 2003 is very clear that, the then existing ceiling of Rs.1,000/- per month was last revised to Rs.1,600/0 per month in 1982 and since then a large number of persons have gone out of the purview of the Act due to successive rise in wage levels resulting from rise in the cost of living, and with a view to cover more employed persons, it is proposed to enhance the wage ceiling from Rs.1,600/- per month to Rs.6,500/- per month. So, the legislature thought it fit to regulate the payment of wages to certain classes of persons as indicated in this Act so as to benefit certain classes of employed persons.”

Further His Lordship Mr Justice K.Chandru of the Madras High Court in a recent judgment of 28.02.2011 in the matter of P.Palani vs The District Manager on 28 February, 2011 has observed that:

“Under Section 1(6) of the Payment of Wages Act, the Act has been made applicable to persons who are drawing wages not exceeding Rs.10000/- per month which limit can be increased periodically at the interval of every five years. The said notification has been issued on 8.8.2007 by the Central Government's notification in S.O.1380 (E).”

With Regards

V.Sounder Rajan

Advocate -Labour & HR & Consumer Law Consultant -Chennai

Legal Consultant for Indian Staffing & Recruiting Industry

By appreciation, we make excellence in others our own property.

Voltaire

Hi

Overview of Indian Contract Staffing (Labour) Law –Part IV

In continuation of our Fourth Part it is noticed that somehow, the deployment of Contract Labour in India has been looked upon with an eye of distrust ,suspicion and a tool for exploitation of labour . Therefore, the abolition of the Contract Labour system had been under the consideration of the Government of India prior to 1970. In the second Five Year Plan, the Planning Commission had made certain recommendations to find out the problems of Contract Labour with progressive abolition of the system and wherever the abolition was not possible improvement of the service conditions of such Contract Labour. It must be borne in mind that the concept of “Welfare State” was edifice of the economic system until 1992 when the focus shifted to slow and steady Globalization. Under the concept of a Welfare State as enunciated in the Directive Principle of State Policy in the Constitution of India, it is the duty of the State to ensure a living wage and proper working conditions for the workers with full enjoyment of leisure ,social and cultural activities .Also it became the duty of the State to take steps to promote the participation of Labour in Management of Industrial Undertakings.

To trace the history prior to the enactment of the Contract Labour (Abolition and Regulation) Act 1970 leading to its enactment the following developments are note worthy:-

The 20th session of the Indian Labour Conference (1962) recommended legislative action to abolish the Contract labour system.

The Contract Labour (Regulations) Bill, 1964, was drafted and considered by the 22nd and 23rd sessions of the Standing Labour Committee (1964and 1965).

Keeping in view the opinions expressed by the interests concerned, the bill was suitably modified and was approved by the Cabinet on 22 June 1966.

The Bill was passed by Parliament on 19 August 1970 and received the assent of the President on 5 th September 1970

The preamble of the Act states that it was passed as an Act to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith.

From the preamble of the act, it can be gathered that the object of the act is twin-fold. One being to regulate employment of Contract Labour in certain Establishment and secondly to provide for its abolition under special circumstances. In short, the Act permitted the deployment of Contract Labour for causal, temporary, and intermittent jobs and at the same time regulate it and also empowered the Government to abolish such Contract Labour in a specified industry wherever it deems fit necessary by issue of a notification. Therefore, the act by itself is permissive, regulatory and a prohibitory all put in one piece of legislation. It is self balancing in nature and a remarkable piece of legislation which has worked well for nearly 43 years since .In our next part we will go through the salutary features of the Contract Labour (Abolition and Regulation) Act 1970.

https://www.citehr.com/285737-legal-...stry-pg16.html

In the previous part we had highlighted the surrounding reasons and the chronology of the events that took place leading to the passing of the Contract Labour (Abolition and Regulation) Act 1970.

