What Happens When Employer Loses Confidence on His Employee

An employer has no other alternative but to initiate a disciplinary proceeding against an employee on whom the management has lost confidence for some acts like forging documents, signatures etc. Maximum punishment a management can give is termination of service for losing confidence on the employee. But on what circumstances such harsh punishment is justifiable?

Discharging an office duty requires confidence, trust and integrity and when an employer losses such confidence on the employee, then there is no other alternative but to dismiss the employee after holding a domestic enquiry, as held by the Hon’ble Supreme Court of India. However, before terminating the service of any employee, it is essential to make sure that the charges as levelled against the delinquent employee has been substantially proved. Only for this purpose, managements often prefer to appoint a labour law advocate as an Enquiry Officer who is conversant with industrial disputes and labour laws to conduct such enquiry. If charges are sufficiently proved in the enquiry, there is hardly any scope of reinstatement if the matter adjudicated before the Labour Court.

In a case, Mr. X was terminated from service after he was found guilty in the enquiry. He was charged with forging signatures in order to obtain loans, preparing false salary certificate, stealing company’s letterhead etc. and all the charges were proved. Mr. X raised an industrial dispute wherein the Labour Court modified the order to compulsory retirement with effect from the date of termination. Being unsatisfied with the award of the Hon’ble Labour Court, the management moved before the Hon’ble High Court and filed a writ petition. The Hon’ble High Court set aside the award of the Labour Court and held that once the management has lost confidence in its employee the order of punishment becomes immune from challenge. Hence, the termination of an employee is valid when the management has lost confidence in him.


Various Reasons Resulting in Industrial Disputes and Labour Problems in India

The various reasons behind an industrial dispute can generally be categorized into economic and non-economic factors. The different types of economic causes are related to monetary compensation like salary, wages, allowances, bonus, working hours, working conditions, leave, medical benefits, holidays without pay, illegal termination, refusal of employment, retrenchments and unjust layoffs. On the other hand, political factors, sympathetic strikes, ill treatment by other workers of the company, indiscipline etc. come within the purview of non-economic factor which often lead to an industrial dispute or a major labour issue.

Salary, wages and other allowances: With the increase in cost of living index, employees/ workers constantly bargain with the management to increase their salary/ wages in order to meet the ever rising cost of living index. However, it is to be noted that the desire to upgrade the standard of living is a natural tendency in human beings. More than 25% of industrial disputes and labour issues are result of demand for increased salary/ wages.

Retrenchment and personnel issues: A very nominal 3% of the industrial disputes are caused by factors like retrenchment and layoffs while 14% of the industrial disputes are caused by personnel.

Indiscipline and misconducts: One of the leading causes of industrial disputes and labour problems in the industries is due to misconducts, indiscipline and often violent behaviours of the workmen towards the company. And unfortunately, this trend of indiscipline and misconducts is moving towards an upward graph. Around 50% of the industrial disputes are direct results of misconducts of the employees/ workers.

Bonus, Working hours and other criteria: Around 7-8% of industrial disputes are due to demand for bonus. Though slowly, this trend of disputes arising out of demand of bonus is ever increasing. Moreover, factors like working hours and leave lead to only 1-2% of industrial disputes.

Apart from these above mentioned factors, an industry faces problems due to reasons like problems between two different unions, non-implementation of awards, agreements, violation of standing orders, service rules, excessive work pressure on the employees, charter of demand, violation of statutory rules and regulations etc.

Sexual Harassment at Workplace – A Common Problem

Women, irrespective of their geographical location, position in their job, caste, religion and often age, are often victims of sexual harassment at their workplaces across the globe. An issue of sexual harassment at workplace needs to be handled more carefully as the reputation of both the victim and the accused are at stake, and more importantly the goodwill of the organization for which they serve. However, the primary object is to safeguard the interest of the victim and to find out the truth behind the alleged sexual harassment at workplace by the victim by way of conducting a departmental proceedings and criminal investigation, if required. This issue of sexual harassment or sexual abuse at workplace or office should be looked into from a point of view of a Human Resource professional as well as from the point of view of a legal expert.

