1. What are the differences between contract
labour and outsourcing? Which is better option and why?
2. Is Contract labour Act applicable when jobs
and services are outsourced?
3. What are the non-perennial and non-permanent
jobs which can be assigned to contract labour?
4. Can we have permanent employees and contract
labour working side by side on the same job?
5. What is the best ratio between permanent and
contact labour? Can we engage 100% contract labour?
6. Can we have different wages and other terms
for permanent employees and contract labour doing the same or similar job?
7. Can we transfer casuals/temporaries on the
rolls of contractor?
8. Application and implication of P.F., ESI,
Bonus, Gratuity and other statutory benefits to contract labour, casuals etc.
and how to ensure compliance?
9. How to ensure submission of PF and ESI returns
by the contractor?
10. How to get a new PF code number from PF
authorities?
11. Security, Housekeeping, Drivers, Canteen,
Horticulture etc. on contract/voucher payment. Sustainability? Is there any
Case laws?
12. Liability of principal employer for injury,
illness, disability, death etc.
13. Can and should the employer have a say in the
number and selection of contract labour?
14. Who is to take disciplinary action against
contract labour? Under what rules? Are standing orders applicable to contract
labour?
15. Is it necessary and desirable to issue
employment card/gate pass/identity card to contract labour? If so under whose
authority/signature? Safeguards?
16. Each contractor engaging less than 20 but
together they engage more than 20. Will the provisions of registration, licensing
and other statutory provisions apply?
17. Statutory requirements and precautions in
awarding contract for safeguarding managements interests.
18. If License not renewed but contractor
continues to work – legal implications including permanency?
19. Contractor changing but contract labour not
changing – implications, precautions required?
20. Contract terminated due to unsatisfactory
performance of the contractor, contractor leaves – can contract labour claim
permanency? What should employer do?
21. Contract labour terminated through a
settlement. Should principal employer be a party?
22. When contractor runs away leaving his
workforce and supervisor, how to manage work and labour and who is to handle
pending conciliation reference?
23. What to do if the contractor refuses to pay
the labour?
24. What are the action required to be taken by
the management after abolition of contract labour?
25. Can management challenge the decision of
appropriate Govt. regarding abolition of jobs?
26. Should contractor and contract labour be
rotated? Why? How often?
27. How to reduce number of contract labour?
28. Contract labour demanding permanency – How to
handle?
29. Contract labour demanding similar benefits as
permanent employees. Is the claim legally valid?
30. Is Pension Scheme also applicable to contract
labour?
31. Is Minimum Wages Act applicable to contract
labour?
32. What is the liability of Principal Employer
in the case of sub-contracting?
33. What are the implications of Supreme Court
Judgment in the SAIL case reversing earlier Air India Judgment?
34. Implications and liabilities of
temporary/casual/probationer employees/trainees? Is there any maximum duration?
35. What is the relevance of 180/240 days &
what are the Implication of breaks?
SOME IMORTANT
QUESTIONS RELATED TO CONTRACT LABOUR
1. What are the differences between contract
labour and outsourcing? Which is
better option and why?
The engagement of labour through a contractor
/ contractors for the accomplishment of certain works other than core ones in
an organization can generally be termed as the system of contract labour,
whereas, outsourcing refers to the practice of contracting out certain
incidental or lean activities/services to outside agencies. Basically, both are in the nature of
contractualisation of labor providing a better output at a reduced cost without
compromising on the competitive working environment. In other words both are
simple contractual arrangements between the de facto employer ie., the
principal employer and the de jure employer ie., the contractor/service
provider. But, difference between the
system of contract labour and the system of outsourcing arises from the manner
of their execution. In contract labour
system, the ubiquity of actual practice would prove that the role of the
contractor is normally limited to that of a supplier of the agreed number of
contract workmen with necessary skill levels, ensuring their availability as
and when required for the principal’s specified operations / services. Continuous supervision and control of the
methods of work and the workmen are retained by the principal himself. In the case of outsourcing, it need not necessarily
be so for in most cases the outsourced services are performed elsewhere under
the direct supervision and control of the service provider. In contract labour system, engagement of
contract labour is more or less a continuous operation as long as the services
are required by the principal employer, whereas, in outsourcing, the
arrangement is normally adhoc and intermittent depending upon the nature of the
services outsourced. In contract labour
system, the principal employer has got certain legal obligations such as
ensuring payment of wages, gratuity, bonus, contributions to P.F. and ESI
schemes, vicarious liability in respect of employment accidents to contract
labour. In outsourcing, there are no
such obligations on the part of the principal as the service provider himself
is a separate legal entity. In contract
labour system, the employment relationship between the principal employer and
the contract labour still subsists in an indirect form by virtue of the place
of work, concurrent closeness of supervision over the method of work and
control of the contract workmen leaving hiring and firing and the existence of
vicarious liability in respect of certain statutory compliances. However, in outsourcing, no employment
relationship exists between the principal and the workforce of the service
provider as long as the out-sourced services are generated from elsewhere, even
though they are meant for the principal.
