Hi, Please let me know what are the HR / LEGAL compliances involved in R&D companies, do we have to register under companies Act, kindly let me know.
From India, Bangalore
From India, Bangalore
Dear All
In one of our earlier posts we had highlighted the exemption provisions of the EPF Act which are once again highlighted :
Section 17 provides for it :
17. Power of exempt
(1) The appropriate government may by notification in the Official Gazette and subject to such conditions as may be specified in the notification exempt whether prospectively or retrospectively from the operation of all or any of the provisions of any Scheme :
(a) any establishment to which this Act applies if in the opinion of the appropriate government the rules of its provident fund with respect to the rates of contribution are not less favourable than those specified in section 6 and the employees are also in enjoyment of other provident fund benefits which on the whole are not less favourable to the employees than the benefits provided under this Act or any Scheme in relation to the employees in any other establishment of similar character or
(b) any establishment are in enjoyment of benefits in the nature of provident fund pension or gratuity and the appropriate government is of opinion that such benefits separately or jointly are on the whole not less favourable to such employees that the benefits provided under this Act or any Scheme in relation to the employees in any other establishment of a similar character :
Provided that no such exemption shall be made except after consultation with the Central Board which on such consultation shall forward its views on exemption to the appropriate government within such time limit as may be specified in the Scheme.
Sec 17 1 (a ) is with reference to exemption from PF Contribution and Sec 17 1 (b) is with reference to Pension and Gratuity.
A common question arises in preparing payroll of Temporary Employees by Staffing Entities whether exemption from coverage under EPF Act of any Temporary Employee is the right of the Staffing Company ?
Yes .But substantiating evidence by way of Documents has to provided to the EPF Department for claiming the exemption . Initially if the same is rejected by the Department then it is better to go in for the coverage thereby limiting the liability .Further the Delhi High Court in the case of J K COLLEGE OF NURSING & PARAMEDICALS Versus UOI & ORS decided on 24th May, 2011 by the Judgment of His Lordship Mr Justice RAJIV SAHAI ENDLAW, J.has held that if any establishment or employer claims to be not covered under the said Act, then it is for the employer to place sufficient cogent and convincing material before the designated authority in an enquiry under Section 7A of the Act, so as to satisfy the Authority with regard to non-applicability of the Act and further held that on failure to place any such material, the onus cannot be shifted on the EPF authorities to prove the applicability of the Act.
It was yet further held that the EPF authorities under no circumstances can be in possession of necessary records evidencing the extent of strength of employees in any particular establishment.
It was also held that in matters like this, the question of onus of proof is immaterial; the Provident Funds Commissioner is an authority created by the statute who has to administer the statutory provisions according to law and for this purpose he is entitled to collect material by resort to powers under various provisions of law including by examination of the books of accounts and others records of establishments.
Next time when any Employer is before the PF authority under Section 7 A the burden of proof is on the Employer and the Employer has to provide all details/ proof to claim exemption.Time need not be wasted to say the Authority has to prove their assertion.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
50In one of our earlier posts we had highlighted the exemption provisions of the EPF Act which are once again highlighted :
Section 17 provides for it :
17. Power of exempt
(1) The appropriate government may by notification in the Official Gazette and subject to such conditions as may be specified in the notification exempt whether prospectively or retrospectively from the operation of all or any of the provisions of any Scheme :
(a) any establishment to which this Act applies if in the opinion of the appropriate government the rules of its provident fund with respect to the rates of contribution are not less favourable than those specified in section 6 and the employees are also in enjoyment of other provident fund benefits which on the whole are not less favourable to the employees than the benefits provided under this Act or any Scheme in relation to the employees in any other establishment of similar character or
(b) any establishment are in enjoyment of benefits in the nature of provident fund pension or gratuity and the appropriate government is of opinion that such benefits separately or jointly are on the whole not less favourable to such employees that the benefits provided under this Act or any Scheme in relation to the employees in any other establishment of a similar character :
Provided that no such exemption shall be made except after consultation with the Central Board which on such consultation shall forward its views on exemption to the appropriate government within such time limit as may be specified in the Scheme.
Sec 17 1 (a ) is with reference to exemption from PF Contribution and Sec 17 1 (b) is with reference to Pension and Gratuity.
A common question arises in preparing payroll of Temporary Employees by Staffing Entities whether exemption from coverage under EPF Act of any Temporary Employee is the right of the Staffing Company ?
