Taking regular money from co-workers to carry union activities by the terminated office bearer be considered as gainful employment to avoid interim relief?
No! Payment towards union activities and fighting for co-workers cases cannot be termed as gainful employment. Such income of the union leader will not be a remuneration for the purpose of section 17-B of the I.D. Act. This has been so decided by Gujarat High Court in the case of M.J. Patel vs. Tata Chemicals Ltd. (2008 1 CLR 588).
What is the basis of deciding/determining the permanent strength of workmen in the Industry?
There is no law which makes it obligatory for the employer to determine the permanent strength. It is the management prerogative to plan for man power subject to the provisions of laws requiring to observe work conditions. The nature job categorized as permanent will be based on the definition of workman under Certified Standing Orders. Since rationalization of manpower is a matter of dispute which can be espoused by the Unions, the subject matter of permanent strength will arise and the employer has to substantiate his stand with industrial engineering studies made to establish scientific method of determining the manpower requirement.
At what age we can retire a person in the industry?
There is no such uniform law regarding age of retirement in related employment regulations in India. However, it is either governed/decided through certified standing orders of the establishment or model standing orders if applicable, services rules formulated by company and agreed by employee or terms of appointment. Though model standing orders under rules of state carry a retirement age but it will be of no use unless it is incorporated in establishment certified standing orders. It will not apply automatically as held by Karnataka HC in the case of Raju (MC) vs. Karnataka Vidyut Karkhane Ltd., Bangalore 1983(1) LLN 198. It is general practice to retire an employee at the age of 58 years but it is necessary that it must be mentioned in either of the above mentioned documents. Simply looking at the physical sate of a person he cannot be retired. Calcutta High Court in the case of Indian Aluminium Co. Ltd. case 2003 (99) FLR 694 has held that retirement of a worker on attaining the age of 58 years will neither be legal nor proper on attaining the age of 58 years in the absence of any such condition of employment.
We have many employees in our company who are marked LWP ( Leave without pay) when they remain absent. They do it habitually. In such situation can we take disciplinary action against such employees on the ground of unauthorized absence?
Yes. You can do . Absence from duty shows negligence towards duty and disinterest in work. The Supreme Court in the case of Delhi Transport Corporation v. Sardar Singh, 2004 LLR 953 has clarified that when an employee habitually absents himself from duty without sanctioned leave for a very long period and his past record was not satisfactory, it prima facie shows negligence and lack of interest in work.It was further held that merely because the absence of a workman was treated as leave without pay for the purpose of maintaining correct record by the management, it does not absolve a workman from the misconduct of his habitual absence from duty. It makes no difference if workman moves an application after enjoying absence and he is marked as leave without pay. Actually leave is to be sanctioned before proceeding on leave.
Can a stay order be granted against a tripartite settlement?
Civil Court has no jurisdiction to entertain any matter covered under Industrial Law. Operation of settlement cannot be stayed by any civil court. Conciliation settlement under section 12(3) entered between management and the sole worker union would be binding on all workmen. Settlement should be considered as a whole. As far as collective issues are concerned, individual workmen are not allowed to dispute the validity of the settlement. The terms of settlement by collective bargaining get incorporated into the individual contract of service and become conditions of service. It has to be considered prima facie to be in the best interest of employees in the absence of attribution of oblique motives based on concrete materials.
We have a security guard who is not able to stand and take rounds while on duty since last six months. He sits frequently on chair. Can we treat such physical deficiency as continued ill health?
Though the term Continuous ill health has not been defined under Industrial disputes Act, certified standing orders must have defined it. The courts have on different occasions defined this term. S.C. in the case of Anand Bihari vs. RSRTC (1991) 1 SCC 731 has held that any disorder in health which incapacitates an individual from discharging the duties entrusted to him or affects his work adversely or fall in the way of his normal and effective functioning can be covered by the phrase continuous ill health . Bombay H.C. in the case of Ramaswamy Murugesh vs. S.G. Bhonsale 2006 I LLJ 281 has also held that the expression has to be given contextual meaning. It should mean the condition of the health of an employee that consistently affects the functioning of the duties of the post. It is not the gravity of the disease that would alone fall within the meaning of the expression but its affection on the due discharge of the normal duties. The Punjab & Haryana H.C. in the case of Groz-Beckert Asia Pvt. Ltd. 2009 Lab IC 3692 also held that the touch stone for applicability of Sec. 2(OO) (C) is the effect of such continued ill health in due discharge of normal duties assigned to the workman. It is the disordered physical condition which would pass the test of continued ill health as contained in Sec. 2(OO) (C) of I.D. Act. Madras H.C. in the case of P. Muthukrishnan 1992 LLR 443 has also held that where the gatekeeper of a cinema hall sustained injury in the course of employment resulting in amputation of left leg not allowed to work when reported for duty, his termination will not amount to retrenchment but will cover under the expression Continued ill health. Delhi HC in the case of Munna Prasad vs. The Mgt. of M/S. Sawhney Rubber 2012 LLR 1255 has held that when the workman despite amputation of both hands in an accident was allowed to work for ten years, his termination on the ground of continued ill health would be illegal.
