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Labour Law

Labour law, the varied body of law applied to such matters as employment, remuneration, conditions of work, trade unions, and industrial relations. In its most comprehensive sense, the term includes social security.and disability insurance as well. Unlike the laws of contract, tort, or property., the elements of labour law are somewhat less homogenues than the rules governing a particular legal relationship. In addition to the individual contractual relationships growing out of the traditional employment situation, labour law deals with the statutory requirements and collective relationships that are increasingly important in mass-production societies, the legal relationships between organized economic interests and the state, and the various rights and obligations related to some types of Social services.

In order to stream line labour laws, the Government has decided to go for much - awaited labour reforms. In this process the Union Cabinet has already approved the wages code bill. The Government has proposed to remove multiple labour laws and replace them with four sets of labour codes. This will ensure the process of registration, filing of return s and standardisation of labour definitions, which will ultimately result into less disputes. In this exercise 44 labour laws will be reduced to 4 broad codes. The EPF Authority imposed damages 100 percent. EPF Appellate Tribunal reduced the same to 22% in terms of para 32-A of the Scheme considering mitigating circumstances. EPF Authority failed in writ petition filled LPA. The Division Bench of the High Court held that delay was more than 6 months attracting damages @ 37% but no such plea was taken by the petitioner before the Tribunal. Hence, order of Tribunal, even if erroneous, does not call for interference under writ jurisdiction. The ordinary meaning of 'charge sheet' is a memorandum of charges, i.e., acts or omissions alleged to have been committed by an employee. It consists of facts and allegations which the person issuing it wants to establish against the employee committing a breach of rules or misconduct in terms of the standing orders, or any act inconsistent with the fulfilment of the obligations implied in the contract of employment. In short, a charge sheet is an allegation of misconduct, misbehaviour, indiscipline, lack of interest in work, negligence, etc., on the part of the employee. Four persons were involved in fraudulent withdrawal of Rs. 80000/- from customer's account. Out of four only one head Cashier was dismissed from service. Labour Court awarded reinstatement with back wages. High Court set aside the order of the Labour Court. On challenge by workman, the Supreme Court held that out of four persons involved in the fraud, ordering dismissal from service against only one on the ground that others have been put to face criminal trial by the Customer of the Band amounts to discrimination of the workman and not sustainable in law. High Court imposed hefty cost of Rs. 50,000 on woman for false complaint of sexual harassment. Del. HC947 Dismissal is justified due to long unauthorised absence. P&H HC 984 Termination proper on the recommendations of inquiry held under POSH Act. Supreme Court 999 Maternity Benefit Act applies to contractual employees also.

Employees' State Insurance

ESI ACT

The promulgation of Employees’ State Insurance Act, 1948 envisaged an integrated need based social insurance scheme that would protect the interest of workers in contingencies such as sickness, maternity, temporary or permanent physical disablement, death due to employment injury resulting in loss of wages or earning capacity. the Act also guarantees reasonably good medical care to workers and their immediate dependants.

Following the promulgation of the ESI Act the Central Govt. set up the ESI Corporation to administer the Scheme. The Scheme, thereafter was first implemented at Kanpur and Delhi on 24^th February 1952. The Act further absolved the employers of their obligations under the Maternity Benefit Act, 1961 and Workmen’s Compensation Act 1923. The benefit provided to the employees under the Act are also in conformity with ILO conventions.

Employees’ State Insurance Scheme

1. Employees' State Insurance Act, 1948
2. Coverage
3. Finance
4. Contribution
5. Benefits
6. Related resources

Employees’ State Insurance Scheme of India,is a multidimensional social security system tailored to provide socio-economic protection to worker population and their dependants covered under the scheme.

The scheme was inaugurated in Kanpur on 24th February 1952. The comprehensive and multi-pronged social security programme is administered by an apex corporate body called the Employees' State Insurance Corporation.

The Employees State Insurance Act, ESI Act for short, was enacted by the Government of India in 1948. The major objective of the Act was to provide certain benefits to employees in case of sickness, maternity and injury (during employment) and for providing other benefits in relation to the main objectives.

Payroll

On the income statement, payroll expenses are part of labor costs. They include employee salaries, employer payments for health insurance or similar benefits, payroll taxes paid by the employer, bonuses, commissions and similar expenses.

