Hello All,
Hope you all are doing well.
My Friends father (current age is 63 years, comes from lower middle class family) is working full-time in a (mid-sized textile) export pvt. ltd. company of Ahmedabad, Gujarat, India since more than 2 decades since the starting of the company as a office assistant without any written employment agreement in place. But the company boss has now said him to leave the company permanently (after signing some unknown documents) from next month due to his old-age, but without any notice period and any retirement benefits; as the company is not willing to pay him salary anymore. The company does not provide any salary slip or any type of documentary proof, but he has an active EPF and ESIC account from this company since 2 decades and also managed to obtain a EPF slip and a salary slip of a decade ago. Also, his monthly salary was incremented from just 4000 (joining salary before 2+ decades) to 6000 (todays salary), which is much below minimum wages.
Note: He is currently working since 5-6 months with an artificial limb as Last year he had lost his one leg (75% locomoter disability certificate available from Govt. Of India) and even during his hospitalization period of 2-3 months he was not paid any salary. Although his family had done the leave procedure in ESIC office and also submitted the ESIC leave documents in his company, but still the company has closed his ESIC account mentioning "LEFT SERVICE" in ESIC portal, so he did not got any ESIC leave benefits, company salary and ESIC medicine benefits during this period. But his same ESIC account was started again by the same company once he re-joined the same company, but it has created a non-contribution period (gap) of 4-5 months approx.
Kindly provide your valuable guidance on below mentioned issues:
1. As the company will not provide any relieving letter, even might show it as a termination instead of retirement.
So, what kind of retirement and other benefits like gratuity, leave encashment, EPF, etc. can he claim ?
2. How to calculate all such benefits for his income as no salary break up/salary slip is available?
3. Although being in full-time job for continuous 2+ decades, his salary is much below minimum wages and his annual increment is also very minimum, So, what are the rules of minimum wages and minimum increment in his case? Can he claim for higher last salary?
4. What can he do to get ESIC retirement benefits for medicines because as per rules recent 5 continuous years is needed for ESIC retirement benefits. Although he had 2 decades of continuous account but their is a recent gap of 4-5 months in last year itself?
5. What can he do or where can he complain if his boss done not agree to provide any benefits?
6. Kindly share any similar reference cases in India or relevant Indian resources, if possible?
7. As the company is clearly exploiting employee rights, So what are the important rights of a private employee protected by the law in this case?
Thanks in advance.
From United States, Cambridge
Hope you all are doing well.
My Friends father (current age is 63 years, comes from lower middle class family) is working full-time in a (mid-sized textile) export pvt. ltd. company of Ahmedabad, Gujarat, India since more than 2 decades since the starting of the company as a office assistant without any written employment agreement in place. But the company boss has now said him to leave the company permanently (after signing some unknown documents) from next month due to his old-age, but without any notice period and any retirement benefits; as the company is not willing to pay him salary anymore. The company does not provide any salary slip or any type of documentary proof, but he has an active EPF and ESIC account from this company since 2 decades and also managed to obtain a EPF slip and a salary slip of a decade ago. Also, his monthly salary was incremented from just 4000 (joining salary before 2+ decades) to 6000 (todays salary), which is much below minimum wages.
Note: He is currently working since 5-6 months with an artificial limb as Last year he had lost his one leg (75% locomoter disability certificate available from Govt. Of India) and even during his hospitalization period of 2-3 months he was not paid any salary. Although his family had done the leave procedure in ESIC office and also submitted the ESIC leave documents in his company, but still the company has closed his ESIC account mentioning "LEFT SERVICE" in ESIC portal, so he did not got any ESIC leave benefits, company salary and ESIC medicine benefits during this period. But his same ESIC account was started again by the same company once he re-joined the same company, but it has created a non-contribution period (gap) of 4-5 months approx.
Kindly provide your valuable guidance on below mentioned issues:
1. As the company will not provide any relieving letter, even might show it as a termination instead of retirement.
So, what kind of retirement and other benefits like gratuity, leave encashment, EPF, etc. can he claim ?
2. How to calculate all such benefits for his income as no salary break up/salary slip is available?
3. Although being in full-time job for continuous 2+ decades, his salary is much below minimum wages and his annual increment is also very minimum, So, what are the rules of minimum wages and minimum increment in his case? Can he claim for higher last salary?
4. What can he do to get ESIC retirement benefits for medicines because as per rules recent 5 continuous years is needed for ESIC retirement benefits. Although he had 2 decades of continuous account but their is a recent gap of 4-5 months in last year itself?
5. What can he do or where can he complain if his boss done not agree to provide any benefits?
6. Kindly share any similar reference cases in India or relevant Indian resources, if possible?
7. As the company is clearly exploiting employee rights, So what are the important rights of a private employee protected by the law in this case?
