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.
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).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.