Post 1968 ,the legal scenario had changed .When in 1970 the Contract Labour (Abolition & Regulation Act was passed by Parliament all Outsourcing activities can be brought within the realm of the Act .For example the definition of

(i) “workman” means, any person employed, in or in connection with the work of any establishment to do any skilled, semi-skilled or un-skilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be express or implied but does not include any such person – (A) who is employed mainly in a managerial or administrative capacity;

The definition is so wide that it will include any contract employee or Temp employed in connection with the work of any establishment to do any skilled, semi-skilled or un-skilled manual, supervisory, technical or clerical work for hire or reward.

Additionally the following explanatory definition is also included :

(b) a workman shall be deemed to be employed as "contract labour" in or in connection with the work-of:-an establishment when he is hired in or in connection with such work by or through a contractor, with or without the knowledge of the principal employer;

This is where the catch is .In case a Temp is employed as "contract labour" in or in connection with the work-of:-an establishment and when he is hired in or in connection with such work by or through a contractor, with or without the knowledge of the principal employer. Even it be termed as a Service Level Agreement where the PE will feign ignorance of the Temp the Temp will be reckoned as a Contract worker.

The other definitions are also wide:-

(c) “contractor”, in relation to an establishment, means a person who undertakes to produce a given result for the establishment, other than a mere supply of goods or articles of manufacture to such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a sub-contractor;

Again here too the definition is wide .Whatever name you may call the Agreement the term "Contractor "in relation to an establishment, means a person who undertakes to produce a given result for the establishment, other than a mere supply of goods or articles of manufacture to such establishment, through contract labour or who supplies contract labour for any work of the establishment.

Similarly the definition of Principal Employer is also wide and linked to the head of that office or department :-

(g) “principal employer” means – (i) in relation to any office or department of the Government or a local authority, the head of that office or department or such other officer as the Government or the local authority, as the case may be, may specify in this behalf,

(ii) in a factory, the owner or occupier of the factory and where a person has been named as the manager of the factory under the Factories Act, 1948 (63 of 1948), the person so named,

(iii) in a mine, the owner or agent of the mine and where a person has been named as the manager of the mine, the person so named,

(iv) in any other establishment, any person responsible for the supervision and control of the establishment.

Since the PE is linked to the term “establishment” one needs to see its definition :-

(e) “establishment” means – (i) any office or department of the Government or a local authority, or

(ii) any place where any industry, trade, business, manufacture or occupation is carried on;

Strikingly the definition of "establishment " is also all inclusive and means any place where any industry, trade, business, manufacture or occupation is carried on.

In our next part we shall explain the most important provision of the Act being Section 10 which is the prohibition of Contract Labour.

With Regards

V.Sounder Rajan

Advocate -Labour & HR & Consumer Law Consultant -Chennai

Legal Consultant for Indian Staffing & Recruiting Industry

https://www.citehr.com/285737-legal-...-industry.html

Inclusion of Arbitration Clause in Flexi Staffing and Recruiting Agreements.

The Credit Control Department of Flexi Staffing & Recruiting Industry may be facing the problem of chasing unpaid Invoices .

Further the Flexi Staffing & Recruiting Industry is burdened with the problem of following up payments from Clients who do not pay or forget to pay Invoices.Of course this has become a perennial issue for the Flexi Staffing & Recruiting Industry.

An avid follower of our posts has posed the simple question.How do we get over this problem?

Well there needs to be a solution for this as the very reward for the effort which each and every Recruitment Professional puts in getting the Business of recruitment, searching a competent person , selecting the person and on-boarding for the Client on their perm rolls .For the Staffing Industry it will be the same process with the additional job of pay-rolling month after month . In the Staffing Industry it will involve funding for the Temps CTC.

Therefore settlement of invoice/s being the fruits of the labour will be taken away if these unpaid Invoices may become Bad debts .

Perhaps this problem cropping up could be on account of the absence of protective clauses in the Staffing & Recruiting Agreement. Maybe you need to have a re-look at your Standard Templates.

