The government of Tamil Nadu in India has recently issued a
circular clarifying that employees of the IT Sector are covered
under the ID Act, 1947 and have the right to form trade unions.
This development has caused consternation in industry circles which
believed that the IT Sector was outside the ambit of this Act.
Obviously, for some reason, the IT Sector has been misinformed of
the correct position under the law.
In the current state of the controversy it is necessary to
illumine the rights of the employees and correct legal position.
Except for supervisory or managerial level employees, all other
employees are considered as "workmen" under the ID Act if
they perform any manual, skilled, unskilled, technical, operational
and clerical work. Even as recently as 2016 the Supreme Court in
Raj Kumar Vs Director of Education re-iterated that its leading
judgement in H.R Adyanthaya Vs. Sandoz (India) Ltd. in 1994 is
decisive on the issue of who is a "workman", and
succinctly re-stated the ratio that "a person to be
workman under ID Act must be employed to do the work of any of the
categories, viz., manual, unskilled, skilled, technical,
operational, clerical or supervisory. It is not enough that he is
not covered by any of the four exceptions to the definition. We
reiterate the said interpretation."
Clearly, no detailed argument is necessary to establish the
proposition that an IT Professional performs a skilled function and
is a workman. Only IT employees employed in supervisory or
managerial roles would be exempt from the application of this Act.
No doubt there are decisions of the Supreme Court which were
decided on the unique facts of the case and have caused some
confusion on the issue, hence the need to re-state the Court's
latest reiteration of the law to dispel any doubt that the IT
Sector enjoys no exemption from the law. Therefore, to avoid
litigation and much acrimony with employees, lay-offs,
retrenchments and terminations of employees must be in compliance
with the requirements of the ID Act.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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On 31 December 2015 the President gave his assent to certain amendments to the Payment of Bonus Act, 1965. The amendments have increased the wage threshold for determining applicability of the Act from INR 10,000 to INR 21,000 per month.
The Payment of Bonus Act, 1965 provides for the payment of statutory bonus to eligible employees. The bonus payable is to be determined on the basis of profits or on the basis of production or productivity of the establishment.
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