In this blog post, Pranusha Kulkarni, an Assistant Professor at Tamil Nadu National Law School, Tiruchirappalli describes the problems with legal education in India. 

This opinion article is not directed at any one university or one set of students and/or teachers. These observations are for the majority which defines our education system, thus barring the exceptional minority. Whatever I am quoting below, I myself have been there and done that as a student (even when I used to be considered as one of the best). And, unfortunately, I am now seeing the exact same thing happening with my students. I am not casting aspersions against any one set of students, and especially not on the students I am currently teaching. I was a student myself just six months ago, and I completely understand how students behave. (for example, even I used to keep blaming the elusive “system” and would feel demotivated when I would score less marks) But now when I stand on the other side, I realise that it’s very easy to blame. As students, the one thing we do best is BLAME. Blame the university, blame our teachers, blame the curriculum, blame everything around us. That’s all we do. Do we try finding internal motivation to push our limits? NO. Do we try changing ourselves first, instead of pointing fingers at others? NO. Thus, the reason why our education system is in shambles is not ONLY because of the teachers. It’s equally, or more so, because of the students. Dr. APJ Abdul Kalam once said, “A student can learn more from a mediocre teacher, than he can learn from the best teacher”. This greatly explains the onus that lies on the student, over and above that that lies on the teacher. By saying this, I am not disregarding the importance of having good teachers. All I am saying is, despite having the best of teachers, chances are high that a student remains distracted and demotivated all through his classes. Motivation can never be instilled from outside. I hope the readers of this article get inspiration and not negative vibes from this article.

Today I completed my first semester as a law teacher. It’s a great feeling. I do not know how much my students could learn from me, for people often receive only what they want to take. But this process of teaching them has definitely helped me learn certain things about being a student. It’s not easy to be a student in a system which is built to judge you, rather than to mould you and to bring the best in you. It is not easy to be a student when life is so fast-paced and labyrinthine that many students get lost in it, because there’s no one to guide them. It is not easy to be a student, when your self-worth is decided by the marks you score.

Every time I read for my classes, memories of my under graduate days – memories of those heady days, when I used to use the rhetoric of “marks aren’t everything” to justify my laziness and distractedness – keep flashing in my mind. It helps me empathise with my students now. It’s very difficult to comprehend the vastness of law as a young adult, is what I feel. I have also experienced that with age, law becomes easier to understand. Maybe it’s in the nature of this discipline that some amount of life experience is needed to fully assimilate its depth.

In the course of this semester, wherein I was involved in teaching, evaluating answer books and projects and setting question papers, each of these activities has taught me what’s going wrong with our education system. One of the main things I have realised is – there are very few students who are genuinely interested in enriching their knowledge. A majority of them just want two things: marks and attendance.

Marks, marks, and more of marks. What for? They don’t want to fail. Do they deserve the marks they are expecting to get? They don’t care. Are they confident that if they score well, they will succeed in life? I don’t think so. Will an employer hire them just because they are toppers? Obviously No. So who taught these students to be so slavish towards marks? What made them forego the chase towards excellence? What has made them so intellectually lazy?

I think we as teachers have failed them. Let us not get into the rhetoric of “the system has failed them”. The system is nothing but them and us. Teachers who use marks and attendance as “lollipops” to demand attention and false respect, teachers who do not encourage curiosity in students, teachers who only want students to be vessels to be filled rather than lights to be lighted, teachers who make students believe that scoring high is the be all and end all of getting an education, have failed the students.

On the other hand, there are students who are nice to teachers just so that their internal marks are decent. Rampant plagiarism has become an accepted standard of practice in submitting projects, and fighting for marks with such shoddy ethical standards, has become a part of this game called education. Has education become so base? If this was not so bad, legal research in India wouldn’t be in such pathetic condition today. There is definitely something wrong with all the stakeholders involved.

What’s wrong with the teachers?

First things first. The method of teacher recruitment in India (through a competitive exam called UGC NET), is flawed. Just because someone has great subject knowledge, doesn’t mean s/he would be able to teach students. Secondly, all that UGC NET does is, testing the memory power of the prospective teacher. It is nowhere concerned with the teaching capability of the individual concerned. Because of this, not all teachers who get permanent teaching positions are qualified enough to teach students. Some may not bother whether the students are understanding what they are teaching, and some may not care to go the extra mile in getting a thorough understanding of the subject they are teaching, because they get complacent with the fact that theirs is a sarkari naukri and they wouldn’t lose it unless there is a disciplinary action against them (Reputed universities are an exception, but most of them are inaccessible to the vast majority in India due to the high fee structure). Clubbed with this is the fact that teaching has ceased to be a calling these days, due to which it has just become another job which pays you decently enough. People bribing universities to get a permanent teaching positions is not uncommon. As a result of this corruption in the education system, where the input itself suffers, the output is not going to be that great either.

What’s wrong with the students?

Students today are a distracted lot. Some say it’s an effect of neo-liberal thought. Many students do not know why they are doing what they are doing. They are just going with the flow. This attitude might be considered by some as fruitful, in that it provides opportunities to explore the world and oneself, but it can be dangerous too. A ship sailing without a destination is, by all means, doomed.

Students today are also a complacent lot. Millennials as they are, not used to hardships that life throws at them, they are just not used to something called “hard work”. Smart work is the in thing they say. And what does this so called “smart work” consist of? Shortcuts, shortcuts and loads of shortcuts. And history has stood testimony to the fact that all the great souls of the world became what they are because they did hard work and not the so called “smart work”, because there’s nothing smart in “smart work”. For example, Cut-copy-paste and Google have ruined the meaning of “research projects” in India. They are sheer waste of valuable paper and money. Also, a waste of time for the teacher who is supposed to “evaluate” hundreds of such copy-pasted junk. I call them junk because there is hardly any research involved in these so called “research projects”. Rhetoric truisms, or pages of text books are reproduced in the name of research. Yes, there might be exceptional students working really hard and trying to bring in the much needed originality, but the minority doesn’t define the system. The mediocre majority does. So shouldn’t we as teachers motivate the interested students to further push their limits and try to be their best version? Shouldn’t we as important stakeholders in the education system, create a research atmosphere in our universities?

Sadly, the importance of research is not understood well by the students. They do not understand that, whatever career path they choose for themselves, research and analytical skills are the foundational skills based on which other specialised skills are built. Googling is NOT a part of this research & analytical skillset (it can only give you a primary introduction to a subject, unless you are using the search engine to access scholarly works or legal databases). Frankly speaking, even I as a student, read very less case-laws and mind you, it’s not going to help.

Effects of Lack of Research Culture in India

How many of us, as students or teachers, genuinely strive towards encouraging a thriving academic culture in our respective universities? How many of us as teachers put our foot down when students come negotiating for marks for their average performance? How many of us as students are really hungry for knowledge? We repeating that marks don’t define us, and we ourselves hankering after marks is a dirty oxymoron we are living with.

Why do you think India is lagging behind in the area of research? Yes, let’s start the blame game. Lack of funds, lack of resources, lack of “good” faculty, blah blah blah. Does a law student need funds to do a well-researched project? If he is really motivated enough, can’t he put in a genuine effort to develop his skills, by reading books?

Hawala Scheme of Research Projects

We are well aware of the hawala scheme through which ill gotten money is smuggled across legal systems to evade taxation. Similarly, there is an inter-university and inter-batch hawala scheme of project exchange going on in India, in the name of “developing research acumen” among the students. Because of a lack of centralised project submission portal, teachers easily get duped, and also, because of lack of strict evaluation parameters to check plagiarism, the students get away with such malicious submissions, and such students who never bother to be attentive in classes/ understand the subject, get a strong sense of entitlement when it comes to resuming the blame game!

What’s the Solution?

Being associated with law for more than five years, I have realised one thing. No law can change human behaviour. A person changes his/her behaviour because they internally realise that whatever they are doing isn’t right. Law can just act as a catalyst to this realization, which realization in the end may or may not dawn upon the person concerned. Same is the role of a teacher. As a teacher I have realised that, I cannot get every student motivated to study or to get interested in the subject, how much ever I try to do so. It is adults we are dealing with, and there is a strong sense of self-agency in all adults. Adults do things only if they want to do it. Thus, there are always going to be those actively disassociated students who do not want to study, for whatever reasons. We as teachers can either try motivating them to study, or can ignore them. And as far as students are concerned, they would go a long way if they develop some humility and curiosity towards everything and everyone around them, instead of being slavish towards marks and attendance. And it’s high time for students everywhere to realise that good marks don’t guarantee happiness or success or even a well-paying job in life. Excellence and internal satisfaction do.

And as far as teacher recruitment is concerned, it would be great if demonstrable teaching ability is tested together with UGC NET. Also, it would augur well for the cause of education if universities are less commercialised and bureaucratised, and more importance is given to creativity rather than toeing the line. Administrators need to stop moral policing and should be open to diversity among students and their culture. We cannot have dictatorship in the name of discipline. In fact, a disciplined mind can never be creative. Channelizing this unbridled creativity of the youth and guiding their latent energy should be the duty of a teacher and an administrator in the present day universities. I hope this doesn’t sound utopian, and I hope we reach this goal soon, in the interest of the student within all of us!

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In this blog post, Ashok K. K. Vasudevan, the Managing Director at Festo Global Production Centre, India and a student pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, describes the Dispute Resolution Machinery and Provisions for Appeal under the Employees’ Provident Fund and Miscellaneous Provisions Act of  1952.

What is Employees Provident Fund and Misc. Provisions Act, 1952? ⁽¹⁾

The Employees Provident Fund (EPF) Scheme was established with the intent of providing social security and is also seen as a motivation Avenue resulting in a satisfied workforce for employees, who contribute to the growth of an organisation and thereby to the economic growth of a nation.

The Employees’ Provident Fund Organisation is a statutory body which monitors and administers the Provident Fund Scheme, Insurance Scheme and Pension Scheme. The Ministry of Labour and Employment under the Government of India uses the Employees’ Provident Fund Scheme of 1952 as the basis to enforce certain policies and the Act governing this Scheme is hereby defined as follows:

⁽¹⁾ “The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (Act No.19 of 1952) 4^th March 1952 – An Act to provide for the institution of provident funds, pension fund and deposit-linked insurance fund for employees in factories and other establishments.

Be it enacted by Parliament as follows:-

1. Short title, extent and application –

(1)       This Act may be called the Employees‟ Provident Funds and Miscellaneous Provisions Act, 1952.

(2)       It extends to the whole of India except the State of Jammu and Kashmir.

(3)       Subject to the provisions contained in section 16, it applies –

(a)        to every establishment which is a factory engaged in any industry specified in Schedule I and in which twenty or more persons are

employed and

(b)       to any other establishment employing twenty or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify, in this behalf:

Provided that the Central Government may, after giving not less than two months‟ notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any establishment employing such number of persons less than twenty as may be specified in the notification.

(4)       Notwithstanding anything contained in sub-section 3 of this section or-sub-section 1 of section16, where it appears to the Central Provident Fund Commissioner, whether on an application made to him in this behalf or otherwise, that the employer and the majority of employees in relation to any establishment have agreed that the provisions of this Act should be made applicable to the establishment, he may, by notification in the Official Gazette, apply the provisions of this Act to that establishment on and from the date of such agreement or from any subsequent date specified in such agreement.

(5)       An establishment to which this Act applies shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time falls below twenty.” ⁽¹⁾

Dispute Resolution Machinery and Provisions for Appeal under Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 ⁽¹⁾

The Industrial Disputes Act of 1947 provides a machinery for the settlement of major industrial disputes, which can be broadly classified as (1) Conciliation (2) Court of Inquiry (3) Voluntary Arbitration and (4) Adjudication. In this article, our focus will be on “Conciliation”, which will be more relevant to the topic under discussion.

⁽²⁾ “Conciliation is the “practice by which the services of a neutral party are used in a dispute as a means of helping the disputing parties to reduce the extent of their differences and to arrive at an amicable settlement of agreed solution.” ⁽²⁾

A Conciliation officer by law can be appointed to conciliate between parties of an industrial dispute, which in this case of the article would apply to disputes relating to the Employees’ Provident Fund under the Miscellaneous Provisions Act of 1952.

 As per the law, a Conciliation Officer has the powers of a Civil Court, and he/she can go behind the facts relating to a dispute and offering a judgment that is binding upon the parties in dispute. When the officer receives information related to a dispute, he/she is required to send a formal invitation in writing to the parties concerned and informing them of his intention to start conciliation proceedings from a specific date. The officer will then commence doing as deemed fit in persuading the parties in coming to a fair and amicable settlement.

The conciliation officer is expected to send his report to the government who has authorized him / her along with a copy of any settlement arrived between the parties. In the event of failure of conciliation, the officer will need to send a detailed report elaborating on the reasons for the failure of conciliation. The report from the conciliation officer needs to be submitted within 14 days of the starting of the conciliation proceedings or earlier. However, this timeframe of 14 days may be extended by an agreement in writing of all the parties involved in the dispute and subject to the approval of the conciliation officer. When an agreement is reached between the disputing parties, a memorandum of settlement is prepared which remains binding for a period as agreed upon by the parties involved. When no such period is agreed upon, then a period of six months comes in to effect from the date of signing the memorandum of settlement. It continues to be binding on the parties to the dispute after the expiry of this said period of six months until the expiry of two months from the date on which, a notice in writing is given by one of the party or parties to the settlement, indicating their intention to terminate the settlement.

The government has the discretion to appoint a Board of Conciliation consisting of a Chairman and two or four other members, in the event the conciliation officer fails to resolve the differences between the parties to the dispute.

Having seen so far as to how conciliation as a dispute settlement machinery can be adopted, we now focus on its applicability under the Employees Provident Fund and Miscellaneous Provisions Act of 1952.

Section 7A and 7B in the Employees’ Provident Fund and Miscellaneous Provisions Act of 1952 bear relevance in the event of any disputes arising in the administration of the Employees’ Provident Scheme. The following section elaborates on the relevant sections in reference to this context:

⁽¹⁾”7A. Determination of moneys due from employers. –

(1)       The Central Provident Fund Commissioner, any Additional Central Provident Fund Commissioner, any Deputy Provident Fund Commissioner, any Regional Provident Fund Commissioner or any Assistant Provident Fund Commissioner may, by order,

(a)        in a case where a dispute arises regarding the applicability of this Act to an establishment, decide such dispute; and

(b)       determine the amount due from any employer under any provision of this Act, the Scheme or the Pension Scheme or the Insurance Scheme, as the case may be, and for any of the aforesaid purposes may conduct such inquiry as he may deem necessary.

(2)       The officer conducting the inquiry under sub-section 1 shall, for the purposes of such inquiry have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), for trying a suit in respect of the following matters, namely:-

(a)        enforcing the attendance of any person or examining him on oath:

(b)       requiring the discovery and production of documents;

(c)        receiving evidence on affidavit;

(d)       issuing commissions for the examination of witnesses, and any such inquiry shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purpose of section 196 of the Indian Penal Code 45 of 1960.

(3)       No order shall be made under sub-section 1, unless the employer concerned is given a reasonable opportunity of representing his case.

(3A)    Where the employer, employee or any other person required to attend the inquiry under sub-section 1 fails to attend such inquiry without assigning any valid reason or fails to produce any document or to file any report or return when called upon to do so, the officer conducting the inquiry may decide the applicability of the Act or determine the amount due from any employer, as the case may be, on the basis of the evidence adduced during such inquiry and other documents available on record.

(4)       Where an order under sub-section 1 is passed against an employer ex-parte, he may, within three months from the date of communication of such order, apply to the officer for setting aside such order and if he satisfies the officer that the show cause notice was not duly served or that he was prevented by any sufficient cause from appearing when the inquiry was held, the officer shall make an order setting aside his earlier order and shall appoint a date for proceeding with the inquiry: Provided that no such order shall be set aside merely on the ground that there has been an irregularity in the service of the show cause notice if the officer is satisfied that the employer had notice of the date of hearing and had sufficient time to appear before the officer.

Explanation.– Where an appeal has been preferred under this Act against an order passed ex parte and such appeal has been disposed of otherwise than on the ground that the appellant has withdrawn the appeal, no application shall lie under this sub-section for setting aside the ex parte order.

(5)       No order passed under this section shall be set aside on any application under sub-section four unless notice thereof has been served on the opposite party.

7B. Review of orders passed under Section 7A. –

(1)       Any person aggrieved by an order made under sub-section 1 of section 7A, but from which no appeal has been preferred under this Act, and who, from the discovery of new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the order was made, or on account of some mistake or error apparent on the face of the record or for any other sufficient reason, desires to obtain a review of such order may apply for a review of that order to the officer who passed the order: Provided that such officer may also on his own motion review his order if he is satisfied that it is necessary so to do on any such ground.

(2)       Every application for review under sub-section 1 shall be filed in such form and manner and within such time as may be specified in the Scheme.

(3)       Where it appears to the officer receiving an application for review that there is no sufficient ground for a review, he shall reject the application.

(4)       Where the officer is of opinion that the application for review should be granted, be shall grant the same: Provided that, –

(a)        no such application shall be granted without previous notice to all the parties before him to enable them to appear and be heard in support of the order in respect of which a review is applied for, and

(b)       no such application shall be granted on the ground of discovery of new matter or evidence which the applicant alleges was not within his knowledge or could not be produced by him when the order was made, without proof of such allegation.

(5)       No appeal shall lie against the order of the officer rejecting an application for review, but an appeal under this Act shall lie against an order passed under review as if the order passed under review were the original order passed by him under section 7A.”

Conclusion 

To conclude, we see that the Employees Provident Fund (EPF) Scheme was established with the intent of providing social security for an employee of an organisation, in addition to working as a motivation for the employee in contributing positively to the growth of the organisation. This important scheme is governed by the Employees’ Provident Fund and Miscellaneous Provisions Act of 1952. We also saw how “conciliation” could be used as a dispute settlement machinery with a presiding conciliation officer, for settling any disputes between parties as governed by the Industrial Disputes Act of 1947. In the event of a dispute arising related to Employees’ Provident Fund, it could be addressed through conciliation under the auspices of The Central Provident Fund Commissioner, any Additional Central Provident Fund Commissioner, any Deputy Provident Fund Commissioner, any Regional Provident Fund Commissioner or any Assistant Provident Fund Commissioner and the handling of any disputes in the governance of the EPF Scheme is addressed in Section 7A and Section 7B of the Employees Provident Fund and Miscellaneous Provisions Act of 1952. Thus, conciliation, as defined by the Industries Disputes Act of 1947, can serve as a dispute resolution machinery for any appeals under the Employees’ Provident Fund and Miscellaneous Provisions Act of 1952 and Sections 7A and 7B in this Act serve to provide clarity on how such disputes could be handled.

References:

1. http://www.epfindia.gov.in/ ⁽¹⁾
2. http://www.yourarticlelibrary.com/industries/4-industrial-dispute-settlement-machineries-for-settling-industrial-disputes-in-india/27993/⁽²⁾

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 n this blog post, Tusharika Bhattacharya, a student, pursuing her Final Level of the Company Secretary Course from the Institute of Company Secretaries of India and pursuing a  Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses the Labour Law Compliances for Sick Industrial Companies (SICA).

What is SICA?

An act to make in public interest, special provisions to secure the timely detection of sick and potentially sick companies owning industrial undertakings, the speedy determination by a Board of experts of the preventive, ameliorative, remedial and other measures which need to be taken with respect to such companies and the expeditious enforcement of the measures so determined and for matters connected therewith or incidental thereto.

Checklist

Applicability Of The Act:

(1) This Act may be called the Sick Industrial Companies (Special Provisions) Act, 1985.

(2) It extends to the whole of India.

(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act and any reference in any provision of this Act to the commencement of this Act shall be construed as a reference to the commencement of that provision.

(4) It shall apply, in the first instance, to all the scheduled industries other than the scheduled industry relating to ships and other vessels drawn by power.

(5) The Central Government may, in consultation with the Reserve Bank of India, by notification, apply the provisions of this Act, on and from such date as may be specified in the notification, to the scheduled industry relating to ships and other vessels drawn by power.

Section 4: Establishment Of Board

With effect from such date as the central government , by, notification , appoint, there shall be established a board to be known as the Board of Industrial and Financial Reconstruction” to exercise the jurisdiction and powers and discharge the functions and duties conferred or imposed on the Board by or under this Act.

(2) The Board shall consist of a Chairman and not less than two and not more than fourteen other Members, who are to be appointed by the Central Government.