From the points
of view of economy and control over performance, the contract labour system is
a better one in respect of activities incidental to the core activities of the
establishment. In terms of effective
services and timely delivery, outsourcing is a better option for the principal
is relieved of the responsibility of on- the job- supervision.
2. Is Contract labour Act applicable when jobs and services
are outsourced?
Normally,
as long as the outsourced jobs/services are performed elsewhere, the Contract
Labour Act is not applicable. However,
if they are performed in the premises of the establishment of the principal by
the employees of the outsourcing agency, the Act will apply.
3. What are the non-perennial and non-permanent jobs which
can be assigned to contract labour?
It is
not possible to define non-perennial and non-permanent jobs with a mathematical
precision. It is always relative or contextual to the trade, business,
manufactory or core activity of the principal employer’s establishment. What is
a core activity in a particular establishment may be an incidental one in
another and vice-versa. For the sake of convenience, we can generalize that any
distinct job whose performance requires only a short period of time is a
non-perennial job and a job whose requirement is intermittent or only
occasional is a non-permanent one.
4. Can we have permanent employees and
contract labour working side by side on the same job?
Generally, no because such an arrangement, if followed regularly, would
indicate that the contract is ruse or sham. How ever, occasional engagement of
contract labor along with permanent employees on the same job to meet the
contingency of sudden increase of volume of work in the core activity which
needs to be accomplished in a specified time may be justified.
5. What is the best ratio between permanent
and contract labour? Can we engage 100% contract labour?
The ratio between the core activity of the establishment and its non-core
activities would be the determinant.
6. Can we have different wages and other terms for permanent
employees and contract labour doing the same or similar job?
No;
Pl. see Rule 25(2)(v)(a) of the Central Rules,1971. In this connection I would
also furnish the extract of the relevant portion of the judgment of the h’ble
Supreme Court in BHEL Workers’ Association, Hardwar v.Union of India
[1985(1)SCC630] as hereunder:
“…..Contract
labor is entitled to the same wages, holidays, hours of work
And
conditions of service as are applicable to workmen directly employed
By the
principal employer of the establishment on the same or similar
kind
of work.”
7. Can we transfer casuals/temporaries on
the rolls of contractor?
No.
8. Application and implication of P.F.,
ESI, Bonus, Gratuity and other statutory benefits to contract labour, casuals
etc. and how to ensure compliance?
The E.P.F Act,1952 takes the contract labor employed in the principal
employer’s establishment into the sweep of its definition of the term
‘employee’ u/s 2(f). Provision has also been made for separate codes for
contractors in the clarification issued by the EPFO.
The
contract labor employed in factories and other establishments covered by the
ESI Act,1948 are also employees under the Act as per section 2(9).The term
‘immediate employer’ defined u/s2(13) of the Act includes a contractor also.As
per S.40 of the Act, the principal employer has to pay contributions in the
first instance subject to the right of reimbursement.
Regarding
payment of bonus under the P.B Act 1965 to contract labor, no mention in either
statute.However, since the charges payable to the contractor would include all
proportionate statutory dues to the contract labor for the entire period of
contract, one can safely conclude that the principal employer should ensure
bonus disbursement to the contract labor engaged for his establishment.
The
liability of the principal employer for the payment of gratuity to the contract
labor under the P.G Act1972 is also in the twilight as there are divergent
views among different High Courts. For instance,in Cominco Binani Zinc Ltd.
V.Pappachan[1989 LLR 123] the Kerala
High Court held that neither the C.L.R.Act nor the P.G Act provide that the
employees engaged thru the contractor would be entitled to gratuity from the
principal employer and as such the principal employer would not be liable to
pay gratuity to the contract labor.On the contrary,the Madras High Court has
held in Madras Fertilizers Ltd.v. C.A under the P.G Act [2003 LLR 244] that the
principal employer can be directed to pay gratuity to his contract labor
subject to reimbursement by way of recovery from the contractor. I would
request others to throw more light on this!
