1. GRATUITY CANNOT BE PAID IN INSTALLMENTS
Recently, the Kerala High Court, in Sadhoo Beedi Enterprises Represented by its Managing Partner Vinod P.P. Kakkad vs. Controlling Authority under the Payment of Gratuity Act & Anr. reported in 2024 SCC OnLine Ker 7290, held that gratuity payment under the Payment of Gratuity Act, 1972 ("Gratuity Act") is a statutory right ensuring socio-economic security for employees and must be paid in a lump sum within 30 days of becoming payable. The Court held that the law does not provide for payment of gratuity in instalments as the purpose of gratuity is to serve as a retirement or terminal benefit ensuring immediate financial support to the employee or their dependants. It was further held that financial distress of the employer is not an excuse for denying or delaying payment of gratuity, which provides socio-economic security to the employee.
2. 10% INTEREST ON DELAYED GRATUITY PAYMENT
In M/s. Tata Steel Ltd. v. The State of Jharkhand & Ors., reported in W.P. (L) No. 2120 of 2023 the Jharkhand High Court held that once the notification has been issued by the Central Government notifying the rate of interest payable on gratuity in terms of Section 7(3A) of the Gratuity Act, the same is binding on all concerned stakeholders and has the force of law, unless modified by a fresh notification. It was further held that in terms of Section 7(3A) of the Gratuity Act, merely because the Central Government has different rate of interest from time to time with respect to repayment of long-term deposits, the same would not automatically apply to the rate of interest payable in term of Section 7(3A) of the Gratuity Act. This judgment underscores the statutory obligation of timely gratuity payments and upholds the binding nature of Government notifications in ensuring financial protection for employees. Accordingly, if the amount of gratuity is not paid by the employer within the period specified i.e., within 30 days from due date, the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at the rate of 10 per cent.
3. SUPREME COURT MANDATES SHARING OF POSH INQUIRY REPORTS WITH COMPLAINANT
In Ms. X vs. Union of India & Ors., Writ Petition (Criminal) No(s). 284/2020, the Hon'ble Supreme Court of India held that Section 13(1) of the POSH Act mandates employers to provide the inquiry report to all "concerned parties", including the complainant. The Court held that withholding the inquiry report amounted to a violation of procedural requirements under the POSH Act. As a result, the Court imposed a penalty of INR 25,000 on the Border Security Force (BSF) for failing to comply with this requirement. With the growing emphasis on workplace safety, this judgment highlights the need for strict adherence to the provisions of the POSH Act. It's important to note that non-compliance not only leads to penalties but may also result in reputational damage to employers.
4. SUPREME COURT UPHOLDS REGULARIZATION RIGHTS OF LONG-SERVING CONTRACTUAL EMPLOYEES
In the landmark judgement of Jaggo vs. Union of India & Ors., reported in 2024 INSC 1034, the Hon'ble Supreme Court of India held that employees engaged in continuous and substantive roles over long periods, even though labelled as part-time or contractual workers, are entitled to regularization if their work is integral to the organization's functioning. The Supreme Court quashed the appellant's termination orders and directed reinstatement with continuity of service, emphasizing that their service, spanning over decades, was neither sporadic nor casual but essential. It was observed by the Court that the roles of the concerned employees were not only essential but also indistinguishable from those of regular employees. Their sustained contributions over extended periods warranted equitable treatment and regularization of their services. Denial of this benefit, followed by their arbitrary termination would amount to manifest injustice.
5. UNREASONABLE NON-COMPETE CLAUSES ARE UNENFORCEABLE POST-SEPARATION
Recently, in Cigma Events Pvt. Ltd. vs. Deepak Gupta & Ors., C.S. (OS) 1011/2024, the Delhi High Court reaffirmed that unreasonable non-compete clauses are unenforceable post-separation. The Court emphasized that mere possession of client details does not automatically qualify as a trade secret. For information to be classified as confidential or a trade secret, it must possess economic or business value that necessitates protection against competitors. If client information is publicly available or can be easily accessed, it does not meet the criteria for being a trade secret. The Court's ruling underscores that post-employment restrictions must be both reasonable and essential to safeguard genuine confidential or proprietary information.
6. LEAVE ENCASHMENT IS A CONSTITUTIONAL RIGHT
Recently, the Gujarat High Court, in Ahmedabad Municipal Corporation vs. Sadgunbhai Semulbhai Solanki, Special Civil Application No. 12834 of 2018, reaffirmed that leave encashment is akin to salary and thus, qualifies as a property and depriving a person of his property without a valid statutory provision constitutes a violation of the Constitution of India. If an employee has earned leave and chosen to accumulate it, then encashment becomes his right and it cannot be taken away without proper legal authority.
7. ANY INAPPROPRIATE OR UNWELCOME BEHAVIOUR AFFECTING WOMEN IS "SEXUAL HARASSMENT" REGARDLESS OF INTENT
Recently, the Madras High Court, in HCL Technologies Ltd. v. X, Writ Petition No. 5643 of 2020, emphasised that under the POSH Act, the act of sexual harassment itself is given significance and not the intention behind the same. The Court observed that "It is the fundamental discipline and understanding with which the employees of different gender are expected to interact with each other where decency is the yardstick and nothing else. While speaking about the decency it is not the decency which the respondent thinks within himself, but how he makes the other gender to feel about his actions."
8. SUPREME COURT RESERVES JUDGEMENT IN WRIT PETITION CHALLENGING THE CONSTITUTIONALITY OF SECTION 5(4) OF THE MATERNITY BENEFIT ACT, 1961
The Supreme Court of India has reserved its judgment in Hamsaanandini Nanduri v. Union of India (W.P.(C) No. 960/2021), wherein the constitutional validity of Section 5(4) of the Maternity Benefit Act, 1961 ("MB Act") has been challenged. Section 5(4) of the MB Act grants maternity benefits to adoptive mothers only if the adopted child is below 3 months of age.
The Petitioner's counsel argued that the provision arbitrarily denies maternity benefits to adoptive mothers of children older than 3 months, despite the adoption framework being governed by the Juvenile Justice (Care and Protection of Children) Act, 2015, where a child is legally defined as anyone below 18 years of age.
The Hon'ble Court questioned the rationale for drawing the eligibility line at 3 months and whether there was any logical nexus between this restriction and the legislative objective. On behalf of the Union of India, it was contended that biological mothers receive longer maternity leave for post-delivery recovery, however, the Court clarified that the issue at hand was not the duration of leave but rather the exclusion of adoptive mothers based solely on the child's age.
The Hon'ble Court also highlighted a hypothetical scenario where a couple adopts a child older than 3 months (i.e. 3 years, 3 months and 15 days old) and questioned how the mother is expected to care for the child without maternity leave. Notably, the Court hinted that they do not find any rationale behind the same; however, the judgment will provide clarity on the Court's position.
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