Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
JOURNAL SECTION
193
194
JOURNAL SECTION
LLR
2013
JOURNAL SECTION
195
Despite withdrawing its earlier notifications (dated 23.5.2011 and 30.11.2012) pertaining
allowances for provident fund contributions to the EPFO is again planning to notify its
interpretation on allowances ignoring that in the presence of its Advocates, the Supreme
Court in its order dated 12.4.2013 has directed for final disposal/appeals in this context in
second week of August, 2013. These appeals are about various allowances whether EPF
contributions be deducted or not? The EPFO has not learnt about illegal decision by
demanding and recovering contributions on leave encashment. Ultimately it has to bite the
dust when in 2008, the Supreme Court held that it was illegal and money as recovered was
to be adjusted in future payment to be made by the employers.
Employees Provident Fund Organisatioan provides for contribution and read as under :(EPFO) is one such organization in the country,
The contribution which shall be paid by the
which has gained the notoriety of disturbing the
employer to the Fund shall be twelve per
hornets nest, often without any reason or
cent of the basic wages, dearness allowance
justification which results into multiplicity of
and retaining allowance (if any) for the time
litigation. It is now again contemplating to revise
being payable to each of the employees
the definition of wages for contribution towards
(whether employed by him directly or by
the Employees Provident Fund and the
or through a Service Provider) and the
Employees Pension Scheme. At present, it is
employees contribution shall be equal to
calculated at the rate of 12 per cent on basic
the contribution payable by the employer in
and dearness allowance and the matching
respect of him and may, if any employee so
contribution is made by the employers. This
desires, be an amount exceeding twelve per
move is being resisted by the industry, for the
cent of his basic wages, dearness allowance
obvious reasons as it will put more burdens on
and retaining allowance (if any), subject to
it. The government introduced a triple test the condition that the employer shall not be
Ordinarily, Necessarily and Uniformly - to
under an obligation to pay any contribution
define basic wages for provident fund deduction
over and above his contribution payable
through a circular issued on 30th November
under this section.
2012, but had later stayed its implementation.
Therefore, by reading of the legal provisions
Similarly, on 23rd May, 2011 instructions
relating to basic wages and allowances, it is
pertaining to allowances were issued which were
clear that contributions under Provident Fund
also withdrawn and kept in abeyance.
Act are to be paid only on basic wages [which
First of all, it is necessary to know what the specifically excludes house rent allowance
definition of the relevant legal provisions. Section (HRA)], DA and retention allowance. That is
2(b) defining basic wages which is to be read the reason that many organizations of the industry
with section 6 of the Provident Fund Act, challenged the proposal of the EPF in various
July, 2013 - 23
196
JOURNAL SECTION
LLR
July, 2013 - 24
2013
JOURNAL SECTION
197
Though answers are available in these columns but in view of the complicated problems it is advisable to obtain legal
advice on the subject because labour laws are frequently amended and the Governments issue notifications from time
to time besides judicial pronouncements of varying connotations. The birds eye view clarifications, given in LLR, will
certainly enable the readers to ask their lawyer/adviser the right question with greater confidence.As desired by some of
questionnaires, not to disclose their identity, their names are not given against their questions.
Non-obtaining of
licence by the
contractor
consequences of
198
JOURNAL SECTION
Relationship of
employer and employee
between the workers of
contractor and principal
employer
Q
LLR
Apprentice not
entitled to employment
Q In addition to other employees, we also
engage
Apprentices
under
the
Apprenticeship Act. The contract of
apprenticeship provides that the
engagement of apprentice will be only for a
specific duration. My query pertains as to
whether an apprentice can claim
employment as a matter of right?
A No. An apprentice under Apprenticeship Act
is engaged for the purpose of imparting training
It is only Labour Law Reporter wherein the important points of the reported cases are
highlighted so that the busy reader could glance at in a few minutes and update his
knowledge.
July, 2013 - 26
2013
JOURNAL SECTION
Applicability of Contract
Labour (Regulation &
Abolition) Act on an
establishment not being
an industry
Q Ours is a Research Institute and the
High Court held that it does not come within
the purview of industry under the Industrial
Disputes Act. We also engage contract
labour through the contractors. Are we
liable to seek registration and is the
contractor liable to obtain licence under the
Contract Labour (Regulation & Abolition)
Act? Any case law on the subject will be
highly appreciated.
A
199
Unlike other Labour Journals we dont publish judgments pertaining to armed forces,
police or government servants to swallow the volume.
