Understanding Contract Labor Leave Compliance and 240 Days Rule

If some laborers are working under a contractor, are they eligible for leave? If they are not working for 240 days, how will leave be assigned? If yes, kindly suggest how it will be.

Thanks in advance.

Regards,
Anil

Contractor Responsibility for Leave Provision

Contractors, and not the principal employer, will have to provide leaves to contract labor. This is dependent on the attendance as recorded by the contractor. It is advisable not to interfere in such matters.

Regards,
Madhu.T.K

Dear Anil,

As a principal employer, you are ultimately responsible for your contractors' labor compliance. Hence, all you need to do is ensure that the contractor is providing the requisite benefits, maintaining registers, and following compliances. You can ask the contractor to submit their registers for checking every month before clearing their bill, and you should keep a copy as well.

Now, regarding leaves - if those workers have been working under the contractor for more than 240 days, they need to receive leave at a rate of 1 day for every 20 days worked; regardless of whether they have worked on your project for less than 240 days. Therefore, you just need to ensure that their leave register copy is given to you.

If the workers have worked for less than 240 days, then they are ineligible; unless it is due to discharge, dismissal, retrenchment, or if a worker passes away in service. In those cases, the rules are different.

Please let us know if you require further information.

Regards,
Deena Jagasia

How can you ensure that these contract laborers have worked for 240 days under the contractor when he keeps on changing the place of posting and when, under you, the said worker has not worked for 240 days?

It is not possible. Certainly, if you find that the same worker has been engaged for you, you can direct the contractor to grant him leave as per the relevant Act (under Shops and Comm. Establishments Act, there is nothing like 240 days), but at whose cost? It will be at the principal employer's cost that the contractor will be giving him the leave or leave encashment. And now, if you do it and continue to do it for years, that itself is proof of continuous service which may put the principal employer into troubles and even lead to assuming the liabilities under the Payment of Gratuity Act.

Madhu.T.K

It's under the Factory Act. Kindly suggest to me if someone is working less than 240 days, how it is possible to provide leave.

In the case of workers (even those employed directly) who have not worked for 240 days, no leave will accrue as per the Factories Act. However, this 240 days should not be interpreted as the days the worker is physically present for work. Instead, it should include all weekly off days, holidays, and other paid leave days for which the worker has been given wages, as well as the days on which he was absent due to employment injury or simply the ESI leave days.

Madhu.T.K

I have a query. Will 240 days be calculated only based on present days? Or, if an employee is present for 22 days and takes 4 days of EL, will we pay him for 26 days, which means full salary? My query is, will EL be calculated based on 22 days or 26 days?

With Regards,
Anil

I think my previous post is clear, that 240 days should include days one employee remained on paid leaves. If an employee had physically been present for 220 days but has taken 15 days of EL, was on ESI leave for 5 days, then also he will be eligible for leave since he has worked for 240 days. However, his leave will be calculated based on his actual days physically present, which is 220, and he will get 11 days of leave only.

Madhu.T.K