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Staffing & Recruiting Industry -Legal Updates

Last post October 6, 2014 05:40 AM by rajanassociates. 106 repiles.

November 22, 2010 10:34 PM 1
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Staffing & Recruiting Industry -Legal Updates

Dear All


We are specially creating this Post  in CHRM for the Staffing & Recruiting Industry  Professionals  especially when  the Industry has seen tremendous growth in the past 5 years. To keep pace Professionals need to keep themselves updated on the Legal compliance .

Many International players have come into the Indian Scene. But India consisting of Different States and Labour being on the Concurrent List the Legislation can be done both by the Centre and the States.That is why in India we find so many Labour Legislations.

In fact China has pioneered in enacting a "Contracting Law" which regulates the Industry.

The supporters of Globalization want to do away with a so many Legislation but they have not understood the Federal Nature of Our Constitution and the answer for that should not be " a cry without any result". Till that goal of Standardisation of Labour Laws is reached the Industry  has to operate and function within the four corners of the existing Laws.This post is an begining in that direction. In fact there is another way of looking at the problem, the need to operate within the Legal framework taking the benefit of the existing laws.This is a win-win situation.


With Regards

V.Sounder Rajan  Advocate
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
January 31, 2011 09:462
rajanassociates
Total Posts: 136
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Re: Staffing & Recruiting Industry -Legal Updates

IMMEDIATE LEGAL QUESTIONS HAUNTING INDIAN STAFFING COMPANIES


Dear All

In continuation of our earlier post on the subject :

Questions are raised on the rotation of employees of contractors working with Principal Employers ,

The Contractor’s employees are working in XYZ co. [Client] and the employees are on the Contractors pay roll. The Contractor provides them PF . ESIC , Gratuity ,bonus , leave salary ,etc, But the Principal Employer wants rotation of the Contractor Employees who have completed 180 days and wants appointment of new employees in the place of left employees,

Can the request be acceded because ,all the employees are on the permanent rolls of the Contractor and not on contract basis.


The request of the Client can be accepted and is meant to provide break of service from continuous employment. Otherwise the Staffing Company or Contractor will lose business .The concept of continuous employment is found in Sec 25 B of the Industrial Disputes 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.

The Client from their end want to overcome the “continuous employment of the Contractor’s employee with them "for various reasons like avoiding a claim for permanency from the Contractor’s employees and this cannot be faulted. In case the employees are permanent on the Contractor’s rolls which means you need to swap your employees between different Clients. From the "dedicated" mode of deputation a need may arise to switch to "multiple" mode. This is where the Indian Temp Staff Industry must aim to go..The Appointment Letter and Agreement with the Contractors Staff has to be tuned to take care of all this with expert legal help.

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.
February 4, 2011 02:263
rajanassociates
Total Posts: 136
Join Date: November 22, 2010
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Post Date: February 4, 2011
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Re: Staffing & Recruiting Industry -Legal Updates

Dear All


NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES


A common question arises in Contractual Employment


What are the Statutory Registers to be maintained by the Staffing Agency in relation to Muster roll, wages registers, deduction register and overtime ?

As per Rule 78 of CLRA Rules it provides for maintenance of the following :
Muster roll, wages registers, deduction register and overtime register.-(1) (a)

Every contractor shall in respect of each work on which he engages contract labour -

(1) maintain a muster roll and a register of wages in Form XVI and Form XVII, respectively:
Provided that combined Register of Wage-cum Muster Roll in Form XVIII
shall be maintained by the contractor where the wage period is a fortnight or less;

(II) maintain a Register of Deductions for damage or loss, Register of Fines and Register of Advances in Form XX, Form XXI and Form XXII, respectively;

(III) maintain a Register of Overtime in Form XXIII recording therein the number of hours of, and wages, paid for, overtime work, if any.

(b) Every contractor shall, where the wage period is one week or more issue wage slips in Form XIX, to the workmen at least a day prior to the disbursement of wages.

(c) Every contractor shall obtain the signature or thumb-impression of the worker concerned against the entries relating to him on the Register of Wages or Muster Roll-cum-Wages Register, as the case may be, and the entries shall be authenticated by the initials of the contractor or his authorized representative and shall also be duly certified by the authorized representative of the principal employer in the manner provided in rule 73.
(d) In respect of establishments which are governed by the Payment of Wages Act, 1936 (4 of 1936), and the rules made there under, or Minimum Wages Act, 1948 or the rules made there under, the following registers and records required to be maintained by a contractor as employer under those Acts and the rules
made there under shall be deemed to be register and records to be maintained by the contractor under these rules, namely:
(a) Muster roll;
(b) register of wages;
(c) register of deductions;
(d) register of overtime;
(e) register of fines;
(f) register of advances;
(9) wage slip.

(3) Notwithstanding anything contained in these rules, where a combined or alternative form is sought to be used by the contractor to avoid duplication of work for compliance with the provisions of any other Act or the rules framed there under or any other laws or regulation where mechanized pay rolls are introduced for better administration, alternative suitable form or forms in lieu of any of the forms prescribed under these rules, may be used with the previous approval of the Chief Labour Commissioner (Central).

Technically when using mechanized Payroll previous approval of the Chief Labour Commissioner needs to be obtained.

