Newsletter Jul - Sep 2024

Employment and Internship related benefits under Budget 2024-2025

  • The Budget 2024-2025 as presented by the Ministry of Finance, Budget Division on July 23, 2024 focuses on theme – Employment, Skilling, MSMEs and Middle Class oriented towards rural, employment and employable skill development and infrastructure growth.
Employment linked Incentives:

Wage benefits – For the First Timers (New Entrants), direct benefit transfer of one-month’s wage in all formal sectors in 3 instalments up to ₹15,000. This scheme is expected to benefit a total of 210 lakh youths.

 

EPFO Benefits – Job Creation in the Manufacturing Sector linked to first time employees. Incentive to be provided to both employee and employer for EPFO contributions during the first 4 years of employment in specified scales. This scheme is expected to benefit a total of 30 lakh youths

 

Support to employers by reimbursement of EPFO contributions of employers upto Rs. 3000/- per month for all new hires for a period of 2 years from the date of joining by the Government. This scheme is expected to generate 50 lakh jobs.

 

  • Incentives have been provided to both Employer and Employee under the manufacturing sector for EPFO contributions as per the tiers for first 4 years for the new hires. Under the scheme, Government will reimburse EPFO contributions of employers upto Rs.3000 per month per new hire for 2 years.
  • New hire will be determined by the registration of such new hire in the EPFO portal and the applicability will be limited to all the new hire with wage/salary up to Rs.1 Lakh per month.
  • Conditions for availing the benefit of EPFO reimbursement by the employer is that
  • The employer shall belong to the corporate sector and in the case of non-corporate entities, they shall have a track record of 3 years EPFO contribution
  • The employer shall employ at least 50 non-EPFO registered employees or increase in 25% of the baseline of EPFO registered employees from the previous year whichever is lower

Employee must be directly employed in the entity in which wage/salary is received.

  • Loans can be initiated up to Rs. 7.5 lakhs with guarantee from Government Provident Fund
Internship Scheme under the 2024-2025 budget
  • As per the budget speech for 2024-2025, Internship scheme has been announced for creation of internship opportunities in top 500 companies to 1 crore youth in a systemic phase of 5 years. The period of internship shall be for 12 months in which at least half of the tenure shall be spent on actual working in contrary to Classroom environment
  • Under the scheme, allowance of Rs.5000/- per month will be paid to the intern in which Rs. 500/- shall be made by the Company from its CSR and once the company makes the payment, the Government will pay Rs. 4500/- to the candidate directly through direct benefit transfer to the intern’s Aadhar seeded bank account. A one-time assistance amount of Rs.6000/- will be paid to the intern directly by the Government. Hence, Companies will bear 10% of the internship cost plus the training cost from the CSR fund allocated.
  • The top 500 companies shall be selected involving a review and approval by the government authorities. The companies will be selected based on their average CSR spending over the past 3 years. In addition, any other company/bank/financial institution desirous of participating may take prior approval of the Ministry of Corporate Affairs (MCA) which would consider the application taking into account of the represented sectors and areas in the top 500 companies.
  • Insurance Coverage shall also be provided to each individual intern under the existing Government schemes by the Government in itself and the Company may also choose to provide additional accidental insurance coverage to the interns.
  • It is stated that a team under the Indian Corporate Law Service has been set up to implement the scheme.
  • Criteria has been added for the beneficiaries under the scheme. The internship scheme shall be applicable to youth only between the age of 21 years and 24 years where the scheme is aimed to benefit the youth with lower employability by excluding Candidates who hold a degree from IIT, IIM, IISER, CA, CMA etc or any member of the family is assessed to Income Tax or any member of the family is a government employee, etc. It is also added that the candidate shall not be under regular full-time education.
  • The participation of the companies under the scheme is voluntary and any company that is not able to participate directly shall take part through its forward or backward supply chain, through its group or otherwise.
  • A unified portal shall be created for the registration of the employer and the candidates where any direct deployment of interns shall not be made. 

