A Feeling of inherent possibilities by Chinmoy Sarkar

Editorâ&#x20AC;&#x2122;s Note

Towards positive discipline he 2011 year has again been a year of reinforcing positive discipline in the organised sector as far as judicial pronouncements influencing employer-employee relations are concerned. Our labour laws have not changed but the judiciary has provided a broad, liberal and expansive interpretation of various labour enactments. A number of doubts, disputes and reservations on the actual scope, content and application of various laws have been removed. As the time is changed, so the judicial thought process. Both Industry and the Trade Unions have been called upon to subsume their vested interests in the larger interest of country economy. Slowly-slowly it has been established that courts are not going to interfere with the decisions of the employer where the incidents of indiscipline are concerned. In this year too there have been many judgments from the High Courts and Supreme Court be it on contract labour, indusrial disputes, unfair labour practices, dismissals, sexual harrassment and disciplinary proceedings, where fine balance between accountability and discipline has been reinforced. The year ended with the Supreme Court comments in the Siemens case that courts must consider the vast changes in economic and industrial scenario and the new challenges being faced by the company in the matter of re-organisation of its work culture. Companies should not be prevented from re-arranging their businesses. Courts also came down heavily on the employees who were found involved in the matters of dishonesty and misappropriation of public money. Supreme court in the case of Panchmahal Vadodra Gramin Bank has said that the employee could not escape the penalty of dismissal where the findings of the enquiry officer has been upheld by the court and charges relates to dishonesty and lack of probity. SC also deplored the malpractices being adopted by employer to subterfuge the Contract Labour System. BM research team has examined thounsands of pages of judgments of various High Courts and Supreme Court delivered and reported in various journals during the year and selected about 600 important judgments.The complex law and principles laid down in the pronouncements are captured in few lines in simple to understand language. And this is the cover feature of Feb. 2012 issue. If you like it let us know. If not, well, let us know that too.

Anil Kaushik

Readers Response

Insightful The latest Business Manager cover story depicting growth of HR function in the country through Dr. T.V. Rao which in known as father of HRD is very interesting and carry valuable insights on the subject. Dr. Rao has rightly shared his concern about growing tendency among new breed of HR professinals of job hopping. If HR professionals really want to contribute and make a respectable place in the organisation, they have no other option but to stick for a longer period. Hemang Patgaonkar, Mumbai

High Value Contents It is rewarding to read the cover story and article on journey of HR by Udai Pareek and T.V. Rao. The article carries very high value for any one who would be interesting in knowing about HR function in the country. I enjoyed reading the interview excerpts and thank you for bringing out such a wonderful and refreshing food for thoughts. Nirmala Singh, Aurangabad

For me too Understanding HR and its core issues is very important not only for the HR managers but also for others, because at the end of the day the organisation business is only all about managing people effectively. This is not the responsibility of HR alone. I am in operation management heading the organisation but regularly read your magazine and ensure that all my HR team reads it. Your team is doing a wonderful job and contributing to the entire management field. Keep it up. V.M. Singh, Raigarh

Core Strength I am reading your magazine since last one year. I must admit that your magazine has transformed not only in terms of get up, presentation, but also in quality contents. I am a trainer and HR consultant. The articles and features on the entire HR value chain comes as a fresh air. Each issue carry a different dimension. The core strength of your magazine is the nature of articles and solutions provided by you which help practicing managers and even consultants to a great extent. I have also used your magazine contents in my various training programmes. C.M. Chandra, Bangalore

High Impact Magazine I am avid reader of your magazine. The contents are very informative and relevent. I liked the article best practices of high impact HR organisations. The information provided in the article should be of immense benefit to all HR professionals. I congratulate entire team of BM for bringing out such a good journal. Sonali Mahapatra, Bhuveneshwar

Variety of Articles The article of Mr. Kumar about annual increments is very knowledgable. Every HR manager should be aware of legal complications behind adopting increments practices. It is of high worth. Mr. Narayanan article on â&#x20AC;&#x2DC;Worklife Balanceâ&#x20AC;&#x2122; depicts another shade of worklife where balance is necessary. BM each issue carries different kind of articles to cater needs of variety of readers, which is simply super. S.M. Pillai, Chennai

Readers are invited to comment on articles published in BM through email at : bmalwar@yahoo.com, bmalwar@gmail.com 2

Business Manager

February 2012

Inside

Cover Feature

February 2012 Vol. 14 No.8 Chief Editor ANIL KAUSHIK Associate Editor Anjana Anil Hon'y Editorial Board Dr. T.V. Rao, Dr. Rajen Mehrotra, Dr. V.P. Singh, H. L. Kumar DELHI : F- 482,Vikaspuri, New Delhi-18 GHAZIABAD : A - 39, Lohia Nagar, Naya Ghaziabad (UP) Hon'y Co-ordinators Dr. D.N. Singh- Ahmedabad dinanath.singh@cadilapharma.co.in

A.S. Sharma - Gurgaon assharma@jurishr.com

Pankaj Pradeep- Pune Pankaj.Pradeep@fiapl.com

Mihir Gosalia- Mumbai mihir@mihirgosalia.com

Indranil Banerjee- Kolkata indranil.hr@gmail.com

Owned, Published and Printed by Anil Kaushik at Sun Prints, Ganpati Tower, Nangli Circle, Alwar - 301001 and Published From B138, Ambedkar Nagar, Alwar - 301001 ( Raj.) India Editor : Anil Kaushik

The views expressed in the articles published in Business Manager are those of the authors only and not of the Publisher/Editor necessarily. ã Business Manager

While every effort is made to have no mistake in the magazine, errors do occur. Publishers do not own any responsibility for the losses or damages caused to any one due to such ommissions or errors.

Annual Subscription 900/- through DD (by ordinary Book-Post) (by Courier 1140/-) favouring Business Manager ( Please add 40/- to outstation Cheques) may be sent to: B-138, Ambedkar Nagar, Alwar - 301001 (Raj.) India, Ph : 91-144 - 2372022 www.businessmanager.co.in E-mail : bmalwar@yahoo.com, bmalwar@gmail.com Published on 1st of Every Month

IMPORTANT Labour Judgments

Abandonment Apprentice Back wages Bonus Building & Construction Workers Contract Labour Court Powers Daily wager Disciplinary Proceedings Dismissal Employees Compensation Act Employees Provident Fund Employment Exchange (CNV) Act E.S.I. Equal Remuneration Equal Work-Equal Wage Factories Act Fixed term appointment Gratuity Habitual Absence Industrial Disputes Act Industry Interim Relief Lay-Off Limitation Lock Out Minimum Wages Misconduct No Work-No Pay Over time Payment of wages Part Time Employee Probationer Promotion Punishment Reference Regularisation Reinstatement Resignation Retrenchment Retirement Settlement Shops & Establishments Standing Orders Strike Suspension Termination Trade Union Transfer Unfair Labour Practice VRS Workman

Post globalization and economic liberalisation, there have been radical changes in judicial interpretations thus redefining employee-employer reationship and other labour enactments. 2011 year has not been different too. This year also witnessed the same progressive thought process reflected in judicial verdicts, Since labour laws in the country have been extensively explained and interpreted, court ruilings commonly known as case law have attained immense importance for organisations be it manufacturing, service or any other. BM research team has selected around 600 important judgments delivered and reported in various law journals during 2011 and comprehended the principles enunciated in few lines in simple language. Here is an unique collection

pg. Business Manager

19-55

February 2012

Inside

Young Talent- Challenges for theHR

pg.

House Magazine In Organizations

pg.

There is a need for organizations to consciously plan and ensure coverage of employees at all levels and their families in the house magazine, so that the house magazine achieves its objective. An article by Dr. Rajen Mehrotra

pg.

Helpline Labour Problems & Solutions

Questions by readers on variety of problems they face at work and answers by Anil Kaushik Chief Editor. Look at it. These may also be of some help to you.

The Art of Management: Mantra and tantra

pg.

It is known for tremendous patience, waiting in the cocoon to weave around its silk thread, only to emerge out as beautiful butterfly. All its legs untiringly crawl around. We need to work with patience. An article by S.Chandrasekar

A feeling of inherent possibilities

pg.

We are all searching for an answer as how we can use Surrogate HR as a business discipline to make full use of human's natural aptitude and skills? The answer is about removing increased sufferings of human in the material dominated space. Organizations have started understanding the fleeting nature of product value and decaying outlook of leadership positions. Business is now shifting its investment from tangible to intangible and relational assets.

By Chinmoy Sarkar

Industrial Law

Book Review

pg.

Want to become a

Complete HR Manager ?

Subscribe Today

Where Probationer Stands?

pg.

Constitution Bench of Supreme Court has held such an employment on probation, under the ordinary law of master and servant, comes to an end if during or at the end of the probation, the servant so appointed on trial is found unsuitable and his service is terminated by a notice. An article by H.L. Kumar

56 CASE

study Indiaâ&#x20AC;&#x2122;s Best HR Magazine

Quality- A Prerequisite

pg.

62 4

Salvi Parenteral Limited (SPL) was a research-based, international pharmaceutical company that focused on quality and customer satisfaction, and strived to grow on the principles of passion, performance and partnership.The company had to face rough weather in 2007, when one of its products Broadcef came under scrutiny. It was administered on 10 patients in a local hospital managed by the Government of Maharashtra and two patients died after two days.The management of SPL was under tremendous pressure, as the incident could lead to the closure of the company.The case demonstrates how the goodwill of the company in the market, helped it to retain the confidence of its customers and was able to endorse its expertise in manufacturing and stand the rough weather. By Dr. Upender Dhar & others.

Business Manager

February 2012

For subscription details, Contact: E-mail : bmalwar@yahoo.com, bmalwar@gmail.com www.businessmanager.co.in

B-138, Ambedkar Nagar, Alwar - 301001 (Raj.) India, Ph : 91-144 - 2372022

Ganesh Vaidhyanathan Chennai

Young TalentChallenges for the

Few initiatives... 1. Working Environment Working environment is what one feels around him and ensures others feel that too. Is the Boss doing it? 2. Nose-to-the-ground working system About a flat network-structure that emphasizes idea-generators, idea-listeners and idea-implementers. 3. Knowledge input in respect of Functional and Improvement aspects Young employees must be taken through a formal intensive process of updates in productivity-linked furtherance of their career actualization in a rapidly changing scenario. 4. Boosting up identity Young talents need a continuous identity in respect of repositioning.The biggest enemy to the above initiatives is the business priorities as seen by the various functional heads.

R strives to handle all challenges braving opposing undercurrents within a corporate thought system that involves diversity with a common denominator----People. And almost always the roots, if tracked, lead to some hidden set of minds within the workplace who like to think askew. We might already have the adroitness to meet these challenges with innovative methods. However, I trust, young talents (age group 25-35) within our systems also provide HR with a potential possibility to influence corporate futures. That includes effectively arresting events like unionism, and other systemic turbulences that often block-up productive executive time. So, I thought it would be a good idea to explore this further. For the objective defined, I think it somewhat appropriate to alias the HRM function as GRM (Green Resource Management?) even temporarily, if only to converge collective attention. Predictably, the GRM addresses a unique set of human vectors presented by the young talent which needs a clear mapping, diagnosis, designing the nutrients-menu and finally freezing on a road-map for harvesting. 6

Business Manager

February 2012

So, let's begin with identifying the differentiating vectors that the young employees bring in: 'Youth' opens-up floodgates of our preconceived ideations regarding the psychological configurations of the young employees viz. their wisdom, knowledge, exposure, attitudes and personality attributes. The potential of the embodied young mind is a cumulative effect resulting from continuous upgrades, modifications and reconfigurations resulting from past interactions and human experiences, good and bad, throughout every breath of an individual's life cycle. Key factors contributing to the human vectors, thus preparing each human mind, are: Childhood Environment, Parental value addition and handholding, Academic Intake, Knowledge absorption and IQ, Societal Influences and Social Identity. These collectively shape up one's buoyancy of personality and structuring one's thought process (BPTP). Companies hire Mind and the real value that is intended to get onboard is the BPTP. BPTP grows as the physical age increases. Hence our strategy is to manage BPTP and its relative alignment to corporate objectives. An absolute alignment of BPTP is utopian. Individual BPTP impacts the corporate

Young Talent- Challenges for theHR

personality and its various touch points like Share Holders, Customers, End-users and all who are swept by the company's activities in some way or the other. The individual's personality, in an average case, acquires high porosity in terms of egocentric attributes such as fear of failure and consequent loss of face & debilitating neuro- systemic influences such as deficient self-opinion and consequent impairment in expression/communication and so forth. Upon tracking, the root cause of this porosity points to a possible traumatic Childhood Environment, Deficient Parenting and an impaired Societal Identity. While the first two factors are history and cannot be repaired, the Societal Identity can be surely be refreshed. This is then

The first is the Working Environment: For a young mind the company is his Boss. His identity with the company is driven by his Boss's interactions with him. So, the Boss could make or mar his identity, the umbilical cord, connecting him with the organization. the key to improve BPTP through 'Thought Management' initiatives. Societal Identity is a specific transactional positioning that constantly shifts due to a continuous self-evaluation in the transactional world. It points to environmental and transactional opportunities as seen by the individual. Once opportunities are present upfront, an individual rapidly appraises these and classifies them into Pleasant and Unpleasant categories. Unpleasant are naturally trashed in haste; thus one grabs the remaining portion to transact with and attempts to upgrade his BPTP. Thought Management must deal with perceiving all opportunities as a whole and enable the young in expanding their mental aperture across opportunities. 'Opportunities' here represent functional challenges obviously. I read a slogan somewhere, 'To some Challenges are Opportunities, while to

others Problems'. Are we enabling the youngsters to develop that bend of mind when Challenges can only be Opportunities and nothing else? If yes, we are actually working on BPTP. A good start-up action could try the following nutrients:

to succeed. This underscores a need to share grief of failures when they may occur and even greater need to credit all successes to the young. The Boss (and the environment in which the Boss breaths) must acquire an open access to the young mind such that all impediments and complexes are vacated continuously. Working environment is not what one physically creates around him by way of posters, furniture and air-conditioning, not to forget coffee-vending machines these days. Working environment is what one feels around him and ensures others feel that too. Is the Boss doing it? It is a foregone conclusion that the Boss himself must receive nourishment from his bosses up the ladder in similar terms and style, thus fully enabling the Boss in acquiring an absolute freedom from his own inhibitions and fears. The environment, thus suffused with mutual trust, will help young talents to converge their strengths. Increased convergence will result in geometrically increasing BPTP. Specialized training deliveries in themes like Inhibitions, Team Behavior and Relationship will help. Business Manager

February 2012

Young Talent- Challenges for theHR

Young minds usually populating the mid-bottom range of the ladder are subjected to this 'noise' and conveniently develop the SYS-syndrome, Save Your Skin. A good Thought Management must result in evolving a visible and breathing network of candid-thinking and vibrant ideation that continuously audits/upgrades the working system. Free expression is known to considerably reduce relationship stresses.

The second is a nose-to-the-ground working system. The working system necessarily means communication in all its aspects namely, generation, flow, dissemination, decisions, implementation, analysis, course correction and above all its sync with the corporate vision. Usually process updates create hasty patches in the system. Visible, hasty and unexplained are the breeding ground for 'noise' in the system creating room for misplaced application of autocracy. Young minds usually populating the mid-bottom range of the ladder are subjected to this 'noise' and conveniently develop the SYS-syndrome, Save Your Skin. A good Thought Management must result in evolving a visible and breathing network of candid-thinking and vibrant ideation that continuously audits/upgrades the working system. Free expression is known to considerably reduce relationship stresses. I am here talking about a flat networkstructure that emphasizes idea-generators, idea-listeners and idea-implementers. While the traditional structures could co-exist, youth would provide fuel to this ideanetwork. This will enhance their team alignment and strengthen perspectives towards a common goal. Perceptive Communication, Innovation, and Initiatives would be good example themes for training.

The third is the Knowledge input in respect of Functional and Improvement aspects. Functional knowledge inputs are to do with Macro and Micro-mapping of the businesses to which the company belongs, and how the said updates/knowledge are intended to be used by the company. Going a step further, young employees must be taken through a formal intensive process of updates in productivity-linked furtherance of their career actualization in a rapidly changing scenario. This must happen with clock-work precision, irrespective of functional priorities across the company. Economic Slow Down in recent years was a good opportunity for this. In several companies, priority still seemed to focus on how to cut expenditure (I am also reminded about the case studies in the Dec 2011 issue of Business Manager); smarter companies focused on enhancing productivity and preparing employees for tougher times ahead should they ever happen. The improvement aspects are rather subtle in their content and 8

Business Manager

February 2012

they necessarily deal with qualitative need of the function in respect of the behavioral skills as also sharpening the functional skillsets. Often the Qualitative aspects of the tasks get eroded when the young employees are made to race when they need to be continuously trained to jog. Feeling of being taken-care-of could be at best described as a psychological inflation; on the contrary, feeling of being valued-added emboldens one to take charge soon. This strengthens the coreâ&#x20AC;Ś..the BPTP again.

The last but not the least is boosting up identity. I recently saw a series of halfpage adverts in the national news media in which a young child spoke proudly about her father designing an advanced compressor in his workplace so that the air-conditioning in the neighborhood shopping mall is comfortable to shoppers. I bet, the one person most likely to love that advertisementâ&#x20AC;Ś is the Fatherâ&#x20AC;Śthink about it. Here the identity involves self-positioning with a sense of fulfillment through the societal filters such as, Compassion, Responsibility, Respect and Mutual Dependence. One would want to be seen and recognized through these filters. Companies need to minutely design their internal and inter-company events and training programs around bringing out fine human qualities of their young employees. Young talents need a continuous identity in respect of repositioning. Added to training, sponsoring social cause presents a great platform for this as it provides a bias free transactional opportunity for the youngsters. In my limited experience many times I found that the biggest enemy to the above initiatives is the business priorities as seen by the various functional heads. Often a delayed strategic action did become a priority. Left unattended it soon crossed the threshold to become an emergency. Companies pay dearly for these created-emergencies in several ways, including panicking identities of their young talents. Again I am reminded of the case study 2 in the December, 2011 issue, in this context. HR thought management initiatives must specifically address these at all levels like a Mother Hen. Aptly, HRM has a good alias in GRM!! So the next time we meet a young professional, his BPTP must impress us more than his business card. Can we create such individuals in our working environment? BM

Dr. Rajen Mehrotra President , Industrial Relations Institute of India, Mumbai

People at top and senior management level in that company appear to have institutionalized an expectation of seeing their pictures and activities associated with them regularly published in the house magazines and also the honorary internal correspondents who were at the junior management level were eager to oblige , thus finding an easy route of complying without realizing that their present actions are not achieving the objective of the publication need for that organizations to periodically review and take corrective action to understand that the way the HR initiative is being implemented is not achieving its original objective , hence there is need to have an editorial policy for the company house magazine and ensure that the objective is achieved .

House Magazine In Organizations There is a need for organizations to consciously plan and ensure coverage of employees at all levels and their families in the house magazine, so that the house magazine achieves its objective.

ouse magazines in most organizations are a vehicle of internal communication to employees and their families. The house magazines were started as an initiative by organizations to communicate to, by and for the employees and their family members, but over a time period, the original focus of the house magazine is getting lost and in quite many organizations the magazine by and large has started catering to coverage and patronage of the top and senior management personnel of the organization coupled with some articles of human interest ,at the same time leading to limited coverage of the employees at lower levels and / or of their family members. In quite many organizations it is the corporate communication department or public relations department that handles this publication apart from other publications plus handling the press and electronic media on relevant news coverage about the organization. In one of the in-house workshops last year on house magazines for the honorary internal correspondents of a leading manufacturing company with

manufacturing sites and offices spread across India, the editor, a company employee and a friend of mine invited me to speak on my corporate experience of house magazines. I asked the editor to send me the latest issue of his company's house magazine for me to read and prepare for the session. In the session I asked the honorary internal correspondents' present, what was the objective of the company in publishing the house magazine, every alternate month for over the last 40 years? The honorary internal correspondents who are company employees replied, that the house magazine was aimed at having an effective communication with the employees and their family members. I then asked all the honorary internal correspondents to analyze the latest issue of their company's house magazine which I had read, analyzed and brought for the session. The analysis of the participants of the latest issue of the house magazine revealed that there were 82 % pictures which covered employees at top and senior management level, 10 % pictures covered employees at middle management level and only 8 % pictures covered employees at junior Business Manager

February 2012

House Magazine In Organizations

The challenge to organizations is on working out innovative strategies of meeting the aspiration of the contract workmen who also desire to see their picture/write-up in print coverage at the same time ensuring compliance of the Labour Laws that the contract workmen are not employees of the organization but of the contractor/service provider. There is need to be careful in drafting the write up/coverage of the contract workmen who are employees of the contractor/service provider in any publication either of the organization or of the contractor, because there are trade unions that tend to use these publications in litigation alleging that the contract workmen are employees of the organization and not of the contractor/service provider. management and worker level and their family. As for the write-ups in the house magazine the coverage as a percentage was similar to the analysis of the pictures. I asked the honorary internal correspondents that were such coverage achieving the original objective of the house magazine, to which all of them unanimously said "NO" as the analysis of data done by them spoke. I mentioned to them, that if they desire to achieve the original objective, then they all need to change their strategy on coverage. To this statement of mine, the honorary internal correspondents responded that their bosses who are in senior & top management position call them and instruct them to ensure that certain photographs and write ups be sent to the editor with follow up to ensure that the same are covered in the next issue of the house magazine and if they fail to ensure coverage, the bosses are critical of their performance. The editor of the house magazine, who was present in the session, not only concurred with the statement of the honorary internal correspondents, but added that he also receives phone calls from some of the top & senior management personnel seeking clarifications' which is more in the form of questioning, when he deletes and / or reduces the coverage concerning them, as the number of pages are limited. When I summarized the analysis along with the honorary internal correspondents and the editor for that organization it emerged that (i) people at top and senior management level in that company appear to have institutionalized an expectation of seeing their pictures and activities associated with them regularly published in the house magazines and also the honorary internal correspondents who were at the junior management level were eager to oblige , thus finding an easy route of complying without realizing that their present actions are not achieving the objective of the publication (ii) need for that organizations to periodically review and take corrective action to understand that the way the HR initiative is being implemented is not achieving its original objective , hence there is need to have an editorial policy for the company house magazine and ensure that the objective is achieved . Practically every organization of a reasonable size in India publishes a house magazine, as an internal communication tool with an objective of reaching out to employees and their family members. Most organizations have the publication in English as well as Hindi or the 10

Business Manager

February 2012

local language. Presently some of the organizations have come forward with an electronic copy and discontinued the publication on paper, so as to reduce cost, be environment friendly and ensure speedy delivery; however this alternative has limitations in most manufacturing companies, unless employees especially at lower level have a computer at their residence and the individual and all their family members are computer savvy. There is a need for organizations to consciously plan and ensure coverage of employees at all levels and their families in the house magazine, so that the house magazine achieves its objective. My experience has been that family members of employees at all levels whether they are at top and senior management or at middle and junior management or at workmen level desire to see the coverage of their near and dear ones in the house magazine. Employees at top and senior management level because of their organizational and social standing, at times do receive coverage in newspapers, business magazines and / or electronic media, but employees at middle and junior management and also at workmen level are hardly ever covered by newspapers, business magazines and / or electronic media. Organizations need to utilize the house magazine to have a higher coverage through pictures and write-ups of the families and the employees at the level of workmen, junior management and middle management level so as to meet their aspirations of being covered in print media. Seeing one's own picture /write-up in the house magazine is a proud moment for most employees. It is even more so for the spouse and children who show the magazine to neighbors (neighbor's envy, owner's pride! as in the ONIDA TV advertisement of earlier times). We need to remember that the house magazine was and is still a vehicle for vicarious interaction with unknown and unseen colleagues in large organizations. Most organizations presently apart from their own employees at executive and workmen level also engage contract workmen regularly through a contractor / service provider. A large number of these contract workmen have been working for the organization for a substantial time period and rarely find any coverage in any publication / house magazine of the organization. Also the contractor / service provider in most cases are small operators, so they do not have any publication of their own. The challenge to

House Magazine In Organizations

organizations is on working out innovative strategies of meeting the aspiration of the contract workmen who also desire to see their picture / write-up in print coverage at the same time ensuring compliance of the Labour Laws that the contract workmen are not employees of the organization but of the contractor / service provider. There is need to be careful in drafting the write up / coverage of the contract workmen who are employees of the contractor / service provider in any publication either of the organization or of the contractor, because there are trade unions that tend to use these publications in litigation alleging that the contract workmen are employees of the organization and not of the contractor / service provider. In some organizations the first page of the house magazine includes : Message from the desk of Chairman/ Managing Director /Chief Executive Officer ; which is written in a manner that it would be of interest to the employees and their families as it covers "Prominent Organizational Events & Plans", including in some cases status of ongoing / upcoming projects planned by the organization . Some

inviting articles, sketches, write up on certain themes and also having contests, quizzes with attractive prizes and recognition to the writer and/or winner. There needs to be continuous innovation in printing and publishing a house magazine, so that it really becomes a home magazine of the employees, as certain organizations are really large with too many divisions and the geographical spread is high, thus posing a challenge on collecting accurate and timely information, as the magazine needs to be published on the due date. In my corporate career of four decades I have seen employees at workmen and junior management level preserving the old cyclostyled paper / photocopy paper / house magazine where there was coverage mentioning their name and/or picture. They preserve this document for their total working life in the organization with nostalgic memory and present it at suitable occasions when desired. Some of them pass on these preserved documents to the next generation about the coverage of their contribution / involvement to the organization where they worked. My experience has been that

There is increasing need to give more focus on any small improvement or contribution done at workplace by employees from lower level. Also there is need to involve employees and their families including those at the lowest level in the Corporate Social Responsibility (CSR) activities which the organization is involved for the community in and around their manufacturing sites. house magazines in their coverage include information regarding corporate citizenship guidelines / code of conduct / information security / health - safety - environment issues on an ongoing basis to increase and improve (in general) employees and their family's awareness on these issues. Certain organizations in their house magazine do cover news relating to family members of employees such as marriage, birth of a child, success of children in sports /cultural activities / examination, plus picture of employees with their families when the employee completes certain number of years of service in the organization and is recognized with a long service award. There is increasing need to give more focus on any small improvement or contribution done at workplace by employees from lower level, which then brings about a spirit of recognition to groups at lower level, however obtaining / collecting such information by the honorary internal correspondents in a large organization is not easy, as most managers / officers make limited effort on reporting achievements of the lower level staff/workmen. Also there is need to involve employees and their families including those at the lowest level in the Corporate Social Responsibility (CSR) activities which the organization is involved for the community in and around their manufacturing sites or in the chosen geographical area or on the chosen projects and ensure accurate reporting of those involved by publishing them in the house magazine. There are organizations who have tried to convert a House Magazine to a Home Magazine by innovatively making the family members of the employees participate by

coverage of employees at workmen and junior management level in house magazine helps in meeting their psychological need of seeing them covered in print media and partially facilitates in building a positive work environment, hence the same needs to be consciously planned and implemented by organizations. I remember, as a 12 year old child I wrote a letter to the editor of Free Press Bulletin (an evening newspaper published in Mumbai those days) and once the letter was published, I was thrilled at seeing my name printed in a newspaper. I kept a copy of that evening newspaper as a treasured possession of my name coming in print media for the first time for the next 25 years without realizing that other than me, nobody would ever remember about that publication. Later in life as I moved up the organizational hierarchy, I seldom preserved copies where my name / picture was published in newspaper / business magazine /professional magazine / house magazine, because there were other documents to be stored . Most executives at top and senior management level rarely retain a copy of the house magazine which has their coverage, but still desire to see and read their coverage in house magazines and also pressurize the honorary correspondents to ensure coverage. Executives at top and senior management level need to mature and their approach should be to ensure implementing a policy which leads to a balanced coverage in the house magazine of the families and employees at all levels ,more so at the lower, junior and middle management level, so that the house magazine really becomes a home magazine for the employee and their family. BM Business Manager

February 2012

S.Chandrasekar Chennai

Art

The of Management: Mantra and tantra Learning management Tantras from.... 1. 2. 3. 4. 5. 6. 7.

anagement has been an important topic since ancient times. Though we buy costly bulky books on management, we have not turned through the books of Panchatantra and Jataka tales that are packed with meaningful morals that are applicable to present day management scenario. Often we mistake what is special about these books other than children's stuff. Vishnugupta Chanakya is a forerunner to modern day Management Gurus. Arthashastra speaks volumes of high tech

The frog says accept change The turtle proves no risk no gain The caterpillar preaches patience Be a tough stuff like the rat The crab tells capitalize wisely The spoonbill says be active Be the bee, work is worship

management concepts and the lakshana for an ideal king or administrator. The Mahabaratha carries much of values on qualities and essentialities on nuances of management. The knack of business sukshuma and dharma-paripalana are neatly handled. When general ingredients like dhaniya, asafoetida, jeera, mustard, turmeric, fenugreek, chilly and oil can add medicinal value to simple delicious food, we are happy to accept.These are our traditional items that go unnoticed by many of us.When foreigners discover and patent it, it becomes bitter news

The frog says accept change The tiny, slimy and ugly looking frog is often frowned upon. Even its croak is noisy and without melody. But it is a master at adapting to new things. It can survive in adverse weather conditions. So be ready to accept change. This applies well during the rough times of slow economy when an organization is not able to sustain its show. Instead of spreading the fear of downsizing or layoff during recession, it could very well apply an 12

Business Manager

February 2012

8. Have a wide vision like the owl 9. The fish teaches stay together 10. The fox thinks of strategy 11. Save resources says the ant 12. Be watchful like the dog 13. The butterfly multiplies positive energy

because we already knew it but unaware of the necessity to globalize it as our model. Obviously, when we research the long forgotten moral stories, we are surprised about the relevance it has with modern management. With soaring petrol prices and increasing US dollar value against rupee, fund values dipping down and bullions stepping high, the business gurus predict that a downbeat economy is round the corner. To tackle any crisis, revisit the children's books corner to learn management tantra. I have mapped a few of these for easy reading.

alternate arrangement. Having already seen a recession three years ago, and its strong impact even felt now, every organization should keep a full researched parallel business project on hand. At the onset of recession, or when the ongoing project ceases, the organization can adapt a new strategy and deploy its manpower for the new project. Management should empower the employees to accept the changeover. Change agents are vital in the transition phase as influencing catalyst. The success outcome of the new venture wholly depends on the commitment and adaptability to the change theory.

The Art of Management: Mantra and tantra

The turtle proves no risk no gain

Be a tough stuff like the rat

Turtle makes progress only when it peeps out the neck. It is slow in mobility. The food intake is very low and so the energy spent. It breathes less and lives long. It can crawl or paddle forward. At times of danger, it pulls into the shell and remains dormant. We also need calculated risk to move ahead.

Rats are hardy, shrewd members of rodent family. They can resist and survive in difficult conditions with minimum quantity of food. They teach how to face and beat difficulty.

This theory can be perceived for investment options with distributed risk or low risk concept. This model explains how to minimize day to day operational expenses, keep going with focus vision and vital security measures in place. At times of economic turbulence, it helps to sustain for long with mere survival in the market though high growth rate may not be recorded. Trying to jump out the band wagon may cost high and may lead to financial loss that could totally cripple the company for a closure. So a highly calculated approach without high expectations is what we need to learn. This is no time for grand gala expenses during the period of volatility or mortgaging of securities to cover up loss. Keep going slow and steady. Tuttle is a shock absorbent and sturdy model for managing business during recession or otherwise.

The caterpillar preaches patience It is known for tremendous patience, waiting in the cocoon to weave around its silk thread, only to emerge out as beautiful butterfly. All its legs untiringly crawl around. We need to work with patience. Entering the business market as toddler and soon expecting things to go with speed is a costly comedy. It is like a woman circumambulating a peepal tree praying for motherhood and soon touching the stomach for any bulge. Wait and watch is the moral of caterpillar. Conceive a design, implement and wait for it to produce result. The right use of technology, manpower, concept, market and sales will strike a profitable figure if handled with patience. For a product to stand monopoly in market, one has to wait for at least a quarter or half yearly before probing into the success or failure. Any sudden change in gusto would result in the collapse of entire product chain and the market share. To emerge victorious and colorful feathers among the competitors, follow the principle of caterpillar with unified and untiring performance.

