Is Our Absent Third-Party Employee Entitled to Salary for Her Missing Months? What Should We Do?

As per the subject, we hired a third-party payroll employee for our office to oversee all activities falling under HR. However, after Diwali in October 2018, she did not come to the office, and there is no record of her attendance presently. Despite this, she is now demanding her two months' salary for November and December 2018.

Given that she was not present during these two months, the question arises: is she entitled to the salary she is requesting? According to the terms of the one-year contract, we are obligated to provide her with the salary plus an 8.0% increment. Nevertheless, as she was absent for two months and has since left, what course of action should we take?

What steps should we follow in this situation?

Thank you.

You have "engaged" her (never say hired but only say "engaged") through a contractor/outsourcing agency, and as such, you don't have any responsibility to pay any increment or notice pay. She discontinued the job of her own will, and it is not that you have fired her. Then how can she demand notice pay? Refuse to pay it, saying there is no master-servant relationship between you and her.

Reality of Contractual Engagements

Now, coming to the reality, let me say something. In a contract like this, you should not make any commitment like an 8% increment, etc., because this clearly establishes that the contract is a sham and everything is controlled by you only. You can make a commitment of an increase in the professional charges payable to the contractor but not to their employees who are deployed in your plant. Another thing is that you have engaged her in the HR department. HR is a core function and more than that, a confidential function where you cannot have any outsourced employees.

Thank you for your suggestion, ma'am. She continues emailing us about the same issue, insisting on meeting and receiving her money. In this situation, as an HR professional, what steps should I take? Should I meet her in the office? This matter occurred before my joining, and now my Managing Director wants me to get involved and resolve it.

How can I bring closure to this issue?

What key points should I address when meeting with her, considering her extensive experience in the HR field? She likely knows the proper procedures for collecting money. Please provide guidance on this matter.

Thank you.

First of all, ask her to contact her employer. Her employer refers to the agency that pays her salary, i.e., the contractor. Inform her that there is no legal relationship between us, and therefore, we cannot entertain her claims. Since you started working in this company, we have not paid you a salary, nor have you requested it, as the salary was paid by your employer or the outsourcing agency. Now that you have stopped coming to work, how can it be our responsibility to pay you notice pay or two months' salary?

I am addressing only the legal aspect here.

Nature of Contract:

I think from your description, the said employee was in direct contract with your company. Had she been an employee given for assignment from another contractor, the contract would have been with that other party. Now, the most important part of a contract is "Privity of Contract." Here you have a direct contract with the said employee, so she can claim privity. See this for more information Things To Remember While Drafting A Valid Employment Contract

Absenteeism and Termination of Employment:

The Industrial Standing Order states:

Holidays and Leaves:

A person employed in a shop or an establishment shall be entitled to:

1. For every completed year of continuous service, to privilege leave on full pay for fourteen days.
2. In every year, to sick leave on half pay for fourteen days on a medical certificate obtained from a medical practitioner.
3. In every year, to casual leave on full pay for ten days.
4. In the case of a woman, to maternity leave in accordance with such rules as may be prescribed.

"NOW TO COUNT ABSENTEEISM YOU NEED TO DEDUCT ALL LEAVES"

Termination of Employment:

1. For terminating employment of permanent workmen, notice in writing shall be given either by the employer or the workmen - one month's notice in the case of monthly-rated workmen and two weeks' notice in the case of other workmen: one month's or two weeks' pay, as the case may be, may be paid in lieu of notice.
2. No temporary workman whether monthly-rated, weekly-rated, or piece-rated, and no probationer or badli shall be entitled to any notice or pay in lieu thereof if his services are terminated, but the services of a temporary workman shall not be terminated as a punishment unless he has been given an opportunity of explaining the charges of misconduct alleged against him in the manner prescribed.
3. Where the employment of any workman is terminated, the wages earned by him and other dues, if any, shall be paid before the expiry of the second working day from the day on which his employment is terminated. SEE FULL HERE Drafting of HR policies in line of Industrial Dispute Standing Order

Conclusion:

Determine whether the employee was Permanent, Temporary, etc. For due salary, you need to take into account leaves or holidays according to the law. Absenteeism is a breach. Now, in your case, it is reasonable and can be called a breach. Read your state's Shops and Establishment Act. Generally, there is a point on termination due to absenteeism.

Dear friend,

You have not hired the lady; rather, you hired the agency where she was working. You ignored her call and advised her to contact her paymaster for salary and wages. In the meantime, you can direct the agency to look into the matter of the lady. Whether she worked during November - December 2018 is not a subject matter for you. Were you paying her directly?

Thank you for your warm suggestions. As I discussed with her on the call, she arrogantly behaved when I asked her why she didn't punch in and out on a daily basis. She mentioned that it is not mandatory for third-party payroll personnel and is not specified in the contract. The person in question also mentioned that she has MOM with her, which she believes is sufficient to confirm her attendance in the office.

Outsourced Employee vs. Company Employee: Understanding Responsibilities

How can an outsourced employee have an upper edge over a company employee? You have only "hired her services" through a third party (meaning "a contractor"). It is not the principal employer's responsibility to provide wages/salaries to an outsourced employee. Even for statutory matters, the contractor is responsible, not the principal employer. You can assertively tell the female staff to contact her employer (contractor) for her wages/salaries, if applicable. As the principal employer, you have every right to prorate and deduct the amount from the contractor's bill for the days she was absent from duty.