Dear All
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
What can keep Staffing Companies secure from litigation wherever a claim is received from the Temporary Employee ?
At the first instance when Legal notice or claim is received from the temporary Employee without waiting for the Client to take a stand work out a settlement with the candidate in compliance of Legal Provisions of Sec 25(F) of the Industrial Disputes Act and corresponding provision of the Shops and Establishments Act.
This is where specialist legal advice is required .The problem will be solved then and there.Due to the monetary factor involved as to who is to bear the liability whether Client or the Staffing Company the matter gets dragged to Court and Staffing Companies will have to pay through their nose. In cases where the Client is made to bear the liability the Staffing Entity will lose the business.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
50IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
What can keep Staffing Companies secure from litigation wherever a claim is received from the Temporary Employee ?
At the first instance when Legal notice or claim is received from the temporary Employee without waiting for the Client to take a stand work out a settlement with the candidate in compliance of Legal Provisions of Sec 25(F) of the Industrial Disputes Act and corresponding provision of the Shops and Establishments Act.
This is where specialist legal advice is required .The problem will be solved then and there.Due to the monetary factor involved as to who is to bear the liability whether Client or the Staffing Company the matter gets dragged to Court and Staffing Companies will have to pay through their nose. In cases where the Client is made to bear the liability the Staffing Entity will lose the business.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
Dear All
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
The Supreme Court on 14-12-2010 in the matter of General Manager (OSD), Bengal Nagpur Cotton Mills Rajnandgaon Vs. Bharat Lal & anr decided has laid down the law on Two of the well-recognized tests to find out whether the Contract Labour are the direct employees of the principal employer are
(i) Whether the Principal Employer pays the salary instead of the contractor; and
(ii) Whether the Principal Employer controls and supervises the work of the employee.
Now it is therefore for the Principal Employer [Client] and Contractor [Staffing Company] to avoid the risk of the Contract Employees being termed as Direct Employees of the Principal Employer [Client].
This is definitely a Grey area where Specialist Legal advice will be required for the Staffing Companies on a continuing basis .Top Management of every Staffing Company needs to have a compliance Audit on applying the test enunciated by the Apex Court on each and every contract.
On the other side Principal Employers also need to conduct a similar Compliance Audit for availing a 100 % compliance by their Contract so that unwittingly they are not caught napping and running the risk of the Contract Employees being termed as Direct Employees of the Principal Employer [Client].
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
From India, Bangalore
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
The Supreme Court on 14-12-2010 in the matter of General Manager (OSD), Bengal Nagpur Cotton Mills Rajnandgaon Vs. Bharat Lal & anr decided has laid down the law on Two of the well-recognized tests to find out whether the Contract Labour are the direct employees of the principal employer are
(i) Whether the Principal Employer pays the salary instead of the contractor; and
(ii) Whether the Principal Employer controls and supervises the work of the employee.
Now it is therefore for the Principal Employer [Client] and Contractor [Staffing Company] to avoid the risk of the Contract Employees being termed as Direct Employees of the Principal Employer [Client].
This is definitely a Grey area where Specialist Legal advice will be required for the Staffing Companies on a continuing basis .Top Management of every Staffing Company needs to have a compliance Audit on applying the test enunciated by the Apex Court on each and every contract.
On the other side Principal Employers also need to conduct a similar Compliance Audit for availing a 100 % compliance by their Contract so that unwittingly they are not caught napping and running the risk of the Contract Employees being termed as Direct Employees of the Principal Employer [Client].
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
From India, Bangalore
Dear All
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
Mere filing of an Appeal before the Appellate Authority will not operate as Stay of Recovery of EPF dues.
EPF Organization has come out with this Important Circular
EMPLOYEES’ PROVIDENT FUND ORGANISATION
(Ministry of Labour & Employment, Govt. of India), Head Office – Bhavishya Nidhl Bhawan, 14, Bhlkaiji Camaji Place, New Delhi – 110 066.
LC/4/Cir. Judgement/2011/ 19184 dated 25/07/2011
Sub: Forwarding of landmark judgment delivered by Hon’ble Division Bench of Gujarat High Court in LPA No. 12/2010 in SCA No. 3347/2009 reg.
Sir,
Please find enclosed herewith a copy of judgment dated 15/6/2011 delivered by Hon’ble Division Bench of Gujarat High Court in the matter of EPFO Vs. Rollwell Forge Ltd. on the issue of initiating recovery action before expiry of limitation period of appeal prescribed under Sec.7-1 of the Act. While overturning the decision of Single Bench,
Hon’ble Division Bench has held that:
I. In the absence of any specific provision in the Act prohibiting or restraining the authorities from taking any further action of recovery of the amount due and payable by the employer, it is always permissible for the authorities to proceed ahead without waiting for the expiry of the statutory time period of appeal as provided under Section 7-1 of the Act. Any other interpretation in this regard would render provisions and the object of the Act otiose.
2. Mere filing of appeal without obtaining any relief from the Appellate authority shall not preclude or prohibit the authorities to proceed further in the matter for recovery of the amount.
The above judgment may be utilized for expediting recovery action and relied upon in similar situation cases.
