Question & Answers

2017-2018

October QUESTION – Our industrial establishment is engaged in the manufacture and sale of washing machines. We also render after-sales service of the machines and some of our mechanics perform their duties at the customers’ places i.e. outside the factory premises. Some of the mechanics have claimed over-time payment for working beyond the duty hours. Since we do not have any supervision/control or check upon such employees, how can we make payment for the over-time to them? ANSWER – At the very outset, it is made clear that such workers cannot claim overtime wages at rates specified under Section 59 of the Factories Act for work done outside the factory premises of the employer. Where a workman is on tour duty from the headquarters, his work during tour duty does not amount to overtime work and therefore, he is not entitled to extra wages under Section 59 of the Factories Act. Download File
October QUESTION – Our establishment is working for 22 days in a month whereas the gratuity under the Payment of Gratuity Act is payable as if a month comprises of 26 days. We are not clear as to what should be the method of calculation for gratuity of an employee under the given circumstances? ANSWER – Even if there are less than 26 working days in a month, the gratuity as payable under the Act is to be calculated as if the month comprises of 26 days. Reference is made wherein the Bombay High Court has clarified that the payment of gratuity to an employee working in an establishment for 22 days in a month will be calculated @26 days a month. Download File
October QUESTION – Our trade union has raised a charter of demands on behalf of the workers against the management which has been referred for adjudication since no settlement could be arrived during the conciliation proceedings. In the meantime the management has transferred one of the active workers even during pendency of the proceedings for adjudication before the industrial tribunal. Should we file a complaint under Section 33-A of the Industrial Disputes Act since there is a violation of the provision of the said Act inter-alia providing that the conditions of service of the employees will remain unchanged during the pendency of the adjudication proceedings? ANSWER – Transfer of an employee from one place to another is an incident of service as per law settled by the apex court. Hence, if the employer has transferred a workman in accordance with the conditions of his employment, then such a transfer will not amount to change in conditions of services. Reference is made to one case decided by the Bombay High Court where it has been held that transfer of workmen can be effected from one unit to another in view of the said condition in the very appointment order, prima facie, it cannot be said that the members of the petitioner-union cannot be transferred from one unit to another unit of the corporation and as such the transfer even during pendency of proceedings will not be violation of Section 33 of the Act. The Bombay High Court has held that the transfer does not amount to change in the conditions of service. Download File
October QUESTION – It is a common practice that the companies allow the reimbursement of drivers’ salary to its officers/executives. As and when the services of such drivers are terminated by such officers, the drivers claim reinstatement with the management of the establishment in the capacity of its employees and not of the officers. They approach the labour authority also. We are also facing such cases and seek your expert opinion as to what is the legal position with case law on the subject matter. ANSWER – The law is settled on this aspect to the effect that such drivers do not have any relationship of employer and employees with the establishment. However, by way of abundant precautions the management of the establishment should refrain from exercising such supervision upon such driver. Also the benefits which are available to the employees of the establishment need not be extended. As desired some of the cases with their ratios are summarised as follows: * It has been held by Delhi High Court that the driver who was orally appointed by the chairman and managing director in his personal capacity will not be the employee of the establishment. * The Rajasthan High Court has held that a driver, engaged by the chief manager and paying his salary after getting reimbursement, will not become employee of organisation. *It has been held by Madras High Court that the reimbursement of amount of wages paid to the personal driver to the executive by the company would not create relationship of employer-employee between company and the concerned employee. * It has been held that by the Punjab & Haryana High Court that a personal driver of deputy general manager to whom the salary of driver was reimbursed cannot challenge his termination by raising an industrial dispute against the company, hence the Tribunal has rightly rejected the dispute in adjudication. No interference called for. * It has been held by the Calcutta High Court that it is settled position of law that a personal driver of the head of the employer-company is not having relationship of employer-employee with that employer-company. Download File
September QUESTION – Are there relevant factors to determine the quantum of punishment particularly when an employee is guilty of misappropriation? ANSWER – The amount misappropriated may be small or large. It is the act of misappropriation that is relevant. The quantum of amount misappropriated cannot be safe and reasonable yardstick to determine the quantum of punishment and what is material and relevant, in one case, is that the complained act of conductor reflects the propensity to the corrupt and dishonest. The Madhya Pradesh High Court has held that a dishonest person cannot be allowed to continue in the employment when he has lost the confidence of the employer. The Supreme Court has also held that once an act of misappropriation, either small or large amount is proved, the reinstatement of a dismissed will not be justified. Misappropriation of money of the Company is a gross misconduct irrespective of quantity of amount since such a misconduct destroys the trust of the employer upon the employee. Download File
September QUESTION – One of the employees, who is a member of the union, has been illegally and unjustifiably transferred and we want to challenge the same in order to seek justice for him. Can we approach the labour authorities for stay of the transfer order and/or what it is the remedy available to us? ANSWER – So far as the civil courts are concerned, they rarely interfere with the matters relating to transfer of an employee from one place to another since the transfer of an employee is an incident of service. However, the civil courts can exercise their jurisdiction under Order 39 Rules 1&2 in granting injunction but it is only when there is a mala fide or that there is no such condition in the contract of employment i.e. appointment letter or service agreement. So far as the labour court or the industrial tribunal are concerned, they are not empowered to stay the transfer. However, it appears that only in one case it has been held that industrial tribunal can also stay the transfer of the workmen when they establish prima facie case and the balance of convenience in their favour. The courts can interfere with the transfer order is found to be in violation of service rules or contrary to provisions of law, hence in view of the legal position culled out from the various judicial pronouncements and considering the facts that the petitioner has joined the duly in compliance of the transfer order, the High Court will not interfere. The employer not the court to decide where an employee should be posted. Download File
August QUESTION – Under the new Maternity Benefit Act for first two deliveries, 8 weeks should precede the delivery. What can be the status when there is pre-mature delivery i.e. prior to 8 weeks? Will such woman employee be entitled to maternity benefit? ANSWER – As per provisions of the Maternity Benefit Act, as amended by the Maternity Benefit (Amendment) 2017, the maximum maternity leave is for 26 weeks, out of which not more than 8 weeks should precede the expected date of delivery. But if woman is already having two or more surviving children, she is entitled to a maximum period of maternity leave of 12 weeks out of which not more than 6 weeks of maternity leave prior to expected date of delivery. Download File
