Employment Law Alert- November 2023 – April 2024

This newsletter edition offers a comprehensive summary of the relevant legislative, administrative, and judicial developments in the employment and labour law domain spanning from November 2023 to April 2024.

LEGISLATIVE & ADMINISTRATIVE DEVELOPMENTS

Proposed amendments to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”): On February 02, 2024, the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Amendment Bill, 2024 was introduced in the Rajya Sabha. Following are the proposed changes: (i) Complaints under section 9 can be filed within three months and this time period is extendable by another three months under specific circumstances. Further, the basic limitation period for filing complaints will be fixed at one year, which may further be extendable by the Internal Complaints Committee or Local Complaints Committee; (ii) removal of section 10 (conciliation) in its entirety, preserving the integrity of the complaint resolution process.

?·?Interest rate for EPF account holders for financial year 2023-2024 increased from 8.15% to 8.25% by Ministry of Labour and Employment (“MoL&E”): [MoL&E Release ID: 2004768 dated February 10, 2024].

?·??Social Security Agreement with Brazil:? Employee’s Provident Fund Organization (“EPFO”) notified this agreement, which benefits both Indian and Brazilian workers by avoiding double social security payments, allowing for the totalization of contribution periods, and ensuring the portability of benefits [EPFO Notification no. IWU-1109/1/2020-IWU/Brazil/E-file (621352) dated February 13, 2024].

?·??Employees’ State Insurance (Central) Rules, 1950 amended: The Employees’ State Insurance Corporation (“ESIC”) investment threshold has been increased from Rs. 5 crores to Rs. 25 crores [MoL&E Notification No. S-65012/01/2023-SS-I dated February 28, 2024].

?·??Minimum wages revised: Minimum rates of wages including the basic rates and variable dearness allowance for specific industries including Agriculture, Mineral Mines, Stone Mines, and Watch and Ward (Without Arms), have been revised. [MoL&E Order File no. 1 / 7(1)/2024-LS-II dated April 01, 2024].

?·???Auto-claims limit under EPF Scheme increased: The limit has been increased from Rs. 50,000 to Rs. 1,00,000 under Paragraph 68J of the Employees’ Provident Fund Scheme, which specifically deals with medical emergencies [EPFO Notification no. WSU/E-13719/697 dated April 16, 2024].

·??MoL&E extended public utility service status to the following industries:

o?? Processing or production or distribution of fuel gases (coal gas, natural gas and the like), Lead and zinc mining and Food stuff services [Notification no. S.O. 4879(E) dated 09 November, 2023].

o?? Iron and steel industry, Alumina, Aluminum Manufacturing, and Bauxite Mining [Notification no. SO687(E) dated February 14, 2024 and Notification dated February 02, 2024].

o?? Iron ore mining services (for an additional six months) [Notification no. 1711(E) dated April 12, 2024].

??State specific updates:

o??Labour Department of Sikkim issued draft Sikkim Occupational Safety, Health and Working Conditions Rules, 2024 [April 25, 2024].

o??The State Government of Manipur implemented the Manipur Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2021, replacing an older legislation [November 02, 2023].

o??The MoL&E enforced the Employees’ State Insurance Act, 1948, in Nayagarh district, Odisha [Notification no. 44-N-15/15/81/2016-PICI dated February 20, 2024].

?JUDICIAL DEVELOPMENTS

·?M/s Bharti Airtel Limited v. A.S. Raghavendra [2024 SCC?Online?SC?492] - Supreme Court of India

Facts: The Respondent, formerly employed as a Regional Business Head, contended that his resignation was involuntary due to company pressure and sought compensation under the Industrial Disputes Act, 1947 (“ID Act”). The pivotal issue was whether the Respondent qualified as a "workman" under Section 2(s) of the ID Act, thereby warranting protection under the Act.

Decision: The Supreme Court held that the Respondent wasn't a "workman" under the ID Act due to his managerial responsibilities. The Court considered factors such as his supervisory role over other employees and his authority in making business decisions within his area. Additionally, the Court clarified that employee dissatisfaction with performance reviews doesn't constitute forced resignation.

Significance: This case provides clarity on the interpretation of the term "workman" under the ID Act. It underscores the importance of supervisory duties and decision-making authority in delineating workman status within the purview of the law.

·?Mahanadi Coalfields Ltd. V. Brajrajnagar Coal Mines Workers’ Union (2024) [MANU/SC/0192/2024]- Supreme Court of India

Facts: The Petitioner had outsourced coal transportation to a contractor, who employed workers for the project. The Respondent Union representing these workers, contended that 32 individuals engaged in coal transportation were essentially carrying out permanent tasks for the Petitioner and hence entitled to be regularized as Petitioner's permanent employees. Their reliance was placed on clauses in the National Coal Wage Agreement (NCWA-IV), which discouraged the use of contract labour for permanent roles.

