The Legal Update (Labour & Employment) – November 2024 outlines latest judicial decision of various High Courts under Labour law/s.
Summary
1. In Vijay Singh Jakhar Vs. Haryana Employees State Insurance Corporation and others the Punjab and Haryana High Court held principal of school will not fall under the ambit of the definition ‘principal employer’ as defined u/s 2(17) the ESI Act.
2. In Shri Sharad S/o Madhavrao Mohitkar V. The Chief General Manager, Bharat Sanchar Nigam Limited the Bombay High Court (Nagpur Bench) held reinstatement of a worker who is terminated in contravention of Sec 25F of the ID Act is not automatic.
3. In Swarup Parkash and Others V. Presiding officer, labour industrial tribunal, Chandigarh and others the Punjab and Haryana High Court held payment of differential wages does not make a contractual workman as worker of the principal employer.
4. In Union Bank of India V. the Presiding Officer and others the Madras High Court held pensionary regulations of the bank have statutory force and binding on the bank as well as on the employees.
5. In Ajeet Vikram Bahadur Singh V. State of Maharashtra, the Bombay High Court held police do not have jurisdiction to file FIR when criminal proceedings are initiated u/s 92 of the Factories Act by Inspector of Factories.
6. In Syndicate Bank, Hyderabad. V. the Regl.P.F. Commissioner, Hyderabad & 2 ors. The Telangana High Court held that Provident fund contributions have priority over other debts.
7. In Tamil Nadu Grama Bank V. the Regional Provident Fund Commissioner II the Madras High Court held that employer is liable extend the provident fund benefits to the persons who fall under the definition of ‘employee’ as envisaged u/s 2(f) the EPF Act.
The Employees’ State Insurance Act, 1948 (“ESI Act”)
1. The principal of a school shall not be ‘Principal Employer’ as contemplated u/s 2(17) of the ESI Act: The Punjab & Haryana High Court.
In Vijay Singh Jakhar Vs. Haryana Employees State Insurance Corporation and others [CRM-M- 1189 of 2017; dt. November 6, 2024] the Punjab & Haryana High Court examined “whether principal of Jaat Senior Secondary School, is to be considered as principal employer of the said school as per section 2(17) of the ESI Act”.
Brief Facts:
The Employees State Insurance Corporation (in short “ESIC”) filed a criminal complaint against the petitioner, principal of M/s Jaat Senior Secondary School, for non-remitting of contribution for the period 04/2011 to 03/2013 making him as principal employer’ as contemplated u/s 2(17) of the ESI Act. Petitioner invoked the writ jurisdiction to quash the criminal proceedings.
The contention of the petitioner is he was working as principal of Jaat Senior Secondary School, Hisar which was owned and managed by the second respondent, Jaat Educational Society. The petitioner was an employee of the school and getting monthly salary and thus, cannot be termed as principal employer. He further argued, only the management of the school was liable to pay the contribution. There is nothing on the record to establish that the petitioner being principal of the school having control over the affairs of the school or was responsible to the conduct of the business of the school.
Decision:
The Punjab & Haryana High court relying on the decision of the Hon’ble Supreme Court in Employees State Insurance Corporation V. Gurdial Singh and others[1], and in Employee State Insurance Corporation V. S.K. Aggarwal and others[2] held that principal of the school shall not fall under the definition of ‘principal employer’ and not personally liable to pay the contribution under the ESI Act. Criminal proceedings against the principal quashed by the High Court.
The Industrial Disputes Act, 1947 (“ID Act”)
2. Reinstatement is not automatic when termination order is passed in violation of section 25F of Industrial Disputes Act: The Bombay High Court (Nagpur Bench)
Brief facts:
Facts of this case are the petitioner worked as a casual labour and his services were terminated verbally without complying with Sec 25F of the ID Act. Post termination of services, petitioner was employed as a labour with the respondent doing similar nature of work. Petitioner raised an industrial dispute seeking reinstatement with back wages and the dispute was referred to Central Government Industrial Tribunal (“CGIT”). CGIT relying on pleadings and on evidence produced found that the petitioner has worked for more than 240 working days during preceding 12 months from the date of termination and held respondent had not complied with the provisions of Sec 25F of the ID Act and termination as illegal. Relying on the decisions of the Supreme Court in Incharge Officer and another Vs. Shanker Shetty[3] and Jagbir Singh Vs.Haryana State Agriculture Marketing Board and another[4], the CGIT awarded a monetary compensation of Rs. 30,000. Aggrieved, petitioner filed the present writ petition.
