Rehiring VRS Employees: What Benefits and Rights Do They Have When Returning?

I sincerely request your guidance on the issue below.

Reemployment of VRS Employees

Certain employees/labourers who took Voluntary Retirement Scheme (VRS) and later rejoined the same organization at the request of management—what benefits can they claim from management?

Engagement as Contract Labour

Can management directly engage the ex-employees as contract labour and curtail their benefits?

Core Work and Employment Status

If the ex-employees engage in core work of the organization, will they be treated as permanent employees?

Termination and Consequences

Lastly, can they be terminated without prior intimation? If so, what would be the implications and consequences if they are principal employees or contractors?

Regards

Your question is not clear enough. Did employees who took VRS rejoin the organization directly or through the contractor? If the ex-employees are engaged by the company through the contractor, then the provisions of the Contract Labour Act will apply. Please remember that the Contract Labour Act does not have provisions for granting permanency; its aim is only to regulate and abolish contract labour.

Regards,
Preetam Deshpande

As per CLRA, there are no such distinctions for contract labor as temporary or permanent. Management engages the contract labor after signing a work order with the contractor, and the provisions of the CLRA will apply if the contractor has employed 20 or more. Contract laborers are not eligible for any benefits.

For employees who are directly hired by the company, they will benefit from ESI, PF, Bonus, and Gratuity. These employees can be directly engaged by the management. It is up to the discretion of management if they would like to engage them as permanent employees, especially if they are involved in a crucial assignment. If these employees are under probation, they can be terminated immediately based on company regulations. However, permanent employees should be given the required notice period.

Implication

At the end of the contract, if the employer terminates permanent employees, they would be eligible for retrenchment compensation, and other compliances under the ID Act would need to be followed for retrenchment.

Regards,

Hi Preetam Deshpande,

I appreciate your valuable suggestion. Yes, they are directly engaged by the company. However, only E.S.I benefits are provided to us by the company itself, and the ID card is also issued in the name of the company. What more benefits can we demand from the company, and whom should we approach? Also, they were asked not to come to work again just a day before (no prior intimation provided).

Regards,
Satish Malve

Appointment Letters and Employment Terms

Have the ex-employees been issued new appointment letters? If yes, then the employees will be considered as new employees for all purposes, and you will have to refer to the terms and conditions of the appointment letter.

If no such appointment letter was given, then there has to be some sort of written communication whereby employment would have been offered. Please refer to those letters and find out what the terms and conditions of the services were.

Based on the terms and conditions of the appointment letter, benefits such as retrenchment compensation, notice period, etc., could be determined and asked for.

Regards,
Preetam Deshpande

Dear Sharmila Das,

I appreciate your valuable suggestion. You mentioned that management engages the contract labor after signing a work order with the contractor, and the provisions of the CLRA will apply if the contractor has employed 20 or more.

However, employees did not and have never approached any contractor for work. Management requested us to come back for work and issued an ID card stamped with the company seal. Additionally, E.S.I was provided by the company itself, stamped with the company seal. Later, management claims that we were employed through a contractor without our involvement at all. We don't even know who our contractor is, as we never approached him, and no documents were signed regarding the contract by the employees.

I request your input on the above issue. Can we be considered as contract labor or direct labor employed by the company?

Regards,
Satish Malve

Response to Employment Rejoining and Benefits Inquiry

Thank you. No such appointment letter was provided. The management simply called all the ex-employees through one of the ex-employees. The management said, "Why are you sitting idle at home? Why don't you work here? Anyhow, you know about the work as you were employees here earlier and have experience as well." Meanwhile, you joined the organization and started working there. They assured that benefits would be provided. Later, after working for a certain number of months, when these employees inquired about the benefits, the management rejected it and threatened that if they asked for the benefits, they would not be allowed to work there. Those who rebelled were laid off from employment, and others were afraid to take this step. So, what can be done now for the sake of employees who put hard work and labor into the organization to generate profits?

E.S.I was provided by the organization. I.D. card was issued by stamping the organization seal.

With regards,
Satish Malve

If the employer has engaged you directly as a contract worker, then according to the Contract Labour (Regulation and Abolition) Act, the employer is considered the primary employer for contract workers hired for a fixed period of contract. In such cases, the employer is required to register contract workers under PF and ESI registration.

Regards,

If the principal employer is exploiting the ex-employees in terms of work and not providing the benefits and facilities they are supposed to receive as their principal employer, what can be done and whom should they approach, considering the employees are afraid to approach the management due to fear of losing their jobs? What benefits can be claimed from the principal employer? Currently, employees are only receiving E.S.I benefits.

Regards,
Sarvendra Singh