Hello,
This is getting to an interesting but a simple point.
I write with the limitation of NOT having read wither of the judgement and on the basis ONLY of my understanding of the law on the subject and the posts in this thread!:
1) I contend that the PE is under no legal obligations to pay gratuity to an employee engaged through a contractor because no "employer-employee relationship" exists.
2) Sec 22 (?) of CLRA does obligate and empower the PE to pay wages to the employee of the contractor if the contractor has failed to pay and in such case only the PE may recover such amounts from the contractor. And since GRATUITY is NOT "wage" under any applicable law,the PE is NOT obliged to pay gratuity to employees of a contractor under any conditions.
Having said this, I raise a caution too. The way contract labour issues are handled in most organizations, it is fairly easy to prove such contracts to be SHAM and claim direct "employer-employee relationship" between the (so called) Contractor's employees and the PE and in such case, yes, the PE will be held obliged to pay gratuity to such Contractor's employees!
Further, it is interesting to take a note as to why the same logic will not work in case of ESI or PF. The clue is that even the Contractor's employees are "workers" under the Factories Act! Kindly ponder over this issue.
Regards
samvedan
January 16, 2013
-------------------------------
This is getting to an interesting but a simple point.
I write with the limitation of NOT having read wither of the judgement and on the basis ONLY of my understanding of the law on the subject and the posts in this thread!:
1) I contend that the PE is under no legal obligations to pay gratuity to an employee engaged through a contractor because no "employer-employee relationship" exists.
2) Sec 22 (?) of CLRA does obligate and empower the PE to pay wages to the employee of the contractor if the contractor has failed to pay and in such case only the PE may recover such amounts from the contractor. And since GRATUITY is NOT "wage" under any applicable law,the PE is NOT obliged to pay gratuity to employees of a contractor under any conditions.
Having said this, I raise a caution too. The way contract labour issues are handled in most organizations, it is fairly easy to prove such contracts to be SHAM and claim direct "employer-employee relationship" between the (so called) Contractor's employees and the PE and in such case, yes, the PE will be held obliged to pay gratuity to such Contractor's employees!
Further, it is interesting to take a note as to why the same logic will not work in case of ESI or PF. The clue is that even the Contractor's employees are "workers" under the Factories Act! Kindly ponder over this issue.
Regards
samvedan
January 16, 2013
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