With the increase in numbers of working women in India, the responsibility of protecting the dignity of the female employees by their respective employers has increased manifolds. Sexual harassment or abuse of the women employees at their workplaces is basically the result of a perverted mind which needs to be cured with the assistance of psychiatric treatment or exemplary punishment or both. Apart from all these theoretical blabbering, there are certain practical aspects that one should be aware of.

A sexual harassment at workplace is said to have taken place when a women is subject to sexual harassment at her workplace by her employer. The term ‘employer’ in this regard means and includes “any person employed through any of the offices including contract workers, employees will mean all employees of the company.” Thus we can say that a woman can bring charges of sexual harassment at workplace against anyone who is directly or indirectly engaged and/ or appointment by her employer.

Every organization is supposed to form a committee in order to deal with sexual harassment issues at workplace and to investigate into the alleged charges and to provide relief to the victim of sexual harassment at workplace. However, many companies in India, in spite of having a huge numbers of female employees have failed to establish such a committee to safeguard the interest and dignity of their female employees. In this context, a committee means “committee formed by the company/ organization to investigate the cause of sexual harassment of women at workplace” Such committee should consist of 7 members – 3 women employees and 3 employees from the side of management and 1 member should be from an external Non-Governmental organization (NGO). And 1 woman should be compulsorily appointed as the chairwoman of the committee.

Before we discuss more about sexual harassment at workplace, we need to find out what exact the term “sexual harassment at workplace” means. As per the Protection of Human Right Act, “human rights” include the rights to life, dignity, liberty and equality for every Indian. These basic “human rights” have been guaranteed by the Constitution of India. Similarly Indian working women has their right to live with dignity at their workplace and the responsibility of protecting their rights falls on their employer. Recently, the Hon’ble Supreme Court of India has become more stringent on violations of such rights granted to the working Indian women. For a better understanding, the definition of “sexual harassment at workplace” is defined hereunder:

Acts which can be termed as sexual harassment are as follows:

1. Any direct or indirect unwelcome sexually determined behaviour,
2. Physical contact and advances.
3. Demand or request for sexual favours.
4. Sexually covered remarks including showing pornographic material in any form i.e. digital or hard copy.
5. Any other unwelcome physical or non-verbal conduct of a sexual nature.

Procedure of Complaint

For a victim of sexual harassment at workplace, it does not matter whether the said victim woman is drawing salary, honorarium from her employer or providing a voluntary service to her employer. Even the type of organizations i.e. Government, public or private organization in which the woman works do not matter while filing a complaint against sexual harassment at workplace. However, there are certain procedures which one needs to follow while lodging the complaint before the compliant committees which are discussed below:

1. Any female employee including those employed under contract basis if harassed by a co-employee is eligible to file written confidential complaint to the Chairwoman of the committee. The complaint should contain proper details of the incident along with name of witness(es), if any. After receiving the said complaint, the Chairwoman will thoroughly investigate the matter, and if satisfied with the prima facie evidence, the Chairwoman will call a meeting of the committee and start a full investigation. A copy of the said complaint should also be forwarded to the Human Resource personnel of the organisation.

2. The committee will investigate the matter thoroughly and can summon witness(es) and take their oral/ written submission, if necessary in order to determine the validity of the alleged complaint made by the female employee.

3. The committee should give its report in writing with valid reasons for its conclusion to head/ executive of the organization who upon receiving such report from the committee is liable to take necessary actions against the delinquent employee.

4. The total procedure of the investigation starting from the day of filing such complaint before the committee till the day of submitting the investigation report to the organization should be completed within fifteen (15) working days.

The woman complainant as well as the witnesses should not be victimized or discriminated in any manner whatsoever. However, an activity of a woman employee filing false complaint of sexual harassment at workplace against a co-employee, with an intention to settle personal score or to defame the said person, is a gross misconduct and disciplinary measures/ actions can be taken against the female employee.

Responsibilities of the Employer

Every employer whether in Government, private or public sector is responsible for maintaining the dignity and integrity of the female employees in their organizations. And they should give their best effort to stop any kind of sexual harassment or abuse on any of their female employees and should be responsible to take these under mentioned steps:

1. The employer needs to circulate notifications defining the provisions of sexual harassment at workplace to each and every employee of the organization.