Decision:
The Bombay High Court held that in case of illegal termination reinstatement is not automatic. In the instant case after termination of employment petitioner has been working as a labour with the respondent, i.e in gainful employment, hence, is not entitled to reinstatement and confirmed the order passed by the CGIT.
3. Differential payment of wages under Minimum Wages Act, 1948 (“Minimum Wages Act”) does not make the workmen direct worker of Principal employer: The Punjab and Haryana HC
The petitioner filed the present Writ Petition challenging the adverse award passed by the Labour Court.
Brief facts:
Petitioner was serving the second respondent, Govt. Medical college, through various contractors and challenged the termination of services. However, the petitioner has not shown any appointment letter or termination letter issued by the respondent. The Labour Court held that petitioner was engaged through contractors during the relevant time and answered the reference in favour of the respondent, college management. Apart from the termination of services workmen raised a dispute for non-payment of minimum wages under the Minimum Wages Act. The Division bench of the High Court directed the respondent to pay differential amount of wage to the workers. Petitioner, prompted by the order of the High Court made another reference before the Labour Court wherein it held that payment of differential wages under the Minimum Wages Act does not make workman as a worker of principal employer and dismissed the plea on the ground of res judicata, The petitioner contended that principle of res judicata was inapplicable as fresh cause of action arose on account of payment of differential wages by the respondent and by making such payment by the respondent it confirmed that workman was actually appointed by respondent.
Decision:
The Punjab and Haryana High Court, on perusal of the various provisions of the Contract Labour (Regulation & Abolition) Act, 1970, held that mere payment under the said Act by the respondent Management does not make the workman as worker of the Management. The Court further held, in view of principle of res judicata as contemplated by Section 11 of C.P.C., the second reference is not maintainable.
4. Voluntary retirement of the employees is deemed to be accepted in absence of specific communication rejecting the application made by the employee: Madras High Court.
Brief Facts:
The present petition was filed challenging the order passed by the single judge bench which upheld the award passed by the Central Government Industrial Tribunal cum Labour Court (in short “Tribunal”).
The second respondent, employee, joined the services of the petitioner in the year 1961 and was unauthorisedly absent from November 21, 1995 onwards citing health reasons. Subsequently, the second respondent submitted an application of voluntary retirement on November 28, 1995. The petitioner has not accepted the application and directed the employee to report to the work. However, the petitioner has not communicated the rejection of the voluntary retirement application to the second respondent. The contention of the petitioner is the employee had abandoned the service and remained incommunicado. Hence, they had not made any formal communication. The employee raised an industrial dispute which was referred to the first respondent, Tribunal. The contention of the second respondent is, as per the Pension Regulations of the bank, the petitioner is obligated to inform the applicant about the refusal to grant voluntary retirement before expiry of three months, in absence of such intimation, there is a deemed approval. The Tribunal held that employee is deemed to have retired after three months from the date of receipt of application and entitled to retiral benefits. Aggrieved, petitioner approached the single judge bench and finally division bench of the High Court.
Decision:
On perusal of Pension regulations of the Bank the Madras High Court held that the second respondent had completed 20 years of service with the petitioner and eligible to opt for the voluntary retirement. Pension Regulation 29(2) mandates the bank to send written communication to the employee in case of rejection of the application of voluntary retirement which had not been complied by the petitioner. It is held that regulations have statutory force and binding on the bank as well as on the employees. In case of non-communication, voluntary retirement is deemed to be approved. The High Court upheld the decision of the single judge bench.
The Factories Act, 1948 (“Factories Act”)
5. Once a person prosecuted and convicted under the special statute, cannot be tried again for the same offence under the IPC.
Petitioner invoked Writ jurisdiction to quash FIR in the instant case.