August QUESTION – Although we take every precaution is engaging contract labour but for sake of information we are anxious to know that what consequences can follow the contract labour system is held to be sham? ANSWER – When contract labour system is held to be sham than the employees of the contractor can become the employees of the principal employer. Hence, appropriate precaution is taken lest the contract labour system is held to be as sham, camouflage or ruse. Reference is made to the judgment wherein the Supreme Court has held that if the contract is found to be sham or nominal and merely a camouflage, then the so-called contract labour will have to be treated as director employees of the principal employer and the industrial adjudicator should direct the principal employer to regularise their services in the establishment subject to such conditions as it may specify for the purpose. Download File
August QUESTION – In order to categorization of employees and payment of minimum wages, we are anxious to know as to whether an employee who is outsources certain activities will be covered under the Minimum Wages Act? ANSWER – It will mainly depend upon the nature of arrangement with the employee who is engaged. If he categorised as employee and also control and supervision are exercised by the employer such an employee can be treated an ‘employee’ to be entitled under the Act. Even though weavers after lifting cotton from employer premises weave it in their home and then return the finished product to the premises but the Act, applies even to such employees. Sub-section (i) of Section 2 defines an employee which includes such out workers. Download File
July QUESTION – While dealing with disciplinary proceedings, I frequently come across with the term ‘natural justice’. Kindly apprise with an example as to what does it mean? ANSWER – The term ‘natural justice’ cannot be imprisoned in a strait-jacket of a rigid formula as its scope depends upon the circumstances of the case, nature of enquiry, rules, scheme, character of rights of person affected and policy of the statutes under which the Tribunal has to deal with the matter etc. The principles of natural justice are applicable for failure to give notice for the normal deduction of wages for the period of absence under Section 9(1) of the Payment of Wages Act. Download File
July QUESTION - Ours is a public sector undertaking and we engage employees on daily wages or on casual basis since we do not get the permission for engaging on permanent basis. Some of the daily wagers complete 5 years’ service and their services are either terminated or they quit their job. The query is whether our establishment is liable to pay gratuity to such daily wagers or casual employees? ANSWER – Yes. There is no distinction between permanent or temporary or substitute employee under the Payment of Gratuity Act. Casual worker/daily wagers are entitled to payment of gratuity under the Act. Download File
June QUESTION – Can Union activities be carried on during office hours and at the working place? ANSWER – No. In one case it has been held that though trade unionism is recognised all over the world, it did not mean that an officer bearer of a union can claim as a matter of right to carry on trade union activities during officer hour. To allow one to claim as of right to carry on trade union activity during office hours without attending to his office duties would be an anachronism since it would amount to fleecing the tax payer in order to encourage the trade union activities. Similarly the Supreme Court has also held that the union activities cannot be carried on at the work place. Download File
June QUESTION – Whether a notice of enquiry under certificate of posting will be deemed to have been served upon the delinquent employee? ANSWER – No. The Kerala High Court has also held that notice of enquiry sent to an employee through ‘under certificate of posting’ will not be deemed to have been served upon the employee. Download File
June QUESTION – The Certified Standing Order of our industrial establishment provide that if an employee will remain absent for eight consecutive days, the Management will be within its rights to draw an irresistible presumption that the employee has abandoned the job of his own accord and his name will be struck off from the rolls having lost the lien of the job. Can we invoke such a clause in case any employee remains absent for eight days consecutively and also has not reported for duty despite letter sent to him calling to report for duty? ANSWER – Such a clause under Certified Standing Orders has been held to be ultra vires by the Supreme Court. In another case the Rajasthan High Court has held that termination of a workman for his wilful absence without enquiry will be unjustified. In a case the Supreme Court has followed by holding that even if a workman absents or overstays his leave, an enquiry will be imperative in order to afford an opportunity to the employee. Abandonment of employment by workman is presumed only when an enquiry is held against him. Abandonment of service can’t be presumed in absence of notice to workman without enquiry. It is pertinent to state here that the abandonment of job by an employee depends upon his intention as held by the Supreme Court. Download File
June QUESTION – Are the employees engaged through a contractor liable to be covered under the Factories Act? ANSWER – The words ‘ including a contractor’ were added by the Factories (Amendment) Act, 94 of 1976, meaning thereby than even a worker engaged through a contractor and working in a factory is a ‘worker’ for the purpose of the Factories Act. All the beneficial provisions in the Act apply with equal force to such workers/labourers employed through a contractor. Download File
June QUESTION - The Query pertains as to whether an employee who is detained for additional work be entitled to payment of overtime when his wages are above the minimum rates of wages? ANSWER – Admittedly, the concept of overtime is widely dealt in the Minimum Wages Act, but it does not mean that only those employees will be entitled to overtime who are getting mere minimum wages. Reference is made to one case, the Delhi High Court has held that even if the wages being paid to the employees in a scheduled employment, are higher than the minimum wages, the employees would be entitled to overtime in accordance with Rule 25 of the Minimum Wages (Central) Rules, 1950. It is further held that the Section 14 of the Minimum Wages Act, 1948 would be applicable even if the wages paid or payable are higher than the minimum wages notified. Download File
May QUESTION – We are in the advanced state of negotiations with the union pertaining to general demands by the workers. We are in a fix as to whether the settlement should be made before the conciliation officer or directly with the union. Kindly let me know as to what are the salient features when a settlement is made before the conciliation officer? ANSWER – In a case, the Supreme Court has observed that a settlement arrived at in the course of conciliation proceeding has extended application since it is binding on all parties to the industrial dispute and to all others who were summoned to appear in the conciliation proceedings and to all persons employed in the establishment or part of the establishment, as the case may be, to which the dispute related on the date of the dispute and to all others who joined the establishment thereafter. Such a settlement will be binding on all workmen of the establishment, including even those who belong to a minority union which had objected to the same. To that extent, it departs from the ordinary law of contract, the division bench held that merely because the petitioner-union was not associated with the settlement, it cannot be said that it would not be binding on them. Download File
May QUESTION – We understand that there is a provision of compensatory holiday. Should we take it that in case we ask an employee to work on holiday, he should be given a compensatory holiday. Kindly enlighten as to what does it mean? ANSWER – If a worker works on a weekly holiday, he is entitled to substituted holiday u/s 52 of the Factories Act by complying with the provisions of Section 52 of the Act and not a compensatory holiday. Compensatory holiday is required to be given to those workers, who have been deprived of the aforesaid weekly holiday either (i) due to exemption granted by the state government in the State Factories Rules, framed u/s 64 of the Act or (ii) as a result of an exempting order issued by the State Chief Inspector of Factories u/s 65 of the Act. Download File