(3) The Chairman and other Members of the Board shall be persons who are or have been or are qualified to be High Court Judges, or persons of ability, integrity and standing who have special knowledge of, and professional experience of not less than fifteen years in science, technology, economics, banking industry, law, labour matters, industrial finance, industrial management, industrial reconstruction, administration, investment, accountancy, marketing or any other matter, the special knowledge of, or professional experience in which, would in the opinion of the Central Government be useful to the Board

Section 5: Constitution of Appellate Authority

(1) The Central Government may, by notification, constitute, with effect from such date as may be specified therein, an appellate authority to be called the “Appellate Authority for Industrial and Financial Reconstruction” consisting of a Chairman and not more than three other Members, to be appointed by that Government, for hearing appeals against the orders of the Board under this Act.

(2) The Chairman shall be a person who is or has been a Judge of the Supreme Court or who is or has been a Judge of a High Court for not less than five years.

(3) A Member of the Appellate Authority shall be a person who is or has been a Judge of a High Court or who is or has been an officer who is not below the rank of a Secretary to the Government of India or who is or has been a Member of the Board for not less than three years.

Section 6: Term Of Office, Conditions Of Service, Etc., Of Chairman And Other Members

(1) Before appointing any person as the Chairman or other member, the Central Government shall satisfy itself that the person does not and will not, have any such financial or other interest as is likely to affect prejudicially his functions as a member.

(2) The chairman and every other member shall hold office for such period, not exceeding five years, as may be specified by the Central Government in the order of his appointment, but shall be eligible for reappointment: Provided that no person shall hold office as the chairman or other member after he has attained the age of sixty-five years.

(3) Notwithstanding anything contained in sub-section (1) a Member may— (a) by writing under his hand and being addressed to the Central Government resign his office at any time; (b) may be removed from his office in accordance with the provisions of section 7.

(4) A vacancy which is caused by the resignation or removal of the Chairman or any other member under sub-section (3) or otherwise shall be filled by fresh appointment.

(5) In the event of an occurrence of a vacancy in the office of the chairman by reason of his death, resignation or otherwise, such one of the Members, as the Central Government may, by notification, authorise in this behalf shall act as the chairman till the date on which a new Chairman, appointed in accordance with the provisions of this Act to fill such vacancy, enters upon his office.

The salaries and allowances payable to and the other terms and conditions of service of the chairman and other members shall be such as may be prescribed:

(8) The Chairman and every other Member shall before entering upon his office, make a declaration of fidelity and secrecy in the form set out in the Schedule.

(9) The Chairman or any other Member ceasing to hold office as such shall not hold any appointment or be connected with the management or administration in any company in relation to which any matter has been the subject-matter of consideration before the Board, or as the case may be, the Appellate Authority, for a period of five years from the date on which he ceased to hold such office.

Section 8: Secretary, Officers, And Other Employees Of ‘Board Or Appellate Authority

(1) The Central Government shall appoint a Secretary to the Board and a Secretary (by whatever name called) to the Appellate Authority to exercise and perform, under the control of the Chairman, such powers and duties as may be prescribed or as may be specified by the Chairman.

(2) The Central Government may provide the Board and the Appellate Authority with such other officers and employees as may be necessary for the efficient performance of the functions of the Board and the Appellate Authority.

(3) The salaries and allowances payable to and the conditions of service of the Secretary and other officers and employees of the Board and the Appellate Authority shall be such as may be prescribed :

Provided that such Secretary, officer or other employee shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the Schedule.

Section 13: Procedure Of Board and Appellate Authority

1) Subject to the provisions of this Act, the Board, or, as the case may be, the Appellate Authority, shall have powers to regulate –

(a) the procedure and conduct of the business;

(b) the procedure of the Benches, including the places at which the sittings of the Benches shall be held;

(c) the delegation to one or more members of such powers or functions as the Board or, as the case may be, the Appellate Authority may specify.

(2) In particular and without prejudice to the generality of the foregoing provisions, the powers of the Board, or, as the case may be, the Appellate Authority, shall include the power to determine the extent to which persons interested or claiming to be interested in the subject-matter of any proceeding before it may be allowed to be present or to be heard, either by themselves or by their representatives or to cross-examine witnesses or otherwise to take part in the proceedings.

(3) The Board or the Appellate Authority shall, for the purposes of any inquiry or for any other purpose under this Act, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying suits in respect of the following matters, namely :-

(a) the summoning and enforcing the attendance of any witness and examining him on oath;

(b) the discovery and production of document or other material object producible as evidence;

(c) the reception of evidence on affidavit;

(d) the requisitioning of any public record from any court or office;

(e) the issuing of any commission for the examination of witnesses;

(f) any other matter which may be prescribed.

Section 15: Reference to Board

(1) Where an industrial company has become a sick industrial company, the Board of Directors of the Company, shall, within sixty days from the date of finalization of the duly audited accounts of the company for the financial year as at the end of which the company has become a sick industrial company, make a reference to the Board for determination of the measures which shall be adopted with respect to the company :

Provided that if the Board of Directors had sufficient reasons even before such finalization to form the opinion that the company had become a sick industrial company, the Board of Directors shall, within sixty days after it has formed such opinion, make a reference to the Board for the determination of the measures which shall be adopted with respect to the company.

(2) Without prejudice to the provisions of sub-section (1), the Central Government or the Reserve Bank or a State Government or a public financial institution or a State level institution or a scheduled bank may, if it has sufficient reasons to believe that any industrial company has become, for the purposes of this Act, a sick industrial company, make a reference in respect of such company to the Board for determination of the measures which may be adopted with respect to such company

Provided that a reference shall not be made under this sub-section in respect of any industrial company by –

(a) the government of any State unless all or any of the industrial undertakings belonging to such company are situated in such State;

(b) a public financial institution or a State level institution or a scheduled bank unless it has, by reason of any financial assistance or obligation rendered by it, or undertaken by it, with respect to, such company, an interest in such company.

Section 16: Inquiry Into Working OF Sick Industrial Companies

(1) The Board may make such inquiry as it may deem fit for determining whether any industrial company has become a sick industrial company –

(a) upon receipt of a reference with respect to such company under section 15; or

(b) upon information received with respect to such company or upon its own knowledge as to the financial condition of the company.

(2) The Board may, if it deems necessary or expedient so to do for the expeditious disposal of an inquiry under sub-section (1), require by order any operating agency to enquire into and make a report with respect to such matter as may be specified in the order.

(3) The Board or, as the case may be the operating agency shall complete its inquiry as expeditiously as possible and endeavor shall be made to complete the inquiry within sixty days from the commencement of the inquiry.

Explanation : For the purposes of this sub section, an inquiry shall be deemed to have commenced upon the receipt by the Board of any reference or information or upon its own knowledge reduced to writing by the Board.

(4) Where the Board deems it fit to make an inquiry or to cause an inquiry to be made into any industrial company under sub-section (1) or, as the case may be, under sub-section (2), it may appoint one or more persons to be a special director or special directors of the company for safeguarding the financial and other interests of the company or in the public interest.

(4A) The Board may issue such directions to a special director appointed under sub-section (4) as it may deem necessary or expedient for proper discharge of his duties.

(5) The appointment of a special director referred to in sub-section (4) shall be valid and effective notwithstanding anything to the contrary contained in the Companies Act, 1956 (1 of 1956) or in any other law for the time being in force or in the memorandum and articles of association or any other instrument relating to the industrial company, and any provision regarding share qualification, age limit, number of directorships, removal from office of directors and such like conditions contained in any such law or instrument aforesaid, shall not apply to any director appointed by the Board.

(6) Any special director appointed under sub-section (4) shall –

(a) hold office during, the pleasure of the Board and shall be removed or substituted by any person by order in writing by the Board;

(b) not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in good faith in the discharge of his duties as a director or anything in relation thereto;

(c) not be liable to retirement by rotation and shall not be taken into account for computing, the number of directors liable to such retirement;

(d) not be liable to be prosecuted under any law for anything, done or omitted to be done in good faith in the discharge of his duties in relation to the sick industrial company

Section 18: Preparation and Sanction of Schemes

(1) Where an order is made under sub-section (3) of section 17 in relation to any sick industrial company, the operating agency specified in the order shall prepare, as expeditiously as possible and ordinarily within a period of ninety days from the date of such order, a scheme with respect to such company providing for any one or more of the following measures, namely :-

(a) the financial reconstruction of the sick industrial company;

(b) the proper management of the sick industrial company by change in or take over of, management of the sick industrial company;

(c) the amalgamation of –

1. the sick industrial company with any other company, or
2. any other company with the sick industrial company (hereafter in this section, in the case of sub-clause (i), the other company, and in the case of sub-clause (ii), the sick industrial company, referred to as ‘transferee company’);

(d) the sale or lease of a part or whole of any industrial undertaking of the sick industrial company;

(da) the rationalization of managerial personnel, supervisory staff and workmen in accordance with law;

(e) such other preventive, ameliorative and remedial measures as may be appropriate;

(f) such incidental, consequential or supplemental measures as may be necessary or expedient in connection with or for the purposes of the measures specified in clauses (a) to (e).

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In this blog post, Tanisha Agarwal, a student of Institute of Law, Nirma Universtiy, Ahmedabad, who is currently pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses the labour law compliances under the Sexual Harassment of Women at the Workplace Act of 2013.

Introduction

Under the Indian Constitution, all citizens have the right to be engaged in the profession of their choice or to practice their own trade or business. The judgment in Vishakha v. State of Rajasthan recognised that actions which violate a person’s right to ‘gender equality’ and ‘life and liberty’ violate the corresponding fundamental right guaranteed under the Constitution. The Supreme Court laid down the ‘Vishakha Guidelines’, to safeguard female employees from sexual harassment at workplace. The Act is shaped on these guidelines – it is more inclusive in nature and tries to outline evidently the role, duties and accountability of employers in preventing and handling the sexual harassment of women at work The Equal Employment Opportunity Commission (EEOC) of United States which supervises the implementation of title has defined that “Unwelcome sexual advances, requests for several favours, and other verbal and physical conduct of a sexual nature constitute sexual harassment.”

As per the Australian Human Rights and Equal Employment Opportunity Commission, “Sexual Harassment is an unwelcome conduct, such as sexual advances and requests for sexual favours, when a reasonable person would feel offended, humiliated or intimidated by the conduct.” The Convention on Elimination of Discrimination Against Women additionally speaks that Sexual Harassment comprises of such unwelcome sexually determined behaviour as physical contacts and advances, sexually coloured remarks, showing pornography and sexual demands, whether by words or actions. Such conduct can be demeaning and may constitute a health and safety problem; it is discriminatory when the woman has rational grounds to believe that her protest would handicap her in association with her employment, including recruiting or promotion or when it creates a hostile working environment. The ILO (International Labour Organisation) definition of ‘Sexual Harassment’ is a strong form of gender discrimination based on sex, a manifestation of unequal power relations between men and women. Furthermore, the Supreme Court of India in the Vishakha case has defined the Sexual Harassment by the help of from CEDAW. It describes that “Sexual Harassment includes such unwelcome sexually determined behaviour (whether directly or by implication) as: Physical contact and advances; A demand or request for sexual favours; Sexually coloured remarks; showing pornography; Any other unwelcome physical, verbal or non-verbal conduct of sexual nature.

The Act aims to deal with sexual harassment as a social menace and, hence, has a wider ambit. Remarkably, the meaning of ‘workplace’ includes places that employees visit in the course of their employment as well as travel for their work, where the conveyance is provided for by the employer.

Types of Sexual Harassment

(i) Quid Pro Quo Sexual Harassment: (This for that): When a designated senior puts a condition to a female employee to perform certain act which is against her wishes assuring her for a favor in return. This concept is basically called “This for that”.
(ii) Hostile environment: It is created when an employee constantly and repeatedly do certain acts of sexual nature.

• Sexual pranks, or repeated sexual teasing, jokes, in person or via e-mail;
• A demand or request of sexual favour;
• Asking for Verbal or Non-Verbal advances;
• Touching or grabbing; etc.

Employer’s Duties

The Act lays numerous duties on employers. All employers must make sure that they offer a safe working environment for their employees. Staff Handbooks must contain provisions on sexual harassment and state that sexual harassment will be taken as misconduct, and employers ought to take suitable action if a sexual harassment incident is reported.

Employers are obligated to form an internal complaints committee (ICC) at each office or branch which has 10 or more employees. The ICC, which must have atleast four members, at least half of whom are women, will listen to the sexual harassment complaints. A Local Complaints Committee (LCC) will be set up in each district to hear complaints from institutions where there are fewer than ten employees, or where the complaint is against the employer himself.

The ICC and LCC have the same powers as a civil court, like collecting evidence and requiring witnesses to attend and produce evidence on oath, making recommendations to the employer, allowing the employee up to three months’ leave and granting compensation to be paid by the harasser by way of deductions from their salary. There is no upper limit on the compensation that can be given, and the aspects that will be taken into account include mental trauma, suffering and emotional distress, the loss of career opportunities and any medical expenses the employee incurs for physical and/or psychiatric treatment. The pay and financial status of the harasser may also be taken into account.

Employers will not be vicariously liable, so they are not mandated to pay the compensation awarded to the employee. The harasser is solely liable for this. Nevertheless, it is imaginable that the law will change over time and in the future, employers will be required to pay employees who have been subjected to sexual harassment at work.

The complaint to the ICC or LCC must typically be made within three months of the date of the suspected incident, or if there has been a series of incidents, within three months from the date of the most recent incident. The ICC or LCC’s inquiry into the accusation of sexual harassment should be concluded within 90 days, and the employer must assist them by providing documents, etc.

Another requisite under the Act is for establishments to conduct regular workshops and awareness training for employees and also to exhibit, in a noticeable place in the office, the order comprising the ICC and the penal consequences for employees who sexually harass female employees.

Employers also have a duty to aid the employee file a police complaint if she wants to press criminal charges against the harasser.

Compliances

There are many compliance necessities which need to be obeyed by an organisation. The primary requirements to be observed under the SH Act is as follows-:

(i) Drafting and implementation of Sexual Harassment Policy: The employer needs to prudently draft a sexual harassment policy which should cover the basics such as:

• ICC Composition: names, designation and contact details of the ICC members.
• What constitutes as a sexual harassment act like verbal, physical, quid pro quo, etc.

The policy should contain the process for Resolution, Settlement, Prosecution, enquiry and trial procedure to deal with

(ii) Amendment to the Employment Agreements: What businesses fail to do is to modify their employment contracts to be in tune with the SH policy. This is also a noteworthy feature as the employee signs the commitments under the employment agreement at the time of joining.

(iii) Formation of Internal Complaints Committee (“ICC”): This is one of the main duties for an employer to observe the following conditions. The structure of the ICC should constitute of a woman “Presiding Officer” at prominent designation, two members who have legal knowledge and have had experience in social work, one person who is familiar with the sexual harassment issues or a person from NGO, and it is mandated that more than 50% of the members are females in the committee.

(iv) Sensitization of the ICC and Employees: This is one of the crucial aspects to be followed by the organisation for the avoidance of SH at the workplace.
Briefing the employees (both males and females) about sexual harassment, what constitutes sexual harassment and consequences thereof,
conducting orientation sessions or seminars for the members of the internal committee
involving women in the workshops to make the workshop more successful and include case studies for better comprehension. Establishing a better security system in the office is also one of the ways, for example, cameras in the cabins and corridors. 

(vi) Filling of Annual Report by ICC: The businesses are obligated to file reports giving various data. The ICC shall prepare annual report under Section 21 of the Act: (i) number of sexual harassment complaints received in a year; (ii) number of complaints disposed of in a year; (iii) number of cases pending for more than 90 days; (iv) number of awareness programs or workshops against sexual harassment conducted in a year; (v) nature of action taken by the employer or district officer; and (vi) where no such report is required to be prepared, intimate such number of cases, if any, to the District Officer. (As per section 22 of the Act)

Conclusion

A growing number of complaints of sexual harassment at work places shows the better awareness. The prime objective of Act is to guarantee safe and secure atmosphere to every woman, regardless of her age, employment status, autonomy from all forms of sexual harassment by making the employer accountable for the same. Cases like TERI, Tehelka, etc. have set a specimen of how such eminent organisations faces the loss of repute if not observing with SH Act. The punishment prescribed for non-compliance under the SH Act is fine up to Rs. 1,00,000/- or cancellation of license to carry out the business/service by the organisation, which might eventually lead to defamation; attacking the name and goodwill of the organisation. To end, “it takes years to b

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In this blog post, Seuj Bikash, an Advocate, presently practising in the Gauhati High Court who is also currently pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, details Lock-in and Penalty Clauses. 

Introduction

The employer-employee relation in a business establishment is generally regulated by an Employment Agreement or contract between the employer or business organisation and the employee since such relation involves serious issues of diverging interests related to employment. It is very normal that the employer and the employee both are motivated and guided by their own interest. It is advantageous for an employer to retain a well-experienced, trained and skilled employee in service of the organisation for a long period. Often the employer has to incur heavy expenses for training of the employee and therefore the employer must have to ensure the interest of his business that such an employee serves his/her organisation at least for a certain period of time. On the other hand, the employee always gets attracted towards better opportunities for advancement of his/her career. In the competitive corporate world, if more lucrative offers come from other employers or business organisations, the employee will not like to miss such opportunities to shine his career. Therefore, the employer often incorporates the “lock in” and “penalty clauses” in the employment agreement/contract so that such an employee can be retained for a definite period of time.

The lock-in and penalty clauses

The lock-in clause is that specific clause in the employment agreement which sets a particular time-frame within which the employment agreement cannot be terminated by either any one or both parties to the employment Agreement. If any party to the agreement violates the said clause, then such violation is regarded as a breach of the agreement/contract and in accordance with the law of contract breaching party have pay to pay a sum, which is generally a heavy one, stipulated in the agreement to the aggrieved party. The employer also incorporates penalty clause in the employment agreement to recover the expenses incurred by him on the training or skill development of the employee. Though incorporation of such clauses helps in controlling the attrition rates of employees in the business organisation, often such clauses are being regarded as objectionable by the Indian Judiciary. Usually, the damage amount fixed in the employment agreement is inconsistent with the income of the employee for which the employee is compelled to serve the employer for a long duration. In such condition, a specific provision of the Indian Contract Act,1872 is invoked to protect the interest of the employee, i.e., the section 27 of the said Act which provides that every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. However, a remedy is also available to the employer under the same Act who has incurred expenses on training and skill development, etc. of the employee so that such expenses may be recovered by the employer, that is, section 73 of the Act. The section-73 of the India Contract Act states that when a contract has been broken, the party who suffers from such breach of contract is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in usual course of things from such breach, or which the parties knew when they made the contract, to be likely to result from the breach of it. From this provision in the law of contract it appears that only in respect of those losses or damages which occurred naturally in usual course of things can be received by the aggrieved party to the contract and the aggrieved party is entitled only to such damages as will compensate him for loss suffered to the extent that such loss or damages are reasonably foreseeable as resultant of such breach. This principle of the law of contract is directly applicable with regard to the lock-in clause in the employment agreement. Therefore, in determining the amount to be paid as compensation for breach of the lock-in clause, the courts in India use to rely on the actual expenses incurred by the employer which is a reasonable amount incurred by the employer on the employee’s training, skill development, etc. To determine what will be the exact amount to be paid by the employee to the employer for such breach, the court has to look in to the fact and circumstances of each case and the proof of damages produced by the employer.

The section 74 of the Indian Contract Act, 1872 is worth mentioning in relation to the penalty clause in an employment agreement/contract. The section 74 of the Indian Contract Act,1872 states that when a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for. Often the employer includes a specific penalty clause in the employment agreement/contract/bond which requires an employee to agree beforehand to pay a fixed sum to the employer by way of penalty in the event of a breach of the agreement by the employee, irrespective of any actual damages or loss. Therefore, in many occasions, the courts in India had to face with the question whether the said section 74 of the Indian Contract Act, 1872 could be strictly applied to compel the employee to pay the sum which the employee earlier agreed to pay to the employer in case of breach of the employment agreement by him. The courts in a number of cases have taken the stand that even if the employment-agreement/contract/bond may stipulate payment of any penalty amount in the event of breach, it does not mean that the employer shall be entitled to receive the stipulated amount in full as compensation on the occurrence of such default; rather the employer shall be entitled only to reasonable compensation as determined by the court.

