Dear Sir,
Kindly help. We are a manufacturing company, and one of our employees is set to retire on 28/02/2018. However, we wish to continue his services as he is physically and mentally fit. Can we retain his services? If so, what are the rules according to the Companies Act?
Thank you for your assistance.
From India, Hyderabad
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Kindly help. We are a manufacturing company, and one of our employees is set to retire on 28/02/2018. However, we wish to continue his services as he is physically and mentally fit. Can we retain his services? If so, what are the rules according to the Companies Act?
Thank you for your assistance.
From India, Hyderabad
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Dear Krishna,
I don't know why you are linking your query to the Companies Act. Are you going to appoint him as a Managing Director or Whole Time Director and the like? If you want to continue the services of your employee beyond the age of superannuation prescribed in the applicable service rules, only the concerned employee and yourself are the decision-makers. There is no legal bar to extend the services of the employee who has attained the age of retirement. How to go about it can be a pertinent issue. His services can be extended for some more time either as a regular or fixed-term employee or as a consultant on a retainer basis depending on the nature and status of his job position. But, ensure that it does not give rise to nepotism/favoritism or poor succession planning in the organization.
From India, Salem
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6108I don't know why you are linking your query to the Companies Act. Are you going to appoint him as a Managing Director or Whole Time Director and the like? If you want to continue the services of your employee beyond the age of superannuation prescribed in the applicable service rules, only the concerned employee and yourself are the decision-makers. There is no legal bar to extend the services of the employee who has attained the age of retirement. How to go about it can be a pertinent issue. His services can be extended for some more time either as a regular or fixed-term employee or as a consultant on a retainer basis depending on the nature and status of his job position. But, ensure that it does not give rise to nepotism/favoritism or poor succession planning in the organization.
From India, Salem
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In this case can ESI & PF act applicable for the employee/Retainer
From India, Calcutta
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From India, Calcutta
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ESI will be applicable if the employee draws less than Rs. 21,000/- but in PF there is no contribution required for EPS, the entire contribution including employer’s goes to PF accumulation
From India, Mumbai
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From India, Mumbai
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Dear Krishna,
There is no issue with working even after the age of 58 with sound health, but membership under EPS shall be ceased, and ESI will be applicable if the employee draws less than Rs. 21,000. This changing trend has already occurred decades ago in the PSU and Government sectors. It would be advisable to make a change in the SOP or the policy manual of your establishment to have legal sanctity.
From India, Mumbai
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There is no issue with working even after the age of 58 with sound health, but membership under EPS shall be ceased, and ESI will be applicable if the employee draws less than Rs. 21,000. This changing trend has already occurred decades ago in the PSU and Government sectors. It would be advisable to make a change in the SOP or the policy manual of your establishment to have legal sanctity.
From India, Mumbai
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Such extensions should be exceptions and can't be treated as rules. Disgruntled employees may create a ruckus. The safest option is, as advised by Mr. Umakanthan, to treat him as a consultant on a fixed salary after taking into account his last drawn salary. Keep him for a year or two on a contract basis.
From India, Bengaluru
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From India, Bengaluru
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Enforcement of negative covenants in employment terms.pdf