End: As above
Yours faithfully,
(Anils S. Dixit)
Regional PF Commissioner-I(Legal)
For Staffing Entities the High Court apart from laying down the law that mere filing of appeal without obtaining any relief from the Appellate authority shall not preclude or prohibit the authorities to proceed further in the matter for recovery of the amount the Circular has also a serious impact on Staffing Companies as immediately on fixation of the liability the Department can also go for recovery action as in the absence of any specific provision in the Act prohibiting or restraining the authorities from taking any further action of recovery of the amount due and payable by the employer, it is always permissible for the authorities to proceed ahead without waiting for the expiry of the statutory time period of appeal as provided under Section 7-1 of the Act.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
From India, Bangalore
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
Mere filing of an Appeal before the Appellate Authority will not operate as Stay of Recovery of EPF dues.
EPF Organization has come out with this Important Circular
EMPLOYEES’ PROVIDENT FUND ORGANISATION
(Ministry of Labour & Employment, Govt. of India), Head Office – Bhavishya Nidhl Bhawan, 14, Bhlkaiji Camaji Place, New Delhi – 110 066.
LC/4/Cir. Judgement/2011/ 19184 dated 25/07/2011
Sub: Forwarding of landmark judgment delivered by Hon’ble Division Bench of Gujarat High Court in LPA No. 12/2010 in SCA No. 3347/2009 reg.
Sir,
Please find enclosed herewith a copy of judgment dated 15/6/2011 delivered by Hon’ble Division Bench of Gujarat High Court in the matter of EPFO Vs. Rollwell Forge Ltd. on the issue of initiating recovery action before expiry of limitation period of appeal prescribed under Sec.7-1 of the Act. While overturning the decision of Single Bench,
Hon’ble Division Bench has held that:
I. In the absence of any specific provision in the Act prohibiting or restraining the authorities from taking any further action of recovery of the amount due and payable by the employer, it is always permissible for the authorities to proceed ahead without waiting for the expiry of the statutory time period of appeal as provided under Section 7-1 of the Act. Any other interpretation in this regard would render provisions and the object of the Act otiose.
2. Mere filing of appeal without obtaining any relief from the Appellate authority shall not preclude or prohibit the authorities to proceed further in the matter for recovery of the amount.
The above judgment may be utilized for expediting recovery action and relied upon in similar situation cases.
End: As above
Yours faithfully,
(Anils S. Dixit)
Regional PF Commissioner-I(Legal)
For Staffing Entities the High Court apart from laying down the law that mere filing of appeal without obtaining any relief from the Appellate authority shall not preclude or prohibit the authorities to proceed further in the matter for recovery of the amount the Circular has also a serious impact on Staffing Companies as immediately on fixation of the liability the Department can also go for recovery action as in the absence of any specific provision in the Act prohibiting or restraining the authorities from taking any further action of recovery of the amount due and payable by the employer, it is always permissible for the authorities to proceed ahead without waiting for the expiry of the statutory time period of appeal as provided under Section 7-1 of the Act.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
From India, Bangalore
Dear All
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
PF Department has recently come out with the following Circular:
EMPLOYEES’ PROVIDENT FUND ORGANISATION
(Ministry of Labour & Employment, Govt. of India), Head Office
Bhavishya Nidhl Bhawan, 14, Bhlkaiji Camaji Place, New Delhi – 110 066.
No. Coord./4(6)2003/Clarification/Vol.II/2482 Dated: 21.06.2011
Sub: Forwarding of Landmark Judgment delivered by the Hon’ble Division Bench of Madhya Pradesh High Court on the issue of considerable components of Basic Wages – regarding
Sir,
Please find enclosed herewith a copy of Judgment dated 24.03.2011 in the matter of Montage Enterprises Pvt. Ltd versus Employees Provident Fund, Indore & one another delivered by the Hon’ble Divisional Bench of Madhya Pradesh High Court Bench at Gwalior whereby, the Hon’ble Court has laid down a principle for treatment of certain allowances like Conveyance/Transportation allowance, Special Allowance etc. as component of “Basic Wages” for the purpose of Provident Fund liabilities if the same are being paid uniformly, necessarily and ordinarily to all employees. The same may be utilized as per merits of the case.
Yours faithfully
End: As above.
(Anita S. Dixit)
Regional PF Commissioner-I (Coord.)
Staffing Entities need to adhere to this dictum of Hon’ble Divisional Bench of Madhya Pradesh High Court Bench at Gwalior whereby, the Hon’ble Court has laid down a principle for treatment of certain allowances like Conveyance/Transportation allowance, Special Allowance etc. as component of “Basic Wages” for the purpose of Provident Fund liabilities if the same are being paid uniformly, necessarily and ordinarily to all employees apart from laying down the law .
The Department can re-open the Returns for earlier period of non compliance and the penal provisions will be incurred.
The rate of penal damages for belated payment of EPF dues is as follows:
If the period of default less than 2 months -5 %
If the period of default is 2 months above but less than 4 months – 10 %
If the period of default is 4 months above but less than 6 months – 15 %
If the period of default is 6 months above–25 %
The above is in addition to 12 % simple interest .
