Problem Regarding Contract Labour Termination After The End Of Agreement

Hello everyone,

Our management has decided to terminate or not to continue with all the contract laborers under one contractor after the end of their agreement. Management has also given a one-month notice to the contractor and contract laborers before this termination. However, in this situation, all those contract laborers are demanding employment. Thus, they have started a GHERAO and are seeking employment under any contractor. Keep in mind that it's a GHERAO and not a strike. Contract labor is not under the definition of a workman under the ID Act 1947.

As per the Contract Labor Act 1970, we have followed all the legal processes. Contract laborers cannot be absorbed as permanent workmen in any case, and we did not revoke or suspend the agreement before the end of the contract. Now, in this situation, we don't need them, but due to the trouble they are causing, they are forcing us to take them, which is ultimately illegal. So, what should be done in this situation?

1. SHOULD WE CALL THE POLICE?

2. SHOULD WE GO FOR NEGOTIATION TO FIND A MIDDLE WAY? In this case, please mention what kind of middle way.

3. SHOULD WE INFORM THE LABOR COMMISSIONER? In this case, please provide the detailed procedure/steps.

URGENT REPLY NEEDED

From,

Sakshar Sarbajna

9051093364

Dear Sakshar,

At times, in industrial conflicts, plurality pushes legality to the back seat, pity undermines procedures, and commotion drives common sense away. So, tactics alone can effectively handle such a chaotic situation. Better first ascertain the presence of the following factors: Whether the practice of switching contract labor among the existing contractors is in vogue in your company? If not, whether the particular contractor who is likely to lose the contract is behind the agitation? If so, is the non-extension of the particular contract necessitated by the completion or shortage of the particular contract work or due to any differences with the particular contractor? If yes, first initiate a one-to-one discussion with the contractor and convince him about the impossibility of the extension of the contract or iron out the differences and renew the contract further subject to the assurance of effective compliance of his contractual obligations in the future. If the termination of the contract is real and genuine, seek police protection to avoid any untoward incidents and if possible immediately try to obtain an injunction from the local Civil Court against the agitators and inform the Conciliation Officer for the area forthwith.

Thank you very much, Mr. Umakanthan.M.

Actually, our factory is in a tribal area, and all local people work there as contract laborers. Now, if we seek police protection or inform the conciliation officer, there might be a chance of more violence, which could lead to untoward incidents. We may face trouble in the future as well.

Currently, I am attempting to settle the dispute through negotiation or finding a middle way because this will help me avoid any future problems concerning contract labor in the factory. So, Mr. Umakanthan.M., could you please suggest some middle-way solutions that could help resolve this dispute? If this approach does not work effectively, I will consider all the steps you have mentioned.

I am grateful for your kind suggestions.

From Sakshar

I was wrong; contract labor can go on strike because they fall under the definition of workmen.

Dear Sakshar,

I couldn't understand where you have said that "the management has also given a 1-month notice to the contractor and contract laborers before this termination." I can understand your action in giving one month's notice to the contractor since you have entered into an agreement with him, but I couldn't digest the idea of giving one month's notice to contract laborers, since you are not the immediate employer of these contract laborers.

I appreciate the posting of Sh. Umakanthan, who has rightly mentioned that tactics alone can effectively handle such a chaotic situation and has made certain relevant queries, which you need to answer if you want proper advice. Sh. Umakanthan has been in the labor department and has vast experience in dealing with such situations.

Thanks,
BS Kalsi

To my friend BS Kalsi,

We have given notice about the termination of contract labors to the contractor only, not to the contract labors. Now, the contractor did not inform them that their contract has been finished. On the very next day, we did not permit them to enter inside the factory. This resulted in a gherao by the contract labors.

Dear Sakshar,

It's nothing new in such places and circumstances. Most of the companies, big or small, face such problems. I'm not sure what type of contract this has been. Was this a piece rate contract based on the quantum of work carried out by the contractor or for the supply of labor on a number of shifts basis? In a 'piece rate' type of contract, the situation used to be not that serious whereas the contract for the supply of labor for various routine work like housekeeping, loading & unloading, landscaping, canteen, etc., it's natural for laborers to agitate when the contract comes to an end.