Doing payroll is a complicated process that involves ensuring that every employee is paid correctly, calculating the appropriate payroll taxes (which can vary with the employee's salary, whether he or she has hit the Social security cap for the year, etc.), and correctly deducting miscellaneous items (such as court-ordered child support, gym memberships or 401(k) contributions).

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Payroll is a list of employees who get paid by the company. Payroll also refers to the total amount of money employer pays to the employees. As a business function, it involves:

1. Developing organization pay policy including flexible benefits, leave encashment policy, etc.
2. Defining payslip components like basic, variable pay, HRA, and LTA
3. Gathering other payroll inputs (e.g., organization’s food vendor may supply information about the amount to be recovered from the employees for meals consumed)
4. The actual calculation of gross salary, statutory as well as non-statutory deductions, and arriving at the net pay
5. Releasing employee salary
6. Depositing dues like TDS, PF, etc. with appropriate authorities and filing returns

In short, we can say that payroll process involves arriving at what is due to the employees also called as ‘net pay’ after adjusting necessary taxes and other deductions.

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Payroll is not just about paying your people. It reflects the image of our Company.

Quote

"Character is how you treat someone who can do nothing to you" "Never tell anyone your plans, show them your results instead" "Create the life you can't wait to wake up to" " The key to success is to focus on the goals, not obstacles" "Rock bottoms will teach you lessons that mountain tops never will" "Faith like a mustard can move mountains"

Shops & Establishment

The Shop and Establishment Act is regulated by the Department of Labor and regulates premises wherein any trade, business or profession is carried out. The act not only regulates the working of commercial establishments, but also societies, charitable trusts, printing establishments, educational institutions run for gain and premises in which banking, insurance, stock or share brokerage is carried on. This act regulates areas such as working hours, rest interval for employees, opening and closing hours, closed days, national and religious holidays, overtime work, rules for employment of children, annual leave, maternity leave, sickness and casual leave, etc.

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One of the important regulation to which most businesses in India are subject to is the Shop and Establishment Act, enacted by every state in India. The Act is designed to regulate payment of wages, hours of work, leave, holidays, terms of service and other work conditions of people employed in shop and commercial establishments. In this article we look at the salient features of the Shop and Establishment Act.

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The Government of Tamil Nadu proposes to amend the Tamil Nadu Shops and Establishments Act, 1947 vide amendment 2018 [Tamil Nadu Shops and Establishments (Amendment) Act, 2018]. Presently there is no provision for registration of shops and establishments. The legal position is that the general principal that the employee is entitled to withdraw her resignation before it become effective is not applicable if there is any stipulation to the contrary in the provisions governing the terms and conditions of the office/post. Further, a 'prospective resignation' cannot be withdrawn if there is a legal contractual or constitutional bar. Yet another factor which may dilute the general principle is when the administration had made arrangements acting on his resignation or letter of retirement to make other employee available for his job, that would be another matter. In a recent judgement, the Supreme Court had held that the unrestrained choice of an employee to withdraw a resignation may yet be constrained if the employer had made arrangements acting on the resignation or letter to make another employee available for the job.

EPFO

"EMPLOYEE BECOME ENTITLED TO BE MEMBER OF THE PROVIDENT FUND"

All the eligible employees in the establishment are to be extended the benefits of the Act.  It is made clear that in view of the Amendment to para 26(2) of the Employees' Provident Fund Scheme, there is no exemption for coverage of an employee when joining an establishment as covered under the Act.  The amendment as made has also been upheld by the Supreme Court.  The Bombay High Court has clarified that the Government of India has the power under section 7(1) of the Employees' Provident Funds Act to modicy the Employees' Provident Fund Scheme, 1952 from time to time, hence coverage of an employee from the day of his joining will not be illegal.

A quasi-judical authority like provident fund commissioner should act reasonable, fairly and should not act with undue haste and arbitrainess. When a request had been made well in advance for adjournment of proceedings by assigning rseasons, the commissioner should have, in fairness, accommodated the petitioner by granting a short adjournment hence the order passed ex-parte being an arbitrary exercise of power which was in  violation of Article 14 of the constitution cannot sustian.

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As per the rules, in EPF, employee whose ‘pay’ is more than Rs. 15,000 per month at the time of joining, is not eligible and is called non-eligible employee. Employees drawing less than Rs 15000 per month have to mandatorily become members of the EPF. However, an employee who is drawing ‘pay’ above prescribed limit (at present Rs 15,000) can become a member with permission of Assistant PF Commissioner, if he and his employer agree.

