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.
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.
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 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 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.
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 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.
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 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 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.
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 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.
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.