Staffing and recruiting industry -legal updates

Dear All

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES


Sub :Temporary Employee Welfare

Placing Temporary Employee Welfare/ Satisfaction on the priority list will be the need for the hour. .The Staffing Industry deploying Temporary Employees in thousands to their Clients have to build a strong internal mechanism .

An internal mechanism/Nodal Agency needs to be established for the following :

(a)to establish contacts and hold consultations with a view to maintaining harmonious relations between the Staffing Entity management and Temporary Employees ;

(b)to bring to the notice of the Staffing Entity management the grievances of Temporary Employees , individual as well as collective, with a view to securing their expeditious redress and to act as a liaison officer between the management and labour ;

( c) to study and understand the point of view of Temporary Employees in order to help the Staffing Entity management to shape and formulate labour policies and to interpret these policies and to interpret these policies to the Temporary Employees in a language they can understand;

(d)to watch industrial relations with a view to using influence in the event of a dispute between the Staffing Entity management and Temporary Employees and to help to bring about a settlement by persuasive effort;

(e)to advise on fulfillment by time management and the concerned departments of the Staffing Entity of obligations, statutory or otherwise, concerning regulation of working hours, maternity benefit, medical care, compensation for injuries and sickness and other welfare and social benefit measures;

(f)to advise and assist the management in the fulfillment of its obligations, statutory or otherwise, concerning prevention of personal injuries and maintaining a safe work environment,

(g)to promote relations between the concerned departments of the Staffing Entity and Temporary Employees which will bring about productive efficiency as well as amelioration in the working conditions and to help Temporary Employees to adjust and adapt themselves to their working environments;

(h)to encourage provision of amenities at the Clients place ,sickness gratuity payments, and legal advice to Temporary Employees ;

(i)to help the Staffing Entity management in regulating the grant of leave with wages and explain to the Temporary Employees the provisions relating to leave with wages and other leave privileges and to guide the Temporary Employees in the matter of submission of application for grant of leave for regulating authorized absence;

(j) to advise on provision of welfare facilities, , social and recreational facilities, sanitation, advice on individual personnel problems and education of children;

(k)to suggest measures which will serve to raise the standard of living of Temporary Employees and in general promote their well-being.

Our future post will be indicative of the way forward and the legal sanction if any available for it.




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,

Dear All

Sub : Effect of the Recent Amendment- Sec 2 A of the Industrial Disputes Act - Sub Section (2) & (3) Direct reference of Dispute.

In one of our earlier Posts we had touched upon the second aspect of the recent historic amendments to the ID Act .

The following one which is in the nature of our view would touch upon another important aspect and whether the Staffing Entity Legal Department is well equipped to deal with its impact.

Earlier the Temporary Employee or Contract worker could not approach a Labour Court for disputes in relation to discharge, dismissal, termination or retrenchment without the assistance of a Labour Union. Now by the amendment he/she can approach the Labour court directly . This a drastic provision and will have a crippling effect on the Staffing Industry.

The remedy is:

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.

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

Issue for Staffing Industry:

1. Individual Employee grievance /disputes in relation to discharge, dismissal, termination or retrenchment is subject to Conciliation by Labour Officer and thereafter by Labour Court.

2. Will open the floodgates of Temporary /Contract Employee Litigation.


Tips for avoidance:

1. Need to have a strong Internal redressal mechanism thereby closing all issues internally.GRM-Grievance Redressal Machinery can resolve such issues.

2. Take Notices from individual Temporary employees and their Lawyers seriously and solve them immediately.Take expert Legal advice on each issue.

3. A pro-Temporary employee approach even without even consulting the Principal employer [Client] needs to be taken.

4. Because of the insertion of this provision a separate provision needs to be made out by way of contingent liability to cover such risks in the Staffing Company's Budget.

5. CEO /HOD should be vigilant on this and take direct action in resolving disputes.They must get weekly reports from their Compliance Head /Team on resolution.They must appoint an official directly reporting to them to monitor and secure compliance.In special cases they must take Independent unbiased opinion from an Ombudsman appointed for such purpose as there will be a tendency by the handling team to justify their action which could possibly end up in Claims.