There are some companies that act like rat. They never boast or hype about their output but show their presence in the market. Their traditional work style helps in building a network, to sense client's need or impending danger for industry or devise plans to tackle crisis. These companies spend on normal mode and avoid hefty investments on long term returns during the rainy days of economy. Always they have high reserve and work swiftly to monitor and act accordingly. Their cost on operations is average and cost to employee is not high. Even if activity is not at height, they do not cease to work or research but would stealthily carry on the homework under cover without exposing the status to competitors.

The crab tells capitalize wisely It uses all its faculties of sight, smell, taste, hearing efficiently. It can dwell in depth of burrows and wait for the right time to catch prey. So try to capitalize on your senses. Though a small creature, it is tough shelled, swift and compound eyed. An organization has to have a clear vision, business model, experience in industry; acumen to read statistics, devise strategy and listen to market trend. If the organization is not performing to the expected level, no harm in running it with minimum support staff and resurge to capture market at the right time. Till that hibernation period, the top management should not rest or spend second honeymooning without being prepared for the moment; it should rectify mistakes of past and keep books clean. The right time does not announce and step in; the market suddenly goes feverish and so the big brass. It is important to make use of all the viable ways to capitalize and to show an impressive come back. Keep the gun powder dry and ready!

The spoonbill says be active These birds wade in shallow waters and feed by moving their open beaks in water. It Business Manager

February 2012

The Art of Management: Mantra and tantra

Fox can play strategy and get things done. It is a synonym for statesmanship. Being brainy, it excels in tricks and teaches to use defensive plans to win over a problem.

Survival of the fittest would stand good when an organization catches on with slightest spurt that is sensed. Whatever opportunity that comes across the strategy, the organization acts fast to clinch the deal and utilize for its growth. As competition thickens, employers will seek out companies with a strong employee brand, act fast to retain talent. A combination of these aspects will enable a brand to become iconic. Sensing the taste of customers, a company has to act fast to address the needs and change conventional style.

future, often stated in competitive terms. Vision refers to the category of intentions that are broad, all-inclusive and forwardthinking. It is the image that a business must have of its goals before it sets out to reach them. It describes aspirations for the future. This should build great goal, elevate enthusiasm and self-esteem of every employee in the organization. With its wider vision angle, the management should read the interest of clients. It should have the ability to precisely foresee and predict the changes of industry even before Confederation of Indian Industries could announce.

Be the bee, work is worship

The fish teaches stay together

It is very organized, with good memory, always busy, dedicated to work for long hours without extra reward. Under the queen, all bees work with dedication and commitment. Work hard with commitment.

Fish always remain together - shoals of fish. Their togetherness proves them less vulnerable to the dangers around. Unity is strength

swiftly sights a fish, catches and swallows in no time. Learn to act fast.

The fox thinks of strategy

Have a wide vision like the owl

Fox can play strategy and get things done. It is a synonym for statesmanship. Being brainy, it excels in tricks and teaches to use defensive plans to win over a problem.

This is amazingly a nocturnal bird, rests by day and hunts by night. Its large protruding eyes enable it to see clearly at a distance and can turn around by 270?. Let's have a vision for future. Many organizations eye for growth and diversification without having their vision fixed on the target. The higher you fly the wider has to be the vision but things go wrong sometimes due to deviation. Corporate vision is a short, concise, and inspiring statement of what the organization intends to become and to achieve at some point in the 14

Companies belonging to same group that have been running for years have to remain balanced to sustain bad economy. Financial provisions are available in funding sick companies as inter-corporate exchanges. When market competition tightens, it is sure that weak units in an industry wanes and vanishes. When unexpected thing happens, the subsidiary companies hitherto that offered services no longer exist and falls prey to victimization. Fish teach us to work in team as employees and to work in unity as companies within a group with mutual reciprocation.

When employers capture the hearts and minds of its employees, they get involved and become engaged and enthusiastic. The employer's organization should slog and search out for better pastures that would help in its long run. Engagement is a valuable contribution by people that makes something that really matters to them. Commitment and engagement are the two very powerful engines of enthusiasm and involvement. Any organization with commitment to its vision, objectives, systematic process and dedicated employees is sure to win the market and retain standing reputation. The presence of agile workers and satisfied customers will maintain vibrant attitude echoing a sound NAV of fund value.

Business Manager

February 2012

The business world is full of Sakunis and Duryodhanas and nobody would care to follow corporate ethics when it is a cut throat competition. The cunning intelligence, crafty, pilfering and cruel nature of the fox is an example since time immemorable. The perfect strategy for a defensive treat and well crafted sketch of intelligent move is often termed as hallmark of statesmanship. An employer has to put himself into the shoes of a strategist during the cut throat competition and how to win over in strict competition. Some companies create and flutter false

The Art of Management: Mantra and tantra

Ants are week, agile and communicate through special sensory network. They can forecast daily weather and save grains for future in the mound. Save resources for contingency in anticipation. Dog is an example for loyalty, watchfulness and daring alertness. Hound, Alsatian, Labrador are watch dogs. It teaches to be alert while on the move. demand and scarce for a product and thus inducing an artificial wave that catches up like forest fire. Not always this trick plays because the dharmachinthana and gnayavadhi approach is always straight forward and may not back fire.

Save resources says the ant Ants are week, agile and communicate through special sensory network. They can forecast daily weather and save grains for future in the mound. Save resources for contingency in anticipation. If the operation of a company is hit by attack of termites, immediate remedy will be taken up. What if a sudden doldrums hit and suffers volatile funds in investment? It is time that organizations should allot allowable fund as reserve for future expansions, security to meet contingency plans and any unforeseen expenses. If the organization carefully operates on calculated risk and saves aside apportion of it in true investments, it would help in crisis management. They work with corporate social responsibility by doing good act to society, act with wisdom to work diligently, preserve and protect for future. Organizations should accordingly use tax benefits and other deductions allowable for saving.

Be watchful like the dog Dog is an example for loyalty, watchfulness and daring alertness. Hound, Alsatian, Labrador are watch dogs. It teaches to be alert while on the move. Always the government, corporate and chamber of industry and commerce will be watch dogs to predict the onset of any change in the business circle. This is to announce any slightest disturbance to economy, trade and commerce, banking rates or stakeholders investment. The organization should seriously look out for needs of leveraging, direct investments, availing corporate subsidy and investing in manpower. The employers should scrupulously maintain their reputation among clients, customers, employees and candidates, as well. The

repelling of customers, interview applicants and dwindling cash flow might be strong enough to paralyze an organization, if left unchecked. Let all corporate houses function dutifully with alertness.

The butterfly multiplies positive energy Butterfly brings joy and shares its happiness. They are the most beautiful delight to watch. They motivate us and give positive energy all around. This does not necessarily talk about Fengshui to bring positive energy but the essential parameters that are to be followed in strict faith by every organization. Maintaining good ambience inside the office, establishing a good brand name, disbursing staff salary on time, recognizing the hard work and motivating the workforce, making the clients/customers feel that they are proud to be in association, good HR policy and practices of the organization be a benchmark for other corporate names, attracting investments from within and abroad, maintaining a healthy financial management and internal administration, never axing or downsizing the workforce during times of recession, engage and utilize the optimum talents in every team member, function with social responsibility and reward all those who supported the company to grow higher and flutter with colours. Of course, when we see the above qualities individually, it makes out pretty clear and outstanding but all qualities are highly essential for a management. An organization should have all the above gunas equally balanced as that of vaatha, piththa and sleshma in human being. Any imbalance in any of the above skills would lead to malfunctioning of body or organization. Too much of any of the skills would definitely prove detrimental to the growth of the organization. These skills directly correlate with HR competencies to be mapped during succession planning. Any gap analysis would proportionately need training for expertise. At least, let's now investigate the stock of skills in possession with our management and offer advice as a management guru and not as a child who enjoyed Jataka or Tom and Jerry tales. BM Business Manager

February 2012

CHINMOY SARKAR, Author, AXELL

A feeling of inherent possibilities onventional HR tries to capture the talent of human as an organizational resource but Surrogate HR inspires him to observe who he is in his professional space. It tries to make him realize the extraordinary potential he possesses as an eternal being in human form. The cat is chasing, the mouse ducks.The cat is unable to achieve a decisive success over the mouse in spite of his authority and influence. The cat cannot conquer the little mouse with his power in the form of claws in his paws. He always demands obedience and compliance; he believes in hectic pursuits. 'Mouse is small, why can't I conquer and crush him?' the cat shouts with tremendous anger.With my little daughter I am watching - A Cat & Mouse Story on the TV. She is spell-bound to see the hot chase. 'Can the mouse be a winner dad, he is so small?' she asks with curiosity. I watch a spider scrolling from one window pan to the other outside the drawing room, the life is also moving there in the NOW without our attention. Mouse is an agile creature while the cat is powered by his wrong image of self. 'Dad, can I also win my race like a mouse?' She asks with innocence in her eyes.The world around her has completely transformed in just one decade, there is no obstruction in the flow of human in its natural setting. My mind is continuously chattering from inside to look for answers in the known. Creativity, making ideas happen! Do not glorify it, what is so great about it? She must not change, she must feel secured in the known, and how can she continue without a direction, without a path in the unknown? Human journey is about experiencing the eternal positive qualities he possesses. As he progresses with creative thoughts, the veils are removed and his real self with abundant power is naturally revealed to him. 'Dad, the mouse has really won', she is now very excited as the movie comes to an end. Economic downturn has brought everyone to a new realization. It has already announced the departure of the old system of managing 'human workforce'.The service & knowledge space is looking for a new discipline where talent of human is respected as valued key resource for the organization. A discipline is about enforcing 'standards of acceptable conduct' through the application of a system that is 'meant to correct behavior'.We are all searching for an answer as how we can use Surrogate HR as a business discipline to make

Business Manager

February 2012

full use of human's natural aptitude and skills? The answer is about removing increased sufferings of human in the material dominated space. Organizations have started understanding the fleeting nature of product value and decaying outlook of leadership positions. Business is now shifting its investment from tangible to intangible and relational assets. Attention is more on ideas, innovation and talent than process efficiency and resource optimization. Human collaboration spirit is at its best playing an unprecedented role in developing mutual trust, experience & knowledge that becomes the primary means of value for an organization. Profit aims at deriving worth as an excellent form of advantage that relates to values and good feelings.The word 'value' draws more importance than 'currency'. Business space has become innovative and collaborative for creative professionals to enjoy the 'feeling of inherent possibilities'. It feels as if he has been exploring his world in the past through a WiFi system under the control of a restricted server inside an organization.There are limitations and restrictions all over which he cannot cherish. Now, the world offers him an internet browsing stick that opens up a universe before him with only Newness in the NOW. An organization is the assemblies of individuals with different values who breathe life together in a common system of appreciation that orders harmony & interpersonal bondage amongst the members.Value is the only reason that an individual pursues his kind of role in his organizational life? Value relates to nature, quality, ability, extent and significance of an entity. Cycle of human life is clearly evident from the fact that human interest is gradually disappearing from material value. Initially, he likes to secure a status for the consumption of society, but bit by bit, he moves into his zone of stimulating interest, into a body of knowledge which will make him distinct from others in immediate setting.The value is reinforced by novelty and relationships where novelty makes it possible for the organization to progress towards innovation and relationship establishes collaboration with others beyond the boundary. However, it is impossible for an organization to explore and exploit the vast energy base individually all its employees own. In absence of a formal structure, an

organization thus allows a few of them to show their talent. Rest of the lot is drugged into deep sleep as swiftly as possible. Absence dominates organization's thinking space, 'not feeling good' influences its decision making. Now the question is, why is the organization incapable of allowing the whole energy flow inside its network? Is it due to the fact that it has no structure to do it in its current format? A result that human resource wants to deliver with passion and love does not consume much energy; rather it contributes renewed energy back into the system. In this background, HR as a discipline cannot remain a branch of knowledge that baffles understanding of employees in its heavily guarded structure built for maintaining secrets.The question, the transparent is asking now is, why does HR assume its power more from limiting than sharing information? The emerging world demands transparency and collaboration between organizational strategic space & HR for the exploration and exploitation of human talent.Who is a human really? Is he an individual full of thought & action to experience his life in the social setting? Is he an business resource in the organization who gets depleted every day in unwanted engagements? Or, is he a professional abundant being who can think & create new, collaborate with others for making a difference to enrich the domain he works for? 'My professional life has come to a grinding halt as I do not know what & why am I doing this? I only know who am I doing it for', the young man appears desperate'. A career faces a crisis point when the work becomes a routine.The testimony of his success comes from destroying the self he has been fiercely caring for and has been in love with since his inception in this planet earth. 'I naturally like to navigate my future journey as a mix of an individual, organizational & professional being. I want to make it a single feeling full of happiness & joy'.Why does a professional lose faith in his potential as a result of misalignment between him as an individual & a resource inside the organization? Organization has to genuinely look for an answer. Is an organizational working space about doing exactly what a human wants to do without fear of losing 'here & in the NOW'.... The new episode of A Cat and Mouse Story has just begun nowâ&#x20AC;Ś BM

Labour Problems & Solutions

Anil Kaushik, Management Expert -HR & IR

Solutions provided here are in context to narrated facts & not in general.

Q. We have an union in our establishment. They have changed their office bearers and have submitted a list of protected workmen. I want to know whether by merely submitting their list, such workmen will be deemed as protected workmen. How long workmen can remain protected? Ans. Mere submission of a list of protected workmen by Trade Union is not enough and a conscious act is specifically contemplated under the I.D. Act. It has to be followed by the communication to be given by the employer in writing. Such workmen can't remain protected workmen forever. The tenure is only for twelve months from the date of communication of the list of recognized workmen by the employer. Becoming a protected workman is not an automatic process. Employer is under obligation to communicate to the Trade Union within 15 days of the receipt of names to be recognized as protected workman. Rule 61 of Industrial Disputes Rules (Central) has provided the procedure. Maximum number of workers to be recognized as protected workmen will only be five. Recently Kerala High Court in the case of Balakrishanan vs. Labour Court 2011 (131) FLR 990 has also held in the same direction. Q. We have dismissed an employee after holding enquiry in to the charges leveled against him, where he was found guilty of the misconduct of serious negligence and putting life of co-workers in danger. Can such a dismissal be declared valid by the court? Ans. In the absence of detailed facts and circumstances of your case, it is difficult to comment upon. However as far as law on the point is concerned, it is very clear that when the findings of enquiry officer is declared fair, proper and legal, it is not open for the labour court to interfere with the punishment imposed by the disciplinary authority. SC in the case of General Manager (P), Punjab & Sind Bank and others vs. Daya Singh, 2010 (125) FLR 880 has also held that once the finding of the enquiry officer are not interfered with, we fail to see how the delinquent officer can avoid the punishment of dismissal of service where acts of serious negligence are found to be committed by him. SC again in the case of Panch Mahal Vadodara Gramin Bank vs. D.M. Parmar, 2011 (131) FLR 1019 has held that after holding guilty of charges of negligence as fair and proper in the enquiry by the court, punishment of dismissal can't be interfered with as disproportionate. Q. We propose to take few good workers in the supervisory category by promoting them for which

we also think that they should undergo short duration training before such promotion. But before we could formally announce such promotion scheme, union has objected to it by saying that it is nothing but management want to break union and lure workers to bring them in their fold. They have also charged the management of doing unfair labour practice. Labour Commissioner of our area is also influenced by union representation and has advised us to restrain from announcing such scheme. We seek your expert opinion on the issue. Ans. I don't see anything wrong in your attempt or scheme of giving an opportunity to workers to prove themselves and come under supervisory category. Trade Unionâ&#x20AC;&#x2122;s fear is natural because they seem to be insecure by your move. Presuming that you have no malafide intention to break the union, I suggest, being quite transparent in your scheme. Don't get scared by labour commissionerâ&#x20AC;&#x2122;s advice. Declare your scheme by giving the eligibility criterion. Every worker should be eligible to apply for training. They should be screened before inducting for training. You should also declare vacant post to be filled through this internal promotion scheme. Workers should be properly interviewed and put to written examination. The purpose is only to be as transparent and fair as you can. I am confident that such an attempt of giving an opportunity of career growth to workers can't be termed as unfair labour practice. Recently SC in the case of Siemens Ltd. vs. Siemens Employees Union, 2011 (131) FLR 1100 has also held that where the management introduce the promotion scheme and workers are invited to undergo necessary training of two years and after that to act as junior executive officers and workers voluntarily applied for the scheme of their own where no allegation of pressure or malafide was alleged and scheme got overwhelming response, it can't be said that management was indulging in unfair labour practice. Court also held that company can't be prevented from rearranging its business. High Court should have considered the vast changes in economic and industrial scenario and the new challenges being faced by the company in the matter of reorganization of its culture. Q. Is it possible that if the enquiry conducted by the management is held unfair and improper by the labour court, the same be directed by the court to be conducted again by an outsider or an advocate on the request of the management? Ans. No! Labour Court has no such powers to direct the management to get the enquiry conducted again through an outsider or an advocate on Business Manager

February 2012

Labour Problems & Solutions management request, in case the earlier enquiry conducted by the management before dismissal is declared unfair and improper. There are no such provisions either in the I.D. Act or any other related law. The established procedure is, when the enquiry is nullified by the court, management will get an opportunity to prove the misconduct again before the court itself and not otherwise. Bombay High Court in the case of Jai Hind Oil Mills Company, 2000 III CLR 116 has also held in the same direction. Q. We have been given an impression that under the present employment regulations, employer either has no right or a very limited one to reorganize its business. On every point of change, it is to be approved by the Govt. We seek your expert opinion as is it impossible to do business in India as management wish? Ans. It appears that you have been given a very wrong impression about the business environment and employment regulations of the country. No doubt there are regulations, restrictions and few limitations but not to the extent making business impossible. No country has given free hand to any trade or business without regulations. Business has to be in a structured frame work. The highest court of the country (SC) has held way back in seventies that employer has right to reorganize his business in the manner he pleases. It was held in Parry and Company case AIR 1970 SC 1334: 1970 II LLJ 429: 1970 Lab IC 1971: 21 FLR 266. When the shifting of manufacturing activities from one place to another was objected and disputed by the employees union, Bombay High Court in the case of Hindustan Lever 1989 LLR 446 held that employerâ&#x20AC;&#x2122;s right to reorganize its work in any manner is well established and workers union can't object to it. Kerala HC in the case of Muslim Printing Pvt. Co. Ltd. 1992 LLR 680: 1992(2) CLR 450 has also held that it is the management's right to decide the strength of its workmen. The number of workmen to carry out a particular work or process efficiently must always be left to be determined by the management and this discretion should always lie with the employer. So, you should not so worry about the employment regulations of the country. Yes! you need to be transparent in employment activities. Q. We have engaged many transport contractors for loading and unloading activities. They need to take away the finished products to different destinations. We have entered into an agreement with them. We have no control or supervision on their functioning. We are only concerned with the net result of the delivery of our product. But ESI Inspector of our area has raised demand over such payments made to transport contractors. He says that all employees of the transport contractors involved in loading - unloading will be covered under ESI. What is your legal opinion? Ans. As the facts you have narrated, it appears that ESI should not be applicable and employees of transport contractors can't be covered under ESI. Andhra Pradesh HC in the case of Hindustan Petroleum Corporation Ltd., 2008 I CLR 859 has held

Anil Kaushik, Management Expert -HR & IR that where no supervisory or other control by the employer management over the workers of the transport contractors was apparent and it was transport contractor's responsibility to ensure proper execution of the work without any breach of the terms of agreement with employer management, said workers of the transport contractors will not come within the meaning of 'employee' under sec. 2(9) and 2(13) of the ESI Act. Court held that the said workers were amenable to the control of the contractor and of the employer management. The employer management had no say over the engagement of the workers neither by the transport contractors nor regarding the terms and conditions of such engagement. In the circumstances employer Management Corporation can't be described as principal employer in relation to such workers. Q. Labour Court has awarded reinstatement with 50% back Wages to one dismissed employee. We have taken him back on duty. We want to know your expert opinion on the point whether the PF will also be paid on such back wages awarded by the court? We sought the opinion from our PF inspector of the area and he has advised us to deduct and deposit PF contribution on such back wages. Ans. PF Inspector has not given you the right opinion. You are not under legal obligation to deduct and deposit PF contribution on the amount of back wages to be paid to the workman consequent upon the compliance of the labour court order. Amount of back wages is sort of damages or compensation to the workman awarded by the court, would not fall under the definition of 'basic wage' as envisaged by the EPF Act. Gujarat HC in the case of Swastik Textile Engineers Pvt. Ltd., 2008 I CLR 953 has also held that back wages awarded by the court are not the same as wages paid to an employee for the duties performed by him. Even if the labour court's order is about reinstatement with back wages depicting continuity in service, it will not carry the meaning 'period spent on duty'. The purpose to allow continuity in service by labour court would be that such period would not be treated as break in service for the purpose of service benefits like pay, increments, leave, allowances, pension etc. In the absence of a specific order that such period should be treated as period on duty, such period can't be held to be period spent on duty. Moreover labour court award of only 50% back wages in your case also intend to show that the period of absence from duty on account of illegal termination from service was not intended to be treated as period spent on duty. Court also held that amount of back wages paid to workman will not constitute basic wages because when the court awards back wages for the period the employee was kept away from duty, what the court does is to award damages assessed in terms of whole or part of the wages the workman would have earned had he been continued in service without interruption. It is not the same as payment of wages for the duties performed or for the period deemed to have been spent on duty. BM

Readers are invited to ask for Solutions of their Labour Problems through e-mail - bmalwar@yahoo.com 18

Business Manager

February 2012

From The Court Room

COVER FEATURE

IMPORTANT Labour Judgments

ost globalization and economic liberalisation, there have been radical changes in judicial interpretations thus redefining employee-employer reationship and other labour enactments. 2011 year has not been different too. This year also witnessed the same progressive thought process reflected in judicial verdicts. Since labour laws in the country have been extensively explained and interpreted, court ruilings commonly known as case law have attained immense importance for organisations be it manufacturing, service or any other. BM research team has selected around 600 important judgments delivered and reported in various law journals during 2011 and comprehended the principle enunciated in few lines in simple language. Here is the unique collection :

E.S.I. Equal Remuneration Equal Work-Equal Wage Factories Act Fixed term appointment Gratuity Habitual Absence Industrial Disputes Act Industry Interim Relief Lay-Off Limitation Lock Out

Minimum Wages Misconduct No Work-No Pay Over time Payment of wages Part Time Employee Probationer Promotion Punishment Reference Regularisation Reinstatement Resignation

Retrenchment Retirement Settlement Shops & Establishments Standing Orders Strike Suspension Termination Trade Union Transfer Unfair Labour Practice VRS Workman

From The Court Room

Abandonment When bank employee remained absent unauthorizedly for about two years and did not respond to management's call to report for duty, voluntary abandonment is rightly presumed. Yousuf Khan vs. State Bank of Hyderabad, rep. by its Managing Director & Another. 2011 LLR 967 (AP HC) Abandonment by workman can't be presumed when management did not initiate any action to call upon to report for duty and offer for employment.

Important Labour Judgments 2011

Apprentice Board can't adopt different yard stick for same category of apprentices for their appointment after completion of apprenticeship. When others appointed, few one can't be left behind. Chairman, Tamil Nadu Electricity Board and Another. vs. D. Venktesan and Another. 2011 (128) FLR 949 (Mad. HC)

Back wages

Divisional Manager, Boudh Commercial Division, Orissa Forest Development Corporation Ltd. vs. Godabarish Badajena & Anr. 2011 LLR 181 (Orissa HC) By not applying leave in advance and remaining absent can't be presumed to be an act of voluntary abandonment. Veer Chand vs. D.T.C. 2011 (128) FLR 803 (Del. HC) When no letter of resumption of duty was sent to workman, abandonment of job by workman can't be presumed, that too without enquiry. Compensation in lieu of reinstatement rightly granted. M/s. Hindustan Associates Engineer Pvt. Ltd. vs. Sh. K.K. Aggarwal & Ors. 2011 LLR 312 (Del. HC) When suspension was revoked and employee was transferred, he was under obligation to make compliance of transfer order. Bank was justified in drawing presumption of voluntary abandonment of service by the employee when he failed to comply with the transfer order. U.P. Singh vs. Punjab National Bank. 2011 LLR 708 (Del. HC)

T.V.S. Finance and Services Ltd. vs. H. Shivakumar. 2011 LLR 613 (S.C.) Working as barber in own saloon, will amount to gainful employment, hence not entitled to full back wages. Mahalakshmi Fibres and Industries Ltd., Kolkata and another vs. Deolal Hazam. 2011 (128) FLR 258. (Jharkhand HC) Reinstatement without back wages proper of a driver when his negligence in driving vehicle was negligible. Tamil Nadu State Transport Corporation (Kumbakoham) Ltd. Rep. by its General Manager, Trichy vs. Presiding Officer, Labour Court, Trichy. 2011 LLR 154 (Mad. HC)

Letter sent by UPC for reporting on duty can't be termed as service. Presumption of abandonment of job by employee not valid.

In the absence of proof established by the workman about his unemployment, there will be no justification for granting back wages.

Shiv Kumar vs. Hansita 2011 LLR 13 (Del. HC)

Dugdh Utpadak Sahkari Sangh Ltd. vs. Presiding Officer, Labour Court & Others. 2011 LLR 245 (All. HC)

Refusal to work on site along with other workers for repairing of advertising boards inspite of repeated calls by employer will amount to voluntary abandonment of service. Vantage Advertising Pvt. Ltd. vs. Javedali Kutubali Hashmi. 2011 LLR 197 (Guj. HC) Even if sending four letters to a daily wager asking him to report for duty will not be a ground of abandonment but will be a case of illegal termination, when not followed by retrenchment procedure. Compensation appropriate instead of reinstatement in such a case. Municipal Corporation of Delhi vs. R.L. Chugh and Others. 2011 LLR 1256 (Del. HC) 20

Allowing 50% back-wages by the Division Bench of the High Court not proper since the employer was not given an opportunity for hearing before passing of the order.

Business Manager

February 2012

In the absence of establishing the fact that driver was appointed as daily wager and caused fatal accident, reinstatement of such driver with back wages would be proper. Management, State Express Transport Corporation (Tamil Nadu) Ltd., Chennai vs. Presiding Officer, 1st Additional Labour Court Chennai and Another. 2011 LLR 281 (Mad. HC) In the absence of charge sheet for unauthorised absence, compensation in lieu of reinstatement and back-wages has been rightly granted. Delhi Transport Corporation vs. Kuldeep Singh. 2011 LLR 400 (Del. HC)

From The Court Room Daily wagers will not be entitled for Back Wages on reinstatement. Ramjibhai Dhanjibhai vs. Deputy Executive Engineer. 2011 LLR 421 (Guj. HC) No back wages to the employee for the period prior to his regularisation. Satinder Kumar vs. Lt. Governor, NCT of Delhi and Another. 2011 LLR 483 (Del. HC) In case of illegal retrenchment, reinstatement with 50% back wages granted by labour court held proper by HC. Municipal Council vs. Chhotalal and Another. 2011 LLR 517 (Raj. HC) When the dismissed chowkidar was detained in jail and could not get any job, 50% Back Wages instead of full would be appropriate as no able-bodied person can remain unemployed and might have worked to earn wages. Nirmal Singh vs. Labour Court, Bhatinda and Others. 2011 LLR 768 ( P & H HC) No grant of back-wages automatically on reinstatement. Ram Kumar vs. Presiding Officer, Labour Court, Ambala & Ors. 2011 LLR 820 (P&H HC) High Court affirmed the award of Labour Court holding retrenchment illegal under Section 25-F of Industrial Disputes Act, 1947 and the workmen will be entitled to full back-wages. Aska Central Multipurpose Co-operative Society Ltd. vs. Their Workmen rep. by the Secretary, Aska Regional Employees' and Workers' Federation and Another. 2011 (III) LLJ 45 (Orissa HC) After acquittal from criminal court, when employee is not permitted to join duty by employer, he will be entitlted to get back wages for the period, he was kept out without duty.

Important Labour Judgments 2011 G.K. Pandey vs. Regional Director, International Airport Authority of India. 2011 LLR 1055 (Bom. HC) No reinstatement with full back wages to employees who could not prove employeremployee relationship and infact were engaged for less than one hour every day in the morning for dusting and cleaning the bank premises. The Saraswat Co-Op. Bank Limited vs. The Saraswat Co-Op. Bank Employees Union & Ors. 2011 LLR 1059 (Bom. HC) Full Back Wages justified when termination effected without retrenchment compensation and workman was not gainfully employed. 1. Ram Chander, Peon vs. The Presiding Officer, Labour Court and Another. 2011 LLR 1217 (P&H HC) 2. Haryana Agricultural University vs. Presiding Officer, Industrial Tribunal-cumLabour Court and Another. 2011 LLR 1218 (P&H HC) Back Wages on reinstatement would be proper when the employee was dismissed solely on the basis of conviction by a criminal court and his conviction was setaside by higher court. Mohammed Abdur Raheem vs. State Bank of India and Another. 2011 LLR 1237 (Mad. HC) Even when there is violation of sec. 25F of the ID Act, reinstatement with full or partial back wages is not automatic. Compensation is such case is appropriate. International Tractors Ltd; Hoshiarpur & Anr. vs. Presiding Officer, Labour Court, Jalandhar & Anr. 2011 LLR 406 (P&H HC)

Bonus

Inderjeet Singh vs. Delhi Transport Corporation. 2011 LLR 901 (Delhi HC) On reinstatement, back wages is not a thumb rule. It lies with the court discretion. Bhajabhai Danabhai Rabari & Ors. vs. State of Gujarat & Ors. 2011 LLR 903 (Guj. HC) In the absence of any evidence of remaining unemployed throughout the period, awarding back wages on reinstatement till superannuation would be wrong and illegal. Senior Regional Manager vs. C.G.I.T., Jabalpur and Another. 2011 LLR 941 (MP HC) Even when the retrenchment was held to be illegal, reinstatement with 25% back wages instead of 50% would be proper. Divisional Forest Officer, Forest Division, Rewa, M.P. and Another vs. Leelavati Yadav. 2011 LLR 494 (MP HC) Income from agriculture land would not be taken as earning to adjust or deny back wages.

