Our factory is situated in a area where ESI Act is not applicable. In such situation, when we want the employer to be covered under ESI, will a workman get compensation from the employer if the establishment of the employer is not covered under the E.S.I. Act?
Yes! Since your establishment is not covered under ESI, you are liable to pay compensation as per provisions of Employees’ Compensation Act to a workman receiving injuries arising out of and during the course of employment. It does not depend on your wish to get your factory covered under ESI Act. Unless there is a notification issued by the Govt. to make the Act applicable in your area, you will be covered under E.C. Act. It is suggested that you should take up a insurance policy for E.C. In case of compensation you will be indemnified by the insurance company. This system is popularly known as group Insurance Scheme and the amount of annual premium is also very reasonable. Some of the newly set up Insurance Companies have also started such type of insurance policies. Now as per latest amendment in the E.C. Act you are also under legal obligation to make your all employees aware in writing about their rights of compensation benefits available to them.
Recently Central Government has included the category of fixed term employment in central rules of Industrial Employment (S.O.) Act. Our industry is in Uttar Pradesh. How it is going to impact us?
The central Govt. has included a new category of workman Fixed term employment by amending the Industrial employment (S.O.) Rules 1946. The notification has been issued on 16. 03.2018. Unless your state government also carry such amendment in your state standing order rules, it is not going to impact you. At present the impact of this amendment is for the industries covered under central rules and also such industries must have such category in their certified standing orders that the employer can appoint a person for a fixed period on contract and after expiry of the contract, he will not be entitled to notice pay or compensation. It will be covered under sec. 2(oo) (bb) of I.D. Act. Such fixed term workman hours of work, wages, allowances and other benefits shall not be less than that of a permanent workman; and (b) he shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered. The provisions under the Industrial Employment (Standing Orders) Act of 1946, under which the rules have been amended to allow fixed-term contracts, are independent statutory provisions, with requirements under any other laws not impacting these, which mean provisions of the Payment of Gratuity Act will not limit the functioning of the Industrial Employment (S.O.) Act. In sum, workers hired under fixed-term contracts will be entitled for gratuity from employers whenever their contract ends, even if they have not completed five years of continuous service. Whereas the permanent workers are not entitled to gratuity under the Payment of Gratuity Act unless they complete minimum five years of service to become eligible for gratuity. In another benefit to workers, the government has said an employer will not be allowed to "convert the posts of the permanent workmen existing in his industrial establishment" as fixed-term employment after notification of the new rules. The amendment will aid the industry to employ workers in sectors which are of seasonal nature and witness fluctuation of demand and hence requires flexibility in employing worker. Before extending the facility of employing workers on fixed term to all sectors, it was initially introduced in apparel manufacturing sector in industrial employment (S.O.) Act in October 2016. Accordingly in Uttar Pradesh, unless this amendment done by the Central Government in Industrial Employment (S.O.) Rules, is adopted and proper amendments are made in U.P. State Industrial Employment (S.O.) Rules, this amendment will not impact employment relations in your State because labour is a state subject and state has to amend their respective rules in the state.
Can we terminate an employee who has mis-represented at the time of interview by mentioning that he was having experience but on verfication it was found that he did not have any experience?
Yes! You can terminate the services of such employee who has obtained the employment by mis-representing the facts. Supreme Court in the case of Kendriya Vidyalaya Sangathan vs. Ram Ratan Yadav 2003 LLR 433; 2003 (97) FLR 117 has held that the termination of a teacher who gave false declaration about his involvement in criminal cases has been held to be valid. Allahabad High Court in the case of Abhishek Chaturvedi vs. Union of India 2017 LLR 816 has also held dismissal justified for obtaining employment by mis-representing the educational qualification. Karnataka High Court in the case of Shri Putta Nanjaraje Urs vs. The Management of KSRTC 2017 LLR 844 has also held in the same direction where employee was found guilty of obtaining appointment on the basis of fake and forged educational certificate. Such actions of an employee amounts to cheating and breach of trust and also causes loss of confidence. Delhi High Court in the case of Subhash Chander vs. P.O. Labour Court 2013 LLR 566 has also held that cheating and breach of trust would justify dismissal.
