JAN2015

Hello Readers,

The Compliance Calendar for January includes remittances for PF, ESI, Labour Welfare Fund and CLRA.

In important judgements, the Honourable Punjab & Haryana High Court has held that abandonment of employment depends upon intention of a workman. The Honourable Karnataka High Court has pronounced thata more beneficial gratuity scheme, over payment of gratuity act, is permissible. The Honourable Uttarakhand High Court has opined that back-wages should berightly denied in the absence of proof for unemployment. The Honourable Bombay High Court has pronounced that full back wages on reinstatement should be paidwhen workman proved unemployment during interregnum and when termination of workman is not on technical ground. The Honourable Bombay High Court has ruled that ahospital engaged in welfare activities is an 'industry under I.D. Act'.

In news to note, a separate bill to regulate small factories is being drafted by labour ministry. The employees' provident fund organization (EPFO) has constituted a five member sub-committee on construction workers. The EPF Appellate Tribunal has held that bifurcation of minimum wages into allowances is not illegal. Central Government has released a notification for amendment in Apprentice Act, 1961. ESIC has released booklets for employee& employers online. The Bonus Act has got an amendment. RBI has extended timing for RTGS transactions till 8PM. The Labour Ministry has prepared a mega housing scheme to offer affordable houses to over 5 crore subscribers of retirement fund body EPFO.

We hope you find the contents of this newsletter relevant and useful. We welcome your suggestions and inputs for enriching the content of this newsletter. Please write to contactadp@adp.com

News to note

Important Judgments

Compliance Calendar for Dec 2014 02

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Abandonment of employment depends upon intention of a workman 04

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More beneficial gratuity scheme, over payment of gratuity act,is permissible

Back-wagesshould berightly denied in the absence of proof for unemployment

Full back wages on reinstatement should be paid when workman proved unemployment during interregnum and when termination of workman is not on technical ground

A hospital engaged in welfare activities is an 'industry under I.D. Act. 06

Separate bill to regulate small factories drafted by labour ministry

EPFO panel on Construction workers

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Bifurcation of minimum wages into allowances-not illegal

Central Government released notification for amendment in Apprentice Act, 1961

ESIC releases booklets for employee & employers on line, through the below links

Bonus Act gets an amendment

RBI extends Timing for RTGS Transactions till 8PM.

Labour Ministry prepares a mega housing scheme to offer affordable houses to over 5 crore subscribers of retirement fund body EPFO

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Compliance Calendar for the month of Jan 2015

20th Jan 15 Kerala By Challan

Labour Welfare Fund Remittances

15th Jan 15 Remittance of Contribution EPF & MP Act 1952 By Challan

15th Jan 15International worker with wages and Nationality EPF & MP Act 1952 Statement in IW

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21st Jan 15Remittance of Contribution (Main code and Sub Codes) ESIC Act 1948 By Challan

ESI Central

Due Date Activity Due Under Mode

Professional Tax - States - Remittances

Andhra Pradesh & Madhya Pradesh State wise regulations

PF Central

KeralaState Labour Welfare Fund

10th Jan 15

15th Jan 15

20th Jan 15

21st Jan 15

Gujarat

By Challan

By Challan

By Challan

By Challan

Karnataka

West Bengal

Gujarat PT regulations

30th Jan 15 By Challan

West Bengal PT regulations

Maharashtra, Assam & Orissa State wise regulations

20th Jan 15 Karnataka PT regulationsKarnataka Online

Karnataka PT regulations

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Compliance Calendar for the month of Jan 2015

Due Date Activity Due Under Mode

31st Jan 15

CLRA Central

Return by Principal Employer CLRA, 1970 By Form XXV

15th Jan 15

Strength & Occupation Return By FormER-1 & ER-2

Employment Exchange (Compulsory Notification of Vacancies) Act, 1959

31st Jan 15 During the month

Annual Return Medical Examination, Pressure Vessel examination,Safety Committee Meeting & Canteen Committee Meeting

By Form 22

Factories Act, 1948 Central

Factories Act

31st Jan 15

Return By Form K

Maternity Benefit Act, 1948

31st Jan 15

Return By Form III

Minimum Wages Act, 1948

31st Jan 15

ReturnBy Form IV, VI & VII

Payment of Wages Act, 1936

31st Jan 15

Return By Form 2 & Copy of Form 1

Tamil Nadu Indl Est (Conferment of Permanent Status) Act, 1981

31st Jan 15

Particulars of contribution By Form A

Tamil Nadu Labour Welfare Fund Act, 1972

31st Jan 15

Return By Form 2

Payment of Subsistance Allowance Act

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ABANDONMENT OF EMPLOYMENT DEPENDS UPON INTENTION OF A WORKMANIn a case of Dal Chand vs. M/s. K.B. Hydraulic Engineering Works (regd) and another, the Honourable Punjab & Haryana High court through Honourable Justice Mr. Rajiv Narain Raina pronounced that▪ Abandonment of employment by a workman is

dependent upon his intention.▪ Failure of the management in allowing workman

for resumption of duties during conciliation proceedings would justify the claim of the workman that he has not abandoned his job of his own accord.