April QUESTION – We are engaging a contractor to carry on certain support activities in addition to regular employees. Since the work of the workers of the contractor is being supervised by our officers, we are anxious to know as to what precautions are to be taken in order to avoid any adverse legal action? ANSWER – As to that you should not exercise control of supervision upon the workers of the contractor. Let the contract labour system may be declared as sham, bogus or camouflage since under such a scenario the workers of the contractor can become the employees of the principal employer if they raise an industrial dispute. Reference is made to a decided case of Bombay High Court wherein it has been held that a contract between the contractor and the principal employer will be deemed as sham, bogus and a mere camouflage when the employees, as engaged through the contractor, were controlled by the officials/employees of the principal employer. None of the officers of the principal employer should sanctioned leave for the workers of the contractor, no advance should be given to such workers and no warning should be issued. Also any instruction is necessary should be given or atleast address to the contractor not the worker. Download File
April QUESTION – Now, since the Payment of Bonus Act has now become more effective after enhancement of wages for the eligibility of bonus, we seek clarification whether maternity leave will also attract payments of bonus to the female employees since we are having large number of female employees in our BPO? ANSWER – Sub-clause (d) of Section 14 of the Payment of Bonus Act provides that for the purpose of Section 13 pertaining to proportionate reduction in bonus in certain cases, the employee who has been on maternity leave with salary, will be treated as if she is in the employment hence bonus will be payable. Download File

2016-2017

March QUESTION – In order to attract and retain the employees, we have been paying bonus every month alongwith the wages which can be even construed as part of wages but it has different head. Query is as to whether it is permissible to pay bonus every month? ANSWER – Merely because the employer has been paying bonus every half year, it does not confer a right to the employees to have such payments half yearly under the Payment of Bonus Act. Section 17 of the Bonus Act only enables the employer to recover the payment, if any, made before the amount becomes due under the Act. No doubt it should reflect the CTC, if must be state as statutory bonus otherwise the ESI authorities can ask for ESI contributions since the definition of wages under Section 2(22) of the ESI Act is very wide. However, whether it is stated as statutory bonus or bonus as per Payment of Bonus Act. It will also be seen that Form C of the Payment of Bonus Rules also contains a column about interim of advance bonus hence there is no prohibition of making the payment of bonus every month. Download File
March QUESTION - We are running three shifts in our factory. During night shift some our employees are found sleeping while on duty. Query is as to whether we can dispense with their services? ANSWER – Sleeping while on duty is a serious misconduct. Where sleeping is stated to be misconduct in the Standing Orders or Service rules it will not include ‘dozing’, which is separate from sleeping. Dozing is regarded as an act of negligence. It is also pertinent to state here that the gravity of misconduct differs from person to person and place to place for instance speaking loudly is necessity in a factory where there is noise of the machines but not in the library of the school or college. Similarly, sleeping by an employee may not be that serious which can be on the part of a watchman. For instance when the workman has admitted his misconduct of having slept during the shift/duty hours and property stolen (jeep) which, at the time of commencement of his shift duty was there, his dismissal from service is justified as the misconduct is of serious nature since sleeping during duty hours is a serious misconduct justifying punishment of dismissal from service. Download File
February QUESTION – In an Internal Complaints Committee, I am appointed as member amongst NGOs. The delinquent / respondent facing the enquiry has been working as Manager but he is insisting that the enquiry should be held in Hindi language since he is not that fluent in English language in which the enquiry is proposed to be conducted by the ICC. I seek clarity as to what should be the language of enquiry as supported with case law. ANSWER – The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and the Rules do not provide anywhere as to what should be the language of the proceedings of an enquiry held by ICC. In the absence of any such clarification, the enquiry should be conducted in the language which is understood by the respondent, more particularly, when he has so demanded. Analogies can be given pertaining to department enquires in the private sector. In one case, the Orissa High Court has held that enquiry should be conducted in the language which is understood by the delinquent employee. Enquiry conducted in Hindi whereas the delinquent does not have knowledge of Hindi, is liable to be set aside since it does not fulfil the requirement of principles of natural justice. Download File
February QUESTION – Besides regular employees, we sometimes engaged petty contractors who do not have their code numbers under EPF Act whereas our establishment is having code number and covered by this Act. In order discharge our obligation we have been deducting and depositing the PF contributions of the employees of the contractor. A union has instigated these workers of contractor that by virtue of depositing the contributions under EPF Act they can become our employees by raising an industrial dispute. Kindly appraise legal position with any supporting case law? ANSWER – It is settled law that merely by depositing PF and ESI contributions for the employee of the contractor by the principal employer, they would not become the employees of the principal employer. Reference is made to the judgment of Punjab & Haryana High Court wherein it has been held that the principal employer has been depositing ESI/PF contributions, providing medical facilities, these will not be the factors for construing that the relationship of employer and employee existed between the principal employer and the workers as engaged through the contractor. In another case also the Delhi High court has held that if the principal employer has been depositing the PF contributions for the employees of the contractor, it would not mean that they have become the employees of the principal employer under the Industrial Disputes Act since the EPF Act only casts the liability of payment of the PF contributions on the principal employer. Despite above judgments, it would be appropriate to obtain a written request from the contractor that in the absence of his coverage under EPF Act, his workers be covered under employer code number and the amount so deposited be deducted from his dues as payable. Download File
January QUESTION – The employee has served nine years and his service was terminated by simple discharge. He was paid his gratuity and not retrenchment compensation. Can the employee be denied retrenchment compensation when he was given order of simple discharge? ANSWER – Your attention is invited to Section 25-B which defines continuous service. The Section 25-B states that a workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including services which may be interrupted on account of sickness of authorized leave or an accident or a strike which is not illegal, or a lock-out or a cession of work which is not due to any fault on the part of the workman i.e. during the period of 12 calendar months immediately preceding dates with reference to which the calculation is to be made as actually worked with the employer for not less than one year. That is to say in the last year the workman should put in 240 working days to become entitled to retrenchment compensation under Chapter 5-A of the Industrial Disputes Act. The Section 25-B does not contemplate continuous employment by workman for 240 days in 12 months if he has not earned salary for 240 days in order to become entitled for compensation. Download File
January QUESTION – Criminal case was filed against the workman and the employer issues a charge sheet to him and commenced the enquiry. The enquiry proceedings and the trial of criminal case went on simultaneously. But the trial court, after hearing, acquitted the workman. But the employer does not absolve the workman and stop the enquiry. Is the Management bound to pursue the domestic enquiry although criminally acquitted? ANSWER – Mere acquittal in criminal case does not stop the domestic enquiry. Domestic enquiry is based on not only the misconduct but on several other reasons. Whereas the trail court in a criminal case will have to confide itself to the IPC. It cannot go and decide on reasonable doubt. Whereas in a domestic inquiry, the report of the enquiry officer is fundamental. The report could be based on certain other reasons which are known about linkage with the misconduct committed by the workman. The employer may take decision of punishment based on the domestic inquiry, but is not influenced by the evidence tendered before the criminal court. It is for the employer to decide about the punishment. He has to give punishment based on the report of the enquiry officer. Download File