The unified portal and process shall be as follows:

  • Display of Partner Companies
  • Posting of Internship opportunities under different partner companies
  • Candidate registration
  • Candidate application for opportunities listed
  • Shortlisting and Selection of Candidates
  • Offer generation
  • Internship joining
  • Completion and Certification

Recent Amendments/Notifications:

Freezing/Defreezing the MID/UAN/Establishment in EPF portal

Notification regarding the deployment of functionality for the SOP on Freezing/Defreezing the MID/UAN/Establishment in EPF portal has been released. IS division has deployed the said functionality effective from 30.06.2024 and the authorities as mentioned in the SOP are requested through the notification to use the functionality to Freeze/Unfreeze the MID/UAN/Establishment


Issue of Form RM – 6 (Format of Third-Party Audit) under EPF Act
Notification regarding issue of Form RM – 6 (Format of Third-Party Audit) with reference to SOP for Management and Regulation of EPF exempted establishments. The SOP was issued earlier which mentioned that Form RM – 5 (Balance Sheet of the Trust) and Form RM – 6 (format of Third-Party Audit) are under preparation and will be circulated. As per the recent notification, Form RM – 6 (Format of Third-Party Audit) has been finalized and circulated for compliance.


Surrender of EPF exemption granted
Notification regarding establishments surrendering their exemption provided by EPFO due to streamlining of compliance process by EPFO.  It has been notified that in the last two years, 27 establishments have surrendered their exemption for EPFO to manage their employees’ Provident Fund. In turn, a total of 30,000 employees have been added to the EPFO with a total amount of Rs. 1688.82 crores being added to the EPFO Fund


Bulk Aadhar seeding in the employer portal under ESIC
Provision for bulk Aadhar seeding in the employer portal has been issued in addition to the earlier instructions provided on Aadhar seeding through OTP authentication, biometric and face authentication. Guidelines have been issued for using this provision. Field officers have been given instructions to examine the employer-wise Aadhar seeding report and focus on targeting employers with large number of beneficiaries who are yet to seed their Aadhar data in the ESIC database.


State Draft rules under the Labour code and launch of the BoCW MIS portal
Notification regarding the finalization of the State draft rules under the Labour code and launch of the BoCW MIS portal has been issued. Meeting was conducted by the Ministry of Labour and Employment to prepare the States and UTs in the finalization of the State Labour Code Rules and implementation of schemes to the BoCW workers. The Ministry of Labour and Employment highlighted the gaps in the State Rules in comparison with the Central Labour Code and the State/UTs shared their views and comments in this regard. The Ministry will be organising 6 regional meeting in the next 2 months with the State/UTs.


Submission of ER-I under the Employment Exchange (Compulsory Notification of Vacancies) Act, 1959
In order to the reduce the burden of Compliance, Public/Private sectors can submit the ER-I Quarterly Return through online mode from 3rd Quarter (30th September) under the  Employment Exchange (Compulsory Notification of Vacancies) Act, 1959


Payment of Bonus in West Bengal
The Labour Department of West Bengal has issued a notification providing guidelines for the payment of Bonus on account of Durga Puja 2024 in the interest of maintenance of industrial peace and harmony. It has been also mentioned in the notification that those employees who are not eligible for Bonus shall be paid ex-gratia amount and all Bonus payments shall be made by 30.09.2024 before the commencement of Durga Puja


Revision of Minimum Wages in various states
* Minimum Rate of wages for un-skilled workers and other categories of workers in respect of scheduled employments in the State of Punjab have been linked to the CPI. The new series of CPI has been linked to the old CPI and the minimum rates of wages for un-skilled workers is Rs. 10899.82 effective 01.03.2024.