July, 2013 - 27
200
JOURNAL SECTION
Protected workman
when deemed to have
been declared
Q
Trade Union functioning in our
establishment has been periodically sending
a list of office-bearers of the Union to be
declared as protected workmen. We raise
objection about submission of membership
statement since the Union has no
representative capacity in our establishment
for want of required number. However, due
to strike, we did not contradict or rebut the
list of protected workmen as sent by the
Union. The Union is claiming that in the
absence of any communication within the
stipulated time from the Management, the
office-bearers notified to be declared as
protected workman have become protected
workmen under the Industrial Disputes Act.
What is the legal position?
A
LLR
Payment of ex-gratia
Q In addition, we are paying ex-gratia to
our employees. Does it come under the
conditions of service?
A Yes. Extending benefit of ex-gratia towards
payment of bonus to certain workmen and
denying to others
who indulged in
strike, was held to
be illegal since it
was being paid for
long and it had
become a condition
of service. A condition of service cannot be
changed without following procedure specified
in section 9-A of the Industrial Disputes Act,
1947.
Bharat Fritz Werner Karmika Sangha vs. Management
of Bharat Fritz Werner Ltd., 2012 LLR 1052 (Karn. HC)
Labour Law Reporter is not only read, re-read but retained also since its judgments are
authoritatively referred in the Courts and the Tribunals.
July, 2013 - 28
2013
JOURNAL SECTION
201
202
JOURNAL SECTION
LLR
2013
JOURNAL SECTION
203
204
JOURNAL SECTION
LLR
To our Readers,
The only question that was posed for determination before the
learned single Judge of the High Court was as to whether the workman
had voluntarily resigned on 1.10.1992 as claimed by the Management
or was he forced to resign on 30.9.1992 as alleged by the workman?
After finding that had the workman resigned voluntarily on 1.10.1992,
he would not have complained to the Management on that very day
and run from pillar to post, by making various complaints to higher
authorities, including the Chief Minister of the State and if the workman
had committed any misconduct, like theft etc., the Management could
have held a domestic enquiry and taken a suitable action as per law,
the Single Judge ultimately concluded that the workman was
retrenched from employment without complying with section 25-F of
the Industrial Disputes Act.
It has been held that it is relevant to note that in order to find out
the correctness of the order passed by the learned Single Judge, the
written claim before the Labour Court, the workman has specifically
alleged that on 1.10.1992, he sent a notice-cum-application to the
Management and a news item to this effect was duly published in a
vernacular local daily.
This factual aspect and version, particularly the receipt of noticecum-application dated 1.10.1992 from the workman, has not been
denied in the written statement filed by the Management. The main
Editor
emphasis in the written statement of the Management was that the
workman had voluntarily tendered his resignation on 1.10.1992. It is
brought to our notice that the Labour-cum-Conciliation Officer has not disputed the important fact that the
workman protested in writing on the very next day of the incident.
Whether the complaint sent by the workman on 7.10.1992 and the resignation tendered by him on
1.10.1992 was voluntary or not, have not been adverted to by the Labour Court. According to us, these are
the real issues in this case.
As rightly observed by the Division Bench that there are contradictory findings by the Labour Court
with regard to claim of the workman that he was tortured by the Management on 30.9.1992 and was made
to write the resignation letter on 1.10.1992. Again, it was rightly observed by the Division Bench that
certain relevant facts such as workman had been in service since 1977 and in such circumstances whether
there is any need to resign without any acceptable reason that too without any monetary incentive and
complaint on the same day to the Management and higher authorities including the Chief Minister, were
not at all considered by the Labour Court and merely accepted that the workman tendered the resignation
in his own writing.
Hence, while on going through the entire reasoning of the Labour Court, materials placed and stand
taken by the workman and the Management, we are satisfied that the learned Single Judge was fully
justified in interfering with the conclusion arrived at by the Labour Court which has been rightly affirmed by
the Division Bench. Consequently, the appeal of the Management fails and the same is dismissed with
costs quantified at Rs.10,000.
M/s. Atlas Cycle (Haryana) Ltd. vs. Kitab Singh, 2013 LLR 231 (SC)
July, 2013 - 32
2013
JOURNAL SECTION
205
an agreement between
an employer and
employee whereby the
employer gives loan to
the employee to buy a
house
This agreement is made at........on this day
ofbetween
M/s.
hereinafter referred to as an Employer on the
first part and Shri.son of
Shri..resident of and working
as.with M/s
Employer hereinafter referred to as an
Employee on the second part.
WHEREAS the Employee has applied for
housing loan amounting to Rs..
and the Employer has agreed to give the said
loan to the Employer and both the parties have
agreed to abide by the following:Terms and Conditions
1. That the aforesaid loan shall be repayable
by the Employee in..years in
equal monthly instalments. In the event of
termination of the services of the Employee
before the loan amount is fully repaid or due to
resignation, retirement, retrenchment, death or
any other reason, the entire unpaid balance
amount of loan shall become immediately due
and payable to the Employer.
