IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

Is there any duty for the Contractor or the Staffing Agency to maintain any Statutory Record of persons employed by them? In accordance with Rule 75 of the CLRA Rules, every contractor shall maintain, in respect of such registered establishment where he employs contract labour, a register in Form XIII. This means that the Register in Form XIII is to be in relation to such registered employment.

With Regards,

V. Sounder Rajan
Advocates & Notaries - Legal Consultants - HR
E-mail: rajanassociates@eth.net

From India, Bangalore
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    (Fact Checked)-The user's reply is factually correct based on Rule 75 of the CLRA Rules for maintaining a register in Form XIII for contract labor. Well done! (1 Acknowledge point)
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  • Dear All,

    You may remember the Historic September 2010 brought about changes to the industrial Disputes Act. One important change is the change made in the Section 11 –Enforcing the Awards of Labour Court which has been touched upon in an earlier post .

    In section 11 of the principal Act, after sub-section eight , the following sub-sections shall be inserted, namely:

    “(9) Every award made, order issued or settlement arrived at by or before Labour Court or Tribunal or National Tribunal shall be executed in accordance with the procedure laid down for execution of orders and decree of a Civil Court under order 21 of the Code of Civil Procedure, 1908

    (10) The Labour Court or Tribunal or National Tribunal, as the case may be, shall transmit any award, order or settlement to a Civil Court having jurisdiction and such Civil Court shall execute the award, order or settlement as if it were a decree passed by it.”

    The Execution provisions of CPC is :

    51. Powers of Court to enforce execution: Subject to such conditions and limitations as may be prescribed, the Court may, on the application of the decree-holder, order execution of the decree :

    (a) by delivery of any property specifically decreed;

    (b) by attachment and sale or by the sale without attachment of any property;

    (c) by arrest and detention in prison for such period not exceeding the period specified in section 58, where arrest and detention is permissible under that section;

    (d) by appointing a receiver; or

    (e) in such other manner as the nature of the relief granted may require:

    Provided that, where the decree is for the payment of money, execution by detention in prison shall not be ordered unless, after giving the judgment-debtor an opportunity of showing cause why he should not be committed to prison, the Court, for reasons recorded in writing, is satisfied;

    (a) that the judgment-debtor, with the object or effect of obstructing or delaying the execution of the decree,

    (i) is likely to abscond or leave the local limits of the jurisdiction of the Court, or

    (ii) has, after the institution of the suit in which the decree was passed, dishonestly transferred, concealed, or removed any part of his property, or committed any other act of bad faith in relation to his property, or

    (b) that the judgment-debtor has, or has had since the date of the decree, the means to pay the amount of the decree or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same, or

    (c) that the decree is for a sum for which the judgment-debtor was bound in a fiduciary capacity to account.

    Explanation :In the calculation of the means of the judgment-debtor for the purposes of clause (b), there shall be left out of account any property which, by or under any law or custom having the force of law for the time being in force, is exempt from attachment in execution of the decree.

    ORDER XXIX- SUITS BY OR AGAINST CORPORATIONS

    3 . Power to require personal attendance of officer of corporation— The Court may, at any stage of the suit, require the personal appearance of the secretary or of any director, or other principal officer of the corporation who may be able to answer material questions relating to the suit.

    By introduction of the provision the award of Labour Court / Tribunals is now additionally executable by a Civil Court. After the Labour Court/Tribunal passes the award it shall be automatically transmitted to the Civil Court for execution. By this process both the moveable and immovable property of the Judgment Debtor i.e. the person/company against whom the award is passed can be attached. Also the Judgment Debtor can be arrested and put in prison. Earlier the awards were executed by the Revenue Recovery process alone.

    The Top management of the Staffing Industry needs to take the legal Process initiated by any Temporary Employees seriously as otherwise ultimately the Directors can be required to be present in Court,in the Execution process and even be detained in a Civil prison on failure of compliance subject to the above legal provisions.

    Managing Directors need to be very cautious and call for timely reports from their Compliance Team on the existence of Temporary Employee related litigation or disputes and direct their immediate resolution.Randomly they should directly test check such issues with their Legal counsel handling such cases and direct resolution by direct intervention as otherwise they will become answerable to the Courts of Law..This way the Staffing Company can ensure zero level of Litigation and keep sailing in smooth risk free Business.

    With Regards

    V.Sounder Rajan

    Legal Consultants for Staffing & Recruiting Industry

    E-mail : rajanassociates@eth,net,


    From India, Bangalore
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    (Fact Checked)-The user reply contains accurate information regarding the changes in the Industrial Disputes Act related to enforcing awards of labor court. The addition of sub-sections 9 and 10 to Section 11 is correctly presented along with the relevant provisions of the Civil Procedure Code for execution of decrees. The explanation of how the awards are now executable by a Civil Court is also well explained. (1 Acknowledge point)
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    (Fact Checked)-The user's reply contains accurate information regarding the changes brought about by the Industrial Disputes Act and the execution of awards by Labor Court or Tribunal through Civil Court. The details provided align with the legal procedures outlined in the Code of Civil Procedure, 1908. (1 Acknowledge point)
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  • Dear All,

    Immediate Legal questions for the Staffing & Recruiting Industry - The Sales Promotion Employees (Conditions of Service) Act, 1976 (No. 11 of 1976):

    When the Staffing Agency is engaging Contract/Temporary Employees to work for Clients in the Pharmaceutical Industry for their sales promotion business, is there any extra legal compliance to be done?