While structuring components of salary, is it necessary to include DA as a part of it. Is there any law on grade fixation? Is it legally compulsory to give LTA & Medical on DA?
DA is not compulsory in salary fixation. It is organisations internal compensation package policy which determines about components of salary. There is no law on grade structure. It is regulated either by your service rules, agreements, terms & conditions of appointment or any other local law applicable to your establishment. Again, giving benefit of LTA & Medical on DA is a matter to be decided according to the policy of the company. There is no law which direct payment of LTA & Medical on DA. The normal practice in industry is about keeping 50% of basic and rest is divided in various allowances.
In many cases it happens that a after submitting resignation and taking full payment, employee raises dispute that he was forced to resign and his resignation was involuntary. What precautions, you suggest, should be taken by company management to ensure that it does not backfire?
In such conditions where after getting all dues on resignation, when challenged its genuineness, it is for the workman to establish that resignation was not voluntary and was obtained under pressure. It is so held by the M.P. HC in the case of Hira Mills, Ujjain vs. Babu 1998 LLR 524. All. HC in the case of Delta Engineering Co. (Pvt.) Ltd. Meerut vs. Industrial Tribunal-V 1998 LLR 622 has also held that burden of proof will lie upon the employees alleging that their signatures on blank papers were used as their resignations. However, Delhi HC in the case of Prabhu Verma vs. D.P. Industries 2019 LLR 711 took different view. Court held that when workman alleged that his resignation was obtained forcefully, It is for the employer to establish that it was not and he left the services of his own. Madhya Pradesh HC in the case of AVTEC Ltd. Vs. Naresh 2019 LLR 254 and Delhi HC in the case of Kay International vs. Raghubir Singh 2019 LLR 361 have held that when workman after submitting resignation receives and accepts full and final payment, such resignation cannot be said to have obtained by force. You can also take following precautions; 1-The resignation should be in the handwriting of the employee with date and if possible with one signature of co worker as witness. 2-There should not be any haste in accepting the resignation by management and should be accepted in writing with date and in terms of employment. 3-The full and final dues in terms of settlement should be in writing and worker should sign the acceptance letter as well as full and final dues details in token of having accepted the correctness of dues. 4- The payment should be made through cheque as far as possible. 5- The workers signature should also be obtained on experience/ relieving certificate. 6- Bipartite settlement should also be signed by the worker and management to the effect and same should be registered under Sec. 18(1) of I.D. Act with the labour authorities. If this process is adopted, there are less chances of challenging the genuineness of the resignation and even if it is challenged, same will not stand in the court of law. Genuineness has to be proved by facts and circumstances.
Exemption from PF if employee after adopting for reduced pension joins after 50 years of age? Any exemption for employee opting for VRS?
No! Such person will not be exempted from EPF Act. He has to be enrolled as a member but he will not be entitled for any pension benefits. All his contribution will be in PF account only. There is no exemption clause in EPF act for any person who has opted for VRS. He will not be entitled for any exemption under EPF act. PF benefits are to be extended to him when he joins the service.
There is a general perception that in case court reaches to conclusion that the termination done by employer is illegal,it awards reinstatement with full back wages. What is the current trends in court decisions? Is still reinstatement with back wages are normally granted in majority of cases?
No! in case of illegal termination , now automatic reinstatement with back wages in no more a rule. S.C. in the case of Raj kumar vs.jalgaon Minicipal Corporation 2013 LLR305 has held that reinstatement is not must for every sacked worker. Calcutta Hc in the case of Bata India Ltd. Vs.Fourth I.T West Bengal 2011 LLR 68 has held that even in the case of illegal termination reinstatement with back wages is no longer a rule.When the termination of a workman is set aside, his reinstatement either with or without back wages is not a rule of thumb and can be deviated by the courts depending upon the merits of each case. There are some of the cases where High Courts have set aside the reinstatement of a workman as awarded by the Labour Court or the Industrial Tribunal. Madras HC in the case of M.V. Sivaji vs. Godrej and Boyce Manufacturing Co. Ltd., Madras and another, 1998 LLR 483 has held that reinstatement of a typewriter mechanic dismissed for forging signatures of the customers is liable to be quashed. In another case Kerala HC, S. Raveendranath Kamoth vs. Presiding Officer, Labour Court and another, 1998 LLR 632 had held that reinstatement will not be appropriate relief to a workman who has been guilty of late coming, neglecting his duties and abusing the Director of the Company. Also reinstatement of a workman guilty of stoppage of work and assaulting the Asstt. Manager and Canteen Contractor has been set aside by the Madras HC even when his past record has been satisfactory. In another case, the Delhi HC, India Tourism Development Centre vs. Presiding Officer, Labour Court and others, 2000 (85) LLR 62 has held that the reinstatement of a workman guilty of habitual absence from duties will not be justified. In addition to above, there are many other judgments oft he Supreme Court and the High Courts where by the reinstatement has been held not to be justified. More over, Now the courts have started awarding lump sum compensation in place of reinstatement and back wages.