9. How to ensure submission of PF and ESI returns by the
contractor?
Make
a specific clause in the agreement that the contractor will submit the
periodical returns to the PF and ESI authorities within the stipulated dates
and furnish a certificate to that effect along with copies of challan for
remittance accompanying his monthly bills for payment.
10. How to get a new PF code number from PF authorities?
Learned
members well versed in EPF procedures may answer please.
11. Security,
Housekeeping, Drivers, Canteen, Horticulture etc. on contract/voucher payment.
Sustainability? Is there any Case laws?
The question is a little bit hazy.
If it
is pertaining to employment of such personnel through contractors, the answer
is ‘yes’ in so far as such jobs are incidental and not prohibited by a
notification u/s 10 of the CLRA Act. However,if there is a statutory obligation
on the employer to provide certain services, the labor employed therein, though
engaged through contractors, will become the employees of the principal
employer ( eg., contract labor employed in a canteen of a factory of 250 or
more workmen)-----Steel Authority of India Ltd., v National Union Water Front
Workers [2001 LLR 961]
If it
is pertaining to “engagement of people on some incidental works” in order to
avoid the intricacies of their regular employment, the emphatic answer will be
‘No’. Payment by voucher or other means or its periodicity are just mere modes.
Mode of payment cannot determine or alter the status of employment. Even if
watering the gardens in and around the premises of the establishment requires
just one hour each in the morning and evening every day and the gardener does it
on part-time basis regularly, he is an employee.
12. Liability of principal employer for injury, illness,
disability, death etc.
Section 12(1) of the Employees Compensation Act,1923 provides that if an
employee is employed by a contractor for the trade or business of the principal
employer and in case he suffers any injury during the course of employment, the
principal shall be liable to pay compensation.Sec12(2) entitles the principal
employer to be indemnified by the contractor. The object of this provision is
to safeguard the right to compensation when employer delegates work to another
person for the contract between the principal and contractor cannot affect the
right of the employees or their dependents to claim compensation from either of
them at their option. However, the following 4 essential conditions have to be
satisfied before invoking Sec12: (1) engagement of a contractor by the
principal employer to execute the work relating to his trade or business. (2)
the work is ordinarily a part of the trade or business of the principal (3) the
accident saddling the liability for compensation should have occurred on, in or
about the premises on which the principal has undertaken or usually undertakes
to execute the work or which is in his control or management and (4) the
occurrence of the accident while the employee was in the course of his
employment in executing the work.
13. Can and should the employer have a say in the number and
selection of contract labour?
Yes; since the contract is for the purpose of getting things effectively done
within a specified span of time and the principal is well aware of the
economics of the project to be contracted out, he has got a say in the minimum
and maximum no. of contract labor likely to be employed. But, the selection of
contract labor is only limited generally to that of specific skills required
for the project and not in terms of pick and choose.
14. Who is to take disciplinary action against contract
labour? Under what rules? Are standing orders applicable to contract labour?
The
principal employer has no disciplinary control over the contract labor employed
for his establishment.
15. Is it necessary and desirable to issue employment card/gate pass/identity card to contract labour?
If so under whose
authority/signature? Safeguards?
Even
though employment card in form XIV is given to every contract worker, ID card
signed by the contractor may be given as an additional safeguard.
16. Each contractor engaging less than 20 but together they
engage more than 20. Will the provisions of registration, licensing and other
statutory provisions apply?
Section
1(4) of the CLRA Act,1970 deals with the applicability of the Act to the
establishment and the contractor in its following two limbs:
(a) to
every establishment in which 20 or more workmen are employed or were employed
on any day of the preceding 12 months as contract labor
(b) to
every contractor who employs or who employed on any day of the preceding 12
months 20 or more workmen
So not withstanding the fact whether every contractor
engaged has less than 20 workmen under him, the Act will apply to the
establishment if the number of contract labor aggregates to 20 or more in the
specified period of time and registration u/s 7 as principal employer is
mandatory.
In so
far as the individual contractors engaged by the principal employer are
concerned, it is my personal view that they need not take licence u/s 12 for
there is no change in the status of the workmen employed through them and
themselves as ‘contract labor’ and ‘contractor’ defined respectively u/s 2(1)
(b) and (c).
17. Statutory requirements and precautions in awarding
contract for safeguarding managements interests.
(1) The management should be very clear about the nature of job/work/activity
to be contracted out; it should not be an activity prohibited u/s 10 of the
Act.
