Legal Compliances Required For The Staffing Industry

IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
Is there any duty for the Contractor or the Staffing Agency to maintain any Statutory Record of persons employed by them ?
In accordance with Rule 75 of the CLRA Rules every contractor shall maintain in respect of such registered establishment where he employs contract labour a register in Form XIII.This means that the Register in Form XIII is to be in relation to such registered employment.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants-HR
E-mail : rajanassociates@eth,net,

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

Legal Consultants for Staffing & Recruiting Industry

E-mail : rajanassociates@eth,net,

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
Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry
E-mail : rajanassociates@eth,net,

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

Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry

E-mail : rajanassociates@eth,net,

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

Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry

E-mail : rajanassociates@eth,net,

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

Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry

E-mail : rajanassociates@eth,net,

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

Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry

E-mail : rajanassociates@eth,net,

Dear Sir,
I would like to know which are the top contract staffing staffing companies in India. If you could give me statistic it will be of great help. And what are the terms and conditions that has to be followed for Contract staffing.
Regards,
Vinod

Dear
Pls see https://www.citehr.com/70981-top-10-...ies-india.html
My Views!: Top Ten Staffing Agencies
rajanassociates

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

Advocates & Notaries -Legal Consultants for the Indian Staffing and Recruiting Industry

E-mail : rajanassociates@eth,net,
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