Can a Junior Officer to the appoining authority sign the dismissal letter of the employee and would it be legal?
Normally it would not be legal. It all depends on the powers delegated by the board of the company to the person concerned, who signs such letters. Punjab and Haryana High Court in the case of Bank ofIndia vs. Central Government Industrial Tribunal 1991 LLR 497 has held that such termination signed by subordinate Officer to appointing authority would be null and void. Because by age old recognised relationship of master and servent it has become and integral part of service jurisprudence that an authority subordinate to the appointing authority cannot terminate the services of the employee.
When Labour Court grants back-wages, the question of gainful employment is also considered. How we can justify that the person is employed gainfully to avoid back-wages?
First of all, it is now settled law that back-wages is neither automatic nor the rule, when reinstatement is granted. It is discretionary and has to be dealt by the court in accordance with facts and circumstances of each case. It has so been held by Supreme Court in the case of Ram Ashrey Singh vs. Ram Bux Singh 2003 LLR 415. It is for the employer to adduce the evidence that the empolyee was gainfully employed during intervening period. Gujarat High Court in the case of Veterinary Officer vs. Rajendra Singh R. Jhala 1997 II CLR 986 has held that if there is no evidence led by the employer about Gainful employment of the employee, grant of back-wages is normal consequence. Supreme Court in the case of Uttar Pradesh State Brassware Corporation Ltd. vs. Udai Narain Pandey 2006 LLR 214 and in the case of Uttar Pradesh State Road Transport Corporation Ltd. vs. Sarada Prasad Mishra 2006 LLR 586 has held that no precise formula can be laid down for payment of entire back-wages and being a discretionary power no straight jacket formula can be evolved for universal application. Supreme Court in the case of North East Karnataka Road Transport Corporation vs. M. Nagangouda 2007 (112) FLR 887; 2007 LLR 340 has held that gainful employment during the intervening period will include either self employment or earning from agricultural pursuits because income either from employment in any establishment or from self employment merely differentiates the source from which income is genreated but the end use is same.
When Labour Court grants back-wages, the question of gainful employment is also considered. How we can justify that the person is employed gainfully to avoid back-wages?
First of all, it is now settled law that back-wages is neither automatic nor the rule, when reinstatement is granted. It is discretionary and has to be dealt by the court in accordance with facts and circumstances of each case. It has so been held by Supreme Court in the case of Ram Ashrey Singh vs. Ram Bux Singh 2003 LLR 415. It is for the employer to adduce the evidence that the empolyee was gainfully employed during intervening period. Gujarat High Court in the case of Veterinary Officer vs. Rajendra Singh R. Jhala 1997 II CLR 986 has held that if there is no evidence led by the employer about Gainful employment of the employee, grant of back-wages is normal consequence. Supreme Court in the case of Uttar Pradesh State Brassware Corporation Ltd. vs. Udai Narain Pandey 2006 LLR 214 and in the case of Uttar Pradesh State Road Transport Corporation Ltd. vs. Sarada Prasad Mishra 2006 LLR 586 has held that no precise formula can be laid down for payment of entire back-wages and being a discretionary power no straight jacket formula can be evolved for universal application. Supreme Court in the case of North East Karnataka Road Transport Corporation vs. M. Nagangouda 2007 (112) FLR 887; 2007 LLR 340 has held that gainful employment during the intervening period will include either self employment or earning from agricultural pursuits because income either from employment in any establishment or from self employment merely differentiates the source from which income is genreated but the end use is same.
Can we terminate an employee who has mis-represented at the time of interview by mentioning that he was having experience but on verfication it was found that he did not have any experience?
