We welcome you to the 1st Edition of Volume 2 of IndusLaw's Employment Corner Bulletin. We have attempted to cover key statutory and judicial updates for the period between of December 2021 and February 2022 that are significant for employers, employees, and HR entities in India. We also bring to you the significant HR practices that have recently caught the attention of the HR community and are being widely debated and implemented by several organizations in India.
1. LEGAL UPDATES
A. STATUTORY UPDATES
1. Key developments under the Haryana State Employment of Local Candidates Act, 2020 and the Haryana State Employment of Local Candidates Rules, 2021
The Haryana State Employment of Local Candidates Act, 2020 ("HLC Act") applies to all private companies, societies, partnership firms, trusts, and any person employing 10 or more persons in Haryana. The HLC Act requires such private-sector employers to reserve 75% of job posts that offer a salary of less than INR 30,000 for individuals who are domiciled in Haryana. In the last 3 months, there have been significant developments under the HLC Act.
(i) Haryana State Employment of Local Candidates Rules, 2021
The Government of Haryana vide a notification dated January 10, 2022, has notified the Haryana State Employment of Local Candidates Rules, 2021 and it has been brought into effect from January 15, 2022.
(ii) Exemptions granted under the HLC Act
The Government of Haryana vide a notification dated January 17, 2022, has exempted the following categories of employers from the HLC Act: (a) vacancies in start-ups and ITeS sector that have been established or have begun operation within 2 years from the commencement of the HLC Act. This exemption is for 2 years from the date of commencement of work; (b) short term employment of less than 45 days; (c) vacancies under employers who primarily engage in agricultural activities; (d) vacancies under employers for domestic work or services in residential homes; (e) vacancies which are being filled through promotion, transfer or absorption of surplus staff of any unit of the same employer in Haryana; and (f) any class, post, skill and category of employment where the local candidates of desired skill, qualification or proficiency required for such employment are not available.
(iii) Dispute concerning the HLC Act
In the case of Faridabad Industries Association v. State of Haryana & Anr, the constitutional validity of the HLC Act was challenged before the Punjab and Haryana High Court on grounds that the HLC Act is violative of the Indian Constitution. The High Court, vide an order dated February 3, 2022, had granted an interim stay on the implementation of the HLC Act and observed that it should be evaluated whether any State can restrict employment, especially in the private sector, on the basis of domicile ("HC Order"). Subsequently, the Government of Haryana had approached the Supreme Court of India against the said order.
The Supreme Court, on February 17, 2022, set aside the HC Order owing to insufficient reasoning. The Supreme Court did not decide on the merits of this matter and directed the High Court to hear the matter in entirety and issue an appropriate ruling within 4 weeks. The Apex Court also directed that no coercive actions can be taken against the employers due to non-compliance with the HLC Act. We have discussed this in further detail in our article "Supreme Court Allows Law Enforcing 75% Reservation In Haryana", which can be accessed here. Recently, the Haryana High Court has again directed the Haryana Government to file its responses to several pleas challenging the HLC Act. The Government is yet to submit its responses.
2. Jharkhand State Employment of Local Candidates in Private Sector Act, 2021
The Government of Jharkhand vide a notification dated December 24, 2021, has published the Jharkhand State Employment of Local Candidates in Private Sector Act, 2021 ("Jharkhand Local Candidates Act"). The Jharkhand Local Candidates Act is applicable to all shops, establishments, mines, enterprises, industries, companies, societies, partnership firms, trusts, and limited liability partnership firms in Jharkhand, in the private sector, employing 10 or more persons. The Jharkhand Local Candidates Act requires private sector employers to reserve 75% of job posts that offer a salary of not more than INR 40,000 for individuals who are domiciled in Jharkhand. The Jharkhand Local Candidates Act has not been brought into force yet.
3. Petrol, diesel & LPG dispensing pumps/stations in Tamil Nadu will qualify as factories
The Government of Tamil Nadu, vide a notification dated January 28, 2022, has expanded the definition of "factory" to include petrol, diesel, and LPG dispensing pumps/stations under the Factories Act, 1948, and consequently, such entities will now be required to comply with the provisions of the Factories Act, 1948.
4. Contract Labour (Regulation and Abolition) Act, 1970 ("CLRA") in Himachal Pradesh
The Government of Himachal Pradesh, vide a notification dated February 07, 2022, has amended the applicability of the CLRA for establishments situated in Himachal Pradesh. As per the amendment, the CLRA will now be applicable to establishments with 30 or more workmen (the existing threshold is 20 workmen).
B. THE LABOUR CODES: STORY SO FAR
It has been widely reported by media organizations that the Ministry of Labour and Employment is considering introducing the Labour Codes in a phased manner, beginning with the implementation of the 2 least controversial Labour Codes - the Code on Social Security, 2020 ("Social Security Code") and the Occupational, Safety, Health and Working Conditions Code, 2020 ("OSHW Code"). However, there is no official notification to this effect yet. The Ministry is also holding discussions with various HR Heads and trade unions across sectors regarding the Code on Wages, 2019 ("Wage Code") to resolve the issues concerning it. The intention is to resolve all issues through corresponding rules without altering the current structure of the Wage (as defined under the Wage Code).