Yes .But substantiating evidence by way of Documents has to provided to the EPF Department for claiming the exemption . Initially if the same is rejected by the Department then it is better to go in for the coverage thereby limiting the liability .Further the Delhi High Court in the case of J K COLLEGE OF NURSING & PARAMEDICALS Versus UOI & ORS decided on 24th May, 2011 by the Judgment of His Lordship Mr Justice RAJIV SAHAI ENDLAW, J.has held that if any establishment or employer claims to be not covered under the said Act, then it is for the employer to place sufficient cogent and convincing material before the designated authority in an enquiry under Section 7A of the Act, so as to satisfy the Authority with regard to non-applicability of the Act and further held that on failure to place any such material, the onus cannot be shifted on the EPF authorities to prove the applicability of the Act.
It was yet further held that the EPF authorities under no circumstances can be in possession of necessary records evidencing the extent of strength of employees in any particular establishment.
It was also held that in matters like this, the question of onus of proof is immaterial; the Provident Funds Commissioner is an authority created by the statute who has to administer the statutory provisions according to law and for this purpose he is entitled to collect material by resort to powers under various provisions of law including by examination of the books of accounts and others records of establishments.
Next time when any Employer is before the PF authority under Section 7 A the burden of proof is on the Employer and the Employer has to provide all details/ proof to claim exemption.Time need not be wasted to say the Authority has to prove their assertion.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
Dear Friends
As per the ID Act Amendment Section 9 C was introduced .By that setting up of Grievance Redressal Machinery became a statutory need :
Section 9 C is extracted :
9C. (1) Every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal Committee for the resolution of disputes arising out of individual grievances.
(2) The Grievance Redressal Committee shall consist of equal number of members from the employer and the workmen.
(3) The chairperson of the Grievance Redressal Committee shall be selected from the employer and from among the workmen alternatively on rotation basis every year.
(4) The total number of members of the Grievance Redressal Committee shall not exceed more than six:
Provided that there shall be, as far as practicable one woman member if the Grievance Redressal Committee has two members and in case the number of members are more than two, the number of women members may be increased proportionately.
(5) Notwithstanding anything contained in this section, the setting up of Grievance Redressal Committee shall not affect the right of the workman to raise industrial dispute on the same matter under the provisions of this Act.
(6) The Grievance Redressal Committee may complete its proceedings within thirty days on receipt of a written application by or on behalf of the aggrieved party.
(7) The workman who is aggrieved of the decision of the Grievance Redressal Committee may prefer an appeal to the employer against the decision of Grievance Redressal Committee and the employer shall, within one month from the date of receipt of such appeal, dispose off the same and send a copy of his decision to the workman concerned.
HR professionals may provide their feedback in this thread on their experience in setting up this Grievance Redressal Machinery in their respective organization.
rajanlawfirm
From India, Madras
As per the ID Act Amendment Section 9 C was introduced .By that setting up of Grievance Redressal Machinery became a statutory need :
Section 9 C is extracted :
9C. (1) Every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal Committee for the resolution of disputes arising out of individual grievances.
(2) The Grievance Redressal Committee shall consist of equal number of members from the employer and the workmen.
(3) The chairperson of the Grievance Redressal Committee shall be selected from the employer and from among the workmen alternatively on rotation basis every year.
(4) The total number of members of the Grievance Redressal Committee shall not exceed more than six:
Provided that there shall be, as far as practicable one woman member if the Grievance Redressal Committee has two members and in case the number of members are more than two, the number of women members may be increased proportionately.
(5) Notwithstanding anything contained in this section, the setting up of Grievance Redressal Committee shall not affect the right of the workman to raise industrial dispute on the same matter under the provisions of this Act.
(6) The Grievance Redressal Committee may complete its proceedings within thirty days on receipt of a written application by or on behalf of the aggrieved party.
(7) The workman who is aggrieved of the decision of the Grievance Redressal Committee may prefer an appeal to the employer against the decision of Grievance Redressal Committee and the employer shall, within one month from the date of receipt of such appeal, dispose off the same and send a copy of his decision to the workman concerned.
HR professionals may provide their feedback in this thread on their experience in setting up this Grievance Redressal Machinery in their respective organization.
rajanlawfirm
From India, Madras
Immediate question for Staffing Entities
Dear All
What can keep Staffing Entities secure from litigation?
At the first instance when Legal notice or claim is received from the Temporary Employee or his/her Advocate the Staffing Entity without waiting for the Client to take a stand work out a settlement with the Temporary Employee in compliance of Legal Provisions of Sec 25(F) of the Industrial Disputes Act and corresponding provision of the Shops and Establishments Act. Staffing Entities need to take specialist legal advice from their own Legal Department or outside Counsel .The problem will be solved then and there thereby saving huge outflow later.
Unfortunately due to the monetary factor involved as to whether the Staffing Entity or the Client is to bear the liability the matter gets dragged to Court.In fact Staffing Entities hesitate to portray the correct position to the Client for fear of losing business.This must be avoided.
