gratuity and regularisation of contractual employee in centre govt.
5 years ago
HI TO ALL THE RESPECTED MEMBERS PRESENT HERE. I HAVE A QUERY :
1) I AM RECRUITED BY CENTRAL MINISTRY ON CONTRACT BASIS AS YOUNG PROFESSIONAL AND DEPUTED BY GOI IN A STATE OFFICE WHEREAS SOME OF MY COLLEAGUES ARE DEPUTED IN CENTRE GOVT. OFFICE.
2) THE APPOINTMENT LETTER WAS SIGNED BY THE CENTRE GOVT OFFICER AND NO 3RD PARTY INVOLVED. OUR SELECTION PROCESS WAS: GD, PERSONAL INTERVIEW AND SKILL TEST
3) AS PER T&C Period of engagement initially for a period of two years (Can be extended up to 5 years –one year at a time
4)You can be transferred to any location based on the - requirements of the Ministry/ State Government.
5) THERE IS NO NOTIONAL BREAK AFTER 89 DAYS AND AFTER 1 YEAR. I AM GETTING MY SALARY AND MARKING ATTENDANCE IN CONTINUITY. THERE IS NO BREAK.
6) can i claim regularisation and gratuity after 5 year of regular contract service. or if contract get extended beyond 5 years?
Shreyash Mohta
Responded 5 years ago
A.Mr. Ankur, as per your query,
In India, we find employers often depute outsourced deputies at their organizations. Those deputies are often called as ‘Contract labours’ and in India and the said is guided under the Act called as ‘THE CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970. Be it an Establishment or Office or Factory or any where workers are employed, the CLRA Act applies. But on the other hand the implementation of this Act is delegated onto the hands of the Appropriate Government. For easy understanding, an Appropriate Authority may be the Central Government or the State Government. Different State forms their State specific rule for the CLRA’s Applicability. The below furnished CLRA applicability table can be referred for our easy view, though the applicability is always subjected to amendments. As per the applicability of CLRA is concerned there arise no dispute or a meager on
the below aspects like:-
EPIF
ESIC
Maternity Benefit
Payment of Wages
Minimum Wages
Labour Welfare Fund
Professional Tax
Payment of Bonus
The main reason as to why there arise little some concerns on extending benefits based upon the above Acts, is because of S. 21 under the CLRA Act. The section basically enumerates the responsibility of the Principal Employer.
But where the case comes into the ‘Payment of Gratuity’ to the contract labours, the mater get complicated as in most of the cases the principal employer do not take the responsibility for the gratuity payment and in the opposite side the Contractors are incapable to afford the payment of gratuity to the workmen as normally in most of the cases contractors income is based upon the ‘commission’ on the total monthly bill amount. Section 21 (4) of the Contract Labour (Regulation and Abolition) Act, 1970 (CLRA), mandates that a principal employer is responsible for the payment of ‘wages’ to a contract employee in the event of a contractor’s failure to pay within the stipulated timelines or in the event of a contractor making a short payment. The principal employer then has the ability to recover the amount paid as ‘wages’, from the contractor.
In The Superintending Engineer vs Appellate Authority on 18 July, 2012, the Hon’ble Madras High Court held that the “it is clear that it will be the basic responsibility, under Sec. 21(4) of the Contract Labour Act, of the petitioner to make the payment of gratuity and the petitioner will have a right to recover that sum from the third respondent contractor”.
On analyzing S. 2 (f) of the Payment of gratuity Act it is found that the legislature did not put a distinction between an employer and a principal employer has not been recognized anywhere in the Payment of Gratuity Act 1972. As per Sec 2 (f) (iii) of the Act, employer means any person who has ultimate authority over the affairs of the establishment.
From the ‘Payment of Gratuity’ point of view, it is the mandate upon the ‘Employer’ to pay gratuity to the employees who suffice S. 4(1) read with S. 2 (c).
(D.B.R. Mills Ltd. Vs. Appellate Authority)
And for certain, contractors who are responsible only for supplying or providing for manpower do not owe to qualify as an ‘Employer’ under S. 2(f) of the Payment of Gratuity Act and at the same time only the ‘Principal Employer’ do have control over the affairs of the business.
Employee’ definition
Section 2 (e) of The Payment of Gratuity Act, states that employees means the person employed on wages to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, but deliberately excluded the Apprentice appointed under the Apprentice Act.
Thus even in this case also the legislature do not segregated the Contract Labours or Company payroll employees in respect to Gratuity payment.
Hence an employee whether on-roll or through contractor, will be eligible for the payment of Gratuity upon substantiated S. 4 (1) read with S. 2(c).
From the above discussion it is clear that
If any welfare legislation, contemplates two meanings, then the Judiciary do interpret the cause which best serves benefit to the beneficiary or the employee.
Under CLRA Act, wages includes the payment which the Employees are entitled for payment at his/her termination form employment, be it called as Gratuity or otherwise.
Gratuity applies to both on-roll and off-roll employees, if attracts S.4 of PoG Act.
Under Gratuity Act Employer means the one has the ultimate control over the affairs of the Company.
The Principal Employer can claim or recover the gratuity amount paid to the contract labour from the Contractor.
Hope this helped.
Shreyash Mohta.
