TeamLease Compliance E-Bulletin - March 2023 | Monthly Newsletter

Welcome to the 12th Edition of TeamLease HRtech Monthly E-Bulletin. This E- Bulletin comprises Labour Regulatory Updates, recent significant Judgments, and Orders & insights into the Labour Code Updates.

Labour Law Regulatory Updates

In this section, we aim to provide insights and recent updates on various Acts of Labour Laws, in the form of Official Notifications, Circulars, Amendments, etc., that have been published and notified in the past one month, governing on the impact and regulation of labour and employment laws.

The Ministry of Labour and Employment on 13th March, 2023 has issued a notification regarding the date of enforcement of certain provisions of the Employees’ State Insurance Act, 1948 in all the areas of Gandhinagar District (Gujarat).

As per the said Notification, the following provisions of the Employees State Insurance Act, 1948 are being enforced in all the areas of Gandhinagar District.

Sections 38 to 43 and sections 45A to 45H of Chapter IV;
Sections 46 to 73 of Chapter V; and
Sections 74, 75, sub-sections (2) to (4) of section 76, 80, 82 and 83 of Chapter VI. The date of enforcement of the said provisions in all the notified areas is 1st April, 2023.

The Employees Provident Fund Organization, (EPFO) on March 13, 2023, issued a Press release regarding the extended date for applications regarding pension on Higher wages.

The following has been stated namely: –

The Supreme Court ruled that workers who resigned before September 01, 2014, and who had exercised their choice under paragraph 11(3) prior to retirement, were entitled to a pension based on increased pay, Via circulars dated December 29, 2022, and January 05, 2023, field offices received instructions in this respect.
It states that the Employees who retired before September 01, 2014, and have executed joint options prior to retirement had access to the EPFO website up to March 03, 2023, to submit applications for the validation of their joint options.
The EPFO on demand of the employees’ / employers’ associations the Chairman, Central Board of Trustees has decided to extend the time for submitting applications for validation of joint options from such employees till May 03, 2023.

The Ministry of Labour and Employment on March 28th , 2023, issued a Press release regarding the launch of an e-passbook facility for EPFO members.

The following has been stated namely: –

The e-passbook shall benefit and be convenient for the EPFO members, enabling them to view more details of their accounts in graphical representations.
The Ministry has also inaugurated the crèche facility in 63 regional offices of EPFO where 100 or more employees are working.

The Ministry of Labour and Employment on the 24th March, 2023 has issued a Notification regarding the date of enforcement of certain provisions of the Employees’ State Insurance Act, 1948 in all the areas of , Kanchipuram, Tirupattur, Tiruvannamalai and Viluppuram districts, in addition to the already notified areas of the said districts, and in all the areas of Kallakurichi district.

As per the said Notification, the following provisions of the Employees State Insurance Act, 1948 are being enforced :

sections 38 to 43 and sections 45A to 45H of Chapter IV;
sections 46 to 73 of Chapter V; and
sections 74, 75, sub-sections (2) to (4) of section 76, 80, 82 and 83 of Chapter VI. The date of enforcement of the said provisions in all the notified areas is 1st April, 2023.

The Ministry of Labour and Employment on the 24th March, 2023 has issued a Notification regarding the date of enforcement of certain provisions of the Employees’ State Insurance Act, 1948 in all the areas of East Khasi Hills and Ri-Bhoi districts, in addition to the already notified areas of the said districts, in the State of Meghalaya.

As per the said Notification, the following provisions of the Employee’s State Insurance Act, 1948 are being enforced :

sections 38 to 43 and sections 45A to 45H of Chapter IV;
sections 46 to 73 of Chapter V; and
sections 74, 75, sub-sections (2) to (4) of section 76, 80, 82 and 83 of Chapter VI. The date of enforcement of the said provisions in all the notified areas is 1st April, 2023.

The Ministry of Labour and Employment notified regarding annual rate of interest (8.15 %) to EPF subscribers for FY2022-23.

The Ministry of Labour & Employment (MOLE) on March 28, 2023, notified that the Central Board recommended 8.15 % annual rate of interest to be credited on EPF accumulations in members’ accounts for the financial year 2022-23.

The recommended rate of interest of 8.15% safeguards the surplus as well as guarantees increased income to members.

The interest rate would be officially notified in the government gazette after approval of the Ministry of Finance, subsequent to which EPFO would credit the interest rate into its subscribers’ accounts.

The Government of Karnataka brought in The Karnataka Tax on Profession, Trades, Callings and Employments (Amendment) Act, 2023 to further amend The Karnataka Tax on Profession, Trades, Callings and Employments Act, 1976, which shall come into force from 1st day of April, 2023.

