Newsletter Apr - Jun 2024

Environmental, Social and Governance Framework

  • Environmental, Social and Governance (ESG) is a framework to analyse the company’s performance and practices on the standards of sustainability and ethical practices.
  • Though ethics, sustainability and governance are considered as non-financial performance indicators, ESG framework is required to ensure accountability on how an organisation treats the employees, suppliers and other stakeholders.
  • The term ESG was initially used revolving around the popular concept of “Who Cares Wins” meaning there should be considerations made to non-financial aspects of the business to gain growth.
The Three Components of the ESG Framework are
  • A bill to further amend the act has been passed (i.e) Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Amendment Act, 2024 which shall come into force on the date the Central Government may by notification in the official gazette appoint.
  • The amendments as mentioned in the bill are made to Section. 9 and Section. 10 of the Act providing for Complaint of Sexual Harassment and Conciliation respectively.
  • In Section. 9 of the act, the period specified for the filing of the complaint under the PoSH Act given as three months has been replaced with one year.
  • Section. 10 of the act has been completely omitted
Analysis of the Amendments to the POSH Act:

1. Environmental – The environmental component of the framework involves organization’s overall impact on the environment and potential risk involved because of environmental issues. This component of the framework has an inclusive list of following to be acted upon and considered

  • Natural resources depletion
  • Air and Water Pollution
  • Energy Consumption and Efficiency
  • Waste Management

2. Social – The Social component of the framework shows how the company treats different groups such as employees, customers, society in which they function and so on. This component of the framework has an inclusive list of following to be acted upon and considered

  • Fair treatment of all groups
  • Fair pay for employees including living wages
  • Workplace health and safety
  • Data protection and Privacy Policies

3. Governance – The Governance component of the framework deals with internal policies and procedures followed to be in compliance with regulations, industry best practices and corporate policies. Governance component of the frameworks contains an inclusive list of following

  • Regulatory compliance and risk management initiatives
  • Ethical business practices including transparency and whistleblowing policy
  • Company leadership and management
  • Board resolution involving structure and diversity of the company
  • In regard to the legislative backing, Environmental, Social and Governance framework is found in parts in various legislations starting from the Companies Act to the Factories Act and in specific legislations like the Air (Prevention and Control of Pollution) Act, Water (Prevention and Control of Pollution) Act and including various Labour legislations like Minimum Wages Act, Payment of bonus, gratuity Acts. For instance, reading of the Companies Act shows that the Board’s report should contain details of the conservation of energy as per Sec. 134(3)(m) of the Companies Act and Corporate Social Responsibility (CSR) responsibilities of the Company are read under Sec. 135 of the Companies Act. ESG framework in particular is not listed in any specific legislation but in parts under various legislations of the country.

Main objective of the ESG Framework is for the company to ensure for

  • Ethics, Transparency and Accountability – All business transactions and decisions should be fair, transparent and amenable to disclosure and visible to relevant authorities.
  • Safety and Sustainability of Goods and Services – Production and Usage of products that do not deplete resources and creating environmental and safety awareness among employees, customers and contractors.
  • Human Resources Development and Well-being of employees – Ensuring wellbeing of employees at all levels with the objective of overall development of the employees and the organization and aligning the employees with business strategies.
  • Promoting Human Rights – Policies and Systems of the company are imbibed with Fundamental Rights and Directive Principles of State Policy. Company shall respect and recognise human rights within and beyond the workplace of all the relevant stakeholders.
  • Protection of Environment – Every company is required to achieve the economic, ecological and social responsibility objectives of sustainable development.
  • Inclusive growth and equitable development – Corporate Social Responsibility activities of the company and other welfare measures for the employees
Conclusion
  • Customer and market demands are lined on focusing for more sustainable and ethical business approach. Individual or institutional investors and Customers who consider ESG strategies for making buying decisions are inclined to seek products or services offered by companies that have incorporated effective ESG framework which can enhance business growth.
  • ESG framework on the other hand helps in attracting and retaining high-quality employees providing them motivation and increasing overall productivity.
  • ESG framework can inevitably cut down the cost fabric of an organization in places of operating expenses, energy bills and other costs.
General Election to Lok Sabha and Bye-election to ACs

Election Commission of India has issued a Notification vide Notification No. 78/EPS/2024 dated 16.03.2024 regarding Phase Wise Paid Holiday on account of General Elections to Lok Sabha and Bye-elections to ACs of various states re-enforcing Sec. 135B of Representation of the People Act, 1951 providing for Grant of Paid Holiday to employees on the day of poll. The Notification stated that suitable instructions shall be issued to all concerned for respective States/UTs and the same shall be endorsed to the commission. On account of the Election Commission of India’s notification, separate notifications were issued by the states stating the specific date of Paid Holiday conducted Phase-wise and specific instructions thereof.