If tasks are allotted one day prior to work day through email, & the work done by an employee is 40-60% only. Can we mark absent or half day based on task completed or to mark full day present?
Your terms of employment will indicate about your proposed action. Is he employed on task basis? Has he been paid proportionately earlier also? What is his mode of payment? Finding out these facts will answer your question. If he is present full day, he cannot be marked absent. Yes disciplinary action can be taken against him for negligence and not doing the work as instructed or refusal to work.
One of the employees has challenged his termination before labour court on the ground that he has completed more than 240 days of working in last 6 months before termination becasue he was doing double duty for three months regularly. Is it legally correct to count two days for single day for counting 240 days of working?
No! Section 25B of the ID Act does not contemplate any such basis of calculation where double duty in single day is to be counted as two days for the purpose of calculation of 240 days working of continuous service. Madras High Court in the case of Tamil Nadu State Transport Corporation vs. N. John Henri Raj 2008 LLR 1208 has held that while calculating 240 days in preceeding calendar year, the double working of a workman on a day will not be taken into consideration since it is only for the purpose of overtime payment and not for reckoning of continuous service. So in your case you appears to be legally sound but it may be your responsibility to produce evidence in the court that the workman has not completed 240 days of continuous service.
We are conducting domestic enquiry against a workman for some charges of misconduct alleged to have been commited by him. During process enquiry officer has refused to allow the representation through advocate to which he has challenged in the High Court. I want to know whether the domestic enquiry can be stayed by court in between and the order of the enquiry officer can be challenged also?
No! Domestic enquiry process cannot be challenged in between before the court of law. Also the order of the enquiry officer is not open for challenge during the pendency of enquiry. Karnataka High Court in the case of Kulla Venkata Shetty vs. The Managing Director, Karnataka State Road Transport Corporation 2008 LLR 1043 has also held that it is neither proper nor desirable for the high court to invoke its jurisdiction under article 226 of the constitution of India to interfere with any or every decision taken by the enquiry officer in the disciplinary proceedings. Such interference will only delay the enquiry proceedings and result in miscarriage of justice. Even if any order passed or decision taken by the enquiry officer is wrong or illegal and is capable of vitiating the report of the enquiry or the decision of the disciplinary authority, the workman should wait till the disciplinary proceedings are completed and challenge the final order passed in the disciplinary proceedings before the appropriate forum.
I am office bearer of a small scale industries association of our area. One of the clerk appointed some time back has been removed on the complaints of members of the association. He has raised a dispute before Labour Authority about his illegal termination. Where we legally stand in the matter?
I presume that your association of small scale industries is a platform to provide guidance on different matters to your members industry and represent collectively on the issues that affect you before the Government. Your members govern their inidividual industries and you as association have no control over them. Normally in India industries associations work like this and in this situation your terminated employee cannot seek any relief under the Industrial Disputes Act as you as a body of small scale industries cannot be held to be a industry under the ID Act. Formation of the association of members itself cannot be an industry. Karnataka High Court in the case of Prema Govinda vs. Karnataka Small Scale Industries Association 2008 LLR 54 has also held in the same direction.
We have suspended an employee on charges of some misconducts and enquiry is still pending. Can some authority or the court direct us to provide work to the suspended employee ?
No! Principal employer cannot be directed to provide work to the suspended employee by any authority or court. This has so been held by Jharkhand High Court in the case of Aparup Kumar Chaterjee vs. Bharat Coking Coal Ltd. 2008 LLR 1278. However, court can direct you to conclude the enquiry in a time bound frame manner if it is delayed.
One female employee was on maternity leave from the date before lockdown announced. She has consumed 26 weeks, now she has said that since during lockdown govt. ordered to treat employee as on duty, her maternity period falling in between lockdown should be excluded and proportionate period of 54 days should be extended as maternity leave. She has also produced a medical certificate where she has been advised to take bed for three months. Are we liable to pay for three months more?
No! Maternity leave period started before lockdown was announce, will continue for 26 weeks and any maternity period falling in between lockdown has no link with Covid induced lockdown. Such maternity period cannot be neutralized against lockdown period and further extended proportionately after lockdown is lifted. She is only entitled to 26 weeks paid leave from the date she opted. However, If she suffers from any illness arising out of delivery after baby is born she is entitled to get paid leave of one more month as per Sec. 8 of Maternity Benefit Act. So in total she is entitled to maximum period 26 weeks plus one month paid leave. Beyond that if she is advised to take bed rest medically, either she has to get this period adjusted against her credited earned leaves or sick leaves as may be available in accordance with co. policy or remain unpaid.
Can formation of works committee replace union formation? Can a wage agreement be executed with works committee thereby replacing the union?
