Employee – Employer relationship

Relevant cases in this section.

Enforceability of the employment bond- In Toshnial Brothers Pvt Ltd v E.E Swarprasad, the contractual clause in the employment agreement stated that the employee should have to pay a compensation amount if he leaves the job within a period of three years. This is a reasonable time period imposed by the employee which the law takes into account. But the employee quit after 14 months and the Madras high court held that since the employer held an explicit contract the employee should pay for the damages incurred by the company in training him and other loss made of while he exists the company, the employee was liable to pay the compensation. This is more competent when the parties are competent and enter into contract with full knowledge and consent for a lawful consideration.

M/s Sicpa India Ltd v Shri Manas Pratim Deb and in Satyam Computers Services Ltd v Ladella Ravichander, the Delhi High court and Andhra Pradesh High Court respectively that the compensation imposed by the employer was too high. But in both the cases the validity of the employment bonds were upheld.

Is it legal to hold the passport of an Employee?

Yes it is illegal to hold the passport of an employee.

Also knowingly allows another person to use a passport or travel document issued to him; shall be punishable with imprisonment for a term which may extend to two years or with fine which may extend to five thousand rupees or with both. 

Can a company terminate an employee in India?

The Indian labor laws, there is no standard process to terminate an employee in India. An employee may be terminated according to terms laid out in the individual labor contract signed between the employee and the employer. Equally, the terms maybe subject to the country's labor laws.

Are employers required to give notice of termination?

In the case of 'workmen' (as defined in the Industrial Disputes Act, 1947), employers must give 30days' notice for termination for convenience or make a payment in lieu of the notice period. 

Rights of employees post termination of employment

·     Right to Receive a Notice for Termination of Employment

As per the state law in Delhi, The Delhi Shops and Establishments Act 1954 mandates that an employer can terminate an employee by giving him at least 30 days of notice or a salary in lieu of such notice provided that he has been with the corporation for more than three months. There is no need on the part of the employer to give notice to the employee if misconduct is the reason for termination. In this case, the employee has an opportunity to explain himself reasonably.

According to the Maharashtra Shops and Establishments Act, 30 days prior notice for termination must be served by the employer to the employee who has worked with the company for more than a year. If an employee has worked with the company for more than three months but less than a year,  at least 14 days prior notice should be served .

·    Right to be Heard

 He must be given an opportunity to explain his position and show cause as to why he should not be dismissed or discharged. Also, when an employee is discharged or dismissed, he must be provided with reasons for such discharge or dismissal.

·     Right to Sue By Reason Of Illegal or Unlawful Termination

An employee must be given just and reasonable cause for the termination of employment by the employer. It should be in consonance with the grounds mentioned by the statutes or by the employment contract. However, if there is found to be no just cause for the termination and is based on illegal grounds such as discrimination on the basis of religion, caste, gender, age,  disability, pregnancy, etc. then the employee can sue the employer on the grounds of illegal or unlawful termination of employment.

·    Right to Receive a Severance Pay

The termination of the employment contract with the employer results in  the employee having some rights over severance pay which includes the following:

  • Payment of salary in lieu of notice.
  • The unpaid salary for days worked.
  • Encashment of unused paid leave.
  • Payment of gratuity to an employee who is employed for more than five years as provided for in the Gratuity Act, 1972.
  • Payment of 50% of the employee’s wages for up to 45 days where an employee employed for more than 1 year is laid off.
  • Compensation will be paid that will amount to 15 days average pay for every year of continuous service.
  • Payment of bonus for those employees who worked for at least 30 days in a financial year and earned up to Rs.10,000 under the Payment of Bonus Act of 1965.
  • Any other payment agreed to be paid on termination by the employer under the company policy.
  • The policies differ from the position the employee holds and the policies of the company.
·    Right To Have an Enquiry Conducted

An employee has the right to conduct an inquiry in case of improper and unjust termination. The facts and circumstances should be looked upon carefully and properly weighed to find the real fault on the part of the employee or if he has to be held responsible or not.

As such the government has no much  protection provisions or statutes for the white collar employees against the vagary of the employer as much  given to the blue collar employees since their termination is governed by strict statues.

