Hi,

Please guide...

 The notice period, notice pay is stated in contract of employment/appointment letter, standing order, SE Act of the state.

The service conditions mentioned in appointment letter and accepted by both employer and employee are contractual obligation.

e.g.

If your establishment is covered under SE Act.

“SE Act Delhi:

 30.  NOTICE OF DISMISSAL.

(2) No employee who has put in three months’ continuous service shall terminate his

employment unless he has given to his employer a notice of at least one month, in writing. In case he fails to give one month’s notice he will be released from his employment on payment of an amount equal to one month’s pay”

If standing orders are applicable to your establishment but certified standing orders are not framed, model standing orders shall apply.

SCHEDULE I

[1][MODEL STANDING ORDERS IN RESPECT OF INDUSTRIAL ESTABLISHMENTS NOT BEING

INDUSTRIAL ESTABLISHMENTS IN COAL MINES]

13.  Termination of employment.--(1) For terminating employment of a permanent workmen, notice in writing shall be given either by the employer or the workmen - one month’s notice in the case of monthly-rated workmen and two weeks’ notice in the case of other workmen: one month’s or two week’s pay, as the case may be, may be paid in lieu of notice.

You may obtain SE Act, Model Standing Orders from Dept. of Labor website of your state or buy from market.

“In case the condition of rate or sum at which notice pay is be adjusted is not mentioned in the appointment letter e.g.  Gross/ CTC/Last paid wages/ Basic + DA, the benefit of doubt may not be the just solution. While tendering PF contribution and settling disbursements like Gratuity, Paid leave…… employer calculate wages by Basic + DA, so notice pay should also be calculated by Basic + DA.

It shall be pertinent to discuss that employer/HR personnel may conceptualize that there is a trend of notice pay @ Gross/CTC however the situation can not be settled by trend.

The tradition and logic seems to Basic + DA.”

The very purpose of notice period is that employer is able to do orderly transition, install replacement, complete exit formalities, and employee is able to firm up his future venture and help the employer to complete the exit formalities.

Notice period should be same which an employer expects from employee who wants to separate by resignation and employer should tender if employer wants to terminate the employee so that during the notice period employee is able to find another employment and thus source of livelihood.

Notice period is incorporated in clauses of appointment letter so that both employer and employee have some discipline or deterrent. If there is none then there can be chaos as any one would be walking out on each other at any time without bothering what would happen to other. The corporate world would be something like Fish Market without any order.

Any policy in the larger interest and beneficial to both employer and the employee has the sanction of law as otherwise it will be easily termed as arbitrary.
 

Notice period/pay is incorporated in separation/termination/exit clause of appointment letter as amount of compensation to be given by employee or employer whosoever does not tender notice.

If notice period/pay is to become part of the contract of employment it should be clearly stated in contract of employment. Contract of employment should be fair and should promote equality and for this reason notice period/pay should be same for both employer and employee. The contract of employment is under Indian Contracts Act. Kindly go thru {Section 73, 74}. The company should incorporate clear and reasonable amount in appointment letter for notice pay. This shall also help to avoid legal hassles.

Another point is that if you are not willing to tender notice pay company may ask you to  serve the full notice period.

Employer and employee enter into contract of employment and sign on the terms and conditions of employment. Since appointment letter is contract of employment the terms and conditions expressed in appointment letter become contractual obligation. In the contract of employment{thru appointment letter} employer is the party which provides employment and sets the service conditions and employer should provide clear, specific, terms and conditions and should not leave anything to speculation, and guess. There should not be ambiguity. Employer should not set arbitrary conditions. It is to the benefit of employer as in a given situation the appointment letter/service conditions may have to pass the test of law and in a given case/situation may not stand the test of law.

At times the employer incorporate statements like interpretation of the management shall be final and binding.

The employer should not take the role of a street magician who produces any thing from thin air.

The service conditions are governed by appointment letter/contract of employment and standing orders of the company. Standing orders in its true spirit should be discussed between employers, employees/representatives of the employees/trade union and passed by certifying officer in the labor dept. If certified standing orders are not framed and standing orders are applicable to the establishment model standing orders shall apply.

Notice period is enshrined in SE Act. You may look into SE Act applicable to your state.

Companies and its HR, personnel, line management would love to declare that company policies shall decide everything however policies of the company should be circulated to employee/ should be in the knowledge domain of the employee, and should be kept in locker away from the reach of the employee.

