Staffing and recruiting industry -legal updates

Dear All

Changes made by the recent amendments to Section 11 of the Industrial Disputes Act  –Enforcing the Awards of Labour Court.these amendments came into force w.e.f mid September 2010.

In section 11 of the principal Act, after sub-section eight , the following sub-sections shall be inserted, namely:

“(9) Every award made, order issued or settlement arrived at by or before Labour Court or Tribunal or National Tribunal shall be executed in accordance with the procedure laid down for execution of orders and decree of a Civil Court under order 21 of the Code of Civil Procedure, 1908

(10) The Labour Court or Tribunal or National Tribunal, as the case may be, shall transmit any award, order or settlement to a Civil Court having jurisdiction and such Civil Court shall execute the award, order or settlement as if it were a decree passed by it.”

By introduction of the provision the award of Labour Court / Tribunals is now additionally executable by a Civil Court. After the Labour Court/Tribunal passes the award it shall be transmitted to the Civil Court for execution. By this process both the moveable and immovable property of the Judgment Debtor i.e. the person/company against whom the award is passed can be attached. Also the Judgment Debtor can be arrested and put in prison. Earlier the awards were executed by the Revenue Recovery process alone.



With Regards

V.Sounder Rajan
VS Rajan Associates,
Advocate & Notaries & Legal Consultants
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684,
Mobile : 9840142164-9025792684-9025792634

Dear All

Sub: Enhancement of wage ceiling by the ID Amendment Act

In continuation of the relevance of the recent ID Act amendments for the Staffing Industry we refer to the aspect Enhancement of wage ceiling by the ID Amendment Act.

Prior to the amendment Wage ceiling of workman in the definition clause Sec 2 (s) was Rs. 1600/- .Now it is enhanced to Rs. 10,000/- per month,.

Consequently any person working in any industry doing any manual, unskilled, skilled, technical, operational, clerical or supervisory work drawing wages up to Rs. 10000/- will be considered as a workman. Workman definition now reads like this:

(s) "workman" means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person –
(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.

The exclusion is where the workmen employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.

In the Staffing Industry this change is conspicuous and Deputed Supervisors and real time Deputed Managers drawing wages exceeding ten thousand rupees per mensem alone may be exempted .All others will come within the definition of workmen for the purposes of any proceeding under the Industrial Disputes Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute.

With Regards

V.Sounder Rajan
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,
Off : 044-42620864, 044-65874684,
Mobile : 9840142164-9025792684-9025792634

Dear All

In continuation of our earlier post on timely payment of wages to the Contractor's employees under Rule 72 of CLRA Rules under the next Rule 73 it is expressly provided that the authorized representative of the principal employer shall record under his signature a certificate at the end of the entries in the register of wages or the [Register of Wages-cum-Muster Roll as the case may be in following form:

“Certified that the amount shown in column No---------- has been paid to the workmen concerned in my presence on -------- at ---------“

Actually the Rules provide for supervision and certification by the Principal Employer at the time of very payment to the Contractor's employees by the Contractor .

With Regards

V.Sounder Rajan
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,
Off : 044-42620864, 044-65874684,
Mobile : 9840142164-9025792684.

While terminating an employee chargesheet must be issued with  the misconduct duly described and seen that chargesheet is received by the delinquent and he  should be asked to reply within 15 days along with list of witnesses if he wants to call and name of defence assistant he wants to engage during inquiry.First and subsequent sitting of inquiry will be held .inquiry officer will submit his report to disciplinary authority and who will issue show cause notice that why such ans such punishment should not be made to you.aHe will reply and according to all documents punishment order will be served.Usually punishment order can be appealed as per Disciplinry rule to higher authority.In termination usually two appeals are allowed.

Usually after recipt of chargesheet reply Inquiry aofficer and presenting officer of company are appointed and delinquent is also given chance to appoint his defence assistant with approval,of IO.

IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

In continuation of our earlier post on the subject

A common question arises in the Staffing Industry is whether compliance of Sec 25(F) of the Industrial Disputes Act a correct process for termination of the Deputed candidate?

Absolutely it is a water tight process and a safeguard for avoidance of wrongful Termination litigation .In the field you will find Clients will hesitate to minimum provide the 15 days’ notice for terminating the candidate.

For Compliance of Sec 25 F of the ID Act the following is to be done :

i. The employee of the Staffing Entity sent for work to the Client must be given a one month's notice in writing, indicating the reasons for retrenchment. The retrenchment can take effect only after the notice period has expired, or if the employee of the Staffing Entity sent for work to the Client has been paid wages in lieu of such notice.

ii. The employee of the Staffing Entity sent for work to the Client must be paid, at the time of retrenchment, compensation, which is equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.

iii. A notice must be served in the prescribed manner, on the appropriate Government. (Section 25F of the ID Act).It has become a practice in the Industry to dispense with this Notice.Government can take steps to delete this provision .


With Regards

V.Sounder Rajan
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,
Off : 044-42620864, 044-65874684,
Mobile : 9840142164-9025792684.

Dear Sir,

If the industry is not covered under Shops and establishments and covered under Factories Act, what we have to do.