Bonus and difference of wages can't be claimed by invoking sec. 33C(2) of the ID Act being not pre-determined. State of U.P. and Anr. vs. Kunwar Pal Singh and Another. 2011 LLR 171 (All. HC) Though Minimum Wages can be split up into various allowances under Minimum Wages Act but for the purpose of Bonus, minimum wages can't be bifurcated and bonus has to paid on total wages. Globe Detective Agency (P) Ltd. vs. Presiding Officer, Industrial Tribunal No. III & Another. 2011 LLR 236 (Del. HC) Where department and branches of the corporation have independent seprate balance sheets, bonus will be calculated by treating each branch independently. Management of India Tourism Development Corporation, Madras and Anr. vs. General Secretary, All India ITDC Employees' Union. 2011 LLR 272 (Mad. HC) Business Manager

February 2012

From The Court Room Local body of Haryana State Agricultural Marketing Board will not be covered under Payment of Bonus Act. Haryana State Agricultural Marketing Board Field Staff Employees' Welfare Association, Jind vs. State of Haryana and Another. 2011 LLR 301 (P&H HC)

Building & Construction Workers Even the factory building under construction before its registration will be covered under BOCW Act. Sterlite Engery Ltd. vs. State Orissa 2011 I CLR 358 (Orissa HC) ; 2011 LLR 322 Building construction company is under obligation to pay 1% cess under the Act and employer can deduct the same from the contractor bill. M/s. Jain Construction Co. vs. Moradabad Development Authority and Another. 2011 LLR 925 (Allahabad HC) No writ maintainable against assessment order of the authority under Construction Workers Welfare Cess Act. Employer should approach appellate authority and not the High Court. M/s. Tanks and Tube-Wells Class-A Category Contractor vs. Collector/District Magistrate, Allahabad and Others. 2011 LLR 849 (All. HC)

Contract Labour When it was held by labour court that subterfuge was resorted to by the employer to show that the workmen concerned were only of a contractor, SC found no infirmity in the judgment of labour court and high court. SC deplored such practices of employer. Bhilwara Dugdh Uptadak Sahakari S. Ltd. vs. Vinod Kumar Sharma Dead by LRs & Ors. 2011 LLR 1079 (SC) To get relief of reinstatement against principal employer, contract worker has to prove that he was directly paid by principal employer and not contractor. General Manager (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon vs. Bharat Lal & Anr. 2011 I CLR 1 (S.C.) In determining relationship between principal employer and contract labour, two determining factors are to be seen22

Business Manager

February 2012

Important Labour Judgments 2011 who pays the salary to the contractor labour and who has the control and supervision on the work of such employee. It is for the contract labour to prove that he was directly employed by the principal employer and not the contractor. General Manager (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon vs. Bharat Lal & Anr. 2011 LLR 113: 2011 (128) FLR 560 (S.C.) Employees of agencies running Govt. hostels canâ&#x20AC;&#x2122;t claim status or salary at par with the State Govt. employees. State of Rajasthan and others vs. Daya Lal and others. 2011 (128) FLR 928 (S.C.) In view of MRTU & PULP Act and Bombay Industrial Relations Act, matter is referred to larger bench to decide whether a person who is employed by a contractor to undertake the work of principal employer, is an employee under the Act? Raymond Ltd. & Another vs. Tukaram Tanaji Mandhare & Another. 2011 LLR 374 (S.C.) When workers shown as contract labours but found as sham, must be presumed to be workers of principal employer and is such case reference is maintainable. Airports Authority of India vs. Indian Airport Kamgar Union and others. 2011 (128) FLR 236 (Bom. HC) Contractor labours engaged in a factory which is a scheduled employment under minimum wages act will be entitled for minimum wages of that establishment. Sirpur Paper Mills Ltd. and Others vs. Government of A.P. Rep. by its Secretary, L.E.T. & P. Department and Others. 2011 LLR 250 (AP HC) Female partners of construction firm not involved and responsible in the management of business affairs can't be prosecuted for violation of provisions of contract labour act. M/s. Kamala Construction Company Through Rajendra Prasad Singh and Others. vs. State of Jharkhand and Another. 2011 LLR 424 (Jharkhand HC) Industrial tribunal can't direct the management not to terminate the services of contract labour pending dispute of regularisation. Batra Hospital Employees Union (Regd.) vs. Management of Batra Hospital & Medical Research Centre & Ors. 2011 LLR 682 (Del. HC) Employees of the contractor can't be thrusted upon the principal employer merely because the contractor did not obtain the requisite licence under Contract Labour Act. For such violation, action against the contractor can be taken under sec. 23 of the Act. Merely because the principal employer paid bonus to the contractor workers, it will not establish the master servant relationship between principal employer and contractor labour. M/s Indian Iron & Steel Company Ltd. (Burnpur Works, Burnpur) vs. State of West Bengal & Ors. 2011 LLR 771 (Cal. HC)

From The Court Room

Important Labour Judgments 2011

Railway canteen employees getting all benefits where it is mandatory to have a statutory canteen, will be treated as railway employees from the years of their joining. Mohan Singh & Ors. vs. Chairman, Railway Board & Ors. 2011 LLR 319 (Del. HC)

Court Powers

Management subject to without prejudice to the rights of the concerned workmen. Hema Chemicals Industries vs. Ramkailas Saroj. 2011 (II) LLN 216 (Guj. HC) Tribunal has jurisdiction to entertain the application for setting aside the exparte award if made before award becomes enforceable. Greaves Cotton Limited vs. Government of N.C.T. of Delhi and Others. 2011 LLR 244 (Del. HC) Ex-parte award of labour court having sound reasons will not be interfered by High Court. Bhimani Khadi Gramodyog Sangh vs. Malshi Desar Maheshwari. 2011 (I) CLR 869 (Guj. HC)

Court will not re-assess the evidence and findings in the enquiry unless the findings are found perverse. Courts will however interfere with the enquiry if principles of natural justice or statutory regulations have been violated. State Bank of Bikaner & Jaipur vs. Nemi Chand Nalwaya. 2011 LLR 634 (S.C.) Courts should not grant relief beyond scope of prayers. When employer challenged the grant of back wages only and not the order of reinstatement, High Court erred in granting compensation in toto. Ranbir Singh vs. Executive Engineer. 2011 LLR 612 (S.C.) Interference on quantum of punishment would be permissible only in rare cases where punishment awarded appears to be unconscionable and actuated by malice. State of U.P. & Ors. vs. J.P. Saraswat. LLN(2) 2011 P. 372 (S.C.) Stay order of termination of a peon appointed on contract basis is illegal. Mukhiya Karyapalak Adhikari, U.P. Khadi Tatha Gramodyog Board Karmit Anubhag, Lucknow & Anr. vs. Santosh Kumar. 2011 LLR 1235 (SC) High Court not to interfere with the punishment, instead should have remanded back the matter to labour court if the punishment was disproportionate to the charges. Management of Christ College Regd. Society vs. Kenchareddi. 2011 LLR 117 (S.C.) Labour Court has no power to award interest on the amount due under section 33C(1) of the I.D. Act. Durlabhbhai Naranbhai Parmar vs. Divisional Controller. 2011 LLR 649 (Guj. HC) ; 2011 FLR (129) 1065 Industrial Tribunal should not have declined the withdrawal of the petition of the employer seeking permission for dismissal of the workmen during pendency of the industrial dispute and, as such, the High Court allowed the petition for withdrawal of application by the

High Court will not interfere with the Award passed by the Labour Court unless the conclusions drawn by the tribunal are perverse or not based on the evidence on record. Dhoraji Municipality vs. Maganlal Jivrajbhai. 2011 (I) CLR 852 (Guj. HC) After expiry of 30 days of publication of award, no application for setting aside the ex-parte award can be entertained by the Labour Court as he becomes functus officio. Management of M/s General Industries Co. & Anr. vs. Satish Kumar. 2011 LLR 792 (Del. HC) High Court can't sit like a court of appeal and re-evaluate the evidence to arrive at different conclusion in writ jurisdiction. Only perversity of the empugned order can be examined. Kumaon Mandal Vikas Nigam Limited through its Managing Director, Nainital vs. Presiding Officer, Labour Court Haldwani, District Nainital & Ors. 2011 LLR 797 (Uttara. HC) The power of Labour Court under section 11A of the Industrial Disputes Act is so wide that a punishment of lesser magnitude can be imposed by it even while upholding the findings in the domestic enquiry. Techno Electrics, Hyderabad vs. ChairmanCum-Presiding Officer, Hon'ble Addl. Industrial Tribunal-Cum-Addl. Labour Court, Hyderabad and Another. 2011 (130) FLR 183 (AP HC) Labour court has powers to reduce the punishment when it is considered shockingly disproportionate to the charges levelled. But where the misconduct was about misbehaving with superior and absuing him, punishment of dismissal should not have been reduced. Karnataka State Road Transport Corporation, Kolar Division, Kolar vs. P. Selvaraj. 2011 LLR 934 (Karn. HC) Interest rightly awarded on delayed payment of back-wages as granted by labour court at the time of reinstatement. Manager, Naaz Cinema vs. Vasantben Rameshbhai Ghumadiya. 2011 (130) FLR 895 (Guj. HC) Business Manager

February 2012

From The Court Room Labour court while exercising equitable jurisdiction has powers to allow interest on delayed payment of due amount. Manager, Naaz Cinema vs. Vasantben Rameshbhai Ghumadiya. 2011 LLR 1092 (Guj. HC) Industrial Tribunal is not to confine its adjudication strictly to the matter as referred for adjudication since the incidental question can also be decided. M/s. NHK Spring India Ltd., Malanpur, Bhind vs. NHK Shramik Sangh, Gwalior (M.P.) 2011 (130) FLR 768 (MP HC) Tribunals adjudicating labour disputes should desist from trying some issues as preliminary ones. Mahipal Singh vs. Presiding Officer, Industrial Tribunal-III & Ors. LLJ (III) 2011 P. 387 (Del. HC) Dismissal of a workman, if not approved under sec. 33(2)(b) of the Act, becomes void abinitio and labour Court may allow a reference regarding such dismissal without considering it on merits. Delhi Transport Corpn. vs. Prem Chand, ex sweeper. LLJ (III) 2011 P. 213 (Del. HC) When witness shirked the responsibility in answering questions during cross examination, rejection of application by the court for summoning CMD of the company under MRTU & PULP Act in complaint for unfair labour practice is right. Vasudev Tanaji Narvekar vs. Larsen & Toubro Ltd., Mumbai & Anr. 2011 LLR 395 (Bom. HC) Industrial tribunal is under no legal obligation to call witnesses of his own for cross examination. M.P. Hasta Shilpa Hath Kargha Vikas Nigam Maryadit Headquarters, Bhopal vs. Om Prakash Kori and Others. 2011 LLR 347 (MP HC) When the workman is not acquainted with labour laws, he should be given opportunity to call record of the management to prove his 240 days working. Mahesh Kumar Sharma vs. Divisional Forest Officer, General Forest Division, Sheopur and Ors. 2011 LLR 349 (MP HC) Under section 11-A of Industrial Disputes Act, interference with punishment can be only in cases of dismissal or discharge of workman. Zonal Manager, Bank of India vs. General Secretary, Bank of India Staff Union. LLJ (I) 2011 P. 529 (Mad. HC) Labour Court becomes functus officio after 30 days of notification / publication of the award in the gazette, thereby cease to have jurisdiction to set aside the award.

Important Labour Judgments 2011

Workers Working in Electrical Department of MCD. 2011 VII AD(Delhi) 531 (Del. HC) Labour court is required to give adequate reasons while denying back wages on reinstatement when termination was found illegal. Pramod Singh vs. Divisional Forest Officer and Others. 2011 LLR 1242 (MP HC) Court not to interfere with the punishment of dismissal order when driver was found drunk and used filthy language and misbehaved with the passengers. A. Chandrappa vs. Management of Bangalore Metropolitan Transport Corporation. 2011 LLR 1277 (Karn. HC) It is not open for the courts to substitute their subjective opinion in place of legitimate conclusion arrived at by the enquiry officer. The Management of Sundram Fasteners Limited vs. The Presiding Officer, II Additional Labour Court, Chennai and Another. 2011 LLR 286 (Mad. HC) In the absence of any party while proceeding ex-parte labour court has to answer the reference and simply can't pass a 'no dispute award'. Labour Court can't reject the application for restoration of the dispute. Satendra Singh Gujar vs. Bank of India, Gwalior and Others. 2011 LLR 61 (MP HC) When workman played fraud in seeking ex-parte award even after receiving full and final payment, court can set aside such award on application filed by the employer within 30 days of its knowledge. Preetam Singh & Sons vs. Chotey Lal and Others. 2011 LLR 242 (Del. HC) Labour Court has no jurisdiction to entertain industrial dispute of workmen and Co-operative Society. Dugdh Utpadak Sahkari Sangh Ltd. vs. Presiding Officer, Labour Court and others. 2011 (129) FLR 85 (All. HC) Labour Court, in a petition under section 33C(2) of the Industrial Disputes Act, cannot grant relief for the period beyond what it has been claimed by the workman. M/s. National Woollen Mills and Another vs. Ramesh Chand. 2011 (129) FLR 912 (P & H HC) Court directions to make workman permanent at the lower grade will be proper. Mahavir Steel Industries (P) Limited, Pune vs. Pune Workers Union, Pune and another. 2011(130)FLR 1103 (Bom. HC)

Daily wager

M/s. Ador Multiproducts Ltd. vs. Mr. N.B. Sagadevan. 2011 LLR 1166 (Karn. HC) There is no complete bar under Order 6 Rule 17 of the CPC and proviso thereto, for seeking amendment to the pleadings even after commencement of the trial. Municipal Corporation of Delhi vs. Workmen, 24

Business Manager

February 2012

Daily wagers are not entitled for regularisation and payment of minimum wages in view of SC judgment of Uma Devi case [(2006 (109) FLR 826].

From The Court Room

Important Labour Judgments 2011

Superintending Engineer and Another vs. Secretary. 2011 LLR 422 (Guj. HC) Daily wager appointed for a fixed period on scarcity relief work will not be entitled for reinstatement. Gujarat Water Supply and Sewerage Board vs. M.D. Doshi. 2011 LLR 262 (Guj. HC) Daily wager has no right to continue. Reinstatement liable to be set aside. State of Maharashtra, Sub-Divisional Forest Officer, Beed vs. Sadashiv Maroti Doke and Another. 2011 (128) FLR 610 Daily wager appointed as tree planter does not hold a post. No reinstatement of such employee after termination. Can only be awarded consolidated damages. State of U.P. vs. Presiding Officer, Labour Court (1st) U.P., Kanpur and Another. 2011 LLR 516 (All. HC) Reinstatement of daily-wagers, appointed on fixed salary on temporary basis, would not be tenable since they have been engaged not against advertisement or through the employment exchanges hence it would be appropriate to convert the reinstatement into compensation only. Manager, Gujcomasol Pesticides Deptt. vs. Kiritkumar Babulal Patel and Another. 2011 (129) FLR 831 (Guj. HC) Compensation of fifty thousand instead reinstatement would be proper in the case of a daily wager who was retrenched without complying with the provisions and served for about 14 years as safai karmchari. Prasar Bharti Broadcasting Corporation of India vs. Presiding Officer, Industrial Tribunal, Patna and Another. 2011 (130) FLR 569 Compensation in lieu of reinstatement appropriate when termination of daily wagers or temporary workmen was illegal. Aniruddhsinh Vajubha Zala & Anr. vs. Sarpanch. 2011 LLR 64 (Guj. HC) A daily wager does protection of ID Act.

not

have

the

State of Haryana and Others vs. Sanjay Kumar. 2011 LLR 1240 (P&H HC)

Disciplinary Proceedings

Where disciplinary authority choose to differ with Enquiry Officerâ&#x20AC;&#x2122;s finding, employee must be given an opportunity of personal hearing before any action. Anil Gilurker vs. Bilaspur-Raipur Kshetriya Gramin Bank & Anr. 2011 LLR 1121 (SC) It is for the employer to prove the misconduct in the court when he chooses to dismiss employee directly without enquiry. Amar Chakravarty & Ors. vs. Maruti Suzuki India Ltd. 2011 LLR 1 (S.C.) Refusal of summoning defence witnesses and documents by the enquiry officer in the absence of justification and relevance stated by the employee, will not render enquiry invalid. State Bank of India & Ors. vs. Bidyut Kumar Mitra & Ors. 2011 LLR 561 (S.C.) If employee absents from enquiry without information to EO even after three chances are given and enquiry held exparte, cannot be said to be vitiated. It is not the duty of the enquiry officer to find out from the management whether any intimation was received from the employee about enquiry. S.B.I. vs. Hemant Kumar. 2011 LLR 449 (S.C.) Punishment of demotion with promotion bar for seven years is appropriate for the misconduct of financial irregularity by bank employee. Even the reviewing authority of the bank should not have interfered with the punishment of removal from service and reduced it. State Bank of Mysore & Others etc. vs. M.C. Krishnappa. 2011 LLR 857 (S.C.) Issuing charge sheet after the employee was relieved and VRS accepted in all respects, is untenable in law. Such action is totally opposed to settled principles of law. G. Mallaiah vs. A.P. State Handloom Weavers Co-Operative Society Ltd. and Another. 2011 LLR 986 (AP HC) Having believed the misconduct, tribunal ought not to have disturbed the punishment given by corporation. In domestic enquiry guilt of employee has to be established on preponderance of probabilities and degree of proof is not that of beyond reasonable doubt. Life Insurance Corporation of India vs. General Secretary & Anr. 2011 II CLR 271 (Guj. HC) In the matter of disciplinary proceedings High Court is only concerned about the decision making process rather than on the merits of the proceedings.

When employee absented in the enquiry even after notice, ex-parte enquiry will be justified.

S. Singaravelu vs. General Manager, Southern Railways, Chennai and Anr. 2011 LLR 35 (Mad. HC)

Chairman-cum-M.D., Coal India Ltd. and Ors. vs. Ananta Saha & Ors. 2011 LLR 673 (SC)

Conclusion drawn by the enquiry officer on the basis of undisclosed facts and circumstances and not on evidence will make the enquiry vitiated.

Vague charges in the charge sheet will render the enquiry and dismissal invalid.

Shyamal Kumar Sarkar vs. Bangiya Gramin Vikas Bank and Another. 2011 LLR 78 (Cal. HC) Business Manager

February 2012

From The Court Room When workman conceded that disciplinary enquiry against him was fair and proper, court can't declare it unfair. Rachappa vs. Managing Director, North-East Karnataka Road Transport Corporation, Gulbarga. |2011 LLR 63 (Karn. HC) In departmental enquiry, it is not necessary that the charges have to be proved beyond reasonable doubt as in court of law. What is required in enquiry is preponderance of possibility. Sanat Kumar Vijjan vs. UCO Bank & Ors. 2011 LLR 85 (Uttrakhand HC) ; 2011 LLJ (II) 74 Punishment of dismissal would be illegal on the charge of negligence not framed in the charge sheet. EO exonerated the employee from the charges of embezzlement leveled against the employee. Kashmira Singh vs. Punjab State. 2011 LLR 155 (P & H HC) Employee can't claim subsistence allowance from the employer during the period of de novo inquiry in the court. Mumbai Cricket Association vs. Pramod G. Shinde. 2011 I CLR 745 (Bom. HC) When principles of natural justice are not followed and Inquiry Officer was biased, civil courts will have jurisdiction to intervene. Delhi Transport Corporation vs. Subhash Chand. 2011 (128) FLR 707 (Del. HC) Onus of proof that inquiry was not fair was on the workers' union which had to prove the allegation made by it. Federal Mogul Bearing India Ltd. vs. State of Himachal Pradesh & Ors. LLJ (I) 2011 P. 605 (HP HC) Enquiry vitiated when enquiry officer performs the role of prosecutor by cross examining the witnesses of both the parties. Requisite degree of impartiality is expected to be maintained by EO in enquiry. C.R. Das-I Alias Chittaranjan Das vs. Personal Manager, Jute Corporation of India & Anr. 2011 LLR 529 (Cal. HC) Enquiry conducted in a one go in single day without examining material witnesses can't be held to be proper and legal. U.P. State Road Transport Corporation, Jhansi vs. Mohd. Ahmad and Another. 2011 LLR 926 (Allahabad HC) Over work is no licence to negligence. Domestic enqury can't be held to be unfair on ultra technical and trivial defects. Managing Director, U.P.S.R.T.C., Lucknow and Others vs. Har Prasad Pathak and Another. 2011 LLR 930 (Allahabad HC) When the workman was acquitted in criminal trial by giving benefit of doubt, initiation of domestic enquiry after such acquittal cannot be stayed on the ground of delay. Om Prakash-II vs. Delhi Society for Prevention of Cruetly to Animals & Ors. 2011 LLR 614 (Delhi HC) 26

Business Manager

February 2012

Important Labour Judgments 2011

When disciplinary authority did not agree with the findings of the enquiry officer exonerating the employee from misconduct and punishing him by his own reasons wihout giving him notice, will be illegal and will amount to violation of principles of natural justice. Janeshwar Prasad Yadav vs. State of Jharkhand and others. 2011 (129) FLR 690 (Jhar. HC) Where the inquiry is vitiated only then the labour court can go into merits of charges and direct the employer to prove the charges. Uttarakhand Transport Corporation vs. Presiding Officer, Labour Court, Dehradun and others. 2011 (129) FLR 700 (Uttra. HC) Calling employee to first lead evidence in the enquiry will vitiate the enquiry. Management has to lead the evidence first. Chief Manager, Rajasthan State Road Transport Corporation, Vidhyadhar Nagar Depot, Jaipur vs. Sukhveer Singh (since deceased) through his Legal Heirs & Anr. 2011 LLR 680 (Raj. HC) Court can't grant stay against domestic enquiry pending criminal trial. National Insurance Co. Ltd. vs. Sunil kumar and Others. 2011 LLR 754 (Del. HC) Confirming the order of punishment by board of directors without giving opportunity of hearing to the employee would be violative of principles of natural justice. Madhukar Tulsiram Tayade vs. Chairman, Board of Directors, Vidarbha Kshetriya Gramin Bank, Akola and Others. 2011 LLR 770 (Bom. HC) Findings of Court in a criminal case must prevail over the department proceedings on same set of charges. State of West Bengal and others vs. Vidyasagar Pandey and another. 2011 (129) FLR 45 (Cal. HC) It is not the quantum of amount misappropriated but the unreliable conduct of the employee which is relevant for the purpose of imposing penalty. K. Murthy vs. Labour Court & Ors. LLN (1) 2011 P. 105 (Mad. HC) When reasons in writing are recorded by authority for dispensation of enquiry being not resonably practicable to follow the procedure prescribed in the rules, authority can dispense with the enquiry and terminate the services. S.P. Arya vs. Union of India & Ors. 2011 LLR 1139 (Delhi HC) Charge sheet about the misconduct of theft has to be very precise and specific. In that absence workman canâ&#x20AC;&#x2122;t be held responsible for loss of goods by EO in the enquiry. K. Ramesh vs. Presiding Officer, Principal Labour Court, Chennai & Anr. 2011 LLR 1149 (Mad. HC) Pending disciplinary proceedings, transfer of the president of the union instead of placing under suspension canâ&#x20AC;&#x2122;t be said to be malafide.

From The Court Room Kedar Singh Baghel vs. M.P. Purva Kshetra Vidyut Vitaran Company Limited, Jabalpur and Others. 2011 LLR 1185 (Mad. HC) Enquiry will be invalid when EO himself appeared as witness. Termination on the basis of such enquiry not sustainable. The Haryana State Co-operative Supply and Marketing Federation Ltd. vs. Prem Singh & Anr. 2011 LLR 1188 (P&H HC) Suspension of an employee has to be supported by justifiable reasons. Sharad Chandra Sharma vs. Delhi Transco Limited & Ors. 2011 LLR 1226, 2011 VI AD (Delhi) 557 (Del. HC) Employee failed to participate in the enquiry, canâ&#x20AC;&#x2122;t further challenge the violation of principles of natural justice. Jitender Kumar Goel vs. Director, Directorate of Education & Ors. 2011 VII AD(Delhi) 592 (Del. HC) When enquiry is not delayed for the reason directly attributable to workman, he is entitled to subsistence allowance in accordance with the service rules of the bank or settlement with the union. Smt. Jayashree Vani vs. Bank of India, Bangalore. 2011(130) FLR 1034 (Karn. HC) Even if there is a provision in the bank rules for conducting common enquiry against two or more employees on the ground of having identical charges, bank can go for individual enquiries. T. Baba Prasad vs. Andhra Bank and two others. 2011(4) LLN 94 (AP HC) High Court is not required to interfere with the findings of the enquiry officer based on evidence and decision of the disciplinary authority to come to a different finding. Failure of employee to submit written explanation of the charge sheet, canâ&#x20AC;&#x2122;t be presumed as admission of charges by the employee. Imposing major penalty without holding enquiry is a serious flaw. U.P. Cooperative Bank Ltd. & Ors. vs. P.O., Labour Court & Ors. 2011 LLR 1247 (All. HC) In enquiry, proof is not required beyond doubt. It is in the realm of probability. Divisional Controller, Gujarat Sate Road Transport Corporation vs. Mohmad Adambhai Mushabhai Bhodiya. 2011 (131) FLR 859 (Guj. HC) Proving charge in the enquiry on the basis of the concept of theory of beyond reasonable doubt is not applicable in domestic enquiry. Dismissal justified of bus conductor for not issuing tickets to passengers. Hidayatali s/o Mehaboobali Sayed, Chandrapur vs. Maharashtra State Road Transport Corporation through Divisional Controller, Chandrapur. 2011 LLR 521 (Bom. HC) When dismissal is for misconduct of using abusive language towards superior, some indication of words, language or getures are

Important Labour Judgments 2011

necessary to justify the punishment. U.P. State Road Transport Corporation vs. Sudhir Nigam. 2011 LLR 361 (All. HC) Enquiry not vitiated for non supplying of list of documents and enquiry report. Raja Ram vs. Presiding Officer, Industrial Tribunal-cum-Labour Court, Panipat & Anr. 2011 LLR 1164 (P&H HC) Disciplinary authority is under obligation to provide an opportunity of hearing to the employee when he choose to differ from the findings of the enquiry officer. Dandapani Muli vs. P.O., Industrial Tribunal, BBSR & Ors. 2011 LLR 910 (Orissa HC) When enquiry officer exonerated the employee from charges and disciplinary authority dissented from, workman needs to be provided opportunity of hearing. Senior Regional Manager vs. C.G.I.T., Jabalpur and Another. 2011 LLR 941 (MP HC) In the absence of any such plea of bias before EO during enquiry, EO will not be deemed as biased. Kewal Krishan vs. Presiding Officer, Industrial Tribunal & Anr. 2011 LLR 1011 (Delhi HC) It is always open for the disciplinary auhority to change his view after going through the explanation of the employee submitted after show cause notice. Subhashchandra Mukherjee vs. Chairman. 2011 LLR 1049 (MP HC) Permanent withdrawal of pension is appropriate punishment to the person who was found guilty of misappropriation. Dipak Kumar Lahiri vs. National Insurance Company Ltd. & Ors. 2011 (II) LLN 151 (Cal. HC) Before imposing penalty to the delinquent, the disciplinary authority has to bear in mind the nature and gravity of charges and whether any financial loss was caused by the delinquent as also his physical disability. T.R. Raghukumar vs. Union Bank. CLR I 2011 P. 893 (Kar. HC)

Dismissal Dismissal of the employee even after retirement is not illegal if rules so permit. State Bank of India vs. Ram Lal Bhaskar & Anr. 2011 LLR 1233 (SC) Dismissal justified of the employee for removing gold jewellery packet from the bank and also admitting the same. Canara Bank, Bangalore vs. Sri Devaraju H. 2011 LLR 97 (Karn. HC) When the enquiry was held to be fair and proper, setting aside dismissal of salesman charged with misconduct of embezzlement of funds not valid. Business Manager

February 2012

From The Court Room

Important Labour Judgments 2011

Beerh Rau Ke Co-Operative Agricultural Services Society Ltd. & Anr. vs. Presiding Officer and Ors. 2011 LLR 40 (P. & H. HC) Dismissal proper of watchman guilty of insubordination and threatening the security officer. Dhirendra Bahadur Shahi vs. Empire Industries Ltd., Vikhroli, Mumbai & Ors. 2011 LLR 125 (Bom. HC) Dismissal proper for assaulting the co-worker.

abusing

and

Asharfi Lal vs. Management of Delhi Cloth Mills. 2011 LLR 118 (Del. HC) Dismissal proper for unatuhorized absence.

habitual

and

V. Manoharan vs. The Presiding Officer, Labour Court, Vellore and Another. 2011 LLR 144 (Mad. HC) Dismissal invalid for single act of absence particularly when the employee (driver) suffered from injuries due to accident. Managing Director, Tamil Nadu State Transport Corporation (Salem Division II) Ltd., Dhamapuri vs. K.V. Krishnan and Another. 2011 LLR 148 (Mad. HC) Dismissal of bus conductor justified for the misconduct of misappropriation. B. Narayanappa vs. Managing Director, K.S.R.T.C., Bangalore and Another. 2011 LLR 412 (Karn. HC) Even if the victim back tracked stating that he was not assaulted, dismissal of employee charged for assaulting coworkman can't be over looked. A. Kajendran vs. Presiding Officer, Central Govt. Industrial Tribunal, Cum Labour Court, Chennai & Ors. 2011 LLR 438 (Mad. HC) Dismissal justified of bus conductor for not issuing tickets to passengers. Hidayatali s/o Mehaboobali Sayed, Chandrapur vs. Maharashtra State Road Transport Corporation through Divisional Controller, Chandrapur. 2011 LLR 521 (Bom. HC) Unauthorised absence and going abroad without management permission shows that employee has no interest in the work. Dismissal for the misconduct justified. M.A. Azim vs. Maharashtra State Road Transport Corporation, through its Works Manager, Central Workshop. 2011-1 LLN 123 (Bom. HC) When bank employee was dismissed on the basis of his past record and it was not brought to his notice before, such dismissal would be invalid. Dehi Ram Baruah vs. Regional Manager, UCO Bank (A Govt. of India Undertaking), Guwahati & Ors. 2011 LLR 480 (Gauhati HC) Dismissal justified for refusal to obey instructions of superior, catching hold of neck of superior, slapping and threating to see him outside factory. Raja Ram vs. Presiding Officer, Industrial Tribunal-cum-Labour Court, Panipat & Anr. 2011 LLR 1164 (P&H HC) 28

Business Manager

February 2012

Refusal to report at place of transfer establishes in subordination and unauthorised absence. Termination justified due to this misconduct. Hindalco Industries Ltd. vs. Suman Lata Tuteja & Ors. 2011 LLR 1197 (Del. HC) No reinstatement to teachers of the school for the misconduct of openly insulting, humiliating and forcibly entering into principalâ&#x20AC;&#x2122;s bunglow. Managing Committee, Frank Anthony Public School & Anr. vs. C.S. Clarke & Ors. 2011 LLR 1201 (Del. HC) Diverting customers to third party causing loss is a dishonest act and loss of confidence is imperative. Dismissal justified for such misconduct. Abeheraj Jaswal vs. M/s. Godrej Boyce Manufacturing & Ors. 2011 LLR 1210 (Del. HC) Dismissal not proper on the ground of unauthorised absence when he developed heart disease and was on medical leave. Phulkumari and Others vs. Bharat Coking Coal Ltd. Dhanbad and Others. 2011(131) FLR 186 (Jhar. HC) Dismissal justified of driver for misbehaving with passengers using filthy language in drunken state. A. Chandrappa vs. Management of Bangalore Metropolitan Transport Corporation. 2011 (131) FLR 342 (Karn. HC) Dismissal justified of a bus conductor found carrying 18 ticketless passengers. U.P.S.R.T.C. through its Regional Manager, Jhansi vs. Presiding Officer, Labour Court (IV), Kanpur and Another. 2011 LLR 1236 (All. HC) Dismissal justified for habitual absence. A. Ganesh Reddy vs. Chief Traffic Manager, B.M.T.C. Central Officers, Bangalore. 2011 LLR 1243 (Karn. HC) An employee who could not respect his superior canâ&#x20AC;&#x2122;t be permited to remain in service. U.P. State Road Transport Corporation Through Regional Manager, Kanpur Nagar vs. Rajendra Singh and Another. 2011 LLR 1257 (All. HC) Labour court order of modifying the punishment of dismissal into reinstatement by withholding two increments for the misconduct of unauthorized absence of 11 months would be illegal. Smt. Padma and others vs. Chief Traffic Manager BMTC Central Office, Bangalore. 2011 (131) FLR 914 (Karn. HC) Dismissal of bus conductor appropriate when found guilty of misappropriation. K. Murthy vs. 1. The Labour Court, Salem, (2) The Management, Tamil Nadu State Transport Corporation, Salem Division-II, Dharmapuri-5. 2011 LLR 329 (Mad. HC) Dismissal justified for defamatory aspersions against senior officers without substantiating them during enquiry. Kewal Krishan vs. Presiding Officer, Industrial Tribunal & Anr. 2011 LLR 1011 (Delhi HC)

From The Court Room Dismissal of union leader justified for shouting and abusing management in filthy language and trying to snatch papers from officers and disrupting production for one and half hours. Ravindra Sharma vs. Labour Court and Others. 2011 LLR 495 (Uttarakhand HC) Dismissal justified of pharmacist for stealing drugs by keeping in dickey of his scooter. Sunil Kumar vs. M/s Telco Ltd. 2011 LLR 611 (Jhar. HC) Dismissal justified for false undertaking of the workman that there was no criminal trial pending against him. Anil vs. Assistant Commissioner, Food and Drugs Administration, Jatharpeth, Akola. 2011 LLR 619 (Bom. HC) Dismissal not justified for misbehaving with the father of managing partner and partner of the firm not connected with day-to-day activity of business, that too outside the premises. B. Rajagopal vs. Jomy Xavier & Anr. 2011 Lab IC 1131 (Kerala HC) Dismissal of bus conductor legal when found carrying passengers three times without ticket. It is grave misconduct. U.P. State Road Transport Corporation, Kanpur Nagar vs. Chandra Prakash Soni and Another. 2011 LLR 923 (Allahabad HC) Dismissal of bank employee proper for misconduct of misappropriation of funds. Shrawan Kumar, S/o Sri Ram Autar Prasad, Patna vs. Central Bank of India, through its Chairman-cum-Managing Director & Ors. 2011 LLR 998 (Patna HC) Dismissal too harsh punishment for the misconduct of retaining key of power house with himself without sanction. Reinstatement with partial back-wages would be appropriate relief. Managing Director, Shree Panchaganga Sahakari Sakhar Karkhana Ltd., Kolhapur vs. Kallappa Narasappa Sangale and Others. 2011 LLR 822 (Bom. HC)

Employees Compensation Act If the insured vehicle is not involved in accident, insurance company can't be held liable for compensation. Mamtaj Bi Bapusab Nadaf vs. United India Insurance Co. & Ors. LLN (2) 2011 P. 19 (SC) Taking auto on per day rent from the owner will not constitute employeremployee relationship for the purpose of compensation under E.C. Act.

