if a contract labour file a case against company then what should cmpnay do please suggest

Dear all,

The company will terminate a contract laborer because of his bad behavior and long absenteeism. If the contract laborer files a case against the company, what should the company do? Please suggest.

Thanks

Did the company have a direct contract with the worker, or was it through a labor contractor?

What procedure did you follow for termination?

What were the terms of the contract?

It is through the contractor.
We will send a letter to the contractor notifying them of the termination of the employee.

Probably all you have to do is tell the contractor to replace the worker. Why was his indiscipline tolerated for so long? The worker has an employer-employee relationship with his contractor only. You are not his direct employer but the Principal employer.

Contractor already replaced the worker, and the labor department says that you have to submit the report and ensure you have attended all legal hiring processes. Now, what should we do to avoid any trouble in the future? Please suggest what steps to take in this situation.

Thanks,
Rajender

You need to strongly deny an employer-employee relationship. You should plead that you are not a necessary party to the dispute, as it is only the contractor who can and has to answer the question of termination. Is the contractor a party to the proceedings? Is there a pleading that the contract is a sham arrangement?

You have to join hands with the contractor to gather documentary proof showing that the laborers were employed by the contractor, paid regularly by the contractor, the contractor has a labor license, you are registered under the CLRA Act, and that provisions like PF/ESI for the laborers are complied with by the contractor. You should also produce a copy of the work order/service agreement with the contractor, etc.

It is high time for you to seek the services of a Labor Law expert.

You need to provide the forum with complete details of the circumstances. It is not possible to give advice on a vague description without knowing how the contract worker was employed, interactions, what work he was doing, and what documents he has to prove he worked for you. If he has complained to the labor department, you need to attend the hearings and explain to the labor officer that you were not the employer and that the contractor has employed him, etc.

Dear Madam,

I have already explained to the labor department that we are not the employer. They replied that you are the principal employer and you have the liability to attend the hiring and provide evidence of the entire process.

Dear Dayma,

The terminated employee would have impleaded you as a party to the dispute since you happened to be the principal employer. Therefore, procedurally, it is correct on the part of the Labor Officer to send notice to you as well. Without knowing the terminated contract workman's actual averments in his complaint to the Labor Officer or whether the contractor just orally stopped him or formally terminated him on the ground of any indiscipline, one cannot suggest any specific reply to be submitted. However, you have to file a reply, and it may generally state that as the principal employer, you are not concerned with the appointment or termination of any particular individual as contract labor. If any remedy is sought by the petitioner/workman regarding his termination/non-employment, it can only be from the contractor who employed him. Request the Labor Officer to drop all further action regarding the principal employer on the grounds of misjoinder of party.

However, if there is any specific allegation about the contract being a sham one and the workman demands a remedy from you, then the Labor Officer has to initiate conciliation and issue a certificate to the effect that conciliation ended in failure. You will then have to prove your stand before the Labor Court only. This is the legal impact of the so-called "Umbrella Contract" (that is, the same PE, the same contract labor but a change of contractors every year or so) adopted by most of the principal employers for the sake of flexibility of hire and fire, as well as cost-cutting.

The person was engaged through a contractor. The Principal Employer cannot and should not have any direct control over the said contract worker. If there is a behavioral issue with any contract workman, the Principal Employer should talk to the Contractor and advise him to remove him from his rolls/stop him. If the contract workman files a case against the company, then the PE can very well defend the case saying that he was only a contract workman and not a direct workman. However, it is to be noted that there should be a perfect contract between the PE and the Contractor, the PE should have the RC, and the Contractor should have the license, there is no loophole in the contract, the contract workman does not have/possess any evidence to say that he is a direct employee of the PE and last but not least, the contract workman was not engaged in a perennial nature of job for which he has some evidence with him. In such a case, it is very difficult to defend the case by the PE.

If the contract is not a sham contract and is a genuine contract and the person is engaged as per the RC and license, then even if the person works for 10 years, there should not be any problem unless the appropriate authority abolishes the contract system in the particular industry.

Ranganathan RS

Dear Friend,

If the contractor has obtained a license under CL(R&A) Act and is the paymaster, then the workman cannot be considered a workman of the principal employer. The contractor is the employer for the workman and is free to take any action against the workman under the provisions of the ID Act. As a principal employer, you should inform the labor office that the principal employer has no role in the admission or termination of the contractor's workman.

Dear Rajendra,

I hope you have noticed the common thread running throughout the responses of all the learned members who have replied so far to your query, particularly the useful tips provided by Mr. R. S. Ranganathan. Therefore, when replying to the Labor Officer, make sure to highlight the following points only:

1) Regarding the complainant/workman, Sri.............., who is a licensed contractor under the CLRA Act of 1970 within our establishment, he is considered the ultimate and actual employer.
2) As a registered Principal Employer under the Act, our concern is solely the execution of the work undertaken by the contractor to our satisfaction. This includes the number of qualified laborers, timeliness, and quality of the work as agreed upon in the contract between the contractor and us.
3) We, as the Principal Employer, did not establish any contract of employment, either express or implied, with the complainant.
4) Our vicarious liability, concerning the contract labor engaged by the contractor for the specific contract work, is limited to the matters outlined in Sections 20 and 21 of the CLRA Act of 1970 only.
5) Therefore, we are not involved in the selection, appointment, transfer, or termination of any specific contract worker by the contractor.
6) However, we reserve the right to instruct the contractor to replace any contract laborer with a suitable substitute if we observe any deficiencies or delays in the execution of the contract work. This was the case with the complainant.
7) It is entirely the contractor's independent decision whether to retain the complainant in their employment by assigning them to other contract work elsewhere. We do not bear responsibility for the contractor's decision.
8) Based on the aforementioned factual and legal position, we request to be excluded from any further proceedings related to the complaint due to misjoinder of party.

It is advisable to seek guidance from your legal advisor and senior management.

Best regards, [Your Name]