Facility for Re-Filing of GSTR-3B for Affected Taxpayers
  • It is noted that there has been discrepancy in the data stored in the GST system and the actually filed data in the fields of ITC availment and payment of liabilities. The affected tax payers are intimated through their registered mail ids providing them an opportunity for making corrections by resetting the filings.
Enhanced GST Portal
  • Introduction of enhanced new GST portal. The enhancements include News and Updates section, User Interface improvements, Updated website policy which came live on the 3rd May 2024. Instructions to read the updated website policy.
Regulating the investment of Non-Resident Indians and Overseas Citizens of India into the Indian Securities Market through Schemes/Funds in IFSC

 

The IFSCA (Fund Management) Regulations, 2022 allows fund management entities to launch various schemes/funds in IFSC. There has been a cap fixed on the investment of the funds. The NRI, OCI and RI are provided with 2 routes to opt for in view to enhance increased investment.

Rights of Persons with Disabilities (Amendment) Rules, 2024 issued

 

Rule 15(1)(p) has been inserted to the Rights of Persons with Disabilities Rules, 2017 – Accessibility standards and Guidelines for Banking Sector, as specified in the notification in the Department of Financial Services, Ministry of Finance, Government of India vide Notification no. F.No. 7/32/2022-BOA-I dated the 2nd February, 2024

 

Rule 15(1)(o) has been inserted to the Rights of Persons with Disabilities Rules, 2017 – Accessibility Guidelines and Standards for Higher Education Institutions and Universities as specified, in the notification of the Department of Higher Education, Ministry of Education, Government of India vide notification number F. No. N-11018/01/2024 dated 19th January, 2024

Clarification issued regarding the Correction in Date of Birth of Insured persons and their Family Members/Dependants

 

ESIC withdrew its earlier notification in consideration of Aadhar as proof of the date of birth. After the withdrawal of notification, several issued for clarification has been raised. In order to address the same, this notification clarifies that Aadhar can be used as a valid proof for change of Date of Birth in accordance with Para 1.73 of ESIC Branch Office Manual which is only applicable to the insured persons and Reg. 80 (2) of the ESI (General) Regulations, 1950 applicable to the insured person and their family members/ their dependants

Change in the period for obtaining valid insurance policy at the time of commencement of the Karnataka Compulsory Gratuity Insurance Rules, 2024

The time period specified for an employer of an establishment to obtain valid insurance policy which is in existence at the time of commencement of the  Karnataka Compulsory Gratuity Insurance Rules, 2024 shall be read as “six months” instead of “six days”

Amendment to Tamil Nadu Shops and Establishments Rules, 1948 has been published in the Tamil Nadu Government Gazette

 

  • Rule. 2A – Application for registration of establishment *which state that the application for registration shall be made in Form-Y to the inspector and every application shall be made online along with a fee of Rs.100/-
  • Rule. 2B – Issue of Registration Certificate* states that the inspector shall provide the certificate of registration in Form-Z within 24 hours from the time of receipt of application and the register of establishments shall be maintained by the inspector in Form-ZA
  • Rule. 2C – Intimation of existing establishment* states that any establishment already existing at the time of commencement of the Tamil Nadu Shops and Establishments (Amendment) Act, 2018 shall make an application online in Form ZB to the inspector 
  • Rule. 2D – Amendment of Registration Certificate* states that any amendment shall be made online and the inspector shall issue a fresh registration certificate online in Form-Z within 24 hours from the time of making the application
  • Rule.6A provides for the First-aid facilities* to be maintained which states that a First-aid boxes at the rate of not less than one box for every one hundred and fifty persons shall be maintained and readily accessible with specified markings

In addition, the penalty for any contravention to the provision under Rule. 18 has been increased to two thousand rupees instead of fifty rupees. 

 

The notification also contain the formats of Form Y(Application for Registration), Form Z (Registration Certificate), Form ZA (Register of Shops and Establishment) and Form ZB (Intimation by Existing Establishment).

Judgments:

Vinod Kumar & Ors. Etc vs. Union of India & Ors.

Date of Order: 30.01.2024

Case No: SLP(C) Nos.22241-42 OF 2016
Authority: Supreme Court of India

Facts of the Case
  • The employees (Appellants) have filed this case against the order/judgment of the Tribunal/High Court requesting for regularization and absorption into the posts of ‘Accounts Clerk’ against which they were temporarily appointed.
  • The Tribunal and High Court have rejected the plea made by the appellants on the ground of temporary appointment
  • The temporary appointment was made through the selection process involving written tests and viva voce.
  • The temporarily appointed ‘Accounts Clerk’ have worked continuously for 25 years and had been given appraisal involving the Departmental Promotional Committee
  • The employees have been involved in substantive nature of work and continuous work similar to that of the permanent employees which will run against the principles of equity, fairness, and the intent behind employment regulations
Summary and Conclusion
  • The Hon’ble Supreme Court stated that the essence of employment and rights cannot be merely determined by initial terms agreed between the employer and the employee
  • It is stated that the Regularisation of employees should be considered on merits of the case in the light of the principles settled by the courts
  • The Hon’ble Supreme Court questioned the process of filling vacancy with temporary appointments 
  • In light of substantive and continuous nature of the roles along with the method of selection and appraisal process and the vacancy being a permanent one whereas only the appointment was made on a temporary basis, the Hon’ble Supreme Court set aside the order of the High Court. It is ordered that the employees (appellants) are entitled for regularization and that the regularization should be completed within 3 months from the date of service of the judgment
Takeaway from the Judgment
  • In conclusion, substantive nature of work coupled with continuous service for more than 10 years similar to that of the permanent workers shall be against the principles of natural justice where the reclassification from temporary to regular status shall be made