While such discussions are on-going, on February 4, 2022, a Private Member Bill has been introduced in the Rajya Sabha (upper house of the Indian parliament) to repeal all 4 Labour Codes. There has been no development on this front.
Further, with respect to the State specific rules under the Labour Codes, it is likely that the Central Government would require the State Governments to fast- track the process of enacting and finalising such corresponding rules. Please find below the list of developments that have taken place with respect to the enactment of the State specific rules.
| Sl. No. | States/UT | Draft Rules/Rules | Current Status |
| 1. | Kerala |
Kerala Code on Wages Rules, 2021 under the Wage Code (published on December 15, 2021) Kerala Occupational Safety, Health, and Working Conditions Rules, 2021 under the OSHW Code (published on December 17, 2021) Kerala Social Security Rules, 2021 under the Social Security Code (published on December 16, 2021) Kerala Industrial Relations Rules, 2021 under the Industrial Relations Code, 2020 ("IR Code") (published on December 30, 2021) |
Draft Stage The Government has invited suggestions /objections from all stakeholders within a period of 45 days, post which the draft rules shall be finalised. |
| 2. | Maharashtra | Maharashtra Industrial Relations Rules, 2021 under the IR Code (published on December 3, 2021) | |
| 3. | Gujarat | Gujarat Occupational Safety, Health, and Working Conditions Rules, 2021 under the OSHW Code (published on December 30, 2021) | |
| 4. | Telangana | Occupational Safety, Health and Working
Conditions (Telangana) Rules, 2022 under the OSHW Code
(published on January 28, 2022)
Code on Social Security (Telangana) Rules, 2022 under the Social Security Code (published on January 28, 2022) |
|
| 5. | Puducherry | Puducherry Industrial Relations Recognition of Negotiating Union or Negotiating Council and Adjudication of Disputes of Trade Union Rules, 2021 under the IR Code (published on February 02,2022). |
C. Judicial Developments
| SUPREME COURT OF INDIA | ||
| Sl. No. | Ratio of the Case | Brief Particulars |
| 1. |
A policy cannot discriminate on the ground of descent (February 24, 2022) Mukesh Kumar and Ors. v. The Union of India and Ors1 |
It was held that a policy for compassionate appointment must not discriminate on grounds of descent by classifying children of the deceased employee as legitimate or illegitimate and recognizing only the rights of the legitimate descent. |
| 2. |
Initiation of disciplinary proceedings against a person with mental disabilities is a facet of indirect discrimination (December 17, 2021) Ravinder Kumar Dhariwal and Anr. v. Union of India and Ors.2 |
It was determined that initiation of disciplinary proceedings against an employee (who was classified as having 40-70% permanent mental disability) for an alleged misconduct was a direct result of his mental disability and that the disciplinary action initiated against the employee is a facet of indirect discrimination on the part of the employer. |
| 3. |
A transient business visit without any written agreement will not qualify as deputation (January 12, 2022) Ms. Sarita Singh v. M/s Shree Infosoft Private Limited3 |
It was observed that a deputation cannot merely be the transfer of an employee outside her/his original post but must also involve a tripartite consensual agreement between the lending employer, the borrowing employer, and the employee. A transient business visit without any written agreement detailing the terms of deputation would not qualify as a deputation unless cogent evidence to the contrary is presented. |
| 4. |
Default or delay in payment of EPF contribution attracts damages (February 23, 2022) Horticulture Experiment Station Gonikoppal, Coorg vs. The Regional Provident Fund Organization4 |
It was held that any default or delay in the payment of EPF contribution by the employer under the Employees Provident Fund & Miscellaneous Provisions Act, 1952 ("EPF Act") is an essential condition for imposition of levy of damages under Section 14B of the EPF Act. |
| 5. |
Employee can be dismissed based on the findings of disciplinary proceedings if acquitted in a criminal trial (January 3, 2022) Maharashtra State Road Transport Corporation v. Dilip Uttam Jayabhay5 |
It was held that an acquittal in a criminal trial held in a court of law has no bearing on disciplinary proceedings initiated by the employer. The Court further observed that due to the different standards of proof in a disciplinary proceeding and a criminal trial, the acquittal in a criminal trial shall not affect the internal disciplinary proceedings and its outcome. |
| HIGH COURTS | ||
| 6. |
Employer directed to pay compensation for the death of an employee caused by stress (January 17, 2022) Harvinder Kaur Vishakha Singh and Ors. v. Tarvinder Singh K. Singh and Ors.6 |
It was observed that the stress and strain caused to an employee during his employment had led to the employee's demise and stated that the employee's death due to a cardiac arrest can be termed as an accident arising out of and in the course of employment. The Court directed the employer to pay compensation to the widow of the deceased employee under the Employee Compensation Act, 1923. |
| 7. |
Employees should not be denied benefits under the Maternity Benefit Act, 1961 on technical grounds (December 7, 2021) Asia Pacific Institute of Management v. Joint Labour Commissioner7 |