6.Resolution of Disputes will confer a satisfaction on the disgruntled Temporary Employee /Contract Worker . Ultimately Human Capital is the one which gives returns for the Business. Temps are the ultimate bread winners .But they are also the unsung heroes.


In one of our future posts we will deal with the issue of Ombudsman and also the effect of the Amendments on Industry as such.


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,

Dear All

In our earlier post we highlighted the impact of the recent amendments to Section 2 A of the ID Act, we had suggested reference of the decision by the Management to an Ombudsman for reviewing its correctness.

On going through the material on Ombudsman in our vies expressed herein we cannot call that Independent person as an Ombudsman .The definition of Ombudsman Committee of the International Bar Association defines the term “Ombudsman” as follows:

An Office provided for by the constitution or by action of the Legislature or Parliament and headed by an independent high-level public official, who is responsible to the Legislature or Parliament, who receives complaints from aggrieved persons against government agencies, officials and employees, or who acts on [his] own motion and who has the power to investigate, recommend corrective action and issue reports.

Therefore the term Ombudsman is used in Administrative and Constitutional Law. In India there was induction of this concept in the realm of Banking and Insurance Industry in their disputes with their Customers.

In the Staffing Industry this concept can be adapted .Normally the decision of a Staffing Entity has to be consistent and needs to provide reasons for an adverse employment action, such as the termination of the Temporary Employee’s employment. When informing an employee of the decision, Staffing Entity needs to be honest with the Temporary employee.

If a Temporary employee complains about the Staffing Entity’s action before a Labour Authority the Staffing Agency must provide reasons for the challenged action which are consistent with Law and the reasons provided to the Temporary employee and sustain the termination. Thereafter, if the employee pursues a judicial action Court or Shop Appeal the employer must provide reasons for the adverse employment action to the court and which are consistent with Labour Law and those provided to the employee and the administrative agency.


To avoid such complications whenever a termination or severance of temporary employment is done in case the Temporary Employee is aggrieved by the action he or she should be permitted to file a review motion to an Independent Authority who will review the decision of the Staffing Agency Management.[In many cases it will be the decision taken by the Staffing Agency Management at the instance of the Client].The Independent Authority which we will call as an “Employment Ombudsman” or “Reviewing Authority” who should be an Employment Law Expert or a Retired Labour or Industrial Court Judge who was not a part of or involved in the earlier decision making process.

The Authority can receive and consider complaint relating to the Staffing Entity discharging in any manner inclusive of Contract ending , dismissal, retrenchment or otherwise termination or discharge of the services of an individual Temporary Employee or any dispute or difference between that Temporary Employee and Staffing Entity connected with, or arising out of, such discharge inclusive of Contract ending, dismissal, retrenchment or termination shall be deemed to be a complaint for decision by the Authority.

The Scheme and Procedure to be followed by the Authority can be prescribed by the Staffing Entity Management

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,

Dear All

In the previous posts in our opinion we had touched on the need to strive at cordial Management -Temporary Employee Relations .To recapitulate the following steps were suggested:

GRM -Grievance Redressal Machinery

Consequent to the Historic September 2010 amendments to the Industrial Disputes Act GRM has become Statutory.

9C. (1) Every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal Committee for the resolution of disputes arising out of individual grievances.

(2) The Grievance Redressal Committee shall consist of equal number of members from the employer and the workmen.

(3) The chairperson of the Grievance Redressal Committee shall be selected from the employer and from among the workmen alternatively on rotation basis every year.

(4) The total number of members of the Grievance Redressal Committee shall not exceed more than six:
Provided that there shall be, as far as practicable one woman member if the Grievance Redressal Committee has two members and in case the number of members are more than two, the number of women members may be increased proportionately.

(5) Notwithstanding anything contained in this section, the setting up of Grievance Redressal Committee shall not affect the right of the workman to raise industrial dispute on the same matter under the provisions of this Act.