January QUESTION – The PF authorities have issued a notice to our establishment to verify ‘escaped amount’ from 1990 onward. The queries are: (a) What does escaped amount mean? (b) Can the PF authorities asked for production of record for such an old period when we are not maintaining the same? (c) Can we file an appeal challenging the production of record as stated above in clause (b) if no, what is the remedy? ANSWER – (a) The term ‘escaped amount’ as provided for in Section 7C of the EPF Act is to be construed as assessment of amount, if any, omitted or escaped attention and/or discovery of any new additional quantum of assessment made. (b) The question is unclear for not providing relevant details of assessment/reassessment made in the ease under question. However, the limitation period u/s 7C is provided for five years from the date of communication of the assessment/review of assessment order. (c) No response is desirable in view of (b) above. Download File
January QUESTION – We engage contractors who are covered by the Contract Labour Act. Since we pay bonus to our employees, the query is as to whether we will be liable to pay bonus to the workers as engaged through the contractor? ANSWER – No. The workers engaged through the contractors as covered under the Contract Labour Act will not be legally entitled to bonus from the principal employer. The Kerala High Court has held that neither Contract Labour Act not the Payment of Bonus Act provide for payment of bonus to the workers of the contractor by the principal employer. The Karnataka High Court has held that as per definition of ‘employee’ u/s 2(13) of the Payment of Bonus Act, the contract labourers are not employees of the principal employer as there is no privity of contract between the principal employer and the contract labourers. Download File
December QUESTION – We are engaged in the marketing and not manufacturing activity. There is heavy recession in the trade and fall in the business. We want to dispense with the services of employees who have become surplus. Can we do so? ANSWER – Yes. It is well established that it is within the managerial discretion of an employer to organize and arrange his business in the manner he considers best. So long as that is done bonafide it is not competent to a Tribunal to question its propriety. If a scheme for reorganization results in surplus age of employees, no employer is expected to carry the burden of such economic dead-weight and retrenchment has to be accepted as inevitable, however unfortunate it is. The legislature realized this position and, therefore, provided by Section 25F of the Industrial Disputes Act, compensation to soften the blow of hardship resulting from an employee being retrenched. The Section 25F applies only to those workmen who have been in continuous service for not less than one year under an employer. The provision of the section would apply only if the workman had completed 240 days in the 12 months preceding his termination. No distinction is made in industrial law, between permanent and temporary employees and both fall within the definition of ‘workman’ in section 2(s) of the Act and Section 25F. The Section 25F is imperative in character. The right flowing from a beneficial provision like Section 25F cannot be withdrawn or curtailed. Be it made clear that the retrenchment compensation and notice pay in lieu of notice is being paid simultaneously with the notice of retrenchment. By way of abundant precaution a scope is made by giving 3-4 days extra wages for effective date of retrenchment lest there may be violation in making the payment of retrenchment compensation more particularly when it is settled law by the High Court and even Supreme Court and merely asking a workman to collect his dues will not amount to compliance of Section 25F of the Industrial Disputes Act, pertaining to simultaneous payment of retrenchment compensation. Download File
December QUESTION - One of our employees is in the habit of absenting himself without obtaining prior sanction of leave or application for leave or even intimation. We have repeatedly warned him but he is absenting last two weeks. I believe that we can presume that by remaining absent continuously for a considerable period the said employees has abandoned his job on his own accord. Are we justified in this context? ANSWER – The law is very well settled that the services of an employee who is in the habit of absenting himself can be terminated but it is imperative that before termination an enquiry be held otherwise the termination will be held as illegal. Needless to reiterate that ‘abandonment of service’ by a workman is only on voluntary relinquishment. It has also seen held absence without leave is a misconduct on the basis of which services of the concerned employee may be terminated after providing him opportunity of hearing. Also abandonment of service will be presumed when no enquiry is held for unauthorised absence. Download File
November QUESTION – In a commercial establishment, the wages payable to the employed persons do not exceed Rs.18,000 per month. An employee who is a workman remains constantly absent and the employer deducts his salary without any notice to him, he is not fined. Is not the employer bound to give notice? ANSWER – The Payment of Bonus Act says that the employer can deduct for unauthorized absence. The employer is not bound to give notice. It is axiomatic principle that the principles of natural justice can be dispensed with by a statute. Where the legislature thought fit to provide for prior notice before imposition of fine under Section 8 of the Act and before deductions for damage or loss sustained and for various acts of commission by the employees, it has not thought fit to provide for issue of prior notice for deduction of wages for absence from duty. There is no violation of the principles of natural justice. Therefore, the order, whether he is a workman or not is not relevant. Download File
October QUESTION – The sub-judge in the district court passed an award reinstating the workman. The employer proposes to file an appeal before the district court, but advised that the district judge is not the authority to entertain the appeal. Is not the award appealable? ANSWER – It is possible that the government has given to the sub-judge additional powers of labour court judge. The sub-judge could act as a labour court judge and reinstate the workman. The award is final and it is not appealable like civil suit and is determined under the civil procedure code whereas the labour court is under the Industrial Disputes Act. So every award passed by the sub-judge in his capacity as the labour court judge is final and it is passed under the Industrial Disputes Act. On its publication by the government it becomes enforceable and final. It cannot be called in question by any court in any manner whatsoever. Any suit cannot be filed for declaring any award as void. There can be writ petition to the High Court against an award. Download File
October QUESTION – The employer is in the habit of dismissing the workers even for minor offence committed by them. The employer has dismissed the worker and the labour court has reverted him from senior clerk to junior clerk and reinstated him in service. Is the labour court has power to reduce the punishment and reinstate the workman? ANSWER – Prior to insertion of Section 11A, in 1971, there was no provision for the labour judiciary to reduce punishment of show cause notice is given enquiry was held and the employer has acted strictly in accordance with the provisions of the Standing Orders. The labour judiciary had no jurisdiction to examine to the merits of the case. The insertion of Section 11A has resulted in enlarging the powers of the labour judiciary in going into the merits of the case and to see whether the punishment given by the employer is proportionate to the offence proved in the enquiry and if the punishment given is found harsh, the labour judiciary has the right to reduce the punishment by even reinstating the workman. Download File
October QUESTION – In addition to regular employees, we are engaging workers through the contractors. Since we are paying bonus to our regular employees, our query is as to whether we, as principal employer, are legally liable to pay bonus to the workers of the contractors? ANSWER – The workers engaged through the contractors as covered under the Contract Labour Act will not be legally entitled to bonus from the principal employer. In one case, Kerala High Court has held that neither Contract Labour Act nor Payment of Bonus Act provide for payment of bonus to the workers of the contractor by the principal employer. In an another case, the Karnataka High Court has held that as per the definition of ‘employee’ under Section 2(13) of the Payment of Bonus Act, the contract labourers are not employees of the principal employer as there is no privity of contract between the principal employer and the contract labourers. Download File