Important Labour Judgments 2011 Oriental Insurance Co. Ltd. rep. by its Senior Divisional Manager vs. T. Saramma and Others. 2011 LLR 75 (A.P. HC) Driver - son of a tractor owned by his father can't be termed as employee under Employees Compensation Act for the purpose of Compensation award. Oriental Insurance Company vs. Santosh Devi & Anr. 2011 LLR 55 (HP HC) In a claim for compensation, the amount paid under the Group Insurance Accident Policy will be deducted from the amount of compensation awarded by the Compensation Commissioner. Ubel Company vs. Jaswinder Kaur and Others. 2011 LLR 72 (P. & H. HC) No relief to the deceased dependents under EC Act when claim was filed after considerable long delay. United India Insurance Company Ltd. vs. Kadar Harun Changda and Others. 2011 LLR 187 (Guj. HC) Compensation rightly awarded when the employee died sitting in the vehicle cabin which he used to drive. Such death will be deemed out of and in the course of employment. M/s. National Insurance Co. Ltd. vs. Zaheeda Banu & Ors. 2011 LLR 178 (Karn. HC) The insurer has been rightly held liable to pay the compensation to the legal heirs of the deceased workman who died while cutting the trees in an estate insured with the insurer. The United India Insurance Co. Ltd. vs. Manjunath & Ors. 2011 LLR 180 (Karn. HC) It would be wrong for the Commissioner to dismiss the compensation claim merely on the ground of the medical report that the deceased driver was alcohlic and there was no evidence that death caused due to alcoholism and smoke. Smt. Jayalakshmi M. Shetty and Others vs. Ramesh and Another. 2011 LLR 310 (Karn. HC) Awarding compensation on less salary than the amount admittedly evident on record would be wrong. (Smt.) Vithabai Bhavsaheb Khairnar and Others vs. Subhash Kanhaiyalal Bafna, Dhule and Another. 2011 LLR 385 (Bom. HC) If the employee was unable to perform the duties which he was doing before the accident, will amount to loss of 100% earning capacity even though the physical disability is 20-25%. Compensation on the basis of 100% loss is appropriate. National Insurance Company Ltd. vs. Hari Om and Anr. 2011 LLR 428 (Del. HC) Workman injured in an accident caused by his own negligence cannot claim compensation. Louis Martis vs. Louis Korrea & Anr. LLJ (1) 2011 P. 342 (Karn. HC) Loosing right arm in accident is itself a proof of loss in earining capacity, commissioner under W.C. Act should have decided the claim on the basis of submission only. Business Manager

February 2012

From The Court Room Narayan Bansilal Vaishnav, Buldhana vs. Champatrao Tryambakrao Deshmukh, (dead through L.Rs.). 2011 LLR 524 (Bom. HC) Employee is not entitled for grant of medical expenses for the injury caused during employment under EC Act. New India Assurance Co. Ltd. vs. Viram Vela Rabari and Another. 2011 LLR 484 (Guj. HC) 100% disability for compensation will be presumed when driver of the vehicle has lost his right eye since he will not be able to perform the duties of a driver. Oriental Insurance Co. Ltd. vs. Shri Diwan Singh and Another. 2011 (129) FLR 78 (Uttarakhand HC) Being EC Act as social welfare legislation, benefit of doubt about death in course of employment should be allowed and compensation be given. New India Assurance Co. Ltd., Bangalore vs. Naseem Banu and Others. 2011 LLR 588 (Kar. HC) Loss of vision in one eye of driver would be treated as permanent total disablement with 100% earning capacity loss. New India Assurance Co. Ltd. vs. Santhosh. 2011 LLR 748 (Kerala HC) Sub-Divisional officers are not entitled to act and function as commissioner under Employees Compensation Act as amended from 2010. National Insurance Co. Ltd. vs. Bhim Singh & Ors. 2011-II CLR 129 (Del. HC) Diabetes Mellitus is not a diseases in the list of occupational diseases as mentioned in the Schedule to the Employees Compensation Act hence a claim by a workman cannot be allowed by the Commissioner under the Act. Shipping Corporation of India Ltd. vs. Ratanji Somabhai Tandel. 2011 (129) FLR 926 (Bom. HC) Insurer of the vehicle has to indemnify the employer with compensation and interest which was paid in an accident caused to the driver while in the employment who was rendered unfit to drive the vehicle. M/s. National Insurance Co. Ltd. vs. Lakhindra Das and Another. 2011 (129) FLR 845 (Gauhati HC) Assessment of loss of earning capacity upto 10% without any basis cannot be relied upon. Oriental Insurance Co. Ltd., Bangalore vs. Shivanna @ Shivananjegowda and Another. 2011(129) FLR 821 ( Karnataka HC) No compensation to deceased family when the death of the operator occured by falling down from the third floor of the administartive building away from the factory. Such death is not accident under EC Act. Smt. M. Suvarna W/o Late S. Narayanaswamy & Ors. vs. The Factory Manager, Motor Industries Co. Ltd., Adugodi & Anr. 2011 LLR 804 (Kar. HC) 30

Business Manager

February 2012

Important Labour Judgments 2011 Employer - owner of the autoriksha will be liable to pay compensation to the dependents of the deceased driver when he knew that driver was not holding a valid driving licence. Insurance company is not liable to pay any compensation in such case. Faimada Begum vs. Akram Pasha & Anr. 2011 LLR 872 (AP HC) The law is settled on this aspect that the statutory liability under the Employees Compensation Act is on the employer and unless a separate clause is included for the lability of interest, the Insurance Company is not liable to make payment of interest especially in case where the accident is not related to a motor vehicle accident. New India Assurance Co. Ltd. vs. Hiralal Gomaji Moriya (Regar) and Others. 2011 (130) FLR 43 (Guj. HC) In reply to plea of the Insurance Company that notice under Section 10 of the Employees Compensation Act, 1923 was not given, the High Court pointed out Clause (a) of the fourth proviso to Section 10(1) of the Act applied in the case of death of workman occurred in accident while he was working in the premises, and under the control of employer. New India Assurance Co. Ltd. vs. Smt. Vimla Devi and Others. 2011 (III) LLJ 209 (All. HC) In an ex-parte proceedings, no evidence of doctor is necessary when commissioner was satisfied with the medical certificate about extent of loss of earning capacity. Sashin and Company vs. Rupa Uka Sakaria (Deceased) by Heir and Another. 2011 LLR 912 (Guj. HC) Insurance company will not be liable to pay compensation when the driver died while replacing the electric fuse wire in transformer, not permissible under the electricity rules. United India Insurance Co. Ltd., Hyderabad vs. Elkachenu kistamma and Ors. 2011 LLR 931(AP HC) For the purpose of determining compensation, minimum wages is to be taken in to consideration where the employee was paid even less than minimum wages. Shankar vs. The Chief Engineer, KPTCL, Gulbarga and Others. 2011 LLR 934 (Karn. HC) Insurance company is not liable to pay compensation for accident while working at crusher, because tractor and trailer were insured by the company and not the crusher. Branch Manager, National Insurance Co. Ltd., Mandya vs. Ramalingegowda and Another. 2011 LLR 939 (Karn. HC) Insurance company liable to pay compensation to deceased dependents. Can't escape from liability for want of exact number of workers working at accident place. Oriental Insurance Company vs. Narpartu and Ors. 2011 LLR 987 (HP HC)

From The Court Room Exhorbitant compensation in case of non scheduled injury without appreciating evidence correctly and genuinely by EC commissioner is liable to be quashed. The New India Assurance Company Ltd. by its Dn. Mang. vs. K. Somashekhar & Anr. 2011 LLR 1043 (Karn. HC) Death due to heart attack while driving vehicle would amount to accident under EC Act and compensation rightly awarded. National Insurance Co. Ltd. vs. Sheeja. 2011 LLR 1071 (Kerala HC) Death of trailer driver due to heart attack out of stress and strain of employment would amount to accident arising out of and in the course of employment. Dependents entitled for compensation.

Important Labour Judgments 2011 State of U.P. and Others vs. Deputy Labour Commissioner (Prescribed Authority), Azamgarh and Another. 2011 (130)FLR 881 (All. HC) When husband is the driver and his wife is the owner of the autorikshaw, there would be no master-servant relationship for the purpose of getting claim under E.C. Act. Prapulla Chandra Satyanarayana vs. Prapulla Chandra Appalakonda and Another. 2011 LLR 1245 (AP HC)

Employees Provident Fund

Commissioner should not reject the claim on mere technical grounds. Bangaru Koteswaramma & Ors. vs. G. Srinivasa Rao & Anr. 2011 LLR 1105 (AP HC) For filing an appeal against the order of Employees' Compensation Commissioner, the awarded amount besides the interest to be deposited as a condition precedent. New India Assurance Company Limited vs. Biju. 2011 (130) FLR 596 (Kerala HC) For getting compensation under the E.C. Act the claimant has to establish (1) Personal injury, (2) Accident and (3) That it arose out of and in the course of employment. Pratap vs. Panipat Co-op. Sugar Mills Ltd. & Anr. FLR (130) 2011 P. 476 (P&H HC) Where there is no medical evidence that the death of the driver was due to his consuming alcohol, claim for compensation cannot be denied. Jayalakshmi M. Shetty & Ors. vs. Ramesh & Anr. LLJ (III) 2011 P. 108 (Karn. HC) Workman has to choose one remedy for his compensation - either to file petition under EC Act or a civil suit for recovery of damages. He can't have both the options. Jairam s/o Hindusingh Balai vs. Jaswant Singh alias Fakirchand s/o Sukharam and Ors. 2011 LLR 1050 (MP HC) Death due to quarrel with co-worker while on duty will amount to accident arising out of and in the course of employment. Union of India Through General Manager, Northern Railway and Another vs. Ifzal Hussain and Another. 2011 LLR 200 (All. HC) Death canâ&#x20AC;&#x2122;t be said to be occured during the course of employment as employment injury when the driver died as a result of altercation and fist fight with another auto driver when vehicles of both dashed with each other. New India Assurance Company Limited, rep. by its Divisional Manager vs. Noorjahan Begum and 8 Others. 2011 LLR 1221 (AP HC) A Fireman of U.P. Government fire department will not be covered under the Workmen's Compensation Act hence the commissioner has erred in allowing the claim for accident compensation.

Two establishments rightly clubbed under EPF Act when both were having functional and financial integrality and directors of both from the same family, MD, technical and commercial manager common, employees of both were being swapped and both registered at same address with same telephone numbers. M/s. L.N. Gadodia & Sons & Anr. vs. Regional Provident Fund Commissioner. 2011 LLR 1124 (SC) Once paying EPF contribution on salary more than prescribed limit by the employer, he can reduce his contribution to Rs. 6,500. Sec. 12 of the EPF Act will not be a bar nor sec. 9A of the ID Act will operate in negative. Marathwada Gramin Bank Karamchari Sanghatana and Another vs. Management of Marathwada Gramin Bank and Others. 2011 LLR 1130 (SC) Even though there is no limitation for EPF authorities to issue notice for damages, time has to be reasonable. Period of 7-8 years for issuing notice can't be termed as reasonable and was liable to quashed. I.O.L. Limited vs. Union of India and Ors. 2011 LLR 100 (All. HC) Amount paid to C & F Agent as ex-gratia and commission can't be treated as wages for the purpose of EPF. C & F Agent are not the employees of the company. The Assistant Provident Fund Commissioner, Nagpur vs. M/s. Leben Laboratories Pvt. Ltd., Akola. 2011 LLR 27 (Bom. HC) ; 2011(II) LLJ 468 When the establishment produces the record about labour wages, it will be illegal for the EPF authorities to assess the labour cost as 25% lump-sum on machine maintenance and loading-unloading bills. Vikas Electricals, Jabalpur vs. Assistant Provident Fund Commissioner, Jabalpur. 2011 LLR 3 (MP HC) No writ is maintainable against PF authorities order when remedy of appeal before tribunal is not exhausted. Lakshmi Metal Industries, Tirunelveli vs. Assistant Provident Fund Commissioner, Tirunelveli & Ors. 2011 LLR 152 (Mad. HC) Business Manager

February 2012

From The Court Room Special Allowance given to confirmed employees arising out of settlement is not basic wage or deemed part of deemed DA to attract PF contribution.

Unloaders employed temporarily cannot be treated as regular for the purpose of coverage of establishment under EPF Act 1952.

Gordon Woodroffe Ltd., Madras vs. RPFC Madras, 2011 LLR 29 (Madras HC)

Saroj Oil & Dal Industries vs. Central Board of Trustees Through CPF Commissioner and another. 2011 (128) FLR 984 (Del. HC)

No PF dues can be demanded when Factory closed down with due process of law and EPF was informed. Bomin Pvt. Ltd. vs. Assistant Provident Fund Commissioner 2011 I CLR 523 (Guj. HC) EPF Appellate Tribunal is also empowered to reduce or waive the damages levied by Employees' Provident Fund Authority. Regional Provident Fund Commissioner, SubRegional Office, Nagpur vs. Manoharbhai Ambalal, Gondia. 2011 LLR 332 (Bom. HC) Damages under sec. 14B of EPF Act will not be legal if there remains no default or arrears on the date when the damages are levied. Hi-Tech Vocational Training Centre vs. Assistant Provident Fund Commissioner. 2011 LLR 231 (Del. HC) Accountant and goldsmiths not paid regular wages will not be considered as employee under EPF Act. Assistant Provident Fund Commissioner, Ranchi vs. Sushil Kumar Gupta. 2011 LLR 305: 2011 (128) FLR 718 (Jharkhand HC) EPF appellate tribunal must give reasons in a speaking order for dispensing with the compliance of sec. 7-O. Assistant Provident Fund Commissioner, Karnal vs. Employees' Provident Fund Appellate Tribunal and Another. 2011 LLR 235 (P&H HC) While deciding about exemption under sec. 17 of EPF Act, authorities have to test the application whether proposals offered better than of EPF Scheme. H.C. Gupta, Assistant General Manager (Retd.) and Others vs. Punjab State Co-operative Bank Limited and Others. 2011 LLR 302 (P&H HC) Employer can split the minimum wages into various allowances for the purpose of determining their liability under EPF Act. Asstt. Provident Fund Commissioner, Gurgaon vs. M/s. G4S Security Services (India) Ltd. and Another. 2011 LLR 316 (P&H HC) If the employer is aggrieved by the order of the provident fund authority, should appeal before the EPF Appellate Tribunal and not the writ petition is to be filed. State Infrastructure and Industrial Development Corporation of Uttarakhand Ltd., Dehradun vs. Regional Provident Fund Commissioner, Dehradun and Others. 2011 LLR 308 (Uttarakhand HC) In the absence of any speaking order by appellate tribunal under EPF Act, dismissal of appeal challenging levy of damages would be unreasonable. HC restored the appeal. Cable Corporation of India Ltd. vs. Union of India & Anr. 2011 LLR 380 (Bom. HC) 32

Important Labour Judgments 2011

Business Manager

February 2012

Rejection of objections filed by employer because limitation Act did not apply, is illegal. RPFC directed to hear the matter afresh under sec. 7A of EPF Act. Fouzdar Farm Equipments, Satna vs. Regional Provident Fund Commissioner, Jabalpur & Another. 2011 LLR 373 (MP HC) Before recovery of any dues under EPF Act, authority needs to provide opportunity of hearing to the employer. U.A. Transport Corporation vs. Employees' Provident Fund Organisation. 2011 LLR 418 (Uttarakhand HC) Two hotels of the same company having no financial integrality with separate establishments are not to be clubbed together for the purpose of EPF. PIEM Hotels Limited & Anr. vs. Regional Provident Fund Commissioner. 2011 LLR 526 (Bom. HC) When old employees are absorbed by the new employer on purchase of old unit, EPF Act will continue to apply. Jessore Industries (India) Limited & Anr. vs. The Regional Provident Fund Commissioner, West Bengal & Nicobar Island & Ors. 2011 (I) LLN 772 (Cal. HC) Canteen subsidy pursuant to settlement does not attract PF contribution and canâ&#x20AC;&#x2122;t be part of D.A. Indian Petrochemicals Corporation Ltd. vs. Regional Provident Fund Commissioner & Another. 2011 LLR 460 (Guj. HC); 2011 LLR 717 (Guj. HC): 2011 I CLR 533 (Guj.) Transport allowance, washing allowance, attendance incentive and special allowance paid to all employees except HRA and lunch allowance will form part of 'basic wages' and will attract PF contribution. Surya Roshni Ltd. vs. Employees' provident Fund and Another. 2011 LLR 568 (M.P. HC) Merely working of part time accountant in two different establishments will not be sufficient to club both into one for PF coverage when partners and employees were different. M/s Paramount Leathers vs. Regional Provident Fund Commissioner and Another. 2011 LLR 597 (Cal. HC) Recovery officer cannot recover the PF amount determined under section 7A till expiry of 60 days of appeal. Mahindra Gears and Transmission Pvt. Ltd. vs. Assistant Provident Fund Commissioner, Employees' Provident Fund. 2011 LLR 602 (Guj. HC) More than 50% workers engaged under the guise of "apprentices" and paying them salary, allowances and bonus instead of stipend will not be excluded from provisions of the EPF Act.

From The Court Room Sree Mangayarkarasi Mills (P) Ltd., Madurai Distt. vs. 1. The Assistant Provident Fund Commissioner, Madurai, 2. The Presiding Officer, EPF Appellate Tribunal, New Delhi. 2011 LLR 604 (Madras HC) EPF Appellate Tribunal is under obligation to consider the submissions made and grounds raised in the appeal by the employer. Failure to do so will render the order illegal. M/s BSBK Pvt. Ltd. vs. Employees' Provident Fund Appellate Tribunal, New Delhi & Anr. 2011 LLR 610 (Chattisgarh HC) EPF Authorities were lawful in rejecting the exemption application of the bank when required documents and records were not produced. Bihar State Co-operative Land Development Bank Limited, Bihar and Jharkhand, Budh Marg, P.S. Kotwali, District-Patna Through its Managing Director and Another vs. Union of India through its Secretary, Ministry of Labour and Employment, New Delhi and Others. 2011 LLR 624 (Patna HC) Writ not maintainable against order passed by EPF authorities under section 7A. Whether a person is an apprentice under standing orders has to be decided on the basis of evidence by appellate tribunal.

Important Labour Judgments 2011 Employer purchasing the machines from the closed establishment after taking full and final payments by workers and setting up the machines at different place will not be a continuing business under EPF Act and PF authorities can't order new employer for payment of EPF contributions of past period. Management of Lingam Press, Coimbatore vs. Presiding Officer, Employees' Provident Fund Appellate Tribunal & Anr. 2011 LLR 863 (Mad. HC) Special allowance & Conveyance paid to all workers universally, necessarily and ordinarily will be part of basic wages for the purpose of PF contributions. Montage Enterprises Pvt. Ltd. vs. Employees' Provident Fund, Indore & Another. 2011 LLR 867 (MP HC) Conveyance Allowance, Education Allowance, Special Allowances, Food Concessions, Medical Allowance, Special Holidays, Night Shift Incentive and City Compensatory Allowance will be deemed as basic wages for the purpose of PF contributions under the EPF Act. The Management of Reynolds Pens India Pvt. Ltd., Kancheepuram and Others vs. The Regional Provident Fund Commissioner-II, Chennai. 2011 LLR 876 (Mad. HC)

Tirupati Jute Industries Limited & Anr. vs. Employees' Provident Fund Organisation & Ors. 2011 LLR 657 (Cal. HC)

Person treated as employee for payment of bonus would come within the ambit of employee as defined by E.P. F. Act.

Before rejecting application of exemption under EPF Act, authorities are under obligation to provide hearing apportunity to the school management.

Sree Mangayarkarasi Mills (P) Ltd. vs. The Astt. Provident Fund Commissioner. LLN (2) 2011 P. 304 (Mad. HC)

Satyabrata Chakraborti vs. Union of India and Others. 2011 (129) FLR 315 (Cal. HC) Order of EPF Authority under section 7A, if reversed by appellate tribunal in appeal, cannot be challenged in high court by EPF Authority. Asstt. Provident Fund Commissioner, Goa vs. Nirmitee Holidays (P) Ltd., Pune. 2011-II LLJ 469 (Bom. HC) ; 2011 LLR 28 (Bom. HC) Assembling of parts of gun in the factory will be a manufacturing process within sec. 2(m) of Factories Act and the unit would be covered under EPF Act. M/s Lowtan and Co. vs. Presiding Officer, Employees' Provident Funds Appellate Tribunal, New Delhi and Another. 2011 LLR 807 (Patna HC) Ex-parte order passed against employer by EPF authorities which was communicated to him after seven months is not proper. High Court ordered EPF authorities to hear afresh the employer and communicate fresh order.

Division bench also upheld the order of single judge declaring spiliting of minimum wages in to basic and allowances as legal for PF purpose. Assistant Provident Fund Commissioner vs. M/s. G4S Security Services (India) Ltd. & Another. 2011 LLR 943 (P&H HC) When interim relaxation from the provisions of the EPF Act was granted by PF commissioner, withdrawl of such relaxation during exemption can't be enforced. Court converted such order in to show cause notice. Religare Enterprises Ltd. vs. Labour Secretary & Ors. 2011 LLR 950 (Delhi HC) When contractor agency was paid as â&#x20AC;&#x153;karigar chargesâ&#x20AC;? after deducting TDS for specialised work of embroidery and printing, such amount will not attract PF contribution. When the status of person as employee is to be determined, it should be seen whether such person has an obligation to report for duty next day.

M/s. Nityanand Restaurant & Bar. vs. The Regional Provident Fund Commissioner & Ors. 2011 LLR 851 (Bom. HC)

The Regional Provident Fund Commissioner, Mumbai vs. M/s. Syndicate Overseas Pvt. Ltd. 2011 LLR 953 (Bom. HC)

When the reference under section 17 of SICA before BIFR was pending against the petitioner-Company, the P.F. Authorities cannot take recourse to any coercive steps during pendency of such reference.

Junior telecom officers or junior account officers can't be excluded from EPF coverage for the period of their pre induction training, specifically when their such period was termed as 'duty' in the rule book and gratuity was also applicable for such period.

M/s. R.S.I. Ltd. & Anr. vs. Employees' Provident Fund Organisation & Ors. 2011 LLR 852 (Cal. HC)

Business Manager

February 2012

From The Court Room Bharat Sanchar Nigam Ltd., Chennai vs. Union of India and Others. 2011 LLR 959 (Mad. HC) Company providing financial services would be covered under the EPF Act and agents getting commission would be treated as employees. Focussed Corporate Services (India) Pvt. Ltd., Coimbatore vs. Union of India, Ministry of Labour and Employment, New Delhi & Ors. 2011 LLR 989 (Mad. HC) Provisions of EPF Act do not prohibit the authorities to proceed for recovery of amount even during the period of appeal provided to the employer. Employees' Provident Fund Organisation vs. Rollwell Forge Ltd. & 1. 2011 LLR 1006 ( Guj.HC) It is for the employer and not the EPF authorities to prove the strength of employees, employed by him against the report of PF authority. J.K. College of Nursing & Paramedicals vs. Union of India & Ors. 2011 LLR 1013 (Delhi HC) Condition of deposit the amount before filing appeal under EPF Act, can't be subsituted by bank gurantee. Socrus Pharmaceutical Limited vs. Assistant Provident Fund Commissioner. 2011 LLR 1018 (Delhi HC) The financial corporation and not the new owner to whom the unit was sold, would be liable to pay PF arrears amount to PF department. Sec. 17B of EPF Act will not be applicable in such case. Alico Rubber Reclamation (Private) Limited vs. Employees' Provident Fund Organisation and Anr. 2011 LLR 1032 (HP HC) Passing order by EPF tribunal declaring ex-parte on the same day ignoring the application of the employer requesting for adjournment on which employer was intimated about next date of hearing, would be illegal and liable to be quashed. Nocil Limited (Erstwhile National Organic Chemical Industries Ltd.) vs. The Regional Provident Fund Commissioner-II & Another. 2011 LLR 1052 (Bom. HC) The organization engaged in the activities of the inspection, sampling, analysis and survey work in the field of ores, minerals & chemicals can't fall in the schedule head of 'engineers and engineering contractors' under EPF Act. Regional Provident Fund Commissioner, W.B. & Anr. vs. Superintendence Co. of India Pvt. Ltd. 2011 LLR 1067 (Cal. HC) When susequent purchaser purchased business by way of sale and continued same business, Sec. 17B of EPF Act will apply and new owner will be liable to pay PF contribution of earlier period if any. A.L. Subramanian vs. Employees' Provident Fund Appellate Tribunal, New Delhi & Ors. 2011 LLR 1074 (Mad. HC) No writ lies against the order of EPF authorites under Sec. 7A. Employer has to file an appeal before tribunal. 34

Business Manager

February 2012

Important Labour Judgments 2011 Bharat Polychem Ltd. vs. Regional Provident Fund Commissioner & Anr. 2011 LLR 1082 (Delhi HC) Order of EPF authorities under sec. 7A & 7B, if made without making compliance of principles of natural justice, is liable to be set aside. MGM New Bombay Hospital, Vashi vs. Regional Provident Fund Commissioner & Ors. 2011 LLR 1117 (Bom. HC) EPF tribunal was duty bound to enquire from the employer counsel for fixatation of hearing outside Delhi. Any such ex-parte order passed at camp hearing by tribunal against employer would be illegal. B. Mansukhlal and Company vs. Employees' Provident Fund Organisation and Ors. 2011 LLR 240 (Del. HC) PF appellate tribunal order without hearing the employer will be invalid. Shiv Herbal Research Laboratory Ltd., Nagpur vs. Asstt. Provident Fund Commissioner, Nagpur & Anr. 2011 LLR 1146 (Bom. HC) Govt. Notification about coverage of establishment under EPF Act can also be challenged before appellate tribunal. Asahai Infrastructure and projects Ltd., Akola vs. Asstt. Provident Funds Commissioner, Akola. 2011 LLR 1148 (Bom. HC) Order for imposing damages and interest under sec. 7A of EPF Act without considering various factors of frequency of delay and default, amount etc. is liable to be set aside. Damien Foundation India Trust, rep. by Mr. L. Camillus Rajkumar, Chennai vs. Presiding Officer, Employees' Provident Fund Appellate Tribunal, Coimbatore & Anr. 2011 LLR 1156 (Mad. HC) EPF authority before passing any order of PF contribution determination amount, has to ensure that notice on the person/establishment on whom liability is proposed to be is fixed, is served and opportunity of hearing is provided. Contractor society being exempted from EPF Act not liable to pay contribution. Pathankot Janta Cooperative Labour & Construction Society Ltd. and Anr. vs. State of Punjab through Secretary, Irrigation, Punjab, Chandigarh & Ors. 2011 LLR 1162 (P&H HC) In the absence of any provision about depositing the assessed amount or part thereof under sec. 7-C of EPF Act, appellate tribunal canâ&#x20AC;&#x2122;t make it a precondition to hear the appeal. Such order is liable to be set aside. Writer Safeguard Private Limited vs. Regional Provident Fund Commissioner-II and Assessing Officer & Others. 2011 LLR 1193 (Bom. HC) Employees pension scheme under EPF Act is a contributory pension scheme, the employee is bound by the terms of the Scheme and he cannot escape his lability to make out the amount payable by pointing out the alleged lapse of the employer.

From The Court Room C. Govindasamy vs. Regional Provident Fund Commissioner, Chennai and Others. 2011(130)FLR 843 (Mad. HC) A transferee of an establishment cannot escape the liability of the provident fund dues which were payable by the transferor whereas the liability would be restricted to the value of assets as obtained on transfer. Mrs. Radhamani vs. Enforcement Officer, Kollam and Others. 2011 Lab. IC 2965 (Kerala HC) Failure on the part of Tribunal to assign reasons to differ from the view taken by Assistant Provident Fund Commissioner to allow the appeal, as rightly contended, has occasioned denial of justice to the petitioner and matter remanded back for reconsideration.

Important Labour Judgments 2011

Union of India and others vs. Ms. Pritilata Nanda. 2011 (128) FLR 838 (S.C.) It is essential for the public sector establishments to notify every vacancy under employment exchanges (CNV) Act 1959. Thota Srinivasa Rao vs. Director, Telugu Academy, Hyderabad and Another. 2011 LLR 138 (A.P. HC)

E.S.I.

Assistant Provident Fund Commissioner, Bangalore vs. Chinmaya Mission Hospital, Bangalore. 2011(131) FLR 159 (Karn. HC)

Definition of factory covers "shop", and there being more than 20 persons, ESI coverage is valid.

PF authorities canâ&#x20AC;&#x2122;t impose interest under sec. 7Q over and above the rate given.

Anant Raj Agencies Pvt. Ltd. vs. Regional Director, ESI Corporation & Anr. 2011 I CLR 120 (Del. HC)

Jyoti Cements (P) Limited and Others vs. P.F. Commissioner and Others. 2011 (131) FLR 557 (Raj. HC)

Doing loading and unloading of cargo outside the premises of employer will come under 'shop' for ESI purpose. ESI applicable.

EPF authority canâ&#x20AC;&#x2122;t claim contributions for the period for which workman neither worked nor agreed to be treated on duty. Universal Brakes (P) Ltd., Coimbatore vs. Presiding Officer, Employees' Provident Fund Appellate Tribunal and Ors. 2011 III CLR 662 (Mad. HC) Civil suit is not maintainable under EPF Act as the same has its own special provisions of appeal before appelate authority. Regional Provident Fund Commissioner vs. Dr. O.P. Mittal and Another. 2011 LLR 1254 (P&H HC) When apprentices are paid wages, salaries and bonus, they are employees under EPF Act. Sree Mangayarkarasi Mills (P.) Ltd. rep. by its Director vs. Assistant Provident Fund Commissioner, E.P.F. Organization, Regional Office and another. 2011 (129) FLR 117 Recovery of PF dues determined under 7A of EPF Act not permissible when unit is closed. Bomin Private Ltd. vs. Assistant Provident Fund Commissioner. 2011 (128) FLR 1092 (Guj. HC)

Employment Exchange (CNV) Act There is nothing in the Employment Exchange (CNV) Act which obligates the employer to appoint only those who are sponsored by Employment Exchange.