In Chand Thapar and Bros.(P) Ltd. Vs. H.H. Jethanandi, 76 CWN 338,a matter before the Calcutta High Court, it was held (in paragraph no.10 of the Judgement) that the parties to a contract may at the time of entering into it provide that in case of any breach, the party in default shall pay the other a certain specified sum. That sum may be liquidated damages. In such cases, it is not to be interfered by the Court. It is well settled that the essence of the liquidated damages is a genuine covenanted pre-estimate of damage. U/s 74 of the Indian Contract Act, when liquidated damages are entered into a contract itself as payable in the event of a breach, then the damages payable when a breach occurs, are to be assessed in the ordinary way subject to that fixed amount as maximum; and it is for the employer to prove the exact amount of damages which he suffered and that amount only could be awarded. The sum named in the contract itself, is not the conclusive evidence. The employer shall have to prove his damages irrespective of the specified amount in the contract. Therefore, the employer cannot get a decree for damages unless he proves that he has suffered loss or damages.

Validity of Negative covenant and injunction against the employee

The agreement/contract which prevents a party to the agreement/contract from doing specific things is called a negative covenant. Some negative covenant restrains the employee from serving other company or organisation involved in similar types of businesses during the course of employment, and some negative covenants do the same even after the course of employment, i.e., even after the end of the terms of employment stipulated in the employment agreement. The objective of the negative covenant is to protect the trade secrets of the employer and to restrict the employee from using the confidential information, skills, knowledge acquired from training provided by the employer and activities of the employer acquired by the employee during the service period for personal benefit of the employee himself or that of similar other business organization. In a number of cases decided by the Honourable Supreme Court, the Apex Court has observed that negative covenants during the course of employment are valid in the eye of the law, but the same operating after the termination of employment are void. The findings of the Apex Court, in Niranjan Shankar Golikari Vs The Century Spinning and MFG. Co. Ltd. reported in AIR 1967 SC 1098 may be referred in connection with this particular point of law. In that case, the Apex Court observed that- the considerations against covenants are different in cases where the restriction is to apply after the termination of the contract than those cases in where it is to operate during the period of the contract. Negative covenants operative during the period of the contract of employment when the employee is bound to serve the employer exclusively are generally not regarded as restraint of trade and therefore do not fall u/s 27 of the Indian Contract Act. A negative Covenant that the employee will not engage himself in trade or business and will not get himself employed by any other master for performing similar or substantially similar duties is not, therefore, a restraint of trade unless the contract as aforesaid is unconscionable or excessively harsh or unreasonable or one-sided. An important question decided in the same case was whether the injunction to enforce a negative covenant can be granted by the court. It was held that there is nothing to prevent the court from granting a limited injunction to the extent it is necessary to protect the employer’s interests where the negative stipulation is not void.

Thus, from the above discussions it can be asserted that though the court may grant injunction to enforce negative covenants, such power should be utilised carefully considering the different facts and paradigms that may vary from case to case, such as excessive harshness of the contract, its opposition to the public policy and good conscience, etc. The court has to see while enforcing the negative covenant that the employee should not be unnecessarily and unjustly driven to idleness or sent back to the respondent organisation to serve in lieu of an inappropriately lesser remuneration. Above all, the yardstick of reasonability must always be observed.

Conclusion

Trained, skilled and experienced employees are inexorably important resource of a company or business organisation for its continuous growth in the competitive corporate world. But, such an employee looking for better opportunities cannot be compelled to serve a particular employer for a long period by mere incorporation of lock-in and penal clauses in the employment agreement or by negative covenants since protections are available to the employee in the law of contract and precedents. Therefore, the employer organisations often take some indirect methods to achieve the same end. The employers often introduce a system of granting a discretionary bonus to the employee. The discretionary bonus or performance related reward, if the employee has left the organisation before the period stipulated in the employment agreement, are withheld by the employers. Sometimes there is a provision for withholding the same if the employee fails to reach a target fixed in the contract. Some employers also adopt a system of granting a bonus or cash-based incentive to the employees who serve the company for a minimum threshold period. Policies to encourage career growth or advancement, promotion to higher ranks within the same organisation, etc. are also undertaken by various business organisations. Such policies which provide mutual benefits to both employer and employees are certainly more efficacious to prevent attrition of employees within the Organization than the compulsive provisions incorporated in the employment agreements/contracts/bonds.

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In this blog post, Meghana Balan, a Bangalore-based Lawyer with an Independent Practice and a student pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses the recent labour unrest and strike at Maruti. 

Introduction

Maruti Udyog Limited or Maruti Suzuki India Limited (MSIL) as it is known today, was established in February 1981 and at one point was a largely government-owned company, with 74% stake held by the government and 26% by Suzuki Japan. Post liberalisation in 1991, the government started to reduce its stake in the company, and by the year 2007 had completely disinvested. One of the earlier reasons for the labour discord, it has been told, is the fact that the workers were opposed to the idea of the government giving up control, as they felt, they were better protected under the government. The labour unrest began as early as the year 2000 when the employees of MSIL went on an indefinite strike, demanding among other things, revisions to their wages, incentives and pension. The discord between the company and its workers continued on and off and peaked in the year 2012.

July 18^th, 2012, saw one of India’s worst labour incidents with one person being killed and several injured. The company declared a ‘lock-out’ and several of its employees were arrested. The issue has hence been partially resolved, however, continue to simmer on and off.

Governing Laws

1. Industrial Disputes Act, 1947
2. Contract Labour (Regulation and Abolition) Act, 1970

Discussion  

The MSIL labour unrest and strike brings to the forefront several labour practices that are questionable, to say the least. The fact is that, the labour laws in India need to be overhauled and reworked in order to plug the loopholes that allow companies to take advantage a largely uneducated work force and at the same time allow flexibility in hiring and termination so that companies are not discouraged from hiring workers on a permanent basis. The MSIL case which is still sub-judice is examined here below to understand the various human resource issues and the legislations that cover them.

It is commonly known that one of the major reasons for dispute in the MSIL Manesar plant was the fact that the company had hired several workers on a contract basis and there was allegedly a huge disparity compensation and benefits. The larger issue here is the fact that it seems to be the norm across industries to hire a percentage of workers on a contract or temporary basis and thereby to circumvent the protective provisions of labour laws.

Facts of the case

(as ascertained by newspaper reports)[1]

1. MSIL in its Manesar factory had as of 2011, employed a total of 2,500 workmen, out of which 1,100 were permanent employees and the rest 1,400 consisted of workers on contract, apprentices and trainees.
2. An unskilled contract worker was paid INR 5,500 a month, and a skilled contract worker (with an ITI diploma) INR 7,000 whereas permanent workers were paid close to INR18,000 per month.
3. The benefits provided to a permanent employee included medical benefits, bus service, and paid leave, none of which were provided to workers on contract, although on ground, the nature of work remained the same for both categories of employees.
4. The process for an individual to become a permanent employee at MSIL was lengthy and never guaranteed. A skilled worker had to work for a year as an apprentice and another three years as a trainee before he was made permanent, being an unskilled worker meant that there was little or no hope of being made permanent.
5. In addition to these glaring disparities, the general working conditions were told to be ‘difficult’ with little or no time for breaks, huge deductions in pay for leave and almost non-existent pay for working extra time in case of workers who were not permanent employees.
6. The MSIL Manesar Union is said to have made demands which included, a fivefold increase in basic salary, monthly conveyance of INR 10,000/-, laundry allowance of INR 3,000/, gift with every new launch, a house for every worker who wants one, cheaper house loans, seven weeks paid vacation, 40 days’ allowance for sick and casual leave.
7. None of these terms were acceptable to MSIL and even before any solution could be found a stray incident involving the suspension of a worker is said to have triggered off serious violence on the 18^th of July 2012, that ended with an HR manager being killed, several people in management (close to a 100) being injured, 9 policemen being injured and the plant being evacuated and sealed.
8. MSIL called a lock-out citing security issues and claimed that none of the workers would be paid for the duration of the lock-out. Further, MSIL claimed that the difference in pay between the contract labourers and permanent workers was much smaller than claimed by the union and that MSIL gave its contract workers the best pay and benefits in the region.
9. Over 90 workmen were arrested, in August 2012, MSIL dismissed 500 workers accused of participating in the violence and restarted operations.

What are the legal implications?

The term ‘strike’ is defined in Sec 2(q) of the Industrial Disputes Act, 1947 as a cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal, or a refusal, under a common understanding of any number of persons who are or have been so employed to continue to work or accept employment.

The provisions of the Act[2], lay down the procedure to be followed by employees who want to go on strike. A strike is considered illegal if said procedure is not followed. The consequence of an illegal strike includes imprisonment and fine[3], loss of wages[4] and dismissal of the workmen[5] (in the case of a violent illegal strike).

‘Lock-out’ as defined under the Act[6] means the temporary closing of employment or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him. Lock-out is the counterpart of a strike; it is the option available to an employer, and the Act deals with it in the same terms as a strike. Therefore, lock-out like strike has to follow procedures laid down in the act for it to be considered legal. Illegal lock-out, like illegal strikes, carries penalties.

In the MSIL case, the strike called in July 18^th, 2012 has been considered illegal and therefore the lock-out declared by MSIL is legal[7]. The actions taken by MSIL thereafter including dismissal of the workmen would be valid actions. The criminal cases filed against several of the employees are still sub-judice, and hence, a conclusion regarding the same may only be arrived when the case concludes.

However, it is important to note that in the MSIL case, although it would seem like MSIL did follow the labour laws including the minimum wages prescribed for that region, the facts of the case reflect the inherent injustice and unfairness meted out to a section of workers. Hiring labourers as contract and temporary workers to avoid paying for their benefits while the level of work and skill required by both categories remaining same has been the main cause for dispute. And although the Contract Labour (Regulation and Abolition) Act, 1970 mandates that any company that has to employ contract labour needs to obtain a license from the labour department and that the labour department can cancel the license if the rights of the contract labourers are abused. It is evident from the facts of this case that these provisions were not implemented.

Current position at MSIL

Since 2013, MSIL has actively cut down on hiring workers as contract labourers and is said to be engaging workers on a temporary basis instead. The temporary workers are hired for short durations, not exceeding 7 -8 months with no guarantee of being re-engaged at the end of the term. MSIL claims that the current permanent to temporary workmen ratio is 70-30 at best.

Despite MSIL’s stop-gap solution, the issues between the management of MSIL and its workers temporary and permanent seem to continue. Even as recently as September 2015, there was strikes and lathi charge. MSIL having given permanent employees a 38 percent hike in wages, (over three years) the temporary workers demanded similar hikes. As things stand, the temporary workers were also given a 10 percent hike in wages in October 2015.

Labour issues at MSIL seem to be on a simmer right now, with no permanent change in policy, it is a matter of time before things come to a boil once more.

Conclusion

India in a bid to protect the interests of the workers has legislated several labour laws, however, it is commonly accepted that the laws are too complex and have given rise to complicated processes due to which most companies have found alternate means of doing business that largely circumvents the protective laws.

The labour laws are either avoided or poorly implemented; therefore the percentage of workers actually protected by the legislations are small, and a large populace of workers are left to fend for themselves. In a country where there is a huge population of unemployed, unskilled labour, companies rarely find it hard to replace workers who ask for more, skilled or otherwise.

In conclusion, one may note that unless the human element is taken into account and fair treatment to all workers, temporary or permanent is meted out, labour unrests and strikes are bound to raise. In today’s Internet-connected world where information is literally at one’s fingertips, unfair practices will meet protests.

Labour laws are in need of being overhauled and while doing so, taking the opinions of the people concerned both labour unions and industry leaders is highly recommended.

References:

[1] Business Standard report dated September 15, 2011

The Hindu report dated September 26, 2015

[2] Section 22 and Section 23 of the Industrial Disputes Act, 1947.

[3] Section 26 of the Industrial Disputes Act, 1947.

[4] Crompton Greaves Ltd. Vs Its Workmen (AIR 1978 SC 1489, 1978)

[5] M/S. Burn & Co. Ltd. & Others vs Their Employees (AIR 896, 1960 SCR)

[6] Section 2(1) of the Industrial Disputes Act, 1947.

[7] Section 24(3) of the Industrial Disputes Act, 1947.

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In this blog post, Srishti Khindaria, a student of Amity Law School, Delhi, Guru Gobind Singh Indraprastha University, analyses the concept of medical negligence and how liability can be fixed on hospitals in cases of medical negligence.

In daily usage, ‘negligence’ may be seen as mere carelessness. In the legal sense, negligence signifies the failure to exercise a standard duty of care which the doer as a reasonable man would have exercised in the given circumstances. There is a reasonably foreseeable duty of care owed to the plaintiff by the defendant, the failure of which of would likely cause an injury.

All professionals engaged in the medical field; doctors, nurses, etc. are responsible for the health, safety and well-being of their patients and are expected to provide a high quality of care to them. However, some medical practitioners and health care providers fail to live up to this responsibility towards their patients and do not provide them with the required standard responsibility of care and attention, by acting maliciously for monetary incentives, etc., thus resulting in severe complications to the life of the patient and sometimes even death.

Though a doctor may not always be in a position to save the life of his patient, he is expected to keep the best interest of the patient in mind at all times and apply his skill and knowledge in the most appropriate manner. Thus, it is an accepted norm that the doctors carry out required investigations and also seek all information and reports from the patient. Further, unless in an emergency, ‘informed consent’ of the patient must always be taken before proceeding with any major treatment, invasive investigation or surgery. Failure of the doctor and the hospital to carry out this obligation is essentially seen as a tortious liability.

Indian hospitals have been held liable for their services- rather lack of services- individually or vicariously. They can be sued for negligence either in Criminal Courts, Civil Courts or Consumer Forums.

The Supreme Court has held that every doctor “has a duty to act with a reasonable degree of care and skill” in the case od State of Haryana v. Smt. Santra.[1]

However, what must be noted is that the legal concept of medical negligence is not just limited to the conduct of doctors but it applies to nurses, pharmaceutical companies, healthcare facilities and other health care providers too.

Thus, those offering medical advice and treatment need to state implicitly that they have the necessary skill and knowledge to be undertaking such activities and also that they have the required skill to decide whether or not to take up a case and to decide what kind of treatment is to be administered. This is known as “implied undertaking” on behalf of the medical practitioner.

And as litigations usually take too long to reach their logical end via civil courts, medical services have now been brought within the ambit of the Consumer Protection Act, 1986, where the complainant is entitled to compensation for deficiency in services within the stipulated period.

Cases that do not fall within the purview of the Consumer Protection Act, for example, where services have been provided free of cost at a government hospital—can be taken up in criminal courts where the medical practitioner can be sued under Section 304-A of the Indian Penal Code that deals with deaths caused by negligence. It states that whoever causes the death of any person by doing any rash or negligent act not amounting to culpable homicide, shall be punished with imprisonment for a term which may extend to two years, or with a fine, or with both.

When Does Liability Arise?

The liability of a medical practitioner does not merely arise when the patient has suffered an injury; it arises when the injury is a direct consequence of the conduct of the doctor when he failed to exercise reasonable care. In other words, a doctor is not liable for every injury suffered by the patient. First, existence of a duty of care by the doctor towards the patient has to be established and then the patient must prove breach of such a duty. In case there was no breach or the injury was not a direct consequence of the breach, the doctor will not be liable. Thus, the burden of proof lies upon the complainant.

It was held in Calcutta Medical Research Institute v. Bimalesh Chatterjee[2] that the onus of proving negligence and the resultant deficiency in service was clearly on the complainant.

Liability of Hospitals in Cases of Negligence

The liability of a hospital in cases of medical negligence could be direct or vicarious. Direct liability in this sense would mean a deficiency in the services provided by the hospital thus making it unsafe and not suitable for treatment. Vicarious liability, on the other hand, would refer to the liability of the hospital as an employer for the negligent acts of its employees.

Some of the conditions under which a hospital is directly liable are:

1. Improper maintenance of hospital resulting in an injury to or death of the patient.
2. Failure in providing a safe and suitable environment as guaranteed–like when the patient is affected by malfunctioning equipment, incompetent staff, inadequate accommodation, etc.
3. Deceptive or misleading signboards, advertisements, and notices, false claims of availability of certain facilities which may be seen as a deficiency in services or as unfair trade practices under the Consumer Protection Act and damages can be awarded for such malpractices.
4. Charging for a facility which was not provided, or charging more than what is mentioned in the displayed list of charges or agreed.
5. Testing for HIV and Hepatitis B is either mandatory or voluntary. When testing is legally done without the consent of the patient, it is known as mandatory testing for instance when screening for blood donors, semen donors or organ donors. In other cases it is voluntary, and express written consent of the patient is necessary to respect his/her need to maintain confidentiality.
6. Improper maintenance of records of treatment and failure to hand over such records to the patient or his authorized attendant/legal authorities within 72 hours, which is in violation of the Medical Council of India Regulations, 2002.

Also, if such records are not provided to the patient or attendant, it may also amount to deficiency in services under the Consumer Protection Act, 1986.

The employer is responsible not only for his acts and omissions but also for those of his employees, as long as such acts occur within the course and scope of employment. This liability is based upon the maxims “respondent superior” which means “let the master answer” and “qui facit per alium facit per se” which means “He who acts through another does the act himself.”

An exception to the above principle is seen in the “borrowed servant doctrine” according to which the employer shall not be liable for acts of an employee when that employee is working under the direct supervision of another employer.

For example, when a surgeon employed by one hospital visits another for conducting a surgery, the other hospital where the surgery is performed would be seen liable for the acts of the surgeon.

However, in present times most doctors are not employees of the hospital and are independent contractors instead. Whether or not a doctor is an employee of the hospital would depend on upon the nature of his/her relationship with the hospital.

But a hospital cannot escape its liability by merely saying that it cannot suo moto perform any operation or amputation and that it provided only infrastructural facilities, nursing services, support staff, technicians. The hospital is not only responsible for the staff it provides but also for independent contractors such as anesthetists/surgeons or doctors in some cases–who admit or operate a particular case. This was held in the case of Smt. Rekha Gupta v. Bombay Hospital Trust and Anr.[3]by the National Consumer Disputes Redressal Commission.

In Joseph Alias Pappachan v. Dr. George Moonjerly[4], it was held that “persons who run hospitals are in law under the same duty as the humblest doctor: whenever they accept a patient for treatment, they must use reasonable care and skill to ease him of his ailment. The hospital authorities cannot, of course, do it by themselves; they have no ears to listen to the stethoscope, and no hands to hold the surgeon’s scalpel. They must do it by the staff which they employ; and if their staff are negligent in giving treatment, they are just as liable for that negligence as anyone else who employs others to do his duties for him.’

In the case of negligent acts that take place in government hospitals, it has been held that the state can be directly liable in case there is a lack of proper facilities, equipment or staff and it may be vicariously liable for negligent acts of its doctors. In a few cases, the court has even granted compensation to the complainant paid by the government doctor whose negligence has been established.

Conclusion

In recent times, the Indian society has seen a growing awareness regarding the rights of patients. This is clearly visible from the recent growth in litigation concerning the medical field or establishing liability and claiming redressal for suffering caused due to medical negligence or for breach of confidentiality arising from the doctor-patient relationship.

The Medical Profession is seen as the noblest of all professions in India; for the patient the doctor or any medical practitioner is like “God is unerring”. But this is what the patient thinks; in reality, a medical practitioner is merely a human and as the old saying goes “to err is human”. Thus, they are prone to committing mistakes, for which laws on medical negligence must be in place; especially in the case of hospitals which are known to abscond their liability in many cases.

[divider]

Footnotes:

[1] AIR 2000 SC 3335

[2] 1(1999) CPJ 13(NC)

[3] 2003 (2) CPJ 160 (NCDRC)

[4] 1994 (1) KLJ 782 (Ker. HC)

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In this blog post, Salang Ishan Sharma, an Advocate in Punjab And Haryana High Court, Chandigarh who is currently pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses how Honda denied the sacking of workers which led to unrest among the workers.

Introduction

The ultimate object of a company is to reap out the profits from it but during such journey the company has to face many obstacles out of which labour unrest is considered substantial in nature. This labour unrest has become very prominent in India. The problem of labour unrest is one of the most serious problems inflicting in our economy. Such unrest is an inevitable concomitant of industrialism. Labour unrest is not confined to India alone. This conception of labour unrest is also conspicuous worldwide in various forms and degrees in different countries as well. Having a second largest labour force in the world after China, a majority of the Indian labour force is in the unorganised sector. Less than 10% of works in the organised sector that comprises of government and other public and private registered companies.

Background

In the earlier decades, the works knew only one method of expressing their protest, and that was going on a strike. But today in the recent times there are many ways of expressing their unrest. Strikes, lockouts, hunger strike, sudden stoppage of work, pen down strike, etc. are some of the examples of a strike in the recent era. Having up poor working conditions, excessive working hours, insufficient pay, discrimination and child labour were some of the root causes which gave potential to uplift labour unrest at that time and which is even prominent today as well.