October QUESTION – We have started our establishment about five years back but despite our best efforts, we have not been able to make any profit. Query is as to when the liability for payment of bonus would arise on our part? ANSWER – There is a special provision under Section 16 of the Payment of Bonus Act, inter alia, provides as under: ‘where an establishment is newly setup, the employees of such establishment shall be entitled to be paid bonus under the Act in accordance with the provisions of sub-sections (1A), (1B) & (1C)’. In the first five accounting years following the accounting year in which the employer sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment and such bonus shall be calculated in accordance with the provisions of the Act in relation to the year, but without applying the provisions of section 15 of the Payment of Bonus Act. Thus, it is made clear that for the first five accounting years, following the accounting year in which the employer sells goods/renders services, bonus is payable only in respect of the accounting year, in which profits are made but the provisions of set-on and set-off would not apply. To be more specific, if there are no profits, the liability for payment of bonus will accrue after six years i.e. the seventh year. Download File
September QUESTION – We are paying wages to our employees which are not less than the minimum wages. Since the definition of wages under Minimum Wages Act provides that is includes HRA also hence, we are splitting the wages into house rent allowance. Since our establishment has now been covered by the Payment of Wages Act, we believe that the bonus will be payable on the basic wages and not on HRA forming part of a minimum wages. ANSWER – For payment of bonus under the Act by an employer, minimum wages, if split into HRA, will not be legal for calculation of bonus since the minimum wages though can be split into HRA under the Minimum Wages Act but not for the purpose of Payment of Bonus Act as held by the Delhi High Court. The minimum wages cannot be bifurcated for Payment of Bonus Act and the bonus has to be calculated on the total wages. The object of Payment of Bonus Act is that, if an employer has to be burdened with the liability of bonus payable, being a percentage of salary or wages, the figure of salary or wage must be such that basic salary or wage must be such that basic salary or wage figure should include all necessary ingredients thereof but salary or wage should not include variables which vary as per the nature, type, period of employment, type of employer & employee and so on as held by the Delhi High Court. Download File
September QUESTION – Under what circumstances, the employees of two separate establishments of one company can claim bonus when separate balance sheets and profit and loss account are maintained? ANSWER – The principle contained in Section 3 of the Payment of Bonus Act, 1965 is that where an establishment consists of different branches, whether situated in the same place or at different places, all such branches shall be treated as part of the same establishment for the purposes of computation of bonus. To that principle is engrafted an exception in the form of a proviso that wherein an accounting year, a separate balance sheet is prepared for an establishment. It shall be treated as a separate establishment and for that purpose, the amount shall, subject to 20% of the total salary or wages of the employees employed during the accounting year, be carried forward for being set on in the succeeding accounting year and so on to be utilized for the purpose of payment of bonus. The Madras High Court has held that for calculation of bonus having separate balance sheets, are to be treated independently. Download File
September QUESTION – Keeping in view the nature of products, we keep trainees before they inducted as employees. Will a trainee, having worked for 5 years be entitled to gratuity? ANSWER – Yes, it has been held that a ‘trainee’ being different from ‘apprentice’ will be included in the definition of the ‘employee’. In another case, the Madras High Court has also held that for the purpose of entitlement of gratuity, the period spent on training will be taken into consideration. However, in one case the petitioner challenged the order of Controlling Authority as well as that of the Appellate Authority to the effect that employees / respondent nos.2 to 26 are entitled to receive the amount of gratuity having considered the period during which they were trainees or badly workers. The Karnataka High Court has held that there is ample authority to support the preposition that a trainee cannot be held to be entitled to gratuity. A trainee could at best be considered as a ‘workman’ in terms of definition under section 2(s) of the Industrial Disputes Act, 1947 but in the absence of any statutory provision under the Payment of Gratuity Act, which could be pressed into service, a trainee cannot be held entitled to gratuity. Further, in view of the judgment of the Supreme Court in Lalappa Lingappa, 1981 I LLJ 308 that there can be no claim towards gratuity for the years during which the employees remains absent without leave and had actually worked for less than 240 days. Even the badly employees are not covered by the substantive part of the definition of continuous service and are not entitled to payment of gratuity for the badly period. The orders under challenge are quashed. When an employee had worked as a trainee in the same establishment prior to regular service in continuation, duration of that training period cannot be wiped out from the purview of continuous service for entitlement of gratuity. Download File
August QUESTION – A residential building is multi-storied and the members are the owners of the flats. The building is maintained by the society formed by the members. A large number of employees are appointed by the society for the purpose of maintenance and security. The workers have formed a union and are demanding better emoluments. What is the remedy? ANSWER – The building is constructed for the members and the apartments are used only for residence. The residents have a right to engage domestic servants. In the instant case the servants are engaged by the society for the services of the residents. When personal services are rendered to the members through the society in a collective manner, such employees and the activity of the employees cannot be treated as industry. It is not comparable with the industry defined under Section 2(j) of the Industrial Disputes Act. At the most they are domestic servants. In the case of Bangalore Water Supply & Sewerage Board Vs. R.Rajappa (AIR 1978 SC 548) makes it clear that domestic servants cannot be treated as industrial workers. The union of the workmen cannot agitate and raise industrial dispute. Management of Som Vihar Apt. Owners Housing Maintenance Society Ltd Vs. Workmen (AIR 2002 SC 2530). Download File
August QUESTION – Is there any prescribed principle/formula for calculation of over time? ANSWER – For calculation of overtime wages, all allowances to which all workers are entitled, are required to be included with the basic wages. Only those allowances for example, in a factory, in which some workers are residing in factory accommodation and other workers are living outside the factory residential complex, the HRA which is normally given only to those workers, who are not residing in the factory accommodation, may not be included. Download File
August QUESTION – Our establishment is engaged in manufacture of hosiery items. Our employees are working on salary basis and as such their production is much lower than those who are our competitors who have piece rate workers. We also want to get the work done on piece rate basis and our workers are also willing to work on piece rate basis which appears to be more advantageous. Are there any disadvantages for such system? ANSWER – The simplest form of incentiveis the piece ratesystem, in whicha price is set by the rate fixer, acting on behalf of the management, for every series of operations resulting in a measurable unit of the product. The more the operative produces, the more he gets and the price is so fixed that by working full factory hours of the standard time he gets rather more than he would by working on a weekly wage, or time rate. The disadvantage to this system is that no accurate time records are kept as they are not necessary, and unless specifically demanded, much information of great useis last to management. Further, since the operative is only paid for what he actually produces, there is a tendency for him to take time off or keep irregular hours whenever he feels inclined and management has very little power to correct him. Production thus may become erratic and much of the value of work measurement may be last. The quality of the product is not maintained by the piece rated worker since he is always interested in the quantity. Download File
