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Recent Decisions on Labour & IR issues. By K. Srinivas, Manager (Legal) M. Sivaraman, Dy. Manager (Legal) Venu Samudrala, Prob.Asst. Exe.(Legal). WELCOME !. OVER-VIEW Revision of Pay & Allowances Sexual Harassment of Women Acceptance of VRS Strikes
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Recent Decisions on Labour & IR issues By K. Srinivas, Manager (Legal) M. Sivaraman, Dy. Manager (Legal) Venu Samudrala, Prob.Asst. Exe.(Legal)
OVER-VIEW • Revision of Pay & Allowances • Sexual Harassment of Women • Acceptance of VRS • Strikes • Proof for Regularization / Re-instatement • Termination of Probationers • False Declaration by Employees • Regularization of Contract Labour • Subsistence Allowance • Bonds
Revision of Pay & Allowances • AK Bindal and Another v. Union of India and ors. AIR 2003 SC 2189 • Non revision of Pay & Allowances in PSUs is not violative of fundamental right to live with human dignity. • Employees of PSUs being not Government servants they have no right to claim Government financial assistance to PSUs for revision of Pay and allowances. Kapila Hingorani v. State of Bihar 2003 LLR 628 (SC) • Starvation deaths of employees of PSUs over non payment of Salary for several years. • No defence in law for the Govt. to say that PSUs are distinct corporate legal entity and hence Govt. not liable. • Where Govt. invests public money in PSUs it cannot be blind to the violation of Human Rights of the employees of PSUs. • State Govt. held liable to release salary and there is no legal basis to direct Central Govt. for the same. Inference: Corporate veil can be lifted if human rights of employees of PSUs are violated
Sexual Harassment of Women • Medha Kotwal Lele and ors. v. Union of India and ors. • SC order dated 27/04/2004 • Clarification issued to directives contained in Vishaka Case. • Report of complaints committee will be treated as findings of a disciplinary enquiry. Inference: • Report of complaint committee will be no more a preliminary enquiry findings. • On proved guilty by complaint committee report employer can straightaway initiate disciplinary action against delinquent. • Vishaka directives incorporating sexual harassment as misconduct will now be governed by the clarifications issued.
Acceptance of VRS • Bank of India v. OP Swarnakar 2003 (2) SCC 721 • VRS is contractual in nature and principles of contract law will apply. • Scheme is only an invitation to offer. Application of employees will be the offer. Before its acceptance by employer, employee is free to withdraw option. • Employees who have accepted benefits / payments under the scheme cannot thereafter withdraw their application or legally challenge the same. Inference: • Above ratio consistently applied will PNB v. Virendra Kumar Goel 2004 LLR 267 (SC) and Punjab and Sind Bank v. S. Ranveer Singh Bawa 2004 LLR 481 (SC). • Withdrawal of option under VRS is possible until its acceptance not withstanding clauses prohibiting withdrawal. • Acceptance of offer by employer is material and communication of order even if slightly delayed will not vitiate.
STRIKES • TK Rangarajan v. Government of Tamil Nadu & ors.2003 LLR 863 (SC) • Employees have no fundamental rights to go on strike. • There is no statutory provision empowering Government employees to go on strike. • There is no fundamental, legal or equitable right to go on strike. Inference: • Decision generated widespread resentment and furore from employees, trade unions etc. • Dicta in the decision has been widely worded on issues not canvassed before the court. • Decision has not been specific to the case of Government employees as it sought to make wide and sweeping conclusions. • Possibly this decision will bind only Government employees since legal right exists for workman under Sec.22 of I.D. Act, 1947. • Then BJP Govt. accepted trade unions view and committed itself to file a review application before SC.