 

*Minimum Wages has been issued in the state of West Bengal for 30 scheduled employments for a period from 1st July 2024 to 31st December 2024. The Minimum rates of wages have been updated based on the Fixation/Revision notifications as issued against each of the employment mentioned

 

*As per Art. 348 of the Constitution regarding the Language use, English translation of the notification is issued in the State of Uttar Pradesh. The notification contains the Type of Agricultural work, Region and the all inclusive minimum rates of wages for adult workers

 

*The minimum wages in the Computer Software Industry sector in the State of Kerala had been earlier fixed in the year 2011. In the year 2019, draft of the revision of the proposal was issued. On account of the suggestions and objections received from the public, the revision has been made to the Minimum Rates of Wages in the Computer Software Industry sector in the State of Kerala

 

* The minimum rates of wages payable to Highly Skilled, Skilled, Semi-Skilled, Unskilled categories of employees employed in 89 scheduled employments in the State of Odisha have been revised to Rs. 600, Rs. 550, Rs. 500, Rs. 450 per day respectively

 

* Minimum wages per day has been revised in six scheduled employments covered under the Minimum Wages Act, 1948 in the union territory of Andaman & Nicobar Island. The per day minimum wages have been fixed for Unskilled as Rs. 633, Semi-skilled/Unskilled supervisory as Rs. 714, Skilled/Clerical as Rs. 837 and Highly skilled as Rs. 920. The revision in minimum wages will be effective from 01.07.2024. The other terms and conditions with regard to this Notification shall be read from Notification No. 133/2023/F dated 27.12.2023

 

* The Labour Department of Maharashtra has issued a notification with respect to the revision in minimum rate of wages for the specified Scheduled Industries with effect from July 1st, 2024 to December 31st, 2024.

 

*Notifications have been issued separately under Sec. 3(1)(b) and Sec. 5(1)(b) of the Minimum Wages Act notifying the people likely to be affected and the draft notification has been taken for consideration for revision of Minimum Wages for Employment in any oil mill, Employment in tanneries and leather manufactory, Employment in any industry engaged in saw milling, Employment in potteries in the State of Maharashtra. The draft notification will come into force after the expiry of 2 months period from the date of publication of draft notification in the Maharashtra Government Gazette and any suggestion/recommendation received within this period will be taken into consideration

 

* The Industries, Energy, Labour and Mining Department has issued Draft notifications separately for revision of Minimum Wages for Employment in any industry manufacturing Paints and Varnishes, Employment in Cement and Cement based industry and Employment in laundry industry in the State of Maharashtra which will be taken into consideration after the expiry of 2 months from the date of publication in the Maharashtra Government Gazette. Cost of Living expenses shall be taken into account in computation of the minimum wages which will be issued by the Government of Maharashtra in the last week of July which allowance shall be effective from July to December and in the last January which allowance shall be effective from January to June

 

*Preliminary notifications were published in the official Gazette for suggestions and objections. After careful consideration of the suggestions, objections and upon consultation of the Minimum Wages Advisory Board, the minimum wages for the employees employed in the distribution of Liquified Petroleum Gas Cylinders, Chemical Industries, Carpentry and Blacksmith industries, Taxies and Autorickshaws, Bricks and Tiles Manufactory, Tailoring Industry, Bakeries & Biscuit Manufactory, Shops & Establishments, Automobiles Workshop, Security Guards, Rice Mills, Flour Mills and Dhall Mills, Plastic Industries, Paper and Paper Products Manufacturing Industries (both Machine Made and Handmade),  Oil Mills, Leather Goods Manufactory, Hotels & Restaurants, General Engineering and Fabrication, Food Processing Industries, Electronic Industry in the Union Territory of Pondicherry have been revised by the Lieutenant-Governor. The Dearness Allowance shall be calculated on the 1st April of every year on the basis of the average of the indices for the preceding twelve (12) months that is from January to December

Judgements:

Mercedez Benz India Private Limited v. Noshir Nadir Desai

Date of Order : 15.01.2024

Case No: WP/12202/2023

 Authority: High Court of Bombay 

Facts of the Case:

  • An employee in service under Mercedes Benz India Pvt. Ltd, after a specified period was posted in its group company Daimler AG in Germany.
  • Employee was again transferred back to India which reinstatement was clear as per his Offer of employment
  • Employee at a later stage filed a petition for computation and entitlement of gratuity as his period of Service at Germany was not considered for measuring his continuity of service under the Payment of Gratuity Act
Sections involved:
  • 2A of the Payment of Gratuity Act, 1972 – Continuous Service
Summary and Conclusion:
  • The dispute arose when Mercedes Benz India failed to consider employee’s relationship upon his assignment in the host company in Germany.
  • The employee filed a petition for the computation of his gratuity and making the two spells of service as continuous.
  • The issue addressed was whether transfer of service between two companies under the same management constituted as discontinuation of service under the Gratuity Act.
  • The Bombay High Court referred to the precedent of Terna Polytechnic v. Ravi Badrappa Randalein which the court held that though the employee in this case was transferred from one educational institution to another educational institution which are 2 different legal entities, there was no fresh recruitment upon reading of the contents of the relieving letter and also that there was absence of any gap between the two spells of service, it shall be considered as continued service for the purpose of entitlement of gratuity under Sec. 2A of the Gratuity Act.
  • Upon reference to the precedent and the facts, the Bombay High Court held that transfer of employee from one entity to another under the same management should not be considered as a break in service.
  • The court also highlighted the legislative intent of the Gratuity Act stating that disregarding the continuity of service in cases of intra-management transfers would undermine the very objective of the act and employees should not be deprived of their gratuity rights due to organizational restructuring.
Takeaway from the Judgment:
  • In conclusion, transfer of employee from one entity to another under the same managementshall be considered as Continuous Service under 2A of the Gratuity Act.
M/S Bharti Airtel Limited v. A.S.Raghavendra

Date of Order : 02.04.2024

Case No: Civil Appeal No. 5187 of 2023

 Authority: Supreme Court of India

Facts of the Case:

 

· Employee was appointed as the Regional Business Head in the grade of Senior Manager – Sales and was performing managerial and supervisory work

 

· Employee after his resignation filed a petition before the Labour Court stating that his resignation was coerced and forceful

 

The Employer contested that the Employee will not fall under the category of “workman” under the Industrial Dispute Act considering the managerial and supervisory position he held for which the Employer’s plea was rejected on the mere fact that the Employee did not have any right to appoint, dismiss or hold disciplinary enquiries against other employees which implied that he did belong to managerial position and hence will be a “workman” under Sec. 2(s) of the Industrial Disputes Act.