July QUESTION – The employer did not concede to the general demands of the workmen. After persuasion the union gave a call of strike and the strike was resorted to after three weeks of notice. The Industrial Tribunal held that the strike is legal. Is not the employer liable to pay wages to the workers when the strike was declared legal? ANSWER – The law does not recognize the strike as authorized absence. The strike is refusal on the part employees to render the normal service. The employees go on strike in order to compel the employer to yield to their demands. If the legal strike is comparable with the authorised leave then instances of employees resorting to strike very often for silly demands. Whether a strike is legal or illegal the workers are liable to lose wages for the period of strike. During the period of strike the contract of employment no doubt continues but the workers have to resort to strike at their own cost. Consequently, they cannot expect any salary to be paid. Bank of India Vs. T.S. Kelawala, 1990 CLR 748 Download File
July QUESTION – The establishment has been paying bonus to its employees for the last several years. The proprietor of the establishment sells his establishment to a new person who is entering the business for the first time. At the end of the financial year he informs the workmen that he is not bound to pay bonus as he is new employer and he has not made any profit during the year. When the ownership of the establishment is transferred, whether the establishment is not bound to pay bonus unless it makes profit? ANSWER – Attention is invited to Section 6 of the Payment of Bonus Act. The transfer of ownership does not absolve the establishment from payment of bonus. The establishment has been paying bonus to the employees for the last several years. The change in the ownership does not render the establishment any exemption. U/s 16 of the Act, it only says that where the establishment is newly set up the employees of such establishment shall be entitled to be paid bonus under law in accordance with the provisions of sub-section 1(a), 1(b) & 1(c) of the Act, even if the ownership is changed and if new owner has not made any profit, he is bound to pay the minimum bonus prescribed under the law. The Section 16 applies to the establishment and not to the owner of the establishment. Central Inland Water Transport Corporation Ltd Vs. Workmen – 1975 I LLJ 117. Download File
July QUESTION – A person is employed as an Apprentice in the establishment. The functions of the Apprentice are to attend the periodic classes held for the Apprentices and carry out lawful orders of the employer. The work of the Apprentices is to supervise and stipend is paid to him every month. The employer does not give any other benefits to the Apprentice and no bonus is paid. The Apprentice makes an application in the labour court u/s 33-C (2) of the Industrial Disputes Act. The application is rejected. Can an Apprentice file an application u/s 33-C of the Industrial Disputes Act? ANSWER – The Section 33-C of the Industrial Disputes Act provides the remedy to workmen who are employed in the establishment, no doubt the Section 2(s) of the Act defines the workmen which include Apprentice. But the Apprentice is a student. He is in fact a learner of the trade. He is not paid wages. Wages are to be paid only to the workman who can claim bonus. Stipend paid to him is not treated as wages. The employee cannot make application u/s 33-C(2). Though the work ‘Apprentice’ is defined as workman, he is out of the provisions of the Act. As he is not employed and only appointed as learner he is not entitled to get bonus or any other benefits. Achutan Vs. Babu, 1996 II CLR 472. Download File
July QUESTION - We are running only one shift but now we want to start another shift. Are we required to seek permission from the Inspector of Factories? ANSWER - Under the provisions of Section 61 of the Factories Act, 1948 no prior permission of the Inspectorate of Factories is required, before starting two shifts system instead of existing one shift system. As per provisions of this Act, an intimation is required to be sent to an Inspector of Factories, giving details of proposed shift timings as well as the date from which the timings are proposed to be changed. This intimation should be delivered in the office of Inspector of Factories, well in advance, so that he may examine the proposal, as to whether the proposed working hours are in accordance with the provisions of the working hours chapter of the Act or not. However, written permission of the Inspector of Factories is required for proposed change of working hours, if the last change of working hours or shift timings was less than a week, before the proposed date of change of shifts/working hours. Download File
July QUESTION - We have made a settlement with the employees through their union by extending certain benefits/privileges for a period of three years which is since over. Can we discontinue to extend such benefits/privileges to the workers since we cannot bear the financial burden? ANSWER - No. The Supreme Court has held that Section 19(2) of the Industrial Disputes Act imposes statutory obligations upon the employer and employees even de hors. The position of law is that the benefits, as extended in the settlement, will continue to be binding even after the expiry of the settlement and as such the employer cannot withdraw the same unless a fresh settlement is substituted and the benefits/privileges are superseded.(1) In another case, the union on or around 31.03.1995 inter alia providing that the union will be consulted before entrusting the regular nature of work to the contractor besides other conditions of work. Certain violations of the settlement were pointed out by the union on or around 06.06.1999 and 20.08.1999 including withdrawal of certain facilities, but the management did not concede to the same. Hence, the union approached the labour authorities for prosecution of the concerned executives of the employer u/s 29 of the Industrial Disputes Act. The labour authorities did not take any action hence a writ petition was filed by the union. While admitting the writ petition, the High Court held that a settlement shall continue even after its expiry until replaced by another settlement of award hence the proceedings for violation of the settlement can be initiated.(2) However, in one case it has been held by the High Court that the benefits which have accrued to the workmen in a settlement could be withdrawn by the employer only after giving a notice of change u/s 9A of the Industrial Disputes Act.(3) (1) LIC Vs. JD Bahadur, 1981 (2) LLN 575 SC (2) Voltas Employees Union Vs. Govt. of NCT of Delhi & Ors., 2004 LLR 115 Del. HC (3) Thanthai Periyar Pokkuvarathu Kazhagha Oozhiyar Sangam Vs. Management of TNSTC Ltd., 2005 LLR 780 Mad.HC Download File
July QUESTION - As and when the workers or their union have any demand of grievance they resort to staging demonstration by shouting vulgar and defamatory slogans. As a result thereto our manufacturing activity adversely affected. Can we approach the Court for obtaining stay orders? ANSWER - Yes. No doubt the workers have a right to such demonstration but it does not mean that they should do it during working hours and/or disturb the normal functioning of establishment particularly when they are employed and the employer and employee relationship exists. Under the contract of service, either express or implied, there are some employees obligations and one of them could be not to disturb the normal functioning of the establishment. Admittedly, the workers do have a right but it is not an absolute right. These are number of cases where the employers have to approach the courts for obtaining injunctions and the courts have a striking a balance. Reference is made to one case wherein it has been held that workers, as represented through the union, have no right to stage demonstration at the premises of the employers establishments, hence the trail court in an ex-parte order, has rightly restained them to hold such demonstration within a radius of 500 metres whichhas been confirmed by the Division Bench of the High Court clarifying that the right to freedom by a citizen will come to an end as soon as the right of someone to hold his property is intervened. IOC Ltd Vs. Karnataka Petroleum & Gas Workers Union, 2013 LLR 509 Kar.HC Download File
