FAQ on Labour Rights - II

    1.       What to do if I am working on direct contract with a PSU without any increment for three years?

Ans: According to the section 25B of Industrial Disputes Act 1947, if an employee is in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorised leave or an accident or a strike which is not illegal, or a lock- out or a cessation of work which is not due to any fault on the part of the workman; he shall be deemed to be in continuous service under an employer, for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than two hundred and forty days (240 days).

The above mentioned section has been the ground for claim for permanency for contract and temporary employees but in recent Supreme Court ruling, it has been said that mere completion of 240 days of continuous service under the employer doesn’t qualify you to claim for the permanent position. According to the ruling, there should be other factors governing your employment or recruitment to the organization for a specific position i.e. the skills, minimum qualification required, and undergoing the same recruitment process defined for a permanent position.

Hence, it is advisable to consult your attorney on the above mentioned grounds for the claim for permanency as employers to avoid this clause of continuous service, propose a contract of 11 months rather than of one year. Further, regarding your no increment for the last three years of service, there is article 14 in the constitution of India which says, equal pay for equal work, but the law has been so loosely defined and again the argument ends at the contract agreement signed by both parties where you have to look into the agreement for any such clause of periodical increment.

I would at last advise you to see your attorney for the best of suggestions.

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

Ans: This has been very clearly defined in Section 25FFF – Industrial Disputes Act, 1947, which states that:-

(1) Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of sub-section (2), be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched:

Provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workman under clause (b) of section 25F, shall not exceed his average pay for three months.

 1[Explanation.

        An undertaking which is closed down by reason merely of-

        (i) Financial difficulties (including financial losses); or

        (ii) Accumulation of indisposed stocks; or

        (iii) The expiry of the period of the lease or licence granted to it; or

       (iv) In case where the undertaking is engaged in mining operations, exhaustion of the minerals in the area in which operations are carried on,

Shall not be deemed to be closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso to this sub-section.]

2[(1A) Notwithstanding anything contained in sub-section (1), where an undertaking engaged in mining operations is closed down by reason merely of exhaustion of the minerals in the area in which such operations are carried on, no workman referred to in that sub-section shall be entitled to any notice or compensation in accordance with the provisions of section 25F, if-

(a) The employer provides the workman with alternative employment with effect from the date of closure at the same remuneration as he was entitled to receive, and on the same terms and conditions of service as were applicable to him, immediately before the closure;

(b) The service of the workman has not been interrupted by such alternative employment; and

 (c) The employer is, under the terms of such alternative employment or otherwise, legally liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by such alternative employment.

 (1B) For the purposes of sub-sections (1) and (IA), the expressions minerals’ and ‘mining operations” shall have the meanings respectively assigned to them in clauses (a) and (b) of section 3 of the Mines and Minerals (Regulation and Development) Act, 1957 (67 of 1957).]

 (2) Where any undertaking set-up for the construction of buildings, bridges, roads, canals, dams or other construction work is closed down on account of the completion of the work within two years from the date on which the undertaking had been set-up, no workman employed therein shall be entitled to any compensation under clause (b) of section 25F, but if the construction work is not so completed within two years, he shall be entitled to notice and compensation under that section for every3[completed year of continuous service] or any part thereof in excess of six months].

And further Section 25F – Industrial Disputes Act 1947 states that:-

No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until-

 (a) The workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; 1[* * * * *]

 (b) The workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days’ average pay 2[ for every completed year of continuous service] or any part thereof in excess of six months; and

 (c) Notice in the prescribed manner is served on the appropriate Government 3[for such authority as may be specified by the appropriate Government by notification in the Official Gazette].

    3.       What does an employees do if his employer does not make his full and final settlement of Account, once the employee leave or is forced to leave the service in the private sector. How soon and with what documents the employees should fight the case?

Ans: If the employee fails to receive the payment from the employer after having entered into full and final settlement of the account, the employee can file a civil suit for recovery of office dues. In case gratuity has not been paid then the employee can proceed under the provisions of Payment of Gratuity Act and then in case Provident Fund has not been released after the employee leaving, then he can proceed under the provisions of the Provident Fund Act.

    4.       My company is not relieving me. I have got a job elsewhere and want to quit the notice period of one month expired one week ago. What can/should I do?

Ans: If one month notice period has expired as prescribed in the contract of employment, intimate to your employer in writing that as notice period has already expired you will stop coming to their office from (specific date) and also write about settling your accounts.

    5.       How many earned leaves, I am entitled to?

Ans: Legally you are entitled to 22 earned leaves for a specified year which can be carried forward to the preceding year but law gives the authority to the organizations to let you accumulate the maximum earned leaved before it gets lapsed. Generally, it has been seen that earned leaves that are accumulated excess of 30 days get lapsed automatically.

    6.       Should I be paid overtime?

Ans: Overtime has been abolished in India and the extra time or day other than the specified that you work can be compensated through compensatory leaves against those extra hours or days of work.

   7.       What are my rights in case of my past employer providing negative feedback or background report?

Ans: You can move to the Court against your past employer for providing your wrong feedback or background report to your present employer. You need to obtain the written documentation in this regard and file a suit against your past employer for doing so.

NOTE: You can forward your queries on your legal rights pertaining to your employment and I will give out the best of the solutions available.