SawaniInstitute

Conveyance allowance is NOT ‘Wages’ u/s 2(22) of the ESI Act.

The hon’ble SC in “ESI Corporation Vs. M/s Texmo Industries[SLP (C) No. 811/2021]”, held that Conveyance allowance is NOT ‘Wages’ u/s 2(22) of the ESI Act. At para 14, the SC observed “From the definition of wages in Section 2(22) of the ESI Act, it is amply clear that wages includes remunerative payments, but does not include compensatory payments”.

The conveyance allowance paid to an employee is in the nature of compensatory payments, thus outside the scope of term ‘Wages’. However, the SC has given a point of caution, where the amount booked as conveyance allowance may be considered as WAGES. At para 25, the hon’ble SC observed as under:

“25. Conveyance Allowance, on the other hand, compensates expenses that might be incurred by an employee for reporting to his usual place of work or to any other place of work, where he may have to report. If an employer were to provide the employee with accommodation within walking distance from his place of work and that employee were not required to go to any other place in connection with his duties under his contract of employment, the employee may not have to incur any expenditure in connection with his employment. In such a case, Conveyance Allowance would be redundant and might be construed as part of allowance consisting wages”.

Therefore, the employer must take due care while preparing the Salary structures. Owing to the above Supreme Court Judgment, in some borderline cases, the employees having gross salary of Rs. 21100 with wage structure comprising of Basic: 17000, HRA: 2500, Conv: 1600 who was NOT earlier a member of ESI would now come within the ambit of ESI.

By Puneet Gupta (Advocate)

Good analysts through Business and HR perspective on preparation by Telecom for 5G

5G isn’t just about high speed, but also about fast data, high security: Priyanka Anand, V-P & HR head (South East Asia, Oceania & India), Ericsson

The whole pace for how we prepared for 5G got accelerated because of the Covid outbreak.

To me, 5G is the underlying technology that can bring this whole thing around low latency that creates seamless experience for people.
Priyanka Anand, vice-president and head of HR (South East Asia, Oceania & India), Ericsson

The 5G roll out will bring in significant hiring opportunities in India, and Ericsson India is betting big on it. Priyanka Anand, vice-president and head of HR (South East Asia, Oceania & India), Ericsson, told FE’s Shubhra Tandon that company is training staff internally and also plans to hire fresh talent to meet the growing demand.

Why should organisations prepare for 5G?

The whole pace for how we prepared for 5G got accelerated because of the Covid outbreak. To me, 5G is the underlying technology that can bring this whole thing around low latency that creates seamless experience for people. So, its not just about high speed, but also about fast data and high security, especially in high-tech industries like ours. So, what 5G can do to collaborate seamless collaboration, it’s about people’s expectations and behaviours changing, and therefore 5G has to be embraced by industries all across.

5G being a new technology, what sort of talent do we have, what sort of training and re-training is needed and what is Ericsson doing in this area?

Ericsson is looking at how to develop talent internally. We have an academy, a focus, we have a concentrated platform available to create curated learning opportunities and learning experiences for our people. It’s anytime, anywhere learning just like anywhere, anytime working. We ensure that whether it’s about 5G, IoT or cloud computing, there’s enough talent for these technologies. We will also be hiring fresh talent coming from the market and universities; we are looking at how to create those learning opportunities and talent repositories by buying, acquiring and building talent.

How many people are getting trained in this technology at Ericsson, can you discuss hiring plans for the year?

It is difficult to comment in terms of numbers. It is always a combination of what’s the demand, what we can refurbish, up-skill and re-skill internally, and what we need to get from the market. So, I think 20% of what exactly competence demands in the market sits with Ericsson. But this number is iffy, and as things accelerate, customer demands accelerate. We continue to look at a conservative increase of between 5% and 10%, but the number can get absolutely swayed this way or that way, depending on the customer demand, competence demand and how we can accelerate our internal confidence funnel. The current headcount in India is at 20,000-plus people sitting across delivery centres and regional operations.

What kind of openings do you see in telecom, apart from 5G technology?

IoT, cloud computing, OSS and VSS remain priority, but we will definitely have a huge focus on artificial intelligence and machine learning, which create greater deal of efficiencies and we enable our people to spend time on more cerebral piece of work, because the transaction piece gets taken care of by these automations. Some employment reports suggest 18-20% growth in employment opportunities in the telecom space.

The demand for niche technologies is going higher and it is being said that talent is becoming expensive to acquire. Are you facing that challenge as well?

War for talent is definitely getting more intensified. We are not oblivious of the fact that we will have to do everything possible to be able to retain the best talent that we have, and also invest hugely on the attractiveness and do what it takes to provide people with development opportunities, ensuring that we prepare people not just for here and now, but make them future proof.

Has salary cost gone up with intensification of talent?

Salary cost is an elusive concept. If we have more people, of course salary cost will go up. At every given point in time, we benchmark our compensation with all the benchmarking firms who tell us what is the right compensation and the skills that we hire for. We have always made and endeavour to keep ourselves competitive within that range.