Meaning

Labour unrest is a dissatisfaction displayed by workers, often in the form of strikes, and sometimes in the form of violent disputes, etc.are follows and creates a hassle in the normal functioning of the business.

Diagnosis

Substantial factors behind such unrest are:

1. Lack of trust between the association of employee and employer:

It is seen that the relationship of employee and employer decides the journey of the company. Pessimist approach between the employer and employee is one of the causes of labour unrest.

2. Status of wages:

India has one of the most rigid laws for employment. But it is not still strong enough to meet the requirements of the present day economy. While all laws are aimed at protecting the interests of the workers, it does not always happen so. One law which protects the workers indirectly paves the way to some other practice by the employer. For example, there are strict regulations regarding the wages, rights and other facilities which apply to permanent employees. To avoid giving them, companies prefer to employ more contract labourers. Thus the law which should protect workers does not always do so.

3. Unfair and ill-treatment of workers by the employees:

Unfair and ill-treatment not only means wages but also covers up the purview of nature of work and facilities provided.

4. Changing of economic environments:

Workers are more uncomfortable or restless and get easily agitated on the grounds of unfair treatment and poor wages. This problem aggravates especially when the company makes huge profits and workers feel the same, discrimination among the workers class, between employer and employee, affects the overall environment of the company which creates a hassle in the company and leads to unrest among the labourers. Also, bad working environments should also be taken into account.

5. Mismanagement and problem of communication between the employer and employee:

Sometimes the middle level management also fails to communicate between the high-level management and the labourers which affect the productivity, sales and proficiency of the company and causes labour unrest.

6. Image building exercise by the trade union leaders:

Whenever any dispute comes into existence, the union leaders are first to come to dominate the company by giving their advantage of political powers and start seeking up concessions or compensations from the factory or company owners otherwise, leads to labour unrest.

Consequences Of Labor Unrest

The impact of such unrest is seen not only upon happening of an event by the company but also when the workers think that some discrimination is done by the company which is not so as per the recent case of Honda motorcycles & scooter of Tapukara plant. Following are the effects:

1. Production misbalance:

Such kind of unrest affects the productivity line of the company on the part of the discrepancies between the employee and employer.

2. Deflation of sales:

With production imbalance, the sales too will affect the company entirely which will determine the prospective prices of such units whose sales have gone down due to such unrest.

3. Fluctuation of Profits:

If the productivity and sales of a company are affected then, fluctuation of profits is also one of the drawbacks of such labor unrest.

4. Scarcity of goods produced:

With such kind of labour unrest when the production of a product stops it leads to scarcity of such goods and creates a grave impact on the country and all the other dependent countries as well.

5. Substantial question of investment:

By taking sales, production and profit into account, fluctuation in the stock market of such company may tarnish the image of the company and may even create doubt in the minds of the potential investor. Also, it may also create a grave impact in the minds of the foreign investor as these incidents will showcase the complex labour scenario to the outside world.

6. Scenario in the economy:

With the fluctuation of profits, sales and production imbalance, the economy will also be affected accordingly. Such economy of the country will decide the values of certain commodities, an effect on imports and exports, GDP, etc. and may even affect the national income in some or the other manner. So such kind of incidents have to be taken into account and that too in a serious manner and resolve it accordingly so that if not stopping such incidents but to minimise the adverse effect of the same.

Possible Solutions

1. Rational Wage policy:

A rational wage policy should be taken into account while dealing with the wages of the workers and must keep a tab on such policies time to time and update the same when in need so as to keep the worker class into a confident position and to make them fell discriminated.

2. Opportunities to take part in the management:

Also, it is mandatory not only for the employers but also for the employees to take an active part in the management their decisions, execution policies, etc. so as that not to keep the workers in the dark room as to what is going on in the management of the company.

3. Comprehension on the part of trade unions:

It is not only the companies which should revisit their approach to trade unions. Trade unions should have a second thought on why and what they exist for. They should safeguard the interest of the workers, but at the same time, they have the responsibility to promote the growth of the industry and the country. They should understand the changed industrial scenario. Trade unions should not become franchisees of politicians.

4. Timely communications between the workers and the employers under proper channels:

Such kind of timely and proper communications channels will between the parties will help them in keeping the company in an effective manner without creating any negative impact and accordingly will gain the trust of the workers as well.

5. Inauguration of dispute resolution committees:

With the establishment of such kind of committees, any dispute arising within the companies between the employer and the workers, can be resolved in a fast pace without any delay i.e. speedy resolution of disputes which will also minimize the effect of the production crisis, sales, profits and the economy and then an action plan should also be initiated in case of any future dispute arises. Also, the way a dispute is handled creates an image of the company in the minds of the workers. It is very important to create a good image because the image persists even after the conflict is over and the worker returns to work. It is far more important to create an inclusive work atmosphere for workers returning after strikes.

Conclusion

It is a kind of disease, which should be diagnosed, as soon as possible and eradicates accordingly. So it is important to resolve such dispute rather to an issue out of it and create politics which affects the not only the company but that country as a whole. Also, as the life of a labourer in the modern age is complex. In big cities, their life has become mechanised and monotonous. To an ordinary worker in a big city, life has no meaning or purpose. The tyrannical handling of the machine technology has transformed a wage-laborer into a cog in the machine. Most of the grievances for which labourers agitate are genuine. However, not only the company but the government should also take the initiative to improve their condition. Labourers should also minimise strikes for the sake of development of their country.

The post An Analysis Of The Labour Unrest At Honda appeared first on iPleaders.

In this blog post, Abhijna Ganesh Somashekhara, who is currently pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, details the labour law compliances required for a firecracker industry with special focus on ant

Child Labour In Match Box And Fire Crackers Businesses Of Sivakasi

Sivakasi is a region in Virudhunagar. Sivakasi has a dry climate, making it appropriate for dry yields like cotton, chillies and millets. Badhrkali Amman sanctuary is the most noticeable point of interest of Sivakasi, and the sanctuary celebrations constitute the significant celebrations of the town. The Sivakasi district has 33 wards, and there is a chosen councillor for each of those wards. As of the temporary populace aggregates of 2011 statistics, Sivakasi urban agglomeration had a populace of 234,688, with 116,869 guys and 117,819 females. The dominant part of the occupants is locked in an employment sector including match works, firecrackers and printing industry. In 2011 as indicated by Sivakasi Municipality, there were five government schools: two grade schools, one centre school, one secondary school and one higher auxiliary school.

Roughly 70% of the firecrackers and matches delivered in India are from Sivakasi. The hot and dry atmosphere of the town is helpful for the firecracker and matchmaking ventures. In 2011, Sivakasi, Tamil Nadu was home to more than 9,500 firecracker plants and delivered very nearly 90 percent of aggregate firecrackers and 500 match manufacturing plants giving 75 % matches yield in India.

Tamil Nadu has been in the spotlight for long in wording for its tyke work issue where guiltless kids fall prey to the exploitative work in fireworks and match businesses. The late fire mischances in 2012 (photograph) and 2013 in Sivakasi where groups of grown-ups and kids were discovered portray the issue hold on. Mostly children in the age gathering of 5‐15 work for over 12 hours a day and procure irrelevant total as wages for their extremely difficult work.

There are three classes of labourers in these enterprises one which is done in the plants, second in units/temporary workers premises and third in the homes. Steps taken to forbid and control are kept of the initial two while the locally established work is still uncontrolled.

Factors Contributing To The Child Labour In Sivakasi

1. Sivakasi gets meagre precipitation with a normal of 812mm yearly, which is lesser than the state normal of 1008mm which influences horticulture which is the significant wellspring of work.
2. Sivakasi and encompassing areas of Tamil Nadu are especially suited for manual match and Fireworks creation on account of the hot, dry atmosphere and vast work accessibility because of the scarcity of occupations.
3. The Government approach supporting little scale modern units that prompted the development of Match businesses in these territories.
4. The backwardness of the locale combined with a blend of traditions and custom that bolster the work of children in these businesses.

Demand And Supply Of Fireworks In Sivakasi

The demand of firecrackers in Sivakasi seasonal and are looked for not just amid the Diwali celebration yet a sprouting industry as crackers as utilised as a part of marriage parade, birthdays and so forth. But on the other hand to cater the one time one month demand the firecracker industry has to carry out the manufacturing process for the rest of eleven months. Hence, as and when the festival and celebrations are draws near the pressure to increase the production is acute. It is to be noted that the fireworks industry in Sivakasi is also exploring foreign markets and have even set up manufacturing units in China.

Firecracker Production Lines

A portion of the outstanding firecrackers businesses in Sivakasi are Jubilant Crackers Pvt Ltd., Aaa Fireworks Crackers Traders, the Coronation Fireworks Factory and so on. It is to be noticed that Om Siva Sakthi Crackers is one of the most recent firecrackers plants that went up on fire. Subsequently, the wellbeing of labourers is one of the primordial worries that commands firecrackers industry in Sivakasi.

Socio-Economic Effect Of Firecrackers

The principle flourishing power of firecrackers and match businesses in Sivakasi is because of the nearness of modest work. Despite the fact that the force of sending kids to industrial facilities is marginally diminished, the act of home‐based firecracker generation, empowered through a system of contractual workers and sub‐contractors, has picked up quality. Likewise, Children are found in outfits fabricating firecrackers after their school hours. The real social effect can be viewed as the children gradually get inundated in these generation ventures and missing out on their studies. They keep on remaining oblivious of the advantages of instruction which incorporates better than average living with no harm to their wellbeing and advancement. The monetary effect of including children is the disavowal of least wages to the grown-up and driving unemployment and masked work.

These circumstances guarantee that the groups required in these generation exercises stay in reverse keeping in mind the end goal to be effortlessly accessible for shoddy work. Also as the exchange, unionism is feeble in these regions the businesses flourish with no composed safe for least wages and other standardised savings benefits.

Health Consequences Of Laboring In Match & Fire Works

Asthma, eye contamination and TB are predominant among 90 for each penny of them who are included in black powder filling and are specifically in contact with the compound elements of crackers and matches. In fireworks children are included in stacking window boxes, settling the circuit, making paper funnels, filling rings and so on. These labourers typically don’t wear any defensive garments, and their entire skins are ordinarily secured with the chemicals, for example, sulphur, aluminium powder and explosive. Additionally, since kids are presented to this compound work at an early age with no satisfactory diversion or relaxation they get influenced mentally and notwithstanding verbal and physical mishandle.

Kids in these are for the most part paid on a piece‐rate premise. Instalment for a piece is low and therefore they are in a roundabout way compelled to work quicker and longer which likewise influences their wellbeing and nourishment.

The absence of wellbeing measures in industrial facilities in Sivakasi, the firecrackers business has been testing hazardously, attempting new procedures and synthetic blends, which the specialists do not expand the odds of real mishaps.

Some Of The Initiatives Taken

In 1996 as indicated by MC Mehta Judgment the Supreme Court gave certain vital bearing: so as to guarantee consistency with Child Labor (Prohibition and Regulation) Act, 1986, a business must be solicited to pay an entirety from Rs 20,000 as pay for each child utilized in negation of the arrangements of the Act (this Act covers rundown of perilous occupations and process which precludes work of Children under 14 years and incorporates firecrackers and match enterprises) ; The whole paid as pay ought to be kept in a store to be known as Child Labor Rehabilitation-cum-Welfare Fund; In those situations where it would not be conceivable to give work to the grown-up part, the fitting government would store an aggregate of Rs 25,000 consistently for every tyke utilized in a plant, a mine, or some other unsafe work, in the Child Labor Rehabilitation-cum-Welfare Fund; direction of kids’ work, conjuring correctional arrangements, guaranteeing instruction up to 14 years and so forth.

Legislature of Tamil Nadu constituted the District Child Labor Rehabilitation cum Welfare Fund to be directed by the District Child Labor Rehabilitation cum Welfare Societies officially constituted under the Chairmanship of the District Collectors concerned. GoTN apportioned a concede of Rs.1.25 crore to the State Child Labor Rehabilitation cum Welfare Society, for the period from 2003 to 2007 to execute the Action Plan for disposal of Child Labor. Amid 2007, the Government have to assist endorsed Rs.50 lakhs towards mindfulness and preparing exercises with respect to child work.

Moreover, National Child Labor Projects are working from 1996 in 12 regions, and some of them are upheld by UNICEF, in Palacode hinder in Dharmapuri locale of Tamil Nadu, as per the updated conspire, the month to month stipend of Rs. 100/‐ every month per child is dispensed simply after the kid is effectively mainstreamed into the formal arrangement of tutoring.

As of late on eighteenth May 2011 Perambulur locale was pronounced tyke work free region in regard to risky and non-perilous business both in composed and disorderly areas. The assertion has been made on the premise of reports acquired from town panchayat presidents, intentional associations and businesses’ associations. In any case, notwithstanding this improvement, the late reports of death in firecrackers and match businesses warrants genuine mediation.

Need For Stock Taking

1. Discussion to be held about the death of Children due to a major fire in a match box, fireworks units Sivakasi where they were employed.
2. Discussion to be held in the State Action Plan on the abolition of child labour with a specific focus on Sivakasi.
3. Discussions to be held on rescue, rehabilitation and repatriation of children working in various fireworks industries
4. Compensation and other entitlements for the children who had died or injured in various accidents in these industries.
5. Develop Action Plan to eliminate child labour in these industries.

The post What Are The Labour Law Compliances Required For A Firecracker Industry appeared first on iPleaders.

In this blog post, Arushi Chandak, a student pursuing her 2^nd Year Student, BA.LLB. (Hons.) from Symbiosis Law School, Pune, and a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, describes the different Industrial Dispute Settlement Machineries. 

A characteristic feature of society is a dispute. This is even more apt for an industrial society where conflict regularly takes place. The biggest conflict of these is that between the capital and labour. While it is possible to reduce and mitigate them, it is not practically possible to eliminate them. Each has their own demands and wants that they want to be fulfilled. The inherent inequality of an employment relationship places more power in the hands of employers and thus the question of distribution of the social product that is the outcome of the common effort of employers and workmen, the issue of the job security that is vital to an employee along with the growing yet constant urge of the workmen to climb the success ladder are some of the important factors that give rise to disputes in any industrial organization. Therefore, industrial disputes are those which arise between an employer or an employer’s organisation on the one hand and the workmen or trade unions of workmen on the other hand. These are on matters relating to an employer-employee relationship.

It has been said by Mr Justice Higgins that “the war between the profit maker and the wage earner is always with us; i.e., the war between those who argue for more investment and those who argue for a maintained or improved standard of living now.”[1]

In view of this, the Industrial Disputes Act, 1947 provides for four major industrial dispute settlement machinery:

1. Conciliation
2. Court of Inquiry
3. Voluntary Arbitration
4. Adjudication

Conciliation

Conciliation, a form of mediation refers to the act of making a passive and indirect effort in order to bring two conflicting parties to a compromise. It is the “practice by which the services of a neutral party are used in a dispute as a means of helping the disputing parties to reduce the extent of their differences and to arrive at an amicable settlement of agreed solution.”

The conciliator or mediator tries to remove the difference between the parties by persuading the parties to rethink over the matter with a give and take the approach but does impose his or her own viewpoint. The conciliator is at liberty to change his or her approach from case to case as he or she deems fit depending on other factors.

The Industrial Disputes Act, 1947 provides for conciliation, and can be utilised either by the appointment of conciliation officers; permanently or for a limited period or via the constitution of a board of conciliation. This conciliation machinery is at liberty to either take note of the dispute or apprehend dispute on its own or when approached by a party.

In order to expedite proceedings, time-limits have been prescribed. It is 14 days in the case of conciliation officers and 2 months for a board of conciliation. The settlement so arrived upon during the course of conciliation is binding upon the parties for the period that has been agreed upon by the parties or for the period of 6 months. It shall continue to be binding until revoked by either of the parties. During the pendency of the conciliation proceedings, before a Board and for seven days after the conclusion of such proceedings, the Act prohibits strike and lock-out.

Conciliation Officer:

Under Section 4 of the Industrial Disputes Act, 1947, the appointment of a such number of persons as is deemed fit by the appropriate government is provided for. This is with reference to the relevant jurisdiction in which the dispute falls.

For undertakings that employ 20 or more persons, the Commissioner/ Additional Commissioner/ Deputy Commissioner is appointed as the Conciliation Officer. But at the State level, some officers from the Central Labour Commission office are appointed as conciliation officers, in the case of Central Government. The conciliation officer enjoys the powers of a civil court, and he is expected to give a judgment within 14 days of the commencement of the conciliation proceedings. This judgement that is given by him is binding upon the parties to the dispute.

Board of Conciliation:

In case Conciliation Officer fails to resolve the differences between the parties, the government has the discretion to appoint a Board of Conciliation. The Board is tripartite and ad hoc body, consisting of a chairman and two or four other members.

The administrator is to be an autonomous individual, and different individuals are assigned in equivalent number by the Board tin view of the question. Conciliation procedures before a Board are like those that may occur before the Conciliation Officer. The Government has yet another choice of alluding the proceedings to the Court of Inquiry rather than the Board of Conciliation.

The apparatus of the Board is gotten under way when a debate alludes to it. As it were, the Board does not hold the pacification procedures voluntarily. On the debate being alluded to the Board, it is the obligation of the Board to do all things as it supposes fit with the end goal of initiating the gatherings to go to a reasonable and neighbourly settlement. The Board must present its answer to the legislature inside two months of the date on which the debate alluded to it. This period can be further stretched out by the administration by two months.

Court of Inquiry

If there should be an occurrence of the disappointment of the conciliation procedure to settle a question, the administration can choose a Court of Inquiry to enquire into any matter associated with or significant to debate. The court is mandated upon to present its report inside of six months and may comprise of at least one people to be chosen by the proper government.

The court of enquiry is required to present its report inside a time of six months from the initiation of enquiry. This report is therefore distributed by the administration within 30 days of its receipt. Not at all like amid the time of pacification, labourers’ entitlement to strike, businesses’ entitlement to a lockout, and bosses’ entitlement to reject labourers, and so forth stay unaffected amid the procedures in a court to an enquiry.

A court of enquiry is different from a Board of Conciliation. While the Board’s basic objective is to promote the settlement of an industrial dispute, a court of enquiry is primarily fact-finding machinery that aims at inquiring into and revealing the causes of an industrial dispute.

Voluntary Arbitration

On the disappointment of placation procedures, the conciliation officer may persuade the parties to refer the dispute to a voluntary arbitrator wherein the arbitrator alludes to getting the question settled since he is an autonomous individual picked by the parties included commonly and willfully.

As such, assertion offers an open door for an answer of the debate through an authority together delegated by the gatherings to the question. The procedure of intervention spares time and cash of both the gatherings which is generally squandered if there should be an occurrence of settling.

This form of voluntary arbitration became a popular method a settling differences between workers and management due to the advocacy of Mahatma Gandhi, who had himself applied it extremely effectively and successfully in the Textile Industry of Ahmedabad. However, voluntary arbitration received legal identity only in 1956 when the Industrial Disputes Act, 1947 was amended in order to include a provision relating to it.

This provision for voluntary arbitration was provided keeping in mind the lengthy legal proceedings and formalities and resulting delays that is involved in adjudication. But it is pertinent to note that the arbitrator is not vested with any judicial powers. He only derives his powers to settle the dispute at hand from the agreement entered into by the parties of opting to refer the dispute to the arbitrator. The arbitrator is required to submit his award to the government who shall then publish it within 30 days of such submission, and the award shall be enforceable only upon the expiration of 30 days of its publication.

Intentional intervention is one of the most democratic ways for settling industrial disputes and conflicts. It is the best technique for determining modern clashes and is a reasonable and fair supplement to aggregate bartering. It not just gives an intentional technique for settling industrial disputes, but on the other hand is a faster method for settling them.

This is because it depends on the idea of self-government in industrial disputes. Moreover, it abridges the extended procedures orderly on arbitration, suggests a solid demeanour and a created viewpoint; helps with fortifying the exchange union development and contributes for working up sound and cheerful modern relations.

Adjudication

A definitive solution for the settlement of industrial disputes is its reference to arbitration by a labour court or tribunals when conciliation fails to achieve a settlement with respect to the dispute or conflict. Arbitration comprises of settling debate through intercession by the outsider delegated by the legislature. The law gives the mediation to be directed by the Labour Court, Industrial Tribunal of National Tribunal.