No! Works committee under I.D. Act has a different scope to function. It is obligatory on the employer to constitute works committee in case workers are more than 100 in numbers. The function of the works committee is to discuss matters of common interest and remove causes of friction in day-to-day working. The representative of works committee do not represent for all purposes. It is not intended to supplant or supersede the union for the purpose of collective bargaining. Works committee is not entitled to consider real or substantial changes in the conditions of service. The decision of the works committee is in no way binding on the workmen or their union. It has been held way back in 1955 in the case of North Brook Jute 1960 I LLJ 580 (H.C.) approving Kemp & Co. Ltd. case 1955 I LLJ 48 (LAT). The nature of the works committees finding is recommendatory or advisory and final decision rest with union and the employer. No legal obligation is imposed upon the employer to implement the decisions reached by such committee. Works committee is created with a view to the rendering recourse to the remaining machinery. Works committee cannot go beyond recommendation as they are the bodies who in first instance endeavour to compose differences and final decision rest with the parties. The works committee cannot consider matters like pay revision, employment or re-employment and rationalisation. So your objective of replacing or reducing the impact union cannot be met by making works committee.
Is it necessary for any supervisor to have disciplinary powers to remain out of workman definition of Industrial Disputes Act?
No! It is not necessary to have disciplinary powers for an officer to come out of definition of workman as defined in I.D. Act. If you look at the definition of workman as provided in Sec. 2(s) of I.D. Act, It has four exclusions. First is about the persons who are subject to Air Force, Navy and Army acts, second is about persons of police and prison, Third one is about person who is mainly employed in managerial or administrative capacity and the last fourth one is about a person who being employed in supervisory capacity draws wages more than Rs. 10,000/- per month or exercises mainly functions of managerial nature either by the nature of duties attached to the office or by the reason of the power vested in him. Gujrat HC in the case of Baroda Rayon Corporation Ltd. Vs. Jayant Kumar Maganbhai, 2018 (156) FLR 1, has held that it is not required for a person as supervisor to have disciplinary powers to get excluded from the definition of workman as defined under the definition of I.D. Act. S.C. in the case of Sh. S.K. Maini vs. M/s. Carona Sahu Company Ltd. 1994 (68) FLR 1101 has also observed that though the workman may not necessarily be employed mainly in managerial or administrative capacity, however, if he is employed in supervisory capacity and draws more than the limit specified in the exclusion (iv), he will not be a workman. While determining the categories of service as indicated by the words supervisory, managerial or administrative, it is not necessary to bring interpretation of one into the other. Once it is established that the workman was in charge of the shift and drawing wages exceeding the limit, he would fall within clause (iv) of sec. 2(s) of the Act. An employee employed in a supervisory capacity goes out of the definition of workman if he draws wages exceeding the limit even if he does not exercise functions of a managerial nature. This conclusion comes from the Gujrat HC judgment in the case of Gujrat Electricity Board vs. B.M. Shah 2001(3) GLH 36 and Bombay HC judgment in the case of Union Carbide (India) Ltd. Vs. D. Samuel 1998 (80) FLR 684.
Is there any time limit prescribed for reference of industrial dispute under I.D. Act?
There are two kind of industrial disputes. One is individual and second is industrial (Collective). Sec. 2A talks of individual dispute which can be directly submitted by the aggrieved workman in labour court after 45 days of approaching conciliation officer for exploring the settlement. Here is a time limit for workman to raise his dispute within a period of three years. However, for collective dispute, the phrase at any time is used in Sec. 10 i.e. to refer any industrial dispute if such dispute is in existence or is apprehended, to the forum created under the Act, for adjudication. Normally, it is inferred that, no time limit is prescribed under the Act to refer the dispute for adjudication. In spite of the fact that limitation Act is not applicable on industrial disputes, the Govt. authority can refuse to refer the dispute if it appears that it is stale or too late or does not exist. S.C. in the case of Sapan Kumar Pandit vs. U.P. State Electricity Board 2001(90) FLR 754. has held that the phrase at any time is prima facie indicator of a period without boundary. But the Governments power to refer the dispute has thus owed limitation of time, that it can be referred only so long as the dispute exists. S.C. in the case of Western India Match Co. Ltd. vs. Western India Match Co. Workers Union 1970 (20) FLR 297 has also held that Government may also refer the industrial dispute at any time during the pendency of conciliation proceeding without waiting for failure report of the conciliation officer. So, the Govt. can very well refuse to refer such industrial dispute, which is raised beyond reasonable time having no sign of existence.
Once a point of dispute is settled between workman and management in conciliation, can it be raised again by workman and referred for adjudication in court?