Employees' State Insurance Corporation vs. Sea Hawk Cargo Carriers Pvt. Ltd. 2011 (128) FLR 82 (Del. HC) Even if blending and packing of tea in continuation to manufacturing process in plantation is done whole the year, would amount to seasonal factory and will be out of ESI coverage. Hindustan Lever Ltd. Kirumampakkam, Pondicherry vs. Deputy Director, Regional Office (Pondicherry) Employees, State Insurance Corporation, Pondicherry and others. 2011 (128) FLR 108 (Mad. HC) The establishment providing professional services about machine tools and equipments to industries rightly covered under ESI as "shop". Machine Tools (India) Ltd., vs. Employees' State Insurance Corporation. 2011 LLR 121 (Del. HC) Providing services of sale and purchase of immovables will be termed as shop under Delhi Shops Act making the establishment coverable under ESI Act Anant Raj Agencies Pvt. Ltd. vs. Regional Director, ESI Corporation & Anr. 2011 LLR 204 (Del. HC) ESI Act not applicable Palika/Parishad employees.

Nagar

Nagar palika, Hardwar vs. Employees' state Insurance Corporation and others. 2011 (128) FLR 331 (Uttarakhand HC) Proceedings under section 45A and under section 75 of the Employees' State Insurance Act are distinct and no period of limitation for recovering arrears under section 45A of the Act is applicable. Deputy Director, Employees' State Insurance Corporation, Hyderabad vs. CMC Ltd. (A Govt. Business Manager

February 2012

From The Court Room

M.M. Rubber Company Ltd. vs. Deputy Director, Employees' State Insurance Corporation & Ors. 2011 LLR 454 (Mad. HC)

When the master servant relationship was not denied before the Labour Inspectors by the employer, absence of employee name in the ESI record will not be sufficient to prove that employee was not employed by the employer.

Giving 7 days notice instead of 15 for recovery of ESI dues by the authorities would be illegal under sec. 45G.

Vivek Metal Industries vs. P.O., L.C & Ors. 2011 LLR 239 (Del. HC)

Writ petition against show cause notice issued by ESI authorities under Sec. 75 & 45 A of ESI Act not maintainable. Employer is under obligation to reply show cause notice.

Production incentive paid by the company to its employees would be part of "wages". E.S.I. contribution would be payable in respect of the same. Impugned order passed by E.S.I. Court set aside. E.S.I. Corporation vs. Traco Cable Co. Ltd. 2011(128) FLR 656 (Kerala HC) For recovery of ESI dues, the personal property of a former Director of a Company cannot be attached.

M/s. G.R. Thangamaligai Jewellers vs. M/s. Employees' State Insurance Corporation & Anr. 2011 LLR 545 (Mad. HC)

Alagappa Spinning Mills Pvt. Ltd. Represented by its Personnel Officer, Rajapalayam, Virudhunagar vs. Employees' State Insurance Corporation. 2011 LLR 573 (Madras HC) Principles of limitation are not applicable on recovery of interest amount on delayed payment of ESI contributions.

Rani K. Lulla vs. Employees' State Insurance Corporation, Chennai. 2011 LLR 289 (Mad. HC)

Essma Woollen Mills Pvt. Ltd. vs. Employees' State Insurance Corporation and Anr. 2011 LLR 650 (P& H HC)

Clubbing of employees working in sales office and manufacturing unit for coverage under ESI is proper.

Prosecution against employer under ESI beyond limitation period of 6 months will not be maintainable.

E.S.I. Corporation vs. Vijay Grover. 2011 (129) FLR 102 (Del. HC) ; 2011 LLR 499 (Del. HC)

E.S.I. Corporation vs. Brajakishore Panigrahi and Another. 2011 (129) FLR 347 (Orissa HC)

Director / Managing Director receiving salary less than the prescribed under ESI Act will come within the definition of employee under the Act.

An order by Employees' Insurance Court rejecting plea for waiver of deposit of 50% amount due (under section 75(2-B) of ESI Act, 1948) is not appealable since no substantial question of law has arisen.

Employees' State Insurance Corporation through its Regional Director vs. Padma Bhawan Engineers (P) Ltd. and Others. 2011 LLR 433 (P&H HC) Non profit making organization is not entitled to waiver of condition of 50% deposit of the amount directed by EI Court. Sulabh International Social Service Organisation vs. Employees' State Insurance Corporation and Anr. 2011 LLR 435 (P&H HC) For admitting the appeal against ESI demand, 25% instead of 50% deposit by employer would be proper because there is no ESI hospital near the workplace. M/s. Bihar Industrial Corporation vs. State of Jharkhand and Others. 2011 LLR 485 (Jharkhand HC) Recovery of ESI dues under section-45A of ESI Act not maintainable when raised after 5 years. M/s. Madhav Retreads vs. Employees' State Insurance Corporation and Others. 2011 LLR 492 (Jharkhand HC) Sick company cannot stall ESI recovery dues merely because it was sick under BIFR. A&F Overseas Trade Limited vs. Regional Director, Employees' State Insurance Corporation & Anr. 2011 LLR 451 (Mad. HC) Pendency of BIFR proceedings cannot prevent ESI authorities from enforcing the provisions of the Act. Employer cannot escape from interest on delayed payments. But damages can be waived or reduced. 36

Important Labour Judgments 2011

of India Enterprise), Rep. by its Senior Executive, Legal & I.R. Sri A.M. Rao. 2011 LLR 247 (AP HC)

Business Manager

February 2012

JCT Electronics Ltd. Mohali through its Vice President vs. Employee's State Insurance Corporation, New Delhi and Others. 2011-II LLJ 3803 (P& H HC) The ESI Act has not provided for an appeal against an award declining to impose interest and/or penalty. Shankarji Kaluji Thakur vs. Chabindas Babulal Jain. LLN (1) 2011 P. 472 (Guj. HC) Schools fall within the ambit of establishments as provided in section 1(5) of the ESI Act. Private Schools Co-ordination Committee vs. State & Ors. LIC 2011 P. 997 (J&K HC) Architectural / Engingeering consultancy organization will be 'shop' for the purpose of coverage under ESI Act. Consulting Engineering Services (I) Pvt. Ltd. vs. Chairman, ESI Corporation & Ors. 2011 LLR 687 (Del. HC) When employees of two units working in the same premises having functional integrality with common electricity connection, both the units will be treated one for the coverage under ESI Act. Regional Director, Employees' State Insurance Corporation Ltd., Chennai vs. M/s. Ambika Offset. 2011 LLR 726 (Mad. HC) Conveyance allowance will not attract ESI contribution. M/s Asian Paints (India) Ltd. (Now known as Asian Paints Ltd.) vs. The Employees' State Insurance Corporation & Anr. 2011 LLR 776 (AP HC)

From The Court Room "Minority" institutions having constitutional protection to administer the institution in their own manner, signify an identifiable group of people or community, who are seen as deserving protection from likely deprivation of their religious, cultural and educational rights by majority communities and likely to gain political power in a democratic form of government based on election hence coverage of educational institutions by clubbing them with others will not be legal and their coverage under ESI Act is liable to be set aside. Salesian Province of Kolkata (Northern India), represented by its Secretary, Father Mananchira Chacko Matthew vs. State of West Bengal & Ors. 2011-II CLR 666 (Cal. HC) When there were only eight employees and such attendance register was also scruitinized by the ESI inspector, no amount of contribution can be determined against such employer, specifically when the establishment was not liable to covered. Syndicate Printers by its Proprietor, V. Chockalingam, Contract of Insurance-14 vs. The Regional Director, ESI Corporation, 143 Sterling Road, Contract of Insurance-34. 2011 LLR 963 (Mad.HC) Travelling allowance is not wages for the purpose of ESI.

Important Labour Judgments 2011 his legal heirs will be entitled for reimbursement of expenditure from ESIC. Regional Director, E.S.I. Corporation, Bangalore vs. Smt. Lakshmi Biradar and Others. 2011 LLR 1271 (Karn. HC) Managing Director or Director of a company can't be treated as an employee under the Act. Regional Director, E.S.I. v. Sri Vasavi Cold Storage Pvt. Ltd. LLN (3) 2010 P. 438 (A.P. HC) Merely using deep freezer by a hotel employing 11 employees will not make him coverable under ESI with in the definition of factory. Arif (Mohd.) vs. Employees' State Insurance Corp. 2011 LLR 91 (Del. HC) The payment towards production incentive paid to the employees within a span of two months will be deemed as 'wages' for ESI contributions. E.S.I. Corporation vs. Traco Cable Co. Ltd. 2010(4) KLT 892 (Kerala HC)

Equal Remuneration

Conveyance allowance is synonymous to travelling allowance. Sirpur Paper Mills Ltd. vs. Employees' State Insurance Corporation, Hyderabad. 2011 III CLR 121 (AP HC); 2011 LLR 1174 Order threatening coercive action for failure to pay ESI contribution cannot be challenged on the ground that the company had become sick or that the demand for interest was unjustified. M.M. Rubber Co. Ltd. vs. Dy. Director, Employees State Insurance Corpn., Chennai. LLJ (III) 2011 P. 322 (Mad. HC) Waiver of deposit of 50% of the amount as challenged in a petition under section 75 of the ESI Act rightly denied since no extraordinary circumstances have been made out from the petitioner. M/s. Aakavi Spinning Mills Pvt. Ltd., Melasubrayapuram vs. Employees' State Insurance Corporation, Pondicherry. 2011 Lab. IC 3098 (Mad. HC) Notifications relating to increase in wage limit under ESI Act do not violates Article 21 of Constitution.

When an establishment is not an 'industry' under ID Act, Contract Labour Act will not apply but Equal Remuneration Act will be applicable on such establishment. Leelaben Parmer and Others vs. Physical Research Laboratory and Another. 2011 LLR 813 (Guj. HC) Criminal complaint under equal remuneration act against MD and CRM of IRCTC Limited (Railway catering) not responsible for conduct of business of the company is liable to be quashed P.K. Goel And Another vs. Labour Enforcement Officer (Central)-I, Bangalore. 2011 LLR 410 (Karn. HC)

EQUAL Work-Equal WAGES

Elgi Equipments Workers & Staff Union, Coimbatore vs. Union of India and Others. 2011(4) LLN 305 (Mad. HC) No damages for late deposit without serving show cause notice. A.K. Industries, Rohtak through its Authorised Signatory D. Mukherjee vs. Employees' State Insurance Corporation through its Regional Director, Faridabad and Ors. 2011 LLR 1248 (P&H HC) In the absence of having any medical facility for treatment of heart ailment by ESIC, expenses incurred for treatment is a private hospital by the employee who died,

There canâ&#x20AC;&#x2122;t be any prohibition on the employer to have different grade of posts in its different units. Court should avoid application of principle of Equal Pay for Equal Work. Steel Authority of India Ltd. & Ors. vs. Dibyendue Bhattacharya. 2011 I CLR 602 (S.C.) Merely because casually employed workmen are performing the same task as Business Manager

February 2012

From The Court Room of regularly employed workmen- can't it self constitute a legal justification for equal pay for equal work. Air India Ltd. vs. Presiding Officer, CGIT & Anr. 2011 LLR 951 (Delhi HC) Principle of equal pay for equal work will not be applicable even when the workmen appointed on casual basis are performing the same duties. Air India Ltd. vs. Presiding Officer, CGIT & Anr. 2011 LLR 1080 (Delhi HC) The demand of equal pay for equal work not justified on the basis of industry cum region formula. When two units of the industry are situated in deffernt parts of the country, equal pay canâ&#x20AC;&#x2122;t be given to employees of both the units. Workmen represented by Hyderabad Asbestos Cement Products Limited vs. Management of M/s Hyderabad Industries Ltd. 2011 LLR 1269 (Jharkhand HC)

Important Labour Judgments 2011 Soumendu Biswas @ S. Biswas and Another vs. State of Jharkhand. 2011 LLR 50 (Jharkhand HC) Fixing of work hours, provided they do not violate any statutory provision, are management functions and courts should not interfere with such function. Transport And Dock Workers Union and others vs. Mumbai Port Trust and another. 2010(127) FLR 1095 Statutory duty of occupier to ensure safety and welfare to worker can not be shifted to any one. S. J. Ghandy and another vs. State of Jharkhand and others. 2010 (127) FLR 1005 (Jharkhand HC)

Fixed term appointment

Daily wager not holding any post is not entitled to invoke the doctrine of 'equal pay for equal work'. Hindustan Salts Ltd. vs. Drang Salt Mine Labour Union and Another. 2011 LLR 402 (HP HC) A railway porter working on a platform, required to work for railways sometime in handling parcels and luggage in the custody of railways, cannot be treated at par with the casual labourers for payment of wages. South Eastern Railway, Adra Division, Adra vs. Regional Labour Commissioner, Central, Dhanbad-Cum-Authority Under the Minimum Wages Act and Another. 2011 (128) FLR 862 (Jharkhand HC)

Factories Act

No reinstatement with consequential benefits to a person employed for a fixed term of service. U.P. State Textile Corpn. Ltd. vs. Suresh Kumar. 2011 LLR 637 (S.C.) Fixed term appointment comming to an end automatically on the completion of the period, will not amount to retrenchment. Smt. Manjeet Arora (Kataria) vs. Presiding Officer, Central Government Industrial Tribunal-Cum-Labour Court, Lucknow. 2011 LLR 509 (Uttarakhand HC) Keeping employees on fixed term appointment for a long period by renewing their contract from time-to-time will not fall within the mischief of section 2(oo)(bb) of I.D. Act. Keru Kisan Rokade vs. Geoffery Manners & Co. Ltd., Nasik. 2011-II LLJ 408 (Bom. HC)

Unless an establishment is covered under the Factories Act, the prosecution launched aginst owners of the establishment engaged in courier service will be illegal. The Management of DHL Express (I) Pvt. Ltd. vs. Assistant Inspector of Factories-III, O/o Inspector of Factories, Chennai. 2011 LLR 292 (Mad. HC) Cognizance of offence u/s. 92 of Factories Act can not be taken if the complaint is filed beyond the period of six months. Soumendu Biswas & Anr. vs. State of Jharkhand. 2011 LLJ II P. 166 (Jhar. HC) No other person than occupier and factory manager be summoned and prosecuted. Qimat Rai Gupta & Ors. vs. State of H.P. & Anr. 2011 LLR 945 (HP HC) Prosecution filed by Factory Inspector beyond limitation period of three months is liable to be rejected. 38

Business Manager

February 2012

Ad hock appointment of three months continued with repeated artificial breaks, thereby completing 240 days of service by employee, his termination will not attract 2(oo)(bb) of ID Act and will amount to retrenchment. Rakesh Kumar and Ors. vs. Management of Bhagini Nivedita College. 2011 LLR 1143 (Delhi HC) Reinstatement of a trainee initially appointed for six months, subsequently extended and relieved after completion of training will be illegal being covered under sec. 2(oo)(b) of the ID Act. Chairman / Manager vs. Umesh Kumar Radheshyam Brahmbhatt. 2011 LLR 161 (Guj. HC) No reinstatement for the employee engaged on contractual basis whose contract was not renewed. Jawaharlal Nehru University vs. Sh. D.K. Pandey. 2011 LLR 10 (Cal. HC) Termination of employee on contract will not be entitled for reinstatement.

From The Court Room

Important Labour Judgments 2011

Indravadan N. Adhvaryu vs. Laxminarayan Dev Trust (through Chief Executive Kothari). 2011 LLR 261 (Guj. HC) Temporary driver engaged against regular post, who continued for years together, got all benefits, will not be entitled to any relief under ID Act when terminated, as such termination would fall under under 2(oo)(bb) of ID Act. 1. State of Maharashtra, through District Civil Surgeon, 2. Deputy Director of Health Services vs. Mehboobkhan S/o Rasool Khan Pathan. 2011 LLR 750 (Bom. HC)

Gratuity Provisions in relation to gratuity of working journalists Act will prevail over the provisions of the Payment of Gratuity Act. P. rajan Sandhi vs. Union of India & Anr. 2011 LLR 426 (S.C.) When employee is allowed to retire, his gratuity can't be forfeited merely beacuse criminal proceedings were pending against him. New India Assurance Co. Ltd. vs. Ashwin Chimanlal Sheth & 2 Ors. 2011 LLR 66 (Guj. HC) The person on fixed term employment when worked for more than 5 years because his contract was extended from time to time, will be entitled for gratuity. U.P. Bhumi Sudhar Nigam, Lucknow vs. Appellate Authority and Others. 2011 LLR 164 (All. HC) Personal allowance and special compensatory allowance would not form part of wages for the purpose of gratuity under Payment of Gratuity Act. State Bank of India, Goa vs. Laxmikant Vithal Palekar & Ors. 2011 LLR 133 : 2011 (128) FLR 317 (Bom. HC) Gratuity can't be withheld for not vacating the quarter by employee. Jehangir Textile Mills vs. Sahebsingh Chotesingh. 2011 LLR 159 (Guj. HC) Gratuity can't be withheld without complying principles of natural justice. Manmohan Prasad vs. H.P. State Small Scale Industries and Export Corporation Ltd. 2011 LLR 177 (H.P. HC) No forfeiture of gratuity without termination for the specified misconduct. M/s. Bharat Coking Coal Ltd. vs. Union of India. Through its Secretary and Others. 2011 LLR 203 (Jharkhand HC) Casual worker putting in five years of continuous service will be entitled to Gratuity. Pioneer Spinners, rep. by its General Manager vs. Regional Labour Commissioner, Central, Chennai. 2011 LLR 151 (Mad. HC) In the absence of any specific finding and charge against the petitioner, gratuity

amount cannot be forfeited. Vinod vs. State of Maharashtra and others. 2011 (128) FLR 618 (Bom. HC) Once the authority passed order under Gratuity Act, recovery against employer is bound to be effected. Jehangir Textile Mills vs. Sahebsingh Chotesingh and Another. 2011 LLR 265 (Guj. HC) When the employee was re-employed as fresh badli worker, he will only be entitled to gratuity for the period from the date of his re-employment till the last date of working. Phoenix Mills Ltd., Mumbai vs. Manohar Arjun Rasal. 2011 LLR 382 (Bom. HC) In the absence of any domestic enquiry and order under sec. 4 (6)(a) and (b) of the Payment of Gratuity Act, forfeiture of gratuity would be illegal. Maharashtra State Road Transport Corporation, Mumbai vs. Maruti Ramchandra Mastud. 2011 LLR 397 (Bom. HC) Allowing 15% compound interest for delay in making payment of gratuity by employer is proper. Hindustan Steel Works Construction Ltd. vs. Suresh Kumar Chetal and Others. 2011 (128) FLR 745 (Chhattisgarh HC) Payment of Gratuity Act is applicable on library. High Court can't direct the authority under the Act to extend the period of limitation beyond provided under the Act. Administrative Officer, T.M.S.S.M. Library and Research Centre, Thanjavur vs. Appellate Authority Under Payment of Gratuity Act (The Joint Commissioner of Labour) and Others. 2011 LLR 351 (Mad. HC) In the absence of separate order of forfeiture of gratuity, same can't be forfeited. Manager Park Side Estate Nonsuch Post, Coonoor vs. Appellate Authority under the Payment of Gratuity Act/Joint Commissioner of Labour, Coimbatore and Ors. 2011 LLR 416 (Mad. HC) Gratuity cannot be denied to an employee merely on the basis of the undertaking signed by him that he will not claim gratuity for the past period. M. Selvadurai vs. Director Personnel, Block-I, Corporate Office Neyveli Lignite Corporation Limited & Ors. 2011 LLR 457 (Mad. HC) Gratuity can not be forfeited for misconduct of subversive of good behaviour. But only for riotous and disorderly behaviour and both misconducts have different meaning altogether. Jaya Hind Industries Ltd., Akurdi, Pune vs. Vilas Vithalrao Takale. 2011 LLR 638 (Bom. HC) Gratuity with 8% interest rightly awarded to legal heirs of the employee. State of U.P. vs. Smt. Anwari Begum and Another. 2011 (129) FLR 195 (All. HC) Service of Badli worker during the years in which he did not complete 240 days, could not be considered for gratuity. Vasantbhai Bhudarbhai vs. Manager, Arvind Intex. LLJ II 2011 P. 145 (Guj. HC) Business Manager

February 2012

From The Court Room The pendency of chargesheet against the employee cannot constitute a sufficient cause for non payment of interest on delayed payment of gratuity by the employer. Vishal Singh Shekhawat vs. Rajasthan State Ganganagar Sugar Mills Ltd. 2011 II 445 (Raj. HC) Controlling Authority under the Payment of Gratuity Act and not the High Court will be the appropriate forum when a person seeks to have Rs. 10 lakh after receiving Rs. 3.5 lakh as gratuity. P. S. Gupta vs. Union of India & Ors. 2011-II CLR 70 (Del. HC) Bank employee dismissed for financial irregularities will not be entitled to Gratuity. Sabarkantha Dist. Central Co-op. Bank vs. Ramanbhai M. Patel & Ors. 2011 CLR I P. 871 (Guj. HC) Gratuity can be forfeited for violent and riotous conduct of the employee. Jaya Hind Industries Ltd. vs. Vilas V. Takale. 2011 CLR II P. 229 (Bom. HC) Even if the workman retained the company house illegally after retirement, employer cannot withhold the gratuity on this account. Gratuity cannot be attached in execution of a decree of the court. Binny Limited vs. The Asstt. Commissioner of Labour (Authority under PG Act) & Ors. 2011 LLR 834 (Mad. HC) In the absence of finding of quantified loss caused due to the employee's misconduct, gratuity cannot be forfeited under sec. 4(6) of the Act. Vinod Vinayak Jinturkar vs. State of Maharashtra & Ors. 2011 LLJ II P. 659 (Bom. HC) Employee of a registered society appointed prior to the date of Notification extending Payment of Gratuity Act, 1972, will be entitled to Gratuity under the Act. Indian Environmental Society vs. Dr. L.M. Saxena. 2011 LLJ II P. 790. (Del. HC) When official accomodation was not vacated after retirement, it was proper to adjust penal rent from retirement dues. Smt. Asha Saxena (Dead) by LRs. vs. U.P. State Electricity Board and Others. 2011 LLR 924 (Allahabad HC) Teachers are entitled to get gratuity under the Act. Mahendra Singh Chhabra vs. Appellate Authority, Payment of Gratuity Act, Indore and Another. 2011 LLR 980 (MP HC) Teachers will be entitled to gratuity from the date of joining and not from the date of the amendment effected in the Act i.e. 3.4.97. Ananta Vishwanathan (Mrs.) vs. Shri Narayana Guru High School & Ors. 2011 LLR 995 (Bom. HC) Employer can't be allowed to stall the claim of gratuity by indulging in litigation. Employer liable to pay gratuity with 15% compound interest. 40

Business Manager

February 2012

Important Labour Judgments 2011 Hindustan Steel Works Construction Ltd. vs. Suresh Kumar Chetal and Others. 2011 (3) LLN 163 (Chhattisgarh HC) Gratuity claim after 5 years of VRS that too on fixed personal and compensatory allowance was not maintainable. State Bank of India vs. Shri Laxmikant Vithal Palekar. 2011 (3) LLN 139 (Bom. HC) Gratuity canâ&#x20AC;&#x2122;t be claimed under ID Act. VST Industries Ltd. vs. Presiding Officer, Industrial Tribunal-cum-Labour Court, Godavarikhani, Karimnagar District and Others. 2011 LLR 1170 (AP HC) An order of the Controlling Authority under the Payment of Gratuity Act allowing claim for gratuity cannot be challenged and/or decided in a writ petition. M/s. Ranbeer Automobiles and Another vs. State of West Bengal. 2011 LLR 1188 (Cal. HC) Appeal against the order of controlling authority after maximum limit of 120 days will not be maintenable. Bhavnagar Municipal Corporation vs. Sunderben Chhanabhai Baraiya Legal heirs of late Chhanabhai & 2 Ors. 2011 LLR 1250 (Guj. HC)

Habitual Absence When workman remained absent for 57 days during four months and also habitually absenting, striking off the name would be proper. Workman Sri P.C. Manjhi vs. Management of Bokaro Steel Plant. 2011 LLR 846 (Jhar. HC) No reinstatement to the workman who is found guilty of habitual absence from duty. Past record of various punishments on account of habitual absence cannot be ignored. Reinstatement set aside. Management of Bokaro Steel Plant, A Subsideary of M/s. Steel Authority of India Ltd. vs. State of Jharkhand and Another. 2011 LLR 847 (Jhar. HC)

Industrial Disputes Act Dismissal of the case by the court is neither an award under I.D. Act nor determination of Industrial Dispute. Rajman Shrikrishna Morya vs. Marshal Security Pvt. Ltd. 2011 LLR 25 (Bom. HC) Part-time employee is protection under ID Act.

entitled

Himachal Pradesh State Electricity Board and Anr. vs. Laxmi Devi and Anr. 2011 LLR 52 (HP HC)

From The Court Room Management is absolutely within their powers to decline the recognition to charge sheeted union office bearer as protected workman. Such employee is not entitled to be nominated by union for recognition as protected workman under sec. 33(3) & (4) of ID Act Hill Life Care Ltd. vs. Hindustan Latex Union (AITUC) 2011 (128) FLR 471 (Kerala HC) Reducing the pay by merging 50% DA in basic would be illegal without complying with the Sec. 9A of the ID Act. Sikh Educational Society vs. Presiding Officer, Industrial Tribunal-cum-Labour Court, U.T. Chandigarh. 2011 LLR 159 (P & H HC) When the ID Act contemplates several steps like conciliation before reference to labour court, High Court can't circumvent the process and direct for reference for adjudication straight way. SPIC Pharma Employees Union (SPEU), Cuddalore vs. State of Tamil Nadu, Chennai and Ors. 2011 LLR 275 (Mad. HC) Overtime can't be claimed under sec. 33C(2) of the ID Act. K.S. Natarajan, S/o. K.A. Srinivasan, Chennai vs. (1) Presiding Officer, Principal Labour Court, Chennai (2) Ananda Vikatan Vasan Publications Ltd., Chennai. 2010 (4) LLN 702 (Mad. HC) For any breach of settlement, matter of dispute is to be referred by the Govt. for adjudication under ID Act since remedy is available under sec. 36A. Writ not maintainable. Tamil Nadu Pokkuvarathu Kazhaga T. Nala Sangam vs. Sate of Tamil Nadu. 2010 (128) FLR 688 (Mad. HC) Since the establishment was involved in manufacturing process of preparation of different articles from forest, will be an industrial establishment under ID Act. Kishan Atmaram Kasti vs. Forest Development Corporation of Maharashtra Ltd. & Ors. 2011 (I) CLR 971 (Bom. HC) When relationship of employeremployee between IIT and workman working in hostel is established, claim of over time payment under sec. 33C(2) of ID Act rightly allowed by Labour Court. Indian Institute of Technology vs. The Presiding of Officer & Ors. 2011 LLR 591 (Madras HC) Termination of a workman who is interested in pending dispute, without obtaining approval under section 33(1) of I.D. Act will be illegal. Labour court was not justified in rejecting the application of the workman without examining the legality.

Important Judgments of 2010 M/s. United Soya Products Ltd. vs. Dy. Labour Commissioner, Bhopal and Others. 2011 LLR 629 (MP HC) When an industrial dispute is raised belatedly, it is upon the workman to show that he was not responsible for the delay. Executive Engineer, Public Works Department, Wardha vs. Namdeo Govindrao Nandurkar, Wardha. 2011-II CLR 46 (Bom. HC) Industrial Dispute between workman & management of co-operative bank shall be decided exclusively by the Labour Court prospectively from date of SC judgment on the point. Nirmalchandra Sirvastav vs. Labour Court, Varanasi. FLR (129) 2011 P. 370 (All. HC) The jurisdiction of Industrial Court is not ousted only because the employer denies relationship of employer and employee. Indo-European Brewaries Ltd. vs. Dnyaneshwar s/o Shyamrao Dhanwate & Ors. CLR I 2011 P. 923 (Bom. HC) Workman will be entitled to get relief under section 33C(2) of I.D. Act for payment of difference of wages reduced by the employer in contravention of section 9A of the I.D. Act. Municipality Baretta, Bhatinda vs. Presiding Officer, Labour Court, Bhatinda and Another. 2011 LLR 818 (P&H HC) An offence under section 29 of the Industrial Disputes Act for nonimplementation of the Award will be continuing and section 468 of Criminal Procedure Code, providing for limitation, will not be applicable. Joytirmay Roy vs. State of Bihar and Others. 2011 (129) FLR 982 (Patna HC) A legal practitioner, in the capacity of an office-bearer of an Association, can represent an employer before the Labour Court. South Arcot Vallalar District Mazdoor Union vs. Presiding Officer, Labour Court, Cuddalore and Others. 2011 (129) FLR 995 (Mad. HC) In the absence of approval for dismissal pending proceedings, the order of the management terminating the services of workman becomes void ab initio. Delhi Transport Corporation vs. Sudan Pal. 2011 LLR 897 (Delhi HC) When workman was discharging his duties of driver after reinstatement, he will be paid current wages as paid to others and not the last drawn wages at the time of termination. S.G. Ramalingam vs. Management of Tamil Nadu State Transport Corporation (Villupuram) Ltd. 2011 LLR 979 (Mad. HC)

Ashok Kumar Pradhan vs. Presiding Officer, Industrial Tribunal, Orissa and Others. 2011 LLR 627 (Orissa HC)

Under sec. 33C(2) of ID Act labour court can interpret the settlement on which employee claim is based and allow the claim.

Provisions of section 33C(1) of I.D. Act include the payment arising out of chapter V-B and section 25-O. If consequent of closure of industry, workers were not paid compensation, they can very well claim the amount under section 33C(1) of I.D. Act.

Claim application under sec. 33C(2) for more than last drawn wages not maintainable as it required further adjudication.