A debate can have alluded to arbitration if the business and the recognised trade union consents to do as such. A question can likewise be alluded to arbitration by the Government regardless of the possibility that there is no consent of the parties in which case it is called ‘mandatory arbitration’. As has been mentioned before, the dispute may be referred to any of three sorts of tribunals relying upon the nature and certainties of the question in inquiries. This include:

(a) Labour courts,

(b) Industrial tribunals, and

(c) National tribunals.

The procedure, powers, and provisions with respect to the beginning of the award and time of operation of an award of these three bodies are comparable and similar. The first two bodies may be set up either by any State Government or by the Central Government. However the National Tribunal may be set up only by the Central Government when it believes that the adjudication of a dispute is of national significance. These three bodies are hierarchical in nature, and it is the Government’s privilege to refer a question or dispute or conflict to any of these bodies relying upon the nature of the conflict or dispute.

Thus, there exist several statutory ways to deal with Industrial Disputes and have been elucidated upon above.

Reference:

[1] Kahn-Freund, Labour Relations and the Law (1983) (3rd ed.) (London, Stevens)

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In this blog post, Deepak Sati, a student pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, describes the concept of constitutional values and labour welfare. 

Origin of Concept of Labour Welfare in India

Labour welfare activities arose in colonial India in reply to the need of cheap labours when; following the abolition of slavery in 1833, British colonies started importing Indian labours. British government passed legislations which led to the development of the concept of labour welfare in colonial India. The Apprentices Act of 1850 was passed with the objective of helping poor and orphan children to learn various trades by apprenticing them to craftsmen. The Fatal Accidents Act of 1853 aimed at providing compensation to the families of workmen who lost their lives as a result of an ‘‘actionable wrong.”

It was the Factories Act of 1881 which paved the way for the foundation of series of labour laws with the objective of bringing improvements in the working conditions of labours. The International Labour Organization (ILO) in its founding year, in 1919, recognised the importance of labour in the economic and social reconstruction of the world and suggested some changes in labour welfare schemes operating in India. The then government of the day, subsequently, enacted the Factories Act of 1922, which provided for the cap of 60 hours a week and 11 hours a day for both men and woman. The minimum age for child worker was set at 12.

Definition of Labour Welfare

The concept of labour welfare is a broad concept. It connotes a condition of well-being, happiness, satisfaction, conservation and development of human resource.¹

The Committee on Labour Welfare, 1969, noted that “labour welfare includes such services, as facilities and amenities as adequate canteen, rest and recreational facilities, sanitary and medical facilities, arrangement for travel to and from work and for the accommodation of the workers employed at a distance from their homes and such other services amenities and facilities as contribute to improve the condition under which workers are employed.”²

Labour Rights and Indian Constitution

Indian constitution provides numerous safeguards for the protection of labour rights. These safeguards are in the form of fundamental rights and the Directive principle of State policy.

Articles 14,19,21,23 and 24 comprise of fundamental rights promised under part III of the Constitution. Articles 38, 39, 39A, 41, 42, 43,43A and 47 form part of the Directive Principles of State Policy under Part IV of the Constitution, but they are not enforceable in a court of law.

Article 39, 39A, 41, 42, 43 and 43A collectively can be termed “Magna Carta of working class in India.”

Let us have a brief overview of these Articles‐

Article 14 commands State to treat any person equally before the law.

Article (19) (1) (c) grants citizens the right to form association or unions.

Article 21 promises protection of life and personal liberty.

Article 23 prohibits forced labour.

Article 24 prohibits employment of children below the age of fourteen years.

Article 39(a) provides that the State shall secure to its citizens equal right to an adequate means of livelihood.

Article 39A provides that the State shall secure the equal opportunities for access to justice to its citizens and ensure that such opportunities are not denied by reason of economic or other disabilities.

Article 41 provides that within the limits of its economic capacity the State shall secure for the Right to work and education.

Article 42 instructs State to make provisions for securing just and humane conditions of work and for maternity relief.

Article 43 orders the State to secure a living wage, decent condition of work and social and cultural opportunities to all workers through legislation or economic organisation. And

Article 43A provides for the participation of workers in Management of Industries through legislation.

Principle of equal pay for equal work and Indian Supreme Court

The principle of equal pay for equal work is enshrined in Article 39(d) of the Constitution. For the first time, this principle was considered in Kishori Mohanlal Bakshi v. Union of India³ in 1962.Supreme Court then ruled that it was not capable of being enforced in a court of law. The Apex court changed its mind in 1982 when in Randhir Singh v. Union of India⁴, through a 3 judge bench, it held that:

The principle of ‘equal pay for equal work’, which meant equal pay for everyone irrespective of sex, was deducible from preamble and Articles 14,16 and 39(d) of the Constitution. The principle of equal pay for equal work w as held to be applicable to cases of unequal scales of pay, based on classification or irrational classification, though both sets of employees(engaged on temporary and regular basis, respectively) performed identical duties and responsibilities.

In DS Nakara v. Union of India⁵ (1983) where the subject matter was related to pension, not a wage, speaking through the constitutional bench of five judges, it observed that:

Article 38(1) enjoins the State to strive to promote the welfare of the people by securing and protecting as effective as it may a social order in which justice‑ social, economic and political shall inform all institutions of the national life. In particular, the State shall strive to minimise the inequalities in income and endeavour to eliminate inequalities in status, facilities and opportunities.Art.39 (d) enjoins a duty to see that there is equal pay for equal work for both men and women and this directive should be understood and interpreted in the light of the judgement of this court in Randhir Singh v.Union of India (1982).

The jurisprudence developed through these two case laws was recently applied by the Apex Court in the case of State of Punjab v.Jagjit Singh⁶ (2016) where it held that temporarily engaged employees(daily wage employees, ad‐hoc appointed on casual basis , contractual employees and the like),are entitled to minimum of the regular pay scale, along with dearness allowance(as revised from time to time )on account of their performing same duties, which are discharged by those engaged on regular basis, against sanctioned posts.

Endnotes:

1. P. Tyagi, “Labour Economics and Social Welfare”, page no 601, 2004
2. Report of the Study Team Appointed by the Government of India 1969, opacity p.32
3. https://indiankanoon.org
4. Ibid
5. Ibid
6. http://supremecourtofindia.nic.in/FileServer/2016-10-26_1477486855.pdf 

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In this blog post, Pooja Vasandani, a student pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, analyses the Payment of Bonus Act, 1965.

The Payment of Bonus Act, 1965 provides a statutory right to employees of an establishment to share the profits of his/her employer. As per this Central Act, any employee who was drawing a salary or wage not exceeding ten thousand rupees per month was eligible to be paid a bonus.

Section 2 (13) of the Act states that, “employee” means any person (other than an apprentice) employed on a salary or wage not exceeding ten thousand rupees per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied.

As per Section 12 of the Principal Act which lays down the ‘Calculation of bonus with respect to certain employees’– Where the salary or wage of an employee exceeds three thousand and five hundred rupees per mensem, the bonus payable to such employee under section 10 or, as the case may be, under section 11, shall be calculated as if his salary or wage were three thousand and five hundred rupees per mensem.

For the purposes of calculation of the bonus to be paid to an employee under the Principal Act, INR 3,500 (Indian Rupees Three Thousand Five Hundred) per month was the maximum amount taken even if an employee was drawing up to INR 10,000 (Indian Rupees Ten Thousand Only) per month.

Amendments To The Principal Act

As per the Amendment, the words “ten thousand rupees” in Section 2 (13) have been substituted for the words “twenty one thousand rupees”.

Further, in Section 12 of the Principal Act, for the words ”three thousand and five hundred rupees” at both the places where they occur, the words ”seven thousand rupees or the minimum wage for the scheduled employment, as fixed by the appropriate Government, whichever is higher” has been substituted.

The following Explanation was inserted at the end, namely:- ‘Explanation.

For the purposes of this section, the expression ”scheduled employment” shall have the same meaning as assigned to it in clause (g) of section 2 of the Minimum Wages Act, 1948 (11 of 1948).’

Payment of Bonus (Amendment) Bill, 2015 to enhance the monthly bonus calculation ceiling to Rs 7,000 per month from existing Rs. 3,500 was approved by Union Cabinet here,” a source said after the Cabinet meeting. The amendment bill will be made effective from April 1, 2015. Now the bill will be tabled in Parliament for approval.

The bill also seeks to enhance the eligibility limit for payment of bonus from the salary or wage of an employee from Rs. 10,000 per month to Rs. 21,000. The Payment of Bonus Act 1965 is applicable to every factory and other establishment in which 20 or more persons are employed on any day during an accounting year. The bill also provides for a new proviso in Section 12 which empowers the central government to vary the basis of computing bonus.

At present, under Section 12, where the salary or wage of an employee exceeds Rs. 3,500 per month, the minimum or maximum bonus payable to employees are calculated as if his salary or wage were Rs. 3,500 per month. The last amendment to both the eligibility limit and the calculation ceilings under the said Act was carried out in 2007 and was made effective from April 1, 2006.

This amendment in the Act to increase wage ceiling and bonus calculation ceiling was one of assurances given by the Centre after 10 central trade unions went on one-day strike on September 2.

The government had hinted at meeting workers’ aspirations on nine out of 12 demands submitted by the unions.

Analysis

The Amendment has sought to make more employees eligible for bonus by raising the ceiling limit of the monthly wages. The Amendment also increases the amount of bonus that would be received by the eligible employee as against the Principal Act which provided that the bonus payable to an employee will be in proportion to his or her salary or wage. However, if an employee’s salary is more than INR 3,500 per month, for the purposes of calculation of bonus, the salary will be assumed to be INR 3,500 per month. After the Amendment, this limit has been enhanced to INR 7,000 per month or the minimum wage for the scheduled employment (whichever is higher).

Although the Amendment received the assent of the President of India on 31 December, 2015, the Amendment shall be deemed to have come into force on the 1st day of April, 2014. Hence, it has a retrospective effect. This would mean that the employees who have already been paid a bonus for the financial year 2014-15, would now become eligible for arrears. The employees who draw a salary between INR 10,000 and INR 20, 999 per month would be eligible for bonus starting from the financial year 2014- 2015 due to the retrospective nature of the Amendment. The labor intensive industries would have a significant impact as the differential/balance amount for the financial year 2014-105 would have to be provided in the current financial year to the employees. However, no specific date for the payment has been provided for in the Amendment.

Registers

Every employer is required to maintain the following registers in the prescribed form:

1.Register showing the computation of allocable surplus (Form A)
2.Register showing the set-on and set-off of the allocable surplus (Form B)
3.Register showing the details of the amount of bonus payable to each of employees, the amount of deductions if any, and the amount actually paid. (Form C)

Returns

The employer is also required to send an annual return to the Inspector appointed under the Act within 30 days from the expiry of time limit specified in Section 19 for payment of bonus. (Form D)

Case Law: Shashikant Janardan Pimpalpure Vs Development Corpn. Of Vidarbha On 20 February, 1995

The respondent No. 1 Corporation filed reply to the application and contested the claim of the petitioner. The respondent set up the defense that the petitioner was not employee of the respondent Corporation, but was appointed in Carpet Weaving Center only and is on the rolls of that establishment only. According to the respondent Corporation, Carpet Weaving Center was totally separate and distinct from the Corporation and had no resemblance to the terms of employment of the employees of the respondent Corporation. The Corporation set up the plea that since the Carpet Weaving Center was a training center and an educational institution and has no profit motive, bonus was not payable under the Payment of Bonus Act. The Corporation also set up the defence that the said Training Center has not completed five years of service and on that ground under Section 16 of the Payment of Bonus Act, the employee is not entitled to the payment of bonus.

The first and foremost question which requires consideration is, whether an application underSection 33-C(2) of the Act of 1947 is maintainable seeking payment of minimum bonus under the Payment of Bonus Act. Admittedly, the petitioners are only seeking minimum payment ofbonus under the Payment of Bonus Act. It is also admitted that before filing of the application under Section 33-C(2) of the Act of 1947, there was no order for payment of bonus to the present petitioner under the Payment of Bonus Act. Scope of Section 33-C(2) of the Act of 1947 is now well settled and does not require any debate. The right to the benefit which is sought to be computed under Section 33-C(2) must be an existing one and that is to say, already adjudicated upon or provided for and must arise in the course of and in relation to the relationship between the industrial workmen and his employer.

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In this blog post, Pritishree Dash, a student, pursuing her fourth year LLB at National University of Advanced Legal Studies, Kochi and a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses the applicability of the Standing Orders Act to Karnataka’s IT Industry. 

Introduction

The Industrial Employment (Standing Orders) Act, 1947 is designed to provide service rules to workmen. There are ‘service conditions’ or ‘service rules’ for various employees like Government employees, bank employees, LIC employees, etc. The object of the Act is to require employers in industrial establishments to define with sufficient precision the conditions of employment under them and to make the said conditions known to workmen employed by them. The case of Agra Electric Supply Co. Ltd. v. Aladdin, (1969) 2 SCC 598 provides the object of the Act to have uniform Standing Orders providing for the matters enumerated in the Schedule to the Act, that it was not intended that there should be different conditions of service for those who are employed before and those employed after the Standing Orders came into force and finally, once the Standing Orders come into the force, they bind all those presently in the employment of the concerned establishment as well as those who are appointed thereafter. Under Section 2(e) “ standing orders” mean rules relating to matters set out in the Schedule of the Act.

The Act applies to all ‘industrial establishments’ employing 100 or more workmen [Section 1(3)]. ‘Industrial Establishment’ means (i) an industrial establishment as defined in section 2(i) of Payment of Wages Act (ii) Factory as defined in section 2(m) of Factories Act (iii) Railway (iv) Establishment of contractor who employs workmen for fulfilling contract with owner of an industrial establishment. [Section 2(e)]. ‘Workman’ derives its meaning under section 2(s) of Industrial Disputes Act. [Section 2(i)]. ‘Workman’ includes skilled, unskilled, manual or clerical work. However, ‘workman’ does not include employees engaged in managerial or administrative capacity or supervisory capacity neither does it include workers subject to Army Act, Navy Act or Air Force Act or to police or prison services.

Standing Orders

Every employer covered under the Act has to prepare ‘Standing Orders’, covering the matters required in the ‘Standing Orders’. The draft standing orders submitted under this section shall be accompanied by a statement giving prescribed particulars of the workmen employed in the industrial establishment including the name of the trade union, if any, to which they belong. Five copies of these draft standing orders should be sent to Certifying Officer for approval within six months. [Section 3(1)]. ‘Certifying Officer’ means Labor Commissioner and any officer appointed by Government to be ‘Certifying Officer’. [Section 2(c)]. The Certifying Officer will inform the Trade Union, if any or workmen and hear their side after which, he will certify the ‘Standing Orders’ for the industrial establishment after the necessary modifications and shall within seven days send the certified order to the employer and the workmen. [Section 5].  Till standing orders are certified, ‘Model Standing Order’ prepared by Government will automatically apply. These are automatically applicable till employer prepares his own ‘Standing Orders’, and the same are approved by ‘Certifying Officer’. [Section12A]. Standing order should be displayed in English and local language on special notice boards at or the near entrance of the establishment. [Section 9]. Modifications of Standing Order shall be done by adopting a similar procedure. [Section 10].

As has been held in the case of Eicher Goodearth Ltd. v. R K Soni (1993), Once the ‘Standing Orders’ are certified, they supersede any term and condition of employment, contained in the appointment letter. If there is an inconsistency between ‘Standing Order’ and ‘Appointment Letter’, the provisions of ‘Standing Order’ prevail. In the case of Rajasthan SRTC v. Krishna Kant (1995), it has been held that standing orders are binding on employer and employee. These are statutorily imposed conditions of service. However, they are not statutory provisions themselves. This means that the ‘Standing Orders’ even when approved, do not become ‘law’ in the sense in which Rules and Notifications issued under delegated legislation become after they are published as prescribed.

‘Standing Orders’ become essential in the case of disciplinary action. A workman can be punished only if the act committed by him is a ‘misconduct’ as defined under the ‘Standing Orders’ (Nulla poena sine lege). The ‘Model Standing Orders’ contain such acts like insubordination, disobedience, fraud, dishonesty, damage to employer’s property, taking a bribe, habitual absence or habitual late attendance, riotous behaviour, habitual neglect of work, strike in contravention of rules, etc. as misconducts. The ‘Certified Standing Orders’ may cover other acts as ‘misconduct’, as approved by ‘Certifying Officer’.

IT Policy Of The Government Of Karnataka

The latest IT policy of the Government of Karnataka, the Karnataka I4 Policy – in which the 4 “I”s stand for IT, ITES, Innovation and Incentives, had announced the intention of the Government to exempt IT, ITES, ‘startups’ and ‘knowledge-based’ industries (the Notification has exempted not only IT/ITES establishments from the provisions of the SO Act, but also ‘startups, animation, gaming, computer graphics, telecom, BPO, KPO and other knowledge-based industries’ (Covered Establishments) from the ambit of the SO Act, with the intent of making Karnataka an investor/ industry-friendly destination. Information technology (IT) and IT-enabled Services (ITeS) establishments in Karnataka are exempted from compliance under the Industrial Employment (Standing Orders) Act of 1946, per recent Notification by Government of Karnataka for 5 years from January 25, 2014, subject to the following conditions:

1. The establishment shall constitute an Internal Complaints Committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder.
2. The establishment shall set up a Grievance Redressal Committee to address complaints of employees in a time bound manner.
3. The establishment shall intimate the jurisdictional Deputy Labour Commissioner and the Commissioner of Labour, Karnataka about cases of disciplinary action, suspension, discharge, termination, demotion, dismissal, etc., of its employees. However, the Notification does not clarify either the period within which such information should be communicated; or the level of detail it should contain. Companies are required to submit an annual return under the Karnataka Shops & Commercial Establishments Act, 1963 (S&E Act). This includes information about the number of suspended or terminated/ discharged/ retired employees in a year. If the labour authorities make it mandatory that with this annual return, employers must also provide actual facts and details of the event and the disciplinary action taken after the occurrence of every incident, it will impose an obligation on such companies that is extremely onerous and unparalleled as compared to any other industry.
4. The employer shall ensure prompt submission of any information regarding the service conditions of the employees sought by the jurisdictional Deputy Labour Commissioner or Commissioner of Labour, Karnataka. (http://www.bangaloreitbt.in/docs/2014/Labour-Notification-dated-25th-jan-2014.pdf)

The Notification does not define terms such as ‘knowledge-based industries’ which can cause confusion as to whether non-IT/ITES businesses such as consultancies, pharmaceutical businesses, financial services and engineering R&D enterprises can also claim an exemption under the Act.

The conditions imposed on exempt establishments might not be novel or unique, yet the wording of the notification is prone to confusion and could possibly expose the industry to even greater regulation and scrutiny than intended. It is important for the government to, therefore immediately clarify the various ambiguities that are inherent in the Notification i.e. the nature of the organisations intended to be exempted and also the intention in clear terms.

References:

• http://www.trilegal.com/index.php/publications/analysis/karnataka-government-clears-the-air-exempts-it-companies

• http://www.nasscom.in/sites/default/files/policy_update/IT%20Sector%20in%20Karnataka%20exempted%20from%20Standing%20Orders%20Act.pdf

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In this blog post, Shruti Sharma, a Legal Associate at BetterPlace Safety Solutions Pvt. Ltd. who is currently pursuing a  Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, gives a brief overview of the amendments brought under the Child Labour Act. 

Introduction

The major concern for the whole world is child labour. It has been affecting one and all in an undesired manner.

Child labour is nothing but a practice where a child is forced to work to fulfil the basic needs of their family. In a developing country like India, the practice of child labour has been increasing rapidly. The foundation and assets of every country are its children who add values to its country, but through the practice of child labour, these assets are being turned into a liability.

Rather than children being healthy and educated, they are forced to work in both hazardous and non-hazardous industries.

India being the most populated country with around 45% children under 18 who are engaged in the vicious trap of child labour.

History of the Child Labour Act

India passed legislation in 1977 prohibiting bonded labour by anyone.

After this legislation still the cases for child labour were reported. Then in 1979, Gurupadswamy Committee was formed by the government to deal with this problem.

Later, The Child Labour Prohibition and Regulation Act was enacted based on the recommendations of the committee in 1986.

Constitution of India

India has passed various laws since Independence on the problem of child labour.

As per the Article 24 of our constitution, employment of children below 14 years in factories, mines and other hazardous employment is prohibited.

Just to curb the problem of child labour, a new fundamental right has been added to our constitution in 2005 as article 21A which states that state shall endeavour to provide free and compulsory education to all children whose age is between 6 to 14 years.