No! The concept oin based Industrial Disputes Act is based on resolution of disputes and if not possible then through adjudication. Thats why sanctity of settlement has been recognized and kept beyond challenge if arrived at during conciliation. In case where the difference or dispute between the parties have been amicably settled resulting in filling of application for withdrawal of the demand notice, no dispute exists. Thus, such dispute could not be referred further for adjudication. P&H Court in the case of Haryana State Industrial Development Corporation Ltd. vs. Presiding Officer, Labour Court-Summary of Cases, 2003 (99) FLR page 5 (Sum) has held that in case such dispute is referred for adjudication, the course open to Labour Court is to conclude, that the dispute between parties has been amicably settled and nothing survive for adjudication.
Ours is a housing finance company. Due to Covid, we have asked employees to submit their resignations and take severance package of one month notice as per their appointment terms. Some have given clear resignations but some have sent emails mentioning that they are forced to resign and challenged management decision before labour authorities. They have also alleged that Co. has enough funds to donate to PM cares Fund but not for employees to pay salaries. Where we stand legally?
Your stand appears weak legally. As you narrated, it appears that since co. is in bad financial position due to Covid generated lockdown, employees were made to resign involuntarily. Involuntary resignation amounts to termination/retrenchment and can always be challenged under I.D. Act. Such employees who have mentioned in emails that they have been forced to resign, tantamount to illegal retrenchment if not complied with relevant provisions of I.D. Act. Moreover, the allegation of donating any fund from Co. towards PM cares Fund will have to be meted out by you strongly and justify the resignations as voluntary. It is suggested that the employees who have mentioned the element of force/undue influence in getting their resignations, you should not treat that as resignation and accept. Rather adopt the legal way of terminating their services by complying with retrenchment provisions. If your strength is more than 100 workmen, then you need to seek prior approval of effecting retrenchment from the appropriate Govt. In all probabilities, such dispute of resignations if referred for adjudication, final order may go against you.
Supreme Court has ordered that matter of payment of wages for the lock down period should be settled by employer and employee mutually. We have paid some amount against April and May wages but not in full. Now how we should go about?
The Supreme Court order is interim in nature. Next hearing has been fixed for last week of July. The order has provided an opportunity to settle the matter amicably by both employer and employee and whatever is decided and agreed between the two will be valid irrespective of MHA dated 29.03.2020 order in question which has been challenged by companies. In view of the order, it is suggested to talk to workers, reach out to some amount or percent of wages to be paid for the lockdown period of 50 days as mentioned in order, make an agreement in writing, get it signed by all workers and registered under Sec. 18(1) of I.D. Act. In case it is not possible for employer and employees to reach out to an agreement, labour authorities can very well be involved for conciliation. If such agreement is reached out with the intervention of conciliation officer, it should be written, signed and registered as tripartite settlement under Sec.12(3) of I.D. Act. In case there is not settlement is made out even after intervention of labour authorities, then this dispute cannot be referred for adjudication as the matter is sub-judice in Supreme Court and then employer has to wait for final order in the matter. That final order would be binding. Instead of waiting for final order of SC, employer should avail this interim opportunity and close the matter mutually from becoming a dispute.
After lockdown period, for cost reduction, can a company process Pay cut in percentage for all employees (slab wise)/lay off /LWP for different employees based on work schedule so burden can be diverted for survival of all/Week Off Day addition e.g. Sat & Sun both in place of Sunday only (Saturday with Pay Cut)? How to process legally?
After lock down, in normal working, I.D. Act would be applicable. Sec. 9-A prohibits employer to effect any change in service conditions that affects adversely to workers without giving them 21 days notice. So make out a case, rational proposal, inform affected individually with 21 days notice and implement. If your employment terms indicate that he is hired to work on all week days and five day week is introduced temporarily without any pay cut, then management can withdraw five day week working and start six day working. However, even after this, It may be an industrial dispute. Workers may challenge your pay cuts/restarting six day week. You should be ready with sounding and reasonable facts before the court/industrial tribunal to establish your genuineness and reasonability.
We have a school and a terminated teacher has raised an industrial dispute. We have asked the Conciliation Officer to close the matter as the teacher is not a workman and such dispute cannot be refered. In such situation what are the powers of the Conciliation Officer?
The Conciliation Officer has only administrative powers and not the adjudicatory powers. He cannot refuse to refer a dispute simply on the ground of decision taken by him. In your case it may be correct that teacher is not a workman but on the basis of this view Conciliation Officer has no power to refuse to refer the dispute and reject the application of the terminated teacher. You can raise this plea before the appropriate labour court. Conciliation Officer cannot assume the adjudicatory powers of the court. Allahabad High Court in the case of Riyan International School Karamchari Sangh vs. State of U.P. 2008 LLR 1261 has also held in the same direction.
We have re-started business activities after govt. permission and lock down was lifted with certain conditions in last week of April 20. We sent communications to workers through mob. messages and personal contacts at their local addresses in our record. Many workers did not report for duty on the pretex that they were not allowed to move out being in curfew area in their permanent home town in different state. Are we liable to pay wages to such workers for the period of absence?