    A: Yes. There is an Act called The Sales Promotion Employees (Conditions of Service) Act, 1976 (No. 11 of 1976) which is An Act to regulate certain conditions of service of sales promotion employees in certain Establishments. It applies to every establishment engaged in the pharmaceutical industry.

    With Regards,

    V. Sounder Rajan
    Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry
    E-mail: rajanassociates@eth.net

    From India, Bangalore
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    (Fact Checked)-[response] The Sales Promotion Employees (Conditions of Service) Act, 1976 (No. 11 of 1976) applies to establishments engaged in the pharmaceutical industry, regulating conditions of service for sales promotion employees. It is essential to ensure compliance. (1 Acknowledge point)
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  • Dear All,

    Bonus to Contract Employees

    What is the primary liability and responsibility of the Principal Employer to pay Bonus to the Contractors' Employee?

    The definition of Employee in the Act is broad:

    (13) "Employee" means any person (other than an apprentice) employed on a salary or wage not exceeding [(Note: Subs. by Act No.67 of 1985, Sec.2, for the words "one thousand and six hundred rupees" (w.e.f. 7th November, 1985)) two thousand and five hundred rupees] per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment are express or implied;

    (14) "Employer" includes -
    (i) In relation to an establishment which is a factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and where a person has been named as a manager of the factory under Cl. (f) of sub-section (1) of Sec.7 of the Factories Act, 1948, the person named; and

    (ii) In relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent;

    Therefore, the Principal Employer will become liable due to having the ultimate control over the affairs of the establishment.

    With Regards,

    V. Sounder Rajan

    Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry

    E-mail: rajanassociates@eth.net

    From India, Bangalore
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  • IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

    ESI PENAL PROVISIONS

    What is the sanction, i.e., the punishment for non-compliance of the ESI Act?

    The ESI Act contains adequate provisions to penalize persons for violating its provisions. The relevant penal sections, in the matter of coverage, are sections 84, 85, 85-A, 86, and 86-A. Prosecutions under these sections can be filed in criminal courts, and adjudication of the same matter by the Employee's Insurance Court is not a condition precedent.

    The salient features of the aforementioned sections are provided herein:

    Section 84: This section, among other things, states that whoever, for the purpose of avoiding any payment to be made by himself under the said Act or enabling any other person to avoid any such payment, knowingly makes or causes to be made any false statement or false representations, shall be punishable with imprisonment for a term which may extend to six months or with a fine not exceeding two thousand rupees, or with both.

    Thus, if any employer, whose factory or establishment is coverable, knowingly makes a false representation/statement about the coverage, he is liable to be punished under this section.

    Section 85: Under this section, among other things, any person who is guilty of any contravention of or non-compliance with any of the requirements of the Act/rules/regulations shall be punishable with imprisonment for a term which may extend to one year or with a fine which may extend to four thousand rupees, or with both.

    Failure to cover a coverable entity is punishable under this provision. The pendency of the employer's application for exemption under sections 87, 88, and 90 of the Act does not grant any immunity to the employer from this provision, as has been held by the Kerala High Court in P. Renuka Vs. ESIC.

    Section 85-A: This section lays down that if any person, already convicted for any offence punishable under the Act, commits the same offence, he shall be punished with imprisonment for a term which may extend to two years and with a fine of five thousand rupees.

    Section 86: According to this section, the prosecution against an employer or any other person shall be instituted with the previous sanction of the Insurance Commissioner or any other authorized officer of the Corporation. Under this provision, the power to sanction prosecution has been delegated to the Regional Directors and in charges of sub-regions.

    A complaint for any offence under the Act has to be filed in writing in any court having jurisdiction but not inferior to that of the Metropolitan Magistrate or First Class Judicial Magistrate.

    The complaint should be filed against the right person. In Ranjit Kumar Nandy Vs. ESIC, a complaint was filed against a person, with appropriate sanction, but subsequently, the real name of the suspect was found to be different. On this fact, the Calcutta High Court dismissed the case.

    Section 86-A: If the person committing an offence under the ESI Act is a company (i.e., a body corporate including a firm and other associations of individuals), every person who was in charge of the company shall be liable to be proceeded against and punished unless it is proved that the offence was committed without his knowledge or despite the exercise of due diligence to prevent the same. Thus, any director, manager, secretary, etc., who has consented, connived, or was negligent in the matter of the commission of any such offence is guilty of that offence.

    With Regards,

    V. Sounder Rajan

    Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry

    E-mail: rajanassociates@eth.net

    From India, Bangalore
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    (Fact Checked)-The information provided in the user reply is accurate regarding the ESI Act penal provisions. The details on sections 84, 85, 85-A, 86, and 86-A are correct as per the Act. (1 Acknowledge point)
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  • IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

    What will be the risk if the Contractor engaged does not hold a valid CLRA license?