These efforts are an exemplary where a country wants an each and every child to be educated and earn a good livelihood without getting into the trap of child labour.

Our constitution not only includes the prohibition of child labour as our fundamental rights but also as per our Directive Principles of state policy under Article 39 (e) and (f) which clearly states that India should secure the health and strength of the children and are not abused. Just because of the economic condition of the citizens they are forced to work which is not suitable for their age and health. Moreover, it is the duty of India to secure that equal opportunities should be provided to children so that they can develop in a healthy manner and their youth should be protected against all kinds of exploitations.

Further in this regard our constitution under Article 45 and 47 shall endeavour to provide care and education for all the children below 6 (six)years of age and raise their standard of living and health.

India shall consider them as their primary duties.

Directive principles of states policy is a mission, aim and an objective of any country which strives to meet in the near future and uproot even the least possibility of activities which directly or indirectly hinders and interferes with our basic concepts of freedom, equality and to live with dignity enshrined in our constitution.

As known to every citizen that unlike our fundamental rights, the Directive principles of state policy are not enforceable by law, therefore an act was enacted as The Child Labour (Prohibition and Regulation) Act, 1986 which comprises the major issues of the child labour problem.

Child Labour (Prohibition and Regulation) Act, 1986

ChildLabour Prohibition and Regulation Act also prohibit the employment of children below 14 years of age.

Moreover, the list includes 83 occupations where employment has been prohibited.

The Act also provides penalties for the violators.

This Act has been categorised mainly into two parts:

The first part prohibits child labour in totality and second part prohibits child labour in the particular establishments.

Amendments to the Child Labour Law

Parliament has passed child labour Prohibition and Regulation Amendment Bill 2016 after 30 years to ban child labour till the age of 14 years.

The major amendment which took place is as per sec 3 “No child shall be permitted or allowed to work in any occupation”.

The word “child” has been defined under Sec 2 sub-clause (ii) as the person below 14 years of age.

The amendment which has become the conundrum for the public is that the Parliament continues to allow children to work in the family-based enterprises.

An exception clause has been added which states that:

• The child can work to support his/her family after the school hours or during vacations but not in the hazardous occupations as set forth in the schedule of the Act;
• The child can work in the entertainment sector provided their education is not affected by the work.

It is the term “help” which has been made a criterion to perform work or not and can turn out to be the biggest lacunae in the Child Labour Act. As earlier also the children were being exploited in the name sake of the family work like working in the bangle making factories, zari works, carpets, etc.

A new term has also been defined in the act named “Adolescent” which means who has completed 14 years of age but not completed 18 years.

It means ADOLESCENT= 14 YEARS TO 18 YEARS.

So, even the adolescents have been prohibited from working in hazardous enterprises subject to the notification of Central Government where they can permit them to work.

New sections 14A, 14B, 14C and 14 D, has been inserted into the new Act.

As per section 14 A, the offence under child labour has been made as a cognizable offence no matter what has been provided in the Criminal Procedure Code.

The term “cognizable offence “has been defined under sec 2(c) of Crpc “. It is an offence where the police officer doesn’t require the permission or authority from the jurisdictional Magistrate before investigating the case and issue warrants”. Therefore, by making the offence under child labour act cognizable it has made quick and easy for the public to get the investigation being done and lodge an F.I.R against the culprits.

Secondly as per section 14B and C, The government has made provisions for not only

Punishment for the employers but also for the rehabilitation of the victims of this child labour practice.

The government shall constitute a Fund named as “Child and Adolescent Labour Rehabilitation Fund” in every district where the fine realised from the accused employer shall be credited.

In addition to this, the Government shall also deposit Rs 15,000 in the fund of the victim child.

Moreover, the exclusive power has been provided to the District Magistrate (DM) as he may on the application of the accused compound the offence if committed for the first time.

The compounding can be made in any ways like paying compensation to the victim child etc.

In the same lines, the punishment has also been amended in two different categories:

• In the case of “child.”

The imprisonment shall be for a term which shall not be less than 6 months but which may extend to two years if a person employs any child or permit any child to work in contravention to section 3 as provided in the act.

• In the case of “Adolescent.”

The imprisonment shall be for a term which shall not be less than 6 months but which may extend to two years or with fine which shall not be less than twenty thousand rupees, but it can be extended to fifty thousand rupees; if a person employs any child or permits any Adolescent to work in contravention to Section 3 as provided in the Act

Suggestions to eradicate child labour

The following measure can be adopted to uproot this problem from India:

• We and the government should come forward and take certain stern actions.
• Even though as per 85^th amendment in our Constitution, free and compulsory education has been provided to children between 6 years to 14 years, the government has to probe into its implementation part.
• The industries which employ child labour should not be provided with the subsidies or any other government benefits.
• Even if adolescents are being permitted to work, then their working hours should be reduced so that they can attend school and gain an education.
• Poverty and Population are the two main root cause of the child labour in India which needs to be controlled by methods being suitable for both the government as well as the public.
• The employers should be sternly punished if found promoting child labour in their industries.
• The most important weapon which can curb this problem is awareness and education among the youths. The youths of our country should come forward and educate the poor families and encourage them to send their children to school because ultimately education can only remove poverty in future and stop the children being entrapped in the vicious circle of child labour.
• Schools should also start providing vocational education or training so that the poor children can learn and earn at the same time.

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In this blog post, Sanjay Khan Chowdhury, who is currently practising under a Senior Advocate in Calcutta High Court and is also pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, explains how labour legislation can promote the Make in India scheme. 

In the year 2015, India stood at 142 as against 182 on ease of doing business along with its labour laws, which make nothing for doing business. After a long echo for labour reforms, it gathered momentum initiated by make in India and ease of doing business. The Indian government desperately needed to reform their labour law, which was seen as a big hindrance to its economic growth and find its utility null and void in growing space of time. It was time that the government bring a globe of change in its labour laws to accelerate business and address new issues to labour sector. It was also time that India learnt to do what its closest competitor China is doing. Indeed, to compete with China was seen as an uphill task and massive changes where needed to compete with its closest competitor and neighbour. In India, currently, there are more than 400 labour laws for central and state combined. Thus, the problem of labour laws needs close and deep introspection. It has also been accused many times that these laws neither has any benefit nor strength for working for population and at the end, they better serve the employer rather than employees. In desperate need for reforms, there are several changes that the government of India needs to inculcate if it wants to really change the domain of its manufacturing sector.

What reforms can the current government bring to change the present scenario of Indian industries? The task is tough but not impossible to achieve the goal of global manufacturing hub. The changes that are urgently and immediately needed are divided into seven parts.

Uniform labour laws

At present- there are around 400 local and national laws prevailing throughout the country. Around 26 crores more or less population is involved in agriculture and around 10 crores are involved in the unorganized sector like construction and retailing. Interestingly none of them are fully covered under the prevailing labour laws. Out of 9 crore workers in the organised sector, only 3 crores including public and private sector combined together are covered by existing law as per the data provided by R.B.I. It’s a very depressing figure for a country whose population is skyrocketing at around 120 crores. India has a lot of sector-specific law which makes lots of overlapping problems and issues which needed to be addressed at the earliest. As a result of such sector-specific law, many companies tend to hire employees on a temporary basis rather than permanent. Some of that laws are payment of wages (Air Transport Services) Rules 1968, Sales Promotion Employees (Condition of Service) Act 1976” etc.

Compound existing law that have a common Application and Objective

The Government should rationalise the prevailing labour law, which has common application and objective. For example, according to prevailing labour law, a labourer in the state of Tamil Nadu under Minimum Wages Act is entitled to Rs. 346.20 per day (laundry and washing clothes) and a labourer in the state of West Bengal is entitled to Rs 245 per day In the fountain and ball point industry, yet we all know how much they are paid. Indeed, they are paid a needle as compared to their sanctioned wages. The Government should draw a uniform way of payment of wages of labourers throughout the country keeping in mind the living standard and inflation. This would save up lots of resource of the government and in a way, could bring about awareness among the labourer of the country. The Act covering various facets of the society like child labour, maternity benefits, bonded labour can all be clubbed together as one single Act since they all intend to achieve a single objective. These Multiple Oceans of law deprived the employer in seeking employees in turn they hesitate and out of a problematic situation of legal compliance they end up depriving the economics of scale.

Relax Retrenchment of Labour

This is one most politically charge up problem backed by left and allied group who call them as the protector of working class (bourgeoisie and the proletariat Marxism theory). But Interestingly it only tends to and is supported by mere 3 crores of working for the population in the country out of 120 crores which seem laughable and nonsense. In my firm, most opinions neither as socialist nor as a capitalist liberalise retrenchment can be the single, most dominant reform that can withstand nuclear blast India prospect of global Manufacturer.

Employees of the Rolls-What!

The government in the past have been unsuccessful in monitoring labour compliance by the employer to the industry in organised Sectors, forget about the unorganized sector. According to the existing law, employers are responsible for maintaining Labour compliance and also labour who are in contract with them. It’s when the employees added additional labour through contract when labours went down. Thus, the employer appoints contractors who in turn provide them with contract labour which in turn pay them much less as what sanctioned by law since they do not fall under the prevailing labour laws on Rolls. Even with that, the Employers appoint Contract Labour for a shorter duration for fear of legal compliance leading to further miniaturisation. The simple solution would be that of providing compliance standard simplified.

Education Cum training and Redevelopment

This is a genuine issue which the Industrial Dispute Act has horribly failed to address. As the Godfather of all the labour laws which are the Industrial Dispute Act 1947, its basic crux is to prevent indiscriminate Hiring and firing. The Industrial Dispute Act has caused serious issue of economic and socio strata. They make the running of industries and its expand very difficult. Thus, large scale industries for example Jute Industry in West Bengal has been totally wiped out by lockouts and bankruptcy of the companies eventually dying out. The labour should be provided with adequate training as in the case of retrenchment or firing, they can be transferred or job ready for another work. The labourer should be provided with the imparting technical vocational skill to the labour and that in the case of retrenchment they can be successfully placed somewhere else. The best way to function would be to create an independent body like worker welfare and education on pan India basis comprising of Intellectual, Academia, Technician, etc. And the existing body like National Productivity Council Employment which in my opinion belong to stone age should immediately be disbanded and thrown in the garbage. Yet it’s not easy but not impossible as well.

Create a New Transparent and efficient Dispute resolution mechanism

At present disputes of the employees take lots of time and are full of legal hassle. The present Industrial Dispute and its procedure are of Stone Age loaded with work and are inadequate to handle today modern dispute. Thus, there is urgent need to reform the Industrial Dispute Act way of Labour issue to effective resolution and time bound disposal of issues. I would suggest that Arbitration would be of immense help if it is applied. It can be very fast and purposeful in applicability and well suited to the present-day environment. The government should also try to bring awareness among the labourer of their right and duties through its efforts.

Exclusion with Compensation

The labours in India is unsecured and are not eligible for compensation after expulsion. Its seems after so many years of Independence still the government of the country lacks behind in the fundamental issue of governance in the country. The stability and economics of the labour in India is still a problematic issue whereas a worker in Maruti manufacturing enjoys a benefit of Compensation where a person working under IT with one-third does not so. Some of the Labour Laws were implemented in the country on the basis of our Socialist belief, but it seems that instead of being helpful to the labour community its null and void in its applicability. The depressing part is that we claim of the global power cum developed nation yet we fail in providing basic fundamental issue concerning the majority of the country.

The best example to India would be that of China where it has strengthened its labour after 2007, providing both improved condition and rights of their citizens. The changes are coming through states like Rajasthan, which has brought an overhaul of it labour laws and showing the way. According to Rajasthan labour law (New), an Industrial establishment employing about 300 workers can retrench its employees without seeking government approval. The threshold of the number of employees for the purpose of Factories Act has been increased from 10-20 (in electricity powered) and from (20-40 in without power). Thus this will certainly lower red tapism and paperwork related issues in small units. Thus, the central government should learn from its states on amending their archaic laws. China with its flexible and adaptive business and labour laws where the investor finds India rigid and restrictive. India’s participation at the World Trade Organization is sad with no keen interest or enthusiasm as if it maintains an anti-WTO stand losing its number 1 position. Trillion dollars in 2014 with little scope anytime soon with the European Union or Trans-Pacific Partnership agreement. The pending goods and service tax (GST) can also be helpful in providing a climate for boosting Economy and Manufacturing sector in the country. Yet the task for the global giant in manufacturing seems bleak but through reformed law and right attitude India can write a marvellous history and can change the course of its own path.

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In this blog post, Sanjay Kumar Jha, who is pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, describes the minimum wage structure for unskilled labourers in the agriculture sector. 

Minimum Wages Act 

One of the earliest legislations in India, the Minimum Wages Act was enacted in 1948, immediately after the country got independence. The Act derives its principle from Article 43 of Constitution of India which mandates that ‘The State shall endeavour to secure, by suitable legislation or economic organization or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage conditions of work ensuring a decent standard of life, and full enjoyment of leisure and social and cultural opportunities in particular’ to ensure a fair deal to the labour class. It also takes care of Article 39 of Constitution of India which directs that both men and women shall have equal pay for equal work and shall have right towards securing an adequate livelihood.

Minimum wages means the legally enforceable lowest limit of wage in a given industry in a given State fixed by the process of invoking the authority of the State. The minimum wage must provide, not merely for bare sustenance of life, but also for preservation of the efficiency of the worker by providing for some component of payment towards education, medical & amenities. Minimum Wages Act in India is a welfare Act applicable to the workers in the unorganised sector who lack the collective bargaining and are likely to be exploited. Hon’ble Apex Court of India during passing a judgment in one of the case has observed that the Minimum Wages Act is a piece of social legislation, which protects the day to day living conditions of sweated labour.

Minimum wages Act 1948 provides for fixation of minimum wages by the appropriate governments at the Centre and State for different scheduled employments under their respective domains for different time periods.

In our country, there is no uniform nationally applicable minimum wage. The minimum wage is sector/occupation driven and varies across different industries in the same State and across States for the same Industry. Time and again there has been demand for evolving a National Wage Policy. But fixation of wage depends on some criteria like local conditions, cost of living, paying capacity of Industry, etc., it is difficult to maintain uniform wages throughout the country.

Payment of minimum wages for the persons deployed towards a job for which he is giving labour and time for an output is a legal requirement & the employer is legally liable to make payment of minimum wages & keep proper records of having paid it.

Labourers in Various Sectors

As regards deployment of unskilled labourers in the agriculture sector, they are normally engaged in farming and related activities i.e. ploughing, seed & pesticide spray on farms, production of seeds & allied associated jobs.

If we go by the type & practice of employment in the agriculture sector, labourers may be classified into casual and attached workers. Under the casual system, the labourers are engaged on job basis for which requirement is huge at the seasonal time and very thin during offseason. They remain unemployed during off season or are able to keep themselves engaged in other activities, at times. Under attached system, a person is engaged on a yearly basis for almost entire job. The output derived by the labourer in attached system is divided between the landlord & the labourer in predefined proportion. In fact, attached system is relatively better system as the labourers are co-sharers in this case. But, this also does not assure a minimum guaranteed return to such labourers.

Labourers in the agriculture sector are not well organised. Moreover, female participation in the workforce is higher in agriculture than in any other sector of the economy. Besides, child labour is also engaged in agriculture on a substantial scale.

Seed production is also a branch of agriculture and is a fast growing industry in India. The industry is supposed to be better organised as these are normally managed by MNCs as well as local companies. However, sample survey with regard to the condition of labourers deployed in these sectors do not reveal a good picture of such labourers, and they also face exploitation by their employers.

It has been observed that payment of minimum wages is an issue in the agriculture sector in general and seed manufacturing company in particular. There is undercutting of wages as well as gender discrimination also exists while making payment to male & female labourers.

The purpose of above illustrations is just to indicate the reality that there is no defined rule of employment & wages admissibility in the agriculture sector for unskilled labourers in particular & all other class of labourers generally deployed in the agriculture sector.

Labourers are classified in following categories broadly

1. Unskilled
2. Semi-skilled/supervisory
3. Skilled
4. Highly skilled

The government has notified minimum wages for all the above categories. Both central and state government issues notifications for minimum wages to be implemented in various sector of industry/work under their jurisdiction. The wages constitute two components (Basic & VDA). While the basic remains fixed for a defined period, the VDA gets on revising time to time on the basis of the average Consumer Price Index for the agriculture sector. VDA varies for different areas as per classification of cities of A, B & C.

The above relates to the concept and statutory provisions of Minimum Wages Act.

However, if we really look at the implementation of provisions, the situation is not good at the ground level particularly in agriculture sector and in general in other unorganised sector. The general observation is that workers get less than minimum wages. It is mainly because the agriculture unskilled labourers are mostly unorganised & unaware of the guidelines/notifications on minimum wages. Moreover, there is acute unemployment, low income in some of the States from where labourers migrate to other cash-rich States who engage then as agriculture labourers at a very low cost. Labourers migrating from Bihar, UP, Orissa to Punjab, Haryana for agriculture purpose is a common phenomenon. These labourers are poor chaps and are prepared to work for any wages rather than being unemployed. Further, calculation of Minimum Wages is a cumbersome exercise and often beyond the capability of the small scale unorganised sector employer and most often beyond the awareness level of employee.

In 2005, the Government of India came up with a legislation titled ‘ Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) which gives security of livelihood in rural areas of the country by providing at least 100 days of guaranteed wage employment in every financial year to every household whose adult member is willing to do unskilled manual work.

Practical issues involved in implementing the minimum wages

Now, we will like to know the practical issues involved in implementing the minimum wages at ground level.

Enforcement of minimum wages is done by both the Centre and State Governments within the respective spheres where they notify the minimum wages. Inspecting officers of the labour department at the Centre and State notify the minimum wages. Inspecting Officers of the labour department at the Centre and State conduct regular inspections and in the event of less payment of minimum wages advise the employer for corrective actions. In the case of non-compliance, penal action can be invoked against the employer as per Act.

The multiplicity of minimum wages rates across Centre & State and across occupations does create difficulty in implementation of Minimum Wages. For the most common occupation, say agriculture, 33 States/UTs have different Minimum Wages rates fixed by them. While Delhi has the highest Minimum Wages rates for unskilled agriculture labourers, the UT of Pondicherry has the lowest.

Generally, it is seen that workers get less than minimum wages. Reasons mentioned for poor enforcement include less of enforcement staff as compared to a number of establishment covered by the Act, Ignorance of labourers and often employers also regarding their rights and privileges, delays in justice when a claim for nonpayment of minimum wages are filed before authorities.

The survey of prosecutions and convictions made under the Act reveals that very few cases have been taken up under the Act so far. Penalties for non-compliance of minimum wages Act are very low, and the procedure for imposing the penalty is cumbersome.

Suggestions for improving the situation

1. There has to be a National Wage Policy and various class/section of the workforce (unskilled/semi-skilled/ skilled) to be covered under that. The Policy should stipulate minimum wages on All India platform which can increase in a certain geographical area based on justification and determined formula.
2. The need of the hour is to fix the basic minimum wage especially for unskilled workforce engaged in activities like agriculture, domestic work, etc.
3. Dearness Allowance should form a part of the minimum wages in all occupations.
4. The compliance under Minimum Wages can be improved if the employers are given a single window clearance for filing all labour law related returns.
5. Enforcement Agency needs to be strengthened, and strict penalty levied for non-compliance.
6. Grievance redressal mechanism needs to be prompt and effective.
7. Mass scale awareness campaign need to be launched educating employee/employer on Minimum Wages concept.
8. Simplicity and uniformity in the calculation of Minimum Wages will go a long way in the enforcement of Minimum Wages.

The post Minimum Wages Hike For Unskilled Labourers In The Agriculture Sector appeared first on iPleaders.

In this blog post, Isha Singh,  a student pursuing her LL.B (5h year) Hons. from Rajiv Gandhi National University of Law, Patiala, Punjab and a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, details the need for social security and the vision of national security by the 2nd National Commission on Labour. 

Social Security-Meaning

The need for Social Security has been due to the inherent insecurity in the humans due to exposure to various kinds of risks and dangers. Such insecurities arise due to the fear of losing jobs, the fear of having enough to eat in the future or not and having socially empowering schemes for themselves or not.

