Interview Document

Management Representative

1. What is the total number of permanent, temporary, contract

labor, and fixed-term workers?

We currently employ 1500 permanent employees and 800 contract

labourers supplied by 43 registered contractors. Additionally, we
have 100 fixed-term workers.

2. What is the rationale behind deciding this distribution of workers?

The worker distribution is based on both industry standards and

operational efficiency. We maintain a 60:40 ratio of permanent to
temporary/contract labor for non-core operations. Ideally, the ratio
should be 70:30, where 70% of core roles are performed by
permanent staff and 30% by contractors, particularly for non-
essential or ancillary services.

3. How many contractors are used for supplying contract labor?

We currently work with 43 registered contractors, as indicated by

our registration certificate.

4. In which functions and roles is contract labor used?

Contract labor is typically deployed in non-core functions such as

housekeeping, security, ancillary production tasks, reject material
handling, and warehouse operations. These roles do not directly
impact the core manufacturing process and are suitable for
outsourcing.

5. How do you ensure that contractors comply with statutory

requirements, including wages and working conditions?

We strictly adhere to the Contract Labour (Regulation and Abolition)

Act, 1970. Contractors are responsible for compliance, but we
implement a monthly tracking and audit mechanism to ensure they
meet statutory obligations. This includes verifying payment records
for wages, ESI, EPF, and ensuring adherence to safety regulations.

6. What measures are in place to monitor and manage the work

conditions of contract laborers?
Work conditions for contract labor are regularly audited to ensure
compliance with the Factories Act, 1948. This includes providing
safety gear, proper training, health check-ups, and maintaining
welfare amenities such as restrooms and canteen services for both
permanent and contract labor without discrimination.

7. Is the ESI contribution paid by the company for contract labor, or

is it recovered from contractors?

The ESI contributions are paid directly by the contractors under their
respective ESI registrations. In rare cases, if contractors fail to pay,
the principal employer may pay the contribution from its own code
and deduct it from the contractor’s payment.

8. How does the company ensure that contractors have paid the ESI
contribution for contract labor employed?

We implement a monthly audit of ECR (Electronic Challan Cum

Return) forms submitted by contractors. These are cross-checked
with wage registers to ensure accurate and timely payment of ESI
contributions.

9. Are there regular audits or checks to ensure compliance with ESI

provisions?

Yes, we conduct monthly audits of ECR submissions from

contractors. Additionally, our HR department verifies compliance
with ESI provisions to ensure correct and timely payments.

10. How much are the wages paid to workers, and how are these
wages divided into components like Basic, DA, HRA, etc.?

Contract laborers are paid as per the Minimum Wages Act of the
respective state. The wages consist of Basic Pay, Dearness
Allowance (DA), and in some cases, House Rent Allowance (HRA), as
applicable. Additional allowances may be added based on the
number of years the worker has spent with the company, but 90% of
contract laborers receive minimum wages.

11. What is the process for EPF contributions, and how do you
ensure timely deposits?

The contractor deposits 12% EPF contributions on behalf of each

employee under their UN (Universal Account Number). These
deposits are verified monthly through the submission of PF challans,
which must be done by the 15th of the following month.
12. What mechanisms are in place to address discrepancies in EPF
contributions or issues with the Employees' Provident Fund
Organisation (EPFO)?

In case of discrepancies, we rectify any differences in the next

month’s contribution, ensuring accurate adjustments. The ECR
system allows us to track contributions and address any anomalies
with the EPFO.

13. How many workers (Permanent & Contract) have completed 240
days of continuous service?

Currently, 200+ permanent and 100+ contract workers have

completed 240 days of continuous service.

14. Has there been an accident in the past with any worker? How
was it dealt with? What was the compensation paid?

Any accidents are handled per the provisions of the Employee

Compensation Act, 1923. In the event of an accident, compensation
is calculated based on the worker’s wages and disability or death,
and all medical care and rehabilitation support are provided.

15. How many trade unions are there? Is there any employee-
sponsored union?

There is one recognized trade union in the organization, registered

under the Trade Union Act, 1926. We do not currently have an
employee-sponsored union.

16. What are the standard procedures followed during layoffs,

retrenchment, or closure of operations?

The company follows the Industrial Disputes Act, 1947, specifically

under Section 2(oo) and Section 25-F for layoffs and retrenchment.
Procedures include seeking government approval, paying
compensation, and ensuring proper documentation. However, we
have not experienced any layoffs or retrenchments so far.

