Labour Court/ Tribunal to grant relief of reinstatement and/or back wages usually declare the punishment imposed by employer as shockingly disproportionate. Can you explain what is it all about and what can be factors to be taken in to consideration by court/ Tribunal when reaching to conclusion about the punishment as shockingly disproportionate?
It is established that normally Court /Tribunal is not required to consider the proprietary or adequacy of the punishment or whether it is excessive or too severe. Court may treat the punishment as victimization or unfair labour practice after considering the nature of misconduct, past record and length of service like circumstances being shockingly disproportionate as no reasonable employer would ever impose in like circumstances. This has so been observed by SC in the case of Hind Construction and Engineering Co. Ltd. vs. Their Workmen AIR 1965 SC 917. SC in another case of Union of India vs. G Anayutham 2000 II LLJ 648 has held that to judge the validity of any administrative order normally the wednesbury test is to be applied and in India courts will apply the principle of Proportionality to find out if the decision was illegal or suffered or one which no sensible decision maker could have arrived at. Court has to examine all relevant factors like nature of charges proved, past conduct, penalty imposed earlier, the nature of duties assigned having due regard to their sensitiveness, exactness expected and discipline required to be maintained in the establishment /department in which the person works. This has been observed by SC in the case of Director General RPF vs. Ch. Sai Babu 2003 1 SCR 729. AP HC in the case of G.V. Triveni Prasad vs. Syndicate Bank 2007 II LLJ 685 has held that Courts have to constantly remain guard against adopting populist approach in such matters and refrain from interfering with the punishment imposed by employer on employee. The power of review in cases should be exercised with great care and circumspection. The court has to keep in mind the paramount requirement of maintaining discipline in the services and the larger public interest. SC in the case of State of Gujrat vs. Anand Acharya Alias Bharat Kumar Sadhu 2007 9 SCC 310 has held that court sitting in judicial review against the quantum of punishment imposed in disciplinary proceedings will not normally substitute its own conclusion is not in dispute. If the punishment shocks the conscience of the court, then the court would appropriately mould the relief either by directing the disciplinary authority to reconsider the penalty imposed or may, make an exception in rare case and impose appropriate punishment with cogent reasons in support thereof.
Is there any limitation period prescribed for claiming the gratuity from employer?
Rule 7(1) of Payment of (Central) Gratuity Rules provides that employee shall apply for payment of gratuity to the employer within 30 days from the date it becomes due. The prescribed form is FORM I. Rule 8 Provides that employer within 15 days from the receipt of the claim application received from the employee, shall specify the amount of gratuity after verifying the claim and fix the date for payment not later than 30 days of receipt of the claim application under notice to controlling authority. If the claim is not admissible, the employer is under legal obligation to inform the employee specifying the reasons of not admitting the claim. Such information will be given to employee in form L and M respectively. However Sub Rule 5 of Rule 7 also prescribes that the application for gratuity filed after expiry of specified period shall also be entertained if the employee adduces sufficient reasons for delay in preferring the claim. No claim shall be invalid under the Act merely because it was not filed by employee in prescribed time limit. Karnataka HC in the case of General Secretary, Vokkaligara Sangha, Bangalore vs. R. Chandramouli 2002 LLR and Gujrat HC in the case of Indian Red Cross Society vs. Vidyaben H Vyas 2004 LLR 288 have also held in the same direction.
In case of absence of any nominee, who will get the gratuity of the deceased- his mother or wife?
The provision of section 6 of the Payment of Gratuity Act, 1972 read with Rule 4 of Payment of Gratuity Rules, 1972 (Central Rule) contemplates the nomination in prescribed manner. Since deceased had not declared his nominee, legal heirs of the employee are eligible for payment of gratuity amount. But in case of dispute between the claimants, the controlling authority cannot decide the entitlement of rival claimant and the only recourse is to obtain a succession certificate from appropriate civil court. Allahabad HC in the case of Asha Debi Jauhari vs. Smt. Sharda Deb 1977 (35) FLR 306 has held that for this purpose the provisions of Rule 12 of Payment of Gratuity Rules, 1972 is not relevant and the only forum is available to obtain a succession certificate from the local Civil Court or the Administrator General of the State. In another case of Nagar Palika vs. Appellate Authority 1988 (56) FLR 27 Allahabad HC has held that it is not necessary for the claimant to first obtain the succession certificate and only then apply for payment of Gratuity. It would always depend upon the facts of the case as to whether such certificate would be necessary or not. When both the wife and mother if dependant are part of family as defined in Sec. 2(h) of the Act and the nomination can only be in the name of family members. In case mother is not dependant on the deceased son, the gratuity is to be paid to his wife.
What steps management should take while serving a charge sheet and if refused, how to go about it further?