▪ Reinstatement would be appropriate when the management has alleged that the workman has abandoned his job of his own accord and, as such, it amounted to violation of section 2(oo) of the Industrial Disputes Act, 1947.

▪ Any termination or even abandonment of job on the part of a workman would attract section 25F of the Industrial Disputes Act and if its compliances not made, the abandonment of job would be treated as illegal and the workman will be entitled to reinstatement.

▪ When the labour court has held that the management has wrongly presumed that the workman has kept away from work and abandonment has been rightly granted whereas instead of 10% back-wages full back- wages should have been awarded.

MORE BENEFICIAL GRATUITY SCHEME, OVER PAYMENT OF GRATUITY ACT, IS PERMISSIBLE

▪ In an case of R.Balurao, s\o Late Ramachandran Shivabhatjois vs. Divisional controller, KSRTC, Mysore, and others, the honourable Karnataka High Court through Hon'ble Justice Mr.Ram Mohan Reddy pronounced that

▪ An employee is entitled to gratuity under a provision of any other law or regulation or scheme framed thereunder if the same is more beneficial than those as provided under the Payment of Gratuity Act, 1972.

▪ An employee is not entitled to gratuity if he is not able to claim the same under any provision of law.

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In a case of Laxmi Sugar Mills Co. Ltd. vs. presiding officer, labour court, haridwar & Anr., the Honourable Uttarakhand High Court through the verdict by the honourable Justice Mr. Alok Singh pronounced that

▪ Awarding reinstatement to a workman, after 10 years of termination of his services, seems to be totally unjustified.

▪ Lump sum compensation is appropriate after 10 years of termination of services of the workman instead of reinstatement.

▪ When no material was ever produced before the labour court by the workman to show that they were not engaged gainfully or totally remained idle after termination of their services till impugned award was passed, non-grating back-wages by the labour court is justified.

FULL BACK WAGES ON REINSTATEMENT SHOULD BE PAID WHEN WORKMAN PROVED UNEMPLOYMENT DURING INTERREGNUM AND WHEN TERMINATION OF WORKMAN IS NOT ON TECHNICAL GROUND

In a case of Shashikantgangaramnarkar vs. Advance Transformers and Equipment Pvt Ltd, Mumbai and Another, the Honourable Bombay High Court through the verdict by Honourable Justice Mr. M.S. Sonak. J pronounced that

▪ Denial of 50% back-wages by the labour court on reinstatement of the workman without stating any reason needs modification hence the workman would be entitled to full back-wages.

▪ When the workman, in his evidence, before the labour court stated that after termination he remained unemployed and made efforts for employment but could not get the same, would justify full back-wages.

▪ Failure of the employer to rebut the evidence of unemployment during interregnum would justify the claim of the workman for full back-wages.

▪ Labour court erred in not granting full back-wages to the workman on his reinstatement when the termination was not on only technical ground.

BACK-WAGES SHOULD BERIGHTLY DENIED IN THE ABSENCE OF PROOF FOR UNEMPLOYMENT

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▪ If a workman states that he remained unemployed during pendency of the proceedings before the labour court, the burden of proof to prove employment by the workman shifts upon the employer to rebut the same.

▪ Grant of full wages would be justified on reinstatement when the petitioner-workman has served the employer for a long period without any blemished past record.

▪ Daniel of back-wages, which were to be awarded, would justify levy of interest on payment to the workman concerned.

▪ When there is denial of back-wages and the termination is held as illegal, the High Court, in writ petition, will interfere in the award.

A HOSPITAL ENGAGED IN WELFARE ACTIVITIES IS AN 'INDUSTRY UNDER I.D. ACT.In a case of Union of India through director & Ors. Vs. Mohan P. Gore, the honourable Bombay High Court through the verdict by Honourable Justice Mr. M.S. Sonak pronounced that▪ An institution is an industry if it yields profits but the same is siphoned off for altruistic objects or if

it makes no profit but hires the services of employees as in like business, but the goods and services, which are the output of that institution, are made available at the low or no costs, to the indigent needy who are priced out of the market.