Dear All

Sub: Impact of changes in Appropriate Govt for disputes between Contractor and Contract Labour.

The impact of the  recent September 2010 Amendment on the definition of appropriate Govt has been clarified Accordingly Industry, corporation, PSEs and PSU owned or controlled by the Central Govt., for them appropriate Govt. would be Central Govt. and if such industry under the control of State Govt., appropriate Govt. would be State Govt. The amendment reads as follows:

Amendment of section 2

2. In the Industrial Disputes Act, 1947 (14 of 1947) (hereinafter referred to as the principal Act), in section 2,—

(i) in clause (a),––

(a) in sub-clause (i), for the words “major port, the Central Government, and”, the words “major port, any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, or any corporation, not being a corporation referred to in this clause, established by or under any law made by Parliament, or the Central public sector undertaking, subsidiary companies set up by the principal undertaking and autonomous bodies owned or controlled by the Central Government, the Central Government, and” shall be substituted;

(b) for sub-clause (ii), the following sub-clause shall be substituted, namely: -

“(ii) in relation to any other industrial dispute, including the State public sector undertaking, subsidiary companies set up by the principal undertaking and autonomous bodies owned or controlled by the State Government, the State Government:

Provided that in case of a dispute between a contractor and the contract labour employed through the contractor in any industrial establishment where such dispute first arose, the appropriate Government shall be the Central Government or the State Government, as the case may be, which has control over such industrial establishment.”;

Another important Amendment affecting the Staffing Industry and Contractors in general is inclusion of the following proviso :

Provided that in case of a dispute between a contractor and the contract labour employed through the contractor in any industrial establishment where such dispute first arose, the appropriate Government shall be the Central Government or the State Government, as the case may be, which has control over such industrial establishment.


The above proviso literally means that for the Employees of the Contractor of such Industries the concerned Government shall be the Central Government or the State Government, as the case may be, which has control over such industrial establishment. In case the Staffing Company is a Contractor for a central PSU then for the employees of the Contractor to raise a dispute will be the Central Govt and if deputed for a State PSU then it will be the State Govt.

With Regards

V.Sounder Rajan
VS Rajan Associates,
Advocates & Notaries & Legal Consultants -Labour Law
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684,
Mobile : 9840142164-9025792684-9025792634

Dear All

We send our Pongal & Maha Sankranti Greetings .

Significance of Pongal

Pongal is a harvest festival - the Tamil equivalent of Thanksgiving. It is held to honor the Sun, for a bountiful harvest. Families gather to rejoice and share their joy and their harvests with others. The Sun is offered a "Pongal" of rice and milk.

Literally meaning "Boiling over", Pongal, signifies the advent of prosperity. Pongal is normally celebrated over a period of four days, starting on the 13th January. Since the calculation to determine the day is based on the solar calendar, the date doesn't change. It is considered a very auspicious occasion when the Sun transits the Capricorn sign. A rich and abundant harvest of paddy and other crops depend on the availability of good rain, as most of the rivers in Tamil Nadu are not perennial. Hence, there is the invocation of the Sun God and the God of Rain at the time of Pongal.

The period is referred to as Uttarayan Punyakalam and is considered auspicious. Legend has it that the Devas wake up after a six-month long slumber during this period. And so it is believed that those pass away during Uttarayana attain salvation. In fact, Bheeshma is believed to have waited for the dawn of Uttarayana before he gave up his life.

As is customary, cleaning of every house a few days prior to the Pongal festival is an indispensable ritual. Not only every house is cleaned, but it is also dusted and whitewashed. Wearing new clothes on Pongal is also customary. Attired in a new "Lehanga" and half sari for young girls and lungi and angavastram, the men, women and children prepare themselves for celebrating the first day called Bhogi Pandigai. This day is dedicated to Indra, who is also called Bhogi. It is believed that on this day Lord Krishna had urged the people to neglect Indra and not worship him. People take oil bath on this day. Using rice paste "Kolam" is drawn and this represents the Sun. The items that are generally used to celebrate Pongal; Sandalwood paste, vermilion, mango saplings, coconut fronds, sugarcanes, banana leaves, ginger pieces, white flour, new vessels for cooking, turmeric, and a "thali" or metal plate in which the sun is viewed.

Pongal is a four-day affair. The first day, Bhogi, is celebrated on the last day of the month of Margazhi. Scholars have often compared Bhogi to the Indra Vizha celebrated by the Chola kings at Kaveripattinam, also known as Poompuhar. Indra Vizha was celebrated in honour of Lord Indra, also called Bhogi, the God of thunder and rain.

The second day is Surya Pongal also called Perum Pongal. It is the most important day and people worship Surya, the Sun God and his consorts, Chaya and Samgnya. There are several legends associated with Surya Pongal. A sage named Hema prayed to Lord Vishnu on the banks of the Pottramarai tank in Kumbakonam. On Surya Pongal day, the lord is believed to have taken the form of Sarangapani and blessed the sage. Yet another legend has it that Lord Shiva performed a miracle where a stone image of an elephant ate a piece of sugarcane.