One of the solution for this is to include an Arbitration clause in terms of the Indian Arbitration and Conciliation Act 1996.This will help the Industry to have some hold on the Client in recovering the dues.Well this is a first step in the right direction.

By including an Arbitration Clause in every Template you are indirectly protecting the Invoice in its settlement by the process of recovery by way of legal action .

The next logical question posed by any Professional in the Flexi Staffing & Recruiting Industry is to specify its advantages.

They can be crystallized like this:

1. It a Method of Alternate Dispute Redressal without the intervention of Courts .

2. It is fast ,quick and time Bound.

3. When there is default settlement of Invoice/s the Staffing or Recruiting Industry Entity without incurring heavy costs of Court Fee in the Normal process of recovery just needs to invoke the Clause and start the process of pursuing the claim before the Arbitrator.

4. As an interim measure even pending appointment of the Arbitrator the Recruiting and Staffing Professional can seek the Arbitration Courts help by requesting the Court to issue a direction to the Non –paying Client to provide security for the unpaid Invoice/s pending the Arbitration proceedings. This will ultimately protect the recovery process of outstanding Invoices.

The Recruiting and Staffing Industry should make a beginning to include this Arbitration Clause in every Contract,Agreement,MOU or in their Offer and acceptance letters if the clause is already not there in their Template.

This is critical for Business and reduces the risk and will aid in timely collection and recovery of dues.Of course the pitfalls of Arbitration process also looms large but the advantages outnumber them.

With Regards

V.Sounder Rajan

Advocate -Labour & HR & Consumer Law Consultant -Chennai

Legal Consultant for Indian Staffing & Recruiting Industry

https://www.citehr.com/285737-legal-...-industry.html

Dear Staffing Industry Friends,

This is the first part of the write-up on the need to record "Contract Staff Misconduct."

Being part of the Temp Staffing Industry since December 2005 and serving as a specialized pioneer for Legal Consultation to the Contract Staffing and Recruiting Industry players, we have observed that many clients in the Staffing Industry want to terminate Contract Staff due to disciplinary and performance-related issues.

For the Contract Staffing Company, the relationship is based on the Fixed-Term Contract.

Many Staffing Professionals have initiated a debate on this issue, and we have faced many difficult questions from each of them.

We believe that some innovation for this controversial topic is required as we acknowledge the legitimacy of the questions raised by Staffing Professionals pan India.

The concept of Temporary Employment needs to be understood by Contract Staffing Professionals. With a Fixed-Term Contract that includes provisions for Notice and Notice Pay, the Staffing Professional must understand that situations of Misconduct or Performance-related issues with the Contract Staff can be managed easily. In such cases, the following actions can be taken without referring to Misconduct:

(i) Issue a Notice of termination by providing the Notice Period;
(ii) Issue a Termination letter by providing Notice Pay without any hesitation.

However, in all cases of misconduct or performance-related issues, the Clients, i.e., the Principal Employer, may not agree to either the Notice Period or Notice Pay. They may simply instruct: "Fire this guy!"

When the Client considers terminating the Contract Staff due to misconduct/performance-related issues, the matter should be examined from two standpoints:

(i) As per the conditions of the Appointment letter;
(ii) From the standpoint of the Shops and Establishments Act.

Termination, as per the Appointment letter, is only possible under the relevant clause provided in the Appointment letter. Such termination, known as Termination simpliciter, does not attribute any performance or discipline-related issues to the Contract Staff. This ensures a smooth exit for the Contract Staff, as discussing the Contract Staff's conduct or discipline may lead to stigma and harm their chances of future employment. Additionally, the risk of litigation or retaliation may become significant for the Agency.

To be continued.

V. Sounder Rajan
Advocate - Labour & HR & Consumer Law Consultant - Chennai
Legal Consultant for Indian Contract Staffing & Recruiting Industry

Hi, may I know the governing laws in India for contractual employees who are working with the government sector? As these days, the government is hiring on a contract basis, please let me know the laws applicable in this situation in the case of the government sector. These employees are experts in different domains like finance, materials management, procurement, HR, etc.

