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vathiraja271481
51

Dear Mr. Ajay,

1. As regards to bonus, you have to pay an employee (other than an Apprentice), who is employed on a salary or wage not exceeding Rs. 10,000/- per month, as per section 2 (13) of The Payment of Bonus Act, 1965, provided he has worked for 30 days in the organisation for that accounting year, as per section 8 of the ibid act. And, every employer is bound to pay his employee a minimum bonus of 8.33% of his earned wages or Rs. 100/-, whichever is higher, whether the company is having any allocable surplus or not as per section 10 of the said act. So, the allocable surplus provision as told by Mr. Manjunath comes in to play only when paying the maximum bonus of 20%.

From the above, it is evident that a contract labour is eligible for getting the bonus on fulfilling the above terms with the Contractor and as rightly suggested by Mr. Manjunath, the onus of paying the bonus to contract labour rests with the Contractor and the Principal Employer will only interfere when the contractor fails to pay the bonus to his employees.

2. As regards to the retrenchment benefits of workman, who completes one year of service with the contractor, the following is to be given: -

(a) His left over salary/wage, as on date of relieving.

(b) 15 days wage/salary for every completed year of service as per section 25F of Industrial Disputes Act, 1947, provided he has completed 240 days of continuous service in that year.

(c) One month notice to be given before his retrenchment or one month notice pay in lieu as per section 25F of the said act.

(d) A minimum bonus of 8.33% of his wage for the left over period, if any, as per the Payment of Bonus Act, 1965.

(e) Since contract labours, in general, are not given leave during their employment, they may be given leave salary as per their eligibility. In construction field, generally they are given leave pay @ 1 day wage for every completed 20 days of service (As per Factories Act, 1947).

(f) Their PF accumulations to be paid in Form 19 and Form 10 (C) as per clause (d) or (e) of sub- para 1 of paragraph 69 of EPF Scheme, 1952.

For Migrant workmen, you need to give displacement allowance, outward/inward journey allowances, wage for the period of journey from his place of residence to work place and vice versa, in addition to other retrench benefits as narrated above, as per Inter-State Migrant Workmen Act, 1979..

Hope, your doubts will be cleared to an extent.

P. Vathiraj

+91 9585 333 344

From India
saswatabanerjee
2358

Retrenchment compensation is coming under industrial dispute act and not under contract labour act or payment of wages act. For termination of individual labour (or even for closure of the contractor business), retrenchment compensation does not apply.
From India, Mumbai
vathiraja271481
51

Dear Mr. Saswata Banerjee,

You are absolutely right that the retrenchment compensation is coming under industrial dispute act and no where it is argued it to be covered in Contract Labour Act. And every employee, whether it is express or implied, whether he is permanent, temporary or on contract employment, the retrench benefit applies to one and all.

Where the Contract Labour Act, Migrant Workman Act, BOCW Act, Shops and Establishment Act, and Mines Act talks about the terms and conditions of respective field, The Industrial Dispute Act discusses about the industrial dispute between the parties, which is clearly mentioned in clause `k' of section 2 of Industrial Dispute Act, 1947. And, please remember, the Industrial Dispute Act never talk about Employee but talk about workman, the definition of which is given in clause `s' of section 2 of the said act.

For the benefit of all the readers, I am enclosing important updates on labour law judgement of Feb 12. Case study No. 9 will clear the doubts on the applicability of retrenchment benefits even to casual labour in the case of BSNL in 2012.

P. Vathiraj

From India
Attached Files (Download Requires Membership)
File Type: pdf Labour-Law-Update-February-2012.pdf (183.3 KB, 197 views)

saswatabanerjee
2358

I read the judgement. It is for casual workers not contract workers. It does not give anything to show that contract workers have to be given retrenchment compensation
From India, Mumbai
saiconsult
1897

A contract worker is normally appointed for a fixed tenure or for the duration of the project . If so, he is not entitled to any retrenchment compensation on the termination or on the project coming to an end.
B.Saikumar
Mumbai

From India, Mumbai
vathiraja271481
51

Dear Saswata,
I am enclosing one more judgement copy which will clarify the issue on retrenchment benefit to contract labour.
As said by Mr. Saikumar, termination of service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry, will not attract the word `retrenchment' as per section 2(oo) (bb) of Industrial Dispute Act, 1947.
But, if an undertaking or project is closed down due to which the contract of the workmen is not renewed, then the retrenchment benefit has to be given as per section 25(FFF) of Industrial Disputes Act, 1947, provided if the workman was in employment for a continuous period of one year.
P. Vathiraj

From India
Attached Files (Download Requires Membership)
File Type: pdf The_Executive_Engineer_vs_R.Munusamy_on_19_April,_2011.PDF (111.8 KB, 54 views)

saswatabanerjee
2358

Ok, I do not know why you wish to make me read 20 pages of judicial wording when it has nothing really related to our topic in hand. Again, after reading through the 20 pages, I find :

A. The case is not about contract labour. It is about temperory workers. We ads clearly talking of contract labour. I specified that they will not get retrenchment benefit as it is not provided in the contract labour act. Nothing in the judgement is about contract labour. The only time the word contract has come in that judgement is where they have talked of contract of employment between the temperory workers and the company, it's not about engagement of contract workers

Please go through what you send intead do wasting our time or misleading members

B. the court says that refusal of work to such temperory workers on account of closure of the concerned unit is not retrenchment. In any case, the original post does not talk of closure of the factory. It talks of termination of a contract. What does that have to do with this ?

I hope you are not going to put another such judgement copy in response.


From India, Mumbai
nilsoni
10

Dear All
first read the query raised, all are giving their comment and now this thread is out of track,the question was asked
If a contractor removes his workmen from the job after one year of service, what type of benefits he is liable to get from the contractor/employer.
nowhere it is mentioned that the contract is for 1year or a workman is employed for any service period,it only the case that the workmen is has removed so it presume that the contract is still on and for any reasons the contractor has removed him from the work, if the case is like this the workmen is eligible for RC.
regards
Nilesh Soni.

From India, Mumbai
saswatabanerjee
2358

The matter comes down to this :
Does industrial disputes act cover contract labour ?
I believe it doesn't
If it doesn't then there is no provision for retrenchment compensation elsewhere.
What is your opinion on this ?
Will appreciate more feedback since its a critical matter

From India, Mumbai
saiconsult
1897

The contention that the contract labour is not entitled to retrenchment compensation because he is not covered by the Industrial Disputes Act is not based on sound law.The industrial Disputes Act is very well applicable to the contract labour since he is very much a workman within the meaning of Sec.2(s) of the I.D Act and is entitled to retrenchment compensation if his termination does not fall within any of the exceptions to retrenchment specified under Sec.2(oo) of the I.D Act. The only ground on which a contract worker is not eligible for retrenchment compensation is when he is recruited for a fixed tenure or for the duration of the project which is the common method in the employment of contract labour.
B.Saikumar
HR & Labour Law Adviosr
Mumbai

From India, Mumbai
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