The third day is Mattu Pongal, celebrated to glorify cattle that help farmers in a myriad ways. On this day, the cows are bathed and decorated with vermilion and garlands and fed. The last day is Kaanum Pongal. It is that part of the festival when families used to gather on the riverbanks and have a sumptuous meal (kootanchoru). It is also time for some traditional dances such as kummi and kolattam. In recent years, that day is celebrated as Uzhavar Tirunal in honor of farmers.

The dishes prepared during these days are "Sarkarai Pongal", "Ven Pongal", Dosai and Sambhar, Vadai and Payasam (a sweet rice pudding).

The sun itself stands for all the ideals of the Pongal festival. Its message is that of light, unity, equality and true selflessness. These are the ideals of Karma Yoga. Hence, the sun is the greatest Karma Yogi.

When we celebrate Pongal, our sense of value changes. We begin to understand that our real wealth is the goodwill and friendship of your relatives, friends, neighbors and other human beings and ESPECIALLY OUR VIEWERS IN LAWYERSCLUB INDIA .

Our wealth is the land on which our food grows, the cattle which help us in agriculture, and the cow which gives us milk. We begin to have greater love and respect for them and for all living beings – the crows, the fish and all other creatures.

To the agriculturalist, Pongal is a day of triumph. He would have by then brought home the fruits of his patient toil. Symbolically, the first harvest is offered to the Almighty – and that is Pongal. To toil was his task, his duty, but the fruit is now offered to the Lord. This is the spirit of Karma Yoga.

Thanks & Regards

V.Sounder Rajan -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,
Off : 044-42620864, 044-65874684,
Mobile : 9840142164-9025792684-9025792634

Sub: Dealing with Temporary Employees Absconding cases in the Staffing Industry


Dear All

In the Staffing Industry one can find several instances of the Temporary Employees absconding from the place of work.i.e the place of the Principal Employer.

 In such cases the Temporary Employee need to be terminated so that the Full  & Final  is done and the name removed from Pay rolling records.

Securing this process is a challenge for the HR Managers of Staffing and Temping Business .

The process will be dependent on each of the Staffing Company HR practice and needs of the Client.

There is a practice in the Staffing Industry that until the principal Employer i.e the Client  gives the “No dues “the F & F cannot be done .This is a Standard practice in the Temping and Staffing Industry.Therefore the Termination practice has to be synchronized  with that.

Staffing Companies have to have a secure Legal Department or avail Expert Legal advice on Severance and Termination practices tailor made for their needs which in the long run will be a security for the Staffing Industry to avoid post termination claims by the Temporary Employees which may make inroads into  the slender margins earned from the  Principal Employer [Client] .

With Regards

V.Sounder Rajan
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,
Off : 044-42620864, 044-65874684,
Mobile : 9840142164-9025792684-9025792634

Dear All

Sub: Statistics of Enforcement of CLRA by the Central Govt


The enforcement of the provisions of various Labour laws has been prescribed under provisions of the relevant Acts and is secured through the officers of the Central Industrial Relations Machinery (CIRM) in the Central Sphere, and through the State enforcement machinery in the State Sphere.

In the Central sphere, the officer of Chief Labour Commissioner (Central)s organization conduct inspection regularly under the Contract Labour ( Regulation & Abolition) Act, 1970 and take action by filing prosecution cases against the defaulting employers and contractors.

Details of Inspection conducted and prosecution launched during the last three years and current year under Contract Labour Act, 1970 is found in the Attachment.Shri Harish Rawat, Minister of Labour and Employment gave this information in reply to a question in the Lok Sabha .


The attached data will give a picture on the realistic Enforcement scenario in respect of these two enactments .

Presently the level playing field available for the Indian Staffing Industry to operate in the present liberalised regime of the Central Government is again seen and is found to be quite adequate and is commendable and will be an invitation to International Staffing & Recruiting Companies to open shop in India


With Regards

V.Sounder Rajan
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,
Off : 044-42620864, 044-65874684,
Mobile : 9840142164-9025792684-9025792634

IMMEDIATE LEGAL QUESTIONS FOR  INDIAN STAFFING COMPANIES


Dear All

In continuation of our earlier post on the subject :

What is continous service under the ID Act?

25-B. Definition of continuous service: -- For the purpose of this Chapter,-

(1) a workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorized leave or an accident or a strike which is not illegal, or a lock-out or a cessation of work which is not due to any fault on the part of the workman;

(2) Where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer—

(a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than—

(i) one hundred and ninety days in the case of a workman employed below ground in a mine; and
(ii) two hundred and forty days, in any other case;

(b) for a period of six months, if the workman, during a period of six calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than—

(i) ninety five days, in the case of a workman employed below ground in a mine; and
(ii) one hundred and twenty days, in any other case;

Explanation: -- For the purpose of clause (2), the number of days on which a workman has actually worked under an employer shall include the days on which—

(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment [Standing Orders] Act, 1946 (20 of 1946), or under this Act or under any other law applicable to the Industrial establishment;

(ii) he has been on leave with full wages, earned in the previous years;
(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and
(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.


There are many inter-related issues to this which we will address in our further posts.

With Regards

V.Sounder Rajan
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,
Off : 044-42620864, 044-65874684,
Mobile : 9025792684.