Below is a list of Q&As regarding recent court decisions on employment and labor law cases. CHROs and other human resources executives in India should be aware of those new rulings.
1. Whether ex-gratia payment, which has not been paid in accordance with the statutory provisions, can be deducted from compensation under the Employee’s Compensation Act?
The Karnataka High court decided that any ex-gratia payments cannot be deducted from the statutory payable compensation under the Employee’s Compensation Act. Additionally, any exceptional deposit is required to be made with the commissioner directly.
HRPI View: This is significant for the Payroll, Finance and Labor relations teams. Most organizations pay ex-gratia without involving the labour commissioner’s office. We recommend this kind of issues need to be reviewed by Legal.
Refer to Appendix 1
2. Whether an employee’s death resulting from work-related stress can be deemed as work-caused death?
The Karnataka High court decided that if a person dies due to stress or strain of the job, the Employer is liable to pay compensation and employment injury.
Similarly, the Jammu Kashmir high court held that the word ‘accident‘ means any unintended and unexpected occurrence where work procedures were absent. The court enumerated the following principles to identify if there was an accident:
- There must be a causal connection between the accident and the work done in the course of employment
- The burden is on the worker to prove that the work has led to the injury
HRPI View: Medical wellbeing team needs to be aware of this latest decision as it could have a potential impact to a company.
Refer to Appendix 2
3. When can an employee receive their Accident reimbursement from the employer under the Employee’s Compensation Act?
Supreme Court decided that the reimbursement should be accrued from the date of the accident occurred instead of the date of the claim filed. The employer has thirty days to pay the reimbursement.
Refer to Appendix 3
4. What happened if a claim hasn’t been filed on time under section 10 of the Employee’s Compensation act?
The Allahabad high court held that in the case of the claimant fails to give any reason for not approaching the tribunal within the filling time, they won’t receive interest on the reimbursed amount from the date of accident.
Refer to Appendix 4
5. Is the buyer of a business responsible to pay dues (taxes) which was generated prior to the acquisition?
In accordance with the Employee’s State Insurance Act, the Calcutta high court held that both the buyer and the seller are jointly liable to pay any statutory dues in the period up to the date of transfer.
HRPI View: Knowledge of this case should be shared with M&A teams in HR.
Refer to Appendix 5
6. Does back wages constitute basic wages under the Employees' Provident Fund (EPF) Act, and is employer required to make contributions on such back wages?
The Kerala high court decided that back wages will constitute basic wages under the EPF Act. Additionally, the employee who is reinstated will receive full back benefits during the suspension. Therefore, the employer needs to to pay their share of contribution on the back wages.
Refer to Appendix 6
7. Is a non-executive director responsible for violation of the EPF Act?
The Kerala high court and Supreme Court asserted that non-executive directors of an establishment cannot be prosecuted unless there is evidence to show that they oversaw and were responsible for the conduct of the business.
Refer to Appendix 7
8. Can the Provident fund department hold a current owner of a company accountable for dues owed by its previous owner?
The Kerala High court asserted that the provident fund authority has the right to proceed against the company for any mandatory dues. However, an individual should not be hold accountable for any personal liability.
Refer to Appendix 8
9. Is special allowance subject to provident fund contribution ?
The Supreme Court asserted that special allowances which formed part of the employees' basic wages are subject to provident fund contributions.
Refer to Appendix 9
10. Should employer pay employees gratuity when they resign?
The Delhi high court decided an employee would be entitled to gratuity even if he or she had resigned.
Refer to Appendix 10
Appendix (Case Reference Numbers)
- Nusrat Jahan v. The managing director, (Misc, first appeal bearing no. 200839/2017 (WC), decided on June 25, 2020
- Divisional Controller, NEKRTC v. Smt Laxmi, (Misc. First appeal no. 200122/2018 (WC) decided on June 25, 2020
- A. Kamal Basha v. Thiru P. Chandrasekaran, (C.M.A no. 1651 of 2015 Decided on August 24, 2020
- United India Insurance Company Limited v. Jayalalitha (first appeal from order no 1212 of 2020 decided on Sept 1, 2020)
- Premchand jute and industries private limited v. The employees state Insurance Corporation, (W.P. No. 1111 of 2011 decided on august 18, 2020)
- The manager, wallardie estate, Harrison’s Malayalam limited v. The regional provident fund Commissioner, (W.P. (C) no 40468 of 2018 (G) decided on May 5, 2020.
- T.a Varghese v. Ram Bahadur Thakur limited, (CRLA no. 356 of 2006 decided on June 5, 2020)
- Manuel Mohandas v. The assistant provident fund, (W.P. (C) no. 2633 of 2011 (D) decided on June 11, 2020)
- The regional provident fund commissioner (II), West Bengal v. Vivekananda Vidyamandir, (Civil appeal nos. 6221 of 2011, judgment dated February 28, 2019) in (“Vivekananda Vidyamandir).
- B.S. Rawat v. Shyam Lal college, (WP (C) 3147/2020, C.M. No. 20958/2020 decided on sept 14, 2020