(6) The Grievance Redressal Committee may complete its proceedings within thirty days on receipt of a written application by or on behalf of the aggrieved party.

(7) The workman who is aggrieved of the decision of the Grievance Redressal Committee may prefer an appeal to the employer against the decision of Grievance Redressal Committee and the employer shall, within one month from the date of receipt of such appeal, dispose off the same and send a copy of his decision to the workman concerned.

Temp Welfare Officers -TWO

Akin to Welfare Officers in the Factory scenario induct dedicated Zonal Temp Welfare Officers :


(a)to establish contacts and hold consultations with a view to maintaining harmonious relations between the Staffing Entity management and Temporary Employees ;

(b)to bring to the notice of the Staffing Entity management the grievances of Temporary Employees , individual as well as collective, with a view to securing their expeditious redress and to act as a liaison officer between the management and labour ;

( c) to study and understand the point of view of labour in order to help the Staffing Entity management to shape and formulate labour policies and to interpret these policies and to interpret these policies to the Temporary Employees in a language they can understand;

(d)to watch industrial relations with a view to using his influence in the event of a dispute between the Staffing Entity management and Temporary Employees and to help to bring about a settlement by persuasive effort;

(e)to advise on fulfillment by time management and the concerned departments of the Staffing Entity of obligations, statutory or otherwise, concerning regulation of working hours, maternity benefit, medical care, compensation for injuries and sickness and other welfare and social benefit measures;

(f)to advise and assist the management in the fulfillment of its obligations, statutory or otherwise, concerning prevention of personal injuries and maintaining a safe work environment,

(g)to promote relations between the concerned departments of the Staffing Entity and Temporary Employees which will bring about productive efficiency as well as amelioration in the working conditions and to help Temporary Employees to adjust and adapt themselves to their working environments;

(h)to encourage provision of amenities at the Clients place ,sickness and benevolent scheme payments, pension and superannuation funds, gratuity payments, and legal advice to Temporary Employees ;

(i)to help the Staffing Entity management in regulating the grant of leave with wages and explain to the Temporary Employees the provisions relating to leave with wages and other leave privileges and to guide the Temporary Employees in the matter of submission of application for grant of leave for regulating authorized absence;

(j) to advise on provision of welfare facilities, , social and recreational facilities, sanitation, advice on individual personnel problems and education of children;

(k)to suggest measures which will serve to raise the standard of living of Temporary Employees and in general promote their well-being.


“Reviewing Authority” or Ombudsman

The Ombudsperson should receive and consider complaint relating to the Staffing Entity discharging or terminating in any manner inclusive of Contract ending , dismissal, retrenchment or otherwise termination or discharge of the services of an individual Temporary Employee or any dispute or difference between that Temporary Employee and Staffing Entity connected with, or arising out of, such discharge inclusive of Contract ending, dismissal, retrenchment or termination shall be deemed to be a complaint for decision by the Authority.


The Staffing Entity management should endeavor to have all of them in place
.GRM is Statutory whereas TWO and Ombudsman are recommended. if all the three are there the Staffing Entity Management would be secure and insulated from Temp related disputes.The system of GRM-TWO & Ombudsman will take care of itself and a secure Internal Responsive Machinery created. In Staffing Industry glossary we can coin a new word "Temp Industrial Relations " -TIR.

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,

Dear All


We had earlier posted an item on Gratuity payment to Contract workers and the response for its relevance is enormous considering the mails we are getting.This shows that the Staffing Industry Professionals are very sensitive to happenings around them .

One viewer has raised a point on the very relevancy of Gratuity to Temporary Employment -

When the Employment is temporary and sent to the Client why is that Staffing Company should pay Gratuity ?

Our simple answer is the liability to pay rests with the Staffing Company .But the Principal Employer needs to re-imburse it.

To understand this the definition of Employee in the Gratuity Act under Section 2 (e) needs to be seen::

e) "employee" means any person (other than an apprentice) employed on wages, in any establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied,and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity.

