Contractor Employees Legal Perspective.ppt

Contractor Employees�Legal Perspective

1. Contractor Employees
Legal Perspective
By
Faisal Mahmood Ghani
Advocate and Industrial Relations Advisor

2. •Contracting manpower
•No distinction between workman and non-
workman
•No distinction between core and non-core
operations
•Documentation with contractor’s
employees
•Controlling and managing contractor’s
employees
Conventional view

3. Superior judiciary examining such
arrangement
•Contractorworkerschallengingsuch
arrangementclaimingemployment
relationshipwithorganizationof
deployment
•EvenwhereContractorclaiming
employment relationshipwithits
worker(s)andorganizationwhere
deployeddisowning;ofnoconsequence
•Court making distinction where such
arrangement is merely paper
documentation to avoid employment

4. relationshipanddenialofbenefitsunderthe
labourlaws.
•SuperiorJudiciaryhaveheldthatsuchworker’s
supplyarrangementisaimedatcircumventionof
LabourLaws.
•ConsequentlyworkersofContractorwere
declaredasworkersofdeployedorganization.
•ThisviewinmostoftheJudgmentswas
maintainedbySupremeCourtandisnow
followedwithconsistencybythelowerCourts.
.

5. .
•Superior Courts have made distinction
between contracting out core and non-
core functions; and have reiterated the
previous view that contracting out non-
core functions is permissible subject to
meeting the three main ingredients for
outsourcing.

6. Legal view
Nowthecriteriatobefulfilledfor
outsourcingofnoncorefunctionsand
where the contractor/service
provider/vendorcanrenderservicesand
deployitsworkersare:
1.Engagementandappointmentletterof
thecontractor;
2.Paymentofsalaryandotherbenefitsby
thecontractor;
3.ControlandsupervisionbytheContractor

7. .
Howeverthereisnolegalexposurewhere
outsourcingisdoneincorefunctionsbut
theAgreementrequiresdeploymentof
non-workman;assuchpersonsarenot
governedundertheLabourLawsbut
underthetermsofappointmentlettere.g.,
Salesrelatedpersons,managementcadre
etc.