Gratuity to contract labour

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Querist : Anonymous (Querist)
21 December 2011

is there any judgment on payment of Gratuity by the Principal Employer in respect of contract labour working with different contractors for different time with less than 5 yrs service in respect of each contractor but more than 20 years of total service

R.Ramachandran (Expert)
21 December 2011

There are no case laws so far to that effect.

Do you mean to say that the worker is engaged with the same principal employer for about 20 years, but under different contracors?

Dhingra, (Expert)
Click to Talk
21 December 2011

Principal employer is not liable to pay any gratuity to a worker hired through a contractor as of contract. Only the contractor, on whose role the worker had been, is liable to pay gratuity, if becomes due.

Querist : Anonymous (Querist)
21 December 2011

In response to Mr P.Ramachandran.What you say is correct 20 yrs of service with the same Principal Employer but with different Contractor

Querist : Anonymous (Querist)
21 December 2011

In response to MrPS Dhingra, CEO and Consultant . There is a Madras HC judgment reported in 2003-I-LLJ-854(MADRAS FERTILIZERS LTD VS cONTROLLING AUTHORITY UNDER PG ACT & OTHERS) Justice V.S. SIRPURKAR has held that It is the responsibility of the Principal Employer to pay the gratuity of contract worker subject to recovery from the contractor later.In this case the contract worker worked with the same contractor for more than 5 years with the same Principal Employer. I seek decision for responsibility of Principal Employer when the contract labour worked with the same employer for 20 yrs but with different contractor of spell of service less than 5 yrs with each contractor

raj kumar makkad (Expert)
21 December 2011

Devinder Singh vs Municipal Council, Sanaur [SUPREME COURT OF INDIA, 11 Apr 2011]

(A) Labour & Industrial Law -

Industrial Dispute Act, 1947 - Appellant was engaged by the respondent for doing the work of clerical nature - He was paid consolidated salary of Rs.1,000 per month - After two years, his service was discontinued without giving him notice and compensation as per the requirement of s. 25-F of the Act - Appellant raised industrial dispute, which was referred by the State Government to the Labour Court - Labour Court passed an award for reinstatement of the appellant without back wages - Labour Court held that the appellant had worked for more than 240 days in a calendar year preceding the termination of his service and that his service was terminated without complying with the mandatory provisions contained in s. 25F of the Act - Writ petition filed thereagainst was allowed by HC - HC held appointment of appellant was contrary to the recruitment rules and arts. 14 and 16 of the Constitution - Hence, instant appeal - Whether HC was justified in upsetting the award of reinstatement? - Held, HC neither found any jurisdictional infirmity in the award of the Labour Court nor it came to the conclusion that the same was vitiated by an error of law apparent on the face of the record - Approach adopted by the HC in dealing with the award of the Labour Court was ex facie erroneous and contrary to the law laid down by SC - Impugned order was set aside and the award passed by the Labour Court for reinstatement of the appellant was restored - Appeal allowed.

(B) Labour & Industrial Law - Industrial Dispute Act, 1947 - Definition of workman - Held, whenever an employer challenges maintainability of industrial dispute on the ground that the employee was not a workman within the meaning of s. 2(s) of the Act, what the Labour Court/Industrial Tribunal was required to consider was whether the person was employed in an industry for hire or reward for doing manual, unskilled, skilled, operational, technical or clerical work in an industry - Once the test of employment for hire or reward for doing the specified type of work was satisfied, the employee would fall within the definition of 'workman' - Further, source of employment, the method of recruitment, the terms and conditions of employment/contract of service, the quantum of wages/pay and the mode of payment were not at relevant for deciding whether or not a person was a workman within the meaning of s. 2(s) of the Act - Definition of workman also did not make any distinction between full time and part time employee or a person appointed on contract basis - There was nothing in the plain language of s. 2(s) from which it could be inferred that only a person employed on regular basis or a person employed for doing whole time job was a workman and the one employed on temporary, part time or contract basis on fixed wages or as a casual employee or for doing duty for fixed hours was not a workman - Appeal allowed.

prabhakar singh (Expert)
22 December 2011

Agree with experts.

Querist : Anonymous (Querist)
24 December 2011

Thank you to Sri Rajkumar Makkad.The citation quoted is with regard to workman under ID Act.But such definition of workman under ID Act can be equated to ëmployees"under Payment of Gratuity Act.The definition of workman under ID Act and employees under Payment of Gratuity Act are distinguishable.Pl.clarify

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