No! Once Govt. allowed re opening of business activities and after reopening you have called workers to report for duty and they do not report, wages of such absence period is not payable. It appears that during lockdown such workers left for their permanent homes in different states from local residence. If they have done it without management information and approval, at their own risk, they have to be responsible for their own acts. Moreover, during lockdown, by moving from their local residences, they have also violated the Govt. guidelines of remaining at the same place where they were at pre lock down period. Since they have communicated about their inability to report due to circumstances beyond their control, it is suggested that neither their names should be struck off from rolls, nor any disciplinary action should be initiated.
After lockdown, when we started factory, we asked every employee to give an undertaking that he has not been infected by corona virus so far, he will follow the quarantine rule of the Govt. in case so directed by co., will immediately report to management in case of any symptoms of Covid, maintain and comply with social distancing, wear the mask, maintain discipline and give full production. Few employees refused to give that undertaking. We have marked them absent, not allowed to join the duties and deducted the salary. They have now raised the dispute that they have illegally terminated. What is the legal position?
There appears no industrial dispute at this point as their names are very much on the rolls of the company and they have been marked absent and not paid wages because they did not give undertaking which was required. Undertaking does not in any way change the service conditions. Though the facts of a case are not exactly the same but similar to some extent where Industrial Tribunal, Bombay, in the case of Vishnu Tulsiram & Others vs. Metal Press India Bombay, 1977 (50) FJR 331 has held that. Keeping the workmen out of the factory premises unless they gave the required undertaking did not amount to termination of their services or punishing them. It was up to the workmen to give the undertaking and to enter the factory. If they did not give the undertaking and consequently did not work, the employer cannot be said to have wrongly marked them absent; The undertaking demanded by the employer did not amount to alteration of the rules as there were no existing rules. Marking the workmen absent and depriving them of their wages did not amount to introduction of new rules of discipline; Though the employer is entitled to proceed against the workmen on the basis of the alleged go-slow or sit-down strike and other misconducts, charge sheet them and then proceed in accordance with law, it does not mean that the employer must follow that remedy or that was the only remedy available to him or that it was not open for him to declare a lockout; and If the demand of the employer was unjustified and consequently the non-payment of wages was unjustified, it is open to the workmen to raise an industrial dispute and have it adjudicated in accordance with law.(On facts, the Tribunal found that the alleged misconduct of the workmen was proved and that the employer was justified in asking for the undertaking). The undertaking asked by the employer is legal and effective and there is no contravention of Section 9A or Section 33(2) (b) of the Industrial Disputes Act, 1947.
When we reopened the factory and office, we made out a detailed SOP and called workers initially in small groups. Workers were informed to be ready to report next day on call. Many workers could not be called for duty because there was no work for them and plant was operational only at 50% capacity. This happened in May and June also. We paid salary only to those who attended duties. Remaining workers are now also asking for their salary of the period. Are we under obligation to pay to such workers also?
Yes! In such situation where you informed workers of re-starting the plant and asked them to be ready to report on call, you as an employer is liable to wages to such workers who have not been called for duty. It is not their fault. As employer you were not able to provide employment to them and asked them to be at home. Better would have been for you to declare lay off for such workers who were not called. In that case your liability to pay wages would have reduced to 50% of basic and DA. I suggest that initiate a dialogue with such workers, make them understand the co. situation in a transparent way and also understand their position. Try to strike out a settlement which leads to win- win situation. There are many options. In such absence, you will be liable to pay full wages to such workers.
We are planning to ask some employees to do work from home till situation improves, as employees health is priority for us. What kind of changes should we make in employment contract to insulate co. interest and also employee interest so that it is in tune with employment laws also?
When you ask an employee to do work from home, it means employee home will attain a status of notional extended workplace. While drafting employment contract in respect of such employees, you need to keep in mind the nature of work he is going to perform. You can specify certain guidelines related to daily attendance by login and log out through his computer, use of social media during working time, daily scheduled meeting with team mates and leader, specific tasks and assignments, data protection, internet usage limit to be reimbursed by Co. dress code while moving out on Co. assignment, restructuring the compensation package by including certain expenses like electricity, internet and AC consumption allowance and excluding transport, food etc allowances because neither such employee would come to office nor will take food in office cafeteria. Such benefits can be accrued on actual basis. Leaves entitlement can also be restructured. There should be condition that WFH is temporary arrangement and can be withdrawn at any time and in that condition his original compensation package will become effective and WFH package will cease to effect because it is not going to work for a long time everywhere in India. It can be job and industry specific. In WFH model trust between employer and employee is the key. You cannot oversee the employee all the time and have a sort of surveillance over them.
Whether bonus will be payable to such persons who are paid only commission?
No! Section 2(21) of the Payment of Bonus Act does not include any commission payable to the employee vide clause (vii) of section 2(21). It clearly defines salary or wages. Its opening provisions includes within it all remunerations (other than the remuneration in case of overtime work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment and includes dearness allowances, yet in express terms, the definition does not include any commission payable to the employee vide clause (vii) of section 2(21).