To avert such problems, many firms ensure that most of these casual laborers are not called to duty on a regular basis but with breaks frequently. Many engage more than one contractor at a time for different types of work where different contractors are assigned. I'm also not sure what has been the duration of the contract. Contracts with longer durations pose these kinds of problems. Personally, I do not advocate these types of perennially temporary casuals for engaging them in regular work. Agitations will go on and on for permanency, and courts will uphold their demands as well based on the merits of them being engaged continuously over years.

Coming back to your problem on hand, if you cannot avoid engaging contract labor in one way or another, you may consider a pruned labor strength in critical areas through some other contractor for shorter periods, say for 3 months. By rotation, you may engage one after the other, making sure that agitating laborers could find a place with one or the other contractor. This method is being used by many firms, especially in PSUs and major private sector companies as well.

In remote places, even the police with their local affiliations and political pressures may not be of much help as they have to take care of local interests as well. Moreover, corporates also have social obligations to help the locals make their livelihood, especially in tribal areas. I hope they are still not prone to violent agitations. It's also obvious that once they leave their traditional and locally available lifestyle like agriculture or forest-dependent, it's very difficult to send them back to their traditional living while denying their job and modern living provided by their job. You have to think ahead with an eye on long-term/future plans if your plant has to run for many more decades there.

Nice to see the comments. There will be a good percentage of factories running on labor through contractors, and the occurrence of similar situations is inevitable. While we take precautions for the future, how can we address the problems at hand? Is paying gratuity (15 days/year) for the number of years worked by the contractor labor a legally accepted method?

Dear friend,

Yes, this is a quite routine situation now and then. I need some clarifications.

Whether your contract is over or the undertaken work is complete?

My question is, suppose there is a harbor construction work or any factory construction, whether it is a private project or government project, you have taken some bit of the mega project.

Why I am asking the above is... Asking for the continuation of employment is not at all a sin by the working community. Don't see this problem as a law and order problem.

Your contract is over, but there is a lot of work to do by another contractor. So workers are asking for continuous employment though the contractor changed. The question is, who will relieve you from this responsibility with a smooth skip.

That is why I asked, who is your principal employer? Is it a government body or private? My sincere, honest, and the most applied practical solution is the transfer of your responsibility of providing employment to another contractor who will succeed you.

See, it is a well-known fact... Rules are framed only to systemize our responsibilities towards the well-being of humans, either you or others. Live and let live. No law goes beyond natural justice. If you are unable to provide employment in continuation, try to lay the burden to another contractor succeeding you through your principal employer. The principal employer can only solve your problem by laying conditions to the newly acquired contractor to recruit the previous workers at a time or gradually in steps of stipulated times.

All the best, sir. Never try to create an abnormal law and order problem as this could be solved through conciliation, joint meetings, and useful negotiations with honest people.

Yanam absence is a lesson to both parties, management, and the working community. So such cases never be repeated. Take the help of police but solve the problem with your principal employer's timely decision in negotiations.

In recent times, several like situations are settled in this way only. Time will release all tensions.

Ok

To address the issues you are facing, it is advisable to file an application with the labor commissioner, whether at the central or state level, who is legally authorized to facilitate negotiations between both parties, including the principal employer under the Industrial Disputes Act.

It is estimated that resolving this matter may require one or two sessions.

Dear Sakshar,

I have gone through various comments/advice on the situation. As per the relevant Act, contract workers cannot be engaged for an unlimited period. Absorption of workers from one contractor (on completion of the contract) with another contractor sounds quite humane but is not a tangible solution.

Some of our friends have referred to practices being followed by PSUs and other private sector companies regarding doing away with the contract workers by absorbing them as departmental workers. PSUs have run into tremendous losses; one such example is Hindustan Steelworks Construction Ltd. The hard fact of life is that organizations cannot survive without contractors and their workers for some job, either petty or short-term. The same workers who were delivering the requisite quantum of work as contract workers adopt a laid-back attitude upon becoming regular employees of the company and become a source of problems.

I agree that the problem is ticklish, but it has to be tackled out of the box by involving some influential person of the locality as well as the state labor machinery.

Regards,

S.K. Johri

Dear all,

Can anyone tell me about an accident case in a company where a criminal case is made against the HR manager personally in court? Is this possible or not? What are the basic rules for this type of incident?

Tanwar