The qualifying period is provided under Section 4:

Section: 4

Payment of gratuity.



(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, -

(a) on his superannuation, or

(b) on his retirement or resignation, or

(c) on his death or disablement due to accident or disease:


In the Industry one will find Clients requiring the same Temporary Workers being continuously requisitioned beyond the qualifying period of gratuity.The problem will crop up if the Temporary Worker's Contract is terminated say on the 65 th month without payment of Gratuity when post completion of the 60th month the Temporary Employee would have qualified for Gratuity.Then who is liable to pay the Gratuity.The Client will just say he or she is not their employee and the Staffing Company has to shell it out from their funds.

As the whole Staffing concept in India works on re-imbursement of CTC of the Temporary Employee by the Client the Staffing Company will not understand the issue and initially try to wash of its hands .Supposing there is a claim .In this context the earlier Bench Judgment of the Madras High Court cited becomes relevant with the attendant risks on Gratuity accumulation as a contingent liability which can boomerang on the Staffing Entity if settled by the Client as per the dictum of the cited Judgment.

Staffing Entities can launch an audit of Gratuity Compliance by getting the details of those Temporary Employees who have completed or in the process of completing 5 years and their Gratuity payment compliance. If they are not paid then they should immediately direct their Compliance Team to make payment in compliance of the Act and seek re-imbursement from Clients or vice-versa.

Managing Directors and CEO's being at the helm of affairs may need to call for Monthly Compliance reports from their Compliance Head so that they are not caught napping on this crucial compliance .Non compliance may lead to penalties under Section 9 of the Act and will also lead to making hefty payments without re-reimbursement from their respective Clients .

For the Staffing Industry Professionals whenever they are going in for a long term relationship say beyond five years with a Client it should be ensured they make this liability explicitly clear to the Client and make a provision for it in the CTC .This pay out has to be made to the Temporary Employee whenever there is a resignation or termination beyond 5 years.In the case of disablement the liability would arise earlier than that period. The best precaution is to make a provision for Gratuity as a part of the Standard Form Contract of the Staffing Company.


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,

Dear All,

You may remember the Historic September 2010 brought about changes to the industrial Disputes Act. One important change is the change made in the Section 11 –Enforcing the Awards of Labour Court which has been touched upon in an earlier post .

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.”


The Execution provisions of CPC is :

51. Powers of Court to enforce execution: Subject to such conditions and limitations as may be prescribed, the Court may, on the application of the decree-holder, order execution of the decree :
(a) by delivery of any property specifically decreed;
(b) by attachment and sale or by the sale without attachment of any property;
(c) by arrest and detention in prison for such period not exceeding the period specified in section 58, where arrest and detention is permissible under that section;
(d) by appointing a receiver; or
(e) in such other manner as the nature of the relief granted may require:

Provided that, where the decree is for the payment of money, execution by detention in prison shall not be ordered unless, after giving the judgment-debtor an opportunity of showing cause why he should not be committed to prison, the Court, for reasons recorded in writing, is satisfied;
(a) that the judgment-debtor, with the object or effect of obstructing or delaying the execution of the decree,
(i) is likely to abscond or leave the local limits of the jurisdiction of the Court, or
(ii) has, after the institution of the suit in which the decree was passed, dishonestly transferred, concealed, or removed any part of his property, or committed any other act of bad faith in relation to his property, or
(b) that the judgment-debtor has, or has had since the date of the decree, the means to pay the amount of the decree or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same, or
(c) that the decree is for a sum for which the judgment-debtor was bound in a fiduciary capacity to account.

Explanation :In the calculation of the means of the judgment-debtor for the purposes of clause (b), there shall be left out of account any property which, by or under any law or custom having the force of law for the time being in force, is exempt from attachment in execution of the decree.


ORDER XXIX- SUITS BY OR AGAINST CORPORATIONS

3 . Power to require personal attendance of officer of corporation— The Court may, at any stage of the suit, require the personal appearance of the secretary or of any director, or other principal officer of the corporation who may be able to answer material questions relating to the suit.