(2) If the work is of a composite nature involving
various specialized componential sub-works, a single contractor having all the
where-withal and infrastructure can be preferred. Even then it should be
ascertained before hand whether he would be engaging sub-contractors for
technical reasons.
(3) As for as possible,
sub-contracting should be avoided; if inevitable, the number should be limited.
(4) A reasonable fore-cast
should be made about the requirement of man-power for the entire work to be
contracted out. Particularly, when different contractors are to be engaged, the
probable no. of men likely to be employed by each should be determined.
(5) Apart from technical
expertise, the experience of the contractor with the CLRA Act should be
assessed for ensuring his statutory compliance during the execution of the
contract.
(6) It should be ensured
whether adequate insurance coverage under the Employees Compensation Act has
been taken by every contractor engaged.
(7) While determining the cost
of the contract work, minimum wages if any fixed for the employment, statutory
contributions to EPFO and ESIC,bonus,insurance premium etc., should added to
the labor cost.
18. If
License not renewed but contractor continues to work – legal implications
including permanency?
In Labourers Working in Salal Hydro-Project v.State of
J&K [AIR 1984 SC 177] the Supreme Court said that if contractors
undertake or execute any work through contract labor without obtaining a
licence u/s 12(1), they would be guilty of a criminal offence punishable u/s 23
or 24. The same is the position when the licence obtained earlier is not
renewed later u/s 13(3).But it should be noted that the Act does not provide
for automatic absorption of contract labor either expressly or by necessary
implication. Hence it is difficult to say that the provisions of the Act or the
Rules made there under would lead to abolition of contract labor in the
concerned establishment with a simultaneous absorption of the existing contract
labor engaged through a defaulting contractor in the absence of provision for
absorption or grant of permanency.
19. Contractor changing but contract labour not
changing – implications, precautions required?
This
would be an anomalous situation of rotating the same group of contract labor
among various contractors in the same establishment one after another and is
normally called as “umbrella contract.”Apart from being a clear vindication of
the fact that the arrangement is sham or ruse, it can also be considered as an
unfair labor practice on the part of the principal employer as enumerated at
item No. 10 of part I of Schedule V of the Industrial Disputes Act,1947.
20. Contract terminated due to unsatisfactory
performance of the contractor, contractor leaves – can contract labour claim
permanency? What should employer do?
The engagement of a particular group of contract labor is coterminous with the
contract between their contractor and the principal employer. When the contract
itself is terminated for whatsoever reason, the exit of the contract labor is
simultaneous too. In such an unfortunate situation, look-out for a next
suitable contractor is the option.
21. Contract labour terminated through a
settlement. Should principal employer be a party?
No.
22. When contractor runs away leaving his
workforce and supervisor, how to manage work and labour and who is to handle
pending conciliation reference?
Stop engaging the abandoned contractor’s workforce and supervisor; settle their
wages due, if pending and adjust it with the payments due to the contractor.
Inform the conciliation officer about the developments and keep yourself off.
23. What to do if the contractor refuses to
pay the labour?
Make direct payment and debit it to the contractor’s a/c.
24. What are the action required to be
taken by the management after abolition of contract labour?
Don’t
engage any more contract labor in the prohibited activity. Since absorption of
the erstwhile contract labor is a separate issue depending upon so many factors
like the conditions, if any stipulated in the orders, demand and willingness of
the contract labor for absorption etc., wait and decide accordingly.
25. Can management challenge the decision
of appropriate Govt. regarding abolition of jobs?
Yes, if there are valid grounds.
26. Should contractor and contract labour
be rotated? Why? How often?
No.
27. How to reduce number of contract
labour?
The
engagement of multi-skilled regular workmen in sufficient numbers on jobs of
perennial and intermittent nature would help reduce the number of contract
labor.
28. Contract labour demanding permanency – How to handle?
Normally
contract labour cannot stake a claim for permanency against the principal
employer. However, in the case of the
alleged contract is said to be sham or a camouflage, they can raise a dispute
under sec 2(k) of the Industrial Disputes Act, 1947 for the remedy of
absorption as regular employees of the principal employer.
29. Contract labour demanding similar benefits as permanent
employees. Is the claim legally valid?
Yes, if they are engaged in similar or same jobs as the permanent employees.
30. Is Pension Scheme also applicable to
contract labour?
Yes.
31. Is Minimum Wages Act applicable to
contract labour?
Yes.
32. What is the liability of Principal
Employer in the case of sub-contracting?
Since
sub-contractor is also a contractor, no change in the liability of principal
employer vis-à-vis sub-contractor.
