Zerodha has come up with a unique strategy to get its employees to meet their health goals and become fitter.
Zerodha to pay bonus to staff for physical fitness
Zerodha, the financial services company, has come up with a unique strategy to get its employees to meet their health goals and become fitter.
The Company realised that the pandemic-imposed sedentary lifestyle, physical inactivity and work-life imbalance had led to the deterioration of its employees’ fitness levels.
To get the employees to make an attempt to improve their health and energy levels, the Company encouraged them to adopt healthier alternatives. It has asked its employees to set a health goal, which they would achieve over a period of 12 months.
They will have to make a major change in their lifestyle or living pattern for the better. They will have to track their progress and also update the same regularly, so that they are accountable for their actions and improvements.
Their efforts will be well rewarded by Zerodha, of course. Those who manage to achieve their goals in a year’s time will get a month’s salary as bonus. There will also be a lucky draw for Rs 10 lakh!
Read MoreHow new SEBI regulations benefit listed company employees?
Companies will now be allowed to provide share-based employee benefits to employees, who are exclusively working for such a company or any of its group companies including a subsidiary or an associate.
Earlier this month, the Securities and Exchange Board of India approved the merger of the SEBI (Share Based Employee Benefits) Regulations, 2014 (SBEB Regulations) and the SEBI (Issue of Sweat Equity) Regulations, 2002 (Sweat Equity Regulations) into the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.
The new regulations have widened the scope of employees who can be offered stock options, and brought in other key changes that will benefit the employees and listed companies issuing these options.
How new SEBI regulations benefit listed company employees……
What are the key changes?
Companies will now be allowed to provide share-based employee benefits to employees, who are exclusively working for such a company or any of its group companies including a subsidiary or an associate. Under the earlier regulations, only permanent employees of the company and its holding and subsidiary companies were eligible for share-based benefits; the new regulations broaden this by deleting the word “permanent” and also permitting employees of group/associate companies. Experts say this will not only help companies to better use share-based employee benefits for retaining employees for longer period, but also imbibe a sense of responsibility and ownership in the employee that will push him/her to work for the growth of the company.
Are the new rules applicable to all companies?
No, these will be applicable only to listed companies as these have been framed by SEBI, which only regulates listed companies. For unlisted companies, any change needed will have to be brought into the Companies Act 2013, by the Ministry of Corporate Affairs.
What are the other important changes?
To provide immediate relief to an employee or his/her family in instances of permanent incapacity or death, the regulations have dispensed with the requirement of a minimum vesting period and lock-in period (minimum 1 year) for all share benefit schemes. Experts feel this will allow companies to provide instant relief to bereaved family members who otherwise would have had to wait.
The new regulations have extended the time period for appropriating the unappropriated inventory of shares held by the trust from the existing one year to two years, subject to the approval of the Compensation Committee/ Nomination and Remuneration Committee. This is expected to provide relief to companies that could not grant or dispose of such excess inventory due to adverse market conditions.
The regulations now also permit companies to transfer excess shares or monies held by a trust upon its winding up, to other share-based employee benefit schemes, subject to approval of the shareholders for such transfer. This measure will give more clarity to companies to manage their assets and financial resources of the trust in a more efficient and organised manner.
The regulations will now provide companies with flexibility in switching administration of their schemes from the trust route to the direct route, or vice versa, with the approval of the shareholders, subject to the condition that the switch is not prejudicial to the interest of the employees. Earlier, companies that opted for any of these routes had to carry on with that route until the conclusion of the scheme. As there are some practical challenges in either of the routes, switching will provide flexibility to overcome the respective challenges.
When will sweat equity get issued?
Sweat equity shares will be allowed to be issued for providing the know-how or making available rights in the nature of intellectual property rights or value additions.
As per Section 2(88) of the Companies Act, 2013 “sweat equity shares” means such equity shares as are issued by a company to its directors or employees at a discount or for consideration, other than cash, for providing their know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called.
