Benefits to Contract workers vis-à-vis Permanent Workers

The Hon’ble Madras High Court in the matter of Airport Authority of India vs. Authority under Contract Labour (R & L Central Rules), Writ Petition No.8591 of 2002, decided on 14.06.2011; held that where the workmen employed by a Contractor perform the same or similar kind of work as the workmen directly employed by the principal employer of the establishment the wage rates, holidays, hours of work and other condition of service of the contractor, shall be the same as applicable to the workmen directly employed by the principal employer of the establishment on the same or similar kind of work.

In the said judgment the Madras High Court directed the Chief Labour Commissioner to enquire into the question whether the work done by the workmen employed by the Contractors is the same kind of work as that done by the workmen directly employed by the principal employer.

It is also necessary to mention herein that Commission Agents under Provident Fund Act, employed by Banks for financial services / Employees doing work on canvassing are entitled to Gratuity. The Hon’ble Madras High Court, while deciding an appeal of a Company providing financial services to banks through Paid Commission Agents held that such Paid Commission Agents did not cease to be employees merely because they were paid commission and therefore such employees are required to be covered under the Provident Fund Act (Focused Corporate Service India Pvt. Ltd. Vs. The Union of India [2012 1 LLJ 449]) Madras High Court.

In the above matter, the Hon’ble Madras High Court referred to the decision of the Hon’ble Supreme Court in International Ore and Fertilizers (India) Private Limited v. Employees State Insurance Corporation reported in [(1987) 4 SCC 203] wherein it was held that a welfare legislation should receive liberal construction in achieving the purpose of the legislation.

Further, the Courts also have held that field workers visiting customers at their houses for canvassing and doing business by selling insurance policies, collecting premium from customers are covered by the definition of “employee” under the Payment of Gratuity Act, 1972. (United India Insurance Company Ltd. Vs. H. K. Khatua 1984 Lab 1C33).

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