In a recent ruling, Mumbai High Court has stated that Housing societies are not industries even though they earn profit. And therefore the order of the labour court regarding the employment of watchman stands null and void for them. As such the housing societies can now can re-employ watchman whose service has been terminated.
“The labour court appears to have been swayed by the fact that a few members of the society were carrying on businesses like coaching classes and a dispensary and the society was charging advertisement charges for the neon signs put up by the members. The court was of the view that since the society was earning income, it could not be termed as mere housing society” said the judge (Source: https://timesofindia.indiatimes.com/)
With this step, housing societies are now free to employ staff directly and avoid going via contractors. By this method, they will also be able save substantial amount in this field. Contractors not only changes huge money (salary of the watchman plus contractors profit margin) but also the societies are now required to pay a GST of 18% for the service.
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