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 automatically 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.


The Top management of the Staffing Industry needs to take the legal Process initiated by any Temporary Employees seriously as otherwise ultimately the Directors can be required to be present in Court,in the Execution process and even be detained in a Civil prison on failure of compliance subject to the above legal provisions.

Managing Directors need to be very cautious and call for timely reports from their Compliance Team on the existence of Temporary Employee related litigation or disputes and direct their immediate resolution.Randomly they should directly test check such issues with their Legal counsel handling such cases and direct resolution by direct intervention as otherwise they will become answerable to the Courts of Law..This way the Staffing Company can ensure zero level of Litigation and keep sailing in smooth risk free Business.

With Regards

V.Sounder Rajan
VS Rajan Associates,
Legal Consultants for Staffing & Recruiting Industry
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684,

Dear All

Immediate Legal questions for the Staffing & Recruiting Industry -The Sales Promotion Employees (Conditions of Service) Act, 1976 (No. 11 of 1976)

When the Staffing Agency is engaging Contract/Temporary Employees to work for Clients in Pharmaceutical Industry for their Sales promotion business ,is there any extra legal compliance to be done?

A:Yes.There is an Act called The Sales Promotion Employees (Conditions of Service) Act, 1976 (No. 11 of 1976) which is An Act to regulate certain conditions of service of sales promotion employees in certain Establishments . It applies to every establishment engaged in pharmaceutical industry.


With Regards

V.Sounder Rajan
VS Rajan Associates,
Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684,

Dear All

Bonus to Contract Employees

What is the primary liability and responsibility of the Principal Employer to pay Bonus to the Contractors Employee ?

The definition of Employee in the Act is wide :

(13) "Employee" means any person (other than an apprentice) employed on a salary or wage not exceeding [(Note: Subs. by Act No.67 of 1985, Sec.2, for the words "one thousand and six hundred rupees" (w.e.f. 7th November, (1985)) two thousand and five hundred rupees] per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied;

(14) "Employer" includes -
(i) In relation to an establishment which is factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and where a person has been named as a manager of the factory under Cl. (f) of sub-section (1) of Sec.7 of the Factories Act, 1948, the person named; and

(ii) In relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent ;


Therefore the Principal Employer will become liable in view of his having the ultimate control over the affairs of the establishment .

With Regards

V.Sounder Rajan
VS Rajan Associates,
Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684,

IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

ESI PENAL PROVISIONS


What is the sanction i.e the punishment for non compliance of the ESI Act ?

The ESI Act contains adequate provisions to persons for violating its provisions. The relevant penal sections, so far as violations in the matter of coverage, are sections 84, 85, 85-A, 86 and 86-A. The prosecutions under these sections can be filled in the criminal courts and adjudication of the same matter by Employee’s Insurance Court is not a condition precedent.

The salient features of the aforesaid sections are PROVIDED HEREIN :


Section 84: This section inter alia states that whoever, for the purpose of avoiding any payment to be made by himself under the said Act or enabling any other person to avoid any such payment, knowingly makes or causes to be made any false statement or false representations, shall be punishable with imprisonment for a term which may extend to six months or with fine not exceeding two thousand rupees, or with both.

Thus, if any employer, whose factory or establishment is coverable, knowingly makes a false representation / statement about the coverage, he is liable to be punished under this section.

Section-85: Under this section, inter alia, any person who is guilty of any contravention of or non-compliance with any of the requirements of the Act/rules/regulations, shall be punishable with imprisonment for a term which may extend to one year or with fine which may extend to four thousand rupees, or with both.

Failure to cover a coverable entity is punishable under this provision. Pendency of the employer’s application for exemption under sections 87, 88 and 90 of the Act does not grant any immunity to the employer from this provision, as has been held by the Kerala High Court in P. Renuka Vs. ESIC

Section-85-A: This section lay down that if any person, already convicted for any offence punishable under the Act, commits the same offence, he shall be punished with imprisonment for a term which may extend to two years and with a fine of five thousand rupees.