On seeing the trend of the Court decision wherever proper Retrenchment compensation is paid at the time of retrenchment i.e when the Temporary Employee is fired the Employers have been protected.
But every Employer will learn the Hard way.For example if a Temporary Employee has worked for 3 years when he is fired the Temporary Employee ought to be given one months notice or pay together with 45 days salary as retrenchment compensation.But this will not be paid and he will be sent just like that.In the event of the Temporary Employee going to Court and the case is pending for 2 years and claims for re-instatement with back wages and wins the case then the Employer has to pay 2 years back wages together with the retrenchment compensation or even give the .By this time the Staffing Entity would have finished their Contract with the Client and the whole liability would be on their head.In fact by this settlement whatever the Staffing Entity earned in the whole Contract will be lost.
The success of Staffing Business is to foresee this risk and curtail it.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
Dear All
What can keep Staffing Entities secure from litigation?
At the first instance when Legal notice or claim is received from the Temporary Employee or his/her Advocate the Staffing Entity without waiting for the Client to take a stand work out a settlement with the Temporary Employee in compliance of Legal Provisions of Sec 25(F) of the Industrial Disputes Act and corresponding provision of the Shops and Establishments Act. Staffing Entities need to take specialist legal advice from their own Legal Department or outside Counsel .The problem will be solved then and there thereby saving huge outflow later.
Unfortunately due to the monetary factor involved as to whether the Staffing Entity or the Client is to bear the liability the matter gets dragged to Court.In fact Staffing Entities hesitate to portray the correct position to the Client for fear of losing business.This must be avoided.
On seeing the trend of the Court decision wherever proper Retrenchment compensation is paid at the time of retrenchment i.e when the Temporary Employee is fired the Employers have been protected.
But every Employer will learn the Hard way.For example if a Temporary Employee has worked for 3 years when he is fired the Temporary Employee ought to be given one months notice or pay together with 45 days salary as retrenchment compensation.But this will not be paid and he will be sent just like that.In the event of the Temporary Employee going to Court and the case is pending for 2 years and claims for re-instatement with back wages and wins the case then the Employer has to pay 2 years back wages together with the retrenchment compensation or even give the .By this time the Staffing Entity would have finished their Contract with the Client and the whole liability would be on their head.In fact by this settlement whatever the Staffing Entity earned in the whole Contract will be lost.
The success of Staffing Business is to foresee this risk and curtail it.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
Dear
Pls see
9C. (1) Every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal Committee for the resolution of disputes arising out of individual grievances.
(4) The total number of members of the Grievance Redressal Committee shall not exceed more than six:
Pointing out to " one or more Grievance Redressal Committee" and "The total number of members of the Grievance Redressal Committee shall not exceed more than six".
rajanlawfirm
From India, Madras
Pls see
9C. (1) Every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal Committee for the resolution of disputes arising out of individual grievances.
(4) The total number of members of the Grievance Redressal Committee shall not exceed more than six:
Pointing out to " one or more Grievance Redressal Committee" and "The total number of members of the Grievance Redressal Committee shall not exceed more than six".
rajanlawfirm
From India, Madras
Thx Sir,
but i want to know that One Grievance Redressal Committee of six members is sufficient for 1000 employees or we have to maintain more Committee's, if yes then what will be the criteria.
Thanks & Regards
Manish
From India, Patiala
but i want to know that One Grievance Redressal Committee of six members is sufficient for 1000 employees or we have to maintain more Committee's, if yes then what will be the criteria.
Thanks & Regards
Manish
From India, Patiala
Dear
The Section does not provide any cap .Depending upon the class of workmen you can have multiple GRM.It is for the Management to decide.Starting with one GRM may be ideal.If the complaints are not manageable then you can go in for the multiple mode.
rajanlawfirm
From India, Madras
The Section does not provide any cap .Depending upon the class of workmen you can have multiple GRM.It is for the Management to decide.Starting with one GRM may be ideal.If the complaints are not manageable then you can go in for the multiple mode.
rajanlawfirm
From India, Madras
Immediate concern for Staffing Entities
Dear All
The Gujarat High Court in the matter of Chemical vs Secretary decided on 26 April, 2011 by HONOURABLE MR.JUSTICE H.K.RATHOD on describing the possibilities of a Contract worker raising an Industrial Dispute before the Industrial Dispute has listed out the following contingencies:
In this connection, it will be necessary to note that even if contract labour is in vogue in a concern, employees employed by the contractor can validly raise the following contentions which may buttress their grievance that even though they are the direct employees of the principal employer, they have wrongly been treated as employees of the contractor who is not a real intermediary. Such types of disputes under the ID Act can legitimately be raised in the following cases which are mentioned by way of illustrations only without suggesting that they are exhaustive;
(1) when it is alleged that the employees were directly employed by the principal employer and subsequently contract system was introduced for the same activities resulting in snapping of relationship of employee-employer between the workmen on the one hand and the main employer on the other, thus, violating sec. 9A of the ID Act.