June QUESTION – The employer has more than 100 workers five years ago. At present he has less than 50 workmen. The employer layoff the workmen every now and then and does not pay compensation. The union of workmen is demanding compensation as he had in the past more than 50 workers. Are not the workmen entitled for layoff compensation? ANSWER – U/s 25(C) to (E) of the Industrial Disputes Act in Chapter VA, the industrial establishment in which less than 50 workmen on an average have been employed in the preceding calendar month are not entitled to receive layoff compensation. The employer’s inability or failure to give employment by itself militates against the theory of conferment of power. The power to layoff for the failure or inability to give employment has to be searched somewhere else. No scheme in the Act confers with power. The number of workmen being less than 50, there were no standing orders not there any terms in the employment that when there is no work, the workmen would remain unemployed and no payment of wages made. In such situation, the conclusion seems inescapable that the workmen who were laid-off without aby authority or law or power in the management. The establishment where there is a power in the management to layoff the workmen is entitled for 50% of the wages according to the industrial law. In the absence of having 50 workmen or if there is not term in the contract of appointment having the right to layoff with 50% wages, the workmen are entitled for full wages. At the most when the reference is made to the Industrial Tribunal has power to reduce full wages, but payment shall not be less than 50% are prescribed. Firestone Tyre & Rubber Co. Vs. Workmen, 1976 I LLJ 493. Download File
June QUESTION – The canteen in the factory is run by a contractor with his own employees and after work in canteen attend factory and do unskilled work. Their wages are paid by the contractor although the entire amount is reimbursed by the principal employer. The employees approached the commissioner of labour who referred the matter to the Industrial Tribunal. But the Tribunal does not entertain their demand and advised the union of workmen to approach, the labour commissioner for abolition of contract labour and then refer the same to the Industrial Tribunal. Has the Industrial Tribunal no power to direct the employer to reinstate the workmen with full back-wages? ANSWER – You are referred to the Contract Labour Act. There is no provision in the Act for automatic absorption of contractor labour without abolition of the contract labour by issue of notification by the appropriate government. Mere fact that the contractor has been engaged for a long time is not the ground for regularization of contract labour by the principal employer. It is only the appropriate government and not the Courts of even the High Court who can abolish the contract labour system. The Supreme Court on more than one occasion examined the various factors enumerated u/s 10(2)(1) of the Act and held that appropriate government is only the authority to abolish the contract labour. Thereafter the workman can approach the government to refer the matter to the Industrial Tribunal seeking reinstatement. The Industrial Tribunal or the Labour Court on its own cannot director the absorption of the contract labour by the principal employer. Gujarat Electricity Board Thermal Power Station Vs. HMS, 1995 I CLR 967 (SC). Download File
June QUESTION – In view of the recent amendment enhancing the applicability of the Payment of Bonus Act, we will also become liable to pay bonus to our employees. While going through the Payment of Bonus Act, I have not been able to understand what does the available surplus and allocable surplus mean. ANSWER – Available surplus in any accounting year is computed under Section 5 of the Act in respect of any accounting year shall be the gross profit for that year after deducting therefrom those sums referred to in Section 6 of the Act hence an employer has to calculate ‘gross profits’ of his establishment in the manner specified in Section 4. Then, from ‘gross profit’ so calculated he has, to deduct the sums referred to in Section 6 as prior charges. The balance is called ‘available surplus’. ‘Allocable surplus’ means in relation to an employer, being a company other than a banking company which has not made the arrangement prescribed under the Income Tax Act for the dividends payable out of its profits accordance with the provisions of Section 194 of that Act, 67% of the available surplus in an accounting year. In any other case, 67% of such available surplus. Thus, when in respect of any year the allocable surplus exceeds the amount of minimum bonus payable to the employees, the employer must pay to every employee in respect of that year bonus in proportion to the salary or wage earned by the employee during the year subject to a maximum of 20% of such salary or wage. Download File
June QUESTION – Due to family dispute we have to sell out industrial establishment to a transferee. Since there is considerable number of employees who may raise objection. My specific query pertains as to whether the employer is under obligation to obtain the consent of the employee to transferring an establishment? ANSWER – No. The Supreme Court has held that transfer of an establishment, no consent of the workmen is necessary. The common law rule that an employee cannot be transferred without consent, applies in master-servant relationship and not to statutory transfers. There is nothing in the wording of Section 25FF even remotely to suggest that consent is a pre-requisite for transfer. The underlying purpose of Section 25FF is to establish a continuity of service and to secure benefits otherwise not available to a workman if a break in service to another employer was accepted. Therefore, consent of the individual employee cannot be a ground to invalidate the action. Management, Mettur Beardsell Ltd Vs. Workmen of Mettur Beardsell Ltd, 2006 LLR (SN) 868: 2006 II LLJ 899 (SC). Download File
June QUESTION – What are the general principles pertaining to resignation of an employee and its acceptance? ANSWER – In this context, it is pertinent to make reference to a judgment of Karnataka High Court wherein their lordships have summarized the law on the point declared by Supreme Court in various decisions as follows: (1) Resignation submitted by an employee of the company becomes effective and operates to terminate the services of the maker thereof only when it is accepted by the competent authority and is communicated the same in writing. (2) Till such acceptance and communication, the employee submitting the same continues to remain in service. (3) So long as resignation is not accepted, the employee of the company continues in service and resignation can be withdrawn. (4) The resignation must take effect from the date specified in resignation letter and it cannot be advanced by the employer by accepting the resignation from an earlier date. These well settled principles could be varied by providing for variations or modifications in service rules or statutory provisions governing the employee of the company. Download File
May QUESTION – The reference of the general dispute is pending adjudication before the Industrial Tribunal. The employee had committed misconduct and the employer terminated the services of the employee had committed misconduct and the employer terminated the services of the employee by making application for permission and sending the employee one month’s notice pay. Is the employer entitled to deduct the income tax from one month’s wages sent to the employee? ANSWER – In computing the amount of one month’s wages to be paid u/s 33(2)(b) of the Industrial Disputes Act, the employer is justified in reducing the amount for statutory deductions. If the employee is drawing Rs.15,000 salary it not that he should send the entire Rs.15,000 as one month’s pay. Whatever amount statutorily to be deducted the employer has a right to deduct staturoty dues and send the notice pay. S. Ganapathy & Ors Vs. Air India & Anr., AIR 1993 SC 2430. Download File
May QUESTION – Employee has been charge sheeted for sexual harassment and suspended from service. A domestic enquiry was held and the workman was dismissed from service. The employee challenges the dismissal order as according to him the enquiry was defective. The employee contends that without Complaint Committee enquiry has taken place and the employer has dismissed him from service simple after completing the domestic enquiry. Is it mandatory that a Complaints Committee should be constituted alongwith domestic enquiry? ANSWER – Sexual harassment is a very serious misconduct. The Model Standing Orders are amended only after 1997 to include sexual harassment as a major misconduct. The Supreme Court has in Vishaka’s case has laid down the law that a Complaints Committee has to be constituted in addition to a domestic enquiry. Mere domestic enquiry is not sufficient. The employer employing female employees should be careful in an offence relating to sexual harassment. The Complaints Committee should be headed by a woman and a domestic enquiry is also necessary to proceed against delinquent workman. The judgment of Vishaka’s case is very explanatory and under Article 141 of the Constitution of India, the law declared by the Supreme Court is binding on all Courts and citizens. Vishaka Vs. State of Rajasthan, AIR 1997 SC 311. Download File
