Petition Filed In Supreme Court To Decide Allowances For Provident Fund Contributions

Surya Roshni Limited, having its industrial establishment in Gwalior (MP), has filed a Special Leave Petition in the Supreme Court which was heard on 2nd March, 2012 and the notice was issued to the EPFO for further proceedings and for staying of Order of the Madhya Pradesh High Court.

ImageIt may be recollected that in Surya Roshni Ltd. vs. Employees Provident Fund & Anr., 2011 LLR 568, the Madhya Pradesh High Court (Gwalior Bench) has held that transport allowance, attendance incentive, washing allowance and special allowance being paid to all the employees except house rent allowance and the lunch allowance not being paid to all the workers will be treated as ‘basic wages’ for the purpose of attracting provident fund contributions.

The above case is perhaps the first case where the controversy, as prevailing all over India, will be decided once for all. The subscribers of Labour Law Reporter will be apprised about the outcome of the judgment.


Employer may be redefined for sexual harassment

The committee on sexual harassment has  recommended change in the definition of  employer to make it  more broad-based  and to include  contractors, homeowners  and  landlords.  ‘Workplace’  can include vehicles provided by employers for  women to travel to and for the work. The panel  also suggested that the head of a private institution  including a company, hospital or university be  specified.  The committee felt preventive aspects  reflected in the proposed Bill had to be strictly in  line with the Supreme Court guidelines in the  Vishaka case.

Amendment of labour laws

Review/amendment of labour laws is a  continuous process and amendments are made  in labour laws from time to time keeping in view,  inter-alia, the problems of the labourers. Recent  amendments carried out include those under the  Payment of Wages Act, 1936, the Payment of  Bonus Act, 1965, the Apprentices Act, 1961, the  Payment of Gratuity Act, 1972, the Employees’  State Insurance Act, 1948, the Industrial Disputes  Act, 1947, the Plantation Labour Act, 1951 and  the Workmen’s Compensation Act, 1923. A new  Act, namely, the Unorganized Workers’ Social  Security Act, 2008 has also been enacted.  There is no provision for regularization of  contract worker under the Contract Labour  (Regulation & Abolition) Act, 1970.  The big companies are adopting various  strategies like ancillarisation, outsourcing and  dispersed production network, but there is no  specific evidence to suggest that this strategy is  being adopted to take advantage of flexibility that  smaller firms enjoyed.  This information was given by the Minister  of Labour and Employment Shri Mallikarjun  Kharge in reply to a written question in the Lok  Sabha.  The Inter State Migrant  Workmen (Regulation  of Employment and  Conditions of Service)  Act, 1979, which  stipulates compulsory  licencing of contractors  who arrange migrant  workers, hasn’t been  implemented in 32 years.  There are those who work hard and there are those  who don’t need to work because of them…..  

Government has no data on migrant workers

The government has no data on the number  of migrant workers in the country and it doesn’t  know how many  people annually  move across states  in search of jobs or  for other reasons.  Government  records further  reveal a shocking  trend – there is nil  reporting of  registered migrant  workers, employers and contractors from major  migration hubs like Punjab, Haryana, New Delhi,  U.P., Gujarat, Uttrakhand, West Bengal,  Chandigarh and even MP.  34 JOURNAL SECTION LLR  February, 2012 – 22

Job market set to boom in 2012

 In stark contrast to the fears of economic  slowdown hurting the country’s labour market,  two separate job market surveys  suggested an improving employment  scenario and predicted  robust hiring activities for  the new year which could  be the best in the world.  Painting an optimistic  picture, global HR firm Manpower said, in its  quarterly job market report, that Indian employers  recruitment plans for the next three months – the  first quarter of the new year 2012.  In a separate monthly report, job portal said that hiring activities surged in  November across all sectors.

. Maruti defends stand on good conduct bond

Maruti Suzuki India Ltd (MSIL), on 1.12.2011, quashed allegations that demanding a good conduct bond from workers was an unfair labour practice even as it remained evasive on details of the severance packages doled out to the 30 workers who resigned from the company in November, 2011. The government had, on 29.11.2011, rapped Maruti for making workers sign the good conduct bond in August before they were allowed to enter the factory. The bond became a key issue between the workers and the Management and led to a near 3 month long labour strike at the factory. 4 JOURNAL SECTION LLR January, 2012 – 16 “The good conduct bonds are strictly in compliance with the standing orders of the company, which have been certified by the Haryana government”, said R C Bhargava, chairman, MSIL. “We have followed exactly what it stipulated and I am not sure why it is unfair, how something which is legally certified becomes an unfair practice.” Workers had been demanding formation of an independent union at the factory and Maruti had alleged that workers deliberately delayed production and tampered with the equipment before insisting on the bond.

