FAQ on Labour Rights - I

    




  
1.     What are the Laws & Acts under which the rights of employees are commissioned?


Ans:
1.1               The Factories Act, 1948
1.2               The Industrial Disputes Act, 1947
1.3               Child Labour (Prohibition and Regulation) Act, 1986
1.4               Bonded Labour System (Abolition) Act, 1976
1.5               The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
1.6               Apprentices Act, 1961
1.7               Employees Provident Fund and Miscellaneous Provisions Act, 1952
1.8               The Employees State Insurance Act (ESI Act), 1948
1.9               Payment of Gratuity Act, 1972
1.10            Payment of Bonus Act, 1965
1.11            Payment of Wages Act, 1936

2.       Are employment bonds at the time of joining, legal?



Ans: Employment Bonds can be legal only when it mentions that the incumbent is provided with any specialized training after their joining which incurs certain expenditure on the part of the employer. On the breach of such bonds the employers can file suit for recovery of the expenditure incurred on the training. It has been seen recently that companies have been using this ploy to exploit fresh joiners which is not ethical.


These bonds are loosely defined without specifying the type of expenditure that will be incurred on the new joinee that they claim to recover. It is also evident that the organizations actually find it difficult to legally pursue so many cases of the breach of the bond and this has given birth to a new trend for organizations asking the fresh joiners to deposit a certain amount in a specific company account that would be refundable only after the tenure of the bond completes. This is also a very dangerous trend and can be challenged in a court. 

   Employment Bonds are mostly used by organizations more as a deterrent to stop high attrition at the entry level.


3.       What are my basic rights as a permanent employee that I should be aware of in order to avert exploitation on the hands of the employer?


Ans: The basic rights that a permanent employee should be aware of in order to avert exploitation on the hands of the employer can be categorized as follows:-


As a new joinee it is your legal right to ask for the clarity and declaration of the perks & benefits that you have been promised. Further, clarification on the rules, regulations, culture, procedures, and restrictions etc. that are being followed in the organization is also your right.


As a working employee it is your legal right to ask for better working condition as per the industry standards. It is your right to get your specified salary latest by the first week of every month. It is your right to demand for compensatory leave for any extra days or hours of work. It is your right to avail your entitled leave for the year. It is your right to reject any decision taken against you without your knowledge or consultation.


As an employee in the notice period it is your legal right to ask for your speedy full and final settlement. It is your right to avail relieving letter, experience certificate and tax certificate. It is your right to expect a fair employment reference from the organization.


As an employee undergoing termination it is your legal right to know and question the grounds for your termination. It is your right to question the decision if the termination is without any prior notice. It is your legal right to avail on the spot full and final settlement in case of termination.


Further, you need to look into the exact clauses in the labour laws for specific situations.


4.       What are my basic rights as a contract employee?


Ans: In the Indian context, Contract employees are considered and looked upon as the second grade employees of the organisation. It is not like that but just a misconception that should be eradicated. There are certain rights as contract employees also. They can be categorized as follows:-


As a new joinee it is your right to know the type of contract you are put under. There are two types of contract employees. One that work on the payroll of a third party or contractor and the one that works on the rolls of the organization but not on permanent rolls. The later type of contract employee is actually an employee on probation and has the right to be confirmed after six months of probation. Many organizations in order to evade this obligation terminate the contract just before the completion of six months duration and then rehire with fresh contract. This is exploitation and contract employees should watch out for this. It is advisable to go through the terms and conditions thoroughly in case of contract employees to avoid before signing the contract agreement to avoid later hassle. There is one more term, very commonly used by contractors to woo contract employees for their clients i.e. “contract to hire”. It has no legal obligation and it’s just an invention of the staffing industry to woo contract employees.


As a working Employee it is your legal right for better working condition as per the industry standards. It is your right to get wages equal to permanent employees for same kind of work or duty. You are entitled to equal leaves as entitled to the permanent employees. It is your right to receive your salary by the end of first week of the specified month by the contractor and failing which the company is entitled to pay.


As an Employee at the end of the Contract it is your right to ask for an immediate full & final settlement with the organization in question without any obligation pending from either side.


Further, it is your right to end the contract in the following cases:-

• When harassment occurs
• When your salary is not paid
• When the employement terms and conditions are changed
• When there is false allegation of misconduct by the employer

5.       Is ESI/Medical Insurance mandatory?


Ans: Employee’s State Insurance as commonly called ESI is mandatory for establishments having 20 or more than 20 employees, earning below Rs. 15,000 pm. For employees above this salary range, it is not mandatory for employers to provide medical insurance to these employees but in case of any accident at workplace they have to provide the compensation. Hence, you can opt out of the medical insurance cover that the company provides to employees.


6.       Can I opt out of EPF?


Ans: Yes, one can opt out of Employee provident Fund (EPF) scheme if the basic salary is above Rs. 6500. It is mandatory for those earning basic salary below Rs. 6500. If you are already a member of EPF scheme and your basic salary increases above the level of Rs. 6500 in the same organization then also you cannot opt out.


