Labour Law Alert – August 2021

Labour Law Alert – August 2021

Labour Law Alert – August 2021

The Labour Law Alert is our monthly publication that shares latest government notifications and cases related to Employment and Labour Laws in India. Our employment law experts curate this compilation.


Creation of ‘Empowered Group’ for HealthCare Personnel
Centre has created an ‘Empowered Group’ to address challenges of Covid-19 in the Healthcare Department

The Government of India vide its notification dated July 26, 2021 has decided to establish an Empowered Group (“Group”) on Augmenting Human Resources and Capacity Building for different categories of people employed as healthcare personnel and any available resources in a dynamic manner. The Group will be convened by Shri Apurva Chandra, the Secretary of Labour and Employment. Through this dedicated portal, the National Career Service (“NCS”) portal, which has been established under the Ministry of Labour and Employment, will be accessible to the public.The private employment health care data will be shared with the NCS Portal ( through API Integration for job seekers. The said order will remain in force till December 31, 2021. 


Covid-19 Relief Scheme for ESIC
Employees' State Insurance Corporation – Covid-19 Relief Scheme
The Employees’ State Insurance Corporation (‘”ESIC”’) has notified the ‘ESIC COVID-19 RELIEF SCHEME’ (‘”Scheme”’) for the welfare of the Insured Persons (“IP”) who are eligible employees under section 2(9) of the Employees’ State Insurance Act (“ESI Act”). As a part of this scheme, dependents of IP who died from Covid-19 after three months from the date of registration and have been employed for a minimum of seventy (70) days before diagnosis will be provided with periodic payments. For dependants of IP, the minimum relief under this scheme will be INR 1800/- per month. The scheme will be effective for two (2) years starting from March 24, 2020. 


Limited Working Hours for all Establishments

Government of Karnataka Limits Working Hours for all Establishments
The Government of Karnataka vide notification dated, July 20 2021, has modified a previously published notification in Karnataka Gazette dated, February 2 2021. The amendment has been made to the working hours of employees in any establishment of Karnataka. Every week, forty-eight hours of working are allowed. Therefore, each day is limited to nine hours of work. The total hours of work cannot exceed ten hours if overtime is included except on days of stock-taking and preparation of accounts. However, the total number of overtime hours will not exceed fifty hours in a period of three continuous months. 


Code on Wages (Jharkhand) Rules, 2021
The Government of Jharkhand Introduces Code on Wages (Jharkhand) Rules, 2021
The Government of Jharkhand (“Government”) has introduced the Code on Wages (Jharkhand) Rules, 2021 (“Rules” There are nine chapters that further break down into 56  Rules. It contains important provisions for the standard working-class regarding their expenditures, number of working hours, bonuses, and wage period. Based on the floor wages determined by the Central Government, the Government will set the minimum wage under the Rules. Other states, such as Rajasthan and Himachal Pradesh, have also introduced Rules on the Wage Code 2019.

Latest Cases

1.    ‘Closure’ Considered Valid once Compensation Accepted by Employee

Bombay High Court Sets Aside order of Labour Court in a matter of Reinstatement of Employees1 
In the present case the High Court of Bombay (“Court”) set aside an award given by the Labour Court on the reinstatement of employees, represented by the Pune Labour Union (“Respondent”) considering a writ petition filed by the Appellant. The employees of Meltron Engineering Industries (“Appellant”) had claimed reinstatement with a demand for continuity of services after the closure of the factory owned by Appellant. After the closure, the employees were reinstated and their dues were accepted. The Labour Court had stated that they considered a violation of section 25H of the Industrial Disputes Act, 1947 (”Act”) since, after the restart of the factory the employees were not given the opportunity of re-employment. In addition, the former employees were granted back wages with an opportunity to continue employment and closure was declared non-bonafide. The Court elaborated that the Labour Court itself had erred by conflating the matter of closure with that of retrenchment in invoking Section 25H of the Act. If the Labour Court had considered the act of the Appellant as closure, they cannot give a decision invoking section 25H of the Act and if section 25H of the Act was invoked they cannot possibly have conducted an act of closure. The Court gave the following clarifications: 

  • The closure was duly affected and the closure compensation was also granted. This compensation was accepted by the Respondent
  • The Company was reinstated; however the employees were not entitled to employment on the part of Appellant

