Some important judgments of Oct, 2021.

• Sundays and holidays to be counted for 240 days working of any employee.
• Gratuity paid is exempted upto the prescribed ceiling under Income Tax act.
• Termination even for habitual absence must be as per the Industrial Disputes Act, 1947
• Maternity Benefit only when the employee has put in 80 days of service.
• Principal Employer supervising employee of service provider has to extend maternity benefit.
• Without establishing employer-employee relationship raising demand for EPF dues is not sustainable.
• An employee exonerated by the police investigation would ne reinstated pending inquiry.
• Imposing damages, witjpout establishing mens rea or financial crises faced by employer, is not proper.
• Amount recovered by the EPF authority to be credited to the respective account of beneficiaries.

Jab for Job: 82% of Indian Employers Want Employees To Be Vaccinated

As India hits a historic milestone of administering 100 crore Covid vaccines, a study by the world’s #1 job site Indeed shows almost all employer and employee respondents (94% and 87% respectively) want people coming in to work to be vaccinated with at least a single dose. Some businesses are either making it mandatory or heavily encouraging vaccination among their new hires. But, the common trend across employees and employers is that a majority of both employers (52%) and employees (61%) are in favour of Hybrid work models as compared with either going to work every day or working from home every day. The future of work is definitely hybrid.”

Govt to soon set up panel for National Employment Policy

The government will soon set up a committee to frame India’s first National Employment Policy with an aim to significantly push up employment generation in the country. Work has begun to identify the members of the committee that is expected to have representatives from stakeholder ministries, academia, experts and representatives of employers and trade unions, a senior government official told ET. “The new committee will be notified soon. We hope to put in place the first draft by next fiscal,” the official said, adding that the policy will be based on the data that emerges from employment surveys currently under way.

Support group for the differently-abled offers employment opportunities

A Chennai-based support group of parents of children with intellectual disabilities has embarked on a new journey – ensuring employment opportunities for the children. Towards creating an inclusive workplace, VOICE (Voice of Parents for Inclusion, Care and Empowerment of Children With Special Needs) is facilitating employment for the differently-abled, parents of such young adults and able-bodied individuals. KNSOFT Technologies, a Hyderabad-based startup, is the first company that has associated with VOICE to offer work from home opportunities for more than 80 people, which includes 10 neuro-diverse individuals, 20 special moms, and the remaining being individuals in need.

Gig workers have constitutional right in India to form unions, says TN Hari of BigBasket

Emerging tech businesses that employ gig workers should have a mechanism to address their grievances on time and those trying to muzzle the voices of protest must face legal actions, said Bigbasket head of human resources TN Hari on October 21.

Hari’s remarks came after Salauddin expressed concern over the mistreatment many gig workers face when they try to raise their voices against the establishments they work with. “It is a constitutional right in India to form unions. No company can stop and persecute anybody for forming it. That’s the law of the land. If a person is vocal and speaking up whether on social media or at other places and a company is blocking this individual or taking punitive actions, it is completely illegal and that is not desirable at all,” said Hari.

Under the employment transactions, an employee offers services, and the employer provides a salary plus other non-monetary benefits (perquisites).

Under the employment transactions, an employee offers services, and the employer provides a salary plus other non-monetary benefits (perquisites). So, at both ends, there is supply, and thus the same should be taxable under GST. In this article, let us understand in detail the treatment of GST on employee remuneration and notice pay recovery.

What is Notice Pay Recovery?
Whenever an employee joins or leaves an organization, he/she is bound by the terms of employment. An employee is usually required to serve the agreed notice period before he/she resigns. But, most of the employee agreements have a clause stating that if an employee wants to leave the company without serving the agreed notice period, then he is required to pay an amount equal to the unserved notice period.

This is called notice pay recovery, which is either recovered from the employee or deducted from the salary payable to him.

Treatment of GST on Employee Remuneration…….
Under the CGST Act, all supply of goods and services attracts GST. It applies to an amount made by a registered taxable person for consideration and in the course of furtherance of business. However, Schedule I of the CGST Act includes transactions treated as supplies even if it is made without consideration between related parties but is made in the course of furtherance of business. Also, Section 15 of the CGST Act states that the employer and employee are deemed to be related persons.
Thus, supply made by an employer to an employee is liable to GST even if it is made without consideration (except gifts up to Rs. 50,000). However, Schedule III of the CGST Act states that ‘services by an employee to the employer in the course of or concerning his employment’ are not considered as supply of goods or services. So, GST does not apply to employee remuneration.

Applicability of GST on Notice Pay Recovery…….
As discussed above, employment services are exempted from GST. Thus, some professionals are of the view that as notice pay recovery is in the course of employment, the same is also exempt from GST. But, it should be noted that Schedule II of the CGST Act states certain activities that shall be treated as a supply of goods or services.

Such activities include ‘Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation’. To this, there can be a different point of views:

1.  It could be contended that an employee receives the notice period pay for not serving the notice period prescribed by the employer.

The action of not serving the notice period leads to tolerating the act of an employer. Thus, GST is applicable to notice pay recovery.

2.  In case the notice pay policy does not contain such agreement for tolerating the act of an employee. Then, such notice pay recoveries are not subject to GST.

This is a long-pending issue and needs clarification from the GST authorities. Taxpayers can make representations to seek clarification, as this is a prevalent issue.

There are also a few crucial decisions made in favour of the assessees stating that such notice pay recoveries are not subject to GST:

1.    Order of Commissioner (Appeals) in case of M/s.Gujarat State Fertilisers & Chemical Ltd – It held that cessation of employment is treated as employment service not liable for the GST.

2.    Allahabad CESTAT in case of M/s. HCL Learning Systems Vs CCE, Noida – It held that the amount recovered out of salary already paid is not subject to GST

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)

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