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 There should be condition that WFH is temporary arrangement and can be withdrawn at any time and in that condition his original compensation package will become effective and WFH package will cease to effect because it is not going to work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.
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.
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.
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.
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.
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.
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.
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.
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.
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.