Thanks in advance.
From United States, Cambridge
There is no need to talk to the employer or anybody connected with the employer but he should go to the Labour Office and find the appropriate authority and file a complaint. It is ridiculous that such kind of sheer exploitation happens in India, perhaps only in Gujarat.
I am sure that the employer will try to delete all records relevant to his employment but the fact that some body in the factory would be a witness to his employment, other than the ESI registration and PF registration. That is enough for him to establish that he was employed.
His right to get salary at par with the minimum wages notified by the Gujarat Government will also be materialised with retrospective effect. But the labour Officer has authority only to make it applicable for six months.
Regarding the retirement benefits, since there was no communication of superannuation and no document like Standing Order to prove that the employees would retire on attaining certain age, this will come under the purview of termination of employment of Industrial Disputes Act. Therefore, he should get compensation at the rate of 15 days wages for every completed year of service.
In addition to this, the employer should pay him gratuity as per Payment of Gratuity Act which is again at the rate of 15 days wages for every completed year of service.
He can apply for withdrawal of EPF and of course, will get pension from EPFO with retrospective effect from the date of reaching 58 years of age.
He can continue to get the medical benefits from the ESIC by paying Rs 120 per year as contribution.
The denial of ESI benefits at the time when he had surgery should also be reviewed and the employer's action striking his name from the rolls should be challenged.
All these will be possible only if somebody takes it up and fights for him. It all depends on the attitude of the personnel in the Labour department to help an employee. Though the objective of such departments is to help the working class and to protect their rights under various Labour Acts, many of them consider it as a place for their living and enjoyment. If the officer concerned is not inclined to employer's MONEY, he will succeed.
I am sure that if media is enlightened, some thing positive can happen. I long if I were in Gujarat to help the poor man.....!
From India, Kannur
4238I am sure that the employer will try to delete all records relevant to his employment but the fact that some body in the factory would be a witness to his employment, other than the ESI registration and PF registration. That is enough for him to establish that he was employed.
His right to get salary at par with the minimum wages notified by the Gujarat Government will also be materialised with retrospective effect. But the labour Officer has authority only to make it applicable for six months.
Regarding the retirement benefits, since there was no communication of superannuation and no document like Standing Order to prove that the employees would retire on attaining certain age, this will come under the purview of termination of employment of Industrial Disputes Act. Therefore, he should get compensation at the rate of 15 days wages for every completed year of service.
In addition to this, the employer should pay him gratuity as per Payment of Gratuity Act which is again at the rate of 15 days wages for every completed year of service.
He can apply for withdrawal of EPF and of course, will get pension from EPFO with retrospective effect from the date of reaching 58 years of age.
He can continue to get the medical benefits from the ESIC by paying Rs 120 per year as contribution.
The denial of ESI benefits at the time when he had surgery should also be reviewed and the employer's action striking his name from the rolls should be challenged.
All these will be possible only if somebody takes it up and fights for him. It all depends on the attitude of the personnel in the Labour department to help an employee. Though the objective of such departments is to help the working class and to protect their rights under various Labour Acts, many of them consider it as a place for their living and enjoyment. If the officer concerned is not inclined to employer's MONEY, he will succeed.
I am sure that if media is enlightened, some thing positive can happen. I long if I were in Gujarat to help the poor man.....!
From India, Kannur
Thanks a lot sir for your quick response.
Sir, is their any way possible for him to get minimum wages with minimum increments as per Guj. Govt. rules for the last 2 decades instead of just 6 months. Also, how to know his rightful minimum wage and minimum increment figures for Gujarat?
As his employer has verbally ordered him to not come from next month. Should he wait for the current month salary then go for complaint in labour office? Also, is their any other office apart from labour office where he should complain?
Thanks in advance.
From United States, Cambridge
Sir, is their any way possible for him to get minimum wages with minimum increments as per Guj. Govt. rules for the last 2 decades instead of just 6 months. Also, how to know his rightful minimum wage and minimum increment figures for Gujarat?
As his employer has verbally ordered him to not come from next month. Should he wait for the current month salary then go for complaint in labour office? Also, is their any other office apart from labour office where he should complain?
Thanks in advance.
From United States, Cambridge
The first level to raise such complaints and disputes is Labour Officer/ Asst Labour Commissioner. But the Courts (Labour courts and Tribunals) have powers to make it from his date of joining. (I would take the assistance of our Senior member Umakanthan Sir, who is a Retired Labour Commissioner from Tamil Nadu for more clarity in this matter)
His right to get minimum wages cannot be defended by the employer and it should be on the basis of this statutory wages that his gratuity and other benefits should be calculated. In order to see what happens to gratuity, he may wait for 30 days from which he remained unemployed.