Has there been an increase in contract staffing for Ericsson?

Contract staffing forms 40% of the workforce, and there has been an increase in hiring in the last one to two years. India has always been a major contributor in overall market area hiring, these numbers will again increase due to the demand in 5G . I would expect to see an increase in workforce by approximately 10% in India for the year 2021. The projected hiring will almost be to a similar level as this year.

Employer can register headload workers: Kerala High Court

Information:

The Kerala High Court has held that inclination or willingness to do headload work with the consent of the employer will satisfy the requirements of the Kerala Headload Workers Act (this Act is similar to Maha. Mathadi Workers Act) to obtain registration as a headload worker.

Justice Bechu Kurian Thomas made the ruling while allowing a writ petition filed by Manzoor E., proprietor of a cashew packing unit in Kollam, and three others challenging the order of the assistant labour officer, Kollam, rejecting the application for registering their employees as headload workers.

Even in Maharashtra same or similar logic can be applied and employers should be allowed to engage Mathadi Workers of his own choice without the compulsion of recruiting them through Gangs/Tolis.

No doubt, Writ Petition needs to be filed for the purpose. However, I do not think so anyone has so far tried on these lines. Experiment can be done.

Synopsis on RESIGNATION & it’s legal locus standie

1. Resignation is an act of relinquishment of one’s own right and in relation to an office, if connotes the act of giving up or relinquishing the office. A prospective resignation is an expression of the intention of the employee to relinquish or quite his office or the post held by him, from a future date.

2. When the employee resigns his job and the employer accepts the same, the contract of employment comes to an end and the employer-employee relationship will be severed. The employer can refuse to accept the employee’s resignation under certain circumstances, such as when the employee wants to leave in the middle of a work which is urgent or important and for the completion of which his presence and participation is necessary; or when there is a disciplinary inquiry pending against the employee etc.

3. A resignation becomes effective from the date of its acceptance. Therefore, accepting resignation with retrospective effect or before the effective date, were held not valid, since the employee had the right to withdraw the resignation before the effective date. a ‘prospective resignation’ can be withdrawn at any time before it becomes effective, and it becomes effective when it operates to terminate the employment.

By Dayanand Mangaonkar

Jet Airways staff approaches labour dept over non-payment of gratuity, salary arrears;

A group of Jet Airways staff has urged the labour department to initiate steps to “summon” the management of the erstwhile Jet Airways, including former Chairman Naresh Goyal over the non-payment of gratuity and some salary arrears, among others. In a letter to the Deputy Chief Labour Commissioner, Jet Airways Officers and Staff Association also requested for calling the Monitoring Committee, which is handling the matter for the winning bidder, the Jalan-Kalrock consortium, and pass a suitable order on the issue. On June 22, the National Company Law Tribunal (NCLT) approved the consortium’s resolution plan for grounded Jet Airways, subject to certain conditions.

By Dayanand Mangaonkar

Ford Motors employees protest gujarat company announces closure

Hundreds of workers of Ford Motors gathered in front of the plant in Sanand, about 25 kilometres from Ahmedabad, Gujarat to protest against the closure of the company. The workers demanded primarily that the company should not shut down. If it has to, the workers sought intervention from the state government to ensure that Ford’s employees will get a priority for jobs at the same wage in the company that replaces the Ford Motors. “Our primary demand is that the plant should not be shut down. If the company is going to shut down the Sanand plant, we request the Gujarat government that we should get priority for jobs at the same wage in the company that replaces Ford Motors in the coming future,” said a protesting employee of the auto company. Notably, independent MLA Jignesh Mevani met the protesting workers at Sanand on September 24 and lent his support to their cause. “I stand by your cause and will fight for you till we arrive at a situation favourable to you (workers). I do not know about the remaining 181 MLAs, but I assure you that you have my full support,” said Mevani in a speech at the location of the protest.

Meesho introduces 30-week gender-neutral parental leave policy

Social commerce platform Meesho on Thursday announced a 30-week gender-neutral parental leave policy as part of its efforts of rolling out inclusive policies for its employees. The policy has been designed with an outlook to provide fulfilling employee experiences, cognizant of the efforts in caregiving and growing a family, Meesho said in a statement. The new policies also reflect evolving societal beliefs and ensure non-discriminatory benefits irrespective of employees’ gender or sexual identity, it added. Meesho has about 1,000 employees.

Evergrande’s EV unit stops salary of employees, factory suppliers

China Evergrande Group’s electric-car unit has missed salary payments to some of its employees and has fallen behind on paying a number of suppliers for factory equipment, according to people familiar with the matter, evidence the stricken property developer’s debt woes are having an impact beyond its core business. The cash flow difficulties mean China Evergrande New Energy Vehicle Group Ltd. will likely miss its target to start mass deliveries next year considering trial production of electric vehicles at its factories in Shanghai and Guangzhou has been dialed back, the people said, asking not to be identified as they’re not authorized to speak publicly.