Registrar, J.N.K.V.V., Jabalpur and Others vs. Sudarshan Singh and Others. 2011 (130) FLR 130 (MP HC)

Business Manager

February 2012

From The Court Room Kagatila Sambasiva Rao vs. Labour Court, Guntur, Guntur District and Others. 2011 (3) LLN 78 (AP HC) Workmen are entitled to wages from the date of termination where retrenchment was held illegal and such claims of money under sec. 33C(2) rightly awared by court. Dhanalakshmi Mills Ltd., Tirupur vs. Presiding Officer, Labour Court, Coimbatore and Ors. 2011 LLR 1028 (Mad. HC) Labour court order is liable to be quashed when claim under sec. 33C(2) was neither based on existing right nor the award as adjudicated. State of U.P. and Another vs. Ram Sahai and Another. 2011 LLR 1103 (All. HC) High Court is not expected to reappriciate the evidence and interfere with the labour court award passed under sec. 33(2)(b) in writ jurisdiction. Delhi Transport Corporation vs. Presiding Officer, Industrial Tribunal-II & Anr. 2011 LLR 1113 (Del. HC) Award after attaining finality can't be disturbed under the garb of factual errors. Hind Filters Employees' Union vs. Factory Manager, Hind Filters Limited and Others. 2011 (130) FLR 675 (MP HC) It is incumbent upon the workman to submit application to the Labour Court praying for summons for production of relevant record showing that he has worked continuously for a period of 240 days. Mahesh Kumar Sharma vs. Divisional Forest Officer, M.P. & Ors. LLJ (III) 2011 P. 136 (MP HC) Reduction of wages cannot be made without issuing a notice under section 9A of the Act. Sikh Educational Society vs. Presiding Officer, Industrial Tribunal. FLR (128) 2011 P. 200 (P&H HC) The labour court award without appreciating the recorded evidence in right perspective is liable to be set aside. Krishan Kumar Nagar vs. The Management of M/s. Delhi Transport Corporation. 2011 LLR 1191 (Del. HC) Section 33B of U.P. Industrial Disputes Act, 1947 provides power to the State Government for withdrawing any proceeding pending before a Labour Court and transfering the same to another Labour Court, hence a Labour Court can transfer a dispute to another Labour Court. Meerut Development Authority, Meerut vs. Labour Court, Saharanpur and Another. 2011(130)FLR 868 (All. HC) The benefit that is payable under section 33C(2) of the Industrial Disputes Act is pre-existing benefit or flowing from preexisting right. Crompton Greaves Limited vs. S.B. Lokhande and Others. 2011(130) FLR 908 (Bom. HC) Compensation amounting to approx 7 years salary will be appropriate to the employee who worked little less than a year. Bindan Singh vs. Institute of Company Secretaries of India. 2011(131) FLR 95 (Del. HC) 42

Business Manager

February 2012

Important Labour Judgments 2011 The benefit of overtime allowance was being made available upto 1982 and again from 1987, but when the workmen filed petition under section 33(C)(2) claiming this benefit during the interim period, the denial thereto by the Management, on the basis of departmental circular, is not justified and application is perfectly maintainable. Faqir Chand vs. Food Corporation of India and Another. 2011(131) FLR 164 (P&H HC) Labour court is not empowered to entertain a claim under sec. 33(C)(2) of ID Act which is not based on existing right. Mohan Nagpal vs. Editor, Navbharat Times, New Delhi and Anr. 2011 III CLR 692 (P&H HC) Conciliation Officerâ&#x20AC;&#x2122;s bounden duty is either to record / register a settlement or to submit a failure report. He has no power and jurisdiction to declare that a bipartite settlement will be considered as binding upon all workmen. Vidyut Metalics Employees' Union, Thane vs. Vidyut Metalics Pvt. Ltd., Thane and Ors. 2011 LLR 1262 When the workmen received the amount in terms of settlement without any protest, no claim under 33(C)(2) of ID Act can be made by them. Status of petitioners as to whether they are trainees or workmen canâ&#x20AC;&#x2122;t be decided under such application. R. Udayakumar etc. vs. The Presiding Officer, II Additional Labour Court, Chennai and Anr. 2011 LLR 1265 (Mad. HC) An ex-parte order by the Labour Court, if not a speaking one and without findings on issues raised, is liable to be quashed. Management of Venkateswara Electricals P. Ltd., Chennai vs. Presiding Officer, Principal Labour Court, Chennai and Anr. 2010 (IV) LLJ 393 (Mad. HC) In the absence of production of complete pay roll, workman will be presumed to have worked for more than 240 days. Divisional Forest Officer, Bhiwani vs. Chameli (Smt.) and Others. 2011 LLR 206 (P & H HC) For claiming closure compensation workman has to prove that he has worked for 240 days during last 12 months. Burden not to be shifted to employer. VST Industries Ltd. vs. Presiding Officer, Industrial Tribunal-cum-Labour Court, Godavarikhani, Karimnagar District and Others. 2011 LLR 1170 (AP HC)

Industry Rajghat Samadhi committee will not be Industry under the ID Act. Kanhaiya Lal vs. Union of India and Others. 2011 (130) FLR 109 (Delhi HC) Integrated Child Development Services Scheme of Maharashtra state is an industry and the Anganwadi Sevikas and helpers are workmen under the ID Act.

From The Court Room Vidya vs. State of Maharashtra and another. 2011 (129) FLR 556 (Bom. HC) Central council for research in Ayurveda & Siddha is "industry" under ID Act. Central Council for Research in Ayurveda & Siddha vs. Central Govt. Industrial Tribunal, Jaipur & Anr. 2011 LLR 469 (Raj. HC)

Interim Relief The principle of hearing the other side has to be followed in all proceedings. T.V.S. Finance and Services Ltd. vs. H. Shivakumar. LLN(2) 2011 P. 12 (S.C.) When interim relief was granted without hearing management, payment of 50% of last drawn wages would be appropriate. TVS Finance and Service Ltd. vs. H. Shiva Kumar. 2011 LLR 192 (S.C.) To avail interim relief under ID Act, filing of affidavit by workman about non employment is sufficient. Food Corporation of India vs. Union of India and Others. 2011 LLR 77 (Cal. HC) Interim relief under sec. 17B of the ID Act will be payable from the date of filing the writ by employer. Candila Pharmaceuticals Ltd. vs. Jyotiben Harisbhal Pandit. 2011 LLR 162 (Guj. HC) When the workman is gainfully employed getting more than adequate remuneration, there will be no justification of granting interim relief under sec. 17B of ID Act. Rauf Mohmed Sheikh vs. Pragati Glass Works Pvt. Ltd. 2011 LLR 257 (Guj. HC) Benefit of sec. 17B of ID Act will be available to workman from the date of filing application and not from the date of award.

Important Labour Judgments 2011 It is mandatory for the employer to pay interim relief under sec. 17B of ID Act when challenging reinstatement in higher court. Union of India and Another vs. Hemant Shamrao Sankpal. 2011 LLR 919 (Bom. HC) Employer can pay last drawn wages as interim relief under sec. 17B without taking work from employee or if he wants to take work from him, employer has to pay at least minimum wages. M/s. Natraj Picture Palace vs. Prescribed Authority, Minimum Wages Act, Asstt. Commissioner, Mirzapur and Others. 2011 LLR 921 (Allahabad HC) Awarding interim relief of reinstatement till the decision of the complaint of unfair labour practice by the Industrial Court would not be interfered by the High Court in writ petition. Chief Officer, Nagar Parishad, Yavatmal and Another vs. Smt. Pratibha Pradip Gaikwad. 2011(131) FLR 94 (Bom. HC) For getting interim relief under sec. 17(B) of ID Act pending proceedings in HC, workman has to give an affidavit that he is unemployed, only then the payment will be released. Satya Prakash and Sons vs. Presiding Officer, Labour Court, Kanpur and Another. 2011 LLR 1275 (All. HC) An interim relief should not amount to granting final relief. Zilla Parishad, Gadchiroli and Others vs. Chandramala. 2011 (130) FLR 701 (Bom. HC) When labour court reinstated provisionally with 75% back wages, it will not be deemed as final award and if challenged in High Court by employer, no interim relief would be available to workman under 17-B of I.D. Act. Hiru B. Barot vs. IPCA Laboratories Limited & Anr. 2011 LLR 644 (Bom. HC)

Lay-Off

Cadila Pharmaceuticals Ltd. vs. Jyotiben Harishbhai Pandit. 2011 LLR 267 (Guj. HC) Interim relief under section 17-B of I.D. Act is available to the workman from the date of filing the writ petition by managment and not from the date of the award. Airport Authority of India and Another vs. Bharat H. Parmar and Others. 2011-II LLJ 390 (Guj. HC) Amount paid by the employer to the employee as interim relief under sec. 17B is in the nature of 'subsistence allowance' and can't be recovered even if employee reinstatement is set aside. General Manager, Government Milk Scheme vs. Shivaji Basvantrao Patil and 45 Others. 2011 LLR 752 (Bom. HC) Employer is liable to pay interim relief to the employee pending proceedings in higher court under sec. 17B of ID Act even after his superannuation. Management of Centaur Hotel vs. P. S. Mohan Nair & Anr. 2011 LLR 762 (Del. HC)

For commencement of continuance of lay-off permission through application under Section 25-M(1) of Industrial Disputes Act, 1947 had to be made but the mills did neither apply for nor obtained the said permission hence the claim for wages for the alleged period of lay-off has been rightly allowed. Management of Cambodila Mills, Coimbatore and Another vs. Presiding Officer, Labour Court, Coimbatore and Others. 2011-III LLJ 157 (Mad. HC)

Limitation Labour Court would be treated as a court under limitation act. Jankiram Pandharinath Thorat vs. Akot Municipal Council and Others. 2011 (130) FLR 427 (Bom. HC) Business Manager

February 2012

From The Court Room

Important Labour Judgments 2011

No limitation for filing application under sec. 33C(2) of ID Act. M/s. Bhartiya Cutler Hammer Ltd. vs. Presiding Officer, Labour Court-II Faridabad and Others. 2010 (127) FLR 1086 (P & H HC) 770 (P & H HC)

Lock Out

Minimum Wages Act will not be applicable upon society registered under Tamil Nadu Co-operative Societies Act even though it is registered under the Factories Act. Management, Dindigul Ladies Polythene Workers Industrial Co-operative Society Ltd. vs. Controlling Authority under the Minimum Wages Act, Dindigul and Another. 2011 LLR 283 (Mad. HC) When the establishment not covered under Shop Act and out of 'Scheduled employment, can't be prosecuted under MW Act.

Once it has been accepted by the workmen themselves that they had indulged in violence, a declaration of lock out cannot be held to be illegal. Punjab Tractors Workers Union vs. Presiding Officer, Industrial Tribunal, Punjab, Chandigarh. 2011 (131) FLR 503 (P&H HC)

Prosecution of an employer, for nonproduction of record and failure to furnish information to the inspector under Minimum Wages Act, will be tenable.

Minimum Wages

Radhe Shyam Makharia and another vs. State of Bihar and another. 2011 (128) FLR 272 (Patna HC)

For non payment of Minimum Wages, three times panelty justified. Unity Infraprojects Ltd. vs. Labour Enforcement Officer (Central) & Ors. 2011 LLR 25 (Bom. HC) and Tiruchirappali North Sarvodhaya Sangam, rep. by its Secretary, Trichy vs. Secretary to Government, Labour and Employment, Government of T.N., Chennai & Ors. 2011 LLR 33 (Madras HC) Security guards even engaged through contractors are entitled to get minimum wages from the principal employer in case contractor fails to pay the same. Principal employer being a government body cannot take the stand that they are not liable to pay minimum wages. Tool Room & Training Centre vs. Delhi Industrial Security Guards (Regd.). 2011 LLR 827 (Del. HC) Authority under the Minimum Wages Act and not the Labour Court would be appropriate forum for making a claim when the wages, as paid by an employer, are less than the minimum rates of wages. State Bank of India and Others vs. Basukinath Das and Others. 2011 (3) LLN 415 (Patna HC) Part time employees working in hospital are also entitled for minimum wages. Manjulaben Punjalal Dabhi vs. State of Gujarat and other. 2011 (130) FLR 824 (Guj. HC) Before passing any order by labour commissioner, employers needs to be heard. Hasmat Rai Burman vs. Union of India and Others. 2011 (130) FLR 578 (Patna HC) Ten times amount of difference of wages as compensation not justified against principal employer when less minimum wages paid by contractor. Fertilizer Corporation of India Ltd., G. Unit vs. Authority under M.W.A.C. for W.A.L.C. and Others. 2011 LLR 172 (All. HC) 44

M/S Reliance Telecom Ltd. and another vs. State of Bihar and another. 2011 (128) FLR 198. (Patna HC)

Business Manager

February 2012

Either the High Court or the Company Judge has no authority to direct payment of wages under the Minimum Wages Act since appropriate authority under the said Act has been constituted. Bikramaditya Mishra vs. Official Liquidator, Rohtas. 2011 (128) FLR 1096 (Patna HC)

Misconduct Non-disclosure by the workman of his having appeared for Matriculation examination was held not to be misconduct. Bank of Baroda vs. Presiding Officer, CGI Tribunal. LLN(1) 2011 P. 388 (P&H HC) Failing to cooperate in the enquiry will not be a misconduct. Vinod Kumar Srivastava vs. State of U.P. and Others. 2011 LLR 975 (Allahabad HC) Non-intimation about his admission in hospital by the employee will not be a misconduct warranting dismissal. K.A.K. Babu vs. Depot Manager, A.P.S.R.T.C., Madhira Bus Depot Khammam District and Anr. 2011 LLR 993 (AP HC) Misconduct means arising from ill motive. Acts of negligence, errors of judgment or innocent mistakes do not constitute such misconduct. Narayan Prasad Dehariya vs. State of M.P. and Others. 2011 (130) FLR 1044 (MP HC) Termination of bus conductor was not proper when he was found carrying passengers of another bus without ticket which met with accident. During accident normal rules often not followed. Standard of duty changes. So the misconduct can't be judged by same standards. Dilip Srivastava vs. Presiding Officer, Industrial Tribunal, U.P. Kanpur and another. 2011 LLR 971 (Allahabad HC)

From The Court Room Disabled person does not have right to commit fraud against any one. Satya Prakash & Sons vs. Presiding Officer, Labour Court, Kanpur & Anr. 2011 III CLR 170 (All. HC) Acts of negligence, errors of judgment or innocent mistake cannot constitute misconduct which warrants initiation of disciplinary proceedings. Narendra Kumar Tripathi vs. Union of India and others. 2011 (129) FLR 519 (Cal. HC)

No Work-No Pay If the workmen are not allowed to work by the employer, the principle "no work no pay" will not apply. Panipat Co-op. Sugar Mills Ltd. vs. Presiding Officer, Labour Court & Ors. CLR II 2011 P. 292 (P&H HC)

Over time

Important Labour Judgments 2011 U.P. State Road Transport Corporation vs. Appellate Authority under Payment of Wages Act, Mau and Others. 2011 LLR 629 (All. HC) Construction of residential house activity will be covered under the Payment of Wages Act. Smt. Shashi Sharma vs. The Labour-cumConciliation Officer & Anr. 2011 LLR 841 (P&H HC) Challenging order of the employer proposing to make deduction of 8 days' wages of the striking workers under article 226 of Constitution of India will not be appropriate since the appropriate forum has been provided under the Payment of Wages Act, 1936. Hind Khadan Mazdoor Federation vs. Coal India Ltd. and Others. 2011 (130) FLR 125 (MP HC) Five times penalty instead of ten times for non payment of leave wages would be proper keeping in view the financial difficulties of the organization. Akola Zillah Dudh Utpadak Sangh Sahakari Sansthanacha Sangh Ltd., Akola vs. Sheshrao Ramchandra Mhasaye. 2011 LLR 1018 (Bom. HC) No writ against order of authority under Payment of Wages Act. Ramala Sahkari Chini Mills Limited, Meerut vs. Authority under Payment of Wages Act and Others. 2011 LLR 1102 (All. HC)

When a worker is provided with accommodation, travelling allowance and city compensatory allowance are not universally paid to each and every employee, such allowances are not required to be included for the purpose of over time payment under ‘ordinary rate of wages’ as per sec. 59(1) and (2) of Factories Act. Jossie vs. Flag Officers Commanding-in-Chief. 2011 LLR 1168 (Kerala HC)

Payment of wages It is not necessary for the authority to decide preliminary issue first without discussing the merits under Payment of Wages Act Sub Divisional Officer, Bharat Sanchar Nigam Ltd. vs. Prescribed Authority and Another. 2011 LLR 170 (All. HC) In the absence of any loss due to negligence, deduction of wages will be illegal.

Denial of wages to data entry operators reverted to the post of conductors for the period from the date of reversion to date on which the workmen were restored to their original position will be illegal. State Express Transport Corp. Ltd., rep. by its M.D., Chennai and Another vs. Arasu Viraivu Pokkuvarathu Oozhiyar Sangam, Rep. by its General Secretary, Chennai-2. 2011 LLR 278 (Mad. HC)

Part Time Employee For reckoning the length of service in context of sec. 25F of the ID Act engagement of part time typist on intermittent occasions can't be counted as service. Not entitled to retrenchment benefits. G.I.C. Housing Finance Ltd., Hyderabad and Another vs. Presiding Officer, Labour Court-I, A.P., Hyderabad and Another. 2011 LLR 801 (AP HC)

Probationer

Charan Singh vs. General Manager, Punjab Roadways, Hoshiarpur. 2011 LLR 579 (P&H HC): 2011 FLR (129) P. 630 It would be unjust to allow management to recover the amount from workman after 15 years which he might have withdrawn from the payment of wages authority court under his order.

“Unsatisfactory service” will not be penal in case of termination of the probationer. Paramjit Singh vs. Director, Public Instructions & Ors. 2011 LLR 116: 2011 (128) FLR 495 (S.C.) Business Manager

February 2012

From The Court Room The days put in by the workman on his probation can't be considered for counting 240 days for the concept of continuous service. Termination of probationer as per his terms of appointment will not be termed as retrenchment. Management of Apparel Export Promotion Council vs. Surya Prakash. 2011 LLR 333 (Del. HC)

Promotion

Important Labour Judgments 2011 I.N.T.U.C., Bhagalpur and Another vs. Union of India and Others. 2011 (129) FLR 989 (Patna HC) Though there is no limitation for making reference provided in the law but it ought to be made within reasonable time. Employer must show that such delayed reference has caused prejudice to him. Bank of India vs. Union of India and Others. 2011 (130) FLR 48 (Patna HC) The Government can refuse to make a reference to the Labour Court or Industrial Court if the dispute is raised after a long delay. Natvargiri Shivgiri Goswami vs. Union of India & Ors. FLR (129) 2011 P. 974 (Guj. HC)

Employee can't be promoted merely on the basis of his claim that he was performing highly skilled work and possess minimum qualification. U.P. State Road Transport Corporation vs. Imtiaz Ahmad and Another. 2011 LLR 977 (Allahabad HC)

Punishment The findings of the enquiry officer having being upheld by court, no reason why the employee could escape the penalty of dismissal from the service. Punchmahal Vadodra Gramin Bank Vs. D.M. Parmar 2011 (131) FLR 1019 (SC) It is well settled that punishment is primarily a function of the Management and the Courts rarely interfere with the quantum of punishment. Sate Bank of Mysore and others etc. vs. M.C. Krishnappa. 2011 (130) FLR 1082 (SC) Denial of salary on principle of â&#x20AC;&#x153;no work no payâ&#x20AC;? and termination of service on account of unauthorised absence are not two punishment. State of U.P. and others vs. Madhav Prasad Sharma. 2011 (128) FLR 915 (S.C.)

Reference Govt. is not to see the delay in raising the dispute, but whether the dispute existed or not while making reference. Kuldeep Singh vs. G.M., Instrument Design Development and Facilities Centre and another. 2011(128) FLR 121; 2011 I CLR 5 (S.C.) Reference of a dispute for increase of salary by the employee of a temple, not against the appropriate person/employer, will not be justified hence the claim is liable to be quashed. Sri Nathji Bhandar and Another vs. State of West Bengal and Others. 2011 (129) FLR 1086 (Cal. HC) Appropriate government, in exercise of its administrative powers, can decline to refer a dispute for adjudication when there is perversity and inordinate delay without any justifiable explanation. 46

Business Manager

February 2012

When conciliation proceedings were pending, no order to refer the dispute could be made by the High Court in writ petition. SPIC Pharma Employees Union (SPEU) Cuddalore vs. State of Tamil Nadu & Ors. LLJ (III) 2011 P. 72 (Mad. HC) The appropriate government can very well decline to refer the dispute when raised after 20 years. M. Kadirvelu vs. Union of India, rep. by its Secretary, Ministry of Labour, New Delhi & Anr. 2011 LLR 534 (Mad. HC) Refering a dispute by Govt. raised by workman after about 9 years is liable to be quashed. All India Institute of Medical Sciences vs. Sanjay Kumar & Anr. 2011 LLR 398 (Del. HC) Workman can raise industrial dispute even after receiving VRS benefits though management can object the legality of the reference before tribunal. M/s. Greaves Cotton Ltd. vs. Govt. of N.C.T. of Delhi & Ors. 2011 LLR 315 (Del. HC) State Govt. power for refering the dispute is administrative one and not a judicial or quasi-judicial. Bihar Colliery Kamgar Union, Dhanbad vs. Union of India & Ors. 2011 LLR 304 (Jharkhand HC) Govt. while declining to refer the dispute should records reasons for the same. Govt. can't assume power and jurisdiction of adjudicator. Kartar Singh and Ors. vs. Joint Secretary to Government of Haryana and Ors. 2011 LLR 859 (P& H HC)

Regularisation When canteen is run by Hotel Corporation of India in the premises of Air India, dismissed employees of HCI can't be treated as employees of Air India and any such regularisation would be illegal. Balwant Rai Saluja & Ors. vs. Air India Ltd. & Ors. 2011 LLR 739 (Del. HC) Daily wager has no right to ask for restoration of status as he has no status. No regularisation of such employee.

From The Court Room Sushil Kumar Srivastava vs. Public Service Tribunal, Uttarakhand and Others. 2011 LLR 309 (Uttarakhand HC) Once enquiry is conducted, management can't take plea that workman was temporary and no enquiry was required. In the absence of any reference on the point, tribunal can't grant regularization to the workman. General Manager (Telecom), Nagpur & Ors. vs. Zarir S/o Pesi Mawalwala, Nagpur & Ors. 2011 LLR 1020 (Bom. HC) Employees appointed as assistants temporarily by LIC in various branches will not be entitled to regularisation. Hashmuddin and Others vs. Life Insurance Corporation of India and Others. 2011 LLR 511 (All. HC)

Reinstatement Merely because the appointment was contrary to the recruitment rules, reinstatement with back-wages can't be denied to the employee who was appointed on consolidated salary and continued to work for two years and termination was found illegal. Devinder Singh vs. Municipal Council, Sanaur. 2011 LLR 785 (S.C.) Charge of misappropriation is not mitigated by depositing the amount back. Reinstatement in such case with full back wages is improper and set aside.

Important Labour Judgments 2011 reinstatement by the employer. Nagar Palika Nigam, Khandwa vs. Tulsiram and Another. 2011 LLR 405 (MP HC) Even though the retrenchment may be illegal and unjustifiable, that itself does not create a right of reinstatement with full employment benefits and back wages. Kripa Ram vs. Secretary H.P. State Board. LLN (1) 2011 P. 264 (MP HC) Non payment of retrenchment compensation at the time of termination does not mean that such workman will be automatically reinstated. National Small Industries, Kashmipur vs. Labour Court, Haldwani and Another. 2011 LLR 419 (Uttarakhand HC) Compensation instead of reinstatement is justified when employee was terminated according to terms of appointment though Section-25F was not complied with. Ramesh Singh Rajput vs. Castrol India Ltd. and Another. 2011 LLR 505 (Del. HC) Striking off name of workman from roll due to absence without notice or retrenchment compensation will be illegal. Compensation instead of reinstatement would be proper. Mayank Desai vs. Sayaji Iron & Engg. Co. Ltd.& Anr. 2011 LLR 536 (Guj. HC) In case of illegal termination, compensation in lieu of reinstatement and back wages will be proper. State of Chhattisgarh & Anr. vs. Umendi & Ors. 2011 LLR 581 (Chattis. HC)

S.B.I. vs. Hemant Kumar. 2011 LLR 449 (S.C.)

Reinstatement not the compensation will be appropriate relief to the malaria workers who have worked for more than 240 days of their disengagement and were not paid retrenchment compensation.

Even in the case of illegal termination, reinstatement with back wages is no longer a rule.

Smt. P. Pentamma vs. The Presiding Officer Labour Court, Guntur & Anr. 2011 Lab IC 1206 (A.P. HC)

Bata India Ltd. vs. Fourth Industrial Tribunal, West Bengal and Others. 2011 LLR 68 (Cal. HC)

Granting reinstatement would not be proper when the establishment has been closed down at the time of order hence the workman will get benefit of retrenchment compensation.

Reinstatement not proper of a bank cashier who is found guilty of misappropriation. Even no compassionate appointment for legal heir of such person. B.K. Basavalingappa, since deceased by his L. Rs. vs. Chitradurga Gramin Bank, represented by its Chairman. 2011 LLR 189 (Karn. HC)

State of U.P. through Principal Secretary, Deptt. of Land Development vs. Vinay Kumar Maurya. 2011 (II) LLN 65 (All. HC)

No reinstatement of Bus conductor who assaulted checking inspector and took back sold tickets.

Compensation in lieu of reinstatement with back wages can be granted by the court, to be calculated taking into consideration service putting by the workman.

Management of Pallavan Transport Corporation (represented by its General Manager), Chennai vs. (1) Anbazhagan (2) Presiding Officer, First Additional Labour Court, Chennai. 2010 (4) LLN 736 (Mad. HC)

At the age of 57, employee should be awarded monetary compensation instead of reinstatement.

Misconduct of negligence being negligible, reinstatement appropriate.

State Bank of Patiala vs. Union of India & Ors. 2011 LLR 701 (All. HC)

T.N. State Transport Corporation (K) Ltd. vs. P.O. Labour Court Trichy, 2011 LLR 284 (Mad. HC)

When a worker is dismissed from service in view of his conviction for an offence involving moral turpitude, he may be reinstated in service on his acquittal by the Appellate Court.

Workman is entitled to receive wages for the period from the date of order of reinstatement to the date of actual

Suresh Chander vs. Nagar Palika, Rajsamand & Anr. 2011 LLR 654 (Raj. HC)

Business Manager

February 2012

From The Court Room Maharashtra State Financial Corporation vs. Nimba Jagannath Tamboli. CLR I 2011 P. 1018 (Bom. HC)

automatically entitled to reinstatement and he can claim wages under section 33C(2) of the Industrial Disputes Act.

Lump-sum Compensation in place of reinstatement would be appropriate where workman only worked for 3 years and 15 years have passed since termination.

P. Sundararaj vs. Presiding Officer, I Addl. Labour Court, Chennai and Another. 2011 (129) FLR 119 (Mad. HC)

Indian Acrylics Ltd. and Anr. vs. Presiding Officer, labour Court, Patiala and Ors. 2011 LLR 794 (P&H HC) Relief of reinstatement with back-wages granted by labour court was upheld partially by the High Court restricting the same to reinstatement only. Back-wages was set aside because it should not be passed in a mechanical order. Oghad Masri Rabari vs. State of Gujarat. 2011 LLR 811 (Guj. HC) Reinstatement with full back wages proper in the case where employee got the loan and leave from the employer for under going bypass surgery but could not go because he was unable to arrange money demanded by the hospital. Such Act can't be termed as deceiving the employer and unauthorised absence. Termination on such misconduct is illegal.

In the case of loss of confidence, compensation instead of reinstatement would be appropriate. Vajravelu vs. Management of Salem Steel Plant, Salem and Anr. 2011 LLR 269 (Mad. HC) In lieu of reinstatement and back wages, compensation of Rs. 10,000/- is too meagre. Enhanced to Rs. 75,000/Rukshmaniben Hiralal Rajpopat vs. Rajkot Nagar Primary Education Committee. 2011 (131) FLR 872 (Guj. HC) When employer denied duty to workman on reinstatement, employee will be entitled to salary for the period. Panipat Co-operative Sugar Mills Ltd. vs. Presiding Officer, Labour Court, Ambala and Others. 2011 LLR 918 (P&H HC)

Punjab National Bank and Others vs. Subhasini Das and Others. 2011 (129) FLR 812 (Cal. HC)

When the bus conductor was charged for taking money from passengers without issuing tickets but found short of cash or Rs. 8.50, charge canâ&#x20AC;&#x2122;t be believed to be proved. Dismissal illegal. Reinstatement with 50% back wages appropriate.

Though termination was held illegal and violative of standing orders of corporation, no reinstatement was ordered because workman reached the age of retirement by the time of order.

Krishan Kumar Nagar vs. Management of M/s. Delhi Transport Corporation. 2011 LLR 1273 (Del. HC) No reinstatement of a bank employee who showed lack of honesty and integrity.

General Manager, Indian Oil Corpn. Ltd. vs. Ravindranath Mishra & Anr. LLJ II 2011 P. 802 (Patna HC)

Sagar Sadashiv Kasture, Pune vs. Central Bank of India, Bombay and Others. 2011 LLR 17 (Bom. HC)

Reinstatement set aside granted by labour court when workman (trainee) remained absent unauthorizedly and not responded to management call to report for duty. Employee lost the job of his own and not due to any wrong by management.

No reinstatement with back wages to a workman who declined the offer of the employer during conciliation to take him back but without back wages.

Surat Municipal Corporation vs. Aminesh Chandravadan Bodiwala. 2011 LLR 905 (Guj. HC)

Reinstatement with 50% back-wage will be appropriate when the employer, at the time of termination of service of the workman, did not comply with the conditions precedent as stipulated by section 25-F of the Industrial Disputes Act.