The VVF Ltd. Employees Union vs. M/S. VVF India Limited & Anr 

Date of Order: 09.04.2024

Case No: Civil Appeal Nos. 27 44 -2745 OF 2023 with CIVIL APPEAL NO. 27 54 OF 202
Authority: Hon’ble Supreme Court of India

Facts of the Case
  • The employees union (Appellants) have filed the appeal in the Hon’ble Supreme Court against the Judgment of the High Court requesting for demands under the charter
  • The demands include the revision of salary, leave facilities, increment and other allowances.
  • The Tribunal passed an award on 29.03.2024 granting partial relief. This award was contested by both the employer and the union council under separate writ petitions
  • Employer’s writ petition was dismissed on the ground that there is no deviation from the common for the employees whereas the employer questioned the jurisdiction of the writ court.
Summary and Conclusion
  • The Hon’ble Supreme Court held that the revision of wages and other facilities should be based on the Industry-cum-region test. The prevailing pay and other allowances should be compared with equally placed or similarly situated industrial units in the same region.
  • It was highlighted that the Financial Capacity of the employer would be strong factor for recommendation for revision of salary which could not be ignored in fixing the wage structure.
  • It is pertinent to state that the company underwent a demerger and the employees union contested in comparison with the other concern. It has been clarified that the 2 entities are not the same after the demerger.
  • As per the employer evidence submitted, various allowances paid were without any evidence and employer witnesses has projected his deposition in detail particularly on the financial position of the company.
  • In consideration of the facts and the evidence submitted, the Hon’ble Supreme Court set aside the Judgment of the High Court also that of the Tribunal and ordered for a fresh re-examination of the case directing the Tribunal to conclude the reference within a period of 6 months.
Takeaway from the Judgment
  • Financial capacity of the employer should be considered as an important factor in fixing the wage structure. 

Judgments Snippets

  • Payment of gratuity cannot be directed with reference to CLRA Act. – 2024 LLR 400 Calcutta High Court
  • No employee can claim leave of absence as a matter of right – 2024 LLR 405 Karnataka High Court
  • Findings of disciplinary enquiry can be challenged even after taking voluntary retirement. – 2024 LLR 393 Bombay High Court
  • ESI Authorities cannot initiate recovery without supplying the order determining the amount – 2024 LLR 371 MADHYA PRADESH HIGH COURT
  • Employer’s visiting card is not sufficient evidence to prove ’employer-employee’ ‘relationship’ – 2024 LLR 388 Delhi High Court
  • Trainees, not employed as apprentices or under standing orders, are employees under EPF Act. – 2024 LLR 420 KARNATAKA HIGH COURT
  • Minimum wages cannot be the only factor for determining accident compensation – 2024 LLR WEB 142 PUNJAB AND HARYANA HIGH COURT
  • Interest on belated deposit of PF dues cannot be waived off – 2024 LLR WEB 155 MEGHALAYA HIGH COURT
  • Termination of services without providing opportunity to show cause or holding disciplinary enquiry is unjustified – 2024 LLR WEB 156 SUPREME COURT OF INDIA
  • POSH enquiry will quashed if copy of complaint was not served to the accused – 2024 LLR 486 KERALA HIGH COURT
  • Dismissal for obtaining employment on false information justifies forfeiture of gratuity – 2024 LLR 490 KARNATAKA HIGH COURT
  • Fixed term employee cannot claim employment as a matter of right – 2024 LLR 501 KARNATAKA HIGH COURT
  • No employer-employee relationship can be established merely on the basis of ESI card – 2024 LLR 506 HIMACHAL PRADESH HIGH COURT
  • It is not mandatory to pay PF contribution for HRA and conveyance allowance – 2024 LLR 578 MADRAS HIGH COURT
  • Weekly offs cannot be deducted while calculating the number of days an employee has worked – 2024 LLR 638 RAJASTHAN HIGH COURT
  • Belated application does not defeat the employee’s right of claiming gratuity. – 2024 LLR 634 CALCUTTA HIGH COURT
  • Employee cannot change date of birth after 10 years even though the original one was incorrect – 2024 LLR 604 SUPREME COURT OF INDIA
  • Employee cannot withdraw resignation after it is accepted by the appropriate authority – 2024 LLR 591 SUPREME COURT OF INDIA
  • Interest on belated remittance of EPF dues is mandatory – 2024 LLR 675 MADRAS HIGH COURT
  • For the purpose of payment of bonus to the employees, the definition of “wages” as provided in the Minimum Wages Act, cannot be used – 2024 LLR WEB 210 DELHI HIGH COURT
  • Limitation under the POSH Act is not to be seriously applied in cases involving continuous molestation and harassment – 2024 LLR WEB 223 MADRAS HIGH COURT

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