▪ If an institution is oriented on a humane mission, which is fulfilled by the men who work, not because they are paid wages but because they share the passion for the cause and device job satisfaction from their contribution, it may not be covered by the definition of 'industry' as observed in the case of Bangalore Water Supply and Sewerage Board v Rajappa, 1978 LIC 467 (SC) by Justice Mr. Krishna Iyer.

▪ The scope and parameters of the definition of State under the Article 12 of the Constitution of India and Industry under section 2(j) of the Industrial Disputes Act, 1947 are completely different.

▪ A hospital engaged in charitable activities is also an industry under section 2(j) of the Industrial Disputes Act 1974.

SEPARATE BILL TO REGULATE SMALL FACTORIES DRAFTED BY LABOUR MINISTRY▪ The Small Factories (Regulation of Employment and Condition of Service) Bill, 2014, which has

been uploaded on the labour ministry’s website for public comments till November 10, is likely to be introduced in the winter session December-end the labour ministry said the draft was finalized after extensive discussions by the working group constituted by it.

▪ The draft denies a small factory “as any premise wherein a manufacturing process is carried on and which employs less than 40 workers” and seeks to exempt employers from complying with 14 act. (for complete bill visit: labourlawreporter.com)

▪ The employers can register and even close down their factories by electronically notifying it to the authorities concerned. While mandatory registration of a small factory is to be done within 60 days of its commencement after paying the prescribed fees, in the case of closure, the owner/employer needs to electronically notify this to the chief inspector within 15days of closing the factory. On 'Financial inclusion'. The draft proposes that wages of over Rs. 1000 “Shall be paid to the workers by depositing them in the bank account of the workers, electronically”. It shall be the responsible of the employer to get a zero balance account opened. It adds.

▪ On minimum wages, the draft mandates that no employer shall pay less than the fixed minimum wages, but proposes no penalty for non-compliance, adding that any claim in this matter is to be decided by an authority to be set up by the State Government. The draft includes proposals on child labour, health and safety standards, maternity benefits, leave entitlement, bonus, and gratuity among other things. The bill having 55 section also has provision regarding unfair labour practices, service conditions, adjudication of disputes, etc.

EPFO PANEL ON CONSTRUCTION WORKERS▪ The Employees' Provident Fund Organization (EPFO)

has constituted a five member sub-committee on construction workers under the tripartite central board of trustees to suggest a mechanism for increasing social security coverage for workers in the sector. The sub-committee will be chaired by the central provident commissioner, said an EPFO circular dated October 15, and will include one government representative to be nominated by the labour secretary and an additional central PF commissioner. The employers will be represented by SS Patil and Ravi Wig, while the employees will be represented by Ramen Pandey of congress-led INTUC and MJ Rao of the BJP - led Bhartiya Mazdoor Sangh. The tenure of the sub- committee shall be “At the pleasure of the Chairman” according to the circular.

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BIFURCATION OF MINIMUM WAGES INTO ALLOWANCES-NOT ILLEGAL▪ An appeal was filed by the appellant, before the Employees' Provident Fund Appellate Tribunal against

the order dated 06.07.2011, passed by the EPF authority, under section 7A of the act, assessing P.F dues and allied dues on allowances also which is illegal.

▪ The EPF Appellate Tribunal observed that the employer has bifurcated the minimum wages into different heads like basic wages, house rent allowance, conveyance allowance, etc. The employer has been paying employees' contribution only on the basic wages as provided under the Employees' Provident Funds and Miscellaneous Provident Act, 1952 excluding allowances. The EPF authority pleaded that PF dues can never be calculated on wages lower than minimum wages. Accordingly, the EPF authority initiated proceeding under section 7A of the act, taking into consideration the minimum wages under the minimum wages act and directed the employer to pay the contribution so determined. The EPF appellate tribunal opined that minimum wages has not been defined under the Employees' Provident Funds and Miscellaneous Provident Act, 1952. Only basic wages is defined under the Act. EPF authority has no power to hold whether minimum wages amount to basic wages or not. While interpreting a provision of any Act, the court only has to interpret the law and cannot legislate it. If a provision of law is misused and subjected to abuse of process of law, it is for the legislature to amend, modify or repeal it, if deemed necessary. There is no compulsion to hold that the definition of basic wages should be equated to the definition of minimum wages as defined under section 2(b) read along with section 6 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and not on Minimum Wages Act. Hence, impugned order is set aside. Appeal is allowed.