33. What are the implications of Supreme
Court Judgment in the SAIL case reversing earlier Air India Judgment?
Let’s
first have a brief look at the principles emerging out of the judgment in Air India Statutory Corporation v.
United Labor Union & Others [ 1997(I) L.L.N.75 ]:
(1)
Since the public law interpretation is the basic tool of interpretation in that
behalf relegating common law principles to purely private law field, the
term “appropriate government” occurring
in Sec 2(1)(a) of the CLRA Act should be interpreted so as to ascertain whether
an establishment is an instrumentality or agency of the State not merely with
reference to its constitution, pervasive control exercised by the State over
it, but, with reference to its activities complying with the basic law
requirements of Art.14 of the Constitution. Hence, for the Air India Statutory
Corporation, the appropriate government is the Central Govt from the inception
of the CLRA Act.
(2)
Since the notification prohibiting employment of contract labor from December
9, 1976 for sweeping, cleaning, dusting and watching of buildings owned or
occupied by the establishments in respect of which the appropriate govt. under
the said Act is the Central Govt. was in exercise of its power as appropriate
Government after consultation with the Central Advisory Board is valid in
law.
(3) In
tune with the Directive Principles of State Policy, on abolition of contract labor system from any establishment
u/s 10 of the Act by the appropriate Government, the logical and legitimate
consequence thereof, will be that the erstwhile regulated contract labor
covered by the sweep of such abolition for the concerned activities would be
entitled to be treated as direct employees of the employer from the date of
abolition.
Now,
the principles laid down by the Hon’ble Five-Judge Constitution Bench of the
Supreme Court in Steel Authority of India Ltd and others v. National Union
Water Front Workers and others [ 2001(4) L.L.N.135 ] on the same issues
are:
(1) In
the case of a Central Govt. company/undertaking, an instrumentality of the
Govt., carrying on an industry, the criteria to determine whether the Central
Govt. is the appropriate Govt within the meaning of the CLRA Act, is that the
industry must be carried on by or under the authority of the Central Govt. AND
NOT that the company/undertaking is an instrumentality or an agency of the
Central Govt. for purposes of Art.12 of the Constitution; such an authority may
be conferred either by a statute or by virtue of principal and agent or
delegation of power and this fact to be ascertained on the facts and in the
circumstances of each case.
(2)
Since the impugned notification dated December 9, 1976 by the Central Govt.
apart from being an omnibus notification devoid of compliance of sub-secs (2)
of Sec 10, it is ex facie contrary to the postulates of Sec 10 of the
Act. Besides that in as much as it is indicative of non-application of mind by
the Central Govt., it can not be
sustained.
(3)
Beneficial legislation should be construed liberally in favor of class for
whose benefit it is intended but that does not mean reading in provisions of
enactment what legislature has not provided, whether expressly or by necessary
implication, or substituting remedy or benefits provided by legislature. A
combined reading of ss 2© and 2(i) of the CLRA Act and Se 2(s) of the
Industrial Disputes Act,1947 would reveal that contract labor engagement by
contractor does not create relationship of master and servant between principal
employer and contract labor. Therefore, neither Se10 of the CLRA Act nor any
other provision in the Act, whether expressly or by necessary implication,
provides for automatic absorption of contract labourer on issuing a
notification by appropriate Govt. under ss(1) of Se. 10, prohibiting employment
of contract labourer, in any process, operation or other work in any
establishment. Consequently, the principal employer cannot be required to order
absorption of the contract labourer working in the concerned establishment.
IMPLICATIONS OF THE JUDGMENT
(1)
The reasoning adopted for the determination of “appropriate government” in Air
India case cannot be accepted. The appropriate govt. for the Central
Undertaking would be those covered under sec 2(a) of the I.D Act, 1947.
(2) No
automatic absorption of contract labor consequent abolition u/s 10.
(3)
If a notification prohibiting contract labor in any process/job in any
establishment is devoid of consideration of all the factors mentioned in ss(2)
of Se.10, it is invalid.
(4)
Since the over-ruling of Air India’s judgment is explicitly declared to be
prospective, any direction issued by any industrial adjudicator/any court
including High Court, for absorption of contract labor pursuant to the
over-ruled judgment will hold good and the same should not be set aside,
altered or modified in cases where such a direction has been given effect to
and become final.
34. Implications and liabilities of
temporary/casual/probationer employees/trainees? Is there any maximum duration?