Our one employee has resigned after restarting of business activities post lockdown. His service tenure was 4.9 months before lockdown. On the date of resignation he has completed five years. Now would he be entitled to gratuity?
Yes! He will be entitled to gratuity since he has completed five of continuous service in your organization. Do not get confused with lock down period of no working. It will be deemed as on duty days as per govt. order. Employee will be entitled to all benefits on this period till 17.5.2020 when this order is withdrawn.
We have wage structure of basic, HRA, conveyance allowance and site allowance. I want to know that while paying gratuity whether it would be payable on complete salary components including conveyance and site allowance?
No! While paying gratuity under the Payment of Gratuity Act neither the conveyance allowance nor the site allowance will be taken into consideration since the definition of the wages as clarified by the Supreme Court in the case of The Straw Borad Manufacturing Company Ltd. vs. It’s Workmen (1977) 2 SCC 329 means basic wages and dearness allowance and nothing else. This corresponds to section 2(s) of the Act. So you are not liable to pay gratuity on conveyance and site allowance. Bombay High Court in the case of Voltas Ltd. vs. Chandrakant Y. Bhramhane 2008 LLR 84 has also held in the same direction.
What is the difference between domestic enquiry and enquiry by IC under POSH law?
1- Domestic Enquiry is not governed by any defined statute but by principles of natural justice and procedure defined in services rules/standing orders and guidelines provided by courts whereas the enquiry by IC is governed by the provisions of POSH Act. 2-In IC it is a four member committee and qualifications are provided in the POSH Act, whereas in domestic enquiry it is normally one Enquiry officer and there is no qualification of Enquiry officer provided in any law. 3-For IC the period is of three years for members to remain in the committee, whereas for enquiry officer, it comes to an end with submission of enquiry report to the disciplinary authority. 4- IC can recommend the punishment to the accused/respondent in their report whereas Enquiry officer cannot recommend any punishment. It is for the disciplinary authority to decide on the punishment. 5- The complaint of sexual harassment can be received by any member or presiding officer of the IC and initiate action whereas in domestic enquiry, Enquiry officer has no such role. Chargesheet is issued by the management and on receiving the explanation, decide whether inquiry should be conducted or not? 6- No advocate is allowed to represent any party before the IC whereas in domestic enquiry it is possible if service rules/standing orders so provide. 7-IC has powers to conciliate upon the matter on the request of the complainant and reach to a settlement without any monetary consideration but in domestic enquiry Enquiry Officer has no such powers. 8- IC members have the same powers as vested in civil court in respect of summoning of records, enforcing the attendance of any person to examine him on oath and production of documents, whereas Enquiry officer has no such powers. 9-IC has to complete the inquiry within 90 days whereas as per one SC judgment domestic enquiry should be completed within six months or one year. However, there is no such provision in any law about time frame. 10- IC can recommend interim relief to the aggrieved woman in respect of her transfer to some other place, to grant leave for a period up to 3 months in addition to already available leaves whereas Inquiry officer has no such powers. 11- IC proceedings are to be held in camera and no publication of proceedings is allowed whereas in case of domestic enquiry , no such prohibition is applicable.
When work from home is becoming popular, pl. clarify whether my home will be deemed as workplace and can late night calls of boss discussing sexuality under the guise of knowing work progress and other similar virtual acts be deemed as sexual harassment?
Section 2(o) of the Act defines workplace in an inclusive and non-exhaustive manner which under its sub clause (vi) includes a dwelling place or a house. Although, the spirit of the Act refers to the domestic servants and helpers who are employed in a dwelling place or a house when it means that workplace includes a dwelling place or a house. Yet the unprecedented extraordinary times of Corona virus lockdown and on application of literal rule of interpretation, the meaning of workplace shall also encompass work from home under Section 2(o) (vi). Therefore, sexual harassment occurring through online medium while working from home falls under the scope of Prevention of Sexual Harassment at Workplace Act, 2013. The second most pertinent question that is likely to arise is that, since there is no physical element involved while working from home, what are the kinds and forms of sexual harassment that can occur while working from home? The answer to the kinds and forms of sexual harassment that can occur while working from home can be found under section 2(n) of the Act, which is yet another non-exhaustive and inclusive clause defining "sexual harassment". The relevant sub clauses here are sub clause ii, iii, iv and v of section 2(n) which deals with the expressed or implied unwelcome acts or behaviour demanding or requesting sexual favours, making sexually coloured remarks, showing pornography and any other unwelcome verbal or non-verbal conduct of sexual nature, respectively. Therefore, such are the instances of sexual harassment that are covered under the Prevention of Sexual Harassment at Workplace Act, 2013 which one can encounter online while working from home.
What is the difference between domestic enquiry and enquiry by IC under POSH Law?
