The Employee May Ask For Permanent Position Or Other Benefits?

The labours are selected on contract basis (for period of six months only). and after giving 1 week break the extension order has been given to the contract labour upto six months. then one more extension was given to the some particular employees, after relieving order has been given to labours. In mean while we have advt. published for outsourcing the labours from agencies. and the same employees has been taken as outsourced labour for one year. As a principal employer we may face any issues if continues the same employee? what are problems may face by principal employer?

what ever change in designation does not deny his claim for permanent position when he prefers a complaint against your company before labour court. Hence do not resort such activity and try to convince management to take manpower on a permanent role atleast for a good worker.

Dear Suresh,

The arrangement of outsourcing of labour being adopted in your company is nothing but an " Umbrella Contract " the salient feature of which is the continuity of employment of the same contract workmen in the same establishment with periodically changing the contractors for the purpose of records. If you analyse the CLRA Act,1970, you will find that engagement of contract labour on jobs or operations of perennial nature is prohibitable by the Appropriate Government. Even otherwise, in case of any complaint or claim regarding permanency or for absorption as regular workmen of your company by the contract labour, it would be very easy to prove that your contracts are sham or bogus ones only to deprive such workmen the rights and benefits of regular employment under the garb of contract labour. Such a practice is certainly an unfair labour practice under the Industrial Disputes Act,1947 [ Sl no 10 of I of Schedule V ]. Any such judicial orders against your management would have retrospective effect from the day one of the commencement of such an arrangement. So it would be prudent to take the issue seriously at least now and plan your staffing pattern accordingly. The ratio decidendi of the case laws and the periodical restrictions imposed by the Govts on contract labour now-a-days indicate the trend that adoption of contract labour is not more beneficial or better than regular employment but for the flexibility in Hire and Fire.