It was observed that the Maternity Benefit Act, 1961 ("MB Act") is a beneficial legislation and that the provisions of the MB Act should be given effect to in letter and spirit and technical issues must not come in the way of ensuring such benefits as provided under the MB Act to pregnant women. |
| 8. |
Employees can be asked to undertake RT-PCR test at their own cost (December 21, 2021) Deepak Kumar Radheshyam Khurana and Ors. v. Mumbai Port Trust and Anr.8 |
It was determined that an employer can require its employees to undertake the RT-PCR test at their own cost in cases where the employees have not got themselves vaccinated against COVID-19. |
D. JUDICIAL UPDATES UNDER THE POSH ACT
| Sl. No. | Ratio of the Case | Brief Particulars |
| 1. |
Right to work in a peaceful atmosphere is a basic right and administrative lapses in handling sexual harassment complaints cannot be entertained Sushma Alaguvadival v. Union of India and Ors.9 |
It was held that the right to work is a basic right of an employee, and it is the duty of the employer to ensure a sense of security at the workplace for its employees. The Court further stated that the failure to institute an effective method of redressal of sexual harassment complaints at the workplace such as constituting a sexual harassment committee, inquiring and proceeding further with respect to such complaints is a failure on part of the employer in complying with the provisions of the POSH Act. |
| 2. |
Application of POSH Act extended to female school students Pawan Kumar Niroula v. Union of India and Ors.10 |
The application of the POSH Act has been extended to female students in a school who had alleged sexual harassment against a teacher. The definition of "aggrieved woman" under the POSH Act was interpreted to mean a woman of any age who may or may not be employed, but who alleges sexual harassment. It was held that since the teacher was an employee and under the ambit of the POSH Act, the allegation of sexual harassment by 67 female students would fall under the purview of the POSH Act. |
2. WHAT'S TRENDING11?
A. Employers are introducing mental health mentors at workplace to combat burnout
Many organizations are implementing employee assistance program to assist their employees to deal with work stress and burnout. Through these programs, employers are offering their employees access to mental health therapists, psychiatrists, and group/peer counselling sessions. Proctor and Gamble India has recently set up an internal "task force of certified mental health first aiders" who will identify early signs of burn-out and mental exhaustion amongst the employees and guide them to get appropriate professional help.
B. Vahura has launched a program to mentor women in the legal industry
Vahura, a legal talent management organization, has introduced "ReLawnch", a programme to help women legal professionals to re-enter the workplace. The program offers consultations and mentorship to women to help them overcome their professional hurdles after career breaks and re-enter the professional space. Such programs are increasingly becoming common in overseas markets.
C. Employers are implementing inclusive policies to support transgender employees
In a progressive move, Uber India has announced that its employee health insurance shall now cover the cost of gender reaffirming surgery for its full-time employees. Gender reaffirming surgery includes various procedures that help people transition to their self-identified gender. Recently, Fashnear Technologies Private Limited (Meesho) had also rolled out a Gender Confirmation Leave Policy that provides employees underdoing gender reaffirming surgery, paid leaves of up to 1 month.
D. Axis Bank invites applications from homemakers
Axis Bank has commenced a hiring program called "HouseWorkisWork" to hire homemakers (irrespective of the gender) with requisite qualifications and job skills, coming out of a career break or without prior experience. Axis bank has reserved 15 such positions in its human resources department for the said role.
E. Companies are extending greater and gender-neutral childcare benefits to the workforce
In order to improve the work-life balance of employees, several companies are now offering greater and flexible childcare benefits to its employees. Such benefits are being provided in the form of extended leaves, flexible work hours and remote working options. Recently, BYJU's announced its 'Childcare Policy' for its employees under which employees with children up to 12 years of age are entitled to additional 7 days of leaves. The childcare leaves can be availed on multiple instances and can also be divided into half-day leaves. Further, BYJU's maternity leave policy allows employees to avail an additional 13 weeks of unpaid leave in addition to statutory limits and for fathers, the number of paternity leaves has been increased from 7 to 15 days.
Several organizations are also organizing virtual childcare camps and engaging virtual nannies for their employees' children wherein virtual interactive sessions such as story-telling sessions, knowledge-sharing, art, and craft sessions are being conducted for such children.
Footnotes
1. Civil Appeal No. 1620/2022 (Arising out of SLP (C) No. 18571/2018).
2. Civil Appeal No. 6924 of 2021.
3. Civil Appeal No. 346 of 2022
4. Civil Appeal Nos. 2136, 2121, 2135 and 2141 of 2012
5. Civil Appeal No.7403 of 2021
6. First Appeal No. 1476 of 2007
7. Writ Petition (Civil) No. 13923 of 2021 and CM Appl. 43967/2021
8. Writ Petition (L) No. 17132 of 2021
9. Writ Petition (Civil) Nos. 6995 of 2014, 27067, 27068 of 2013, M.P. Nos. 2 of 2014, 1 and 2 of 2013
10. Writ Petition CT 86 of 2021
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