Proof for Regularization / Re-instatement • UP Avas Evam Vikas Parishad v. Kanak 2003 LLR 1 (SC) • It is the responsibility of the workman to prove that he worked for more than 240 days. • Mere filing affidavit by workman cannot substitute evidence on receipt of salary appointment order etc. • Employer cannot be compelled to lead evidence BHEL v. State of UP & ors. 2003 LLR 817 (SC) • Once workman leads evidence, onus then shifts to employer to produce records etc. to prove that he was not engaged so. • Failure to do so will lead to adverse inference and reinstatement / regularisation will be directed. Workmen of Nilgiri Coop. Mktg. Society v. State of TN. 2004 LLR 351 (SC) • Even if workers continued for years together, to seek regularisation etc. proof is required to be laid by said workers. • Apart from control and supervision test, an integration test is to be applied to determine employer – employee relationship. Inference: • Onus to prove initially lies with workman and on discharge of the same it shifts to the employer. • Mere perennial nature of engagement is not the factor but several tests will have to be applied.
Termination of Probationers • Mathew P Thomas v. Kerala State Civil Supply Corpn. 2003 LLR 349 (SC) F Termination simplicitor of a probationer will not be stigmatic. • Termination of probationer even when he was warned of unsatisfactory work will not be stigmatic. • Such termination will not be invalid. Inference: • Earlier rulings on “foundation” and “motive” for discharge of probationer stands diluted. • Even the show cause notice issued earlier to improve performance will not be regarded as motive for termination and is not stigmatic.
False Declaration by Employees • Kendriya Vidyalaya Snagathan & ors. v. Ram Ratan Yadav • 2003 LLR 433 (SC) • Suppression of material facts or giving false declaration in employment applications will lead to termination of service. Inference: • Declarations made by applicant in employment forms are very material. • On found guilty of suppression or false declaration, it is no defence to state that he did not understand the language or the implication of the statements required thereunder.
Regularization of Contract Labour • Ram Singh v. UT of Chandigarh 2004 LLR 47 (SC) • Following SAIL decision held that not High Courts but only Industrial Courts and Tribunals should examine regularisation. • Multiple pragmatic approach involving and “integration” test will have to be applied and mere control test not relevant. Workmen of Nilgiri Coop. Mktg. Society v. State of TN. 2004 LLR 351 (SC) • Mere long years of working not relevant but to establish employer – employee relationship, workman will have to prove the same. • High Courts not to interfere. • Industrial Courts to adopt an integration test. Inference: • Genuine contracts will prevent direction for regularisation. • High Courts cannot interfere and it is responsibility of contract labour to prove existence of direct employer – employee relationship with PE. • Labour Courts / Tribunals to apply multiple tests.
Subsistence Allowance • Indra Bhanu Gaur v. Committee, MGT of MM Degree College • 2004 LLR 228 (SC) • In absence of pleading and establishing prejudice by the delinquent caused by non-payment of subsistence allowance, proceedings will not be vitiated. • Suspended employee has to request for release of subsistence allowance. Inference: • Settled position is slightly diluted as suspended employee is now supposed to request for the allowance. • In case of non payment, the suspended employee has to plead and establish prejudice that non-payment had denied him opportunity so as to assail the disciplinary proceedings
Bonds • Weiler International Electronics v. PV Somasundaram • 2003 LLR 357 (BOM) • Injunction restraining former employee not to divulge trade secrets will not be issued on mere apprehension. • Bonds and agreements restraining such disclosure by former employees even after leaving the services will have to be for reasonable period and with geographical limits. • Star India Pvt. Ltd. v. Laxmiraj Sitaram Naik 2003 LAB. I. C. 1618 (BOM) • Injunction restraining former employee not to join competitor and divulge trade secrets can be issued only if the existence of such trade secrets is proved and that the former employee was imparted with such secrets is established. • Negative covenants which lead to effecting the right to employment and livelihood of former employees cannot ordinarily be enforced. Inference: • Bonds and negative covenants with employees will be invalid if found to be against Sec.27 of Contract Act or against public policy or if it places unreasonable restrictions. • Can be enforced if non-disclosure or non-compete covenants are for limited period and territorial in operation. • Mere knowledge and expertise or style of working gained by an employee through long years of working is his own product and not the business or trade secret of the employer.