Apart from the above the further consequences for default are:
Attachment of Bank Accounts
Realization of dues from Debtors[ Garnishee Order]
Attachment of moveable and immovable properties.
Arrest and detention in Prison.
Action under section 406/409 of the Indian Penal Code[ Criminal Law] and Section 110 of Cr .P.C
Prosecution.Prosecution for Non payment of contributions normally end in favour of the Department.Mandatory punishment of detention in Prison is provided .
Managing Director or CEO of Staffing entities on their part need to direct their Head of Compliance to file adherence reports on the Circular issued by the Department and arrange for a Board of Directors directed Compliance Audit on the following EPF Circulars :
1. No.: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011
2. No. Coord./4(6)2003/Clarification/Vol.II/2482 Dated: 21.06.2011
If a negative report on compliance of the above EPF Department Circulars is indicated by the Board directed compliance Audit Team then immediate remedial action is to be taken to avoid penal action by the Department.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
From India, Bangalore
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
PF Department has recently come out with the following Circular:
EMPLOYEES’ PROVIDENT FUND ORGANISATION
(Ministry of Labour & Employment, Govt. of India), Head Office
Bhavishya Nidhl Bhawan, 14, Bhlkaiji Camaji Place, New Delhi – 110 066.
No. Coord./4(6)2003/Clarification/Vol.II/2482 Dated: 21.06.2011
Sub: Forwarding of Landmark Judgment delivered by the Hon’ble Division Bench of Madhya Pradesh High Court on the issue of considerable components of Basic Wages – regarding
Sir,
Please find enclosed herewith a copy of Judgment dated 24.03.2011 in the matter of Montage Enterprises Pvt. Ltd versus Employees Provident Fund, Indore & one another delivered by the Hon’ble Divisional Bench of Madhya Pradesh High Court Bench at Gwalior whereby, the Hon’ble Court has laid down a principle for treatment of certain allowances like Conveyance/Transportation allowance, Special Allowance etc. as component of “Basic Wages” for the purpose of Provident Fund liabilities if the same are being paid uniformly, necessarily and ordinarily to all employees. The same may be utilized as per merits of the case.
Yours faithfully
End: As above.
(Anita S. Dixit)
Regional PF Commissioner-I (Coord.)
Staffing Entities need to adhere to this dictum of Hon’ble Divisional Bench of Madhya Pradesh High Court Bench at Gwalior whereby, the Hon’ble Court has laid down a principle for treatment of certain allowances like Conveyance/Transportation allowance, Special Allowance etc. as component of “Basic Wages” for the purpose of Provident Fund liabilities if the same are being paid uniformly, necessarily and ordinarily to all employees apart from laying down the law .
The Department can re-open the Returns for earlier period of non compliance and the penal provisions will be incurred.
The rate of penal damages for belated payment of EPF dues is as follows:
If the period of default less than 2 months -5 %
If the period of default is 2 months above but less than 4 months – 10 %
If the period of default is 4 months above but less than 6 months – 15 %
If the period of default is 6 months above–25 %
The above is in addition to 12 % simple interest .
Apart from the above the further consequences for default are:
Attachment of Bank Accounts
Realization of dues from Debtors[ Garnishee Order]
Attachment of moveable and immovable properties.
Arrest and detention in Prison.
Action under section 406/409 of the Indian Penal Code[ Criminal Law] and Section 110 of Cr .P.C
Prosecution.Prosecution for Non payment of contributions normally end in favour of the Department.Mandatory punishment of detention in Prison is provided .
Managing Director or CEO of Staffing entities on their part need to direct their Head of Compliance to file adherence reports on the Circular issued by the Department and arrange for a Board of Directors directed Compliance Audit on the following EPF Circulars :
1. No.: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011
2. No. Coord./4(6)2003/Clarification/Vol.II/2482 Dated: 21.06.2011
If a negative report on compliance of the above EPF Department Circulars is indicated by the Board directed compliance Audit Team then immediate remedial action is to be taken to avoid penal action by the Department.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
From India, Bangalore
Dear All
NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
Clients want the Staffing Entities you to Hire and fire? Is it possible?
Yes when Staffing Companies have their Associates on their permanent rolls and can be moved from one Client to another .This is a long shot. In the present Industrial Law scenario this is not feasible. The Indian Staffing Industry should aim for this.
In that scenario the Staffing Entity can have the following dedicated class of workmen/Staff on their pay roll coming within the following parameters
Classification of workmen.--(a) Workmen /Staff shall be classified as --
(1) permanent,
(2) Probationers,
(3) badlis,
(4) temporary,
(5) casual,
(6) apprentices.
(b) A “permanent workman” is a workman who has been engaged on a permanent basis and includes any person who has satisfactorily completed a probationary period of three months in the same or another occupation in the industrial establishment, including breaks due to sickness, accident, leave, lock-out, strike (not being an illegal strike) or involuntary closure of the establishment.
(c) A “probationer” is a workman who is provisionally employed to fill a permanent vacancy in a post and has not completed three months’ service therein. If a permanent employee is employed as a probationer in a new post he may, at any time during the probationary period of three months, be reverted to his old permanent post.
