l. Notifications
1. Karnataka Government exempts IT/ITeS and various other establishments from the Industrial Employment (Standing Orders) Act, 1946
The Karnataka Government has exempted IT, ITES, startups, animation, gaming, computer graphics, telecom, and other knowledge-based industries (“Industries”) from application of the Industrial Employment (Standing Orders) Act, 1946 ("IESO Act") for five years from June 6, 2014. The IESO Act applies if 50 or more workmen are employed by an organization in the preceding 12 months. It requires organizations to draft standing orders, covering aspects like working hours, layoff, and retrenchment, which is further required to be certified by the relevant labour authority.
Industries would be required to be compliant with the following, irrespective of the exemption mentioned above:
(i) Industries must comply with the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013 (“POSH Act”).
(ii) A grievance redressal committee (“GRC”) must be constituted as required under Section 9(C) of the Industrial Disputes Act, 1947 (“IDA”), applicable to establishments with 20 or more workmen. Non-compliance penalties are lower, but establishing a GRC is advisable for organizations with 50 or more workmen.
(iii) Industries must inform the jurisdictional deputy labour commissioner and commissioner of labour in Karnataka about employee dismissals, terminations, suspensions, and discharges, and provide relevant information if requested by labour authorities.
(iv) These exemptions will apply until the Industrial Relations Code, 2020 is enacted. Recent reports suggest that the Ministry of Labour may notify the labour codes soon.
2. Telangana Government extends exemption granted to IT and ITeS sectors from select provisions of Telangana Shops and Establishments Act, 1988 for 5 years
The Telangana Government has extended the exemption for IT and ITeS sectors from certain provisions of the Telangana Shops and Establishments Act, 1988 (“Telangana S&E Act”) for four years, effective June 7, 2024. This continuation applies to Sections 15, 16, 21, 23, and 31, covering aspects like working hours, special provisions for young persons and women, and holidays.
Industries would be required to be compliant with the following, irrespective of the exemption mentioned above
- Employees are entitled to overtime pay beyond 48 hours of work per week and must be given a weekly day off.
- Employees working on mandatory national and festival holidays must be given compensatory holidays with wages as per the Telangana S&E Act.
- Adequate security and transportation must be provided for young women employees working night shifts.
3. Employees Provident Fund Organisation issues temporary measure to settle physical claims and benefits of beneficiaries in case of death
The Ministry of Labour & Employment, Government of India, issued a circular dated May 17, 2024, allowing the processing of physical claims without Aadhaar seeding as a temporary measure to confirm membership and the genuineness of claimants. This measure addresses delays in benefit release due to inaccurate Aadhaar details after a member's death. It applies only to cases where member details are correct in the universal account number but inaccurate or incomplete in Aadhaar.
ll. Judgments
1. M/s Bharti Airtel Ltd. v. A. S. Raghavendra
- Background
The Supreme Court (“SC”), in its judgment dated April 2, 2024, ruled that an employee cannot unilaterally dictate employment terms related to appraisal.
- Facts
The respondent, appointed as a regional business head in 2009, resigned in 2011and received a settlement. Approximately 19 months later, he alleged his resignation was coerced, leading to conciliation proceedings.The state government filed a complaint in 2013, which the labour court rejected. The single judge bench of the High Court initially upheld the claim but was later contested by the company, reaching the SC.
- Analysis and decision
The SC found that an employee's managerial position does not automatically classify them as a “workman” under Section 2(s) of the ID Act. It emphasized that a deeper inquiry into resignation circumstances is necessary, and dissatisfaction with appraisal does not equate to coercion. The SC ruled that the employee did not qualify as a “workman” and set aside the single judge's ruling, reinstating the labour court's decision.
2. Shriram Manohar Bande v. Uktranti Mandal & Ors.
- Background
The SC, in its judgment dated April 25, 2024, held that non-communication of resignation acceptance does not invalidate termination.
- Facts
The appellant, an assistant teacher, resigned in October 2017 but later withdrew it. He received a termination letter in November 2017. The tribunal initially set aside the termination, but the Bombay High Court (“BHC”) upheld it, ruling that resignation acceptance is valid even if not communicated.
- Analysis and decision
The SC affirmed that the acceptance of resignation determines termination, regardless of communication. It upheld the BHC's decision, reinforcing that once resignation is accepted by the appropriate authority, it is final, and any subsequent withdrawal is not permissible.
3. Stone Hill Education Foundation vs. Union of India and Ors.
- Background
On April 25, 2024, the single judge bench of the Karnataka High Court (“KHC”) struck down paragraphs 83 of the Employees Provident Funds Scheme, 1952, and 43A of the Employees' Pension Scheme, 1995, as arbitrary and unconstitutional.
- Facts
The central government introduced these provisions to extend benefits to international workers. The KHC ruled that these provisions were unconstitutional, citing unequal contribution requirements between Indian and international workers as discriminatory.
- Analysis and Decision
The KHC struck down paragraph 43A of the Pension Scheme, and paragraph 83 of the Employees Provident Fund Scheme. The KHC reasoned that introduction of paragraph 43A and paragraph 83 is in the nature of subordinate legislation and cannot go beyond the scope of the parent legislations. Keeping in view the aims and objects of the Employees Provident Fund Scheme, when a ceiling amount of INR 15,000 (Indian Rupees fifteen thousand) per month has been placed as a threshold for an employee to be a member to the fund, an international worker cannot be made to pay contribution on his gross salary. KHC further noted that these provisions are violative of Article 14 of the Constitution of India. This distinction in the amount of contribution is discriminatory and violative of Article 14 of the Indian constitution.
4. Mohanakrishnan v. Deputy Inspector General of Police
- Background
The Madras High Court (“MHC”), in its judgment dated June 11, 2024, held that serious offences under the POSH Act are not barred by limitation and that principles of natural justice must be upheld.
- Facts
The petitioner challenged an enquiry report for alleged sexual harassment, claiming the proceedings were time-barred.The MHC found that serious allegations, like sexual harassment, can be considered beyond the strict time limits and emphasized fair procedural practices.
- Analysis and Decision:
The MHC ruled that the enquiry report's time limitations were inapplicable for serious offences. It also stressed that natural justice principles must be followed, partially vitiating the enquiry report but upholding the complaint's validity and rejecting the accused's technical objections.
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