Yes. The issues are pertinent to be considered, if an ex-employee is re-hired by the same company as a fresher after short lapse of time.My views on this issue are as under .
1) When an emlployee has submitted his resignation and the same has been accepted and all his dues have been settled and paid, his contract and the employer-employee relationship with the company comes to an end for all intents and purposes.When the company decides re-hire him after a short of laps eof time, I would recommend to the company to treat him as fresher for the following reasons.
i) If the intervening period is treated as leave without pay to allow him contnuity, it will have implications on gratuity as his past servcie will also count for gratuity. What if the employee again leaves the company after a year wilh gratuity in disregard of the generosity of the employer.This may also send a wrong message to other employees.
ii) Even if the employer is willing to treat the period as LWP or a break and is willing to pay contributions for the intervening period, it may raise technical questions within the frame work of the provisions of the Act an dthe schemes.
In terms of Sec.6 of the P.F Act , the P.F contributions shall be paid on basic wages + Dearness allowance etc. Sec.2 (b) of the P.F Act defines 'basic wages ' as all emoluments earned by an employee while on duty or on leave with wages. When an employee is on LWP, he does not earn any wages and when he does not earn any wages, how he can pay contribution. Even assuming that the employer is too generous to pay him salary for the two months out of grace and good will, such salary cannot be deemed to have been earned by the employee while on duty and therefore it is difficult to fit such payments within the purview of Sec.2(b).
Again even assuming that the employee has two months leave at credit at the time of resignation and the employer is willing to treat him to be on leave with wages, then questions will be raised by P.F for delay in depositing the contributions which may attract interest and damges etc under the provisions of the Act. This is not to speak of adjustments in records and relevant registers and returns etc as the employer has to do lot of explaning before the P.F authorities.
The question is whether all this trouble is worth taking for an employee who chose to leave the comapny and probably re-aproached the company when he has no options left for him in the market.(It is not clear from the post wherget the comapny has aproached him with any offer.)
iii) Thirdly, if an employee who is a mmeber of the P.F scheme, leaves a company and joins another company covered by the P.F Act , he can be readmitted to the benefits of P.F and pension as per the provisions of the P.F Act and the schemes tehreunder. Thus his rights to P.F and pension benefits are protected by the Act even if he is treated as fresher in the same company.
These are my views.Nevertheless, in private sector, the employer enjoys boundless discretion in matters of emploeyr-employee relationship and can very well treat the intervening gap as leave or leave without pay but bearing in mind the above issues.
B.Saikumar
Mumbai