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All the eligible employees in the establishment are to be extended the benefits of the Act. It is made clear that in view of the Amendment to Para 26(2) of the employees' Provident fund scheme, there is no exemption for coverage of an employee when joining an establishment as covered under the Act. The amendment as made as also been upheld by the Supreme court. The Bombay High court has clarified that the Government of India has the power under section 7(1) of the Employees' provident funds Act to modify the Employees' provident funds scheme, 1952 from time to time, hence coverage of an employee from the day of his joining will not be illigal.

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EPF Appellate Tribunal is empowered to condone delay beyond prescribed limit of 60 for further  upto 60 days subject to sufficent causes to its satisfaction considering Rule 21 of EPF Appellate Tribunal (procedure),1997.Challenge to order of EPF Authority in writ petition is not maintainable till statutory remedy of appeal is not exhausted.

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Wages being paid on per piece basis is a mode of payment and it will not change the definition of 'employee' under the Act. Merely because the women workers were permitted to do work off site, would not take away their status as 'employees' in view of definition as provided under section 2(f) of the Act.

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Women doing stitching work at their own machines receving wages on piece rate basis would be employees coverable under section 2(f) of the employees provident funds and miscellaneous provision act  1952, irrespective of the fact that raw materials such as fabric,thread,buttons etc.were supplied by the company, since the garments were stitched as per specification provided by the company and the company had absolute right to reject the finished garments or goods in case of any defect.

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The employees of newspaper industry have always been treated as a class apart and as such not treating them as "excluded employees" under the EPF & MP Act, 1952 and the scheme by a notification issued in 1956, will not be unconstitutional. ______________________________________________________________________________________________________________________________________________________ Be it clarified that the interest is earned on the provident fund contributions from the date of joining and becoming member. However, if an employee is withdrawing or settling his accumulation then such withdrawal will be subject to TDS. There are certain exemption which are enumerated as under as per circular of the Employees' Provident Fund Organisation dated 20.05.2019. 1. If he has rendered continuous service for a period of five years or more or 2. If, though he has not rendered such continuous service, the service has been terminated by reason of : a. the employees ill health or b. by the contraction or discontinuance of the employer's business or c. other cause beyond the control of employee, or 3. If, on cessation of his employment, the employee obtains employment with any other employer, to the extent amount of such accumulated balance is transferred to his individual account in any recognised provident fund maintained by such other employer. While computing the period of continuous service, the period or periods of continuous services rendered under former employer(s) shall be counted for the purpose of 1 & 2 above. Under the above situations, the accumulated balance due and payable to the employee is not liable for TDS under section 192 A of Income Tax Act, 1961. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Law is well settled that damages imposed by the EPF authority under Sec 14 B of the Employees' Provident Fund Act, 1952 can be recovered either from the transfer or from transferee but not from the both if once recovered from any one since liability is jointly and severely upon both. Considering employees engaged through contractors, doing contractual work, to be employees of principal employer, not proper when contractor was having separate licence for the purpose, principal employer not having control over the working of the employees engaged through contractors, contractors are independent establishments to carry on statutory testing of cylinders, since Section 2(f) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, specially includes persons employed by or through contractors. The EPF Authority attached residential house and bank account of the previous director of the company for recovery of EPF dues. Petitioner-previous director challenged the order of the EPF Authority in writ petition. The Learned Single Judge of the High Court held that the relief as sought not permissible in writ jurisdiction. The petitioner is entitled to approach competent authority since the EPF dues are for the period before resigning the petitioner from the post of Director of the Company. Writ petition stands rejected. While holding proceedings under section 7A of the EPF Act, the Commissioner is vested with the power to collect all evidence and collate of material before coming to a proper conclusion but in the instant case, he has failed to call for any record to ascertain the unity of ownership, interdependence, transferability of employees from one unit to another. When the PF authorities did not ask for any relevant record for determination of money from the employers, there cannot be adverse inference that the coverage by clubbing three establishments is based on the adverse inference hence liable to be set aside.

HR Tips

A human resource manager has two basic functions: overseeing department functions and managing employees. That's why human resources managers must be well-versed in each of the human resources disciplines – compensation and benefits, training and development, employee relations, and recruitment and selection.