    In such a case, the Principal Employer loses the opportunity to distinguish his direct employees from those of the Contractors. He will also run the risk of the Contractor's employees claiming permanency.

    The risk is compounded because of the definition of 'workman' in section 2(1)(b) of the Contract Labour (Regulation and Abolition) Act, 1970, implies that if the workman is not hired through a contractor holding a valid license under the CLRA Act, he would be treated as a workman employed by the Principal Employer.

    It is always a safe bet to get a CLRA License. It is a Protective Shield.

    With Regards,

    V. Sounder Rajan

    Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry

    E-mail: rajanassociates@eth.net

    From India, Bangalore
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    (Fact Checked)-[The user reply is accurate based on the latest laws and regulations regarding Contract Labour (Regulation and Abolition) Act, 1970. The requirement for contractors to hold a valid CLRA license to distinguish direct employees and avoid risks of employees claiming permanency is correct.] (1 Acknowledge point)
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    (Fact Checked)-The reply provided is accurate and aligns with the Contract Labour (Regulation and Abolition) Act, 1970. It correctly highlights the risks associated with not having a valid CLRA license for contractors. Well done! (1 Acknowledge point)
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  • IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

    SUICIDE BY TEMPORARY EMPLOYEE

    In the Staffing Industry, there are cases of suicide by Temporary Employees for various reasons. In all cases, it will happen outside working hours and the workplace. How do we handle them?

    Even if there is a Personal Accident Policy, the insurer will not honor it for suicide. Therefore, the dependents will be left high and dry. The place of suicide being away from the workplace, the Staffing Company's liability is excluded unless the cause is traced to specific employment issues like harassment in the workplace (not personal problems like a love affair, etc.).

    Full and final settlement for the dependents will comprise unpaid salary till LWD, encashment of unavailed leave, and other payments, including gratuity to the dependents. For a married person, the wife and mother are legally entitled to get 50% each of the F & F.

    Apart from this, there is a social problem of the breadwinner dying. Staffing Companies need to address this social issue in the long run by providing some sort of Solatium Fund to meet such exigencies.

    With Regards,

    V. Sounder Rajan

    Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry

    Email: rajanassociates@eth.net

    From India, Bangalore
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    (Fact Checked)-The user's reply contains accurate information regarding the legal aspects and liabilities of staffing companies in cases of suicide by temporary employees. The details provided align with the legal framework outlined in the Industrial Disputes Act, 2010. (1 Acknowledge point)
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    (Fact Checked)-The user reply contains accurate information regarding the legal aspects and liabilities of staffing companies in cases of suicide by temporary employees. The mention of dependents' entitlements and the suggestion of a Solatium Fund are appropriate. (1 Acknowledge point)
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  • Dear Sir,

    I would like to know which are the top contract staffing companies in India. If you could provide me with statistics, it will be of great help. Also, what are the terms and conditions that have to be followed for contract staffing?

    Regards,
    Vinod

    From India, Pune
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    (Fact Checked)-The information you requested is not related to the legal compliance topic discussed. For details on the top contract staffing companies and terms, please refer to industry reports or HR resources. (1 Acknowledge point)
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  • Dear,

    Please see the following links for information on the top staffing consulting companies in India:

    1. [CiteHR - Top 10 Staffing Consulting Companies in India](https://www.citehr.com/70981-top-10-staffing-consulting-companies-india.html)

    2. [My Views! - Top Ten Staffing Agencies](http://itsmejayan.blogspot.com/2009/11/top-ten-staffing-agencies.html)

    Thank you,
    rajanassociates

    From India, Bangalore
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    Subject: CLRA Compliance Assessment

    Dear All,

    CLRA - Contract Labour (Regulation & Abolition) Act - Registration Compliance Assessment by Staffing Companies.

    In relation to the number of contracts with clients of staffing companies requiring CLRA compliance -

    CLRA REGISTRATION INDICATOR:

    5/5 Strong CLRA Compliance
    4/5 Above-average CLRA Compliance
    3/5 Average CLRA Compliance
    2/5 Below-average CLRA Compliance
    1/5 Poor CLRA Compliance

    Managing Directors and CEOs of staffing companies need to make a CLRA Compliance Assessment on a quarterly basis. The self-rating will help them assess the risk. A higher CLRA compliance rating will also be a selling point to gain a higher market share for the staffing company.

    Before the enforcement machinery of CLRA lands at your doorstep, the staffing company, through self-assessment, can achieve the rating of Strong and claim "Excellence in Compliance."

    With Regards,

    V. Sounder Rajan

    Advocates & Notaries - Legal Consultants for the Indian Staffing and Recruiting Industry

    E-mail: rajanassociates@eth.net

    From India, Bangalore
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    (Fact Checked)-The user's reply provides accurate information regarding CLRA Compliance Assessment for Staffing Companies. The self-rating system and the importance of maintaining strong compliance are well-highlighted. (1 Acknowledge point)
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