Can a pregnant employee be terminated in India?

It is illegal for an employer to discharge or dismiss a pregnant employee during or on account of absence, due to her pregnancy or delivery or any such kind of post-natal illness.

Punishment for employer denies maternity benefits?

If the employer denies maternity benefit to a female employee, the labor court can hold the employer liable to imprisonment for 3 months, fine the employer with an amount up to Rs. 5000, or both, as per the rules for maternity leave in India.

Instance of adoption and maternity leave.

Yes. If the baby you've adopted is under the age of three months, you are entitled for a maternity leave of 12 weeks. 

Eligibility of maternity leave.

Eligibility of maternity leave goes to woman who must be working in the organization for a period of at least 80 days within the past 12 months i.e., a year. Payment during the leave period is based on the average daily wage for the period of actual absence. 

Legal rights of working women:-
Law against sexual harassment

In 2013, the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act was enacted to help those who face sexual harassment at work by a colleague or by your employer the establishment should have a redressal mechanisms well documented to address such complaints and actions should have be taken for the same by the company.

Law for maternity benefits:    

Maternity Benefit Act, 1961 enshrines:-

  • 26 weeks of paid maternity leave.
  • One month of paid leave for any illness due to pregnancy or miscarriage.
  • Medical bonus of Rs 2,500 to Rs 3,500 if the employer provides pre-natal and post-natal care.
  • Maternity benefit when the employee shows proof of delivery, to be paid 48 hours in advance.
  • In case employee dies leaving no legal heir, a nominated beneficiary gets the maternity benefit.
  • No establishment can hire you for six weeks after delivery, miscarriage, or medical termination of pregnancy.
  • No one can also fire you during maternity leave. 
Law for factory workers

Proper working conditions include ensuring health, safety, welfare, proper working hours, leave, and other benefits. Women workers must get 24 hours’ notice if there is a change in their shift timings. If a factory hires more than 30 women workers, it has to have a crèche for children aged six years and below.

Law for equal pay

The Equal Remuneration Act under Article 39 of the Indian Constitution lets you claim equal pay incase if your male colleagues get more than the female colleagues. Employers must pay male and female employees equally for the same position. Also, employers cannot discriminate against women during the hiring process.  

Law protecting women working night shifts

The Shops and Establishment Act protects women employees who work night shifts and therefore, It entitles the employer to get the statutory approvals and should ensure proper and safe working environment to the female employees.

Are women allowed to work at night in India?

The government circular is that “No female worker shall be bound to work without her written consent before 6 am and after 7 pm. The authorities will also have to provide free transportation, food, and sufficient supervision if such a situation arises on the night working hours.  

Against Gender Discrimination in Remuneration:-

Section 5 of The Equal Remuneration Act, 1976 stating the employer is legally bound to pay the same wages to both male and female workers for work done in similar nature

The penalty for the discrimination is given in Section 10 (2) which says that if any employer

(a) makes any recruitment in contravention of the provisions of his Act, or

(b) makes any payment or remuneration at unequal rates to men and women worker, for the same work or work of a similar nature, or

(c) makes any discrimination between men and women workers in contravention of the provisions of this Act,

he shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to twenty thousand rupees or with imprisonment for a term which shall be not less than three months but which may extend to one year or with both for the first offence, and with imprisonment which may extend to two years for the second and subsequent offences.

Working on holidays

Employer cannot force an employee to work on holidays. And if  any employee works on holiday Employer will give twice the wages to employees who work on  holidays or normal wages with a substituted holiday. Failure to comply with the provisions may attract imprisonment up to 3 months or fine up to Rs.500/- or both. But there is no prohibition on working on declared holidays.

National and Festival Holiday Act, which is applicable to all establishments in the country, irrespective of under which law it is formed it is mandatory to grant leave on following 3 days, i.e. 26th January(Republic Day), 15th August (Independence Day) and 2nd October(Gandhi Jayanti). For rest of the festival holidays the declaration depends on the discretion of the concerned States and establishments. Number of festive holidays can differ from state to state.

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