Engaging Casuals after breaks and removing them on Union Formation-Is it valid practice?
No! Such practice of giving repeated breaks and engaging casuals again and again to avoid their permanency is a clear case of Unfair Labour Practice. Termination of such casuals will amount to retrenchment and if not executed by complying relevant provisions of the Industrial Disputes Act, 1947, it is bound to be declared illegal and such casuals in all probabilities will be awarded reinstatement. In the case of Haryana State Electronics Development Corporation vs. Mamni, it was held that where services of a workman (Junior Technician) was terminated on regular basis and on each occasion she was appointed for 89 days after a gap of 2-3 days and completed 240 days in a year, such termination will be retrenchment.
Such action of the employer will amount to Unfair Labour Practice. In this case employer can not take benefit of section 2(oo) (bb) of the Industrial Disputes Act, 1947 which states that termination of the service of the workman as a result of the non-renewal of concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein…….” is not Retrenchment u/s 2(oo) of the ID Act.
by Dayanand Mangaonkar
Read MoreImportant Judgments of the month
- Casual employees engaged for maintenance of guest house to be covered by ESI Act…… Mad HC
- pujari in a temple is not a ‘Workman’…….. Raj HC
- An employee will be ‘Workman’ when management has failed to show that he was sanctioning leave, issuing gate pass and granting overtime of any worker…….. Cal HC
- Termination of a workman, without holding proper enquiry and proving guilt is illegal……….. Cal HC
- Settlement under Section 12(3) of the ID Act, 1947 between Union and Management us binding on all workman……. Mad HC
- No accident compensation payable when death occurred due to disease…….. Mad HC
- An enquiry will not be proper if Subsistence Allowance not paid, and Enquiry Officer was not examined……. Del HC
- Compensation for accident only if it occurred in the course of and arisen out of employment……. Mad HC
- Principal Employer can not shrink responsibility to identify eligible workers engaged through contractor…. Mad HC
- Trainee if not under Apprentice Act or Standing Orders, will be treated as ‘employee’…………. Mad HC
When employee resigns from the services having outstanding amount of advances and loan taken by him, can employer adjust such outstanding amount from his full and final settlement payable?
Yes! Employer will be within his rights to adjust the outstanding amount of advances and loan from the full and final dues. Madras high Court in the case of Rajapalayam Mills Ltd. vs. Labour Court, Madurai, has also held so.
The employee challenged the adjustment under Payment of Wages Act as illegal deduction. Court said that after resignation, relationship of employer and employee ceases and parties are governed under Contract Act and not Payment of Wages Act. If the employee owes any money to the employer, the former becomes debtor and latter becomes creditor and therefore it would be open to the employer to adjust the entire amount due on account of wages under section 7(4) of the Act. Section 7(1) to 7(3) will come into play in such circumstances.
It can not be said that after severance of the employer employee relationship the employer should be required to chase the workman to recover the loan amount by filing civil litigation as also held by Bombay High Court in Engineering and Ancillary Manufacturers vs. Salim Khan.
But such advances and loan can only be adjusted against payable wages, leave encashment and bonus only.
Even if the amount of recovery is higher than the payable full and final dues, such balance recoverable amount can not be adjusted against Gratuity if payable being barred by the Payment of Gratuity Act itself. The only option left with the employer in such situation is to recover the balance amount through Civil Suit in the Court of Law.
By Dayanand Mangaonkar
Read MoreComputation of Retrenchment Compensation – Whether 26 days basis or 30 days basis a month be considered;
At one point of time, certain controversies have arisen regarding retrenchment compensation. In one case the Bombay High Court has held that retrenchment compensation should be calculated as if a month comprises of 26 days. The Madras High Court also followed the same.
However, the Calcutta High Court while considering both the judgments has clarified by holding that the retrenchment compensation shall be calculated by taking the month comprising of 30 days and not of 26 days. It was further clarified that the decision of Bombay and Madras High Courts were based upon the interpretation of Section 4(2) of the Payment of gratuity Act, 1972 which did not apply for the calculation of retrenchment compensation under the Industrial disputes Act, 1947. Thus, for the purpose of calculation of 15 days’ wages, the monthly wages are not required to be divided by 26, then multiplied by 15.
The similar stand was taken by Supreme Court in the case of Guru Jhambheshwar University, Hisar vs. Dharampal wherein it was affirmed that concept of 26 working days while paying retrenchment compensation is not applicable.
By Dayanand Mangaonkar
Read MoreZerodha 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
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