Contractual Employer deducting PF
2 weeks ago
Nowadays, there are no rules protecting employees from layoffs, regardless of whether they are contractual or permanent. It seems that most IT companies have adopted a strategy under the guise of performance. From my personal experience, even if an employee performs well and contributes significantly, if the company finds that they can hire a cheaper candidate and save on salary costs, they will do so. They force the employee who earns a higher salary to train someone with a lower salary. Once the knowledge transfer (KT) is complete, if the lower-paid individual is capable, the company will dismiss the higher-paid employee citing performance issues. They do not consider the impact on the employee’s family, their expenses, rent, or how they will manage daily life and repay loans. In these situations, the affected employee is left speechless and disillusioned. Consequently, IT employees are forced to take on contractual jobs alongside permanent positions to ensure some job security. However, if they are terminated from one job without notice, they might seek another contractual job. But if the contractual job also deducts Provident Fund for two or three months, PF contributions overlap, and eventually, the employee becomes jobless. This scenario explains why skilled employees are becoming jobless. Please help, what should we do if an employer fires an employee in such cases?
A.Dear Sir,
Your issue cannot be solved without the involvement of following department. Try to approach the following department and get it solved.
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Please approach the following authority or similar authority in a state
The Office Commissioner of Labour
Section 12 in The Industrial Disputes Act, 1947
12. Duties of conciliation officers.- (relevant section 12(2) of ID Act)
(1) Where any industrial dispute exists or is apprehended, the conciliation officer may, or where the dispute relates to a public utility service and a notice under section 22 has been given, shall hold conciliation proceedings in the prescribed manner.
(2) The conciliation officer shall, for the purpose of bringing about a settlement of the dispute, without delay, investigate the dispute and all matters affecting the merits and the right settlement thereof and may do all such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute.
(3) If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation proceedings the conciliationofficer shall send a report thereof to the appropriate Government 1 or an officer authorised in this behalf by the appropriate Government] together with a memorandum of the settlement signed by the parties to the dispute.
(4) If no such settlement is arrived at, the conciliation officer shall, as soon as practicable after the close of the investigation, send to the appropriate Government a full report setting forth the steps taken by him for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof, together with a full statement of such facts and circumstances, and the reasons on account of which, in his opinion, a settlement could not be arrived at.
(5) If, on a consideration of the report referred to in sub- section (4), the appropriate Government is satisfied that there is a case for reference to a Board, 2 Labour Court, Tribunal or National Tribunal,] it may make such reference. Where the appropriate Government does not make such a reference it shall record and communicate to the parties concerned its reasons therefor.
(6) A report under this section shall be submitted within fourteen days of the commencement of the conciliation proceedings or within such shorter period as may be fixed by the appropriate Government: 3 Provided that, 4 subject to the approval of the conciliation officer,] the time for the submission of the report may be extended by such period as may be agreed upon in writing by all the parties to the dispute.]
To restrict IT Companies from exploiting their employees by playing double standards, the Division Bench of the Karnataka High Court in the case of Commissioner of Income Tax v. Texas Instruments India Pvt Ltd (2021) 435 ITR unambiguously held that the IT employees considered to be "workmen" under Section 2(s) of the Industrial Dispute Act, 1947. The court while reiterating the definition of "workmen" under the Industrial Disputes Act stated that, "In terms of section 2(s) of the ID Act, the definition of a workman is very broad since the said definition would cover any person who has the technical knowledge, self skilled in an industry. Thus the software engineer would per se come within the purview and ambit of a workman under Section 2(s) of the ID Act so long as such a person does not take a supervisory role". Further, the Hon'ble Bombay High Court in the case of Godrej and Boyce Manufacturing Company Ltd. v. Shivkranti Kamgar Sanghatana, 2024 SCC OnLine Bom 938, decided on 28-03-2024 ruled out that the nature of duties and functions is the determining factor in ascertaining ‘workman’ under S. 2(s) of Industrial Disputes Act, 1947, Given the above-cited ruling of the Hgh Courts, it can be safely opined that the employees of the IT Sector irrespective of their nature or terms of employment comes under the purview of the Industrial Disputes Act, 1947 and can raise disputes before the Industrial Tribunal/Labour Court seeking relief against their illegal termination/retrenchment by their employers. Section 25F of the Industrial Dispute Act, 1947 provides for the employer to fulfil certain conditions before retrenching any employee. It states that no workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until- (a) the workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice, (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days’ average pay for every completed year of continuous service or any part thereof in excess of six months; and (c) notice in the prescribed manner is served on the appropriate Government. The condition given under section 25F(c) requires the employer to give notice to the appropriate government in addition to the other two conditions. Further, unlike notice requirements of section 25F, the employer is required under Section 25N to make an application along with the reasons for intended retrenchment to the State Government for seeking its prior permission to retrench the employee. Hence, a simple termination as per the employment contract can prove disastrous if the employee challenges the termination before the Industrial Tribunal or Labour Court. Further, Termination without notice amounts to illegal termination and is defined as an industrial dispute under Section 2A of the Industrial Disputes Act, 1947 which also violated the mandatory provision of Sec.25F and 25N of the Act that prescribed certain conditions to comply with by the employer before termination/retrenchment of a workman/employee from the employment. In that scenario, the terminated employee/workman can raise an industrial dispute directly before the Industrial Tribunal/Labor Court concerned for adjudication within three years from the date of termination/retrenchment. So, in the prevailing situation, if you are not holding the position of Manager/Supervisor then after serving a legal notice to the Company, you can raise an Industrial dispute directly before the State Govt. Industrial Tribunal under Sec.2A of the I D Act. and simultaneously file an application u/s.33C(2) of the I D Act before the concerned Labour Court claiming dues from your employer receivable to an employee on illegal termination/retrenchment. Otherwise, if you are holding the position of Manager/Administrative Officer in the Company, you have to file a civil suit before the Civil Court seeking appropriate relief in the matter. The contractual employees are also covered under the EPF & M P Act, 1952 and contribution is deducted once they are engaged by an employer as per the Act. For irregular interruption in employment and reemployment in other establishments, a member of EPF faces overlapping records in his EPF account. A Joint Declaration Form is used to correct Provident Fund (PF) member details. It is a combined form required to be signed by both the employee and employer and to be submitted to the concerned office of the regional PF commissioner to rectify and update the correct information in the employees’ PF accounts. In case of non-cooperation from the previous or present employer in this regard, an individual PF member can file a complaint online using the EPF i-Grievance Management System (www. https://epfigms.gov.in/) and also in offline mode to the concerned office of the Regional PF Commissioner. Feel free to contact our legal team. if you need any assistance in the matter of drafting the complaint or raising a dispute under the I D Act before the Industrial Tribunal / Labour Court/Civil Court, to navigate the issue in the right way.
the Industrial Disputes Act of 1947 defines layoff, it excludes employees in management or supervisory positions. The Act also states that an employee must be a 'workman' to be eligible for any legal redress provided by it. While the word "workman" is broadly defined, it does not apply to most IT personnel. Hence the only solution the said issue is the contract infringement or arbitration.
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