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brijendrasingh   21 July 2015

Company probation and notice period policy

Ours is a Pvt Ltd company, a garment manufacturing company which has obtained license under the factories act 1948. The terms and conditions mentioned in appointment letter is

  1. 06 months probation period.
  2. Two months notice period.  (Earlier it was one, but now it has been revised to two months).

Out of various clauses mentioned in the appointment letter the undermentioned is also included:-

 

“ Your services will be governed by the terms and conditions applicable to the employees in the management cadre and you agree that you have read the same and understood it. You have agreed that you are not a workman as defined under Sec 2 ( s ) of  I. D. Act, 1947 and / or sec. 3  ( 5 ) of MRTU & PULP  ACT, 1972.”

The clause of discontinuing the service is as under:-

‘A notice of two calendar months is required by either side for discontinuing the service or payment of two months salary in lieu of Notice.  No reason may be assigned for such termination of service.”

 

The appointment letter is being drafted by the company advocate.

My query is with regard to Schedule -1 of Model standing orders in respect of Industrial establishment wherein the following is clearly mentioned:-

2(b)        A permanent workmen is a workman who has been engaged on a permanent basis and includes any person who has satisfactory completed a probationary period of three months in the same or another occupation in industrial establishment……………  

13. Termination of employment : for terminating employment of a permanent workmen, notice in writing shall be given either by the employer o the workmen – one month’s notice in the case of monthly-rated workmen and two weeks notice in the case of other workmen one month’s or two week’s pay, as the case may be , may be paid in lieu of notice.

My question is:-

  1. Is the six months’ probation period legal??
  2. With regard to definition of workmen, is a manager ask for one month’s notice period with above reference in the model standing orders??
  3. Please let me know the rules about the buying out of notice period
  4. Position of old employees who have been issued with appointment letter with only one month notice period?

The company has not introduced the company manual in writing and most of the rules are floating on verbal concurrence of the MD.



Learning

 4 Replies

Kumar Doab (FIN)     21 July 2015

Other threads by the querist:

https://www.lawyersclubindia.com/forum/Working-hours-of-the-drivers-in-mumbai-123843.asp#.Va5KXLV-jMo

 

https://www.lawyersclubindia.com/forum/Notice-period-policy-124002.asp

 

 

  1. Does the company have its standing orders certified?

If NO, Model Standing Orders shall apply.

For your reckoner you may go thru:

 

Industrial Employment (Standing Orders) Act, 1946

The provisions of the Act are applicable in Maharashtra State on Industrial Establishment, as Defined in the Act and employing 50 or more employees. The Employer of such an Industrial Establishment is under an obligation to follow the Model Standing Orders under the Act, till he obtains Certified Standing Order under the Act from the Competent Authority (Deputy Commissioner of Labour) to suit the local requirements of his Establishment. For this he has to follow the procedure laid down under the Act. Such Standing Orders are also settled under the Bombay Industrial Relations Act, 1946, pending which the Model Standing Orders framed for the industry are discipline in an Industrial establishment, which help in eliminating many industrial disputes.

https://mahakamgar.gov.in/MahLabour/lc-industrial-employment.htm

 

  1. You have posted that:

“Out of various clauses mentioned in the appointment letter the undermentioned is also included:-

 

“ Your services will be governed by the terms and conditions applicable to the employees in the management cadre and you agree that you have read the same and understood it. You have agreed that you are not a workman as defined under Sec 2 ( s ) of  I. D. Act, 1947 and / or sec. 3  ( 5 ) of MRTU & PULP  ACT, 1972.”

 

This practice seems to be illegal, unfair, transgression.

The employer is no one and no body to ask for such certification from any employee.

The law of the land shall decide who is a ‘Workman’ and ‘Who is not’.

How does certification by employee help the employer?

 

Even a person designation as Manager may very well be a workman as per test of law.

 

The employee to whom standing orders (model: in the absence of certified sanding orders) apply, the probation period is already determined by statue; Model Standing Orders…………………..and standing orders shall prevail upon any private agreement that employer has drafted and signed with employee…………………..e.g. appointment letter.

The Manager even if has signed the appointment letter with 30 days notice period and above mentioned extract, if is covered by the def. of ‘Workman’ will remain a workman………………and can seek refuge in ID Act/ Standing Orders……………..

 

The notice of 21 days is necessary to be issued for any change in service conditions to all employees covered by ID Act……………………for acceptance.

 

The mere information of change may not suffice for any employee and acceptance may be required.

brijendrasingh   22 July 2015

Dear Kumar Doab Sir,

Thank you so much for answering to my query every time I post it in the Lawyers Club.

I am an active member in the club and your strong follower. I read both new & old posts in the page and look for the answers you post for them with much interest. 

payal   24 July 2015

Hi 

I have joined the startup company without offer letter as they took me as trainee.

After 1 month they told me you can continue with us.

Now i completed two month in the company and i did not get any salary from them.

Can i complaint against them.Actually they are doing these things with all employee in the company.

Even now also i didnot get any offerletter from them

Please let me know what i should do.

 

Kumar Doab (FIN)     24 July 2015

@Payal,

Always initiate a new thread.

 

All affected employees may join hands and stand as a witness to each other.

 

There are many threads with similar query and involving StartUP companies defrauding ill-informed, gullible employees.

The employees that are not united and not properly informed are easy to exploit.

1st Gather irrefutable evidence and proof of employment and having worked………………e.g. I.Card, PF number, ESIC card, emails,SMS,Whatsapp,daily reports, assignments, recorded phone calls, audio/visual, witnesses etc……………….

 

If NO offer letter/appointment letter is given on record and signed by you then how can the employer claim that you were a Trainee?

Otherwise also the word trainee may only represent a status in the company and you might actually be doing the work of a regular employee.

Trainees other than apprentices engaged following the provisions of the Apprentice Act have the status of employees.

The period of training may be considered as period during which you have worked and contributed towards revenue of the company, as a regular employee.

Non issuance of appointment letter may be another violation of law of the land.

For each person taken in the company the employer has to maintain various forms/registers and submit these to jurisdictional authority even if by electronic means.

If you have evidence then it is fraud, breach and your counsels may opine that you can lodge criminal complaint u/s406, 420 as well……………………

 

You should provide full information, pointwise!

What is this establishment registered as: Commercial, Industrial?

What is its line of business:IT,ITeS,banking etc?

How many maximum persons are employed in it at any point of time, before and after your joining?

Did you record the transactions (audio/visual/minuted/witnessed)?

The Redg Office, Corporate Office of the company, and your reporting office was located in which state?

 

What was your designation and nature of duties?

Do you have I.Card, Visiting card,leave policy, HR policy, Service Rules and Regulations, Conduct and Discipline Rules, Exit Policy that are mentioned in the appointment letter?

What was your promised monthly salary?

Was any salary slip of each month, PF number with a/c slips, ESIC card,Form16 given to you?

Are you a member of any employee’s/Trade Unions?

 

 


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