Yes! You can terminate the services of such employee who has obtained the employment by mis-representing the facts. Supreme Court in the case of Kendriya Vidyalaya Sangathan vs. Ram Ratan Yadav 2003 LLR 433; 2003 (97) FLR 117 has held that the termination of a teacher who gave false declaration about his involvement in criminal cases has been held to be valid. Allahabad High Court in the case of Abhishek Chaturvedi vs. Union of India 2017 LLR 816 has also held dismissal justified for obtaining employment by mis-representing the educational qualification. Karnataka High Court in the case of Shri Putta Nanjaraje Urs vs. The Management of KSRTC 2017 LLR 844 has also held in the same direction where employee was found guilty of obtaining appointment on the basis of fake and forged educational certificate. Such actions of an employee amounts to cheating and breach of trust and also causes loss of confidence. Delhi High Court in the case of Subhash Chander vs. P.O. Labour Court 2013 LLR 566 has also held that cheating and breach of trust would justify dismissal.
Can a Junior Officer to the appoining authority sign the dismissal letter of the employee and would it be legal?
Normally it would not be legal. It all depends on the powers delegated by the board of the company to the person concerned, who signs such letters. Punjab and Haryana High Court in the case of Bank ofIndia vs. Central Government Industrial Tribunal 1991 LLR 497 has held that such termination signed by subordinate Officer to appointing authority would be null and void. Because by age old recognised relationship of master and servent it has become and integral part of service jurisprudence that an authority subordinate to the appointing authority cannot terminate the services of the employee.
Recently Central Government has included the category of fixed term employment in central rules of Industrial Employment (S.O.) Act. Our industry is in Uttar Pradesh. How it is going to impact us?
The central Govt. has included a new category of workman Fixed term employment by amending the Industrial employment (S.O.) Rules 1946. The notification has been issued on 16. 03.2018. Unless your state government also carry such amendment in your state standing order rules, it is not going to impact you. At present the impact of this amendment is for the industries covered under central rules and also such industries must have such category in their certified standing orders that the employer can appoint a person for a fixed period on contract and after expiry of the contract, he will not be entitled to notice pay or compensation. It will be covered under sec. 2(oo) (bb) of I.D. Act. Such fixed term workman hours of work, wages, allowances and other benefits shall not be less than that of a permanent workman; and (b) he shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered. The provisions under the Industrial Employment (Standing Orders) Act of 1946, under which the rules have been amended to allow fixed-term contracts, are independent statutory provisions, with requirements under any other laws not impacting these, which mean provisions of the Payment of Gratuity Act will not limit the functioning of the Industrial Employment (S.O.) Act. In sum, workers hired under fixed-term contracts will be entitled for gratuity from employers whenever their contract ends, even if they have not completed five years of continuous service. Whereas the permanent workers are not entitled to gratuity under the Payment of Gratuity Act unless they complete minimum five years of service to become eligible for gratuity. In another benefit to workers, the government has said an employer will not be allowed to "convert the posts of the permanent workmen existing in his industrial establishment" as fixed-term employment after notification of the new rules. The amendment will aid the industry to employ workers in sectors which are of seasonal nature and witness fluctuation of demand and hence requires flexibility in employing worker. Before extending the facility of employing workers on fixed term to all sectors, it was initially introduced in apparel manufacturing sector in industrial employment (S.O.) Act in October 2016. Accordingly in Uttar Pradesh, unless this amendment done by the Central Government in Industrial Employment (S.O.) Rules, is adopted and proper amendments are made in U.P. State Industrial Employment (S.O.) Rules, this amendment will not impact employment relations in your State because labour is a state subject and state has to amend their respective rules in the state.
Our factory is situated in a area where ESI Act is not applicable. In such situation, when we want the employer to be covered under ESI, will a workman get compensation from the employer if the establishment of the employer is not covered under the E.S.I. Act?
Yes! Since your establishment is not covered under ESI, you are liable to pay compensation as per provisions of Employees’ Compensation Act to a workman receiving injuries arising out of and during the course of employment. It does not depend on your wish to get your factory covered under ESI Act. Unless there is a notification issued by the Govt. to make the Act applicable in your area, you will be covered under E.C. Act. It is suggested that you should take up a insurance policy for E.C. In case of compensation you will be indemnified by the insurance company. This system is popularly known as group Insurance Scheme and the amount of annual premium is also very reasonable. Some of the newly set up Insurance Companies have also started such type of insurance policies. Now as per latest amendment in the E.C. Act you are also under legal obligation to make your all employees aware in writing about their rights of compensation benefits available to them.