Thanks.

[QUOTE=essykkr;2146991]Here, what you are talking about is the Fixed-Term Employment on a contract. In such cases, CLRA is not applicable. The employment shall be governed by the terms and conditions of the employment agreement with the individual. Though in terms of benefits, the employee shall be entitled to all social security benefits like ESI, PF, Gratuity, etc. However, it's difficult to claim permanency in such cases, as after the expiry of the contract period, employment automatically comes to an end, or if there is a stipulation in the appointment letter to this effect. "Like on hiring a permanent employee, the position became redundant."

Thanks.

What kind of possibility for ESI and PF is there if employment is under a fixed-term contract like one year and after the expiry of the year, the same contract is renewed without any break, like ending on 30-09-14 and getting renewed on 01-10-14 in the government sector? Please clarify this.

Regards - KK

Sub:- " Contract Staff Misconduct." –Part II



Being part of the Contract Staffing Industry from December 2005 onwards and being a specialized pioneer for Legal Consultation to the Contract Staffing and Recruiting Industry players we have been noticing that many of the Contract Staffing Industry clients want to terminate Contract Staff on disciplinary and performance related issue/s.

This is a continuation of the write up (Part I ) on the need to record " Contract Staff Misconduct."

In our earlier part we had pointed out the situations when the Contract Staffing Industry Clients wish to terminate Contract Staff on disciplinary and performance related issue.

For the Client they will just inform the SPOC of the Contract Staffing Industry Professional that this Contract Staff needs to be fired immediately .



Now for Contract Staffing Industry Professional he or she has to see it from the Legal perspective:-



For illustrative purposes from the Shops and Establishments Act under Section 30 of the Delhi Shops and Establishments Act, there are only two types of Termination.



The first type of Termination is termination with notice of 30 days and the other one is termination for misconduct wherein an opportunity is to be given to the Temp to explain his conduct.



What do Courts say on this !



But on this, Courts of Law have interpreted that “Termination for Misconduct on Performance related issue” can be done only after conducting a Domestic Enquiry. During the period of the enquiry Contract Staffing Industry entity has to pay the Contract Staff salary, 50% to 75% salary and continue the Contract Staff employment during the period of Enquiry as a via-media. For the Contract Staffing Industry Professional all this may look complicated.



How does the Contract Staffing Industry Professional take this !



The Branches of the Contract Staffing Entities have to adhere to proper maintenance of Contract Staff files as it will serve as the basic record to compare performance and productivity of the Contract Staff well ahead and take the steps of collecting resignation letters or issuing termination letters with the correct period of notice.



Open a Tracker ?



Yes for every Contract Staff open a Tracker on his/her Conduct.



Therefore this need to document Contract Staff misconduct and their discipline in a “Tracker” is paramount. Documenting these issues should not be considered as an unpleasant experience for most of Supervisors and Managers of the Contract Staffing Industry.



Down the line and time the documentation is definitely going to help the of the Contract Staffing Industry Professional to clearly tell the Contract Staff that a typical type of performance or behavior is not acceptable and this interaction can help Contract Staff improve their performance or their conduct to avoid termination.



..To be continued ....

With Regards

V.Sounder Rajan

Advocate -Labour & HR & Consumer Law Consultant -Chennai

First dedicated Legal Consultant for Indian Contract Staffing & Recruiting Industry

An expert is someone who has succeeded in making decisions and judgments simpler through knowing what to pay attention to and what to ignore.

Edward de Bono

https://www.citehr.com/285737-legal-...-industry.html

Sub:- " Contract Staff Misconduct." –Part II

Being part of the Contract Staffing Industry from December 2005 onwards and being a specialized pioneer for Legal Consultation to the Contract Staffing and Recruiting Industry players we have been noticing that many of the Contract Staffing Industry clients want to terminate Contract Staff on disciplinary and performance related issue/s.