The following are the amendments :

After Section 2(a) the following clauses shall be inserted, namely:- Section 2(aa) “agent” means a person who acts on behalf of another person in the course or furtherance of business; Section 2 (ab) “assessment” for the purposes of this Act, means determination of tax liability under this Act and includes self assessment, reassessment and best judgment assessment.
In clause (h) of Section 2 in the explanation after the words “Every branch of a”, the words and punctuation mark “proprietary concern”, shall be inserted.
In Section 9(2) of the Principal Act, for the words “not exceeding one and half times”, the words “equal to one hundred per cent of” shall be substituted.
In Section 10(6) of the Principal Act, for the figure and symbol “2%”, the words “one and a half per cent”, shall be substituted.
In Section 11(2) of the Principal Act, for the words “one and a quarter per cent”, the words “one and a half per cent”, shall be substituted.
In Section 12 of the Principal Act,- (i) the words and punctuation mark “, without reasonable cause”, shall be omitted; and (ii) for the words “not exceeding fifty percent”, the words “equal to ten percent”, shall be substituted.

New / Amended Provision Schedule [See section 3(2)] Rates of tax on professions, trades, callings and employment

Class of Persons required to pay Professional Tax- Salary or wage earners whose salary or wage or both, as the case may be, for a month is Rs. 25,000 and above Rs 200 per month

Labour Codes Update

Team Lease’s Opinion – There has not been any major movement or discussion towards the implementation of the four codes. A number of states are yet to notify these codes while some continue to have some reservations.

The ministry of labour and employment late last fiscal year held a series of discussions with stakeholders including industry representatives and trade union leaders to build consensus on the implementation date, but these efforts did not fructify. Trade unions are completely opposed to them and a consensus with them had not been reached

The status of publication of Draft State Rules , remains unchanged, with the following count of each Labour Codes:

Count of the Draft Wages Rules – 31 States / UT’s
Count of the Draft Occupational Safety, Health and Working Conditions Rules – 25 States / UT’s
Count of the Draft Industrial Relations Rules – 27 States / UT’s
Count of the Draft Social Security Rules – 27 States / UT’S

Judgments

In this section, we aim to highlight all relevant imperative judicial decisions rendered in the recent months in the area of Labour and Employment Law.

POSH Committee’s timeline to complete the inquiry within 90 days under the POSH Act:In W.P.(C) 88/2023-DELHI HIGH COURT

On 11 January 2023, the Delhi High Court made a crucial observation that all POSH Committee members need to take note of:

Even if the Committee fails to complete the inquiry within the 90 days timeline that is laid down under Section 11(4) of the POSH Act, 2013, the inquiry proceedings will not be quashed, and
The 90 days timeline “cannot be said to be mandatory.”

In this case, the petitioner is a Chartered Accountant and sought that the proceedings must be quashed because the POSH Committee could not complete the inquiry within 90 days.Another observation that the Court made was that the petitioner could not point out any prejudice that the delay caused him.

It was also noted that such complaints “deserve to be treated with a certain amount of seriousness and responsibility” and have to be inquired into and “taken to their logical conclusion” in the interest of both the complainant and the respondent, further, Justice Vikas Mahajan observed that “I am prima facie of the view that the complaint of sexual harassment and the inquiry proceeding emanating therefrom cannot be quashed merely for the reasons that the internal complaints committee (ICC) failed to complete the inquiry within the time frame given in Section 11(4) of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act (POSH).”

Rajkumar Agarwal v. Vehicle Tata Venture No. UP 70-BM-1600 Commercial Auto Sales Private Limited through its Director Sanskar Gupta and Others.

The Supreme Court recently referred to a larger bench the question of whether an employee entitled to receive benefits under the Employees’ State Insurance Act of 1948 (ESI Act) for a motor accident, can claim compensation under the Motor Vehicles (MV) Act of 1988 as well in the absence of any authoritative judgment on the issue.

Brief Facts

The appellant suffered injuries resulting in his lower limb amputation. The Motor Accident Claims Tribunal (MACT) initially awarded him compensation, and the respondents contested this award.

The Allahabad High Court reversed the tribunal’s judgment on the ground that an employee insured under the ESI Act would be barred from claiming compensation or damages of a similar kind by virtue of section 53 of the ESI Act. Hence the present appeal.

Issue

The matter being examined here is the potential contradiction in filing a compensation claim simultaneously under the ESI Act and the MVA.

Appellant’s Claims

The bar under Sections 53 and 61 of the ESI Act are not absolute bars but merely bar compensation of a similar kind. There is a distinction between a claim for periodic insurance payment and damages or compensation – they are not benefits of a similar kind.

Furthermore, the MVA being a subsequent enactment, and by virtue of the provisions under sections 163(A) and 167 beginning with a non obstante (a clause that ensures the enforceability of one provision over another that is contradictory to it) clause, there is no bar against subsequently claiming compensation under the MVA.

Respondent’s Claims

The benefit received under the ESI Act bars the employee from seeking a similar benefit (compensation or damages) under any other act.

Judgment

The division bench found a need for more authoritative judgements on this issue. The present bench did not find it prudent to rule on the matter. Therefore, the issue was referred to a larger bench.

The Contributors To This Edition Of The E-bulletin Are – Anandam Marimuthu, Mahesh Kumar & Krishnendu Gourisaria of Teamlease Services Limited.