“Human security can be said to have two main aspects. It means, first, safety from such chronic threats as hunger, disease and repression. And second, it means protection from sudden and hurtful disruptions in the patterns of daily life – whether in homes, in jobs or in communities. Such threats can exist at all levels of national income and development.”[1]

Social Security-Definition

The term “social security” invites ambiguity because it has not clearly been defined anywhere. However, there are two schools of thought- one is that of ILO, that restricts it only to the protection of income against loss, and the other is a holistic concept that entails the protection of all interests of the human life.[2]

The approach to social security can be different for different people. For instance, Lord Beveridge (1942) listed eight kinds of primary conditions which demand social security, viz, Unemployment, disability, loss of livelihood, retirement, marriage expenses, funeral expenses, physical disease or incapacity, childhood allowances.[3]

2^nd National Commission on Labour

Introduction

This report was submitted in the year 2002. The Chapter VIII of the report addressed the issue of Social Security. However, the report was a critique of the existing labour law regime and suggested reforms in the organised sector, it also supplemented the introduction of reforms in the nongovernmental sector as the Government Sector employees were covered under the schemes that were framed as under Article 309 of the Indian Constitution read with the recommendations of the Pay Commissions.

The report raised a concern that the legal regime in India pertaining to social security is on the lines of the recommendations of the ILO, though all such Conventions haven’t been ratified by India as yet. The Study Group on Social Security, formed as a part of the Report-building process remarked that although it might not be possible to ratify all the conventions immediately, their eventual accession is desirable by timely amendments in the laws and policies, starting with the Minimum Standards Convention.

Reason for the need of the Commission

The inadequacy of the Labour law regime in India to address the social security benefits for the unorganised sector coupled with the laxity in the implementation of the current benefits for the Governmental sectors gave rise to the Commission in 2002 and its report submission giving out suggestions and recommendations to remedy the current scenario.

National Social Security –A vision of the Commission

Due to the inadequacy of the labour law legislations to address the issue of social security among employees, the need for the report was felt. Therefore, the Commission came out with the following suggestions and recommendations:

• The Commission was of the opinion that a National Policy on Social Security be formulated and a Nation-wide plan, or scheme be structured to achieved the objectives set out in the Indian Constitution.[4]

• Considering the proposals put forward by various committees like the Committee on India Labour Code (1994), The Ninth Plan Working Group on Labour Policy; the commission recommended the constitution of a high-powered National Social Security Authority under the Chairmanship of the PM of India. The function of the Authority would be the reinforcement of the National Security policy at the federal and the state level.[5]

• At the administrative level, it is imperative to an exclusive Ministry/Department dealing with various aspects of the subject of social security. It could be an entirely separate Ministry of Social Security or a Department of Social Security within either the Ministry of Labour or the Ministry of Social Justice.[6]

• Functional integration of Social Security programmes could be attempted by establishing a Centre Social Security Board having separate division dealing with:
  • Medical benefits
  • Sickness, maternity and employment injury benefits.
  • Old-age, invalidity, survivors benefits including gratuity and funeral expenses.
  • Unemployment insurance and other related services.
  • Common services, namely, registration, a collection of contributions, inspections, penalties, etc.[7]

• A similar mechanism of Social Security Board be replicated at the State level and corresponding committees at Area and District levels so that this service should be decentralised and reach out to maximum beneficiaries as possible, and it is tripartite or multi-partite involving workers, other stakeholders, too. For the same purpose, the committees will have the below-mentioned functions:
  • Identification of the beneficiaries and the issue of identity cards to them.
  • A collection of contributions.
  • Dispensing the benefits.
  • Maintenance of records.[8]

• A compassionate Public Relations Team needs to be set in place to counter the hesitation of the poor and illiterate people shying away from availing the benefits of the social security regime. The prime function of the team would be to impart basic knowledge as to the schemes.[9]

• Since poverty is the root cause of social insecurity in India due to the deprivation of productive and remunerative income for the people, therefore, State must assume responsibility to take care of contingencies that create social insecurity and provide the people with a stable and peaceful income opportunity.[10]

• Priority must be given to old, infirm and young people who are destitute and constitute a liability on the state, by providing them with social assistance programmes.[11]

• Special care needs to be extended to women, children and old people who need to be given maternity benefit, security against widowhood and desertion; care and nutrition; and security against unemployment in old age and pension benefits respectively.[12]

• The Social Security System envisaged by the Commission broadly entailed 4 tiers, namely:
  • Social assistance programmes financed wholly by taxes and from the exchequer.
  • Partly contributory schemes which are partly subsidised by the State
  • Wholly contributory social insurance schemes,
  • Voluntary Schemes.[13]

• Lastly, the Commission recommended that the social security policy/plan for India must be outlined on the following principles:
  • Classification
  • Participation
  • Equity and Efficiency
  • Occupation-specific/ Area-specific/ Need-specific
  • Gender Adequacy
  • Unified Administration[14]

Recommendations for the unorganised Sector

The commission clarified that the unorganised sector included:

• The Self-employed group;
• Those employed in small establishments outside the purview of current social security regime;
• Those employed on a casual or intermittent basis without any security of income.[15]

To begin with, the Commission proposed that once the social security programme built for the organised sector is launched in full-swing, the people under the unorganised sector would be slowly and progressively roped in. However, pending such inclusion, there at least must be the successful implementation of the following measures:

• Welfare funds must be appropriately set up for each of the major employments, such as rickshaw pullers, agriculture, beedi industry, fishery, etc.

• Moreover, such Welfare funds need to be contributory, such that large contributions are warranted from the employers because as it is, the contributions made by the workers would be small and insignificant owing to their unstable income.[16]

• Subsidised insurance schemes must be made more popular among such workers, covering insurance for major life hazards and risks including health, life, accident, unemployment, paired with a uniform rate of subsidy.[17]

• Unorganised workers may be mobilised and organised into:
  • Self-Help Groups
  • Local Workers Economic Organisation
  • District Level Cooperatives including Milk Cooperatives
  • Mahila Mandals/ Yuvak Mandals, etc.[18]

• To cover pensions and other rateable benefits like maternity or old age benefits, either the existing ESI and EPF/ EPS schemes may be suitably amended to provide such protection against a composite contribution, or separate insurance schemes may, as appropriate, be devised for the self-employed on an occupational or area basis.[19]

• National Old Age Pension scheme may be redesigned and drawn up, just like the National Maternity Benefit Scheme for the unorganised sector. Moreover, a National Housing Scheme and a National Cloth Supply Scheme may be formulated for the distribution of houses and cloth to people at a subsidised rate.[20]

References:

[1] Retrieved from <http://www.prsindia.org/uploads/media/1237548159/NLCII-report.pdf> on 31^st October 2016 at 13:01 hrs.

[2] Report of the 2^nd National Commission on Labour, 2002, page 800.

[3] Id, p 804.

[4] Id, p 911.

[5] Id, p 912.

[6] Id, p 913.

[7] Id, p 913.

[8] Id, p 914.

[9] Id, p 921.

[10] Id, p 923.

[11] Id, p 925.

[12] Id, p 926.

[13] Id, p 926.

[14] Id, p 926.

[15] Id, p 933

[16] Id, p 934

[17] Id, p 935

[18] Id, p 937.

[19] Id, p 938.

[20] Id, p 942.

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In this blog post, Vanshaj Mehta, a student of Institute Of Law, Nirma University, who is currently pursuing a  Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses the right to strike in the light of the Maruti Case Study.

Today, the vast majority of the regions, particularly India, are reliant upon remote venture and under these conditions, it is vital that nations who look for outside speculation must keep the shield in their individual modern laws so that there will be no abuse of the right of strike. In India, the right to challenge is a major directly under Article 19 of the Constitution of India. In any case, right to strike is not a key right but rather a lawful right and with this privilege, statutory limitation is connected to the Industrial Disputes Act, 1947. [1]

Each right accompanies its own obligations. Most effective rights have more obligations connected to them. Today, in every nation of globe whether it is just, entrepreneur, communist, offer the right to strike to the laborers. However, this privilege must be the weapon of a final resort on the grounds that if this privilege is abused, it will make an issue in the generation and budgetary benefit of the business. This would at last influence the economy of the nation. Today, the majority of the nations, particularly India, are needy upon outside venture and under these conditions, it is important that nations who looks for remote speculation must keep some defense in separate modern laws so that there will be no abuse of the right of strike. In India, the right to challenge is a key directly under Article 19 of the Constitution of India. In any case, the right to strike is not a principal right but rather a legitimate right, and with this privilege, statutory limitation is joined in the modern question Act, 1947.

Position in India

In India not at all like America right to strike is not explicitly perceived by the law. The exchange Union Act, 1926 interestingly gave restricted right to strike by sanctioning certain exercises of an enlisted exchange Union in the promotion of an exchange debate which generally breaks of basic monetary law. Presently a privilege to strike is perceived just to restricted degree admissible under the points of confinement set around the law itself, as an honest to goodness weapon of Trade Unions. [2]

Representatives are required to buckle down and show dependability to the firm, in return for some level of employer stability and advantages, such as lodging appropriations, great protection, the utilization of recreation offices, what’s more, rewards and benefits. Compensation start low, yet position are remunerated, with advancements in view of a mix of position and capacity. Authority is not in view of confidence or speedy choice making yet on the capacity to make an accord, considering the requirements of subordinates. Studies demonstrate proceeded with an inclination for managers who are requesting yet indicate sympathy toward laborers’ private lives over less-requesting supervisors intrigued just in execution on the occupation. This framework rewards conduct exhibiting recognizable proof with the collaboration, demonstrated by singing the organization melody, not taking the greater part of one’s excursion days and sharing credit for achievements with the work amass. Pride in one’s work is communicated through rivalry with other parallel segments in the organization and between one’s organization and different organizations in comparable lines of business. Along these lines, people are spurred to look after wa (concordance) and take an interest in gathering exercises, at work as well as in night-time mingling (nomikai). The picture of gathering dependability, be that as it may, might be increasingly a matter of philosophy than practice, particularly for individuals who don’t make it to the top.[3]

Regardless of what is said above, there is a stewing discontent among the senior administrators at Maruti Udyog that the basic leadership portfolios have been bit by bit assumed control by the local Japanese administrators once Suzuki picked up greater part stake in the most recent fifteen years. The underlying tussle between the Indian Government and Suzuki some time recently 1997 was about the senior most positions and now with the outright power to contract and fire, the second rung of senior chiefs have been changed bit by bit with a predisposition towards Japanese officials. It is a known strategy in the corporate halls to clearly hold the employment titles and workplaces undisturbed however expel the obligations one by one and vest it with another position. This has been done both plainly what’s more, secretly in the course of the most recent twelve years. A few senior officials have said goodbye to Maruti Udyog because of this reason. With regards to the Manesar laborers conforming to the Japanese work culture, there is positively no issue in such manner, and the specialists are glad to be a piece of the way of life. They have grasped the recently discovered strategies of buckling down, picking up regard on the work floor and getting a charge out of the their rewards for all the hard work with the acclaim by the media it got year on year about the piece of the overall industry, item quality and the esteem given to after deals benefit. Truth be told it has significantly impacted their way of life at home and the nature of the item and the honors won by the organization in India are confirmation to the way that the normal Maruti Udyog laborer’s feeling of belongingness to his boss is obvious.

The privilege to strike in the Indian constitution set up is not supreme right but rather the spill out of the principal right to shape union. As each other crucial right is liable to sensible limitations, the same is likewise the case to shape exchange unions to give a call to the specialists to go on strike and the state can force sensible confinements. In the All India Bank Employees Association v. I. T., the Supreme Court held,

“The privilege to strike or right to announce bolt out might be controlled or confined by the proper modern enactment and the legitimacy of such enactment would need to be tried not with reference to the criteria set down in proviso (4) of Article 19 however by entirely unexpected contemplations.”

In this manner, there is an ensured key right to shape affiliation or Labor unions, however, there is no basic right to go on strike. Under the Industrial Disputes Act, 1947 the ground and condition are set down for the legitimate strike and if those arrangements and conditions are not satisfied then the strike will be unlawful.

On 18 July 2012, Maruti’s Manesar plant was hit by savagery as laborers at one of its auto production lines assaulted managers, engineers, and other administration work force and smoldered and slaughtered a senior HR official, harmed 100 administrators, including two Japanese, ostracizes. The crowd additionally harmed nine policemen.[4] The organization’s General Manager of HR had both arms and legs broken by his assailants, not able to leave the building that was set on fire, and he was burned to death.[5] The occurrence is the most exceedingly bad ever for Suzuki since the organization started operations in India in 1983 and a standout amongst the most deplorable of mechanical wrongdoings ever.[6] From April 2012, the Manesar plant laborers’ union requested a fivefold increment in pay, a month to month movement recompense of 10,000, a laundry stipend of 3,000, a corporate blessing with each new auto dispatch, what’s more, a house for each specialist who needs one or less expensive home advances for the individuals who need to fabricate their own home. Notwithstanding this pay and typical weekend/occasions, the union requested the present four paid weeks of get-away be expanded to 7 weeks, in addition to every specialist to have 40 days of wiped out leave and easygoing leave adding up to 75 days.[7] There were a few reports guaranteeing that the wage question, according to a union representative, might be standing related. As indicated by the Maruti Suzuki Workers Union, a chief had manhandled, what’s more, made mocking remarks on a low-standing laborer. [8]

Conclusion

The whole scene shows a solid case for HR administrators to increment their contribution at the floor level with the specialists likewise seeking after their expert training and profession improvement. As part of the underlying preparing for the lesser chief while joining administration, it is vital to make it a piece of study in the way of a normal specialist, their social structure, the past history of union exercises, the investigation of resolutions and choices taken and the examination of the offices given to the specialist opposite the laborers of the contenders.

The present peace at Maruti Udyog, Manesar is a handled peace between the Haryana Govt and the Maruti administration. This surely is not going to be a changeless arrangement. As said before, a normal Haryanvi laborer is a hard contender, and it is pointless for the administration to support, create and sustain a hostile to work position among their officials. Correspondence of goal at all levels assumes an imperative part in decreasing trust shortfall. As opposed to the unions coming to know about their organization’s extension arranges through gossipy tidbits, news paper alternately the Television, it is in light of a legitimate concern for the organization that the administration takes the union into certainty about their building up new offices in Gujarat or somewhere else. This will go far in building certainty among the laborers about the trustworthiness and straightforwardness of the administration.

References:

[1] The Hindu- Survey of Indian Industry 2011 edition.

[2] The Hindu Business Line, 07 Nov 2012, ” Maruti Suzuki Continues to Walk the labor tight rope” by Roudra Bhattacharya

[3] Economic Times, 29 Aug 2012, ” Maruti Suzuki share holders chide management of poor handling of labor unrest” by Chanchal Pal Chauhan.

[4] Economic Times, 20 Jul 2012, ” Stand off at Manesar plant may hit investment” by Pankaj Doval.

[5] The Hindu, 21 Jul 2012, ” Violence at Maruti symptomatic of simmering worker discontent” by Aman Sethi.

[6] Economic Times, 22 Jul 2012, ” Four Reasons behind MUL- Manesar Problems” by Malini Goyal.

[7] The Wall Street Journal, 01 Sep 2012, ” Maruti Suzuki sales hit by labor unrest, others gain” by Anirban Chaudury.

[8] Annual report of Maruti Udyog Limited- Jun 2012 for FY 2011-12.

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In this blog post, Aakansha Bansal, a student pursuing her Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses labor law compliances that need to be undertaken by the manufacturing industry. 

Labour Law: Defined

Labour law addresses the relationship between the employees, employers, trade union and the government. It highlights the employees’ right to work and social norms which ensure a decent environment for the employees to work in.

Manufacturing Industry: Defined

Manufacturing Industry is an industry that uses the tool, machines, and most importantly labor to convert raw materials into consumer goods or saleable goods.

Why Labour Laws?

The nature of the manufacturing industries makes it obligatory for them to be governed by certain laws to ensure fair and secured working conditions and environment to the workers, employees, and labor.

Labour Policy in India

After independence, it was greatly felt that the labor policy must emphasize upon self -sufficiency and self -reliance on the part of workers and labor.

The main postulates of labor policy are as follows-

1. Enhancing the status of the workers in industry.
2. Adequate enforcement of legislation.
3. Recognition of workers right.
4. Promoting industrial peace.
5. Ensuring fair wage standards and provisions of social security.

Important Labour laws in India

• THE INDUSTRIAL DISPUTES ACT, 1947
• THE TRADE UNIONS ACT, 1926
• THE EMPLOYEES’ COMPENSATION ACT, 1923
• THE EMPLOYEES’ PF AND MISCELLANEOUS PROVISIONS ACT, 1952
• THE MINIMUM WAGES ACT, 1948
• THE FACTORIES ACT, 1948
• THE PAYMENT OF BONUS ACT, 1965
• THE APPRENTICES ACT, 1961
• THE MATERNITY BENEFIT ACT, 1961
• THE PAYMENT OF GRATUITY ACT, 1972
• THE CHILD LABOUR (PROHIBITION AND REGULATION) ACT, 1986

THE INDUSTRIAL DISPUTES ACT,1947

OBJECTIVE- The main objective of the Act is industrial peace and economic justice. The production of an industry is only possible when the industry functions smoothly without any disputes or interruptions.

MAIN FEATURES OF THE ACT-

• Any industrial dispute may be referred to an industrial tribunal by an agreement of parties to the dispute or by the State Government if it deems it expedient so to do.
• An award shall be binding on both the parties to the agreement for a term not exceeding one year.
• It provides that strikes and lock-outs are prohibited during the pendency of awards, settlements or any conciliation and adjudication proceedings,
• Provision has been made for the payment of compensation to the workmen in case of lay off or retrenchment of workmen and also in the case of transfer or closure of an undertaking.
• Many authorities such as Conciliation Officers, Board of Conciliation, Works Committee, Labour Courts, Tribunals and National Tribunal has been set up to ensure industrial peace.

THE TRADE UNION ACT, 1926

The Act extends to the whole of India except the state of Jammu and Kashmir. Generally, Trade Union means an association of workers with the object of promoting and protecting the interest the interests of the working class.

OBJECTIVE- The objective of the said Act is to protect workers against exploitation by the employer, representation of workers’ grievance by the trade union to the management and to take disciplinary action against the worker who commits in-disciplinary action.

THE EMPLOYEES’ COMPENSATION ACT, 1923

The Act extends to the whole of India except the state of Jammu and Kashmir.

OBJECTIVE- It provides for the payment of compensation by a certain class of employers to their employees for injury by accident during the course of their employment. It is a guarantee against hazards of employment to which an employee is exposed because of his employment.

PAYMENT OF COMPENSATION AMOUNT-

• In the case of death of a workman- minimum compensation is Rs.120000/- or an amount equal to 50% of the monthly wages multiplied by the relevant factor, whichever is higher. This is, however, subject to maximumRs.8000/- per month w.e.f. 31^st May 2010.
• In the case of Permanent Total Disablement (PTD)- minimum compensation is Rs.140000/- or an amount equal to 60% of the monthly wages multiplied by the relevant factor, whichever is higher.

RELEVANT FACTOR- It depends on the age of the deceased or injured workman. Higher the age, lower would be the relevant factor and vice versa. It is specified in Schedule 4 of the Act.

PENALTY- In the case of default on employer’s part, he is bound to pay 50% of the compensation amount along with interest.

EMPLOYEES’ PF AND MP ACT, 1952

OBJECTIVE- The object of this Act is to provide for the institution of provident funds, pension fund and deposit linked insurance funds for employees in factories and other establishments. The employer is bound to provide the employees with Provident Fund Scheme and to make a contribution of both the employees’ and employer’s share of the fund and then deduct the employees’ share from their wages.

APPLICABILITY- Following conditions must be fulfilled-

• The establishment must be engaged in an industry specified in Schedule 1.
• At least 20 persons must have been employed in that establishment.

THE MINIMUM WAGES ACT, 1948

This Act applies to the whole of India.

OBJECTIVE- It was passed for the welfare of laborers. This Act aims at securing the welfare of the workers in a competitive market by providing them with the minimum wages in certain employments. The appropriate Government is empowered to fix the minimum rates of wages in the manner prescribed under this Act.

APPLICABILITY- It applies to the employments specified in the schedule of the Act and in certain cases may extend to any other employment if the appropriate Governments thinks that it is expedient to do so.

THE FACTORIES ACT, 1948

This Act applies to the whole of India, except the State of Jammu and Kashmir.

OBJECTIVE- This Act aims at safeguarding the interest of workers, and it also provides for the certain standards with regard to safety, working hours and welfare of the workers.

APPLICABILITY- This Act applies to all industrial establishments employing ten or more workers where power is used and twenty or more in all other cases. It is applicable to both the seasonal as well as non- seasonal factories.