This is a continuation of the write up (Part I ) on the need to record " Contract Staff Misconduct."

In our earlier part we had pointed out the situations when the Contract Staffing Industry Clients wish to terminate Contract Staff on disciplinary and performance related issue.

For the Client they will just inform the SPOC of the Contract Staffing Industry Professional that this Contract Staff needs to be fired immediately .

Now for Contract Staffing Industry Professional he or she has to see it from the Legal perspective:-

For illustrative purposes from the Shops and Establishments Act under Section 30 of the Delhi Shops and Establishments Act, there are only two types of Termination.

The first type of Termination is termination with notice of 30 days and the other one is termination for misconduct wherein an opportunity is to be given to the Temp to explain his conduct.

What do Courts say on this !

But on this, Courts of Law have interpreted that “Termination for Misconduct on Performance related issue” can be done only after conducting a Domestic Enquiry. During the period of the enquiry Contract Staffing Industry entity has to pay the Contract Staff salary, 50% to 75% salary and continue the Contract Staff employment during the period of Enquiry as a via-media. For the Contract Staffing Industry Professional all this may look complicated.

How does the Contract Staffing Industry Professional take this !

The Branches of the Contract Staffing Entities have to adhere to proper maintenance of Contract Staff files as it will serve as the basic record to compare performance and productivity of the Contract Staff well ahead and take the steps of collecting resignation letters or issuing termination letters with the correct period of notice.

Open a Tracker ?

Yes for every Contract Staff open a Tracker on his/her Conduct.

Therefore this need to document Contract Staff misconduct and their discipline in a “Tracker” is paramount. Documenting these issues should not be considered as an unpleasant experience for most of Supervisors and Managers of the Contract Staffing Industry.

Down the line and time the documentation is definitely going to help the of the Contract Staffing Industry Professional to clearly tell the Contract Staff that a typical type of performance or behavior is not acceptable and this interaction can help Contract Staff improve their performance or their conduct to avoid termination.

..To be continued ....

With Regards

V.Sounder Rajan

Advocate -Labour & HR & Consumer Law Consultant -Chennai

IMPORTANT EPF CIRCULAR

EMPLOYEES PROVIDENT FUND ORGANISATION

MINISTRY OF LABOUR AND EMPLOYMENT, GOVERNMENT OF INDIA, DELHI

Ref. No. LC(637)2009/Vol.I/203- Dated: 27.05.2014

Subject: Filing of Review Petition against judgement of Hon’ble Supreme Court of India in SIP No. 1205/2009 in the matter of Marathwada Gramin Bank Employees Union Vs. Management of Marathwada Gramin Bank – regarding.

Reference: This office letter No. LC-2(637)2009/MH/12780 dated 08.10.2013

Please refer to the above Cited letter wherein views on the issue of filing Review Petition/implementation of the order dated 09.09.2011 of the Hon’ble Supreme Court of India in SLP No. 1205/2009 in the matter of Marathwada Gramin Bank Karamchari Sangathan & Ors. Vs. Management of Marathwada Gramin Bank, were called for.

2. The views expressed by the Zonal Addl. Central Provident Fund Commissioners as to whether review petition need to be filed or not has been examined at Head Office. Having analysing the pros and cons of the issue, Competent Authority felt that there is no point in going for review against the said judgement of Hon’ble Supreme Court of India.

3. All the Regional Provident Fund Commissioners-In-charge of Regional /Sub-Regional Offices are, therefore, directed not to force employers to contribute over and above the statutory wage ceiling in respect of their employees. However, option is available for the employees to contribute beyond the statutory wage ceiling if they so desire subject to the conditions enumerated under para 26(6) of the Employees’ Provident Funds Scheme, 1952.

Yours faithfully,

(P.K.UDGATA)

Addl. Central Provident Fund Commissioner (Compliance)

Tei.: 011-26172672



By implementing this Circular now EPFO cannot force the Contractors to contribute over and above the statutory wage ceiling in respect of their Contract employees.