The
Schedule specifying matters to be provided in standing orders under the
Industrial Employment ( Standing Orders ) Act,1946 deals with classification of
workmen by means of examples. Therefore, depending upon the type of industry,
nature of employment etc., workmen can be broadly classified into the following
categories:
(1)
permanent:
“ A
workman engaged on a work of permanent nature which lasts throughout the year
and who has also completed his probationary period, if any, not being engaged to
fill in a temporary need of extra hands on permanent jobs, e.g., in leave
vacancies.”[ Jaswant Sugar Mills Ltd. V. Badri Prasad-AIR 1967 SC 513 ]
(2)
Probationer:
One of
the literal meanings of the term ‘probation’ is a fixed period of time during
which a new entrant to a job is put on the job with simultaneous training or
orientation and watched over to find out his/her suitability to be confirmed.
So, a probationer is a provisional employee in the waiting for confirmation.
The period of probation will be as fixed in the Standing Orders or Service
Rules applicable. The period of probation of an employee may be extended by the
employer if the rules so provide. Therefore, an employee can not get automatic
confirmation on completion of the specified period of probation and there
should be a specific written order by the employer. Similarly, keeping an
employee as probationer indefinitely even after the expiry of the specified
period may, in judicial review, lead to deemed completion of the probation
period.
(3)
Temporary workman:
The
Model Standing Orders in Schedule I of the Industrial Employment ( Standing
Orders ) Central Rules, 1946 defines that a temporary workman is a workman who
has been engaged for work which is of an essentially temporary nature likely to
be finished within a limited period. When a workman is engaged either for work
of a temporary or casual nature or on a work of permanent nature to fill in a
temporary need of extra hands, he is called a temporary workman. What is
important here is the nature of his engagement and its regularity. In other
words when a person is employed only whenever a suitable work is available, his
nature of employment under the employer is considered to be purely temporary.
Per contra, if the same person is regularly employed, that is to say without
intermittent break, if any, he cannot be deemed as a temporary workman and
deprived of the benefits of continuous service under the employer.
(4) Casual labor:
In
casual labor also the prominent feature is the absence of regularity in
employment due to several factors such as the nature of works to be done, the
periodicity of the works etc., and casualization of certain works are resorted
to in order to save costs.
(5)
Apprentice:
A
combined reading of the terms ‘apprentice’ and ‘apprenticeship training’
occurring in ss ( aa) and ( aaa ) of Se 2 of the Apprentices Act, 1961
respectively would mean that a person undergoing a course of training in any
industry or establishment in pursuance of a contract of apprenticeship is an
apprentice. The Central Model Standing Orders defines that apprentice is a
learner who is paid an allowance during the period of his training whereas the
TamilNadu Model Standing Orders defines that apprentice is one who is engaged
in learning any skilled work provided that the period of such learning, shall
not exceed one year for those with prescribed technical qualification and three
years for others.
For
the purposes of certain labor enactments viz., the Employees Compensation
Act,1923, the Industrial Disputes Act,1947, the Factories Act,1948, the
Employees State Insurance Act,1948, the Employees Provident Fund Act,1952,[
other than Act apprentices in the last two] apprentices are treated as workmen.
The Payment Bonus Act,1965 and the Payment of Gratuity Act,1972 explicitly
exclude apprentice from their respective definitions of the term “employee”.
35. What is the relevance of 180/240 days & what are the
Implication of breaks?
Sec.
25B of the Industrial Disputes Act, 1947 defines continuous service of a
workman under an employer. Simply put,
if a workman’s service under an employer for a period is said to be continuous
inclusive of interruptions on account of sickness or authorized leave or an
accident or a legal strike or lock out, a cessation of work not due to any
fault of the workman. When it is not possible, sec 25B introduces a legal
fiction by way of providing deeming clauses under sub-sec 2 of sec 25B. Clause (a) of 25B(2) states how to determine
continuous service of a workman for a period of one year; Clause (b) of sec
25B(2) states the case of a period of 6 months.
The explanation provided thereunder specifies certain interruptions to
be treated as non-interruptions for the purpose of computing the number of days
on which a workman has actually worked.
They are – 1) Lay-off days, 2) Days spent on leave with wages, 3) Days
of absence due to temporary disablement arising out of an employment accident
and 4) 12 weeks of maternity leave in case of female worker. For a period of one year, a workman should be
deemed to be in continuous service under an employer if during the preceding 12
calendar months, he has worked for 190 days in case of employment below the
ground in a mine and 240 days in any other case including the
breaks/interruptions mentioned above.