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1. RESEARCH IS THE KEY Start with some research, then perform some more research and then top it up with much more research. Make sure your research yields results and information from trusted sources. Just don't end up asking your friend or your friend's friend for advice. Understanding the industry benchmark, knowing the industry and the details of the open position will help a lot. Remember you are planning for a new job so your current job and current salary are not the right baselines. Determining the market value is significant.

2. AVOID THE MOST COMMON MISTAKE Most common and biggest mistake is NOT realizing that the salary negotiation already begins as soon as the interviewer asks you for your current and desired salary. The question 'What's your current salary, and what's your desired salary?' usually comes up early in the interview process, so people are not aware that the negotiation has already begun. The organization knows the kind of opening they have, they also know what are they willing to pay for that open position. By asking you to mention your current and desired salary they are binding you within your own limits. This way you never come to know what was the real value of that position and that gets you into a position of disadvantage. To overcome such scenarios you may take a different stand and give a balance response.

3. LEARN TO APPLY POKER TECHNIQUES The research you did in step 1 will help you apply the poker techniques. This means you will know when to bluff, you will know when the other person is bluffing and you will know how long to hold your cards and when to show and move on. For example, you may want to call out that you have other offers in hand with better prospects and value. Similarly, the company may choose to mention that they are interviewing other candidates and may make a final decision based on certain condition(s).

4. CONFIDENCE MATTERS, A LOT Make sure you appear confident even if you are not confident from within. Remember the game of chicken, the principle of the game is that each player prefers not to yield to the other so your presence of mind and tact sensitivity in the given situation are also some of the key factors.

General

No reinstatement if the workman has lost confidence of the management. Dismissal justified for misappropriation of fund by an employee. Termination for unauthorised absence without enquiry is not legal. No automatic absorption of contractor labour, on prohibition contract labour system Any change in appointment letter by corrigendum is not permissible.

Sexual Harassment

It is not sexual harassment where:

* There is attraction between employees until it crosses the boundary between welcome conduct.

* It is uninvited but still welcomes.

* It is offensive but still is tolerated

Sexual harassment is covered in the workplace when it happens:

• at work
• at work-related events or where people are carrying out work-related functions
• between people sharing the same workplace

A single incident is enough to constitute sexual harassment – it doesn’t have to be repeated.

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A quasi-judical authority like provident fund commissioner should act reasonable, fairly and should not act with undue haste and arbitrariness. When a request had been made well in advance for adjournment of proceedings by assigning reason, the commissioner should have, in fairness, accommodated the petitioner by granting a short adjournment hence the order passed ex-parte being an arbitrary exercise of power which was in violation of Article 14 of the constitution cannot sustain.

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Create awareness on the presence of the Internal Committee and make known complaint procedures. Do not guide or lead the complaint to make statements. Treat the complaint with respect. Do not insist on a detailed description of harassment. This could increase the complainant's trauma. Ensure that the body language of each member communicates complete attention to the complainant and the respondent. Do not interrupt or allow interruptions when conversing with the complainant and/or Respondent.

Contractor Labour Regulation & Abolition Act

The Object of the Contract Labour Regulation and Abolition) Act, 1970 is to prevent exploitation of contract labour and also to introduce better conditions of work. A workman is deemed to be employed as Contract Labour when he is hired in connection with the work of an establishment by or through a Contractor. Contract workmen are indirect employees. Contract Labour differs from Direct Labour in terms of employment relationship with the establishment and method of wage payment. Contract Labour, by and large is not borne on pay roll nor is paid directly. The Contract Workmen are hired, supervised and remunerated by the Contractor, who in turn, is remunerated by the Establishment hiring the services of the Contracto.