2.    ‘Daily Wage Employees’ only Subjected to Compensation not Reinstatement 

The Supreme Court refuses reinstatement of employee under Section 25F of the Industrial Disputes Act, 19472 
The Supreme Court (“Court”) held that Panchamlal Yadav (“Respondent”) would not be reinstated with Madhya Bharat Gramin Bank (“Appellant”) as it would violate Section 25F of The Industrial Disputes Act (“Act”). The issue arose when the Respondent was terminated by the Appellant and he filed for an Industrial Dispute. The main question faced by the Central Government Industrial Tribunal (“CGIT”) was whether the Respondent a regular worker i.e. had he worked for over two hundred forty (240) days continuously and eventually subject to reinstatement of section 25F of the Act. As the Respondent failed to prove that he had worked for five (5) years at the Appellant’s bank, the CGIT stated that the respondent was not a regular employee and was on daily wages therefore, reinstatement could not be granted.

The Respondent filed a writ petition before the High Court of Madhya Pradesh, wherein the Appellant had failed to prove that the Respondent was on daily wages due to lack to proper records. The failure of proving the same on part of Appellant resulted reinstatement of the Respondent with full back wages by the High Court.

The issue that if section 25F of the Act automatically cause a reinstatement of full back wages in the Court. The Court allowed the appeal and clarified that Respondent was a daily wage employee and thus was only subject to compensation in this regard, however reinstatement with back wages were not necessarily entitled under the said section. 

3.    Employee Provident Fund Authority Fails to Charge Recovery Amount

High Court of Madhya Pradesh settles a dispute against Employee Provident Fund Authority3  
The case is filed by M/S. Model School Shivhare Petrol Pump (“Petitioner”) in the High Court of Madhya Pradesh (“Court”) against the Assistant Provident Fund Commissioner (“Respondent”). The Petitioner has contended that the Employee Provident Fund Authority (“EPF”) had determined the amount based on a complaint, without any prior notice. They further had conducted a raid and seized all the documents and records of the petitioner.  

The EPF Authority passed an ex-parte impugned order which directed the Petitioner to pay an amount of Rs 12, 31,400/- within a period of 15 days. The Petitioner filed an appeal in the Court against the impugned order along with an application for temporary injunction and waiver of the condition of pre-deposit of 75% of the assessed amount for admission of appeal. Due to irregular hearing during the pandemic, the Respondent had already deducted and recovered an amount of Rs.4,52,000/- from the personal bank accounts of the Petitioner and further directed to freeze the remaining bank accounts. The petitioner was ready to deposit 50% of the impugned order within seven (7) days due to which the court found it appropriate to grant interim relief to the petitioner. As an amount of Rs 4,52,000/- has already been recovered from the petitioner and if the petitioner deposits the total of  50% of the impugned amount, there will be no further recovery from the petitioner until the next hearing date. An expeditious resolution of the pending issues was requested from the appellate authority.  

4.    Dismissal of Employee without Proper Enquiry is ‘Illegal’

Calcutta High Court grants Reinstatement against the Petition of Webfil Ltd.4 
An Industrial dispute was raised by Webfil Ltd. (“Petitioner”) in the High Court of Calcutta (“Court”) against Dipesh Kumar Bagchi (“Respondent”). The Petitioner’s management had terminated the Respondent’s employment by invoking clause in his appointment letter giving him a month’s notice, without a proper enquiry and had refused to pay him any back wages. The Industrial Tribunal held that such a termination is illegal and passed the award in favour of the Respondent and held that the termination of the employee was not justified and is entitled to get reliefs as prayed. The Petitioner filed a writ petition with the Court and raised three objections:

  • The Tribunal did not have the jurisdiction to pass the award: 
  • The workman was not an employee and was not covered under the Industrial Disputes Act, 1947 (“Act”)
  • The employee was employed elsewhere after termination and therefore he was not entitled to back wages.

With regard to the issue raised on the jurisdiction of the Tribunal under Section 2A (2) of the Act the Court clarified that there was no specified Tribunal or Labour Court for adjudication of such application. Accordingly, the Respondent cannot be blamed for filing the application in the 8th Tribunal. And the Petitioner also never took any steps to transfer the matter to the 4th Tribunal. Thus the first objection was rendered baseless by the Court. The Petitioner could not establish the second objection with regard to the Respondent not satisfying the conditions for being held as a workman under Section 2(s) of the Act. Hence, the Court came to the conclusion that the petitioner falls within the definition of workman. The Court stated that the dismissal of an employee from service without holding a proper enquiry is illegal and arbitrary. The non-conductance of enquiry and proving any guilt against the delinquent employee is not accepted by law and is arbitrary. This action shows the true High handedness of the management of the company. Such a termination was considered illegal and entitles to the Respondent to reinstatement with back wages as well as continuity of service. The Petitioner was directed to pay the full back wages to the Respondent and the writ petition was dismissed.