2. The interest on the loan amount
outstanding shall be payable by the Employee at
the rate of% (per cent) per
206
JOURNAL SECTION
LLR
an undertaking by an
employee in favour of M/
s employer
for adjustment of
gratuity and provident
fund
I.hereby undertake to give
my consent for adjusting the outstanding amount
of the Housing Loan, if any, against the amount
of gratuity and provident fund which may become
payable to me or to my nominee on termination
of my service on account of superannuation,
death, resignation or otherwise.
The balance amount of gratuity, if any, may
be paid to me or my nominee, as the case may
be. Consent of my nominee to this effect is also
given herein below:
(Employee)
I. the nominee of
Shri..hereby give consent
to the above.
(Nominee)
2013
JOURNAL SECTION
Witnesses:
1
2
a charge-sheet to an
employee for hacking a
computer system
To
.
.
207
a warning to an
employee for publishing
information which is
obscene in electric form
To
.
.
It has been brought to the notice of the
Management that you have been misusing the
computer by publishing/transmitting the material
in the electronic form, which is lascivious or
appealing to the prurient interest the effects of
which is such as to tend to deprave and corrupt
persons who are likely, having regard to all
relevant circumstances, to read, see or hear the
matter contained or embodied.
The above act, on your part, is unbecoming
Pearls of Wisdom
EMAILS INCREASE STRESS
There is a direct link between stress at work place
and email use, researchers have found.
Employees were more prone to increased stress
when reading and sending emails which was indicated
by their increased blood pressure, heart rate and
cortisol level.
July, 2013 - 35
208
JOURNAL SECTION
a warning to a worker
for insulting and
outraging the modesty
of a woman colleague
by using most obscene
language
To
LLR
an affidavit to be given
by the contractor to the
principal employer
about the compliance of
various labour laws as
applicable
AFFIDAVIT
I......................S/o Shri...........................
R/o.......................................... Proprietor/
Partner/Director/General Manager of.......
..................................... do hereby solemnly
declare and affirm as under:
1. That we have taken a contract for
carrying on certain activities from M/
s. having its office at
..
2. That as per assignment, we have carried
on the same by our workers for the last
month. We have paid wages to our workers in
the presence of the nominee of the principal
employer.
Besides that we have
deposited Employees Provident Fund and ESI
contributions with the Authorities the detail of
which is enclosed herewith as annexure A to
this affidavit. We also undertake to deposit the
contribution under Employees Welfare Fund for
our employees.
3. To the best of our knowledge, we have
made compliances of all the applicable labour
laws. Nevertheless, we undertake that if at any
time any laps is noticed or that the Management
of. is asked to
deposit or make the payment against any
recovery for which we are liable, we undertake
to reimburse the same.
Deponent
2013
JOURNAL SECTION
Verification
Verified that the contents of the above
affidavit are true and correct to the best of my
knowledge, belief and record. Nothing has been
concealed there-from. Verified on this.......day
of.....................at.. (Place).
Deponent
Encl.: Annexure A
guidelines for
constituting Grievance
Redressal Committee
On occurrence of a grievance, the employee
or employees involved shall attempt to resolve
the matter on an informal basis with the Head
of the Department. The Head of the
Department will endeavour to decide the
grievance within three days of its receipt.
If the grievance is not resolved to the
employees satisfaction by the informal
discussion, it shall be reduced to writing and
referred to the Manager or the HRD
Executive, as the case may be, by any
designated person on behalf of the Union along
with the supporting evidence. The written
grievance shall set forth the nature of the
grievance, the fact on which it is based, the
alleged clauses of the settlement violated and
the relief requested. The Manager will provide
opportunity for hearing to the union
representative and if, as a result of this
meeting, the grievance remains unresolved, he
shall reply in writing preferably within seven
days of the meeting.
If the grievance remains unresolved, the
matter may be referred to the Grievance
Redressal Committee.
The grievance must be taken up promptly
and no grievance will be considered or
discussed which is presented later than one
month after the occurrence of the
grievance.
209
210
JOURNAL SECTION
LLR
charge-sheet of sexual
harassment
To
........................................
It is reported against you that
on.................(date) at.................(time) while on
duty, you tried to molest a female employee and
your behaviour on duty was outrageous to the
modesty of the woman. You are aware that the
female employees, who come for work, are to
be protected but you have indulged in the
activities, which amount to sexual harassment.
The above-mentioned charge is of grave and
serious nature and makes you liable for
appropriate disciplinary action.
You are hereby called upon to show cause,
within 3 days, as to why an appropriate action
should not be taken against you. Should you fail
to submit your explanation within the specified
period, it will be presumed that you admit the
charge and have no explanation to offer.
Disciplinary action, as deemed fit, will be taken
against you without any further ref\erence to you.
