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Basavaraj (Asst, Manager-Legal)     03 January 2011

Minimum Wages as per Factories Act

Please need urgent advice:

We are appointing operators through Man Power Agency and we will advice man power agency to depute their employees at designated sits.

We are paying operators a minimum wages as per Karnataka Shops & establishment Act of Rs.3516/-. Now one of our Client who is in business if engineering works, telling that they are the Principal employer of operators and operators/employees deputed by our Man Power will come under the preview of ‘Factories Act’ and not as per Shops & Establishment Act and our Client telling that we have to pay operators minimum wages as per Factories Act @ Rs.4000/-.

 But question is that our Man Power Agency employees who works ultimately on behalf of us. Hence we will the Principal Employer for this also we had executed an Agreement with our client.

Since operators does not involve in an engineering works, just they are maintaining coffee and tea vending machines installed by us at our Client premises.

I request learned Members to advice on below doubts:

1.      Whether we have to pay minimum wages as per Factories Act?

2.      Agreement b/w us and our Client clearly says that ‘does not create any employee & employer relationship”.

3.      Since we are the Principal Employer also We have indemnify our Client on this issues by executing ‘Indemnity Bond’      

 

Kindly Let me know that we are liable to pay minimum wages as per Factories Act or Is it okay that we are paying as per Shops & Establishment Act?

 

 



Learning

 4 Replies

V. VASUDEVAN (LEGAL COUNSEL)     03 January 2011

The whole issue is raised on misplaced assumptions. The minimum wages payable to the workmen under various categories are fixed and notified from time to time under the Minimum Wages Act, by the appropriate Government - viz. Central or State Government. Please ascertain the category of the employees/associates deployed by you under the Karnataka Minimum Wages Notification.

Basavaraj (Asst, Manager-Legal)     04 January 2011

Dear Mr. Vasudeven sir, thanks for your response

They are come under unskilled catgoery.

 

We are paying of Rs.3358 but our client asking us to pay Rs.3950 as per Engineering Industry, since our outsource employees will go to our clinet premises and switch on coffee vending machine and maintain like cleaing and washing thats it, so that our Man Power also never raised any questions on this but our cleint is asking us to pay minimum wages as per their engieering industry @ unskilled perdsy Rs.149.

Pathikrit Naha (DGM - HR & ADMIN)     04 January 2011

I am agree with Mr Vasudevan's view, in addition please ascertain that the premises where those operators are working is registered under Factories Act or  declared as Establishment under shops & Establishment Act.

Minimum wages must be as per Minimum Wages Act or as notified by the Govt from time to time as per the Act.

 

Dhiraj Sharma (Manager-Human Resources)     04 January 2011

The basic test is where the operators are working if it is a factory then Minimum Wages Act will operate instead of hop & Establishment Act. Furthermore, labour supply agency is a contractor and the factory manager is a "Principal Employer".

Hence, you are to pay wages according to the cieling provided in Minimum Wages of State for engineering companies.

Dhiraj Sharma


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