2. The service rules and/ or standing orders of an organization whether Government, private or public sector should contain clauses against any kind of sexual harassment at workplace along with appropriate punishments/ penalties.

3. Proper working conditions in relation to work, leisure, health and hygiene etc. should be provided to the female employees of the organization and at no time a female employee should feel discriminated at her workplace.

In case the sexual harassment at workplace is caused by any third party who is neither directly nor indirectly related to the employer, the employer is bound to take all the necessary steps in order to provide assistance to the affected female employee and to do all other acts which are necessary to stop any derogatory actions on any female employees.

Various Laws Which Can Be Used In Case Of Sexual Harassment at Workplace

Certain sections under the Indian Penal Code can be used in order to establish charges against an accused. Apart from filing complaint before the Complaint Committee, remedies under various sections of IPC or Indian Penal Code can easily be found.

Section 354 of IPC reads as follows:

“Section 354. Assault or criminal force to woman with intent to outrage her modesty

Whoever assaults or uses criminal force to any woman, intending to outrage or knowing it to be likely that he will thereby outrage her modesty, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both.“

Section 509 of IPC reads as follows:

“Section 509. Word, gesture or act intended to insult the modesty of a woman

Whoever, intending to insult the modesty of any woman, utters any word, makes any sound or gesture, or exhibits any object, intending that such word or sound shall be heard, of that such gesture or object shall be seen, by such woman, or intrudes upon the privacy of such woman, shall be punished with simple imprisonment for a term which may extend to one year, or with fine, or with both.“

Now apart from IPC, the Indecent Representation of Women (Prohibition) Act, 1987 is well equipped to deal with any form of sexual harassment or sexual abuse of women at their workplace.

Section 4 of IRWP Act reads as follows:

“Prohibition of publication or sending by post of books, pamphlets, etc., containing indecent representation of women.- No person shall produce or cause to be produced, sell, let to hire, distribute, circulate or send by post any book, pamphlet, paper, slide, film, writing, drawing, painting, photograph, representation or figure which contains indecent representation of women in any form:

Provided that nothing in this section shall apply to-

(a) any book, pamphlet, paper, slide, film, writing, drawing, painting, photograph, representation or figure-

(i) the publication of which is proved to be justified as being for the public good on the ground that such book, pamphlet paper, slide, film writing, drawing, painting photograph, representation or figure is i the interest of science, literature, art, or learning or other objects of general concern: or

(ii) which is kept or used bona fide for religious purposes;

(b) any representation sculptured, engraved, painted or other wise represented on or in-

(i) any ancient monument within the meaning of the Ancient Monument and Archaeological Sites and Remains Act 1958(24 of 1958); or

(ii) any temple, or on any car used for the conveyance or idols, or kept or used for any religious purpose;

(c) any film in respect of which the provisions of Part II of the Cinematograph Act, 1952(37 of 1952) will be applicable.“

For more information on the Indecent Representation of Women (Prohibition) Act, 1987, you can check the whole Act. Thus at the end we can say that sexual harassment at workplace is a delicate subject which needs to be taken care of very diligently.

This article is a republished article by the same author. However, right now a separate law has come into force known as Sexual Harassment of Women at Workplace Act, 2013 which we will deal in subsequent publications. In the meantime if you have further queries related to sexual harassment at workplace, feel free to contact a labour law advocate in Kolkata at the earliest.

Physical Verification Mandatory Before Covering an Establishment under the EPF & MP Act

An order passed u/s 7A of the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952 was challenged before the Employees’ Provident Fund Appellate Tribunal.

The Appellate Tribunal observed that the representatives of the EPF authority inspected the establishment and checked attendance and other records. The establishment informed the representative of the EPF that at no point of time the total eligible strength of employees touched 20. In spite of such submission, the Enforcement Officer passed an order determining the quantum to be paid by the establishment.

It is an admitted position that no physical verification of the employees were done.

In spite of this Act being social welfare in nature and each and every employer is bound to pay the dues but at the same time it is necessary to be sure that the establishment is legally covered under the EPF & MP Act.

