T HE CHALLENGES IN ENGAGING CONTRACT WORKFORCE – LABOUR LAW PERSPECTIVE

L IVE CASES Air India & Best & Crompton – IR exposure Group 4 Securities – Financial exposure Company X: for procedural and safety – Prosecution exposure

N EED FOR CONTRACT WORKFORCE Uncertainty in businesses Flexible arrangement within the legal framework Employer can concentrate on core activities Entrusting to a professional agency

T YPES OF CONTRACTS Job contract Manpower supply contract (without supervision by the Principal Employer) Both are recognised under the Act

W HAT NEEDS TO BE ENSURED ? The work is not prohibited Core and perennial nature of work to be avoided Ration of regular Vs contract workers There must be written agreement Contractor does have EPF and ESI codes

U NDERSTANDING CERTAIN TERMS Contractor Contract Labour / Workman Establishment Wages Ultimate liability

P RIMARY COMPLIANCE ACTIVITIES Registration Certificate by Principal employer Form V has to be issued to the contractor Contractor license by the Contractor Payment of minimum wage (national floor MW or notified MW) ESI and EPF Coverage from day one License by the contractor including sub contractors (or sub contractors)

O THER COMPLIANCE ACTIVITIES Maintenance of registers Submission of returns Display of abstract / notices Providing amenities to contract labour ( drinking water, toilets, canteen, etc. ) Safety measures

A BOLITION OF CONTRACT LABOUR Only Sec 10 speaks about this The legal position in case of abolition Various judgements Impact of: 240 days under ID Act Can raise ID challenging the status 480 days under Conf Perm Status Act

O THER RELEVANT POINTS EPF and ESI coverage from the first day All categories of workforce engaged for work have to be covered Bifurcation of minimum wages to minimize EPF outflow is not legally correct Nature of each wage component determines statutory contributions – not nomenclature PEs liability on: Gratuity – Two views prevail Bonus – As on date, not liable

C ERTAIN CHECK POINTS It has to be job contract PE not to supervise and control CLs PE not to allocate work PE not to enforce reward or reprimand PE not to make payment PE not to sanction leave

Our Contact: Aparajitha Corporate Services Limited Nagaraj Krishnan – Varadan K