With respect to new directions of the EPFO Circular dated 01.06.2021 for mandatory seeding UAN with Aadhar for generating monthly ECR

VERY IMPORTANT BREAKING NEWS
24.09.2021

Subject : With respect to new directions of the EPFO Circular dated 01.06.2021 for mandatory seeding UAN with Aadhar for generating monthly ECR

On 10.09.2021, I raised , and argued three issues for relief before the Hon’ble Delhi High Court :

1. Grace period of 5 days be given for remitting PF Contribution as per paragraph 38 of the Scheme,1952 for the Wage Month of May 2021 failing which 7Q (interst ) , damages ( 14-B ) and additional liability under Section 36(1)(va) and Section 2(24)(x) of IT Act,1961will be faced by the Employers because of “due-date” and further requested for extension up to 31.12.2021 for generating ECR with out seeding Aadhar or without verification of Aadhar .

2. Whether directions of the EPFO in compliance of Section 142 of the Social Security Code,2020 , is legal or not ?

3. Whether seeding with Aadhar is necessary in view of Justice Puttaswamy case ,(2019) 1 SCC 1 or not ? Or in view of the Section 142 of the Social Security Code , 2020 which has not been notified , and moreover , Rules , Schemes have not been framed so far.

Therefore , the Delhi High Court has granted interim relief as prayed by the Association of Industries and Institutions on 17.09.2021.Now, the Employer/ Establishment can generate ECR without seeding Aadhar with UAN upto 30.11.2021 .

This matter is listed on 10.11.2021 for further hearing , and assessment of the legality of the EPFO Circular dated 01.06.2021 in view of Section 142 of the SS Code, 2020

In five days week setup, are support service workers coming on duty on off day entitled to OT Wages?

Yes, All employees are entitled to overtime whenever they are called to work on Saturday or Sunday because five day week policy is adopted by the Company.

Accordingly, Saturday is holiday for such employees. Employer can not convert Saturday as working day for them because in other organisations Saturday is working day. Now question comes of category entitled for overtime wages. There is no question of category. Every employee who is called for work on holiday is entitled to OT Wages.

Punjab & Haryana High Court in the case of Municipal Workers Union, Ludhiana vs. Municipal Corporation, has also held that there can not be any discrimination between two sets of homogeneous employees for the purpose of OT Wages. It is impermissible under the Law.

Four Labour Codes unlikely to be implemented during this fiscal.

The four labour codes are unlikely to be implemented this fiscal in view of slow progress on the drafting of rules by the states and also for political reasons like elections in Uttar Pradesh, a source said.
The implementation of these laws assumes significance because once these are implemented there would be reduction in take-home pay of employees and firms have to bear higher provident fund liability.

The Ministry of Labour is ready with the rules under the four labour codes. But the states have been slow in drafting and finalising those under new codes. Besides, the government is not keen to implement the four codes due to political reasons, which are mainly elections in Uttar Pradesh (due in February 2022 onwards).

The four codes have been passed by Parliament. But for implementation of these codes, rules under these must be notified by central as well as state governments for enforcing those in respective jurisdictions.

“It is likely that the implementation of the four labour codes may be dragged beyond this fiscal year,” t he source said.

Once the wages code comes into force, there will be significant changes in the way basic pay and provident fund of employees are calculated.
The labour ministry had envisaged implementing the four codes on industrial relations, wages, social security and occupational health safety & working conditions from April 1, 2021. These four labour codes will rationalise 44 central labour laws.

The ministry had even finalised the rules under the four codes. But these could not be implemented because many states were not in a position to notify rules under these codes in their jurisdictions.

Labour is a concurrent subject under the Constitution of India and therefore both the Centre and states have to notify rules under these four codes to make them the laws of the land in their respective jurisdictions.
According to the source, some states have worked on draft rules on four labour codes. These states are Uttar Pradesh, Bihar, Madhya Pradesh, Haryana, Odisha, Punjab, Gujarat, Karnataka and Uttarakhand.

Under the new wages code, allowances are capped at 50 per cent. This means half of the gross pay of an employee would be basic wages.

Provident fund contribution is calculated as a percentage of basic wage, which includes basic pay and dearness allowance.

The employers have been splitting wages into numerous allowances to keep basic wages low to reduce provident fund and income tax outgo. The new wages code provides for provident fund contribution as a prescribed proportion of 50 per cent of gross pay.

After the implementation of new codes, the take-home pay of employees would reduce while provident fund liability of employers would increase in many cases.

Once implemented, employers would have to restructure salaries of their employees as per the new code on wages.
Besides, the new industrial relation code would also improve ease of doing business by allowing firms with up to 300 workers to go ahead for lay-offs, retrenchment and closure without government permission.

At present all firms with up to 100 employees are exempted from government permission for lay-off, retrenchment and closure.

By Dayanand Mangaonkar