In India, we find employers often depute outsourced deputies at their organizations. Those deputies are often called as ‘Contract labours’ and in India and the said is guided under the Act called as ‘THE CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970. Be it an Establishment or Office or Factory or any where workers are employed, the CLRA Act applies. But on the other hand the implementation of this Act is delegated onto the hands of the Appropriate Government. For easy understanding, an Appropriate Authority may be the Central Government or the State Government. Different State forms their State specific rule for the CLRA’s Applicability. The below furnished CLRA applicability table can be referred for our easy view, though the applicability is always subjected to amendments. As per the applicability of CLRA is concerned there arise no dispute or a meager on
the below aspects like:-
EPIF
ESIC
Maternity Benefit
Payment of Wages
Minimum Wages
Labour Welfare Fund
Professional Tax
Payment of Bonus
The main reason as to why there arise little some concerns on extending benefits based upon the above Acts, is because of S. 21 under the CLRA Act. The section basically enumerates the responsibility of the Principal Employer.
But where the case comes into the ‘Payment of Gratuity’ to the contract labours, the mater get complicated as in most of the cases the principal employer do not take the responsibility for the gratuity payment and in the opposite side the Contractors are incapable to afford the payment of gratuity to the workmen as normally in most of the cases contractors income is based upon the ‘commission’ on the total monthly bill amount. Section 21 (4) of the Contract Labour (Regulation and Abolition) Act, 1970 (CLRA), mandates that a principal employer is responsible for the payment of ‘wages’ to a contract employee in the event of a contractor’s failure to pay within the stipulated timelines or in the event of a contractor making a short payment. The principal employer then has the ability to recover the amount paid as ‘wages’, from the contractor.
In The Superintending Engineer vs Appellate Authority on 18 July, 2012, the Hon’ble Madras High Court held that the “it is clear that it will be the basic responsibility, under Sec. 21(4) of the Contract Labour Act, of the petitioner to make the payment of gratuity and the petitioner will have a right to recover that sum from the third respondent contractor”.
On analyzing S. 2 (f) of the Payment of gratuity Act it is found that the legislature did not put a distinction between an employer and a principal employer has not been recognized anywhere in the Payment of Gratuity Act 1972. As per Sec 2 (f) (iii) of the Act, employer means any person who has ultimate authority over the affairs of the establishment.
From the ‘Payment of Gratuity’ point of view, it is the mandate upon the ‘Employer’ to pay gratuity to the employees who suffice S. 4(1) read with S. 2 (c).
(D.B.R. Mills Ltd. Vs. Appellate Authority)
And for certain, contractors who are responsible only for supplying or providing for manpower do not owe to qualify as an ‘Employer’ under S. 2(f) of the Payment of Gratuity Act and at the same time only the ‘Principal Employer’ do have control over the affairs of the business.
Employee’ definition
Section 2 (e) of The Payment of Gratuity Act, states that employees means the person employed on wages to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, but deliberately excluded the Apprentice appointed under the Apprentice Act.
Thus even in this case also the legislature do not segregated the Contract Labours or Company payroll employees in respect to Gratuity payment.
Hence an employee whether on-roll or through contractor, will be eligible for the payment of Gratuity upon substantiated S. 4 (1) read with S. 2(c).
From the above discussion it is clear that
If any welfare legislation, contemplates two meanings, then the Judiciary do interpret the cause which best serves benefit to the beneficiary or the employee.
Under CLRA Act, wages includes the payment which the Employees are entitled for payment at his/her termination form employment, be it called as Gratuity or otherwise.
Gratuity applies to both on-roll and off-roll employees, if attracts S.4 of PoG Act.
Under Gratuity Act Employer means the one has the ultimate control over the affairs of the Company.
The Principal Employer can claim or recover the gratuity amount paid to the contract labour from the Contractor.
Hope this helped.
Shreyash Mohta.
Helpful
Helpful
Share
ankur arora
Replied 5 years ago
SIR..I AM REALLY THANKFUL TO YOU THAT YOU SPARED SOME PRECIOUS TIME FOR ME. I AM NOT RECRUITED BY ANY THIRD PARTY. DEPUTATION IS DONE DIRECTLY BY THE CENTRE GOVT. MINISTRY BODY.
A.Dear Sir,
You can give representation if not considered for said benefits, you may approach either Central Administrative Tri9bunal or High Court.
For full procedure contact me on mobile through Vidhikarya.
Rate me Five Star *
Please visit the following link.
https://vidhikarya.com/LawyerRating/9506c43f5d0b2d266a07
You can give representation if not considered for said benefits, you may approach either Central Administrative Tri9bunal or High Court.
For full procedure contact me on mobile through Vidhikarya.
Rate me Five Star *
Please visit the following link.
https://vidhikarya.com/LawyerRating/9506c43f5d0b2d266a07
Helpful
Helpful
Share
Read Related Answers
Pf exit date noy done by employer
Dear Client,
Firstly you have breached the contract of employer and employee hence once the due process of resignation is followed only then you would be eligible for the PF. Please get back with you...
Employer replied to my BGV as "Absconded candidate"
Dear Sir
Please approach the following authority or similar authority in a state
The Office Commissioner of Labour
Karmika Bhavan, Dairy Circle,
Bannerghatta Road, Bangalore-29.
080-29753078
labou...
Pf exit date
Dear Sir,
PF PROVIDENT FUND
How to solve the two UAN problem?
Note that each person should have only one UAN number (like PAN), hence if you have multiple UAN, it’s not allowed and creates problem...
Company asked me to pay one month salary on resignation on probation period
Dear Client,
If the offer of the company meets the terms of your appointment letter appointing you as a probationer, then you can opt for resignation on payment of one month's salary without serving a...
UNCREDITED SALARY,THREAT AND EMOTIONAL SUFFERINGS
Dear Client,
An employee is governed by the appointment/offer letter issued by a company and based on acceptance of the terms and conditions of the appointment letter you were allowed to resume your...
Read Blogs on Employment and Labour
Employment and Labour Lawyers
Find Lawyers by Location