Brief Facts:
The second respondent was working as a helper in the Pidilite Company which is engaged in the manufacture of adhesive PVC tapes. There was a short blaze of fire thrown from the machine on which the respondent was working resulting in burns on his face and hands and got hospitalised. On a complaint raised by the respondent FIR was registered against the petitioner, manager of the unit. The Director of Industrial Safety and Health and the Inspector of factories also filed two separate criminal complaints under Section 92 of the Factories Act before the Court of the Chief Judicial Magistrate (“CJM”), Satara regarding the same incident. The petitioner pleaded guilty in the said complaint, pursuant to which the CJM, Satara by its order dated February 14, 2019 convicted him under Section 92 of the Factories Act and sentenced him to pay Rs.30,000/-, out of which Rs.12,500/- was directed to be paid to injured victim. Accordingly, the petitioner has deposited the fine amount. The CJM has specifically recorded that the second respondent has recovered from his injuries and resumed duties thereafter.
Decision:
On examination of the provisions of the Factories Act, the Bombay High Court held that once criminal complaint has been lodged by the Factory Inspector, the police lose their jurisdiction to investigate the same matter and to file a separate chargesheet arising out of the same incident. The Bombay High Court quashed and set aside the FIR against the petitioner.
The EPF & MP Act, 1952 (“EPF Act”)
6. Provident Fund payment have priority over other payments.
The present Writ Petition was filed against the order passed by the Debt Recovery Appellate Tribunal, Kolkota.
Brief Facts:
Petitioner, bank has extended the financial assistance to M/s Water Development Society (“Establishment”), which was failed to repay the loan to petitioner. Petitioner has moved to Debt Recovery Tribunal, Hyderabad (“Tribunal”), which allowed the petitioner to recover the loan amount. Petitioner sold the property of the Establishment. Meanwhile the respondent, provident fund commissioner, filed a claim petition seeking recovery of contributions and interest which was defaulted by the Establishment. Recovery officer dismissed the claim petition against which the respondent preferred an appeal before the Tribunal, The Tribunal held section 11(2) of the EPF Act creates a right in favour of the respondent and petitioner cannot claim priority in respect of their debt and was directed to pay the amount defaulted by the Establishment along with the interest of 16% compounded annually. Aggrieved petitioner challenged the order of the Tribunal in the Debt Recover Appellate Tribunal, Kolkata which modified the order of the Tribunal by reducing the interest payable to 12% instead of 16%.
Decision:
The Telangana High Court relying on the decision of the Supreme Court in Maharashtra State Cooperative Bank V. Assistant Provident Fund Commissioner[5] held that sec 11 of the EPF Act contains a Non-Obstante clause and lays down that if any amount is due from the employer whether in respect of the employees’ contribution or the employer’s contribution, the same shall be deemed to be the first charge on the assets of the establishment and shall be paid in priority over all other debts. However, it further held, respondent is not entitled to penalty u/s 14B or interest, accordingly the High Court modified the order of the Appellate Tribunal.
7. EPF Act would be applicable to the persons who are not covered under the contributory scheme of the bank.: the Madras High Court.
Brief Facts:
Present Writ Petition was filed challenging the assessment order of the respondent, directing the petitioner to remit provident fund contribution in respect of certain class of employees. The question for consideration before the Madras High Court is “whether 625 persons of the bank who are not covered under the contributory provident scheme of the bank entitled to coverage under the EPF Act, as they fall under the definition of ‘employee’ as envisaged under the Act”.
The contention of the appellant is that by virtue of sec 16(1)(c) EPF Act any establishment set up under any Central, Provincial or State Act and whose employees are entitled to the benefits of contributory provident fund or old age pension in accordance with any scheme or rule framed under that Act governing such benefits, would not be covered under the EPF Act. It is further submitted by the appellant that the employees of the petitioner’s bank are covered under the Regional Rural Banks Act, 1976. The petitioner framed their own regulation in respect of the provident fund and hence, they will not come under the purview of the EPF Act.
Respondent relying on the decision of the Supreme Court in Pawan Hans Ltd. Vs. Aviation Karmachari Sanghatana reported[6] contended that those employees who are not covered under the contributory provident fund scheme of the appellant are required to be covered under the EPF Act.
Decision:
The Madras High Court held first respondent, appropriate authority, has rightly applied provision of the EPF Act to the petitioner bank and held 625 employees of the petitioner Bank who are not covered under the scheme of the bank cannot be treated as exempted category under the Act and hence, the bank is liable to pay the EPF contribution dues determined in respect of these employees.
[1] AIR 1991 SC 1741
[2] 1998 (6) SCC 288
[3] [2010 (8) Scale 583]
[4] [(2009) 15 SCC 327]
[5] 2009 (10) SCC 123
[6] (2020) 13 SCC 506
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