Generally service rules/certified or model standing orders/HR policy/Manual applicable in the organization carry such procedure of communication. Even if it is not there, first, it should be served personally. One more person should be there at the spot while making service as witness. If refused to take delivery, make a note of such refusal, with signature of person who attempted to deliver with date and time and one witness. Send the photocopy of such charge sheet with refusal endorsement along with cover letter at his last available address. If the employee is not available, send by regd. post at his last available address and put a copy on the notice board of the organisation. If employee avoids to take delivery, the same can be published in newspaper also. The purpose is to make employee aware of the charges against him. Sending charge sheet by ordinary post has no legal sanctity. Procedure provided in the service rules has to be adhered. Deviation from that will make the service invalid. A.P. HC in the case of Principal Chief Conservator of Forests vs. T. Bhaskar Rao 2006 LLR 768 has held that when rules provide the service of charge sheet either by registered post or by publication in newspaper, pasting of charge sheet at the residence of employee will not make service legal. As far as publication in news paper is concerned, it should be ensured that the newspaper should be popular in the area in which charge sheet is published, failing which, such service will be bad in law. S.C. in the case of Union of India vs. Dinanath Shantaram Karcher 1998 LLR 1097; 1998 FLR (80) 446 has held like this. You should take special care in case of female employee. Do not serve the charge sheet alone or in the presence of other male employee. At least one female employee should be present while serving the document to avoid any unpleasant happening.
We have two drivers and one cook for guest house. Their salaries are being paid by managers who have been given co. cars and drivers drive their cars. Cook salary is paid by another manager who regularly stays in guest house. These salaries are reimbursed by Co. to managers as part of their CTC. Drivers and cook have been removed recently due to certain undesirable acts. They have challenged their termination against the company. Can company be liable in such circumstances?
Yes! Co. can be liable. It all depends on the facts of each case but as has been narrated, it seems that all the three (drivers and cook) will be deemed as employees of the company and it may be declared as illegal termination. Delhi HC in the case of Union Bank of India vs. Mujahid Qasim 2021 I CLR 386 by applying the law laid down by SC in the case of Bank of Baroda vs. Ghemar Bhai 2005(2)LLN 671 has held that where drivers also performed the other duties like picking up parcels, computers, sundry jobs and also claiming reimbursements, log book maintained to supervise their day to day duties, drivers required to wear the bank uniform for which payment was also made by the bank indicate that functions performed by drivers was integral part of day to day working of the bank will establish employer-employee relationship and entitled to reinstatement. They were not mere personal drivers of the bank executives. It will not make any difference that their salary was routed through managers. By applying the above principles, it appears that in your case too if your drivers and cook are able to establish they were doing other duties of the company also and cook was making food for other Co. Guests also who stayed in guest house, it may go against you since employer employee relationship between co and drivers/ cook may be established.
We have two drivers and one cook for guest house. Their salaries are being paid by managers who have been given co. cars and drivers drive their cars. Cook salary is paid by another manager who regularly stays in guest house. These salaries are reimbursed by Co. to managers as part of their CTC. Drivers and cook have been removed recently due to certain undesirable acts. They have challenged their termination against the company. Can company be liable in such circumstances?
Yes! Co. can be liable. It all depends on the facts of each case but as has been narrated, it seems that all the three (drivers and cook) will be deemed as employees of the company and it may be declared as illegal termination. Delhi HC in the case of Union Bank of India vs. Mujahid Qasim 2021 I CLR 386 by applying the law laid down by SC in the case of Bank of Baroda vs. Ghemar Bhai 2005(2)LLN 671 has held that where drivers also performed the other duties like picking up parcels, computers, sundry jobs and also claiming reimbursements, log book maintained to supervise their day to day duties, drivers required to wear the bank uniform for which payment was also made by the bank indicate that functions performed by drivers was integral part of day to day working of the bank will establish employer-employee relationship and entitled to reinstatement. They were not mere personal drivers of the bank executives. It will not make any difference that their salary was routed through managers. By applying the above principles, it appears that in your case too if your drivers and cook are able to establish they were doing other duties of the company also and cook was making food for other Co. Guests also who stayed in guest house, it may go against you since employer employee relationship between co and drivers/ cook may be established.
What steps management should take while serving a charge sheet and if refused, how to go about it further?
Generally service rules/certified or model standing orders/HR policy/Manual applicable in the organization carry such procedure of communication. Even if it is not there, first, it should be served personally. One more person should be there at the spot while making service as witness. If refused to take delivery, make a note of such refusal, with signature of person who attempted to deliver with date and time and one witness. Send the photocopy of such charge sheet with refusal endorsement along with cover letter at his last available address. If the employee is not available, send by regd. post at his last available address and put a copy on the notice board of the organisation. If employee avoids to take delivery, the same can be published in newspaper also. The purpose is to make employee aware of the charges against him. Sending charge sheet by ordinary post has no legal sanctity. Procedure provided in the service rules has to be adhered. Deviation from that will make the service invalid. A.P. HC in the case of Principal Chief Conservator of Forests vs. T. Bhaskar Rao 2006 LLR 768 has held that when rules provide the service of charge sheet either by registered post or by publication in newspaper, pasting of charge sheet at the residence of employee will not make service legal. As far as publication in news paper is concerned, it should be ensured that the newspaper should be popular in the area in which charge sheet is published, failing which, such service will be bad in law. S.C. in the case of Union of India vs. Dinanath Shantaram Karcher 1998 LLR 1097; 1998 FLR (80) 446 has held like this. You should take special care in case of female employee. Do not serve the charge sheet alone or in the presence of other male employee. At least one female employee should be present while serving the document to avoid any unpleasant happening.