Labour Officer

1. What are the most common violations observed concerning the

employment of contract labor, and how are these typically
addressed?
The most common violations observed with contract labor include:
- Non-payment or delayed payment of wages.
- Non-compliance with statutory benefits, such as Provident Fund
(PF) and Employee State Insurance (ESI) contributions.
- Lack of proper safety measures and welfare amenities as per the
Factories Act, 1948.
- Employment of child labor, especially in regions with lower
educational levels.

These violations are addressed by conducting regular inspections

under the Contract Labour (Regulation and Abolition) Act, 1970 and
other relevant labor laws. In cases of non-compliance, notices are
issued, penalties are imposed, and, if violations persist, legal action
is taken, including filing cases in the labor court.

2. How do you verify that establishments are correctly calculating

and depositing EPF contributions for their employees?

EPF contributions are verified through monthly Electronic Challan

cum Return (ECR) submissions. Establishments are required to
upload their ECR details on the EPFO portal, which includes the
number of employees and the amount of contribution deposited.
Inspections are carried out to check compliance, and discrepancies
are cross-verified with wage registers and employee records.

Additionally, establishments are audited annually to ensure proper

calculation and timely deposit of contributions. Employers must
adhere to the 12% contribution requirement for both employer and
employee as mandated by the Employees' Provident Fund and
Miscellaneous Provisions Act, 1952.

3. What steps are taken when an establishment fails to comply with

EPF contribution requirements?

When an establishment fails to comply with EPF contribution

requirements:
- First notice is issued to the employer, asking for an explanation
and compliance within a specified time.
- If the employer fails to respond or comply, a second notice is
issued, and penalties are imposed.
- In persistent cases of non-compliance, the matter is escalated to
the EPFO Recovery Officer, and the company may face legal action
under Section 7A of the EPF Act. This can lead to recovery
proceedings, including attachment of the employer’s bank accounts
or assets.
Fines and interest are levied for late payments or non-payments.

4. What measures are in place to ensure that all eligible

establishments are enrolling their workers under the ESI scheme?

To ensure that all eligible establishments are enrolled under the

Employee State Insurance (ESI) scheme, the ESIC (Employees' State
Insurance Corporation) conducts periodic checks based on the
number of employees and their salary slabs (employees earning up
to ₹21,000/month are eligible). Inspections are conducted under
Section 45-A of the ESI Act, and establishments are mandated to
register with ESI if they have 10 or more employees.

Establishments must submit monthly ESI contributions online, and

the National Informatics Centre (NIC) tracks the compliance of all
registered entities.

5. How do you handle cases where employers fail to provide ESI

benefits to their employees? What are the usual penalties?

In cases where employers fail to provide ESI benefits:

- A notice is issued to the employer, asking them to comply
immediately.
- Fines are imposed under Section 85 of the ESI Act, which can range
from ₹5,000 to ₹25,000, depending on the severity of the violation.
- In serious cases, criminal proceedings can be initiated, and
imprisonment up to 2 years may be ordered under Section 85(b).

Persistent failure to comply leads to legal action in the ESI Court.

Recovery of unpaid contributions is enforced, including penalties for
default.

6. How do you conduct audits and verify the accuracy of ESI

contributions made by establishments?

Audits of ESI contributions are conducted by reviewing the

employer’s wage registers and verifying their ECR submissions on
the ESIC portal. Inspectors from the ESIC department randomly audit
establishments to ensure that contributions match the number of
eligible employees. The online system helps identify discrepancies
between actual payments and required contributions, ensuring
accurate ESI payments.
Additionally, the NIC portal maintains a real-time record of
contributions, which helps inspectors monitor compliance.

7. How do you facilitate the resolution of industrial disputes,

particularly regarding unfair dismissals, layoffs, or retrenchments?

Industrial disputes are handled under the Industrial Disputes Act,

1947. The labor department plays a mediating role, ensuring that
disputes related to unfair dismissals, layoffs, or retrenchments are
resolved through the following steps:
- Conciliation officers from the labor department attempt to mediate
between the employer and the employee to reach a settlement.
- If conciliation fails, the dispute is referred to the Labor Court or
Industrial Tribunal.
- In cases of illegal dismissals or retrenchments, the court may order
reinstatement or compensation, as per Section 25F of the Act.

The goal is to ensure amicable resolution through negotiations,

failing which legal action is taken.

8. What role does the labor department play in ensuring that

establishments comply with the requirements for notice and
compensation under the Industrial Disputes Act?

The labor department ensures compliance with Section 25F of the

Industrial Disputes Act, 1947, which mandates that establishments
provide:
- Notice period (usually one month) before termination or
retrenchment.
- Compensation equivalent to 15 days' wages for every year of
completed service for retrenched employees.

