CONTRACT STAFFING INDUSTRY -F & F SETTLEMENT

IMPORTANT ISSUES IN CONTRACT STAFFING INDUSTRY -F & F SETTLEMENT





Dear All





The essence of compliance of Section 25 F of the Industrial Disputes Act has been made clear by the Supreme Court of India in the reported case of Pramod Jha & others Vs State of Bihar reported in 2003(3) SBR 617. To quote the very words of the Supreme Court it has been held that



“the underlying object of Section 25 F[ the retrenchment provision in the Industrial Disputes Act] is two fold. Firstly, retrenched employee and must have one month's time available at his disposal to search for alternative employment, and so, either he should be given one months notice of the proposed termination or he should be paid wages for the notice period. Secondly the worker must be paid retrenchment compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need for him to go to his employer demanding retrenchment compensation and the compensation so paid is not only a reward earned for his previous services rendered to the employer but is also a sustenance to the worker for the period which may be spent in searching for another employment."



Retrenchment can be simply termed as termination .Two points therefore emerge ;



Firstly, terminated Contract Staffing employee must have one month's time available at his disposal to search for alternative employment, and so, either he should be given one months notice of the proposed termination or he should be paid salary for the notice period.



Secondly the Contract Staffing Employee must be paid retrenchment compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need for him to go to the Contract Staffing Company demanding retrenchment compensation and the compensation so paid is not only a reward earned for his/her previous services rendered to the Contract Staffing Company but is also a sustenance to the Contract Staffing Employee for the period which may be spent in searching for another employment.





With Regards

V.Sounder Rajan ,

VS Rajan Associates, Advocates and Notaries & Legal Consultants