Labour Court/ Tribunal to grant relief of reinstatement and/or back wages usually declare the punishment imposed by employer as shockingly disproportionate. Can you explain what is it all about and what can be factors to be taken in to consideration by court/ Tribunal when reaching to conclusion about the punishment as shockingly disproportionate?
It is established that normally Court /Tribunal is not required to consider the proprietary or adequacy of the punishment or whether it is excessive or too severe. Court may treat the punishment as victimization or unfair labour practice after considering the nature of misconduct, past record and length of service like circumstances being shockingly disproportionate as no reasonable employer would ever impose in like circumstances. This has so been observed by SC in the case of Hind Construction and Engineering Co. Ltd. vs. Their Workmen AIR 1965 SC 917. SC in another case of Union of India vs. G Anayutham 2000 II LLJ 648 has held that to judge the validity of any administrative order normally the wednesbury test is to be applied and in India courts will apply the principle of Proportionality to find out if the decision was illegal or suffered or one which no sensible decision maker could have arrived at. Court has to examine all relevant factors like nature of charges proved, past conduct, penalty imposed earlier, the nature of duties assigned having due regard to their sensitiveness, exactness expected and discipline required to be maintained in the establishment /department in which the person works. This has been observed by SC in the case of Director General RPF vs. Ch. Sai Babu 2003 1 SCR 729. AP HC in the case of G.V. Triveni Prasad vs. Syndicate Bank 2007 II LLJ 685 has held that Courts have to constantly remain guard against adopting populist approach in such matters and refrain from interfering with the punishment imposed by employer on employee. The power of review in cases should be exercised with great care and circumspection. The court has to keep in mind the paramount requirement of maintaining discipline in the services and the larger public interest. SC in the case of State of Gujrat vs. Anand Acharya Alias Bharat Kumar Sadhu 2007 9 SCC 310 has held that court sitting in judicial review against the quantum of punishment imposed in disciplinary proceedings will not normally substitute its own conclusion is not in dispute. If the punishment shocks the conscience of the court, then the court would appropriately mould the relief either by directing the disciplinary authority to reconsider the penalty imposed or may, make an exception in rare case and impose appropriate punishment with cogent reasons in support thereof.
Is there any limitation period prescribed for claiming the gratuity from employer?
Rule 7(1) of Payment of (Central) Gratuity Rules provides that employee shall apply for payment of gratuity to the employer within 30 days from the date it becomes due. The prescribed form is FORM I. Rule 8 Provides that employer within 15 days from the receipt of the claim application received from the employee, shall specify the amount of gratuity after verifying the claim and fix the date for payment not later than 30 days of receipt of the claim application under notice to controlling authority. If the claim is not admissible, the employer is under legal obligation to inform the employee specifying the reasons of not admitting the claim. Such information will be given to employee in form L and M respectively. However Sub Rule 5 of Rule 7 also prescribes that the application for gratuity filed after expiry of specified period shall also be entertained if the employee adduces sufficient reasons for delay in preferring the claim. No claim shall be invalid under the Act merely because it was not filed by employee in prescribed time limit. Karnataka HC in the case of General Secretary, Vokkaligara Sangha, Bangalore vs. R. Chandramouli 2002 LLR and Gujrat HC in the case of Indian Red Cross Society vs. Vidyaben H Vyas 2004 LLR 288 have also held in the same direction.
In case of absence of any nominee, who will get the gratuity of the deceased- his mother or wife?
The provision of section 6 of the Payment of Gratuity Act, 1972 read with Rule 4 of Payment of Gratuity Rules, 1972 (Central Rule) contemplates the nomination in prescribed manner. Since deceased had not declared his nominee, legal heirs of the employee are eligible for payment of gratuity amount. But in case of dispute between the claimants, the controlling authority cannot decide the entitlement of rival claimant and the only recourse is to obtain a succession certificate from appropriate civil court. Allahabad HC in the case of Asha Debi Jauhari vs. Smt. Sharda Deb 1977 (35) FLR 306 has held that for this purpose the provisions of Rule 12 of Payment of Gratuity Rules, 1972 is not relevant and the only forum is available to obtain a succession certificate from the local Civil Court or the Administrator General of the State. In another case of Nagar Palika vs. Appellate Authority 1988 (56) FLR 27 Allahabad HC has held that it is not necessary for the claimant to first obtain the succession certificate and only then apply for payment of Gratuity. It would always depend upon the facts of the case as to whether such certificate would be necessary or not. When both the wife and mother if dependant are part of family as defined in Sec. 2(h) of the Act and the nomination can only be in the name of family members. In case mother is not dependant on the deceased son, the gratuity is to be paid to his wife.