CENTRAL GOVERNMENT RELEASED NOTIFICATION FOR AMENDMENT IN APPRENTICE ACT, 1961▪ The qualification, period of apprenticeship training, holding of test, grant of certificate and other

conditions relating to the apprentices in optional trade shall be such as may be prescribed.

▪ The employer may engage apprentices from other States for the purpose of providing apprenticeship training to the apprentices.

▪ The Central Government shall prescribe the number of apprentices to be engaged by the employer for designated trade and optional trade.

▪ Several employers may join together either themselves or through an agency, approved by the Apprenticeship Adviser, according to the guidelines issued from time to time by the Central Government in this behalf, for the purpose of providing apprenticeship training to the apprentices under them.

▪ Every employer shall make suitable arrangements in his workplace for imparting a course of practical training to every apprentice engaged by him.

▪ Such of the trade apprentices who have not undergone institutional training in a school or other institution recognised by the National Council or any other institution affiliated to or recognised by a Board or State Council of Technical Education or any other authority which the Central Government may, by notification in the Official Gazette, specify in this behalf, shall, before admission in the workplace for practical training, undergo a course of basic training and the course of basic training shall be given to the trade apprentices in any institute having adequate facilities.

▪ Every trade apprentice who has completed the period of training may appear for a test to be conducted by the National Council or any other agency authorised by the Central Government to determine his proficiency in the designated trade in which he has undergone apprenticeship training.

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ESIC RELEASES BOOKLETS FOR EMPLOYEES & EMPLOYERS ONLINE, THROUGH THE BELOW LINKSEmployer: http://esic.nic.in/CIRCULARS/ESIC%20Employers%20Booklet%20English.pdf

Employees: http://esic.nic.in/CIRCULARS/ESIC%20Employees%20Booklet%20English.pdf

BONUS ACT GETS AN AMENDMENT▪ Annual Returns - Every employer shall on or before the 1st day of February in each year upload

annual returns in Form D on the web portal of the Ministry of Labour and Employment giving information as to the particulars specified in respect of the preceding year, Provided that the annual returns shall be filed within the time limit specified in section 19 of the Act.

▪ Every employer on or before the 1st day of February in each year may file annual returns in the Form D to the Inspector giving information as to the particulars specified in respect of the preceding year.

▪ Provided that during inspection, the inspector shall require the production of the accounts, books, register and other documents if the same are maintained in manual form or in electronic form, as the case may be.

RBI EXTENDS TIMING FOR RTGS TRANSACTIONS TILL 8PM.▪ With effect from 29.12.2014 RBI

has extended the working hours for Weekdays / Regular Days to 08.00 Am to 08.00 PM from existing 09.00 AM to04.30 PM and it further extended the working hours for RTGS on Saturdays / Sunday to 08.00 Am to 03.30 PM from existing 09.00 AM to 02.00 PM.

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LABOUR MINISTRY PREPARES A MEGA HOUSING SCHEME TO OFFER AFFORDABLE HOUSES TO OVER 5 CRORE SUBSCRIBERS OF RETIREMENT FUND BODY EPFO▪ The Ministry intends to collaborate with PSU banks, housing finance companies, state-

owned construction firms like NBCC and authorities like DDA, PUDA, HUDA to build houses at a price to be fixed by the government.

▪ Labour Ministry is preparing a scheme under which affordable houses will be provided to the Employees' Provident Fund Organisation (EPFO) subscribers, particularly those who are in the low income bracket," a source in the ministry said.

▪ In a recent note, the Prime Minister's Office had asked EPFO to promote affordable housing for its subscribers and use its funds for the purpose.

▪ According to the note, deployment of 15 per cent of EPFO funds as loan for low cost housing would generate a credit flow of Rs 70,000 crore and can create 3.5 lakh additional low-cost homes.The Labour Ministry is keen on a scheme under which EPFO subscribers could withdraw their PF deposits to make part-payment of the total cost of the house.

▪ The Ministry also intends to provide subsidy to the EPFO subscribers in low-income bracket to help them avail benefits of various low-cost housing schemes of the government.

▪ Financial institutions, sources said, would be roped in to provide housing loan at low interest rates under the priority sector lending for construction of affordable houses under the scheme. The scheme, however, will be optional for EPFO subscribers as there is no need to provide affordable houses to those who already own one.

▪ Under the housing scheme, there would be three different income categories--Low Income, Middle Income and High Income. Houses and financial incentives under the scheme will be offered on the basis of the income of a subscriber.

▪ The subscribers would be facilitated to pay equated monthly instalments of their home loan through their provident fund account.

▪ The source said that under the scheme EPFO may use its funds to create a corpus for providing housing loan at affordable interest rate to its subscribers.

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