Section-86: According to this section, the prosecution against employer or any other person shall be instituted with the previous sanction of the Insurance Commissioner or any other authorized officer of the Corporation. Under this provision, the power to sanction prosecution has been delegated to the Regional Directors and in charges of sub-regions.

A complaint for any offence under the Act has to be filed in writing in any court having jurisdiction but not inferior to that of Metropolitan Magistrate or First Class Judicial Magistrate.

The complaint should be filed against right person. In Ranjit Kumar Nandy Vs ESIC, a complaint was filed against a person, with appropriate sanction, but subsequently, the real name of the suspect was fond to be different. On this fact, the Calcutta High Court dismissed the case

Section-86-A: If the person committing an offence under the ESI Act is a company (i.e. body corporate including a firm and other association of individual), every person who was in charge of the company shall be liable to be proceeded against and punished, unless it is proved that the offence was committed without his knowledge or despite exercise of due diligence to prevent the same. Thus, any director, manager, secretary etc. Who has consented, connived or was negligent in the matter of commission of any such offence is guilty of that offence.

With Regards

V.Sounder Rajan
VS Rajan Associates,
Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684,

IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

What will be the risk if the Contractor engaged does not hold a valid CLRA licence?

In such a case the Principal Employer loses the opportunity to distinguish his direct employees from those of the Contractors .He will also run the risk of the Contractors employees claiming permanency.


The risk is compounded because of the definition of 'workman' in section 2(1)(b) of the Contract Labour (Regulation and Abolition) Act, 1970, implies that if the workman is not hired through contractor holding a valid license under the CLRA Act, he would be a treated as workman employed by the Principal Employer ..


It is always a safe bet to get a CLRA Licence.It is a Protective Shield ,




With Regards

V.Sounder Rajan
VS Rajan Associates,
Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684,

IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

SUICIDE BY TEMPORARY EMPLOYEE

In the Staffing Industry there are caseS of suicide by the Temporary Employees for various reasons . In all cases it will happen outside the working Hours and the work place .How do we handle them?

Even if there is a Personal Accident Policy the Insurer will not honour it for Suicide.Therefore the dependents will be left high and dry ,The place of suicide being away from the work place the Staffing Company’s liability is excluded unless the cause is traced to specific employment issues like harassment in the work place [not being personal problems like Love affair etc] .

Full and final settlement to the dependents will comprise of unpaid salary till LWD , encashment of unavailed leave and other payments including gratuity to the dependents. For a married person wife and mother are legally entitled to get 50 % each of the F & F.

Apart from this there is a Social problem of the breadwinner dying. Staffing Companies need to address this social issue in the long run by providing some sort of Solatium Fund to meet such exigencies .

With Regards

V.Sounder Rajan
VS Rajan Associates,
Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684,

Subject: CLRA Compliance Assessment

Dear All


CLRA -Contract Labour [Regulation & Abolition ] Act- Registration Compliance Assessment by Staffing Companies

In relation to No of Contracts with Clients of Staffing Companies requiring CLRA compliance -

CLRA REGISTRATION-INDICATOR

5/5 Strong CLRA Compliance
4/5 Above average CLRA Compliance
3/5 Average CLRA Compliance
2/5 Below average CLRA Compliance
1/5 Poor CLRA Compliance


Managing Directors and CEO of Staffing Companies need to make a CLRA Compliance Assessment on a quarterly basis.The self rating will help them to asses the risk.A Higher CLRA compliance rating will also be a selling point to corner a higher market share for the Staffing Company.

Before the Enforcement Machinery of CLRA lands at your door step , the Staffing Company by self assessment can achieve the rating of Strong and claim "Excellence in Compliance".

With Regards

V.Sounder Rajan
VS Rajan Associates,
Advocates & Notaries -Legal Consultants for the Indian Staffing and Recruiting Industry
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684, .