The regulations have aligned the pricing and the lock-in requirements of the sweat equity shares with the preferential issue norms as provided in the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
The maximum yearly limit of sweat equity shares that can be issued by a company listed on the main board has been prescribed at 15% of the existing paid-up equity share capital within the overall limit, not exceeding 25% of the paid-up capital at any time.
Further, in case of companies listed on the Innovators Growth Platform (IGP), the yearly limit will be 15% and overall limit will be 50% of the paid-up capital at any time. This enhanced overall limit for IGP will be applicable for 10 years from the date of the company’s incorporation. This proposal will benefit all new start-up companies seeking listing on the IGP platform.
Source: Indian Express
Read MoreGovt seeks to mend fences with unions to roll out labour codes
The Government is looking to resume formal negotiations with trade unions to ensure the smooth roll-out of four labour codes and other related policy steps. A senior labour ministry official said Union labour minister Bhupendra Yadav held a “courtesy” meeting with a dozen central trade unions recently.
Yadav, who took charge in July, has told the unions that they can hold further meetings with him every Friday, either individually or collectively, the official said. The labour ministry is also open to reviving the Indian Labour Conference (ILC), the annual apex tripartite meet comprising government, employer representatives and employee representatives on all key labour policies that have been in suspension for six years.
Read MoreNo GST on nominal canteen expense paid by staff.
Authority for Advance Ruling (AAR) has ruled that wherever canteen expenses are majorly taken care of by the employer and the employees are required to pay just a nominal amount towards the same, no Goods and Services Tax (GST) would be charged on such recoveries. Simply put, no GST can be charged on the nominal payment made by staff for using canteen facilities provided by their employers. Tata Motors had approached the Gujarat bench of AAR for clarification whether GST is applicable on the nominal payment recovered by the Company from its staff for availing canteen facility.
By Dayanand Mangaonkar
Read MorePoints to be kept in mind while conducting Labour Law Compliance
First understand what all Labour Laws are applicable to the organisation (mainly manufacturing unit).
Then what all to check imp points under various Labour Law:
1) Factories Act:
A) Valid Factory License and its renewal on time.
B) Annual Returns submitted on time. Check details filled in Returns are properly mentioned against with it’s supporting.
C) Half Year / Monthly returns submitted on time.
D) Proper maintenance of Accident Register and timely intimation of accidents to Factory Inspector within 24/48 hours as cases maybe.
E) Overtime wages are paid at double rate of ordinary wages.
F) All the Registers are maintained and kept upto date.
2) Contract Labour Act:
A) Annual Returns submitted by Principal Employer. Half yearly returns submitted by Contractor.
B) PE got the registration certificate and contractor have valid licenses.
C) Wages are paid above minimum wage rates. Proper overtime wages are paid.
D) Periodical medical checkup are done for all the contract labour.
3) Payment of Bonus Act:
A) Check calculation of bonus paid and paid on time.
B) Returns submitted on time. All registers are maintained.
4) Payment of Wages Act and Minimum Wages Act:
A) All the registers and records are maintained. Returns under the act are submitted.
B) Wages are paid above the minimum wage rate and on time as per the act.
5) Payment of Gratuity Act:
A) Check if any employees have completed 5 years of employment, if yes, are they paid gratuity at the full and final settlement.
6) EPF Act and ESIC Act:
A) Whether all the workers have been issued UAN no and ESIC card.
B) Proper deduction of PF and ESIC made and deposited on time.
7) Industrial Standing Orders:
A) Check if Act is applicable to the factory. If yes, whether factory have certified standing orders and it is displayed in English and in local language in all departments of the factory.
8) Industrial Disputes Act:
A) Check if factory have Works Committee and if yes, it meets once in every quarter.
Safety Compliances:
A) All the workers are provided with safety shoes. Workers working under cranes and on height are using Helmet.
B) Fire Extinguisher are in place. No expiry medicines are used in First Aid Boxes.
C) Safety Shoes, belt, helmet are used by workers working on height.
Compliance in terms of number and committees:
1) Welfare Officer is appointed if workers are more than 500.
2) Safety Officer is appointed in case of more than 1000 workers.
3) Safety Committee is formed in case if Safety Officer is appointed.
