Fixed term employment allowed in Blue collared sphere of Contract Staffing Industry
The Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 (Rules) notified by the Ministry of Labour and Employment (Ministry), vide notification dated 16 March 2018 (Notification).
Labour reforms introduced.
Fixed Term employment permitted across all sectors in the manufacturing field.
Industrial Employment (Standing Orders) Central Rules, 1946 amended by Notification.
Condition introduced no existing permanent employees can be converted to fixed term employees.
23The Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 (Rules) notified by the Ministry of Labour and Employment (Ministry), vide notification dated 16 March 2018 (Notification).
Labour reforms introduced.
Fixed Term employment permitted across all sectors in the manufacturing field.
Industrial Employment (Standing Orders) Central Rules, 1946 amended by Notification.
Condition introduced no existing permanent employees can be converted to fixed term employees.
In the Blue Collared sphere as per the definition Fixed Term Employee in the amended Industrial Employment (Standing Orders) Central Rules, 1946 – by Notification sub para (h) A “fixed term employment workman” is a workman who has been engaged on the basis of a written contract of employment for a fixed period:
Provided that-
(a) his hours of work, wages, allowances and other benefits shall not be less than that of a permanent workman; and
(b) he shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him even if his period of employment does not extend to the qualifying period of employment required in the statute.
Points to be noted:-
1. There should be a written contract i.e either an appointment letter with the acceptance of the fixed Term Employee or a Fixed Term Employment Agreement or Contract signed by both the employer and Fixed Term Employee.
2. There should be a fixed period i.e starting date and end date in the written contract i.e either an appointment letter with the acceptance of the fixed Term Employee or a Fixed Term Employment Agreement or Contract signed by both the employer and Fixed Term Employee.
3. Hours of work, wages, allowances and other benefits shall not be less than that of a permanent workman employed for the same job.
4. Fixed Term Employee shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him even if his period of employment does not extend to the qualifying period of employment required in the statute.
V.Sounder Rajan
HR & Employment Law Attorney
Specializing for Recruiting and Contract Staffing Industry
M: 98401-42164
Provided that-
(a) his hours of work, wages, allowances and other benefits shall not be less than that of a permanent workman; and
(b) he shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him even if his period of employment does not extend to the qualifying period of employment required in the statute.
Points to be noted:-
1. There should be a written contract i.e either an appointment letter with the acceptance of the fixed Term Employee or a Fixed Term Employment Agreement or Contract signed by both the employer and Fixed Term Employee.
2. There should be a fixed period i.e starting date and end date in the written contract i.e either an appointment letter with the acceptance of the fixed Term Employee or a Fixed Term Employment Agreement or Contract signed by both the employer and Fixed Term Employee.
3. Hours of work, wages, allowances and other benefits shall not be less than that of a permanent workman employed for the same job.
4. Fixed Term Employee shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him even if his period of employment does not extend to the qualifying period of employment required in the statute.
V.Sounder Rajan
HR & Employment Law Attorney
Specializing for Recruiting and Contract Staffing Industry
M: 98401-42164
The first case of Outsourcing reported in India was way back in 1967 ?
GHATGE & PATIL CONCERN’S EMPLOYEES’ UNION Vs. GHATGE & PATIL (TRANSPORTS) PRIVATE LTD. 22/08/1967 –Supreme Court
GHATGE & PATIL (TRANSPORTS) carried on the business of transport and removal of goods by road. It owned a fleet of trucks and employed drivers and cleaners to run them. In 1963 the company, finding difficulty in observing the provisions of the Motor Transport Workers Act 1961, introduced a scheme whereby the trucks, instead of being run by the company itself were hired out to contractors at a fixed rate per mile.
Employees of the company who were engaged in running the trucks resigned their jobs and most of them who had for- merely been drivers became contractors under the scheme.
The workmen's’ Union however raised a dispute asking for the reinstatement of the ex-employees who had been given work on contract basis.
The Tribunal held that the contract system could not be said to be an unfair labour practice, for the ex-employees were never coerced or forced to resign their jobs, and they got more benefits from the contract system than from their original contract of employment.