(d) A “badli” is a workman who is appointed in the post of a permanent workman or probationer who is temporarily absent.
(e) A “temporary workman” is a workman who has been engaged for work which is of an essentially temporary nature likely to be finished within a limited period.
(f) A “casual workman” is a workman whose employment is of a casual nature.
(g) An “apprentice” is a learner who is paid an allowance during the period of his training.
The Recruitment of personnel for deputation for the Staffing Entity should be on the above classification and the letter of Appointment [LOA] needs to be issued on the classification. The terms of Termination needs to be embedded in the LOA .Of course specialist legal help will be required to mould the Hiring and Firing process.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684-9025792634
From India, Bangalore
NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
Clients want the Staffing Entities you to Hire and fire? Is it possible?
Yes when Staffing Companies have their Associates on their permanent rolls and can be moved from one Client to another .This is a long shot. In the present Industrial Law scenario this is not feasible. The Indian Staffing Industry should aim for this.
In that scenario the Staffing Entity can have the following dedicated class of workmen/Staff on their pay roll coming within the following parameters
Classification of workmen.--(a) Workmen /Staff shall be classified as --
(1) permanent,
(2) Probationers,
(3) badlis,
(4) temporary,
(5) casual,
(6) apprentices.
(b) A “permanent workman” is a workman who has been engaged on a permanent basis and includes any person who has satisfactorily completed a probationary period of three months in the same or another occupation in the industrial establishment, including breaks due to sickness, accident, leave, lock-out, strike (not being an illegal strike) or involuntary closure of the establishment.
(c) A “probationer” is a workman who is provisionally employed to fill a permanent vacancy in a post and has not completed three months’ service therein. If a permanent employee is employed as a probationer in a new post he may, at any time during the probationary period of three months, be reverted to his old permanent post.
(d) A “badli” is a workman who is appointed in the post of a permanent workman or probationer who is temporarily absent.
(e) A “temporary workman” is a workman who has been engaged for work which is of an essentially temporary nature likely to be finished within a limited period.
(f) A “casual workman” is a workman whose employment is of a casual nature.
(g) An “apprentice” is a learner who is paid an allowance during the period of his training.
The Recruitment of personnel for deputation for the Staffing Entity should be on the above classification and the letter of Appointment [LOA] needs to be issued on the classification. The terms of Termination needs to be embedded in the LOA .Of course specialist legal help will be required to mould the Hiring and Firing process.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684-9025792634
From India, Bangalore
Dear HR Professionals
NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
Recently the Gujarat High Court in the case of Medical vs Dashrathsinh decided on 10 May, 2011 has held
“If the workman is retrenched by an oral order or communication or he is simply asked not to come for duty, the employer will be required to lead tangible and substantive evidence to prove compliance of Clauses (a) and (b) of Section 25-F of the Act.”
The above reference is to the Industrial Disputes Act .Therefore Staffing Industry Professionals need to impress upon their Clients not to indulge in the practice of oral order or communication of termination of the Temporary Employee without getting clearance from them for termination as the burden of proof of Statutory Compliance would rest on the Employer. In case the Staffing Company points out the hand to the Client then the Principal Employer will become liable to compensate the Staffing Company for any out flow .Of course in such a scenario the Staffing Company may lose the Client .In the context of Staffing Companies working on wafer thin margins the liability arising on the Staffing Company by Client generated retrenchment arising out of an oral order or communication will eat into their Margins and ultimately claims emerging out of illegal retrenchment arising out of an oral order or communication may result in the Staffing Contracts ending with minus margins.
The success of a Staffing Company is to anticipate contingencies of illegal retrenchment arising out of an oral order or communication by Client and include clauses in the Staffing Contract to pass on the liability to the Client. For this the Staffing Company needs to have well tailored Staffing Contracts with a solid legal foundation.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684-9025792634
From India, Bangalore
NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
Recently the Gujarat High Court in the case of Medical vs Dashrathsinh decided on 10 May, 2011 has held
“If the workman is retrenched by an oral order or communication or he is simply asked not to come for duty, the employer will be required to lead tangible and substantive evidence to prove compliance of Clauses (a) and (b) of Section 25-F of the Act.”
The above reference is to the Industrial Disputes Act .Therefore Staffing Industry Professionals need to impress upon their Clients not to indulge in the practice of oral order or communication of termination of the Temporary Employee without getting clearance from them for termination as the burden of proof of Statutory Compliance would rest on the Employer. In case the Staffing Company points out the hand to the Client then the Principal Employer will become liable to compensate the Staffing Company for any out flow .Of course in such a scenario the Staffing Company may lose the Client .In the context of Staffing Companies working on wafer thin margins the liability arising on the Staffing Company by Client generated retrenchment arising out of an oral order or communication will eat into their Margins and ultimately claims emerging out of illegal retrenchment arising out of an oral order or communication may result in the Staffing Contracts ending with minus margins.