(2) When there is absence of proper registration of concerned principal employer under the Contract Labour Act.
(3) When there is absence of proper licensing of the concerned contractor who employs contract labour at a given point of time.
(4) Even though principal employer may be registered employer under the Act and the concerned contractor may be licensed contractor under the Act, his licence may not cover the activity which is carried on by the contract labour.
(5) Even though principal employer may be registered employer under the Contract Labour Act and the contractor may be having a valid license to employ contract labour, under the Contract Labour Act, for a given activity, still licence issued to him may not cover exact number of permissible employees employed by him meaning thereby member of permissible employees under the licence may be less than number of employees actually employed and qua such excess number of employees, protective umbrella of licence would not be available to the contractor so far as the activity covered by the licence is concerned.
(6) Even though principal employer may be registered employer and the contractor may be licensed contractor and the workmen employed by him might be covered by the permissible number of employees as recognised by the licence and even though such activities may be covered by licence, in fact and in substance, control including disciplinary control and supervision of the entire activity may be with the principal employer and the wages of the employees may in fact be coming out of coffers of the principal employer, and may be getting paid through the contractor who may operate as a mere conduit pipe. Such type of control, supervision and payments being outside the scope of sec. 10(2) read with secs. 20 and 21 of the Contract Labour Act would give rise to a legitimate contention that the principal employer is in fact and substance the real employer and the so called contract is an eye wash."
Staffing Industry professionals need to note the above Industrial adjudication possibilities and steer clear of them.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
Dear All
The Gujarat High Court in the matter of Chemical vs Secretary decided on 26 April, 2011 by HONOURABLE MR.JUSTICE H.K.RATHOD on describing the possibilities of a Contract worker raising an Industrial Dispute before the Industrial Dispute has listed out the following contingencies:
In this connection, it will be necessary to note that even if contract labour is in vogue in a concern, employees employed by the contractor can validly raise the following contentions which may buttress their grievance that even though they are the direct employees of the principal employer, they have wrongly been treated as employees of the contractor who is not a real intermediary. Such types of disputes under the ID Act can legitimately be raised in the following cases which are mentioned by way of illustrations only without suggesting that they are exhaustive;
(1) when it is alleged that the employees were directly employed by the principal employer and subsequently contract system was introduced for the same activities resulting in snapping of relationship of employee-employer between the workmen on the one hand and the main employer on the other, thus, violating sec. 9A of the ID Act.
(2) When there is absence of proper registration of concerned principal employer under the Contract Labour Act.
(3) When there is absence of proper licensing of the concerned contractor who employs contract labour at a given point of time.
(4) Even though principal employer may be registered employer under the Act and the concerned contractor may be licensed contractor under the Act, his licence may not cover the activity which is carried on by the contract labour.
(5) Even though principal employer may be registered employer under the Contract Labour Act and the contractor may be having a valid license to employ contract labour, under the Contract Labour Act, for a given activity, still licence issued to him may not cover exact number of permissible employees employed by him meaning thereby member of permissible employees under the licence may be less than number of employees actually employed and qua such excess number of employees, protective umbrella of licence would not be available to the contractor so far as the activity covered by the licence is concerned.
(6) Even though principal employer may be registered employer and the contractor may be licensed contractor and the workmen employed by him might be covered by the permissible number of employees as recognised by the licence and even though such activities may be covered by licence, in fact and in substance, control including disciplinary control and supervision of the entire activity may be with the principal employer and the wages of the employees may in fact be coming out of coffers of the principal employer, and may be getting paid through the contractor who may operate as a mere conduit pipe. Such type of control, supervision and payments being outside the scope of sec. 10(2) read with secs. 20 and 21 of the Contract Labour Act would give rise to a legitimate contention that the principal employer is in fact and substance the real employer and the so called contract is an eye wash."
Staffing Industry professionals need to note the above Industrial adjudication possibilities and steer clear of them.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
Immediate concern for Staffing Entities Dear All Are there any State Government Statutes providing for claiming permanency? A:Yes.The State Government of Tamil Nadu by Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 has conferred this power on the Industrial Adjudicators.The State of Assam has also the Assam Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1985 which provides for employees to claim permanency.But there is a procedure for it. These enactments were enacted before the advent of globalization . With Regards V.Sounder Rajan Advocates & Notaries & Legal Consultants E-mail : rajanassociates@eth,net, -9025792684
From India, Bangalore
From India, Bangalore
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