Non production of necessary documents by the establishment is not exactly fatal as the EPF authority is vested with enough power similar to civil court in relation to examining a person on oath and discovering documents. But in this instant matter, the order u/s7A was passed without physically identifying the employees.

No separate enquiry was conducted by the EFP authority to determine the identity of the employees, their salary and their respective dues. The said order did not have the basis of calculation.

Hence, the Employees’ Provident Fund Appellate Tribunal set aside the order passed u/s7A of the EFP & MP Act, 1952 in November 2015.

Does labour laws of India need a change?

Modern labour regulation is what we look forward to but what it offers us is truly disappointing. In our country, India, our labour regulation really needs an upgrade from top to the bottom. Only if the regulations are updated and modernise, it will attract foreign investments which will further lead to the creation of numerous jobs and hence, the economy of India will rise high. But then who will bell the cat? It does not seem to be that easy.

The Desi laws are much disorganised

India has one of the largest labour and industrial environments in the whole world and as a result of it; we need to give more importance to this area. However, what is being done by the body of legislation is not up to the mark.

Hereunder mentioned are few age old, chaotic and self contradictory Acts, which more than benefiting the common people; put them into legal doldrums.

• Beedi and Cigar Workers Act, 1966

• Trade Unions Act, 1926

• Minimum Wages Act, 1948

However, the Industrial Disputes Act, 1947 is hugely referred in today’s modern labour law industries and it is still considered as the most important weapon in the legal battle for both the workman and the company. Just before the independence of India, the Industrial Disputes Act, 1947, in short known as the IDA, came into existence with incorporation of certain rules and regulations regarding the method and procedures of hiring and firing related to the industrial sectors. This Act is supposed to make it difficult for the company to fire anyone.

The Industrial Disputes Act, 1947 went through an amendment during mid-80’s. Now any company with more than a hundred workers, need to take State Government’s permission before firing workers. How many of them actually do that is another question!

However, this Act has indirectly harmed the growth of industries like the manufacturing sector. Most of the Indian Labour laws (including the IDA) do not give you the permission of free contracting.

If a fashion garment manufacturer, whose demand is always unpredictable, wants to hire workers at a higher price because of the rise in sudden demand but also wants to make it clear that they serve a month’s notice or so and terminate the service of the workers, in case the demand goes down. But in this situation, the India labour law becomes a hindrance.

A contract like this is not feasible and has no legal value since the Industrial Disputes Act clearly specifies how and when the workers may be retrenched. Thus we do not see these kinds of contracts. Initially these labour laws seem to favour the poor workers and their interests.

Chances of possibilities

Hundreds of companies do not hire eligible workers, with a fear that they will not be able to lay them off in case of need. Then why hire these workers initially? This leads to a good number of unemployment too. Many foreign companies do not feel comfortable in investing in India as they think that it is not feasible to do business in the current legal scenario of India.

However, there is no such data post 1980 which shows that the number of workers engaged in companies with 100+ workers have reduced. This reflects the market’s response towards the amendment made in the Industrial Disputes Act during the middle of 1980.

Companies, which are considered to be in a more economically stable position than a worker, should not be given the opportunity to retrench the service of a worker at their own sweet will. But on the other hand, companies should be allowed to enter in different kinds of contracts as per the need and circumstances of a particular situation.

A company can offer you a meagre salary but with a life long assurance of work, whereas, another company can give you lucrative salary with a possibility of being kicked out from the company by a very short period of notice. Choose whatever you feel like, but the opportunities of entering into such types of contract should be given to both the workman as well the company.

Strict rules regarding the “hiring and firing” policy across the globe

The Work Bank has conducted a research on the hiring and firing policies of companies across various countries and 100 points were given to the country which has the most rigid rules regarding the employment policy.

India scores 48 and ranks among the countries with most unfavourable labour laws. China is moderately below India with a score of only 30 but surprisingly Singapore’s score in very near to zero. Now it is proved that most nations with less rigid labour regulations are more economically efficient than other countries.

Governments need to encourage and make understand the workers about the need and essence of reform of labour regulation. It is the responsibility of the Government to convince the workers to support the reform procedures. But this reform will only be successful, if the Governments assure the workers of some complimentary policies which will provide the social security and benefit in the welfare of the workers.