The success of a Staffing Company is to anticipate contingencies of illegal retrenchment arising out of an oral order or communication by Client and include clauses in the Staffing Contract to pass on the liability to the Client. For this the Staffing Company needs to have well tailored Staffing Contracts with a solid legal foundation.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684-9025792634
From India, Bangalore
Dear All The Tamil Nadu Govt has come out with amendments to the State CLRA Rules . Pls see the Attachment .Compliance of the rules is necessitated for the Staffing Industry. rajanlawfirm
From India, Madras
From India, Madras
Dear All
NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
In our recent post we had highlighted the need for the Staffing Entity to comply with Sec 25 F of the Industrial Disputes Act while retrenching a Temporary Employee by an oral order or communication or he is simply asked not to come for duty, the employer will be required to lead tangible and substantive evidence to prove compliance of Clauses (a) and (b) of Section 25-F of the Ac as decided by the Gujarat High Court in the case of Medical vs Dashrathsinh decided on 10 May, 2011.
There is a request from an experienced Staffing Professional from one of the prime players in the Industry to highlight the relevance of Section 25 F of the ID Act vis-a-vis the Staffing Industry .The same is dealt with in this post:
For Compliance of Sec 25 F of the ID Act the following is to be done :
i. The employee of the Staffing Entity sent for work to the Client on oral or verbal termination by the Client or Staffing Entity must be given a one month's notice in writing, indicating the reasons for retrenchment. The retrenchment can take effect only after the notice period has expired, or if the employee of the Staffing Entity sent for work to the Client on oral or verbal termination by the Client or Staffing Entity has been paid wages in lieu of such notice.
ii. The employee of the Staffing Entity sent for work to the Client on oral or verbal termination by the Client or Staffing Entity must be paid, at the time of retrenchment, compensation, which is equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.
iii. A notice must be served in the prescribed manner, on the appropriate Government. (Section 25F of the ID Act).It has become a practice in the Industry to dispense with this Notice.Government can take steps to delete this provision .
Absolutely it is a water tight process and a safeguard for avoidance of wrongful Termination claims/litigation arising out of on oral or verbal termination by the Client or Staffing Entity .In the field you will find Clients will hesitate to minimum provide the 15 days’ notice for terminating the candidate.
Developing a well secured Exit/termination Policy for any Staffing Company is an intangible asset and a Marketing advantage .
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
In our recent post we had highlighted the need for the Staffing Entity to comply with Sec 25 F of the Industrial Disputes Act while retrenching a Temporary Employee by an oral order or communication or he is simply asked not to come for duty, the employer will be required to lead tangible and substantive evidence to prove compliance of Clauses (a) and (b) of Section 25-F of the Ac as decided by the Gujarat High Court in the case of Medical vs Dashrathsinh decided on 10 May, 2011.
There is a request from an experienced Staffing Professional from one of the prime players in the Industry to highlight the relevance of Section 25 F of the ID Act vis-a-vis the Staffing Industry .The same is dealt with in this post:
For Compliance of Sec 25 F of the ID Act the following is to be done :
i. The employee of the Staffing Entity sent for work to the Client on oral or verbal termination by the Client or Staffing Entity must be given a one month's notice in writing, indicating the reasons for retrenchment. The retrenchment can take effect only after the notice period has expired, or if the employee of the Staffing Entity sent for work to the Client on oral or verbal termination by the Client or Staffing Entity has been paid wages in lieu of such notice.
ii. The employee of the Staffing Entity sent for work to the Client on oral or verbal termination by the Client or Staffing Entity must be paid, at the time of retrenchment, compensation, which is equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.
iii. A notice must be served in the prescribed manner, on the appropriate Government. (Section 25F of the ID Act).It has become a practice in the Industry to dispense with this Notice.Government can take steps to delete this provision .
Absolutely it is a water tight process and a safeguard for avoidance of wrongful Termination claims/litigation arising out of on oral or verbal termination by the Client or Staffing Entity .In the field you will find Clients will hesitate to minimum provide the 15 days’ notice for terminating the candidate.
Developing a well secured Exit/termination Policy for any Staffing Company is an intangible asset and a Marketing advantage .
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
Dear All
LEGAL UPDATE -EPF prosecution statistics
The Minister of State for Labour and Employment Shri Mallikarjun Kharge in reply to a question in the Lok Sabha during August 2011 has provided the following :
As per the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952, it is mandatory for the establishments covered under the Act to submit the Provident Fund returns as per the time stipulated in this respect. However, there are cases where the management of various companies do not submit returns or submit the returns after due dates. As a result, the workers become victims as they do not get up-to-date statement of their Provident Fund accounts in the form of account slips in time.
LIST OF COMPANIES (STATE-WISE) WHERE PF RETURNS ARE PENDING
S. No. Name of the State No. of establishments defaulted in submission of PF returns
1. Andhra Pradesh 20213
2 Bihar 927
3. Chhattisgarh 570
4. Delhi 11842
5. Goa 500
6. Gujarat 6165
7. Haryana 4508
8. Himachal Pradesh 1230
9. Jharkhand 1573
10. Karnataka 8068
11. Kerala 3696
12. Madhya Pradesh 3489
13. Maharashtra 18666
14. North East Regions 78
15. Orissa 1780
16. Punjab 7285
17. Rajasthan 2237
18. Tamil Nadu 13734
19. Uttar Pradesh 8757
20. Uttaranchal 638
21. West Bengal 4209
TOTAL 120165
As per section 14(2) of the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 read with para 76 of the Employees’ Provident Fund Scheme, 1952 default in submission of return is a punishable offence and liable for prosecution.