In appeal to the Supreme Court the Union contended that the ex-employees of the company continued to be workmen notwithstanding that they were posed as independent contractors, that the beneficent legislation conceived in the interests of transport workers was being set at naught by the company, and that the setting up of the contract system amounted to unfair labour practice.
…… to be continued
V.Sounder Rajan
HR & Employment Law Attorney
Specializing for Recruiting and Contract Staffing Industry
M: 98401-42164
GHATGE & PATIL CONCERN’S EMPLOYEES’ UNION Vs. GHATGE & PATIL (TRANSPORTS) PRIVATE LTD. 22/08/1967 –Supreme Court
GHATGE & PATIL (TRANSPORTS) carried on the business of transport and removal of goods by road. It owned a fleet of trucks and employed drivers and cleaners to run them. In 1963 the company, finding difficulty in observing the provisions of the Motor Transport Workers Act 1961, introduced a scheme whereby the trucks, instead of being run by the company itself were hired out to contractors at a fixed rate per mile.
Employees of the company who were engaged in running the trucks resigned their jobs and most of them who had for- merely been drivers became contractors under the scheme.
The workmen's’ Union however raised a dispute asking for the reinstatement of the ex-employees who had been given work on contract basis.
The Tribunal held that the contract system could not be said to be an unfair labour practice, for the ex-employees were never coerced or forced to resign their jobs, and they got more benefits from the contract system than from their original contract of employment.
In appeal to the Supreme Court the Union contended that the ex-employees of the company continued to be workmen notwithstanding that they were posed as independent contractors, that the beneficent legislation conceived in the interests of transport workers was being set at naught by the company, and that the setting up of the contract system amounted to unfair labour practice.
…… to be continued
V.Sounder Rajan
HR & Employment Law Attorney
Specializing for Recruiting and Contract Staffing Industry
M: 98401-42164
The Govt of India. had abolished the EPF APPELLATE TRIBUNAL at Delhi and Bengaluru vide notification dated 26-05-2017 .
Earlier Appeals against order under Section 7 A of EPF Act were filed before the EPF APPELLATE TRIBUNAL.
Now all cases to be filed before EPF APPELLATE TRIBUNAL at Delhi and Bengaluru will be heard by CENTRAL GOVERNMENT INDUSTRIAL cum LABOUR COURTS ( CGIT ) situated at 22 places in India.
Directions of the Ministry is attached .
V.Sounder Rajan
HR & Employment Law Attorney
Specializing for Recruiting and Contract Staffing Industry
M: 98401-42164
Earlier Appeals against order under Section 7 A of EPF Act were filed before the EPF APPELLATE TRIBUNAL.
Now all cases to be filed before EPF APPELLATE TRIBUNAL at Delhi and Bengaluru will be heard by CENTRAL GOVERNMENT INDUSTRIAL cum LABOUR COURTS ( CGIT ) situated at 22 places in India.
Directions of the Ministry is attached .
V.Sounder Rajan
HR & Employment Law Attorney
Specializing for Recruiting and Contract Staffing Industry
M: 98401-42164
IMPORTANT POINTS IN GHATGE & PATIL (TRANSPORTS) CASE
i) Since the drivers had resigned their jobs they could not be said to be employed in the Motor Transport undertaking. The word ‘employed’ in the definition of Motor Transport Act. Worker is not used in the sense of using the services of a person but rather in the sense of keeping a person in one’s service. Persons who are independent and hire a vehicle for their own operation paying a fixed hire per mile from their earnings cannot be said to be persons employed in the Motor Transport Undertaking in the sense of persons kept in service. The operators were therefore not Motor Transport Workers within the definition.
(ii) There was no bar in law to the introduction of the con- tract system. A person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has without the arrangement, no proper means of obeying. This, of course, he can do only so long as he does not break that or any other law.
(iii) Those who resigned did so voluntarily and they got substantial benefits under the new system.
