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Why should we pay bonus,gratuity, leaves, notice pay to daily wage workers.

(Querist) 23 September 2008 This query is : Resolved 
Dear Mr. Harbhajan.
I have come across one issue. We have a branch in Neiveli ( chennai)where we are working for BHEL company. We have hired 25 workers on daily wage and 2 on monthly. Those who are on daily wages are under Neiveli labour License purview.
Now some workers are doing some agitations. But our representative who is on monthly rolls insisting on unofficial negotiations for Full and Final Settlements as we wanted to remove 4 daily wage workers.
Here important issue that even though they are under daily wage, we are paying monthly once in to their bank accounts (no. of days worked * daily wage)..hence it is not a salary but a wage.

Now, it seems local trade union met chennai asst labour commissioner and unauthorizedly made the following issues to follow if we need to remove. Here I have a doubt..whether are they really come under law ? or simply that Labour Commissioner supporting these union ?
Can we oppose this ?

Those points are :
1. we should pay 20 days' leave wages for every 240 days completed.

2. We should pay 15 days pay for every 240 days completed. ( might be gratuity).

3. We should pay Conveyance allowance of Rs. 200 every month for the service they have completed.

4. We should give either one month notice or pay 26 days notice pay amount now itself.

Here we can assume that they have joined on 1.12.06 and working till now.

I have a doubt, if these are daily labour why should we pay bonus, gratuity, leaves salary, conveyance ( no law), and notice pay..?
How to go for argument with that Chennai Labour Commissioner in this regard and how can we support this ?
H. S. Thukral (Expert) 23 September 2008
Dear Mr. Balaram
To understand the issue, you have to go through the definitions of employee/workman in every piece of social legislations in Industrial Law such as Payment of Gratuity Act, Payment of Bonus Act,Industrial Disputes Act etc. If the definition says that the daily wager is covered under the Act, then he is eligible for benefits under the relevant law otherwise not. You can support your view on the basis of law only. In my personal opinion A daily wagers is entitiled to prorata bonus if he has worked 30 days or more in any accounting year. Gratuity is based upon continuous service of 5 years and I don't think a daily wager would be eligible or qualify for that. The definition of workman in Industrial Dispute Act and Factories Act is very wide and daily wagers are also workmen under these Acts. They are entitiled to all facilities such as washrooms/rest rooms /canteen/leave/ etc.
under the Factories Act.However no notice pay is required. A daily wager is appointed on day to day basis and hence there is no compulsion to employ him on following day. You can terminate his services without notice or retrenchment benefits if you have employed him on daily basis or as a badli workman.
PALNITKAR V.V. (Expert) 22 February 2009
Mr. Thukral seems to right.


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