Decision: The Court upheld that NCWA-IV clauses aimed to prevent the misuse of contract labour for core, permanent positions and determined that the nature of work performed by a majority of the workers (19 out of 32) was indeed permanent and perennial. While acknowledging Section 25F of the Industrial Disputes Act, 1947 as the primary provision for regularizing wrongfully terminated workers, which didn't directly apply in this case, the Court directed the Petitioner to acknowledge the permanent nature of the work done by the 19 workers. Although not explicitly granting them permanent employee status, the Court's decision significantly bolstered the workers' position. Furthermore, the Court awarded back wages from the date the Industrial Tribunal initially recognized their case.

Significance: This case underscores the restrictions on using contract labour for permanent roles in the coal industry and underscores the importance of NCWA-IV clauses in safeguarding worker rights against unjust contract labour practices. It also highlights the necessity for clear differentiation between permanent and casual work within contractual arrangements.

·?Delhi State Legal Services Authority (DSLSA) v. Annwesha Deb [2024 SCC Online?Del?2833] -?Delhi High Court

Facts:?The Respondent, a female lawyer, was appointed as a panel advocate for the Petitioner and was selected to serve on the Juvenile Justice Board for a fixed term of three years. However, when the Respondent became pregnant and requested maternity leave and associated benefits under the Maternity Benefits Act, 1961 (“MBA”), the Petitioner denied her claim, citing her status as a non-permanent staff member.

Decision:?The High Court (Single Bench) ruled in favour of the Respondent, highlighting that maternity benefits are not merely contractual entitlements but essential social provisions vital for the health of both the mother and child. The court also noted the absence of any clause in the MBA specifically excluding contractual employees from its coverage. However, upon appeal, the Division Bench of the Hon'ble High Court reversed the aforesaid judgment and noted that although the respondent's appointment has a public law element, it is professional in nature and therefore not covered under the MBA. Consequently, due to the nature of her appointment, MBA benefits were not extended to her.

Significance:??This case elucidates the applicability of the MBA based on the nature of the appointment. It underscores the distinction between a professionally engaged practitioner who continues to act in that capacity and an employee appointed according to an Authority's Recruitment Rules.

·??Chanda Keswani vs. State of Rajasthan [2023 SCC Online Raj 3274] - Rajasthan High Court

Facts: The Petitioner became a mother through surrogacy process and applied for maternity leave, which was denied by the Respondent citing the absence of provisions for surrogacy-related maternity leave in the Rajasthan Service Rules, 1951.

Decision: The Court ruled in favor of the Petitioner, adopting a broad interpretation of "maternity leave" as a period crucial for the mother to nurture a bond with the child and ensure their well-being. It underscored that the right to life guaranteed under Article 21 of the Indian Constitution encompasses the right to motherhood and a child's right to proper development. Rejecting any differentiation between biological, natural, and commissioning mothers, the court deemed the denial of maternity leave based solely on the method of childbirth (surrogacy) as discriminatory.

Significance: This case extends the definition of "mother" to include commissioning mothers who undergo surrogacy, highlighting the significance of maternity leave in fostering maternal-child bonds and ensuring child welfare.

·??Smt. N. Bhuvaneshwari v. The Management of M/s. Ambuthirtha Power Private Ltd. [W.P. Nos.49982/2018 & 6531/2019] - Karnataka High Court [Date of decision: April 08, 2024]

Facts: The Petitioner contested the termination order issued by the Respondent. The Labour Court determined the Petitioner to be a “workman” under Section 2(s) of the ID Act and awarded her compensation of Rs.5,00,000/- in lieu of reinstatement, continuity of service, full back wages, and other benefits. On being aggrieved, both parties filed separate writ petitions before the High court.

Decision: The High Court dismissed the Petitioner’s petition and upheld the petition filed by the Respondent Management. It held that the Petitioner, in her role as an Executive Secretary managing records for the Managing Director and Chairman, was not covered under the definition of 'workman' as per Section 2(s) of the ID Act. Additionally, the Court ruled that since the Petitioner failed to establish her status as a “workman”, the Labour Court's adjudication on her entitlement to compensation was unjustified.

Significance: This case provides clarity on the eligibility for benefits under the ID Act, affirming that persons with managerial and supervisory responsibilities are not entitled to the protections afforded to “workmen” under the ID Act.

·?Bhushan Industries v. Lohasingh Ramavadh Yadav [W.P. No. 1025 of 2024] - Bombay High Court [Date of decision: March 20, 2024]

Facts: On April 9, 2013, the Respondent’s employment was terminated under the pretext of abandonment without any prior inquiry. The Labour Court deemed this termination invalid, aggrieved by which, the Petitioner filed a Writ Petition in the High Court. In addition to the validity of the termination, the Court had to also consider the nature of relief to be granted to the Respondent as the establishment ceased operations from March 20, 2020.

Decision: The High Court affirmed the Labour Court's decision, declaring the termination invalid. Regarding the closure of the establishment, the Court instructed the Petitioner to pay the Respondent a lump sum compensation of Rs.4,00,000/- as a final settlement in lieu of reinstatement and back wages within six weeks.

Significance: This case underscores the necessity of conducting an inquiry before terminating an employee on grounds of abandonment of service. It highlights the importance of providing employees with a fair opportunity to present their side of the story to ensure disciplinary actions are based on accurate facts and intentions.