(iv) The Tribunal was right in its conclusion that there was no exploitation of the ex-employees. There was thus no unfair labour practice. The present case was not analogous to the case of contract labour when employment of labour through a contractor or middleman put the labour at a disadvantage in collective bargaining and thus robbed labour of an important weapon in its armoury.
..... to be contd
V.Sounder Rajan
HR & Employment Law Attorney
Specializing for Recruiting and Contract Staffing Industry
M: 98401-42164
i) Since the drivers had resigned their jobs they could not be said to be employed in the Motor Transport undertaking. The word ‘employed’ in the definition of Motor Transport Act. Worker is not used in the sense of using the services of a person but rather in the sense of keeping a person in one’s service. Persons who are independent and hire a vehicle for their own operation paying a fixed hire per mile from their earnings cannot be said to be persons employed in the Motor Transport Undertaking in the sense of persons kept in service. The operators were therefore not Motor Transport Workers within the definition.
(ii) There was no bar in law to the introduction of the con- tract system. A person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has without the arrangement, no proper means of obeying. This, of course, he can do only so long as he does not break that or any other law.
(iii) Those who resigned did so voluntarily and they got substantial benefits under the new system.
(iv) The Tribunal was right in its conclusion that there was no exploitation of the ex-employees. There was thus no unfair labour practice. The present case was not analogous to the case of contract labour when employment of labour through a contractor or middleman put the labour at a disadvantage in collective bargaining and thus robbed labour of an important weapon in its armoury.
..... to be contd
V.Sounder Rajan
HR & Employment Law Attorney
Specializing for Recruiting and Contract Staffing Industry
M: 98401-42164
please suggest, can we approch cgit to get stay order against 7Q i.e interest amount lived by epf authorities. If any judgement copies please share
From India, Hyderabad
From India, Hyderabad
You need to check with CGIT -Hyderabad The Jurisdiction of CGIT is follows:-JURISDICTION OF CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL-CUM-LABOUR COURTS (CGIT-cum-LCs)
Sl. No. Name of CGIT-cum-LC State-wise jurisdiction
1 Mumbai-I Maharashtra (partly), Goa (partly), U.T of Daman and Diu (partly)
2 Mumbai-II Maharashtra (partly), Goa (partly), U.T of Daman and Diu (partly)
3 Nagpur Maharashtra (partly), Goa (partly), U.T of Daman and Diu (partly)
4 Dhanbad-I Bihar (partly), Jharkhand (partly)
5 Dhanbad-II Bihar (partly), Jharkhand (partly)
6 Jabalpur Madhya Pradesh, Chhattisgarh
7 Kanpur Uttar Pradesh (partly), Uttarakhand
8 New Delhi-I Union Territory of Delhi only
9 New Delhi-II Haryana (partly), Uttar Pradesh (partly)
10 Asansol West Bengal (partly), Bihar (partly)
11 Kolkata West Bengal
12 Chandigarh-I U.T. of Chandigarh, Punjab, HP, J and K , Haryana (partly)-Odd No
13 Chandigarh-II U.T. of Chandigarh, Punjab, HP, J and K , Haryana (partly)-Even No
14 Jaipur Rajasthan
15 Lucknow Uttar Pradesh (partly), Uttarakhand
16 Bangalore Karnataka
17 Ernakulam Kerala, U.T. of Lakshadweep
18 Chennai Tamil Nadu, U.T. of Puducherry
19 Hyderabad Andhra Pradesh, Telangana
20 Bhubaneswar Odisha
21 Guwahati North Eastern States
22 Ahmedabad Gujarat
As the Jurisdiction is newly created local practices play a major role.
