Legal Question in Employment Law in India

Hi, I have taken the role of HR in a company that is of foreign origin and has started its operations in India 6 months ago. They have hired over 80 graduates as "consultants." The justification they have given for keeping them as consultants is (a) they are imparting training to them for the work that they have to do

(b) They are paid on an hourly basis.

The consultant agreement has been drafted cleverly. However, I have brought up the issue with the management and I would like to know what are the laws related to consultant vs employee. The company is cutting cost through hiring consultants as it does not require them to pay PF and conform to the regular labour laws of holiday/wages on holidays etc.

Can someone please tell me

(1) If there have been any previous labour law cases that has the consultant vs employee as subject and the judgement for the same.

(2) What are the repercussions of not adhering to the law?

Regards,

Shoba


Asked on 10/12/09, 11:48 pm

1 Answer from Attorneys
RAJIV GUPTA (Cell: +91 9811284735) [email protected]

Dear Ms. Shoba

there is no harm if the company has hired consultants and paying them on hourly basis. in case the consultants have agreed to work as free lancers, the company cannot be compelled to hire them as employees. if possible, you may post the contractual agreement between the employer and consultants.

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Answered on 10/13/09, 2:13 am


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