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Applying tests laid down by precedents for determining whether a contract labourer is a direct employee, the Supreme Court has set aside the award of a Labour Court which had directed reinstatement of retrenched workers. The bench of Justices R F Nariman and Vineet Saran was dealing with an appeal filed by Bharat Heavy Electronics Ltd, which contended that the workers were not its direct employees but were contract labourers, and hence were not "employees" within the meaning of the UP Industrial Disputes Act. To decide the appeal, the bench referred to the test laid down by SC in General Manager, (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon v. Bharat Lala and Another (2011) 1 SCC 635, which is as follows : Two of the well-recognized tests to find out whether the contract labourers are the direct employees of the principal employer are: (i) whether the principal employer pays the salary instead of the contractor; and (ii) whether the principal employer controls and supervises the work of the employee. The expression "control and supervision" in the context of contract labour was explained by this Court in International Airport Authority of India v. International Air Cargo Workers' Union as follows : "If the contract is for supply of labour, necessarily, the labour supplied by the contractor will work under the directions, supervision and control of the principal employer but that would not make the worker a direct employee of the principal employer, if the salary is paid by a contractor, if the right to regulate the employment is with the contractor, and the ultimate supervision and control lies with the contractor. The principal employer only controls and directs the work to be done by a contract labour, when such labour is assigned/allotted/sent to him. But it is the contractor as employer, who chooses whether the worker is to be assigned/allotted to the principal employer or used otherwise. In short, worker being the employee of the contractor, the ultimate supervision and control lies with the contractor as he decides where the employee will work and how long he will work and subject to what conditions. Only when the contractor assigns/sends the worker to work under the principal employer, the worker works under the supervision and control of the principal employer but that is secondary control. The primary control is with the contractor"" Applying the test, the bench held that the workers were not direct employees. It was held that test No. 1 is not met as the contractor pays the workmen their wages. Secondly, the principal employer cannot be said to control and supervise the work of the employee merely because he directs the workmen of the contractor 'what to do' after the contractor assigns/ allots the employee to the principal employer. Supervision and control of the principal employer is secondary in nature, as such control is exercised only after such workman has been assigned to the principal employer to do a particular work. On behalf of workmen, it was argued that although the contractors were changed many times, the labourers remained the same. However, the Court found that there was no evidence to effect that contractors were frequently changed. The Labour Court's award and the High Court's approval of the same were termed "perverse" and set aside.

Factories Act

There is no specific provision in the factories act,1948 and the delhi factories rules, 1950 according to which registers required to be maintained in electronic form, in place of registers such as 

attendance and leave with wages registers and other registers prescrbed in these legislations

It is the responsiblity of the cccupier and the manager of a factory to provide  a canteen and to ensure that it is run in accordance with the provisions of the Factories Act, 1948 and the state Factories Rules framed under this Act and the Rules ton constitute a 'Canteen managing Committee' Which shall be consulted by the factory manager on matters such as quality and quantity of food stuffs, timings of canteen, arrangement of menu.

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The provisions of The Factories Act, 1948, or any rules made under the Act, or any order given in writing under the Act is violated, it is treated as an offence. The following penalties can be imposed:-
(a) Imprisonment for a term which may extend to one year;
(b) Fine which may extend to one lakh rupees; or
(c) Both fine and imprisonment.

If a worker misuses an appliance related to welfare, safety and health of workers, or in relation to discharge of his duties, he can be imposed a penalty of Rs. 500/-.
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Section 49 of the factories Act provides that in every  factory where in five hundred or more workers are ordinarily employed, the occupier shall employ in the factory such number of welfare officers as may be prescribed. Such officer will have statutory protection for his termination. In one case, the personnel officer was also looking after the welfare of the labourers. On termination of his service, he challenged court held that if the employer was employing less than 500 workers in the factory, the personnel officer will not be deemed as labour welfare officer with in the meaning of section 49 of the factories Act and as such the concurrence of the labour commissioner was uncalled for while terminating his service. 

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"An employee suffered from injury caused due to unauthorise use of machine is not entitled to claim any relief from Employer. Prosecution of the employer, under the Factories Act, has been rightly quashed when the Asstt. Inspector of Factories as launching the prosecution did did not have sanction or prosecution by the competent authority, hence the High Court will not entertain the appeal as filled by the appellant, e.g., Asstt. Inspector of Factories. As per provisions of the Factories Act, 1948 and the Delhi Factories Rules, 1950, any person can be appointed as a Factory Manager, for the purposes of this Act. The appointment of the Factory Manager is required to be notified to the Inspectorate of Factories, in accordance with the provisions of these Rules. This Act and the Delhi Factories Rules do not specify who can be/cannot be appointed as a Factory Manager. It is for the Occupier to decide and notify the appointment of Factory Manager. If the construction activity is covered under the provisions of The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, then this construction activity is not coverable under the provisions of the Factories Act. Rate of wages for the overtime work is required to be calculated by dividing gross monthly wages by 26, if actual working days in the month in which a worker has worked overtime, were 26.