4) Works Committee is formed in case of more than 100 workers.
5) Internal Complaint Committee (POSH) is formed in case of more than 10 workers.
6) Canteen Committee is formed in case of canteen service.
7) Occupational Health Center facilities in place, in case of more than 150 workers and factory is carrying hazardous process.
By Dayanand Mangaonkar
Read MoreNEITHER THE PROBATION PERIOD IS EXTENDED NOR CONFIRMATION IS ISSUED, WHAT WOULD BE THE POSITION, IF EMPLOYER WANTS TO TERMINATE SUCH AN EMPLOYEE IN THE EYES OF THE LAW
Such employee can be terminated treating him as a probationer. Such employee will not be deemed as permanent.
Completion of probationary period or continuous working after that would not mean automatic confirmation in service. Non issuance of formal letter of extension of probation period, and mere completion of probation period would not lead to automatic confirmation. It has been so held by Delhi High Court in the case of Himanshu Bhatt vs. Indian Railway Catering and Tourism Corporation Ltd.
Supreme Court in the case of Head Master, Lawrence School, Lovedate vs. Jayanti Raghu, has also held that confirmation of a probationer can only by a written order.
Calcutta High Court in the case of Manjit Singh Bawa vs. Food Corporation of India, has held that a probationer will not become permanent even if he has continued to work after expiry of the maximum period. Simple discharge without any stigma will not be construed as stigmatic as held by Supreme Court in the case of Pavanedra Narayan Varma vs. Sanjay Gandhi Post Graduate Institute of Medical Sciences.
By Dayanand Mangaonkar
Read MoreEvery Detail About Upcoming New Labour Laws 2021 for Workers
The government has extended the execution of the new labour law which consists of codes on wages, besides 1 April providing the firms more time to refurbish the structure of their salary as well as the human resource concerned schemes where it can lead to high employee costs.
Labour Laws 2021
“Implementation of labour codes looks unlikely from April 1. The government wants at least some industrial states to notify rules across the four labour codes along with the Centre to avoid any legal void, the official said.”
The labour ministry is ready with the rules for the 4 codes and mentions them when some states will be ready for the guidelines applied in their domain. Jammu & Kashmir has notified the rules, while Uttar Pradesh, Bihar, Uttarakhand, and Madhya Pradesh have placed draft laws for two codes and Karnataka has prepared rules for one code.
“Elections in a few states have delayed the entire process… while the resurgence of Covid cases in many states has also diluted the focus to some extent,”
One of the biggest impacts of the new labour law will be on the take-home salaries, which is expected to reduce, owing to the fact that the government is eyeing increasing contributions towards provident fund (PF) and other post-retirement schemes. The new laws are expected to come into play soon, which will force employers to modify their employee compensations.
As per the Wages Codes 2019, wages that are paid to an employee include the basic pay plus dearness allowance (DA) and retention payment. Therefore, other remunerations such as PF contributions, bonuses, pension, HRA, gratuity, overtime, etc. are not covered under the definition of wages.
Basic Pay to be 50 Percent of CTC
The new wages code makes it compulsory for organisations to make sure that 50 per cent of employees’ CTC is basic pay, while the remaining 50 per cent comprises other employee allowances, including house rent, overtime, etc.
If the company pays any additional exemptions or allowances that exceed 50 per cent of the CTC, the same will be treated as remuneration to be added to the wages.
Gratuity Cost of Companies to Increase
The new labour laws limit the maximum basic pay to 50 per cent of CTC, thus effectively increasing the Gratuity bonus to be paid to the employee.
Under the new wages code, the gratuity amount will be calculated on a larger salary base, which will include basic pay plus allowances such as a special allowance on wages. This is expected to increase the gratuity cost of companies.
While increasing the social security (pension) components of wages, the new laws are likely to decrease the take-home salary of employees.
15 Minutes Overtime Payment
There is also a rule incoming for any 15 minutes or more overtime will be attracting overtime payment to the employees.
48 Hours Set Work Time for One Week
The government has also made it clear that 48 hours is the maximum limit for a one-week work capacity and the employers are flexible to choose this work time and make it available in 4 days, 5 days, or 6-day week structure.