Sl. No. Name of CGIT-cum-LC State-wise jurisdiction
1 Mumbai-I Maharashtra (partly), Goa (partly), U.T of Daman and Diu (partly)
2 Mumbai-II Maharashtra (partly), Goa (partly), U.T of Daman and Diu (partly)
3 Nagpur Maharashtra (partly), Goa (partly), U.T of Daman and Diu (partly)
4 Dhanbad-I Bihar (partly), Jharkhand (partly)
5 Dhanbad-II Bihar (partly), Jharkhand (partly)
6 Jabalpur Madhya Pradesh, Chhattisgarh
7 Kanpur Uttar Pradesh (partly), Uttarakhand
8 New Delhi-I Union Territory of Delhi only
9 New Delhi-II Haryana (partly), Uttar Pradesh (partly)
10 Asansol West Bengal (partly), Bihar (partly)
11 Kolkata West Bengal
12 Chandigarh-I U.T. of Chandigarh, Punjab, HP, J and K , Haryana (partly)-Odd No
13 Chandigarh-II U.T. of Chandigarh, Punjab, HP, J and K , Haryana (partly)-Even No
14 Jaipur Rajasthan
15 Lucknow Uttar Pradesh (partly), Uttarakhand
16 Bangalore Karnataka
17 Ernakulam Kerala, U.T. of Lakshadweep
18 Chennai Tamil Nadu, U.T. of Puducherry
19 Hyderabad Andhra Pradesh, Telangana
20 Bhubaneswar Odisha
21 Guwahati North Eastern States
22 Ahmedabad Gujarat
As the Jurisdiction is newly created local practices play a major role.
In our earlier post we have referred to GHATGE & PATIL (TRANSPORTS) CASE .Every HR person will ask Is the GHATGE & PATIL (TRANSPORTS) CASE relevant now then why refer to it ?
Actually in that Judgment LAISEZ FAIRE WAS GIVEN A SEAL OF APPROVAL
The Apex Court observed on the whole, however, it is clear that the Company has not done anything illegal.
A person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has, without the arrangement, no proper means of obeying. This, of course, he can do only so long as he does not break that or any other law.
ULTIMATELY the judgment became irrelevant - by the enactment of Contract Labour ( Abolition & Regulation ) Act 1970
So the Judgment of the Apex Court has been overruled-MEANS IT IS JUST referred to FOR tracing history of outsourcing in India .
So Outsourcing is a very old term but in recent times it has acquired a new meaning in Business.
V.Sounder Rajan
HR & Employment Law Attorney
Specializing for Recruiting and Contract Staffing Industry
M: 98401-42164
Actually in that Judgment LAISEZ FAIRE WAS GIVEN A SEAL OF APPROVAL
The Apex Court observed on the whole, however, it is clear that the Company has not done anything illegal.
A person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has, without the arrangement, no proper means of obeying. This, of course, he can do only so long as he does not break that or any other law.
ULTIMATELY the judgment became irrelevant - by the enactment of Contract Labour ( Abolition & Regulation ) Act 1970
So the Judgment of the Apex Court has been overruled-MEANS IT IS JUST referred to FOR tracing history of outsourcing in India .
So Outsourcing is a very old term but in recent times it has acquired a new meaning in Business.
V.Sounder Rajan
HR & Employment Law Attorney
Specializing for Recruiting and Contract Staffing Industry
M: 98401-42164
Fixed Term Employment is also part of Temp Staffing
MOE & L through notification dated 16 March 2018 (Notification), had notified the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 (Rules).
It amended the Industrial Employment (Standing Orders) Central Rules, 1946 to introduce a significant labour reform – allowing fixed term employment for all sectors.
Fixed Term Employee means 'a workman who has been engaged on the basis of a written contract of employment for a fixed period: provided that, (a) his hours of work, wages, allowances, and other benefits shall not be less than that of a permanent workman; and (b) he shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him even if his period of employment does not extend to the qualifying period of employment required in the statute.
MOE & L through notification dated 16 March 2018 (Notification), had notified the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 (Rules).
It amended the Industrial Employment (Standing Orders) Central Rules, 1946 to introduce a significant labour reform – allowing fixed term employment for all sectors.
Fixed Term Employee means 'a workman who has been engaged on the basis of a written contract of employment for a fixed period: provided that, (a) his hours of work, wages, allowances, and other benefits shall not be less than that of a permanent workman; and (b) he shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him even if his period of employment does not extend to the qualifying period of employment required in the statute.
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