Another point is rumor and gossip can not be rules.

The company drafts should follow the Principle of Natural Justice

It is as simple as that if some terms and conditions are applicable to employer and employee and if these are to set by employer these should be supplied to employee and employer should use effective modes of communication, and obtain acknowledgment and acceptance from employee.

It is felt that you have obtained acknowledgment/acceptance of resignation, work experience/service certificate, reliving letter, last salary slip, Form16, PF number, PF accumulation reports/account slip of whole period of employment, NDC/NOC, FNF stat You may submit a letter addressed to the good office of your appointing authority, MD, Company Secretary and mention that you had tendered notice of resignation and thus conveyed your date of retirement to company and thus did not cause abrupt termination  

and that no notice pay and its rate is mentioned in appointment letter dated….issued to you and good offices may inform you in writing by letter thru redg. post why an amount of Rs…..is deducted in FNF statement dated……along with the supporting document from appointment letter issued to you. You may affirm that no policy, rule, law was ever supplied to you and accepted by you for this deduction. Based on the reply you can proceed further. You may mention that along with your letter a postage prepaid {as purchased from PO} self addressed envelope with postage stamps of Rs……affixed on it for sending  reply to your reprsentation by redg post.

You may finetune your representation as suitable to you.

Valuable advice of learned experts/members is sought.

Dear Kumar Sir,

I am privilieged to see your comments on major issues the employees are facing. Thanks for contributing to the forum with all your expertise and creating awareness among the labour class, specially the unorganised class!

I am a software Professional working for a Private Company having not more than 500 employees. I just wanted to know if the Shops and Establishment Act applicable for Software Companies. Also, I wanted to understand about the:

1. Change in Policy by the organisation. Is the company bound to discuss the change in policies like Change in Notice Period, change in working hours, change in the benifits agreed upon during the contract of employment.?

2. If the company has not discussed any such things and makes changes to the policies on its own and communicates the same to its employees over Email, can that be considered as a Valid method?

3. Is it mandatory for the companies to register a copy of its employment policies and the changes to it in the Labour Department?

4. Can a software company ask its employee to work during the weekends (normal operating hours of the company is Monday to Friday, 9 hours a day) and beyond 9 hours in  a day without Over time charges but getting compensatory off in future?

5. Can a company change its Leave Policy on 1st August 2012, mentioning that the same is effective from 1st of June 2012, (almost two months before!)?

Thanks in advance.

In addition to the Industrial Disputes Act, 1947, several states also provide for compliances under the Shops & Establishment Acts, Standard Standing Orders Act, and the like. So, if the employee falls within the definition which has been provided under the said enactments, then he would be protected.

The SE act is applicable to IT companies.

Some states as per their IT policy accepted that the working in IT/ITES companies is a continuous process and granted exemption from some clauses of SE Act e.g. working hours.

You may go thru IT policy which may be available at Dept. of Labor website of the state.You can also get in touch with union for IT employees.

The Left parties were also willing to unite IT professionals. You can get in touch with them. It shall be good if IT professional can come up with effective unions like Pharma Professionals, Banks….Then they won’t be unorganized.

The number of IT professionals is huge hence it can come up with big and effective union. It is a huge vote bank.

Even if IT professional is not member of union it doesn’t mean that he/she can’t invoke the provisions of ID Act….

1. Company should.

“change in the benifits agreed upon during the contract of employment.?”

It is contractual obligation. Basic wages are guaranteed cash, and can not be reduced.

PF, ESIC Act does not permit reduction in wages.

Has the company coerced and forced you to voluntarily sign the acceptance of change/reduction in wages??? If yes employee can agitate.

The blanket exemption granted by some states from provisions of IESO Act

(Karnataka has now ended it) has emboldened the companies to flout the norms.

Many of the clauses in appointment letter issued by majority of the companies may be illegal, unlawful.