Consequential reliefs on reinstatement would mean the back-wages on higher post. Punjab Land Development and Reclamation Corporation Ltd. vs. Presiding Officer, Industrial Tribunal, Punjab and Another. 2011 LLR 1090 (P&H HC) Reinstatement justified when retrenchment compensation was not paid to the employee. Fosroc Chemicals (India) Ltd., through Jayesh B. Sarang vs. Satishbhai Tamakuwala. 2011 (I) CLR 848 (Guj. HC) Reinstatement proper of female employee, who was dismissed for slapping security guard with chappal in self defence, when she was sexually harrassed by security guard. Smt. Vijaya Jalali vs. HMT Limited & Ors. FLR (127) 2010 P. 651 (MP HC) When petition of the employer, seeking approval for dismissal of a workman is rejected, the workman will be 48

Important Labour Judgments 2011

Business Manager

February 2012

Milestone (Franki Stall) Mumbai vs. Mathew D'souza & Anr. 2011 LLR 22 (Bom. HC)

Chairman, Central Silk Board, Central Silk Complex, Bangalore and Another vs. Presiding Officer, Industrial Tribunal, Patna and Another. 2011 (III) LLJ 36 (Patna HC) When a reinstated workman had worked from the date of his initial appointment, the earlier period will be counted for continuity of service hence the employer is directed to grant work-charge status to the workman alongwith interest on the unpaid amount. Nanda Ram vs. State of H.P. and Ors. 2011 LLR 415 (HP HC) Termination of daily wages beldars without paying retrenchment compensation is illegal. Reinstatement without back wages justified. Yog Raj vs. State of H.P. and Others. 2011 (128) FLR 999 (HP HC)

From The Court Room When daily wage workman raised Industrial Dispute after 10 years, compensation of Rs. 25000/- in lieu of reinstatement would be proper. Reliefs rightly refused. Mohd. Zakir S/o Sheikh Rahmatulla vs. Divisional Controller, Maharashtra State Road Transport Corporation, Amravati and Two Others. 2011 LLR 1023 (Bom. HC) Lump-sum compensation equivalent to 6 months wages would be proper instead of reinstatement with 50% back wages in case of a workman of 4 year service. State of U.P. and Another vs. Hind Majdoor Sabha, Meerut and Others. 2011 LLR 1024 (All. HC) When the workman produced medical certificate of his disease while reporting for duty, his dismissal would be illegal and reinstatement with 25% back wages would be proper. Employers in relation to the Management Sijua Colliery of M/s. Tata Steel Ltd. vs. Their Workman Dilip Kumar Singh. 2011 LLR 214 (Jharkhand HC) Compensation and not reinstatement justified in case where Tax Collectors services were discontinued even in violation of sec. 6N of U.P. ID Act. Nagar Palika, Shahjahanpur vs. Balram Mehrotra and Another. 2011 LLR 102 (All. HC) When workman failed to establish his working of 240 days in a year and there is no breach of sec. 25F of ID Act, even assuming illegal termination, compensation and not reinstatement will be appropriate. New Ambika Sahkari Mandali Ltd. (I.B.P. Dealers) vs. Charansinh Shiv Narayansinh Rajput. 2011 LLR 345 (Guj. HC) Compensation instead of reinstatement proper when the workman reached age of superannuation and was disabled due to injuries and he was illegally terminated on the ground being unfit for service. General Manager, Indian Oil Corporation Ltd., Begusarai & Anr. vs. Rebindra Natha Mishra & Anr. 2011 LLR 185 (Patna HC) When a helper on daily wage after completion of 240 days was terminated without notice and compensation, reinstatement without back wages is proper. Superintending Engineer, Rani Awanti Bai Sagar Project, Jabalpur and Others vs. Narayan Prasad Vishwakarma and Another. 2011 (128) FLR 907 (MP HC)

Resignation

Important Labour Judgments 2011 Resignation of an employee accepted on the same day by the school managing committee will not be construed to be given voluntarily when employee did not have any time to withdraw. Manager, Shri Sanatan Dharam Saraswati Bal Mandir School & Anr. vs. Shri K.P. Bansal & Ors. 2011 LLR 605 (Delhi HC) It is the discretion of the management to accept the resignation or treat it under VRS. Rejecting application of the employee to treat his resignation under VRS by management can't be said to be malafide. Dr. C. Madhusoodan vs. Steel Authority of India Ltd. and Another. 2011 LLR 1046 (Karn. HC) In the absence of any verson by the employer against the plea of employee that she was forced to resign, reinstatement rightly awarded against such illegal termination. M/s. Jagran Ltd., Meerut Through its Director vs. Labour Court (II, U.P.), Meerut, and Others. 2011 LLR 1084 (All. HC) To be treated as a letter of resignation with in the eyes of law, language should be un-conditional without reflecting any pressure. Gujarat Water Supply & Sewage Board and Anr. vs. Mahavirsinh Balapbha Gohil. 2011 LLR 1259 (Guj. HC) When there is no provision of waiver of notice period, instant acceptance of resignation will not come in the way of withdrawal of resignation by the employee after four days of submission. P. Gayathri vs. Secretary, Dakshin Bharath Hindi Prachar Sabha, Hyderabad, and Another. 2011 LLR 139 (A.P. HC) When the resignations were in employee handwriting and received all legal dues with extra amounts, can't be said that resignations were obtained under coercion and were invalid. Management of Madura Coats Pvt. Ltd. and Anr. vs. Presiding officer, labour court, Tirunelveli 2011 I CLR 298 (Mad. HC) In the absence of any proof of obtaining resignation under coercion, no industrial dispute is maintainable. Management of Madura Coats Pvt. Ltd. and another vs. Presiding Officer, Labour Court, Tirunelveli and others. 2011(128) FLR 1040 (Mad. HC) Daily-rated employees, once regularised, would become entitled to all service benefits. Din Bandhu vs. Presiding Officer, Labour Court, Bhatinda, and Another. 2011 (130) FLR 469 ( P&H HC)

Acceptance of resignation before completion of notice period will not be invalid even though it was stated in the resignation that it will be accepted after three months. Mahesh Kumar Gupta vs. Labour Court, Dehradun and Another. 2011 LLR 493 (All. HC)

Resignation submitted after developing an under standing can't be termed as involuntary or retrenchment. Shuddhodhan and Others vs. Member Industrial Court, Nagpur, 2011 (128) FLR 412 (Bom. HC)

After completion of stipulated period of service in bond, employer can't compel the employee to be with him in service. Business Manager

February 2012

From The Court Room Damodar Valley Corporation & Ors. vs. Souvik Sarkar and Ors. 2011 LLR 174 (Cal. HC)

Retrenchment Retrenchment compensation can be claimed only against existing establishment and not a closed one. Ram Janam Singh vs. Ashok Kumar Jain. 2011(128) FLR 97 (Jharkhand HC) When the workman performance was found unsatisfactory, compensation in lieu of reinstatement would be appropriate even though his retrenchment was illegal. Prakesh Chand Agrawal vs. Presiding Officer, Labour Court (II), Kanpur & Anr. 2011 LLR 167 (All. HC) When workers were recruited for a specific program not as permanent employee, such workers can't acquire permanent status. Such retrenchment is not illegal. Vijay Kumar Bajpayee vs. M.P. Urga Vikas Nigam Ltd. and Another. 2011 (128) FLR 672 (MP HC) Even if employer did not comply with the provisions of section 25-F of I.D. Act regarding payment of compensation while terminating the services, payment of consolidated damages/compensation instead of reinstatement would be proper. Purvanchal Vidyut Vitran Nigam Ltd., Varanasi and Another vs. State of U.P. and Others. 2011 LLR 631 (All. HC) The termination of the service of the workman was held to be in violation of S.25-F of the Act, but since his appointment was not regular, he was held entitled to compensation only. Nepal Khichhu Ram vs. Presiding Officer, Labour Court. LLJ II 2011 P. 80 (P&H HC) It is the bounden duty of the employer to produce the service record of the workman who alleges violation of provisions of Sec.25-F and 25-G. Navinsingh Bharodiya vs. State of Madhya Pradesh. LLJ II 2011 P. 283 (M.P. HC) Even in the case of violation of sec. 25F of ID Act or sec. 6N of U.P. ID Act, compensation / reasonable damages should be paid instead of reinstatement. M/s. Areva T & D India Ltd. vs. Presiding Officer, Labour Court U.P., Allahabad & Ors. 2011 LLR 697 (All. HC) While calculating 240 days working in case of daily wage workman, period of weekly holidays and public holidays are to be excluded. Since workman did not qualify for retrenchment benefits, he is not entitled to any relief under sec. 25H of ID Act. Ranjit Natvar Lal Chauhan vs. Morbi Nagar Palika. 2011 LLR 704 (Guj. HC) 50

Business Manager

February 2012

Important Labour Judgments 2011 Daily wager completed 240 days will be entitled of benefit of sec. 25F of I.D. Act. Retrenchment without compliance illegal. Yog Raj vs. State of Himachal Pradesh. CLR I 2011 P. 1011 (Himachal Pradesh HC) For applicability of sec. 25F of ID act there is no distinction between a permanent and the muster roll employee. Muster roll employee terminated without retrenchment compensation who worked for more than 7 years will be entitled to reinstatement with full consequential benefits. Subhash Chand vs. Municipal Corporation of Delhi. 2011 LLR 791 (Del. HC) Under U.P. ID Act even the probationer or an appointee for a fix period is entitled to the benefit of sec. 6N. Retrenchment compliance is mandatory in these cases too. Managing Director, Pradeshik Co-operative Dairy Federation Ltd., Lucknow and Another vs. Presiding Officer, Labour Court, Agra and Others. 2011 LLR 799 (All. HC) After lapse of 35 years from retrenchment, even if it was held illegal, compensation of Rs. Two Lakh shall serve the end of justice in place of reinstatement with back wages. State of Bihar vs. Gajadhar Singh (Amin) 2011 LLR 830 (Patna HC) No reinstatement even if there is no compliance of retrenchment procedure of paying notice and compensation. Instead 50% back wages as damages would be proper. Deputy Director, Administration Rajya Krishi Upadan Mandi Parishad, Agra & Anr. vs. Presiding Officer, Labour Court, Agra and Another. 2011 LLR 969 (Allahabad HC) Compensation and not reinstatement would be proper even when retrenchment of supervisor on daily basis was not as per procedure. State of U.P. and others vs. Presiding Officer, Labour Court No. 2, Ghaziabad U.P. and Another. 2011 LLR 973 (Allahabad HC) When workman worked for 80 days, plea of infraction of 25F of ID Act can't be taken. However, since bank clerk cumcashier was terminated without notice in violation of 25G and 25H, compensation of one lakh in lieu of reinstatement with back wages would be proper. Sudha Ratna Singh vs. Union of India and Others. 2011 (130) FLR 58 (Patna HC) Retrenchment justified when a department of the school is shut down. No prior approval of retrenchment is required from director of education in case of unaided school. Prabhu Dayal Public School & Ors. vs. Anirudh Singh and Ors. 2011 LLR 1016 (Delhi HC) In the absence of any document pertaining to enquiry on the misconduct of wilful absence and termination order, such termination amounts to illegal

From The Court Room retrenchment and reinstatement with back wages will be justified. Punjab Agriculture University and Anr. vs. Presiding Officer, Labour Court and Anr. 2011 LLR 1086 (P&H HC) Retrenchment effected without complying the provisions of sec. 9A of the ID Act would be illegal.

Important Labour Judgments 2011

Retirement

Y. Premlatha vs. Hyderabad Co-operative Central Trading Society Limited and another. 2011 (130) FLR 1091 (AP HC)

When the workman retired during the pendency of the case, compensation and not reinsatement rightly awarded by Labour Court.

When company failed to prove why principle of 'last come first go' not followed, retrenchment would be invalid.

Krishna Chandra Rout vs. Presiding Officer, Labour Court, Sambalpur & Three Ors. 2011 LLR 354 (Orissa HC)

Mahavir Steel Industries (P.) Limited, Pune vs. Pune Workers Union, Pune and another. 2011 (130) FLR 1103 (Bom. HC)

In the absence of having practice of not employing persons till life-time, employee cannot challenge his retirement at the age of 58 on the plea that there were no service rules.

Retrenchment without adhering to the mandatory provisions of S.25 is void ab initio. Municipal Council vs. Chhotalal & Anr. LLN I 2011 P. 258 (Raj. HC) Once retrenchment is held to be genuine and bonafide by complying all statutory requirements, reinstatement canâ&#x20AC;&#x2122;t be ordered. Vicco Laboratories Limited and Another vs. Maharashtra General Kamgar Union. 2011 LLR 1178 (Bom. HC) It is mandatory for the employee to complete 240 days service in a year to avail protection under sec. 25F of ID Act. 1. Management of Apparel Export Promotion Council vs. Surya Prakash. 2011 LLR 1208 (Del. HC) 2. Dharmender Singh vs. The Presiding Officer, Industrial Tribunal-cum-Labour Court, Union Territory and Another. 2011 LLR 1215 (P&H HC)

T. Anantha Krishan vs. Management of Madras Purasawalkam Hindu Janopakara Saswatha Nidhi or The Permanent General Benefit Fund Ltd., Chennai and Another. 2011II LLJ 557 (Madras HC) Award of wages beyond the age of retirement is not sustainable. Mahalaxmi Fibres & Industries Ltd. vs. Santosh Tiwari & Ors. LLJ II 2011 P. 100 (Jhar. HC) When there is a settlement about retirement age at 60 years, there will be no significance of Model Standing Orders providing 58 years as retirement age. Balmer Lawrie & Co. Ltd., Mumbai & Anr. vs. Engineering Workers' Association, Mumbai & Anr. 2011 (II) CLR 787 (Bom. HC)

Settlement

In case of illegal termination without retrenchment compensation, reinstatement without back wages proper. Board of Secondary Education vs. Rajesh Nema and Another. 2011 LLR 1280 (MP HC) Employee who has continued in service for five years cannot be terminated form service without complying with the provisions of section 25(F) of the I.D. Act. Keru Kisan Rokade vs. Geoffery Manners & Company Ltd., Nashik. LLN (4) 2010 P. 697 (Bom. HC) When bankers cheque towards one month notice and retrenchment compensation is offered to the employee at the time of retrenchment, it complies with the provisions of ID Act. Sudarshan Rout vs. Commissioner-cumSecretary to Govt. of Orissa & Ors. 2011 LLR 477 (Orissa HC) Retrenchment without following the principle of "last come first go" held illegal. Reinstatement without back wages proper. Mussoorie Dehradun Development Authority vs. Shri Rameshwar and Others. 2011 (128) FLR 1030 (Uttarakhand HC)

During the operation of settlement when agreed that no financial demand will be raised, enhancement of retirement age will not be tenable. M/s Kennametal India Ltd. vs. Kennametal India Employees' Association & Ors. 2011 LLR 584 (Kar. HC) Bipartite settlement arrived at under section 18(3) of I.D. Act will not be binding on the subsequent purchaser of the factory. General Sec., Gujarat Audhyogik Kamgar Sangthan vs. Kalyan Paper & Board Mills & Anr. 2011 LLR 659 (Guj. HC) When a settlement has been made by a Union unrecognised under the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971, only those employees will be entitled to benefits who have been a party to it. S.D. Muley and Others vs. Jaihind Industries and Another. 2011 (129) FLR 929 (Bom. HC) Business Manager

February 2012

From The Court Room Company cannot be said to have violatated the provisions of ID Act when acted as per conciliation settlement. Indian Semlting And Refining Company Limited vs. Anthony D' Almeida and another. 2011 (130) FLR 958 (Bom. HC) Settlement signed by the earstwhile employer with the employees will not be binding on the subsequent employer who bought machinery and factory. Since new purchaser was not party to settlement employees can't get any benefit from the new employer on the basis of the settlement.

Important Labour Judgments 2011 petitioner's establishment employed 100 or more workmen in the 12 months preceding the inspection to attract the applicability of Industrial Employment (Standing Orders) Act. Thus, there was no basis for the prosecution to show the Act was applicable to petitioner's establishment. Bapineedu Chowdary vs. State of Andhra Pradesh and Another. 2011-III LLJ 196 (AP HC)

Strike

General Secretary, Gujarat Audyogik Kamgar Sangthan vs. Kalyan Paper & Board Mills & Anr. FLR (129) 2011 P. 1067 (Guj. HC) Settlement executed with the majority union is binding upon all workmen including members of minority union and the settlement will continue to be effective for specific period till the same is substituted by another settlement. Taj Services Ltd. vs. Industrial Tribunal-1 Delhi & Ors. 2011 LLR 1133 (Delhi HC) Employees who have left services by opting golden handshake and by receiving compensation in terms of section 18(1) of the settlement are not entitled to enhance compensation given to other employees in subsequent settlement. G. Damodaran & Ors. vs. Managing Director, Hindustan Liver Ltd. LLN (4) 2010 P. 725 (Mad. HC)

Shops & Establishments

The doctors, residents, interns, paramedical staff and any other person connected with AIIMS can't be allowed to go on strike. Any such strike is illegal. Such persons engaging themselves in such activity would be liable for disciplinary proceedings and contempt of court. Scheduled Castes and Scheduled Tribes Medical Association (Regd.) Delhi vs. Union of India and Others. 2011 LLR 366 (Del. HC) During the pendency of conciliation proceedings it is not open to the unions and its members to proceed on strike. It would be an illegal strike. Bharat Petroleum Corporation Ltd., Mumbai vs. Petroleum Workmen's Union Thane & Ors. 2011 III CLR 187 (Bom. HC)

Suspension In the absence of proof of reporting for duty after revocation of suspension order, workman will not be entitled to any salary.

Society imparting education to deaf community covered as establishment under Delhi Shops Act will also be covered under Minimum Wages Act.

Chaman Lal vs. Presiding Officer, Labour Court, Patiala. 2011 LLR 577 (P& H HC)

Termination

Multipurpose Training Centre for the Deaf vs. Government of NCT of Delhi & Ors. 2011 LLR 548 (Del. HC)

Standing Orders

When employee submitted cogent proof of his date of birth, his termination on the ground of providing wrong age would be illegal. Shambhu Mishra vs. Airport Authority of India Ltd. & Ors. 2011 LLR 90 (Del. HC)

When certified standing orders providing the age of retirement at 58, reduction of retirement age from 60 to 58 by the management will not amount in to change in service conditions.

Termination without any charge though discharge simpliciter would still be illegal retrenchment when conditions precedent not followed. Reinstatement with 30% back wages proper.

Sri Achyuta Charan Panda vs. The Managing Director, Paradeep Phosphates Ltd. 2011 LLR 472 (Orissa HC)

Cotton Corporation of India Ltd. and Another vs. State of Rajasthan and Others. 2011 LLR 74 (Raj. HC)

There was no foundation in the complaint, as there was no statement that

No illegal termination of a temporary employee due to abolition of his post.

Business Manager

February 2012

From The Court Room Ahmedabad Municipal Transport Service vs. Atul Chimanlal Shah. 2011 LLR 194 (Guj. HC) A temporary employee on a post which is abolished and is relieved, such action can't be termed as termination. No reinstatement in such case. Ahmedabad Municipal Transport Service vs. Atul Chimanlal Shah. 2011 LLR 254 (Guj. HC) Termination of a probationer will be illegal without enquiry if show cause is issued. Jagdish Chand vs. Managing Director, H.R.T.C. and Others. 2011 LLR 346 (HP HC) While imposing punishment, consideration of past records is important. Termination for unauthorised absence of 18 days improper. Reinstatement without wages granted. Veer Chand vs. D.T.C. 2011 (128) FLR 547 (Del. HC) Casual or daily rated workers when not appointed as per rules will not be entitled to any relief on termination. Bachsangji Chehraji Thakur & Ors. vs. Deputy General Manager & Ors. 2011 (I) CLR 862 (Guj. HC) Once the termination has been found void ab-initio, reinstatement with seniority ought to be granted. Kirpa Ram vs. Secretary, H.P. State Board and Others. 2011 LLR 507 (HP HC) Merely because the insurance company made good the losses caused to bank by the abuse of powers by the employee in case of granting loans against bank lending norms, removal from service of such employee can't be set aside. Sunil Kumar Srivastava vs. Union of India and Others. 2011 LLR 1036 (All. HC)

Important Labour Judgments 2011 When the employer at the request of the Union has been deducting the subscription of the Union while making the payment of wages, it cannot be stopped since it will be against the fundamental right granted for formation of a trade union. Coimbatore Periyar Districts Dravida, Panjalai Thozhilalar Munnetra Sangam, rep. by its Gen. Secretary S. Doraisamy & Ors. vs. National Textile Corporation Limited, Coimbatore & Ors. 2011 LLR 1076 (Mad. HC) Registrar is empowered to give registration to a union as a multi state union. Akhil Dadra & Nagar Haveli Kamgar Sangh, Silvassa, Dadra & Nagar Haveli vs. Krantikari Kamgar Union & Ors. 2011 III CLR 26 (Bom. HC) Withdrawal of recognition of a union will not be interfered by the High Court. Committee of Management Trimurti Higher Secondary School, Khushhal, Moradabad vs. State of U.P. . and others. 2011 LLR 246 (All. HC) Before de-recognizing the union, employer must issue show cause notice to union and afford an opportunity of hearing. Air Corporation Employees Union vs. Air India Ltd. 2011 I CLR 695 (Del. HC) Although no employer is under an obligation to offer check-off (collecting membership fee from members) facility to the Union but when such a facility has been extended for 21 years, its withdrawal, all of a sudden, would be arbitrary. Rashtriya Colliery Majdoor Congress and Another vs. South Eastern Coalfields Ltd. and Others. 2011 (130) FLR 248 (MP HC)

Transfer

One who is offered work on daily wages is not entitled for any notice or one month's pay in lieu of notice, while service terminated. State of Maharashtra, Sub Divisional Forest Officer vs. Sadashiv Maroti Doke & Anr. LLN (3) 2011 P. 124 (Bom. HC) Regularising juniors and terminating the services of senior would be in violation of sec. 25A, 25B, 25F and 25G of ID Act. Termination has illegal. Superintendent, Ummed Hospital, Jodhpur vs. Judge, Industrial Disputes Tribunal and Labour Court, Jodhpur. 2011 LLR 1115 (Raj. HC)

Trade Union

Derecognition of the union by airlines management without following the rules of natural justice is liable to be set aside. Air Corporation Employees Union vs. Air India Ltd. 2011 (129) FLR 752 (Delhi HC)

Where undertaking transferred from one employer to other, in the absence of any specific provision, taking consent of employee for transferring his services to new employer does not apply. In such case employee is not entitled to any compensation on the ground that he is not willing to work with new employer. J.V. Sudhakar vs. Government of A.P. rep. by its Principal Secretary, Labour Deptt. and Ors. 2011 LLR 43 (A.P. HC) Conciliation officer has no powers to stay the transfer orders made by employer. He can only mediate and not adjudicate the dispute. Maharashtra General Kamgar Union, through its Joint Secretary and Ors. vs. Pix Transmissions Ltd. & Anr. 2011 I CLR 106 (Bom. HC) Where Standing Orders restrict transfer of employees to Bangalore only, transfer of employees to another state would be illegal. Business Manager

February 2012

From The Court Room M/s. Madura Coats Pvt. Ltd., Rep. by its Manager vs. The Workmen of M/s. Madura Coats Pvt. Ltd., Rep. by Madura Coats Employees' Union. 2011 LLR 81 (Karn. HC) Transfer of chemical engineer from Durgapur plant to sales office as sales manager at Kolkata that too without any vacancy would be malafide and illegal. Dipankar Bandopadhyay vs. Durgapur Chemicals Ltd. & Ors. 2011 LLR 293 (Cal. HC) Transfer of a Technician Grade II to another post in the same category cannot be construed as illegal. T.N. Mohila and Others vs. U.P. State Electricity Board and Others. 2011 LLR 834 (All. HC) Transfer on allegations of misconduct without putting the employee on notice and seeking his reply is bad in law. Madhura Mohan Nayak vs. State of Orissa & Ors. LLN(2) 2011 P. 613 (Orissa HC) Transfer from Bhopal to Bhubaneswar that too on temporary basis needs no interference. Dr. H.S. Tripathi vs. National Council for Teachers Education and Others. 2011 LLR 916 (MP HC) When bank employee was suspected of fraud, his transfer instead of putting him on disciplinary proceedings, would be illegal and liable to be set aside. Biplab Das vs. The Chairman, Bangiya Gramin Vikash Bank & Ors. 2011 LLR 947 (Cal. HC) Transfer from one company to another having separate legal entity not permissible. Transfer on the ground of indulgence in anti-management activities cannot be turned into administrative excegencies. Sneha Kumar Pradhan vs. Mahanadi Coalfields Limited and others. 2011 (130) FLR 852 (Orissa HC) When transfer order affects the service condition and financial entitlements, then court can interfere with the order that too when the transfer was ordered only after 21 days of first transfer. Kartika Chandra Ray vs. Neelachal Gramya Bank and Others. 2011 LLR 706 (Orissa HC) Inconvenience of the employee in domestic front in view of transfer can't justify interference with transfer order. Tapan Kumar Das Purkayastha vs. Hindustan Paper Corporation Ltd. 2011 LLR 735 (Gauhati HC)

Unfair Labour Practice Inviting workers to undergo training to act as officers through introduction of promotion scheme by management would not be unfair labour practice. 54

Business Manager

February 2012

Important Labour Judgments 2011 Siemens Ltd. Vs. Siemens Employees Union 2011 (131) FLR 1100 (SC) Showing workers as on project, but in fact doing perennial nature of work, would be unfair labour practice. Reliance Energy Ltd., Mumbai vs. Yadayya Giri and Others. 2010 (4) LLN 787 (Bom. HC) Keeping sweepers and bus body cleaners as temporary for years together would be unfair labour practice. Order of making them permanent proper. Tamil Nadu State Transport Corporation (Madurai Division-IV) formerly known as Rani Management Transport Corporation Ltd.), Dindigul vs. (1) Presiding Officer, Industrial Tribunal (2) Secretary, Rani Mangammal Pokkuvarathu Thozhilalar Sangam, Dindigul. 2010 (4) LLN 703 (Mad. HC) Paying less to daily wagers having identical nature of duties with permanent, will amount to unfair labour practice under ID Act. Maharashtra Lok Kamgar Sanghatana vs. Ballarpur Industries Ltd. and another. 2011 (128) FLR 885 (Bom. HC) If a workman was employed and reemployed to show that his services were terminated before 240 days will amounts to unfair labour practice. Krishan Lal vs. General Manager, Haryana Roadways, Rohtak and another. 2011 (128) FLR 752 (P&H HC)

VRS Under VRS, right of management to accept or reject the application of any employee for VRS canâ&#x20AC;&#x2122;t be questioned. Chairman and M.D., Indian Overseas Bank & Ors. vs. Tribhuwan Nath Srivastava. 2011 LLR 225 (S.C.) Employees relieved under VRS cannot raise Industrial Dispute under Section 2A of the ID Act. Bayer Bio Sciences Pvt. Ltd. vs. Presiding Officer, Labour Court-I and Others. 2011 (129) FLR 17 (AP HC) Once employee makes option for VRS and is also accepted by the management, can't be further withdrawn by the employee. Anil Nandwani (Mrs.) vs. Food Corporation of India & Ors. 2011 LLR 518 (Del. HC) When employee was relieved under VRS, no disciplinary proceedings could be initiated against him. S.V. Vanajakshi vs. TUCS Limited, represented by its Special Officer, 119, Big Street, Triplicane, Chennai-5. 2011 (I) LLN 709 (Mad. HC) Employee has a right to withdraw his notice of voluntary retirement before acceptance by the management.

From The Court Room

Important Labour Judgments 2011

Mahendra Gajanan Trivedi vs. Bank of India & Ors. 2011 LLR 1096 (Guj. HC)

This is the burden, workmen have to discharge.

Condition of refunding amount received after VRS by workman is proper in order to challenge VRS which was accepted under duress.

Rahimuddin and Others vs. Gossini Fashions Ltd. 2011 LLR 824 (Del. HC)

Man Singh vs. Maruti Suzuki India Ltd. & Another. 2011 LLR 1009 (SC) If an application for voluntary retirement is not withdrawn before acceptance, its acceptance by the employer will be valid. Siddaiah vs. Management of Mandya National Paper Mills Ltd., Belagula. 2011 LLR 1267 (Karn. HC) Withdrawal of application for voluntary retirement is permissible till the date the same is to be effected in future. Balaram Saghan Kshetra Samiti vs. Kantaben Laljibhai Patel & 2 Ors. 2011 LLR 1251 (Guj. HC)

Workman

Even if the casual workers appointed for six months on monthly break up to 30 years canâ&#x20AC;&#x2122;t claim permanency being original appointment not in terms of the process envisaged by the rules. Union of India & Ors. vs. Vartak Labour Union. 2011 LLR 337 (S.C.) Person can't be denied of benefit of a workman under ID Act merely because he was designated as apprentice or trainee. In the absence of trainer to impart any training to such persons, they will treated as workman. Entitled for reinstatement. Workmen of PMP Textiles, Coimbatore vs. Management of PMP Textiles & Anr. 2011 LLR 731 (Mad. HC) Test to determine whether a person is a workman or not is to be decided by examining the true nature of his dominant duties. Superintending Engineer MSED Company Ltd. vs. Sukhadev Ramchandra. CLR II 2011 P. 185 (Bom. HC) 'Balsevika' working on honorarium will not be a workman under ID Act. Devinder Kaur (Smt.) vs. Child Welfare Council, Punjab & Ors. 2011 LLR 357 (P&H HC): 2011 I CLR 42 (P&H HC) To decide, whether a person is a workman, his nature of dominant duties and not the designation will be sole criterion. Superintending Engineer, Maharashtra State Electricity Distribution Co. Ltd. (O&M), Chandrapur and Anr. vs. Sukhdeo Ramchandra Dhakite, Nagpur. 2011 LLR 662 (Bom. HC) No relief to workmen when they failed to establish the master-servant relationship.

Discharging duties of drafting agreement, lease deeds, affidavits and maintaining records can't be said to be of a workman in nature. Employee was held not be a workman. Anita Mathur vs. Idea Cellular Ltd. 2011 LLR 1066 (Delhi HC) Advocate / Legal advisor of the bank is not a workman under ID Act. Sonepat Central Co-operative Bank Ltd. vs. Presiding Officer, Industrial Tribunal-cumLabour Court, Rohtak and Anr. 2011 III CLR 704 (P&H HC) Branch officer of a finance company canâ&#x20AC;&#x2122;t be held to be a workman. Gruh Finance Limited vs. Pradip K. Shah. 2011 III CLR 708 (Guj. HC) Personal financial consultant of a bank appointed in lower management cadre will not be a workman under ID Act. Dominant nature of duties and responsibilities are to be seen. Vandana Joshi D/o. Mr. K.D. Joshi, Thane vs. Standard Chartered Bank Ltd. 2011 LLR 126 (Bom. HC) Assistant civil engineer and administrative officer are not workman under ID Act. Exhibition Society, Exhibition Grounds, Nampally, Hyderabad vs. Labour Court-II, Nampally, Hyderabad & Ors. 2011 LLR 532 (AP HC) Part time junior executive discharging the functions of loan documentation, cheques disbursement making ledger entries, preparing notices, statements, maintaing EMI accounts, receiving cheques and cash from customers are more of administrative nature hence will not be a workman under ID Act. G.I.C. Housing Finance Ltd., Hyderabad and Another vs. Presiding Officer, Labour Court-I, A.P., Hyderabad and Another. 2011 LLR 801 (AP HC) Design and development engineer simply checking drawings prepared by draftsman will be workman under ID Act. Mayank Desai vs. Sayaji Iron & Engg. Co. Ltd.& Anr. 2011 LLR 536 (Guj. HC) Sub managers appointed under separate contract of employment in the same mill will not be workman under ID Act. Management of Madura Coats Pvt. Ltd. and Another vs. Presiding Officer, Labour Court, Tirunelveli and Ors. 2011 LLR 486 (Mad. HC) Whether the person is a workman or not, this plea is to be raised before labour court. Raising such objection in High Court will not be of any help to management. Aringer Anna Primary Agricultural Bank v. Presiding Officer, Labour Court. LLN (4) 2010 P. 476 (Mad. HC) BM

Ref. : Labour Law Reporter,FLR, CLR, LLJ & APS Labour Digest

Business Manager

February 2012

H.L. KUMAR Advocate, Supreme Court

Industrial Law

Where Probationer Stands? Constitution Bench of Supreme Court has held that such an employment on probation, under the ordinary law of master and servant, comes to an end if during or at the end of the probation, the servant so appointed on trial is found unsuitable and his service is terminated by a notice.

he term "probation" means testing a person's aptitude, capacity, etc. before he is taken for permanent employment. When a candidate is appointed against a post that is substantively vacant, with definite conditions of probation, then he is a probationer. The person, who is on probation, is kept on trial regarding his suitability for permanent appointment and is liable to be discharged before permanent absorption. The courts have held that termination of service of a probationer during or at the end of a period of probation will not ordinarily and by itself be a punishment. The period of probation furnishes a valuable opportunity to the master to closely observe the work of the probationer and by the time the period of probation expires, to make up his mind whether to retain the servant by absorbing him in regular service or dispense with his service. Period of probation may vary from post to post or master to master. And it is not obligatory on the master to prescribe a period of probation. The expression 'probationer', its extension, confirmation or termination has given rise to a large number of judgments either of Supreme Court or High Courts. Certain ambiguities are clarified by interpreting the expression 'probationer' depending upon the given facts but sometime such interpretations have led to more controversies hence resulting into large number of cases arising again and again for judicial interpretations. The term 'probationer' is nowhere defined in any statute pertaining to labour matters except that clause (c) Order 2 of 'Model Standing Orders in respect of Industrial Establishments not being Industrial Establishment in Coal Mines' which provides as under: "A 'probationer' is a workman who is provisionally employed to fill a permanent vacancy in a post and has not completed three months' service therein. If a permanent employee is employed as a probationer in a new post he may, at any time during the probationary period of three months, be reverted to his old permanent post." It is pertinent to make reference to the fundamental judicial pronouncements pertaining to the status of a probationer. In a landmark judgment, the Constitution Bench of Supreme Court (Lal Dhingra vs. UOI, 1958 (1) LLJ 544 (SC) : AIR 1958 SC 36.) has held the status of a probationer and his termination from service as reproduced below : "The period e.g., for six months or for one year or it may be expressed simply as "on probation" without any specification of any period. Such an employment on probation, under the ordinary law of master and servant, comes to an end if during or at the end of the probation, the servant so 56

Business Manager

February 2012

The person, who is on probation, is kept on trial regarding his suitability for permanent appointment and is liable to be discharged before permanent absorption. The courts have held that termination of service of a probationer during or at the end of a period of probation will not ordinarily and by itself be a punishment.

Where Probationer Stands?

