Gratuity Case Study

Dear Sir,
I recently came accross one case study on gratuity payment. The case is in on company (XYZ), few workers are working for above 5 years under one contractor (C1). Recently they have changed the contractor (C2) who is associated with that same company but thos workers are still working with the same company (XYZ). Now they are demanding gratuity...so who is liable to pay...principle employer or contractor???

contractor has to pay the gratuity if he denies the Principle employer has to pay
regds
srihari

Dear
Handle it smartly. Other wise you or contractor has to make the payment
It is recommend not to continue with any other than regular workmen more than one year
Regards
Jaswinder singh

Dear Abhishek,
This is totally contractual job so contractor should pay the gratuity to them if contractor fail or denny to pay then principal employee will be totally liable to pay..
I think it is sufficient to understand.
Regards,
Ravindra Kumar Gupta
Asst. Manager-HR
09826910595

Dear
Actually as per the Contractor Agreement with the Principle Employer and Work order issued to him monthly Contractor will claim the CTC amount and the same liable amount can be transferred to other contractor after discussion with Management. Because both Contractors are working with the same Principle Employer.
Correct me if am wrong.
Regards,
Chitrappa

Changing the contractor without changing the contractor's labour is a very good example of sham contract. If the contract is not genuine or is sham, the engagement of labour through contractor will be viewed as an attempt to deter rights of workmen under various Labour enactments. And if these workmen have been engaged in core areas of operations wherein regular workmen are also employed or can be employed, the deployment will be illegal. In such scenario the workers who were engaged through an outside agency (contractor) will have right to claim regularisation or demand gratuity if they are leaving the (principal) employer after 5 years of continuous service.

Note: 1. As far as possible do not engage contract labour in core/main operations which are regular or perennial in nature which could have been performed by regular employees.

2. While changing contractor please ensure that the new contractor places new employees and no workmen of the old contractor is absorbed by the new contractor.

Regards,

Madhu.T.K

Dear Madhu,
Contractor can also take a license for manufacturing process untill unless if local government is not interfare in the work commencement. go through with sec 10 of CLRA Act 1970.

Sorry, I could not find anything which permits a contractor to work on manufacturing process. Moreover, section 10 deals with prohibition of contract labour on operations of perennial nature. Please explain the procedure by which govvernemnt will grant such licence to a contractor.
Madhu.T.K

Can we ask those employees to work on voucher or cash for two months and then avail the benefit of gratuity???

Making voucher payment will not make any difference because by doing this their status remains the same.
Madhu.T.K