Authorised Signatory
Note.Sexual harassment is a serious misconduct to
such an extent, that even trying to molest amounts to
molesting a female employee when the behaviour of the
employee did not cease to be outrageous. Apparel Export
Promotion Council v. A.K. Chopra, 1999 LLR 169 (SC).
Pearls of Wisdom
WHAT NOT TO WEAR IF YOU WANT
TO GET PROMOTED
A worker should look out for materials such as linen and chiffon which can be
transparent.
A person should avoid wearing flip-flops in office, as these are almost never
appropriate in an office environment.
An employee should avoid any piece of clothing that shows too much skin.
T-shirts are rarely appropriate for workplace environment - particularly the ones that
have controversial messages written on them.
IF a person has to ask himself if their clothing is work-appropriate, then probably it
isnt.
A worker should avoid wearing any type of athletic wear in the office and if they
have a Pilates class or tennis match after work, they should pack their clothes to
change into.
July, 2013 - 38
2013
JOURNAL SECTION
Damages reduced to 5%
when delay was not
deliberate
In the appeal filed before the Employees
Provident Fund Appellate Tribunal, the appellant
has challenged the order dated 10.04.2012, passed
by the EPF Authority under section 14-B of the
Act, on account of delayed remittance of PF dues
on the ground that the EPF Authority has calculated
the amount of damages in a very mechanical fashion
without considering the fact that the delay on the
part of the petitioner was not deliberate but due to
financial crisis.
The Appellate Tribunal observed that section
14-B does not mandate that damages must follow
in the event of every default as the Act uses the
words may recover. Such an intention on the
part of the legislature is not decipherable from
section 85B of the Act. This section confers a
discretion upon the EPF Authority to impose
damages and not in the manner as prescribed under
the Scheme, not exceeding the amount of arrears.
Liability of damages does not arise automatically.
It requires application of mind by the deciding
authority and the merits of each case are to be
considered avoiding resorting to arithmetical
calculations following any straight jacket formula.
The power to impose damages under section
14-B is a judicial power to impose damages not
exceeding the amount of arrears within the ceiling,
imposed by the Statute. Exercise of discretion
must be for sound and objective considerations.
Regulation 32A, under which a graded scale for
imposition of damages has been provided, cannot
be regarded as a rigid or inflexible prescription but
guide and channelize the exercise of discretion.
Similarly, regulation 32B structures the exercise
of the discretion to reduce or waive the imposition
of damages. Neither regulation 32A nor regulation
211
212
JOURNAL SECTION
LLR
Assessment of dues
based on inspector
report - to be quashed
2013
JOURNAL SECTION
213
Determination of money
by non-application of
mind - untenable
In an appeal filed before the Employees
Provident Fund Appellate Tribunal, the appellant
has challenged the order dated 05.03.2009, passed
by the EPF Authority under section 7-A of the Act,
thereby assessing the PF dues on the basis of
report of the Enforcement Officer and records
submitted by the establishment whereas the factual
position is that the EPF Authority has neither taken
into account a sum of Rs.7,76,137/- paid towards
settlement of the claims of 6 employees nor
discussed the records submitted by the employer
during the enquiry which is illegal.
The EPF Appellate Tribunal observed that
section 7-A of the Employees Provident Funds
and Miscellaneous Provisions Act, 1952 enjoins
that the EPF Authority should make an inquiry
independently without being influenced by the
report of the Enforcement Officer. It is also
expected from the EPF Authority to give detailed
reasoning regarding submissions made by the
employer and the Enforcement Officer. These
aspects are lacking in the impugned order. The
impugned order has been passed by the EPF
Authority without application of judicial mind.
Hence, the impugned order is set aside. Matter is
remanded back to the EPF Authority to conduct a
fresh enquiry into the matter and to pass a detailed
and reasoned order after affording appropriate
opportunity to the employer. Appeal is disposed
of accordingly.
M/s. Tobu Enterprises Ltd. vs. RPFC, Delhi
ATA No. 233(4) 2009, decided on 1.4.2013
July, 2013 - 41
214
JOURNAL SECTION
LLR
Name
K Chandramouli
Uday Kumar Verma
SK Srivastava
Samirendra Chatterjee
Ravi Mathur
RC Mishra
Ravi Mathur
Anil Swarup
Krishan Kumar Jalan
Tenure (Month)
13
1
0.75
18
1.3
12.25
1
4.5
0
2013
JOURNAL SECTION
215
216
JOURNAL SECTION
LLR
Readers are welcome to ask for solutions of their work place HR Problems to Labour Law Reporter or
directly to Mr. Anil Kaushik through his e-mail at : akaushikus@yahoo.com OR hrsolutionsin@yahoo.com
(Mob.: 09829133699)
-Editor
July, 2013 - 44