Effect of the Amendment- Sec 2 A to the ID Act on Principal Employer

Sub : Effect of the Amendment- Sec 2 A to the ID Act on Principal Employer

 As all Legal and HR Professionals  would have been aware the recent amendments to the Industrial Disputes Act has brought sweeping changes in the Act after two decades by the introduction of Sub Section (2) & (3) Direct reference of Dispute .Its impact on the Principal Employer is detailed in this article.

 Earlier the Employee employed by the Contractor could not approach a Labour Court directly for claiming permanency  if it is in the nature of a dispute in relation to discharge, dismissal, termination or retrenchment without the assistance of a Labour Union.

 Now by the amendment by the introduction of Sub Section (2) & (3) Direct reference of Dispute he/she can approach the Labour court directly.

The process enunciated would be :

1. First he/she has to make an application to the Labour Department Conciliation Officer.

2. If no action is taken by the Conciliation Officer then he/she can file an application to the Labour Court for adjudication of the Dispute in relation to discharge, dismissal, termination or retrenchment.

3. Time limit for questioning all such disputes in relation to discharge, dismissal, termination or retrenchment is 3 years.

Issue for Principal Employer :

1. By the amendment Individual Contractor Employee grievance in relation to discharge, dismissal, termination or retrenchment is subject to Conciliation by Labour Officer and thereafter by Labour Court.Earlier the method of reference by Govt was a deterent on the contractor employees.

2.  This could possibly  open the floodgates of Contractor Employee Litigation for claiming permanency .

Remedial Measures:

Suitable remedial measures based on sound  legal advice is to be taken for ensuring proper termination/ severance of Contractor Employee which means compliance audit of severance by the Contractor is to be done and all cases of termination monitored closely.Knee jerk reaction is to be avoided .This may help to contain the risk.

With Regards

VS Rajan Associates,
Advocates & Notaries & Legal Consultants
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
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