May QUESTION – I understand that an employee engaged on probation continues to be on probation till he is confirmed in writing. Is this rule absolute or there are any exceptions? ANSWER – No. doubt, an employee remains on probation till he is confirmed but his not an absolute rule since it depends upon the terms and conditions of employment or the service rules or standing orders. It is also made clear that an employee cannot remain or probation for indefinite period more particularly when the standing orders under the Industrial Employment (Standing Orders) Act, 1946 provide that a probationer will remain on probation for three months whereas the management can provide longer period but it cannot be a very long period. However, probationer will be automatically confirmed when he works even after the expiry of maximum period of probation as provided in appointment letter or agreement or service rule of Standing Orders.1 The Bombay High Court has also held that a probationer will be automatically confirmed on his completion of maximum period of probation.2 1. State Bank of Bikener & Jaipur Vs. Mohanlal, 1988 (57) 641 : 1989 (74) FIR 100 (SC). 2. M.K. Chubey Raj Vs. SBI, 1990 (76) FJR 43. Download File
May QUESTION – We are engaged in the manufacture of readymade garments and engage the workers on piece rate basis. The query is as to whether we have employer-employee relationship with such piece-rated workers? If so, are they to be covered under EPF, ESI & Bonus Acts? ANSWER – Yes. It cannot be said that whenever payment is made by price-rate, there is no relationship of master and servant. If every piece-rated worker is an independent contractor, lakhs and lakhs of workmen is various industries where payment is correlated to production would be carved out of the expression, ‘workman’ as defined in the Industrial Disputes Act. Piece-rate payment is a well recognised mode of payment to industrial workman. In fact, wherever possible, that method of payment has to be encouraged so that there is utmost sincerely, efficiency and single-mind devotion to increase production which would be beneficial both to the employer, the workmen and the nation at large. The right of the employer to reject the end production, if it does not conform to his instruction coupled with the right to refuse work is established, then certainly it is proved beyond doubt that there is a relationship of employer and employee. Tailors to whom payment is made on piece-rate basis are ‘workmen’ within the meaning of the Industrial Disputes Act.1 However, in another case, it has been held by the Supreme Court that an appraiser for weighing and testing the gold engaged by the bank will not be a ‘workman’ in the absence of relationship of employer and employee.2 Such piece-rated workers are entitled to be covered under EPF, ESI & Bonus Acts providing the eligibility depending upon their earning. 1. Shining Tailors Vs. IT-II, Lucknow, U.P. & Others, AIR 1984 SC 23 : 1983 II LLJ 413 SC & Silver Jubilee Tailoring House Vs. Chief Inspector under Shops & Establishments Act II LLJ 495. 2. Management of Puri Urban Coop. Bank Vs. Madhusudan Sahu, 1992 (65) FLR 805 : 1992 LLR 574 (SC). Download File
May QUESTION – The office of apprenticeship advisor is insisting of providing certain information for inducting apprentices in our factory. The query is it obligatory on the part of an employer to provide information as desired? ANSWER – Yes. It is obligatory to the employer to provide all the information related to the implementation of the Act to the Asst. Central Apprenticeship Adviser and refusing or neglecting to furnish such information, furnishing is false, refusing to answer or give a false answer to any question necessary for obtaining any information required to be furnished shall attract penal provisions under Section 30(2)(a)(i), 30(2)(a)(iii) of the Apprentice Act. Download File
April QUESTION At times we have to retain the employees to work for additional hour and they have to paid overtime. My query pertains as to what should be the procedure i.e. whether hourly rate is to be taken while working of 30 days or 26 days in a month? ANSWER The rate of wages under the Payment of Wages Act, 1936 including rate for deductions due to absence of a worker, is required to be calculated by dividing ‘the monthly rate of wages’ by the ‘number of days a worker was required to work in a factory’ (after excluding the number of weekly holidays). It may be mentioned here that a per provisions of Section 52 of the Factories Act, 1948 a worker is not required to work in a factory, on a weekly holiday (which is normally Sunday). That the ‘number of days a worker was required to work in a factory’, is to be calculated after excluding the number of weekly holidays falling in a month (which may be 25 or 26 or 27 in remaining months of the year). The ordinary rate of wages for calculating overtime wages under Section 59 of the Factories Act, 1948 should be same as rate of wages under the Payment of Wages Act, mentioned in foregoing para. Download File
April QUESTION Our establishment is covered by Payment of Bonus Act and the conditions of service are governed by our Service Rules. Kindly apprise: a) What is meant by conditions of services of an employee? b) In addition to bonus and also to the exempted employees we have been paid ex-gratia. Since the salary ceiling entitlement of bonus has increased. I am anxious to know as to what is the significance of ex-gratia by applying anvil of judicial analysis? ANSWER a) the expression ‘conditions of service’ means all those conditions which regulate the holding of a post by a person right from the time of his appointment till his retirement and even beyond retirement in the matters like pension.1 b) ex-gratia means ‘as an act of grace’, usually refers to a payment made by an employer to an employee as a ‘discretionary’ free gift. Often ex-gratia payments are made to avoid a payment becoming recognized as a normal payment of precedent. The Supreme Court has held that when ex-gratia payment made was neither in the nature of production bonus nor incentive bonus nor customary not any statutory bonus, it cannot be regarded as part of the contract ‘employment’, therefore, the ex-gratia payment made by the bank cannot be regarded as remuneration paid or payable to the employees in fulfillment of the terms of the contract of employment within the meaning of definition under Section 2(22) of the Industrial Disputes Act, 1947.2 1. Manoj Kumar Purohit & Ors. Vs. State of M.P. & Ors., 2016 (1) M.P.L.J. 449 M.P. HC 2. Ghaziabad Zilla Sahakari Bank Ltd Vs. Addl. Labour Commissioner, 2007 LLR (SN) 447 (SC) Download File
April QUESTION. As HR Executive I have not been able to understand as to what are the factors to determine the relationship of employer and employee? ANSWER You are right. Since there are various aspects which are to be taken into consideration for arriving a conclusion as to whether the relationship of employer and employee exists between a person claiming to be an employee and employer. The Karnataka High Court has given the tests to be applied for determining the existence of master and servant relationship and as to when it can be termed as a sham contract. a) Who pays? b) For whose benefit the workmen work? c) Under whose supervision? d) Whether disciplinary action can be taken? e) If so, by whom? f) Has the employer the right to reject the end products? Management of VISL Vs. P.O., 1994 (69) FLR 536 (Kar.HC) Download File
April QUESTION If an employee avails leave for Saturday & Monday, will the total leave will calculated two or three days since the Sunday being off day falls within two days i.e. Saturday & Monday? ANSWER If a worker avails leave on Saturday & Monday, with Sunday as a weekly holiday, leave with wages, for 2 days shall be counted. In this context, it is stated that the leave admissible under sub-section (1) of Section 79 of the Factories Act, 1948 shall be exclusive of all holidays, whether occurring during or at the end of the leave period, as specifically mentioned in the ‘explanation 2’, before sub-section (2) of this section. Download File

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