7.       Should the Employers PF contribution be a part of my CTC? Same for Gratuity?


Ans: It is a mistake to consider your CTC as your salary. The proper term is Cost to Company and also it literally means to refer to the Cost to the Company for keeping you as an employee. This is again a ploy by the organizations and recruiters to mislead and entice new candidates that they negotiate in terms of the CTC. Hence, it is very much correct that the employers PF contribution is also a part of your CTC. The same goes for the Gratuity and medical insurance premium. You should negotiate only on your gross salary rather than your CTC to avoid any kind of confusion. The employer is bound to give you the details.


8.       What are the employee’s rights in case of mergers and acquisitions?


Ans: In this age when everyday companies are being formed, dissolved, merged and acquired, there are certain laws to protect the right of employees from being exploited due to such uncertain developments. In case of companies being merged or being acquired there is always a sword of uncertainty hanging over the head of the employees of the organization as they are at  the mercy of the new management. According to the section 25FF of Industrial Disputes Act 1947 in case of merger or acquisitions where there is a transfer or change in undertaking by any reason, every employee is entitled to one month notice and compensation in accordance to the provisions in section 25F (section 25F states that no employee shall be retrenched until he/she is given a month notice with the reason for retrenchment or salary in lieu of the notice along with compensation of 15 days of every completed year of service or three months average salary), as if the employee is retrenched or laid off.


The above section shall not apply if the service of the employee has not been interrupted due to the transfer; the terms and conditions of service after the transfer are not in any way less favourable than before the transfer.


I hope the sections are clear to everybody. It basically says that if you are moving on new rolls of the acquiring company, the continuation of your serive will be interrupted and therefore the company is liable to give you one month notice or salary in lieu and to pay you 3 months of average salary. This shall not apply if your service is uninterrupted and the terms and condition of the service doesn’t change.


9.       What are the employee’s rights in case of closure or shut down?


Ans: In case of closure or shut down according to section 25FFF of Industrial Disputes Act 1947, every employee before such closure is entitled to notice and compensation in accoedance to section 25F (section 25F states that no employee shall be retrenched until he/she is given a month notice with the reason for retrenchment or salary in lieu of the notice along with compensation of 15 days of every completed year of service or three months average salary), as if the employee had been retrenched (Indian terminology of lay off)

10.   What are the grounds on which an employee can be terminated?


Ans: The valid reasons or grounds on which an employee can be terminated are :-

• Gross misconduct or disobedience
• Sexual Harrasment
• Theft, fraud, dishonesty or wilful breach of trust
• Bribery
• Continued illness
• Habitual absence from duty
•  

11.   What are typical illegal reasons for firing/termination?

Ans: One of the most important job rights is the right to be free from discrimination. Employers typically cannot fire you based on your race, national origin, sex, religion, disability, or age. Some states now protect other categories such as sexual orientation and marital status, so it always pays to check your state laws. In addition, these laws also typically prevent retaliation if you file a complaint against your employer for discriminating against you.


Other typically illegal reasons for firing an employee include firing them for:-

• Forming a union or being part of a union
• Complaining about or reporting on unsafe conditions
• Complaining about or reporting on illegal activities in the workplace
• Asserting your legal rights
•  

12.   What are the rights of an employee in case of termination or pink slip?


Ans: The rights of the employees in case of termination are different than in case of pink slip or lay off. In case of termination, it is the right of the employee to demand the reason for termination and challenge the decision in case of false allegation. If terminated, they are liable for compensation till the day they have worked and an immediate full and final settlement. The employees are mostly exploited in case of pink slips, as organizations generally lay off their over hires in anticipation of some loss of business or recession. Such employees are entitled for one month notice or salary in lieu and three months average salary.


13.   How can I protect my rights before leaving my job?


Ans: Always document the circumstances under which you were fired. This includes who you talked to, what they said and any accompanying conduct by both parties. It can be helpful to write emails to preserve a record, and make sure to make copies of any relevant emails as well.


You can also keep a work journal that records significant employment events such as performance reviews, commendations, reprimands, salary changes, or even less formal comments of approval or disapproval. Always record the date, time and location as well as who was present at any such events. Even if you don't want to challenge the legality of your firing, you will sometimes need to show that you were fired for reasons that didn't involve your own misconduct, and these materials can help immensely.


In addition, ask to see your personnel file. Most states require employers to make this available to you on request. Copy, review and inventory your file. This helps document whether other things were added to the file at a later day in attempt to justify your firing after the fact.


Finally, keep any materials that may be relevant such as employee handbooks, memos, brochures, orientation materials, or any written evaluations of your work. Be very, very careful when taking documents from your employer, though - especially anything that is designated as confidential or for internal use only. Chances are good that your employer will counter-sue you for wrongfully obtaining those documents. Some whistleblower statues provide protection against this, but be extremely careful and always consult with an attorney.

Note : More answers to question related to your legal rights coming in the next post. You are invited to discuss any specific issue through comments or put forward any of your questions related to your legal rights.