The department conducts inspections and reviews records of layoffs

and retrenchments to ensure compliance. Non-compliance leads to
legal action, including fines or reinstatement orders by the Labor
Court.

9. How do you monitor the implementation of settlement

agreements between employers and employees?

Settlement agreements are monitored by the labor department

through conciliation officers. Once an agreement is reached, it is
registered with the labor department and becomes legally binding
under Section 18 of the Industrial Disputes Act, 1947. The labor
department follows up with both parties to ensure the terms of the
settlement are implemented. If either party fails to comply, the
matter is referred to the Labor Court, where enforcement orders are
issued. Periodic reviews and meetings with both parties are
conducted to ensure the settlement terms are being adhered to.

Contractor

1. How many contract workers are employed by you?

We employ around 10,000 contract workers, spread across multiple

clients and sectors, including large multinationals and various
industries.

2. How many organizations do you supply contract labor to?

We supply contract labor to approximately 75 organisations. These

include a mix of large multinational corporations as well as other
medium to large enterprises.

3. What are the different jobs for which you can supply contract
labor?

We supply labor for a wide range of jobs across different sectors. For
blue-collar roles, this includes jobs in shop floors, warehouses, and
other operational tasks. For white-collar roles, we provide labor for
analyst, back-office, and sales positions.

4. What steps do you take to provide contract workers with working

conditions and wages that comply with the legal standards?

We ensure compliance with government-mandated minimum wage

laws by processing the salaries of all contract workers ourselves.
Whenever there is a change in the minimum wage, we notify our
clients and adjust salaries accordingly. We also ensure that the
working conditions provided by the principal employer meet legal
standards, and if any issues arise, we escalate them with the client
for prompt resolution.

5. For how many days is a contract laborer employed for a single

role? What is the usual duration of contracts?

The duration of employment for a contract worker typically varies

from client to client. However, the minimum duration is six months,
as we believe that it takes at least a month for workers to settle into
their role, and the next five months constitute the productive phase.
Contracts for less than six months are usually not feasible due to the
learning curve involved in the work.
6. How do you manage the deduction and deposit of EPF
contributions for your workers? What systems are in place to ensure
accuracy and timeliness?

We have a dedicated compliance team of around 300 personnel who

ensure that EPF contributions are deducted correctly and deposited
in a timely manner. Every month, we process the payroll, deduct the
prescribed contributions, and deposit the EPF with the respective
authorities. We provide proof of these deposits to both the client and
the government in the form of challans to ensure full transparency
and compliance.

7. Can you describe any challenges you face in complying with EPF
and ESI requirements and how you address them?

We generally do not face major challenges in compliance, as we

have a robust system in place. Any challenges that arise are
primarily related to government-prescribed changes in contribution
rates, but we address these by staying updated and ensuring that
payroll deductions reflect the latest rules. Additionally, we work
closely with clients and government authorities to ensure full
compliance with EPF and ESI regulations.

8. Do you have an ESI code? Do you pay ESI contribution after

deducting it from wages, or is it paid by the principal employer?

Yes, we have an ESI code and manage the deductions from the
employee’s salary ourselves. We deduct 0.75% from the employee’s
salary and contribute 3.25% as the employer. Once the
contributions are made, we provide proof in the form of challans to
the client. The principal employer is also involved in ensuring
compliance, but we take the responsibility of making the actual
deductions and deposits.

9. What procedures do you follow to help your workers access ESI

benefits, such as medical care and cash benefits?

Once ESI deductions are made, the workers are issued an ESI card.
They can use this card to access medical care at designated ESIC
dispensaries. In case of claims for other benefits like disability or
maternity, our operations team assists workers in understanding the
procedures and filing claims under the ESI scheme.

10. How do you address disputes with your workers, especially

concerning termination, retrenchment, or layoffs?
We handle disputes by following a clear and transparent process. If
a worker has a legitimate concern, we discuss it with the client and
resolve any errors from our side. If a dispute escalates, we engage
in counseling with the worker and show them the terms of their
employment contract, such as the notice period required for
separation. Most disputes are resolved amicably. If needed, we also
present our case before the labor authorities.

11. How do you interact with trade unions representing your

workers, particularly regarding collective bargaining and dispute
resolution?

So far, we have not encountered any issues with trade unions. We

ensure that we are providing fair wages and working conditions to
our workers, which helps prevent disputes. In the event of a trade
union issue, we have Industrial Relations (IR) experts on our team
who handle collective bargaining and ensure that the issue is
resolved in a fair manner.