The number of prosecution cases filed against chronic defaulting establishments including non-submission of returns are mentioned is given below:-
PROSECUTION CASES – AS ON 31.03.2010
Region EPF Emp- Pension ELDI
Dehradun 4 4 4
Delhi – North 382 264 210
Delhi – South 300 130 181
Chandigarh 424 251 452
Ludhiana 498 306 319
Shimla 75 0 0
Kanpur 152 45 40
Meerut 55 55 55
Patna 1546 1336 1336
Faridabad 334 302 296
Gurgaon 187 177 186
Jaipur 334 80 85
Ahmedabad 1419 216 203
Baroda 489 346 442
Indore 1378 1013 1412
Surat 369 161 167
Kandivali 517 77 76
Mumbai- I Bandra 657 327 344
Mumbai– II Thane 70 70 70
Nagpur 202 172 77
Pune 1270 1252 1272
Raipur 516 283 356
Bangalore 491 436 400
Gulbarga 549 370 353
Mangalore 561 243 248
Panaji 168 178 153
Peenya 178 178 175
Bhubaneshwar 906 477 617
Guntur 344 326 317
Hyderabad 2219 1780 1343
Nizamabad 178 149 139
Chennai 270 233 250
Coimbatore 640 303 306
Madurai 467 321 237
Tambaram 223 227 226
Thiruvananthapuram 1318 954 759
Guwahati 647 470 589
Jalpaiguri 838 838 838
Kolkata 1746 431 417
Ranchi 856 854 726
During the year 2010-11, 1,56,578 complaints were received of which 1,38,745 complaints were disposed off.
The Hon'ble Minister further stated that the Employees’ Provident Fund Organisation deals with the Employees Provident Fund (EPF) and not PPF. Rate of interest is declared on the basis of earnings and balance available in the Interest Suspense Account. Since balance in the Interest Suspense Account was sufficient to allow 9.5 percent rate of interest, hence 9.5 percent rate of interest was declared for the year 2010-11.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
LEGAL UPDATE -EPF prosecution statistics
The Minister of State for Labour and Employment Shri Mallikarjun Kharge in reply to a question in the Lok Sabha during August 2011 has provided the following :
As per the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952, it is mandatory for the establishments covered under the Act to submit the Provident Fund returns as per the time stipulated in this respect. However, there are cases where the management of various companies do not submit returns or submit the returns after due dates. As a result, the workers become victims as they do not get up-to-date statement of their Provident Fund accounts in the form of account slips in time.
LIST OF COMPANIES (STATE-WISE) WHERE PF RETURNS ARE PENDING
S. No. Name of the State No. of establishments defaulted in submission of PF returns
1. Andhra Pradesh 20213
2 Bihar 927
3. Chhattisgarh 570
4. Delhi 11842
5. Goa 500
6. Gujarat 6165
7. Haryana 4508
8. Himachal Pradesh 1230
9. Jharkhand 1573
10. Karnataka 8068
11. Kerala 3696
12. Madhya Pradesh 3489
13. Maharashtra 18666
14. North East Regions 78
15. Orissa 1780
16. Punjab 7285
17. Rajasthan 2237
18. Tamil Nadu 13734
19. Uttar Pradesh 8757
20. Uttaranchal 638
21. West Bengal 4209
TOTAL 120165
As per section 14(2) of the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 read with para 76 of the Employees’ Provident Fund Scheme, 1952 default in submission of return is a punishable offence and liable for prosecution.
The number of prosecution cases filed against chronic defaulting establishments including non-submission of returns are mentioned is given below:-
PROSECUTION CASES – AS ON 31.03.2010
Region EPF Emp- Pension ELDI
Dehradun 4 4 4
Delhi – North 382 264 210
Delhi – South 300 130 181
Chandigarh 424 251 452
Ludhiana 498 306 319
Shimla 75 0 0
Kanpur 152 45 40
Meerut 55 55 55
Patna 1546 1336 1336
Faridabad 334 302 296
Gurgaon 187 177 186
Jaipur 334 80 85
Ahmedabad 1419 216 203
Baroda 489 346 442
Indore 1378 1013 1412
Surat 369 161 167
Kandivali 517 77 76
Mumbai- I Bandra 657 327 344
Mumbai– II Thane 70 70 70
Nagpur 202 172 77
Pune 1270 1252 1272
Raipur 516 283 356
Bangalore 491 436 400
Gulbarga 549 370 353
Mangalore 561 243 248
Panaji 168 178 153
Peenya 178 178 175
Bhubaneshwar 906 477 617
Guntur 344 326 317
Hyderabad 2219 1780 1343
Nizamabad 178 149 139
Chennai 270 233 250
Coimbatore 640 303 306
Madurai 467 321 237
Tambaram 223 227 226
Thiruvananthapuram 1318 954 759
Guwahati 647 470 589
Jalpaiguri 838 838 838
Kolkata 1746 431 417
Ranchi 856 854 726
During the year 2010-11, 1,56,578 complaints were received of which 1,38,745 complaints were disposed off.