SCHEDULE I

[1][MODEL STANDING ORDERS IN RESPECT OF INDUSTRIAL ESTABLISHMENTS NOT BEING

INDUSTRIAL ESTABLISHMENTS IN COAL MINES]

4.     Publication of working time, 7.        Shift working, [2][7-A.          Notice of changes in shift working, 17.          Liability of 17[employer].--,  18.      Exhibition of standing orders

You may go thru the draft of standing orders for a company:

MODEL STANDING ORDERS

ACCORDING TO THE INDUSTRIAL EMPLOYMENT (STANDING ORDERS)

ACT - 1946 AND RULES MADE THEREUNDER

19.      RE-FERSINCE OF INDIVIDUAL DISPUTE TO GRIEVANCE SETTLEMENT AUTHORITY

2. Company might have inserted some statement in appointment letter that policies introduced from time to time shall be applicable and acceptable.

Company believes that majority of the employees shall not their dissent in writing and it shall enforce what it wants.

The employee can submit disagreement in writing and bring the matter on regard.

Company might feel that the contract of employment is personal contract and can not be enforced in a court of law, and it shall succeed in pleading Specific Relief Act.

However courts have not been, are not, can not be run by corporates.

You may show your appointment letter, standing orders to a competent and experienced labor consultant/service lawyer and give inputs in person, and proceed under expert advice of your lawyer.

The matter should be taken up by Works Committee/ Grievance Redressal Committee.( Section 9 C was introduced in the Industrial Disputes Act Industrial Disputes (Amendment) Act, 2010 (No. 24 of 2010) a Grievance Redressal Machinery has been introduced by insertion of Section 9 C. The chairperson of the Grievance Redressal Committee shall be selected from the employer and from among the workmen alternatively on rotation basis every year.)

3. An appointment letter that violates the provisions of SE Act, Labor enactments may be claimed to be void to that extent.

The service conditions as stated in standing orders can not be negated in appointment letter.

Standing orders are certified by Certifying Officer in o/o Labor Commissioner. The service conditions/provisions/changes are to be discussed,mutually agreed upon, and certified.

You may also go thru SE Act applicable to your state. The appropriate notice to Inspector should be given.

SE Act,: e.g. SE Act Delhi

3. Rights and privileges under other law, etc., not affected.

COMMENTS

A plain reading of this section would go to show that it has a limited operation confined to a particular date,  i.e.,  the date on which this Act came into force. On that day if a right or privilege had accrued to any employee under any other law, contract, custom or usage, and if that right or privilege was more favourable or advantageous to him than those declared under this Act, the employee was entitled to retain that right or privilege.

34. Employer to furnish letters of appointment to employees.

35. Inspection of Registers and calling for information.—It shall be the duty of every

occupier of a shop or establishment to produce for inspection of an Inspector, all accounts or records required to be kept for the purpose of this Act, and to give any other information in connection therewith as may be required.

4. Refer to the provisions of IESO Act, Model Standing Orders…

The dialy work hours are usually 8 excluding time for rest and meals which may be 1 hour (including tea breaks of 15 minutes each and lunch break of 30 minutes).

SE Act: e.g. SE Act Delhi:

8. EMPLOYMENT OF ADULTS, HOURS OF WORK:

No adult shall be employed or allowed to work

about the business of an establishment for more than nine hours on any day or 48 hours in any week and the occupier shall fix the daily periods of work accordingly…….. but not exceeding 54 hours in any week subject to the conditions that the aggregate hours so worked shall not exceed 150 hours in a year:

Provided further that advance intimation of at least three days in this respect has been given in the prescribed manner to the Chief Inspector and that any person employed on overtime shall be entitled to remuneration for such overtime work at twice the rate of his normal remuneration calculated by the hour.

Explanation.—For the purpose of calculating the normal hourly wage the day shall be reckoned as consisting of eight hours.

COMMENTS

(a)    Mode for calculation of overtime wages……………..

Claim for overtime should be made within reasonable time.

{ So if employee is being made to work for over time the employee should obtain the instructions in writing and avoid a situation in which company may claim that “If an employee works for extra hours voluntarily and without any direction by the

Management, the claim for overtime will not be admissible; “}

However as contained in the SE Act if company is fooling the employees by making the employee work for OT but denying OT complaint to Inspector may be lodged.

Claim for overtime should be made within reasonable time.

9. INTERVAL FOR REST AND MEALS

21.  CLAIMS RELATING TO WAGES.

5. NO.

The employee to whom IESO Act, Model Standing Orders, SE Act, Minimum Wages Act, Factory Act, Payment of Wages  Act , ID Act…….are applicable is protected to that extent by the provisions of the enactments.

Valuable advice of learned experts/members is sought.