Four Broad Labour Codes on Wages
With the new law, the government is all set to subsume 44 central labour laws into four board labour codes, which are – code on wages, industrial relations; occupational safety, health and working conditions (OSH) and social security. The same has already received the President’s nod.
While the code on wages was passed in Parliament in 2019, the other three codes were approved by both the Houses last year. The Labour Ministry is now all set to implement the new rules under these four labour codes.
“We have finalised the rules under the four codes which are required to implement the four labour codes. We are ready to notify these rules. The states are doing their work to firm up rules under the four codes,” says Labour Secretary Apurva Chandra.
Pertaining to the new labour rules, companies will be required to make major changes in the employees’ salary structure. These include an increase in gratuity and the exclusion of benefits such as bonus, PF, and HRA from the wages.
By Daynanad Mangaonkar
Read MoreUttar Pradesh amends key labour law, abolishes imprisonment
In a move that will provide a huge relief to industrialists and also help to attract more investors to set up industrial units in the state, the Uttar Pradesh cabinet has approved the amendment to Uttar Pradesh Industrial Peace (Timely Payment of Wages) Act 1978, which technically eliminates the possibility of imprisonment in case an employer does not pay timely wages.
The amendment was approved at a cabinet meeting chaired by Chief Minister Yogi Adityanath. According to Suresh Chandra, additional chief secretary labour and employment, under Section 5 (2) of the Uttar Pradesh Industrial Peace (Timely Payment of Wages) Act 1978, if an employer owes Rs 1 lakh or more in wages to a worker and has not paid it, there was a provision for imprisoned from three months to three years, along with a fine of Rs 50,000/-.
By Dayanand Mangaonkar
Read MoreIndian arbitrator asks Renault-Nissan to pay workers ₹70.84 crore interim dues
Indian arbitrator asks Renault-Nissan to pay workers ₹70.84 crore interim settlement after the expiry of a previous wage agreement in March 2019
Workers at the Renault-Nissan plant in Chennai filed an industrial arbitration suit demanding ₹20,000 as a monthly interim settlement after the expiry of a previous wage agreement in March 2019
An Indian arbitrator has asked Renault-Nissan to pay its 3,542 workers at its southern Indian plant an average of over ₹7,100 ($95.52) per month in additional wages as interim relief, according to a copy of the order reviewed by Reuters.
Workers at the Renault-Nissan plant in Chennai filed an industrial arbitration suit demanding ₹20,000 as a monthly interim settlement after the expiry of a previous wage agreement in March 2019.
The consortium had agreed to pay on an average ₹2,250 every month ending March 2021.
Nissan had told the arbitrator its business in India could become “unviable in the long run” if it were to give in to demands of higher pay from its factory workers, according to a court filing by the Japanese automaker.
Nissan and its union have been locked in a legal arbitration dispute since July after the two sides failed to reach a mutual agreement over several issues including higher wages.
In an order dated Aug. 16, a judge ruled Renault-Nissan shall pay ₹10,000 per month for the 12 months ending March 2020, and ₹5,000 a month for the 16 months ending July 2021.
Reuters has reviewed the petition and the order, which have previously not been reported.
That would cost the management ₹70.84 crore ($9.53 million), according to Reuters calculations. Nissan Motor Co, which majority-owns the plant, did not immediately respond to an email seeking comment.
The tussle exposes the business challenges Nissan faces in the world’s fifth-largest car market where, despite investing about $1 billion, it has been elbowed out by competitors and is struggling to woo car buyers.
The setback shows the pressure that Nissan is under as it tries to restructure some of its key international markets such as India – where it is yet to decide on a future strategy for its under-utilised factory.
“Arrears as per the above direction shall be paid by the Respondent/Management in three monthly equal instalments commencing from 01.09.2021,” the order read.
By Dayanand Mangaonkar
Read MoreEPF Pension Case : EPFO Argues In Supreme Court Against High Court Judgments
Very interesting argument made by Adv. C. Aryama Sundaram of EPFO, eventhough I am not in full agreement with his views. But read argument made by him.