The Hon'ble Minister further stated that the Employees’ Provident Fund Organisation deals with the Employees Provident Fund (EPF) and not PPF. Rate of interest is declared on the basis of earnings and balance available in the Interest Suspense Account. Since balance in the Interest Suspense Account was sufficient to allow 9.5 percent rate of interest, hence 9.5 percent rate of interest was declared for the year 2010-11.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
Subject - Latest supreme court decision on contract labour
Dear Friends
Here is the latest decision of the Hon'ble Supreme Court of India of their Lordships Markandey Katju, Chandramauli Kr. Prasad in the matter of Bhilwara Dugdh Utpadak Sahakari ... vs Vinod Kumar Sharma Dead By Lrs & decided on on 1 September, 2011 wherein the Honble Supreme Court was deciding an Appeal which had been filed against the impugned judgments dated 23.08.2004 and dated 21.09.2004 passed by the High Court of Judicature at Rajasthan.
The Apex Court has held as follows :
"This Appeal reveals the unfortunate state of affairs prevailing in the field of labour relations in our country. In order to avoid their liability under various labour statutes employers are very often resorting to subterfuge by trying to show that their employees are, in fact, the employees of a contractor. It is high time that this subterfuge must come to an end. Labour statutes were meant to protect the employees/workmen because it was realised that the employers and the employees are not on an equal bargaining position. Hence, protection of employees was required so that they may not be exploited. However, this new technique of subterfuge has been adopted by some employers in recent years in order to deny the rights of the workmen under various labour statutes by showing that the concerned workmen are not their employees but are the employees/workmen of a contractor, or that they are merely daily wage or short term or casual employees when in fact they are doing the work of regular employees. This Court cannot countenance such practices any more. Globalization/liberalization in the name of growth cannot be at the human cost of exploitation of workers. The facts of the case are given in the judgment of the High Court dated 23.08.2004 and we are not repeating the same here. It has been clearly stated therein that subterfuge was resorted to by the appellant to show that the workmen concerned were only workmen of a contractor. The Labour Court has held that the workmen were the employees of the appellant and not employees of the contractor. Cogent reasons have been given by the Labour Court to come to this finding. The Labour Court has held that, in fact, the concerned workmen were working under the orders of the officers of the appellant, and were being paid Rs 70/- per day, while the workmen/employees of the contractor were paid Rs. 56/- per day.
We are of the opinion that the High Court has rightly refused to interfere with this finding of fact recorded by the Labour court.
The Judgment of this Court in Steel Authority of India vs. National Union Waterfront Workers (2001) 7 SCC 1 has no application in the present case. In that decision the question was whether in view of Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 the employees of contractors stood automatically absorbed in the service of the principal employer. Overruling the decision in Air India Statutory Corporation vs. United Labour Union, (1997) 9 SCC 377 this Court held that they did not.
In the present case that is not the question at all. Here the finding of fact of the Labour Court is that the respondents were not the contractor's employees but were the employees of the appellant. The SAIL judgment (Supra) applies where the employees were initially employees of the contractor and later claim to be absorbed in the service of the principal employer. That judgment was considerating the effect of the notification under Section 10 of the Act. That is not the case here. Hence, that decision is clearly distinguishable.
Mr. Puneet Jain, learned counsel for the appellant submitted that the High Court has wrongly held that the appellant resorted to a subterfuge, when there was no such finding by the Labour Court. The Labour Court has found that the plea of the employer that the respondents were employees of a contractor was not correct, and in fact they were the employees of the appellant. In our opinion, therefore, it is implicit in this finding that there was subterfuge by the appellant to avoid its liabilities under various labour statutes. For the reasons given above, there is no infirmity in the impugned judgment of the High Court. The Appeal is dismissed accordingly. No costs. "
This decision can be considered to be a landmark decision and importance need to be given to the finding in the Judgment of their Lordships "In order to avoid their liability under various labour statutes employers are very often resorting to subterfuge by trying to show that their employees are, in fact, the employees of a contractor. It is high time that this subterfuge must come to an end. Labour statutes were meant to protect the employees/workmen because it was realised that the employers and the employees are not on an equal bargaining position. Hence, protection of employees was required so that they may not be exploited. However, this new technique of subterfuge has been adopted by some employers in recent years in order to deny the rights of the workmen under various labour statutes by showing that the concerned workmen are not their employees but are the employees/workmen of a contractor, or that they are merely daily wage or short term or casual employees when in fact they are doing the work of regular employees. This Court cannot countenance such practices any more. Globalization/liberalization in the name of growth cannot be at the human cost of exploitation of workers.The facts of the case are given in the judgment of the High Court dated 23.08.2004 and we are not repeating the same here. It has been clearly stated therein that subterfuge was resorted to by the appellant to show that the workmen concerned were only workmen of a contractor. The Labour Court has held that the workmen were the employees of the appellant and not employees of the contractor. Cogent reasons have been given by the Labour Court to come to this finding. The Labour Court has held that, in fact, the concerned workmen were working under the orders of the officers of the appellant, and were being paid Rs 70/- per day, while the workmen/employees of the contractor were paid Rs. 56/- per day. "
HR Professionals need to take note of this Landmark decision ..