IT employees constantly live in fear of blacklisting

Information communication and telecommunication (ICT) tools like Internet not only gives information but also it is considered a threat by the IT/ITeS employees. It is like ‘surgical knife which can also be used otherwise’, said Mr A.K. Padmanabhan, President, Centre of Indian Trade Unions (CITU). Speaking on the sidelines of CII Institute of Quality summit, Mr. Padmanabhan said “Work conditions in IT/ITeS may be bad but employees are unable to express it, they fear blacklisting or thrown out of the company.” Technology should not be looked at as means of cutting jobs. Adoption of technologies should suit the country. “Take requirement of the country or it would be disastrous when adopted recklessly”, he explained. Earlier, speaking on labour and employment issues in India, Mr Padmanabhan said labour issues were yet to become key issues in any managements or government decisions. It is not discussed seriously either. Efforts should be made that the country’s youth power be harnessed to achieve employability and growth. The Hindu Business Line

Basic principles for fixation of increments

The scales of increments are fixed on the principles of financial capacity of the employer and the region-cum-industry basis. Once it is found that the employer has the financial capacity for sustaining the burden of increments, the award of annual increments is to be held to be a normal rule. The scales of increments fixed under the settlement or award cannot be stopped unless it is proved that the employer is incapable of bearing the financial burden of such increments. In such cases, the approach to the problem should always be motivated by the requirement that an employer must ensure and achieve industrial peace which is essential for the development and expansion of industry. And this could be achieved not merely by having on the one hand and investing public who would be attracted to the industry by a steady and progressive return on capital which the industry may be able to offer but also by securing a contented labour force on the other hand.


PF Defaults may now invite arrests – EPFO Nagpur Employees’ Provident Fund Organisation’s (EPFO) office in Nagpur has adopted a stricter stance against defaulting employers by resorting to the last option of issuing arrest warrants against many of them. Last month, the office issued as many as 12 warrants that enable the police to arrest persons and produce them before EPFO’s recovery officer. The officer can award them upto six months’ simple imprisonment. The action at Nagpur office is considered one of the biggest so far. Though EPFO has powers to make arrests, such orders are usually not issued. More such actions are likely as now there is a special focus on recovery, said a source. The biggest drive so far remains the one taken in Orissa in 2002, when 21 arrest warrants were issued in six months with each defaulter getting a six month prison sentence, said the source. In Nagpur there have been no jail terms so far. This is because the recovery officer also has the powers to let off the person on payment of the dues or on an undertaking to pay. All 12 warrants are for employers in Vidarbha though the Nagpur office also covers Marathwada. The warrants continue to remain valid in many cases. The process of arresting is slower than in a criminal case as the police can execute warrant according to its own priority. In December EPFO arrested a director of M/s. Navdurga Bamboo Craft Private Ltd., Chamorshi Tehsil, in Gadchiroli District. The firm had defaulted in PF contribution to the tune of Rs.5.50 lakh from 2005 to 2011. He was later freed on depositing Rs.50,000 and furnishing a personal bond to deposit rest of the amount. Arrests come after all the methods of recovery are exhausted. These include attachment of bank accounts and sale of assets. Even the courts advise using this power sparingly, said another senior official in the EPFO. Since last two years, EPFO has shifted to inspector raj, doing away with the computer-based system of tracking defaults. The earlier system used to highlight names of establishments whose contributions came below the normal level. Then notices were served. However, this was not considered the right method for detection. Sources said it often led to false alarms as the contributions fell due to valid reasons like reduction in manpower or delay in crediting the amount by banks. The EPFO has now reverted to field inspection system under which officer gather intelligence about defaults. Most defaults relate to contractual employees or those outsourced, said sources. Times of India

Labour ministry drafts national policy for domestic workers

Soon your domestic help will have the right to demand minimum wages, regulated working hours, paid leave and much more. All these provisions are included in the Ministry of Labour and Employment’s draft national policy for domestic workers. The draft policy, which has been developed under a task force set up by the ministry, has been placed in the public domain till the monthend for inviting comments and suggestions. It is expected to affect around 6.4 million domestic workers. The proposals include minimum wage protection, normal work hours (including compensation for overtime), paid annual leave and sick leave, protection from sexual harassment and social security coverage, including maternity benefits. To facilitate these changes, the ministry plans to amend eight existing laws, which include the Minimum Wages Act, Trade Union Act, Employee’s Compensation Act, etc. Further, since labour is a state subject, the central government would be required to take the states along. J John, editor of the bi-monthly magazine Labour File, said the policy would help bring a huge section of workers, who have been ignored so far, under the law. “This is being done as the government is under pressure from the International Labour Organisation. However, since domestic workers cannot be classified, the implementation of these laws is very difficult,” he said. Business Standard

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