No doubt there have been large number of rulings but the Apex Court in one case (Krishnadevaraya Education Trust vs. L.A. Balakrishna, 2001 LLR 260 (SC).), has set the controversies at rest inter alia holding that an employee, on probation, can be terminated summarily by the employer. appointed on trial is found unsuitable and his service is terminated by a notice." There have been large number of rulings by the Apex Court and the High Courts wherein either the ratio of above judgment of the Constitution Bench has been relied upon, if not specifically but the principles as laid down have been followed in word and spirit. To this day, there is no other judgment of the Apex Court wherein either the principles as laid down have either been deviated from or differed from the above interpretation. For instance in one case (Jiwan Dass vs. Delhi Municipal Corporation, 1971 Lab. IC 795 Del. HC) , Justice Deshpande of Delhi High Court, in para 11 of the judgment while relying upon the above case has categorically clarified as under: "Since the services of a probationer can be terminated during the period of probation without assigning any reason, it cannot be said that the probationer has a title to hold substantively permanent post". A reference in this context is also made to the ruling of Full Bench of Delhi High Court (A.N. Dhingra vs. Union of India, AIR 1975 Delhi 82) wherein the Hon'ble Court has placed reliance upon the case of Parshotam Lal Dhingra (supra) inter alia holding as under : "In the Master of Servant, Vol.I, Law of Service in India, Barwell and Kar, have referred to a very early case of Wechsler vs. Johnston and Hoffman (Calcutta Original Side Suit 455 of 1928), which is unreported, in which Remfry, J. while dealing with the question as to the nature of a probationary service, equated it to offer of goods on approval under the Sales of Goods Act and relied on a number of judgments of English Courts in which it was held that the prospective buyer during the period of approval was a bailee of the goods with an option to buy. On the basis of the discussion by the author, the author came to the following conclusion as to the true meaning and effect of a probation for a certain specified period." The Full Bench further clarified : "In its very nature, appointment made on probation means that the employee is on trial and till confirmation either by a specific order or by operation of rules or terms of contract of service, he cannot have a right to hold the post and during the period of probation, services are liable to be terminated for unsuitability at any time by notice." The Supreme Court has interpreted the term 'probation' as under :

"A probation only implies a process or a period of testing the conduct, character, ability and performance of a person in a certain role not necessarily connected with or referable to employment. It only connotes a period for which he is under watch and trial, so to say, for assessment of his suitability and awaits a formal recruitment/appointment." No doubt there have been large number of rulings but the Apex Court in one case (Krishnadevaraya Education Trust vs. L.A. Balakrishna, 2001 LLR 260 (SC).), has set the controversies at rest inter alia holding that an employee, on probation, can be terminated summarily by the employer in clarifying as under : "If the order on the face of it states that his services are being terminated because his performance is not satisfactory, the employer runs the risk of the allegation being made that the order itself casts a stigma. We do not say that such a contention will succeed. Normally, therefore, it is preferred that the order itself does not mention the reason why the services are being terminated." It is now well settled principle of law that the appointment made on probation/ad-hoc basis for a specific period of time comes to an end by efflux of time and the person can have no right to continue on the post. (Vidya Vardhaka Sangha and another vs. Y.D. Deshpande and others, 2006 LLR 1233 SC). Termination of service before expiry of the extended period of probation will neither be stigmatic nor punitive. However, the services of a probationer can be terminated even during the probation period but if it is sought to be terminated on the basis of misconduct, then reasons for unsatisfactory performance are to be recorded. (Manjit Singh Bawa vs. Food Corporation of India and Ors., 2007 LLR 715 Cal. HC). Even if an order of termination of a probationer refers to unsatisfactory service of the person concerned, the same cannot be said to be stigmatic. (Chaitanya Prakash & Anr. vs. H. Omkarappa, 2010 LLR 225 SC). The Supreme Court has held that the termination of a probationer on account of unsatisfactory performance can never be treated as 'penal'. (Paramjit Singh vs. Director, Public Instructions & Ors., 2010 LLR 116 SC). In one case, the Gujarat High Court has held that the Industrial Tribunal has rightly rejected the dispute of the probationer alleging violation of the principles of natural justice whereas even during the probation period, his performance remained unsatisfactory. (Vasant C. Hanhad vs. Chairman, Oriental Insurance Co. Ltd., 2004 LLR 372 Guj. HC). The Supreme Court has Business Manager

February 2012

Where Probationer Stands?

It is well settled that a probationer continues to be on probation until he is confirmed. Even when a person is continuing beyond the probationary period of any order, he does not become a permanent employee. observed if the order of termination indicates that it is a termination simplicitor and does not cast any stigma on the employee, the mere fact that there was an enquiry into his conduct earlier would not, by itself, render the termination invalid. It was further observed that the respondent having been appointed as a probationer and his working having been found not to the satisfaction of the employer, it was open to the Management to terminate his service. (Municipal Committee, Sirsa vs. Munshi Ram, 2005 LLR 317 SC) The Division Bench of Kerala High Court has held that when there has been sufficient material about the unsatisfactory performance of the petitioner during his probation period and also in the absence of any malafide by the employer, he was justified in terminating his services and the learned Single Judge has misdirected himself in setting aside the termination granting reinstatement with one-eighth of wages which has been quashed by the Division Bench of the High Court. (The National Small Industries Corpn. Ltd. and Others vs. M. Narayanan, 2005 LLR 967 Ker. HC) Termination of a probationer for unsatisfactory performance cannot be termed as stigmatic or based on misconduct more so when it was contractual appointment, as such the Tribunal has rightly rejected her appeal hence the High Court will not interfere with such findings in the writ. (Smita Paul vs. Principal, St. Anthony's Sr. Sec. School & Anr., 2006 LLR 147 Del. HC). As summarily recording, unsatisfactory performance of the probationer during the probation period by the Management will not render the termination of the probationer as illegal. (Manjit Singh Bawa vs. Food Corporation of India and Ors., 2007 LLR 715 Cal. HC). Mentioning unsatisfactory work in the order of termination of a probationer, will not amount to stigmatic or invalid.( Pinaki Ghosh vs. International Airport Authority of India & Ors., 2007 LLR 1238 Del. HC). Merely that the order of termination of a probationer states that his work is not satisfactory though stigmatic but the termination will not be vitiated and also it will not be violative of the Rules. (Miss. Manju Shikdar vs. General Manager (Planning and Development) State Bank of Indore and Ors, 2008 LLR 752 All. HC). Extension or Confirmation : In the absence of rules, if the contract of employment has fixed a particular period of probation and on expiry of the said period the employee still continues in service, then the implications are that he continues as a probationer. This amounts to an implied extension of the probation period. Otherwise, it is well settled that a probationer 58

Business Manager

February 2012

continues to be on probation until he is confirmed. (Express Newspapers (Pvt.) Ltd. vs. Presiding Officer Labour Court, AIR 1964 SC 806 : 1964 (1) LLJ 9). Even when a person is continuing beyond the probationary period of any order, he does not become a permanent employee. (Motilal Khairati Lal Sharma vs. The Union of India, 1973 (6) Lab.IC 56 Raj. HC). Also, in the absence of ceiling about the period of probation, a probationer remains on probation even after period of probation, as held by Delhi High Court. (Sita World Travel (India) Pvt. Ltd. vs. Presiding Officer Labour Court No.4 Delhi & Ors., 1996 LLR 627 Del. HC.) The absence of any provision for extension of the period of probation in the terms and conditions of service, does not necessarily mean that the Government, has no powers to extend the period. An employer, has always an implied right to extend the probation period till it is satisfied that the probationer is fit for confirmation. (Madan Lal Anand vs. Himachal Pradesh Government and Others, 1971 (4) Lab.IC 277 Del. HC). In another case, a Bench of the Apex Court has held that by continuation in service after expiry of the probation period, a probationer cannot be deemed to be confirmed. (Dhanjibhai Ramjibhai vs. State of Gujarat, 1985 (51) FLR 77 SC). The Andhra Pradesh High Court has also held that the confirmation of a probationer cannot be as a matter to right. The confirmation will be made by the competent authority on overall assessment taking into consideration several facts and circumstances. (K. Dasarath vs. Labour Court-I, Andhra Pradesh, Hyderabad and Another, 2002 LLR 945 AP HC). In another case, the Calcutta High Court has also taken the same view. (M/s Kusum Products vs. State of West Bengal & Ors., 2002 LLR 830 Cal. HC). The Delhi High Court has also followed the above judgment in holding that there is no right in the probationer to be confirmed merely because he had completed the period of probation. (K.C. Mangia vs. Central Warehousing Corporation and Ors., 1987 (55) FLR 67 Del. HC). In one case pertaining to Delhi School Education Act and the Rules, it has been held by Delhi High Court that even when the extension letter to a probationer is not served upon an employee, it does not result in his automatic confirmation on expiry of the period of probation, unless there is a rule or a condition to the contrary. It is also well settled that in the absence of any prohibition, the probationer with regard to maximum period of probation, the probationer continues to be on probation. (Arwachin Shiksha Samiti and Ors. vs. Smt. Sarita Gupta and Ors., 1984 Lab.IC (NOC) 173 Del. HC) In another case (State of Punjab vs. Dharam Singh, 1968 (34) FJR 408 : AIR 1968 SC

Where Probationer Stands?

An employer, has always an implied right to extend the probation period till it is satisfied that the probationer is fit for confirmation. There is no right in the probationer to be confirmed merely because he had completed the period of probation. 1210 : 17 FLR 9), the learned Judges of the Supreme Court have also referred to the earlier decisions of their Court to point out distinction between the cases in which there is implied extension of probation period even if no order extending the probation period is passed in holding as under : "This Court has consistently held that when a first appointment or promotion is made on probation for a specific period and the employee is allowed to continue in the post after the expiry of the period without any specific order of confirmation, he should be deemed to continue in his post as a probationer only, in the absence of any indication to the contrary in the original order of appointment or promotion or the service rules. In such a case, an express order of confirmation is necessary to give the employee a substantive right to the post, and from the more fact that he is allowed to continue in the post after the expiry of the specified period of probation, it is not possible to hold that he should be deemed to have been confirmed." A probationer has no right to be confirmed merely on the expiry of probation period even on passing the requisite test. (Mustafa Ansari vs. Kisan Gramin Bank and Ors., 1992 LLR 234 : 1992 II LLN 514 All. HC). Termination of service during the extended period of probation will neither amount to retrenchment nor void for non-compliance of section 25-F of the Industrial Disputes Act.( Edwin A. Daniel and Anr. Vs. Labour Court, Coimbatore and Another, 1993 LLR 356 : 1993 I LLN 169 Mad. HC) Even when a probationer has crossed the specified period of probation, he will not be deemed to be confirmed and, as such, his termination after the expiry of the probation period will neither be unjustified nor illegal, particularly when no maximum period of probation has been prescribed.( Vasant C. Hanhad vs. Chairman, Oriental Insurance Co. Ltd., 2004 LLR 372 Guj. HC). When the terms and conditions of the appointment of an employee on probation do not stipulate deemed confirmation, such an employee continues to be probationer and his services can be terminated without holding of enquiry. (R.P. Garg vs. Indian Oil Corporation Ltd., Delhi and Others, 2005 LLR 20 All. HC). The Kerala High Court has held that a probation has no lien on the job and cannot claim confirmation even on the expiry of the probationary period unless the rules so provide. (The National Small Industries Corpn. Ltd. and Others vs. M. Narayanan, 2005 LLR 967 Ker. HC). Even when no inference of stigma can be drawn on the basis of material on record pertaining to dispensatioin of a probationer due to nonextension of probationary period of the probationer, there will be no illegality in the

same. (Dr. Purushottam Nagar vs. Rajasthan Hindi Granth Academy & Anr., 2006 LLR 1090 Raj. HC). However, when the probationary services of the petitioner under the Standing Orders stood confirmed hence he was not liable to be terminated for the reasons recorded in the impugned order by treating him to be on probation. (R.P. Garg vs. Indian Oil Corporation Ltd. & Anr. 2007 LLR 247 All. HC). When the maximum probationary period is stipulated in a settlement, the employer cannot circumvent the same by issuing letter extending the probation period beyond the maximum as prescribed in the settlement and, as such, it will be ineffective even though the workman has accepted the same since a settlement under the Industrial Disputes Act prevails over the contract made between the employer and the workman. (Management of Ambanad Estate vs. General Secretary, Kerala and Anr., 2009 LLR 309 Ker. HC). It is for the employer and not the court to assess the sauitability of a probationer The termination of a probationer, without holding of an enquiry, will not be invalid. While setting aside the order passed by the High Court, whereby the Award passed by the Labour Court in holding that the evidence to show that performance of the probationer was unsatisfactory, the Supreme Court held that once it was found that the assessment made by the employer was supported by some material and was not malafide, it was not proper for the High Court to interfere and substitute its satisfaction with the satisfaction of the employer. (Oswal Pressure Die Casting Industry, Faridabad vs. Presiding Officer and Another, 1998 LLR 341 SC). The Division Bench of Karnataka High Court, while following this judgment, has held that the enumeration of the Apex Court leaves nothing to doubt that courts should stay away from insisting on proof of the unsuitability of the workman to do a particular job, when the employer having had the opportunity to weigh his performance individually and in comparison with others of the same ilk had formed an opinion in that regard. No employer would desire to do away with the services of an employee if he was satisfied with his performance. Therefore, the order passed by the learned single Judge upholding the Award of the Labour Court cannot be sustained. (The Division Controller, KSRTC vs C.R. Kuppalli and Another, 2002 LLR 282 Karn. HC). Termination : As stated above, that a probationer having no lien on the job, his service can be terminated at the discretion of the employer. Reference is made to some of the cases for ready reference. The Supreme Court has held Business Manager

February 2012

Where Probationer Stands?

The termination of a probationer, without holding of an enquiry, will not be invalid. Probationer having no lien on the job, his service can be terminated at the discretion of the employer. that the termination of a probationer, when it does not cast any stigma, cannot be challenged. (Unit Trust of India & Others vs. T. Bijaykumar and Another, 1993 LLR 153 SC). In another case, the Supreme Court has held that termination of a probationer after making overall assessment, will not amount to retrenchment under the Industrial Disputes Act. (M. Venugopal vs. The Divisional Manager, Life Insurance Corporation of India, Machilipatnam, Andhra Pradesh and Anr., 1994 LLR 161 SC). Also, an employer can terminate the service of a probationer even during the probationary period. (K.V. Krishnamani vs. Lalit Kala Academy, 1997 LLR 16). It has also been held that the services of a probationer can be terminated even by an innocuous order without holding an enquiry. (Life Insurance Corporation of India and Anr. Vs. Raghavendra Seshagiri Rao Kulkarni, 1998 LLR 284 SC). The Supreme Court has also clarified that the order of termination of the Appellant, a probationer, after making preliminary enquiry stating that "your work and conduct has not been found satisfactory" is neither punitive nor stigmatic. Thus, the termination of the probationer on payment of one month's salary in lieu of notice in accordance with contract has been held as legal. (Pavendra Narayan Varma vs. Sanjay Gandhi PBI Medical Sciences & Anr., 2001 (8) Supreme 409 : 2002 LLR 113 SC). Termination of a probationer, initially appointed for 12 months but having found his performance as unsatisfactory, will not be stigmatic hence the Award of the Industrial Tribunal in granting reinstatement with full back wages will be set aside. (Management of M/s. Otis Elevator Co. (India) Ltd. vs. Presiding Officer, Industrial Tribunal-III & Anr., 2003 LLR 701 Del. HC). Termination of a probationer, failing to achieve the given target, will not be illegal even when the termination order has been passed after expiry of the prescribed period of probation by stating the reasons for his unsatisfactory performance. (Vasant C. Hanhad vs. Chairman, Oriental Insurance Co. Ltd., 2004 LLR 372 Guj. HC). Termination of a probationer, for unsatisfactory work, will neither be stigmatic nor punitive when it has been made in accordance with the contract of his service as stipulated in the appointment letter inter-alia services can be terminated by the Management during the probation period. (Vinod Kumar Walia vs. Presiding Judge, Labour Court and Another, 2005 LLR 338 HP HC). When order of a probation is innocuously worded, the Court can lift the veil and look at the real foundation of the order to find out whether it is an order simpliciter for unsatisfactory service or it is a motivated order and punitive whereas in the present case, there was sufficient 60

Business Manager

February 2012

material on the record about unsatisfactory performance by the respondent during his probation period. (The National Small Industries Corpn. Ltd. and Others vs. M. Narayanan, 2005 LLR 967 Ker. HC). Even when maximum period is provided, there cannot be deemed confirmation of the probationer, more so when he was given an opportunity, to improve his performance, by extending his probation period and, as such, the Labour Court as well as the learned Single Judge have rightly held that the termination of the probationer was not illegal or punitive in nature. (B.S. Chopra vs. The Management of Karnataka Handloom Development Corporation Ltd. and Anr., 2006 LLR 204 Del. HC). A probationer has no lien on the job and his services can be terminated by an employer without holding of an enquiry and, as such, the Labour Court has rightly held that when a workman is not confirmed, his probationary services can be terminated and as such no relief can be granted. (Hawa Singh vs. P.O. Labour Court, 2006 LLR 949 Del. HC). When after having accepted the terms and conditions stipulated in the appointment order and allowed the period for which they were appointed to have been elapsed by efflux of time, they cannot be permitted to challenge the validity of their terminations. (Vidya Vardhaka Sangha and another vs. Y.D. Deshpande and others, 2006 LLR 1233 SC). However, in State of U.P. clause (bb) of sub-section (oo) of section 2 has not been inserted in section 2(s) defining retrenchment. Hence a probationer or an appointee for a fixed period is entitled to the benefit of section 6-N (providing for payment of retrenchment compensation and one month's notice or wages thereof at the time of termination of the services of a workman) of the U.P. Industrial Disputes Act. In one case it has been held by the Allahabad High Court that under the (Central) Industrial Disputes Act termination on the expiry of period of appointment does not amount to retrenchment as per section 2(oo)(bb), however, under U.P. Industrial Disputes Act even such cessation of employment is retrenchment requiring compliance of its section 6-N of the Act. (M.D., Pradeshik Cooperative Dairy Federation Ltd. and Another vs. Presiding Officer, Labour Court and Others, 2012-I LLJ 230 All. HC). Language of termination order : In one case, the question arose as to whether language used for termination of probationer will be stigmatic and, if so, whether holding of enquiry by the employer was imperative. On terminating the services of a probationer the language of the order was as under: On a dispute raised by the employee, in a

Where Probationer Stands?

reference for adjudication, the Labour Court declined to give any relief. The employee filed a writ petition. The Delhi High Court held that the language used by the employer e.g. performance not found upto expectation does not cast any aspersion. (Davinder Arora vs. Management of Albert and David Ltd. & Anr., 2002 LLR 612 Del. HC). Reliance was placed on the judgment of Supreme Court wherein the language used in the termination order has been 'work and conduct has not been found to be satisfactory', it safely be held that the impugned order is exfacie not stigmatic. (Pavendra Narain Varma vs. Sanjay Gandhi PGI of Medical Sciences & Anr., 2001 (8) Supreme 409 : 2002 LLR 113 SC). However, in once case, the services of the petitioner were terminated during extended period of probation on the ground that "members-in-charge are not satisfied with the work, conduct and performance of the petitioner", which was under challenge. As per regulation, the services of a probationer could be terminated without assigning any reason. However, the petitioner contended that it is open to the employer to terminate the services by a simplicitor order and no assigning of the cause would not vitiate the order. However, if the cause given is in words which can cast a stigma, order would be undoubtedly vitiated. It has been held by the Allahabad High Court that if the employer does not want to retain a person against whom there are complaints of specific allegations of misconduct, it is sufficient for him to say that he is not suitable without bothering to find out the truth of those allegations. If enquiry into the truths of particular allegations of misconduct is to be conducted, that can be done only on an objective consideration of the facts and circumstances, no finding about the truth of an allegation of misconduct can be given without opportunity to the employee and it would amount to punishing a man without hearing him which has happened in this case. In the result, the petition was allowed and impugned order of termination of services has been quashed. (Mian Gulam Jelani vs. Aligarh Muslim University & Ors. 2002 LLN (3) 123 All. HC). Termination of a driver in a company for unsatisfactory work during the probationary period will be an order simpliciter hence neither any enquiry nor opportunity was required to be given to him and as such the Labour Court erred in setting aside the termination in awarding reinstatement with full back-wages which had been set aside by the High Court. (Chhata Sugar Company Ltd. vs. Presiding Officer, Labour Court, Agra and Another, 2005 LLR 613 All. HC). Even when a show-cause notice is issued to a probationer during the probation period but the same is not followed with an enquiry, it will not be malafide even after the expiry of probation period more so when the notice of termination categorically stated that he has

failed to improve his performance. (B.S. Chopra vs. The Management of Karnataka Handloom Development Corporation Ltd. and Anr., 2006 LLR 204 Del. HC). Termination of a probationer, even by an innocuous or stigmatic order, will be illegal when the real test has been applied that his performance was not satisfactory and not by way of punishment as such the Division Bench of the High Court has rightly set aside the judgment of the learned Single Judge in quashing the order of termination hence while rejecting the appeal by the concerned officer, the Supreme Court has rightly upheld the judgment of the Division Bench in upholding the termination of the probationer. (Abhijit Gupta vs. S.N.B. National Centre, Basic Sciences & Ors., 2006 LLR 545 SC). The Gujarat High Court has held that the Labour Court has erred in setting aside termination of the probationer granting reinstatement since there cannot be an automatic confirmation even on completion of probation period unless the probationer has been confirmed hence the High Court restored the order of termination. (Sayaji Industries Ltd. vs. T.G. Mathew, 2007 LLR 1246 (Guj. HC). The Labour Court has erred in setting aside the termination of a probationer whose performance was far from satisfactory and he was terminated even when punitive could not be construed as retrenchment hence the High Court restored the termination. (Management of Pepsico India Holdings, Mamandur vs. Presiding Officer, Ist Addl. Labour Court, Madras & K. Babu, 2010 LLR 127 Mad. HC). Termination of a probationer, initially appointed for two years but the probation period was extended by another one year since the performance was not found to be satisfactory, will not be stigmatic as upheld by the Tribunal hence the High Court will not interfere with the Order of the Tribunal, particularly when there was a notice when the employer was not satisfied with the work and conduct of the petitioner. (Ram Lal Sharma vs. Himachal Pradesh Road Transport Corporation & Anr., 2010 LLR 970 HP HC). The Supreme Court has held that the termination of a probationer during his extended period of probation, even when stigmatic, should not have been set aside by the High Court when the record revealed that there were deficiencies in his performance and despite opportunities, he did not show any improvement. (Chaitanya Prakash & Anr. vs. H. Omkarappa, 2010 LLR 225 SC). Notwithstanding above, it is advisable that while terminating the services of a probationer, the language should be simple, unambiguous and non-stigmatic. It will be appropriate to state :"That in accordance with the terms and conditions of the appointment, the probationary services are terminated with immediate effect or w.e.f………. as the case may be." BM Business Manager

February 2012

CASE

study

Quality- A Prerequisite

alvi Parenteral Limited (SPL) located at Navi Mumbai in the State of Maharashtra in India was a research-based, international pharmaceutical company that provided a wide range of quality products and services, at reasonable prices.The company focused on quality and customer satisfaction, and strived to grow on the principles of passion, performance and partnership.The core product range was quite wide and included oral solids, small volume parenterals and sterile powder formulations for antibiotics, anti-emetic, anesthetic, anti-malarial, analgesic, vitamin and multivitamins and veterinary products. The raw material was procured mainly from local suppliers and which was not available within the country was procured from China.The company manufactured 6.5 million Vials/Ampoules per month.Established in 1997, by A.H. Khemka, AshwinKhemka and SomeshKhemka, under the technical direction of MahendraKalwankar, the company had grown manifold and aspired to be a respected research-based company. With its diverse product portfolio, and success in India it was rapidly expanding in the world's emerging and developed markets. The company had state-of-the-art WHO GMPapproved manufacturing facility at Navi Mumbai. Intensive technological development was augmented for various injectables, sterile powder and suspensions under various processes such as compounding of batch, aseptic filtration, aseptic filling, sealing, visual checking, packing, and dispatch. A special emphasis was put on research activities at Salvi. A team of scientists worked continuously for new product development and technical advancement activities. In 2005 the company started a subsidiary called Tenesen Laboratoriesin the vicinity of the production plant to take care of the Research & Development activities for Salvi. It was purposely put, so that the production and research teams could continuously work in collaboration. It helped the company with the patent drafting and filing, regulatory support for APIs and formulations and finding various techniques for reducing the cost of the products.This would help end-user to draw benefit. Young professionals, pharmacists and scientists were hired from time to time, as the company believed in the power of youth and dynamism. The scientists at the Research and Development department provided continuous guidance to the production team to comply with all the technical requirements of manufacturing.There were separate teams for quality assurance (QA) and quality control (QC) to achieve quality throughout the production process. These teams ensured that the core value of the company, of providing the highest standards of quality, is protected.To avoid contamination, employees working at the plant used to change their clothes and enter the plant in the specially designed clothes to suit the requirements and the ambience of the plant. The floor in the plant was painted with epoxy paint which had excellent anticorrosion properties, and was water as well as oil resistant.The Company claimed that its major strengths were manufacturing capability, focus on technology and quality and In-house research activity and believed that these strengths gave them an edge in the market, since very few companies had this combination of competencies. Salvi was a regular supplier to the hospitals of the armed forces in India, government agencies, private hospitals, NGOs, other types of organizations and Individuals across the country. The company also had its own marketing operations in India and had over 1000 distributors all over India. Establishing itself in India was not Salvi's goal. It had extended its reach globally by making its active presence in countries like Russia, Ukraine, Uzbekistan, Turkmenistan, Fiji, Vietnam, Sri Lanka, Nepal, Malaysia, Thailand, Nigeria and Peru, to name a few. It had also got its plant approved by the registration authorities of Congo, Sudan and Sri Lanka and was making its presence felt in the world 62

Business Manager

February 2012

Salvi Parenteral Limited (SPL) was a research-based, international pharmaceutical company that focused on quality and customer satisfaction, and strived to grow on the principles of passion, performance and partnership. The company had to face rough weather in 2007, when one of its products Broadcef came under scrutiny. It was administered on 10 patients in a local hospital managed by the Government of Maharashtra and two patients died after two days. The management of SPL was under tremendous pressure, as the incident could lead to the closure of the company. The case demonstrates how the goodwill of the company in the market, helped it to retain the confidence of its customers and was able to endorse its expertise in manufacturing and stand the rough weather.

Salvi Parenteral Limited (SPL)

CASE

market by leveraging its manufacturing capacity, quality products and international alliances. The total turnover of the company was $ 25 million in the financial years 2008-09. International business contributed about 30 percent of the company's revenue and it was set to grow to more than 50 percent by 2011. This included the sales of Salvi's own brands and the revenue generated from the contract manufacturing services that the company provided to its overseas clients Salvi offered the CRAMS (Contract Research and Manufacturing Services) model for the overall growth of its business.The company had been investing in research and manufacturing facilities, to comply with the global standards and to meet the ever-growing international requirements of quality. It also offered Contract Manufacturing facility to the clients who were based in India and outside India, in the regulated and semi-regulated markets from all over the world. The company had to face rough weather in 2007, when one of its products Broadcef came under scrutiny. It was administered on 10 patients in a local hospital managed by the Government of Maharashtra and two patients died after two days.The incident was highlighted by the print and electronic media blaming the company for supplying the contaminated medicine to the hospital. It was claimed by the hospital authorities that the patients had died after they were given the injection. Food and Drug Administration (FDA) ceased all the vials of the medicine available in the hospital.The particular batch of the product, which was under shadow, had 27000 units. FDA collected samples of the medicine from the hospital as well as SPL for testing it in lab.The testing procedure required 14 days and it meant keeping the credibility of the company at stake. SPL also took various steps to cope with the situation. It communicated to its distributors not to distribute the remaining vials of the medicine of that particular batch till test results were declared by FDA.The management of SPL was under tremendous pressure, as the incidentcouldnot only lead to the financial or production loss but also the goodwill of the company was at stake. It was for the first time in the history of the company that it had to face such kind of a situation. There was a risk of getting blacklisted by government which could have lead to the closure of the company. In the meantime SPL also tested its samples and found them contamination free and non toxic. It investigated internal processes particularly production and quality control and found them in order as per international standards. After completing the investigation, FDA declared that there was no problem in the medicine and certified that the medicine was absolutely safe for use. The postmortem reports of the bodies of the patients revealed that, the deaths had taken place due to a bacterial infection and not due to the medicine, Broadcef. Based on this, Government declared through a public notice that the medicine supplied by SPL was absolutely safe for administration on the patients. Interestingly, after the whole episode, SPL was not onlyable to sell all the vials of the particular batch of Broadcef but its overall sales turnover increased, which boosted its confidence.The goodwill of the companyin the market, had helped it to retain the confidence of its customers.This also endorsed their confidence in their expertise in manufacturing pharmaceutical productsand to provide the best possible solutions to esteemed customers.Their focus on research, technological innovation & upgradation and in-house and out-bound training programmes continued.The company started planning for expansion nationally as well as internationally. SPL had targeted the growth in exports by 100 percent and was planning to expand its horizon to Latin America and Africa. It was also planning to enter into the regulated market of the US and Europe with more than 100 overseas product registrations.

Questions: 1. 2. 3. 4. 5.

Discuss the strengths of SPL. "QUALITY A PREREQUISITE" comment on the statement In your opinion what helped SPL in overcoming the crisis. Do you think SPL could draw any leverage from the incident? Discuss Comment on the strategy of SPL to manufacture and market a wide range of products. BM

study

Points to Ponder : Importance of ethical practices and role of quality. Retaining goodwill and reputation of organisation.

This case was developed by Dr.UpinderDhar,( JK Lakshmipat University, Jaipur , Rajasthan) Veena Chavan, Prema Mahale, Aditya Sontakke (BharatiVidyapeeth's Institute of Management Studies and Research, Mumbai) in a case writing workshop organized by BharatiVidyapeeth's Institute of Management Studies and Research, Mumbai in collaboration with JK Lakshmipat University, Jaipur , Rajasthan on December 17-19,2009. Business Manager

February 2012

BOOK LEARNING

The Effective Manager Skills & Strategies By V.R.K. Prasad Publisher : Viva Books Pvt. Ltd., 4737/23, Ansari Road, Darya Ganj, New Delhi - 110002 Price : 295/www.vivagroupindia.com

n the knowledge economy, its all about people and their intellectual capabilities that are going to be the determinants of success. A Manager’s job does not confine itself to merely getting things done through the efforts of others but extends much beyond to the final destination of producing results. The new-age manager has come to occupy the centrestage with the whole business revolving around him. He needs to be a professional who can lead, and foster creativity and innovation with a clear focus on stakeholder value maximization. Possession of soft skills for the graduating youth today has become as essential as any other attribute. But every contemporary skill can neither be covered in the

Supreme Court Judgments on EPF By Ram Niwas Bairwa Publisher : Wadhwa & Company, 27, M.G. Road, (Rampurawala Building), Indore-452 007 Price : Rs. 900/Email : wadhwaindore@yahoo.com

mployees' Provident Fund has always been a subject matter of high litigation between employers and the Provident Fund Organisation. EPF Act enacted in 1952 with the object to ensure compulsory Provident Fund, Pension Fund and Deposit Linked Insurance Fund in various establishments and Business Manager

The book under review - ‘The Effective Manager : Skills & Strategies’ deals with the roles of a manager at threee levels: at the individual level, working level and at the leader’s level. Various skills required at each level have been presented in a lucid, simple and down-to-earth style with easy-to-follow suggestios listed out. The skills covered renge from the traditional to the contemporary, finally leading to the new age. With no complex theoretical concepts, it certainly is not yet another book on executive skills but a different repository altogther with new insights. Dr. V.R.K. Prasad’s book will perhaps fit the bill as he has attempted to probe the manager’s personality requirements, which is most appropriate for the manager of twenty-first century. It would be indeed a useful reading for all the students of managements and HR professionals.

factories for the benefit of employees particularly when they retire.

Step by Step into EPF-

class room with the available material nor does the prescribed syllabus if any, warrants it. For eg:What is Managerial Effectiveness? Both from the modern and our ancient scriptures points of view?Does any institution teach the importance of thinking, introspection, consultancy, and counseling etc? Do we ever realize that all of us need to be marketing, financial and HR Managers first, irrespective of our functional area?Which Syllabus/curriculum covers the art of ‘Boss Management’ or the courage of conviction to ‘Say ‘NO’ when one has to’ or for that matter the need for ‘Sense of Humour’ and ‘Networking’ etc?Finally how one can be a ‘Managerial Leader’? i.e. a bit of manager and a leader simultaneously. Many such contemporary skills in addition to routine, have been covered in the book.

January 2012

Supreme Court has delivered many landmark judgments on various aspects of the Provident Fund Law and provided clarifications. To deliver the social security services to the employees it intend to, is the soul of the Provident Funds which has been underlined and maintained by Supreme Court throughout its sixty years judgments. The book under review "Step by Step into EPF" Supreme Court Judgments is an intelligent compilation of 139 Supreme Court Judgments on provident fund pronounced right from 1956 to 2011. The book attains more credibility when the same is complied with exclusive note on each judgment by a person who happens to be Regional Provident Fund Commissioner of the Provident Fund Organisation-Mr. R.N. Bairwa. The compilation of judicial pronouncement on the subject will prove to be helpful for employers, EPFO Officials, Labour Advocates, EPF Tribunal Officials, Bench & Trade Unions who always look for such judgments for ready reference whenever any need arises.