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A contractor has employed 30 persons for two separate activities in an establishment against two work orders having a common License. 15 workmen are engaged by the contractor in each activity. The Management has discontinued one activity and thereby termination of the contract of the contractor for this activity. The contractor has terminated the services of all the 15 workmen engaged in that activity. However, the other 15 workmen are continuing. Please suggest:

1.0) Whether there is a violation of the last come first go principle.
2.0) What formalities contractor is supposed to do at the time of termination of services of the 15 workmen?


From India, Delhi
Hitesh Shakya

No Employer is entitled to deny or hold Experience Letter (Service Certificate in legal terms) of an Employee or former employee. If the employee demands such an experience certificate during or after the term of employment, the organization is BOUND to issue one. To cite the labour law, 2J(3) of Kerala Shops and Commercial Establishments Act, 1961 mandates that the employer shall issue the service certificate in Form BE, within seven days from the receipt of such a request from the employee (every state has its own S&CE Act, and they will have similar provisions).
From India, Bhopal

1. There is no violation of the last come first go principle of ID Act because the activity itself is stopped and if you take the entire activity as a 'division' the entire division is closed and hence the workers in that division is retrenched.

2. The Contractor has to terminate the employees by complying the provisions of the ID Act (section 25F etc). Accordingly, he should give notice one month prior to the termination and also give compensation at the rate of 15 days wages for every completed year of service.

Alternatively, the contractor can deploy these 15 workers in some other plants. Since there exists master servant relationship only with the contractor and the workers he can deploy his workers anywhere he thinks okay.

From India, Kannur

The contractor has issued two work orders by an establishment but has taken single License.
Whereas,the contractor should have taken two license instead of one. At present situation the contractor has to retrench all the workmen engaged for the WO, which has been cancelled by the PE.
If has been two licence,the retrenchment doesn't require.
Now, the contractor has to terminate all the 15 workmen engaged in that activity by paying retrenchment compensation.
1.0) The violation of the last come first go principle applied, where the skill category is same.
2.0) The contractor is supposed to pay the retrenchment because all these 15 are covered under one license.
There is no need to pay, if the work under WO for which license has been obtained and take a fresh licence for the WO is in operation.

From India, Mumbai

I appreciate the observations of Prabhat but is there any nexus between work orders and licence? I understand that a principal employer can give one form V in favour of one Contractor and as such he can take one licence which will cover two kinds of work if the premises is one and the same. Again, when there is termination of one work order, the contractor can terminate (or redeploy) the workers engaged in that work by paying compensation as prescribed. Since there is no closure of the establishment (of the contractor) but there is complete closure of a particular division of the establishment, should the last come first go principle be applicable?

Again, the workers may be employed by the contractor for a particular project and, naturally, it could be on a fixed term contract. If so, when the project is completed, the workers should go even without getting any retrenchment compensation because termination of employment on completion of a project is not retrenchment, provided there contract of employment is for a certain project or period. This has to be verified with the terms and conditions of employment offered by the contractor.

From India, Kannur

Thank Mr. Madhu, The role of work order is prime because license is being issued on that basis. The terms & conditions of the job offered with value and time period is mentioned there over.
The nexus between work orders and license remained prime.
The contractor can take several licenses from the authority using single From V but there should be separate work orders.
The contractor can take the shelter under....The Section 2(00) (bb) of the Industrial Disputes Act, 1947, on expiry of fixed term of employment of an employee, refusal from service by the employer, does not amount to illegal termination of services of that employee. provided there exist separate work order or on expiry of license....................

From India, Mumbai


Thank you for providing information about the legal provisions in Kerala regarding the issuance of an Experience Letter or Service Certificate. It's important for both employers and employees to be aware of their rights and obligations in such matters. It's always recommended to refer to the specific labor laws and regulations in one's own jurisdiction, as they may vary.

From India, Bangalore
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