The most weaker section of the employees in relation to any organization are contractual labor. PE and its HR representatives are always finding loop holes in law to avoid certain statutory payment e.g Gratuity, Leave pay etc. Non payment of gratuity to contractual labor in the plea of not completing 5 years continuous service is one of such example. All over India, there are organizations where PE is asking contractor to change their employees within 3 years to avoid gratuity payment( I have faced this with renowned MNC). There are employers who are changing contractors without changing contract labor again to avoid payment of gratuity. This is classic exploitation of contractual labor by the PE.
There are cases pending at the Apex Court in this regard. My personal feel the award will be in favor of the contractual labor in future. There are contractual labor who worked under one PE for years together through different contractors but deprived of gratuity as in each case it is less than 5 years continuous service.
In this regard I can share one story ( may be fact ) where one organization had huge problems with employees and unions. The organization employed one champion IR/HR person in permanent position who was assigned to bring down the manpower and set the organization properly. The said guy was also declared as Welfare Officer under Factories Act. The concerned guy by his acumen, faculty, intelligence etc. and with very hard work within 3 years bring down the manpower from 800 to 300 and the organization was running peacefully.
Now the owner of the organization called the Welfare Officer and told him that thank you very much for your effort and result. I am not well conversant with labor laws but I know one thing that if the number of employees are below 500, there would not be required for any Welfare Officer. You please left the organization and as you have worked for only 3 years, therefore you are not eligible for gratuity.
I know few organizations who are taking care about contractual workers very sincerely and settled their gratuity even the worker has not completed 5 years continuous service with any single contractor.
My personal feeling is that going beyond the interpretation of law and with proper mind set under the back drop of PNJ (principle of natural justice) , every employer may consider each case by its merit to pay gratuity to the contractual workers if the total working years with the same PE ( may be under different contractors) 5 years or more continuous service.
S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
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