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
Dear Friends
Here is the latest decision of the Hon'ble Supreme Court of India of their Lordships Markandey Katju, Chandramauli Kr. Prasad in the matter of Bhilwara Dugdh Utpadak Sahakari ... vs Vinod Kumar Sharma Dead By Lrs & decided on on 1 September, 2011 wherein the Honble Supreme Court was deciding an Appeal which had been filed against the impugned judgments dated 23.08.2004 and dated 21.09.2004 passed by the High Court of Judicature at Rajasthan.
The Apex Court has held as follows :
"This Appeal reveals the unfortunate state of affairs prevailing in the field of labour relations in our country. In order to avoid their liability under various labour statutes employers are very often resorting to subterfuge by trying to show that their employees are, in fact, the employees of a contractor. It is high time that this subterfuge must come to an end. Labour statutes were meant to protect the employees/workmen because it was realised that the employers and the employees are not on an equal bargaining position. Hence, protection of employees was required so that they may not be exploited. However, this new technique of subterfuge has been adopted by some employers in recent years in order to deny the rights of the workmen under various labour statutes by showing that the concerned workmen are not their employees but are the employees/workmen of a contractor, or that they are merely daily wage or short term or casual employees when in fact they are doing the work of regular employees. This Court cannot countenance such practices any more. Globalization/liberalization in the name of growth cannot be at the human cost of exploitation of workers. The facts of the case are given in the judgment of the High Court dated 23.08.2004 and we are not repeating the same here. It has been clearly stated therein that subterfuge was resorted to by the appellant to show that the workmen concerned were only workmen of a contractor. The Labour Court has held that the workmen were the employees of the appellant and not employees of the contractor. Cogent reasons have been given by the Labour Court to come to this finding. The Labour Court has held that, in fact, the concerned workmen were working under the orders of the officers of the appellant, and were being paid Rs 70/- per day, while the workmen/employees of the contractor were paid Rs. 56/- per day.
We are of the opinion that the High Court has rightly refused to interfere with this finding of fact recorded by the Labour court.
The Judgment of this Court in Steel Authority of India vs. National Union Waterfront Workers (2001) 7 SCC 1 has no application in the present case. In that decision the question was whether in view of Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 the employees of contractors stood automatically absorbed in the service of the principal employer. Overruling the decision in Air India Statutory Corporation vs. United Labour Union, (1997) 9 SCC 377 this Court held that they did not.
In the present case that is not the question at all. Here the finding of fact of the Labour Court is that the respondents were not the contractor's employees but were the employees of the appellant. The SAIL judgment (Supra) applies where the employees were initially employees of the contractor and later claim to be absorbed in the service of the principal employer. That judgment was considerating the effect of the notification under Section 10 of the Act. That is not the case here. Hence, that decision is clearly distinguishable.
Mr. Puneet Jain, learned counsel for the appellant submitted that the High Court has wrongly held that the appellant resorted to a subterfuge, when there was no such finding by the Labour Court. The Labour Court has found that the plea of the employer that the respondents were employees of a contractor was not correct, and in fact they were the employees of the appellant. In our opinion, therefore, it is implicit in this finding that there was subterfuge by the appellant to avoid its liabilities under various labour statutes. For the reasons given above, there is no infirmity in the impugned judgment of the High Court. The Appeal is dismissed accordingly. No costs. "
This decision can be considered to be a landmark decision and importance need to be given to the finding in the Judgment of their Lordships "In order to avoid their liability under various labour statutes employers are very often resorting to subterfuge by trying to show that their employees are, in fact, the employees of a contractor. It is high time that this subterfuge must come to an end. Labour statutes were meant to protect the employees/workmen because it was realised that the employers and the employees are not on an equal bargaining position. Hence, protection of employees was required so that they may not be exploited. However, this new technique of subterfuge has been adopted by some employers in recent years in order to deny the rights of the workmen under various labour statutes by showing that the concerned workmen are not their employees but are the employees/workmen of a contractor, or that they are merely daily wage or short term or casual employees when in fact they are doing the work of regular employees. This Court cannot countenance such practices any more. Globalization/liberalization in the name of growth cannot be at the human cost of exploitation of workers.The facts of the case are given in the judgment of the High Court dated 23.08.2004 and we are not repeating the same here. It has been clearly stated therein that subterfuge was resorted to by the appellant to show that the workmen concerned were only workmen of a contractor. The Labour Court has held that the workmen were the employees of the appellant and not employees of the contractor. Cogent reasons have been given by the Labour Court to come to this finding. The Labour Court has held that, in fact, the concerned workmen were working under the orders of the officers of the appellant, and were being paid Rs 70/- per day, while the workmen/employees of the contractor were paid Rs. 56/- per day. "
HR Professionals need to take note of this Landmark decision ..
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
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