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
February 8, 2011 10:154
rajanassociates
Total Posts: 136
Join Date: November 22, 2010
Rank: Leader
Post Date: February 8, 2011
Points: 680
Location: India

Re: Staffing & Recruiting Industry -Legal Updates

Dear All


NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES


  A viewer of our posting has posed the following crucial question which arises in Contractual Employment


In case the employee works for just a day and does not turn back to work....how could we make his personal data, coz you might understand here that in case of contract staff, to make their personal data we take atleast a week's time. if he quits within a day, how can we handle payment of ESI/ PF; as we do not have their details for registration. And according to CLA we need to pay and register the employee for all compliance.


The ESI Act provides that an employee is required to file a declaration form upon employment in factory or establishment to show that he is covered under the Act.
On registration every insured person is provided with a ‘temporary identification certificate’ which is valid ordinarily for a period of three months but may be extended, if necessary, for a further period of 3 months. Within this period, the insured person is given a permanent ‘family photo identity card’ in exchange for the certificate.

The above is a compliance requirement from the Employee which may give insight into compliance requirement from the Employee.

But the EPF Act charging Section 6 reads as follows:

6. Contributions and matters which may be provided for in Schemes. – The contribution which shall be paid by the employer to the Fund shall be ten percent. Of the basic wages, dearness allowance and retaining allowance, if any, for the time being payable to each of the employees whether employed by him directly or by or through a contractor, and the employee’s contribution shall be equal to the contribution payable by the employer in respect of him and may, if any employee so desires, be an amount exceeding ten percent of his basic wages, dearness allowance and retaining allowance if any, subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under this section:

Provided that in its application to any establishment or class of establishments which the Central Government, after making such inquiry as it deems fit, may, by notification in the Official Gazette specify, this section shall be subject to the modification that for the words “ten percent”, at both the places where they occur, the words “12 percent” shall be substituted:

Provided further that where the amount of any contribution payable under this Act involves a fraction of a rupee, the Scheme may provide for rounding off of such fraction to the nearest rupee, half of a rupee, or quarter of a rupee.
Explanation I – For the purposes of this section dearness allowance shall be deemed to include also the cash value of any food concession allowed to the employee.
Explanation II. – For the purposes of this section, “retaining allowance” means allowance payable for the time being to an employee of any factory or other establishment during any period in which the establishment is not working, for retaining his services.


Contribution is defined as follows:

(c) “Contribution” means a contribution payable in respect of a member under a scheme or the contribution payable in respect of an employee to whom the Insurance Scheme applies;

Employee Definition:
 
"Employee" as defined in Section 2(f) of the Act means any person who is employee for wages in any kind of work manual or otherwise, in or in connection with the work of an establishment and who gets wages directly or indirectly from the employer and includes any person employed by or through a contractor in or in connection with the work of the establishment.

Strictly speaking as the absconding Employee has been employed for a day there is no provision for exclusion.

But in practice each Organizations pay rolling procedure will definitely influence the Compliance on single day absconding cases.On a case to case basis you can check up with your EPF/ESI Inspector and go by their advice as they are the Enforcing Agency. It is high time that the EPF/ESI Law is amended to take care of such a situation especially arising in the Flexi-Staffing/Temping Industry.

The EPF website says if your Organization is a covered establishment under PF Act .Note: w.e.f 1-11-90 , an employee is eligible for membership from the very first date of joining a covered establishment.

All labour welfare laws do not provide for automatic exemption.This is because Industry may be inclined to use the exemption to neutralise the Law.Therefore no leeway or discretion is to be given . Compliance is the requirement which Govt expects from the Industry.Then it becomes an issue between the Employee and the Department. As an Employer after proper compliance their duty is discharged.For the Employer there is no need to go beyond that.



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
February 11, 2011 11:195
rajanassociates
Total Posts: 136
Join Date: November 22, 2010
Rank: Leader
Post Date: February 11, 2011
Points: 680
Location: India

Re: Staffing & Recruiting Industry -Legal Updates

Dear All


NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

Whether Trainees employed by the Staffing Agency and sent for work to Establishments covered under Shops & Establishments Act are exempted for providing  Statutory Benefits ?

Sec 2 (f) of EPF Act does not provide for an exclusion or exemption of an Apprentice/Trainee under the Shops & Establishments Act .

The Apex Court Judgment in the case reported in the matter of The Regional Provident Fund Commissioner, Mangalore Versus M/s. Central Aercanut & Coca Marketing and Processing Co-op. Ltd. the Hon’ble Bench comprising of THE HONOURABLE MR. JUSTICE ARIJIT PASAYAT & THE HONOURABLE MR. JUSTICE R.V. RAVEENDRAN touched on exemption of an apprentice engaged under the Apprentices Act or under the Standing Orders is excluded from the definition of an 'employee' as per Section 2(f) of the Act .

In the ESI Act also there is exemption of an apprentice engaged under the Apprentices Act or under the Standing Orders.

Shops & Establishments Act is not included either in Sec 2 (f) of the EPF Act or Sec 2 (9) of the ESI Act.Both these Statutes need to be amended to include this.

Hence coverage is not exempted unless he /she are taken into employment under Apprentices Act or under the Standing Orders. For availing this benefit the Certification of the Standing Orders is to be done or the Model Standing Orders adopted by the Staffing Company.

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
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