5.    Illegal Retrenchment Levies Heavy Charges on Employer

High Court of Madras Upholds the Decision of Labour Court against Sri Ganapathy Mills Co. Ltd5  

An Industrial dispute was raised by the management of Sri Ganapathy Mills Co.Ltd. (“Petitioner”) in the Labour Court (“Court”) against the workmen (“Respondents”). Due to continuous and unprecedented recession, the Petitioner’s company suffered huge cash loss and was unable to function properly nor could it bear further losses. The Petitioner negotiated with all the six Trade Unions and as a result settlement under section 18(1) of the Industrial Disputes Act was entered between the parties. In accordance with the agreement all the workmen submitted their resignation and agreed to receive a monetary benefit of Rs 4500/- for the remainder of the service period. However, the Respondent along with twenty-two other workers, refused to receive monetary benefit, even though he is a signatory to all of them. Retrenchment by one-month notice and statutory compensation was the only option available to the Petitioner. Not satisfied with the Petitioner’s decision, the second respondent and twelve other employees raised a dispute at the Court. The Court, by way of common order held that the retrenchment was illegal and ordered reinstatement without back wages and awarded a sum of Rs 2,00,000/- each as compensation as they had attained the age of superannuation.

The Petitioner filed a writ petition in the High Court of Madras challenging the award of the Labour Court. The High Court observed that there is no illegality or infirmity in the award given by the Labour Court and thus does not require the interference of the court. Hence, the writ petitions were dismissed and all the workers will be given Rs 2,00,000/- each along with accrued interest.

6.    Non-payment of Subsistence Allowance is Violation of ‘Natural Justice’

The High Court of Delhi remands an issue Against DIAL to the Industrial Tribunal (The Management of M/s Delhi International Airport Ltd. vs. Ashwani Goel 5.7.2021) 
An industrial dispute was filed by Ashwani Goel (“Petitioner”), senior assistant to Head Airside against the Delhi Airport Limited (“Respondents”). The Petitioner contended that a notice of non-attendance was issued to him along with a charge-sheet of non-performance of eighty eight (88) working days. The case proceeded ex-parte since the Petitioner had avoided attending the proceedings and was not present on the scheduled hearings, thus he was dismissed. The Petitioner after eleven (11) months issued a show cause notice that the case had proceeded arbitrarily since his medical conditions did not allow him to attend the hearings. The Industrial Tribunal held the decision as violating the principal of natural justice. 

The Petitioner filed a writ petition in the High Court of Delhi (“Court”) seeking a reinstatement with back wages. The Court awarded reinstatement with 60% back wages to the Petitioner. 

The Petitioner consecutively filed another petition challenging the order of the Court; as a result he was directed to deposit Fifteen Lakh Rupees (Rs. 15, 00,000) with the Registrar General of the Court. The Court gave the following observations and remanded the matter to the Industrial Tribunal stating the following observations:

  • The money submitted by Petitioner cannot be retrieved, irrespective of the decision of the Court.
  • Not paying subsistence allowance to the Petitioner was a clear case of violation of principals of natural justice.
  • The Petitioner will either be paid his last drawn wages or minimum wages, whichever is higher. 

1Meltron Engineering Industries vs. Pune Labour Union and Anr. 
2Madhya Bharat Gramin Bank vs. Panchamlal Yadav 13.7.2021
3M/s. Model School near Shivhare Petrol Pump vs. Assistant Provident Fund Commissioner
4Webfil Ltd. vs. Dipesh Kumar Bagchi & Anr.
5The Management, Sri Ganapathy Mills Co. Ltd. vs. Presiding Officer, Labour Court, Tirunelveli and Anr


Practice Areas


Other News

We are an extension of your in-house legal team

The client’s satisfaction is evident from years of their association with us, more than a decade for a lot of them. We act as an extension of in-house legal teams and act as External Legal Counsel to you. Our efforts are towards being strategic partners in your growth and not to be just a law firm.

Contact us