EPF Pension Case : EPFO Argues In Supreme Court Against High Court Judgments
The Supreme Court on Tuesday heard the arguments of the Employees Provident Fund Organization in the appeal filed by it challenging the judgments of various High Courts which quashed the Employee’s Pension (Amendment) Scheme, 2014.
A bench comprising Justices UU Lalit and Ajay Rastogi heard the arguments made by Senior Advocate C Aryama Sundaram on behalf of the EPFO.
Sundaram argued that the High Courts lost sight of the fact that the employees who drew salary in excess of the stipulated limit had to exercise the option of making the joint contribution along with the employer in order to become eligible to Employees Pension. The Employees Pension Scheme, when introduced in 1995, had set an upper limit of pensionable salary as Rs.5,000 per monthh, which was later increased as Rs 6,500 per month. Subsequently, a proviso was added to paragraph 11(3) of the Pension Scheme with effect from 16.03.1996 granting an option to the employer and the employee to contribute amounts towards the pension fund at the rate of 8.33% of the actual salary drawn by the employee, where the salary exceeded Rs.6,500 per month.
Later in 2014, the upper limit was hiked as Rs 15,000 per month, and the proviso to paragraph 11(3), which gave the option of joint contribution for salary exceeding the upper-limit, was deleted. The amendments made by 2014 were invalidated by the High Courts.
Sundaram argued that the High Courts assumed that employees would be automatically covered by the EPS scheme, even without making the option for joint contribution.
“Let us assume the High Court is right in saying 11(3) & (4) is arbitrary and are thus struck down. What’s the consequence? Consequence is… it reverts proviso of 11(3)”, Sundaram submitted.
“It reverts to ceiling limit of 6500. But again, point remains, regular contributions have to be made”, Justice Lalit observed.
“That’s what High Court has lost sight of. High Court assumes that contribution at time of opting was not required”, Sundaram replied.
“The challenge is against 2014 amendment. There is no challenge to 1995 scheme. So where in para 11 or any where else is there any entitlement to pension if you haven’t contributed to the fund? If there is no such entitlement, how can it be retrospectively permitted?! I can understand if there was an entitlement under unamemded scheme. Right was not to get a pension, right was to exercise an option. Exercise option at day 1 when salary exceeded ceiling and actually remit the money. Now, if you don’t do any of those 3, where does the right arise under the 1995 scheme? High Court went wrong in asking itself the wrong questions”, Sundaram argued.
The Kerala High Court, while setting aside the 2014 amendments by its 2018 judgment, had declared that all the employees shall be entitled to exercise the option stipulated by paragraph 26 of the EPF Scheme without being restricted in doing so by the insistence on a date. Further, the High Court had also set aside the orders issued by the EPFO declining to grant opportunities to the employees to exercise a joint option to remit contributions to the Employees Pension Scheme on the basis of the actual salaries drawn by them.
Explaining the 2014 scheme to the bench, Sundaram said that it omitted the proviso to 11(3), and added 11(4), which applies only to person who exercised that option earlier.
Taking a glance at the provisions, Justice Lalit observed “What it shows is… those who were availing benefit of 11(3) earlier will continue to avail that benefit provided this option is exercised. Which means there can never be retrospectivity”.
Sundaram then took the bench through the judgment in R.C Gupta and others v. Regional Provident Fund Commissioner, Employees Provident delivered by the Supreme Court on October 4, 2016. The arguments will continue tomorrow.
In April 2019, the Supreme Court had dismissed the special leave petition filed by the EPFO against the Kerala High Court’s judgment, through a summary order. Later, in January 2021, a three judge bench recalled the dismissal order in the review petitions filed by the EPFO, and posted the matters for hearing in open court.
On February 25, 2021, the division bench of Justice UU Lalit and Justice KM Joseph restrained the High Court of Kerala, Delhi and Rajasthan from initiating contempt proceedings against the Central Government and the EPFO over non-implentation of the HC verdicts. The bench also posted the matters for final hearing.
By Dayanand Mangaonkar
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