DUTIES OF EMPLOYER-

• The factory should be kept clean with adequate lighting ventilation and drinking facilities.
• Reasonable temperature for the comfort of the workers should be maintained.
• Overcrowding should be avoided.
• In the case of hazardous substances, additional safety measures have been prescribed from section 41A to 41H.

MAXIMUM WORKING HOURS-

• It cannot be more than 9 hours a day.
• It cannot be more than 48 hours in a week.

OVERTIME WAGES-

• It is double the rate of wages.
• Total working hours including overtime should not exceed 60 hours in a week and total over time hours in a quarter should not exceed 50 hours.

PENALTY- In the case of contravention of any of the provisions of the Act, an employer shall be punishable with imprisonment up to 2 years or a fine up to 1 lakh or both.

THE PAYMENT OF BONUS ACT, 1965

This Act extends to the whole of India.

OBJECTIVE- This Act provides for the payment of bonus to the employees on the basis of the profits earned by the establishment or on the basis of production.

APPLICABILITY- This Act applies to-

• Every factory as per the Factories Act,1948
• Every other establishment in which 20 or more persons are employed on a day during an accounting year.

ELIGIBILITY FOR BONUS- Every employee working in an establishment and drawing a salary for not less than thirty days in that year shall be eligible for the bonus.

DISQUALIFICATION FOR BONUS- Any employee who is dismissed from the service for fraud or violent behavior while on the premises of the establishment or theft or misappropriation of any property of the establishment, shall be disqualified from receiving a bonus.

QUANTUM OF BONUS- Minimum 8.33% and maximum up to 20% of the salary or Rs. 100/-, whichever is higher.

PENALTY- For any contravention of the provision of the Act, the defaulter shall be liable for the imprisonment up to 6 months or fine up to Rs. 1000/-, or both.

THE APPRENTICES ACT, 1961

The Act extends to the whole of India.

OBJECTIVE- The main object of the Act to ensure better training of the workers and to organize lay down standards for the said purpose. It strives to meet an increasing demand for a skilled craftsman. The Act also provides for the regulation and control of training of apprentices in trade.

MEANING OF APPRENTICE- Apprentice is a person who is undertaking the training in pursuance of a contract of Apprenticeship.

QUALIFICATION FOR BEING ENGAGED AS AN APPRENTICE- The person should not be less than 14 years of age and shall also satisfy the standards of education and physical fitness as may be prescribed.

POINTS TO BE TAKEN CARE OF BY THE EMPLOYER-

• Stipend at the rate not less than the prescribed minimum rate
• Proper health and safety measures for the apprentices.
• Hours of work, overtime, leave and holidays should be in compliance with the rules provided by the Act.
• Apprentices are the trainees and not workers.

THE PAYMENT OF GRATUITY ACT, 1972

This Act applies to the whole of India except the state of Jammu and Kashmir.

OBJECTIVE- It provides a scheme for the payment of gratuity to employees.

APPLICABILITY- It applies to every factory, mine, oilfield, plantation, port, railway companies and to every shop and establishment in which 10 or more persons are employed or were employed at any time during the one preceding year. This Act applies to all employees irrespective of their salary.

MEANING OF GRATUITY- It is a lump sum payment to the employee after his retirement or when he leaves his service. However, the term of service of the employee should be at least 5 years to claim the gratuity.

AMOUNT OF GRATUITY PAYABLE- @ 15 days wages for every completed year of service and @ 7 days wages in case of service in a seasonal establishment.

MAXIMUM GRATUITY- 10 LAKHS

PAYMENT ON GRATUITY- (last drawn basic salary + DA) / 26 days *15 *total service period.

The post Labour Law Compliances To Be Undertaken By The Manufacturing Industry appeared first on iPleaders.

In this blog post, Mohammad Farooq, a fourth-year law student at Institute of Law, Nirma University, describes the procedure for obtaining a building permit in Delhi, Gurgaon, and Noida.

The Indian construction sector is one of the major contributors to the growth of the nation accounting for more than 19% of the GDP. It is also the second largest source of employment employing about 33 million people. Several industries like steel, cement, technology, skill-enhancement, etc. are directly affected by the changes occurring in this sector. With the introduction of GST, 100% FDI in construction, governmental schemes and projects like affordable housing for all by 2022 and smart cities project, the infrastructure and housing projects will see a spurt in growth in the coming few years.

Despite all this, the international reports present a gloomy picture that is in sharp contrast to the domestic statistics. India stood at a lowly 184th position globally in 2015 in getting construction permits, 130 out of 183 countries in ease of doing business and 138th in the ease of property registration in World Bank’s Ease of Doing Business (EODB) report. Obtaining the required construction permits for starting any project or building a residential or commercial property is considered to be a herculean task in India. There are myriad causes for this and all of them revolve around the convoluted procedure of getting construction permits, approvals, and clearances. Let us examine the intricacies involved in the procedure for obtaining construction permits in Delhi, Gurgaon, and Noida to get a fair bit of idea about what incorporates the construction process.

Obtaining building permits in Delhi

The Building Bye-laws 1983 have been adopted by Delhi Development Authority, and the same is applicable to the development works undertaken in the National Capital Territory of Delhi. All construction works are sanctioned based on these regulations. The building plan application of a residential plot, prepared by a licensed architect, engineer or supervisor depending upon the size of plots and they shall indicate their name, address and registration number on the plans with a copy of their valid license. submitted to the urban authority office along with a permit fee. At the time of sanctioning the plan, the In case of any grievance like delay in sanctioning of the application, the public can approach a “Shikayat Adalat” situated in the same building of the urban authority.

The list of documents to be provided along with the above application is different for different kinds of projects undertaken by individuals and organizations of different types, and the same is provided on the DDA website. After the completion of construction, the owner has to submit a completion notice along with the requisite set of documents. No building application is deemed valid unless and until the owner giving notice has paid the requisite fee of building applications.

After the application is received, an appropriate inspection date and time (within 10 days of receipt of application) is decided. After the inspection of the construction site, the scrutiny of the case takes place within 30 days. If there is no objection or need of compliance from the owner, then the sanction is given within 60 days from the date of submission. But in case there is any objection/compliance, the same is to be dealt with within 30 days post which the building permit is issued within 15 days from compliance. However, in the case of non-compliance or failure to comply, the building permit is disallowed/refused. Further, it goes without saying that any falsification or misrepresentation of a material fact may lead to revocation of the permit given. After the building permit is issued, the owner has to notify the authority within 7 days of starting the construction work and obtain an acknowledgment of the same. Again, after the completion of the work, the owner is supposed to intimate the authority about the same through the licensed architect, engineer or supervisor along with the requisite documents and fees. In response, the authority inspects the property and submits objections, if any to the architect/engineer/supervisor. After all compliances to the objections are met and all formalities fulfilled by the owner, an occupancy certificate is issued by the authority. Only after the owner receives this occupancy certificate can he reside in the building.

Misuse of the building or using it other than the manner for which it had been authorized is a punishable offense under the DDA Act. Any deviation from the maximum/minimum prescribed limits, etc. will attract penal provisions like demolition or rectification at owner’s cost, in case of non-compoundable items (FAR, no. of floors, open spaces, height, etc.) while in case of compoundable items, penalty will be levied at the rates prescribed. In all other cases, a deviation of up to 10% will be allowed.

Recently, several changes have been made in the 33-year-old bye-laws in order to ease the entire process and make it faster. Now a single online application is to be made instead of approaching several agencies like the airport authority, jail board, fire department, etc. separately. There will be seamless integration so that the urban authority can later take approvals from these departments online in single window clearance thereby removing human interface and reducing the protracted time. The application can be filed online, and the payment can also be made electronically. The same is to be approved within a month. Further, the time limit for granting the building permit has been reduced from 60 to 30 days. Also, the number of documents required for obtaining the permit and the completion cum occupancy certificate has also been reduced significantly. SARAL scheme has been introduced under which for residential plots of size up to 105 sq.mtrs, the plot owner need not obtain the sanction of building plans. He/she has to just to submit an undertaking intimating about construction along with requisite fees and other documents to start construction. Several measures also need to be taken to comply with the green norms and safety norms.

Obtaining building permits in Noida

The process of obtaining building permits in Noida is similar to that of Delhi. An application is submitted along with the requisite fees and documents. The applicant, here, gets 60 day time from date of receipt of objection order to comply with the objections and if he fails to resubmit a fresh plan within this period, then fees will again be charged as per a fresh plan. The site plan should incorporate the boundaries, plot no., name, plot area, the breakup of the plot areas, FAR, height, ground coverage, drainage, sewerage, boundary, etc. The building plan incorporates floors, use of all parts of the building, drainage, sewerage, street elevation, wall thickness, terrace plans, etc.

The permit fees applicable is different for different cases. For a revised plan submitted in case of re-erection after demolition, it is 1/4th of the fresh application fees (provided that the building area is not increased in this case); for revalidating the permit for 5 years, it is 10%, and if the application is made after the expiry of validity of the permit, then the fees applicable is same as fresh one. Compounding charges will be taken form the owner in certain cases, for instance, if the construction had been started without a building permit or if the construction continued beyond the validity of the building permit. If the application is withdrawn at any time before the sanction of the plan, there would be no refund of the fees.

An authorized officer scrutinizes the application and verifies the facts, title over the land, documents submitted and then attests the same along with the owner. However, unlike Delhi building regulations, here the owner and the technical person can be held jointly and severally liable if there is any violation of the building and planning regulations and they shall have to submit an indemnity bond in favor of the urban authority. Further, if the authority finds any violation upon performing any test checks after approval of plans, then the authority reserves the right to blacklist the technical person so appointed, from the organization in which he is registered and prohibited from practicing for a period of 5 years.

The owners get leeway for beginning construction in accordance with the Zoning Regulations of Development Plan/ Master Plan, once the application has been certified by the technical person. The objections found upon the scrutiny of the plans should be addressed within 30 days from the date of intimation of such objection. On the failure to rectify the objections so raised, the authority can compel the compliance, and the costs will be recovered by the owner. If the owner fails to pay the costs, then the same can be recovered from him as an arrear of land revenue. The authority is supposed to either approve or reject the plan within 60 days from receipt of the application, and the plan will be deemed as sanctioned if the authority fails to do so. However, the owner must, in writing bring this fact to the notice of the authority within 20 days after the expiry of 60 days. If the plan is rejected, then the authority must provide the reasons for the same along with the relevant provision of the regulations that have been contravened by the plan. Further, an inspection is conducted within 30 days after the application for occupancy is submitted and if the building is found to be incomplete, the allottee will be penalized 50% of occupancy charges or Rs. 5000/- whichever is more and his/her/their application for occupancy shall be rejected. On such rejection of an application, the allottee will be required to apply afresh along with penalty charges and time extension charges if required and action would also be taken against the concerned technical person who prepared the plan. In case of violations found during the construction or inspection for obtaining the occupancy certificate, the same shall have to be rectified within 30 days from the intimation date, and if it is not rectified by the owner in the stipulated time, then the authority ensures the compliance and the costs for the same will be recovered by the owner. It is imperative to have the occupancy certificate before occupying the building, and the same is issued within 90 days from the date of receipt of the occupancy certificate application. For multi-storeyed buildings, the occupancy certificate is issued only after the examination of the Chief Fire Officer and other certificates such as fees, structural safety, water harvesting, etc. also have to be submitted along with the completion drawings.

If the application for a building permit is refused, then the aggrieved applicant can file an appeal to the Chairman of the Authority within 60 days from the date of communication of such order along with a copy of the refusal order and requisite fees. The decision was taken by the Chairman on shall be final, conclusive and binding. The chairman shall provide the opportunity of hearing to all concerned parties. Additional time to file the appeal may be granted if the reasons satisfy the chairman.

As in the case of Delhi building laws, if the owner falsified or misrepresented any material statement or fact fraudulently, then, after giving an opportunity of hearing, the permit of the applicant may be cancelled and any construction work done would be deemed to have been done without permit and action would be taken against the owner. If the concerned technical person is found liable in any manner for the same, then he too can be blacklisted and debarred.

Obtaining a building permit in Gurgaon

The basics of the procedure remains the same as seen in the case of Delhi and Noida. An application for erection or re-erection of the building is submitted to the competent urban authority with relevant documents and fees. But here, unlike in the previous two cities, the owner appoints an architect/engineer for the supervision of the construction. It will be their duty to advise the owner to stop construction incase of any violations and report it to the competent authority. If the application is rejected, then a fresh application may be filed within 60 days from the date of rejection with fresh scrutiny fees but this only allowed twice in the 60 days.

The procedure to submit application deviates in Haryana from Delhi and Noida. There is a provision for submitting the application through self-certification (for shops, shops-cum-flat, shop-cum-office, shop-cum-office-cum-flat, etc.) where a 15-day notice is given to the competent authority for approving the plan after which construction can be started if no objection is intimated. Again, as in the earlier mentioned cities, the owner will have to remove the objections mentioned by the authority and a failure to do so will lead to authority taking matters in their own hand by removing the violations and recovering the cost from the owner. Action against the defaulting architect or engineer will take place in the same manner as in the above cities. The provision for self-certification will be aborted in such cases of violations, and after scrutiny of the revised drawings and inspection of the site, completion is granted. If there is a change of owner/architect or engineer during the course of the construction, then the same will have to be intimated to the authority within 7 days, and work has to be suspended until he/she is replaced by a new person taking full responsibility of the entire project.

The entire procedure incorporating all the functions like submission of application, approval/rejection, scrutinies filing of documents, etc. is performed online. Also, there are separate committees in the authority that look after the preparation of zoning plans, approvals, violations, granting occupation certificate or any other function. The validity of the sanctions is 2 years for buildings having a height of less than 15 metres and 5 years for multi-storeyed buildings having a height of more than 15 metres. If the construction is not completed within this period, then the sanction elapses, and a fresh application has to be submitted for the incomplete portion. The applicant can apply for revalidation of the building plan in case the construction could not be started even after the expiry of the sanctioned period or submit a revalidation fee before the expiry period if construction could not be completed on time. Further, if within 60 days, the authority does not sanction/reject the application, then the building plan will be deemed to be sanctioned. Approval of the authority should be taken as per the procedure specified before any revision or alteration in the sanctioned building plan. Again, as in the earlier cities, the sanction can be revoked if any fraudulent misrepresentation/concealment of any material fact is found and in case there is any omission or complaint against the architect/engineer or owner, then they can be jointly and severally held liable.

The certificate of occupancy is granted based on the certification of the architect or engineer. After receiving the application for occupation certificate, the authority has to convey his decision within 60 days. If no decision is given, then the owner can go ahead and enjoy possession of the building. Post the grant of the occupation certificate, if it is found that building is being used against the stipulated purpose or altered or modified in any manner, then tan order for revocation of the certificate can be passed after hearing the concerned party. The same can be restored after the violations have been removed.

Thus, it is clear from the study of the procedures of obtaining the building permits in the NCR region that it is a protractracted and messy affair. The delays in the projects faced by the private individuals, builders and contractors stem from myriad reasons. Let us have a look at the major challenges faced by the construction sector in India:-

1. Title Search – Land is one of the most valuable asset in India owing to its scarcity amid growing population. Most suits in civil courts pertain to some property dispute, land being one of them. Therefore, doing a thorough title search before acquiring land or property becomes paramount in the real estate and construction sector. Real estate companies and developers hire solicitors, search clerks, banks, financial institutions, etc. to inspect revenue records and court orders and publish public notices (for objections) in national dailies to ensure that the land/property is free from any title defect before proceeding with the project. However, this public notice is not a statutory requirement, and nobody is bound by it. It is merely considered a prudent practice by prudent real estate developers and they cannot prohibit any objections from public raised after the expiry of the objection period of the notice.

2. Funding – Having a planned finance structure in place, before the project kicks off is imperative for real estate developers to avoid financial pressure later. If there is improper planning or coordination, then it leaves the all the parties including the developer, investor, purchaser or owner in a very confused situation and hence, absolute clarity as to the structure and schedule of payments is important. Further, there are different sort of risks for the investors or the company associated with the different sources of raising funds like equity/preference shares, debentures, loans, overseas borrowings, etc. When taking loans from banks or NBFCs, the borrowers have to furnish collateral security. If there are any delays or deviations in the project, then it impacts the ability to repay these loans. In this context, developers have to proceed cautiously in order to avoid charge creations.

3. Red-Tapism and Corruption – The two are interlinked and ubiquitous phenomena in the real estate and construction sector and directly impact the projects. According to a KPMG report, this sector is the most corrupt sector ahead of metals and mining, aerospace and defense, power and utilities. So, what are the factors that lead to this?Most of the time, the real estate developers complain about the bureaucracy and the consequent delays in getting project approvals and clearances. There are about 40 – 70 approvals required to be taken before beginning a project and according to a CREDAI report it, on an average it takes about 2 – 4 years to get through this harrowing process where the builders or owners have to run from pillar to post across different departments like the National Highways Authority of India, Airport Authority of India, Ministry of Environment, Labor Ministry, Water Board, Civil Aviation, and other sub-departments like fire department, sewage department, electricity board, water department, coastal regulations, etc. By this time the cost of land rises by 24-30 per cent due to hefty interest payments as bank loans are not available for procuring important raw material in this sector. So, companies resort to bribing and unfair practices to expedite the clearance process and overcome the bureaucratic hurdles.

   Often, the builders and owners face the menace of changing rules and regulatory mandates and the frequent inspections by local bodies which lead to further delays. Getting the plinth level certificates, completion certificates, occupancy certificates and other certificates is full of hassles and add the woes of the owners and builders. Add to that, the rising rate of interests and higher costs, dearth of skilled labor and manpower costs et al are pushing the real estate prices out of the roof. Because, of all these reasons, the vulnerability to corrupt practices increases. To encapsulate, we can see that due the high level of complexity involved in large projects and contracts because of a combination of all the above-mentioned reasons, companies intentionally overlook compliances at the contractual and regulatory levels. The construction industry has been witnessing rapid growth, and the privatization of this sector saw the entry of various private players with little experience scrambling for projects and thereby resorting to unfair practices in order to succeed.

4. Unanticipated change of plans – At times, there may be variations in projected plan because of factors like the supply of a different built-up or carpet area than what was agreed upon or because of natural hurdles in the actual construction. This impacts the expenditure directly leading to delays, and rising costs of the project, and these unaccounted expenses are pushed to the consumers.
5. Risk of Default – As we saw above, because of the delays in project completion and other reasons discussed above, the repaying capacity of the borrowers is severely impacted. Consequently, there is a high risk of default involved in handling over the possession of the of the promised units to the investors and purchasers and this, in turn, leads to poor demand which in turn results in the piling up of the builder’s inventory and further aggravating the risk of default. Thus, because of the rising Non-performing assets banks are filled with trepidation before extending loans to builders who have a bad reputation in the completion of projects or who have been blacklisted by other banks. Several litigations have been filed by investors, creditors and bankers against the errant and defaulting developers which leaves the disputed property in limbo for a long time, thereby leaving the investors in a dire situation.
6. Taxation Problems – As discussed above, builders often have unsold flats due to the piling up of inventory built by them. They often mention them as work in progress until they are converted into income by allotting to a buyer for a full consideration, in order to avoid tax liability. Sale of property held in stock i.e. unsold flats are supposed to be treated as business income which is taxable. This creates a situation of deferred tax liability. The valuation of a work in progress is often arbitrary and leads to profits being overstated resulting in higher payment of tax, even while the company has not actually realized the income from the sale.

Conclusion

An overhaul of the system is the need of the hour as most of the projects suffer from bottlenecks and delays due to myriad reasons which has significant repercussions on the construction sector as a whole. Although some steps have already been taken in the instance of Delhi, but its effective implementation and result is still a far cry from the stated objectives.

References:

1. https://www.dda.org.in/about_us/pop_ups/handbook%20bldg.pdf
2. http://pib.nic.in/newsite/PrintRelease.aspx?relid=138407
3. http://www.noidaauthorityonline.com/Application%20Form20406.pdf
4. https://tcpharyana.gov.in/Policy/OfficeOrder/The_Haryana_Building_Code_2016.pdf
5. https://www.linkedin.com/pulse/challenges-faced-real-estate-companies-india-anand-sahu
6. http://blogs.wsj.com/indiarealtime/2014/10/30/red-tape-in-india-gets-longer-says-world-bank/
7. http://articles.economictimes.indiatimes.com/2015-11-10/news/68165030_1_project-approvals-builders-real-estate-business
8. https://www.kpmg.com/IN/en/IssuesAndInsights/ThoughtLeadership/KPMG_Bribery_Survey_Report_new.pdf
9. http://ficci.in/Sedocument/20254/FICCI-EY-Report-Bribery-corruption.pdf

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