1- Domestic Enquiry is not governed by any defined statute but by principles of natural justice and procedure defined in services rules/standing orders and guidelines provided by courts whereas the enquiry by IC is governed by the provisions of POSH Act. 2-In IC it is a four member committee and qualifications are provided in the POSH Act, whereas in domestic enquiry it is normally one Enquiry officer and there is no qualification of Enquiry Officer provided in any law. 3-For IC the period is of three years for members to remain in the committee, whereas for enquiry officer, it comes to an end with submission of enquiry report to the disciplinary authority. 4- IC can recommend the punishment to the accused/respondent in their report whereas Enquiry officer cannot recommend any punishment. It is for the disciplinary authority to decide on the punishment. 5- The complaint of sexual harassment can be received by any member or presiding officer of the IC and initiate action whereas in domestic enquiry, Enquiry officer has no such role. Charge-sheet is issued by the management and receiving the explanation, decide whether inquiry should be conducted or not? 6- No advocate is allowed to represent any pary before the IC whereas in domestic enquiry it is possible if service rules/standing orders so provide. 7-IC has powers to conciliate upon the matter on the request of the complainant and reach to a settlement without any monetary consideration but in domestic enquiry Enquiry Officer has no such powers. 8- IC members have the same powers as vested in civil court in respect of summoning of records, enforcing the attendance of any person to examine him on oath and production of documents, whereas Enquiry Officer has no such powers. 9-IC has to complete the inquiry within 90 days whereas as per SC judgment domestic should be completed within six months or one year. However, there is no such provision in any law about time frame. 10- IC can recommend interim relief to the aggrieved woman in respect of her transfer to some other place, to grant leave for a period up to 3 months in addition to already available leaves whereas Inquiry officer has no such powers. 11- IC proceedings are to held in camera and no publication of proceedings is allowed whereas I case of domestic enquiry, no such prohibition is applicable.
Because of washing allowance and medical allowance, employees crossed wage limit of ESI. Employer still liable to pay ESI on salary?
No! It is well settled principle that washing allowance is a part of wage as per definition of wages provided in Sec 2(22) of the Act. It will be a wrong notion for ESI to treat washing allowance as a perk on one hand and on the other hand expect contribution too on that amount. Medical allowance too is a part of wage but when it is paid only to those employees who are out of ESI coverage has no relevance for the purpose of contributions. Gujarat HC in the case of Regional Director ESIC vs. Bhavnagar Vegetable Products unit, 2016 CLR I 620 has also held that washing allowance would be treated as part of wage and if by adding the amount of washing allowance, employee crosses the wage limit fixed for the purpose, unit is exempted from making payment of contribution of such employees to the ESIC.
We are into footwear industry. We outsource certain jobs on piece rate basis like finishing of straps, slitting. We pay such agencies against job works. We have no control and supervision over their employees of such agencies. ESI Authorities are asking us to pay ESI contribution on the bill amount of job work paid to such agencies. Are we liable for such payment?
No! The facts you have narrated indicate that outsource agencies are not only working for you and you have no control and supervision over them. In such situation you are not liable to pay any ESI on the bill amount paid to such agencies for job work done on piece rate basis. Jharkhand High Court in the case of Bihar Rubber Company Ltd. vs. ESIC Patna 2008 LLR 64 has also held that when the company has got no connection or control on said units/agencies and are not supervised by the company, such units doing the job work would not be covered under section 2(9) of the ESI Act. In this case the company was manufacturing rain wears and air pillows covered under ESI. They were outsourcing various jobs to other units which were neither supervised nor controlled by the company. Court held that demand as raised by the ESI Authorities on the company is misconceived and liable to be quashed.
We have a small unit employing only eight people. After inspection, ESI Authorities have sent us a notice of demand and said that unless we deposit the demanded amount they will not provide us an opportunity to file the objection. Is it legally correct ? Are we bound to deposit the amount first and then go for hearing ?
No! ESI Authorities cannot ask you to deposit the amount as demanded. It cannot be a pre-condition of hearing. You are not legally bound to deposit the amount first and then ask for hearing. ESI Authority is under legal obligation to provide you a copy of the inspection report and basis of their demand notice and give you an opportunity to file your objections to the notice of demand. Allahabad High Court in the case of Naresh Chand Bhargava vs. Chairman ESIC Kanpur 2008 LLR 1262 has also held that ESIC is not empowered to direct employer of an establishment to first deposit the amount as sought to be recovered only then hearing and objections will be allowed.
According to our settlement with the workers we are paying them some amount as food allowance. PF Authorities are asking us to pay PF contribution on this food allowance amount. What is the legal position? Are we liable to pay PF on food allowance?
No! You are not liable to pay PF contribution on food allowance as it cannot be equated with the dearness allowance. Bombay High Court in the case of Tata Hydro Electric Power Supply Company Ltd. vs. The RPFC 2008 LLR 1013 has held that food allowance as given to employees by the employer of an establishment covered under the EPF Act will not be treated as dearness allowance to attract PF contributions since there being no supply of any food to the employees. Food and such allowances cannot be treated as the cash value of the food concession.