Sections involved:
  • 2(s) of the Industrial Disputes Act, 1947 – “workman”
Summary and Conclusion:
  • The case has reached the Hon’ble Supreme Court of India after applications of appeal. The Hon’ble Supreme Court looked into the fact that the Employee had accepted a settlement after his resignation which the Court states that upon acceptance of Settlement on the resignation, Employee had accepted what he had clearly transpired.
  • The Hon’ble Supreme Court stated that the Employee had been heading a team which clearly shows his supervisory power and involves creativity in decision making defining his managerial powers
  • The Court held that mere absence of power to appoint, dismiss or hold disciplinary enquiries against other employees cannot mean that the Employee shall be a “workman” under the Industrial Disputes Act stating that an Employee discharging managerial duties and functions may not be invested with the power of appointment and discharge of other employees.
It was held that the Employee was not a “workman” under Sec. 2(s) of the Industrial Disputes Act considering his nature of employment. It was also stated that Employees in higher ranking positions but without powers to appoint, dismiss or hold disciplinary enquiry would then be included under the umbrella of “workman” under Sec. 2(s) of the Industrial Disputes Act
Takeaway from the Judgment:​
  • In conclusion, Nature of employment of the Employee shall be considered for the definition of Sec. 2(s) of the Industrial Disputes Act.
  • During application of law and while interpreting a particular provision, economic impact and effect of a decision wherever warranted has to be kept in mind
Judgments Snippets:
  • Workman cannot be transferred to a place which did not exist at the time of appointment in the absence of such clause. – 2024 LLR 748 PUNJAB AND HARYANA HIGH COURT
  • Amount in lieu of wages and paid in terms of agreement would not constitute ‘wages’ under the EPF Act. – 2024 LLR 782 KERALA HIGH COURT
  • Even contractual employees engaged by principal employer indirectly are entitled to PF benefits. – 2024 LLR 815 DELHI HIGH COURT
  • Submission of monthly returns beyond the date of their submission is punishable under the EPF Act. – 2024 LLR 822 CALCUTTA HIGH COURT
  • Employee can either choose his entitlement towards payment of gratuity in terms of the Act or the employer’s regulations which ever provides for better terms. – 2024 LLR WEB 248 CALCUTTA HIGH COURT
  • Punishment of termination for a minor misconduct, which caused no loss to the company, is disproportionate. – 2024 LLR WEB 252 GUJARAT HIGH COURT
  • An employee engaged on daily wages has no right to seek regularisation of services. – 2024 LLR WEB 270 SUPREME COURT OF INDIA
  • Municipalities are covered under the definition of ‘factory’ under the ESI Act. – 2024 LLR 709 SUPREME COURT OF INDIA
  • A trainee, not being an apprentice, is an employee for the purposes of claiming gratuity. – 2024 LLR 831 CALCUTTA HIGH COURT
  • Relocation of office will not require the management to give notice of change of conditions of service. – 2024 LLR 851 MADRAS HIGH COURT
  • Absorption after completion of training would not lead to break in service for payment of gratuity. – 2024 LLR 831 CALCUTTA HIGH COURT
  • Financial position of the establishment cannot be linked to delay in making PF contributions. – 2024 LLR 899 TELANGANA HIGH COURT
  • Interest on delayed payment of gratuity is to be granted to the employee even without specific claim. – 2024 LLR WEB 277 GUJARAT HIGH COURT
  • Even if the employee accepted the compensation amount, he can still question the validity of the retrenchment. – 2024 LLR WEB 286 MADRAS HIGH COURT
  • Trainees being paid wages, and not stipend, are employees’ under the EPF Act.- 2024 LLR 904 KARNATAKA HIGH COURT
  • Retrenchment amount would not include gratuity amount payable to the employee. – 2024 LLR 997 KERALA HIGH COURT
  • Compensation cannot be avoided merely because notice pay has been made to the workman on closure of the establishment. – 2024 LLR WEB 295 PUNJAB AND HARYANA HIGH COURT
  • Surrogate mothers are entitled to maternity benefits. – 2024 LLR 952 ORISSA HIGH COURT
An unregistered Trade Union can challenge award of Tribunal/Labour Court but can’t file writ petition. – 2024 LLR 974 MEGHALAYA HIGH COURT
Did you know?
    1. If the employee is terminated or removed for the employment by the employer, the wage of that employee should be paid within _______ days from the day on which he was removed or terminated.
    2. a) 7 days      b) 15 days      c) 2 days      d) 30 days

     

    1. Which of the following is not included under the definition of wages given under the Payment of Wages Act, 1936?
    2. a) Basic Wages      b) Dearness Allowance      c) Incentive      d) Gratuity

     

    1. The term Sabbatical is connected with
    2. a) Paid leave for study      b) Paternity leave      c) Maternity leave      d) Quarantine leave

     

    1. No substitution shall be made in the factories which will result in any worker working for more than ______ days consecutively without a holiday for a whole day.
    2. a) 7 days      b) 10 days       c) 12 days      d) 14 days

     

    1. Leave with wages is allowed for employees if they work for_______ days in a month
    2. a) 15        b) 20           c) 25         d) 28
Answers to the Quiz:
  1. c) 2 days
  2. d) Gratuity
  3. a) Paid leave for study
  4. b) 10 days
  5. b) 20 days

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