If he is on notice period and is still working, certainly, he will get the salary for this month. He can initiate any legal action only after he has been exited from the organisation.
Umakanthan Sir, please put your valuable comments in this issue.
From India, Kannur
His right to get minimum wages cannot be defended by the employer and it should be on the basis of this statutory wages that his gratuity and other benefits should be calculated. In order to see what happens to gratuity, he may wait for 30 days from which he remained unemployed.
If he is on notice period and is still working, certainly, he will get the salary for this month. He can initiate any legal action only after he has been exited from the organisation.
Umakanthan Sir, please put your valuable comments in this issue.
From India, Kannur
Dear Madhu,
Already gone through the thread and the replies you have given. Under the peculiar circumstances of the case marked by total violation of labor laws allegedly on the part of the employer and unexplained inaction on the part of the employee for very long years of continuous service under the same employer, I don't think that any answer better than yours can be given at this stage.
The narrative in the initial post about the initial and current monthly salaries does not seem to be believable with the length of service rendered so far and the designation of the individual mentioned. Perhaps the individual might have been employed as a domestic servant in the residence of the employer and his wages would have been charged under the business account with such fictitious designation. The fact that he was enrolled as a member of EPF and insured with the ESIC by his employer would be sufficient proof of his employment and the salary can be ascertained from the records of the organizations concerned or the employer can be asked to produce the records at the appropriate stage of the dispute, if any, raised later in this regard. In my experience, I found normally both the disputants come forward with half truth only at the initial stage.
As it is, the cause of action for claiming gratuity has not arisen as of now though there seems a fair chance to make a claim for minimum wages u/s 20(2) of the MW Act,1948. But it can be avoided for strategic reasons for claiming gratuity u/s 7 of the PG Act,1972 soon after his actual termination.
I would also suggest to the poster to interact with the employee in such a manner so as to bring out the actual details of his employment before embarking on any legal action for remedy.
From India, Salem
Already gone through the thread and the replies you have given. Under the peculiar circumstances of the case marked by total violation of labor laws allegedly on the part of the employer and unexplained inaction on the part of the employee for very long years of continuous service under the same employer, I don't think that any answer better than yours can be given at this stage.
The narrative in the initial post about the initial and current monthly salaries does not seem to be believable with the length of service rendered so far and the designation of the individual mentioned. Perhaps the individual might have been employed as a domestic servant in the residence of the employer and his wages would have been charged under the business account with such fictitious designation. The fact that he was enrolled as a member of EPF and insured with the ESIC by his employer would be sufficient proof of his employment and the salary can be ascertained from the records of the organizations concerned or the employer can be asked to produce the records at the appropriate stage of the dispute, if any, raised later in this regard. In my experience, I found normally both the disputants come forward with half truth only at the initial stage.
As it is, the cause of action for claiming gratuity has not arisen as of now though there seems a fair chance to make a claim for minimum wages u/s 20(2) of the MW Act,1948. But it can be avoided for strategic reasons for claiming gratuity u/s 7 of the PG Act,1972 soon after his actual termination.
I would also suggest to the poster to interact with the employee in such a manner so as to bring out the actual details of his employment before embarking on any legal action for remedy.
From India, Salem
Thank you Umakanthan Sir and Madhu Sir for your quick and valuable suggestions.
Sir, it looks that the employer was always giving just the minimum wage "without any annual increment" for 2 decades to a full-time regular employee.
* Sir, is there any rule to give atleast some (minimum) increment like 3% of basic salary to regular employee? if yes, kindly provide any relevant case/act details.
* I understand that to make a claim for minimum wages u/s 20(2) of the MW Act,1948, he would have to approach the Labour office. Is it correct sir?
* As the employer does not provide any leave balance details. Sir, is their any rule to provide mimimum Medical Leaves(ML), Earned Leaves (EL),etc to this regular employee? Can the employee claim for leave encashment for EL,ML? What other leaves can he claim for leave encashment apart from EL,ML. Kindly provide any relevant case/act details.
Thanks.
From United States, Cambridge
Sir, it looks that the employer was always giving just the minimum wage "without any annual increment" for 2 decades to a full-time regular employee.
* Sir, is there any rule to give atleast some (minimum) increment like 3% of basic salary to regular employee? if yes, kindly provide any relevant case/act details.
* I understand that to make a claim for minimum wages u/s 20(2) of the MW Act,1948, he would have to approach the Labour office. Is it correct sir?
* As the employer does not provide any leave balance details. Sir, is their any rule to provide mimimum Medical Leaves(ML), Earned Leaves (EL),etc to this regular employee? Can the employee claim for leave encashment for EL,ML? What other leaves can he claim for leave encashment apart from EL,ML. Kindly provide any relevant case/act details.
Thanks.
From United States, Cambridge
Dear Adi Cool,
Your reference to the establishment as " Textile Export Pvt. Limited Company " indicates just its constitution and not its classification such as to whether it is a 'factory' comprising of the administrative office situated within its premises under the Factories Act,1948 or an exclusive office situated elsewhere as an 'establishment' coming under the Gujarat Shops and Establishments Act,1948. Thus this classification criterion of the said establishment is very pertinent to ascertain the statutory employment benefits like rates of minimum wages, types of leave and their scales etc.
Now, let me answer your latest queries as follows:
a) No Indian Labor Law relating to wages prescribes the grant of annual increment to employees.
'Wages' or 'Salary' can be in the form of a certain consolidated amount or bifurcated into various components such as basic and allowances for any wage period not exceeding one month. It depends on various factors like the nature of work, type of industry, agreement between the employer and union of workmen etc. Noteworthy feature of fixation under the Minimum Wages Act,1948 is that the minimum rates of wages are fixed and revised with the bifurcation of the gross wages into basic and variable dearness allowance so as to neutralize the effect of inflation. Thus the statutory minimum wages always remain incremental. As per the ratio decidendi of the hon'ble Supreme Court of India in the Airfrieght Corporation case [ 1999 LLR 1008 ] 'wages' or 'salary' has to be taken as a single package that shall always remain at par with the statutory minimum rates of wages and if it is split into basic and allowances, only those allowances mentioned in the inclusive part of the definition of the term under the MW Act,1948 have to be taken into account for determining the parity between the industry wages and the statutory minimum wages..
b) YES; the authority u/s 20(1) of the MWA,1948 is normally the Deputy Labor Commissioner of Labor appointed by the appropriate Government for the area of the place of employment.
c) This question can be answered only with reference to the classification of the establishment and the establishment-specific labor law applicable to it. Normally the accumulated portion of the earned leave alone is encashable on termination of employment.
From India, Salem
Your reference to the establishment as " Textile Export Pvt. Limited Company " indicates just its constitution and not its classification such as to whether it is a 'factory' comprising of the administrative office situated within its premises under the Factories Act,1948 or an exclusive office situated elsewhere as an 'establishment' coming under the Gujarat Shops and Establishments Act,1948. Thus this classification criterion of the said establishment is very pertinent to ascertain the statutory employment benefits like rates of minimum wages, types of leave and their scales etc.
Now, let me answer your latest queries as follows:
a) No Indian Labor Law relating to wages prescribes the grant of annual increment to employees.
'Wages' or 'Salary' can be in the form of a certain consolidated amount or bifurcated into various components such as basic and allowances for any wage period not exceeding one month. It depends on various factors like the nature of work, type of industry, agreement between the employer and union of workmen etc. Noteworthy feature of fixation under the Minimum Wages Act,1948 is that the minimum rates of wages are fixed and revised with the bifurcation of the gross wages into basic and variable dearness allowance so as to neutralize the effect of inflation. Thus the statutory minimum wages always remain incremental. As per the ratio decidendi of the hon'ble Supreme Court of India in the Airfrieght Corporation case [ 1999 LLR 1008 ] 'wages' or 'salary' has to be taken as a single package that shall always remain at par with the statutory minimum rates of wages and if it is split into basic and allowances, only those allowances mentioned in the inclusive part of the definition of the term under the MW Act,1948 have to be taken into account for determining the parity between the industry wages and the statutory minimum wages..
b) YES; the authority u/s 20(1) of the MWA,1948 is normally the Deputy Labor Commissioner of Labor appointed by the appropriate Government for the area of the place of employment.
c) This question can be answered only with reference to the classification of the establishment and the establishment-specific labor law applicable to it. Normally the accumulated portion of the earned leave alone is encashable on termination of employment.
From India, Salem
Hello Sir,
It is a GST registered factory in Ahmedabad urban area of Gujarat.
{under Form GST REG-06 [see Rule 10(1)]}
Its details obtained from GST website is as follows:
Nature Of Core Business Activity
Manufacturer
Nature of Business Activities
1. Factory / Manufacturing 2. Wholesale Business
Trade Name
*** EXPORTS PRIVATE LIMITED
Constitution of Business/ENTITY TYPE
Private Limited Company
NATURE OF BUSINESS
Factory / Manufacturing
DEPARTMENT CODE
RANGE II
Taxpayer Type / REGISTRATION TYPE
Regular
Effective Date of registration
01/04/2017
GSTIN / UIN Status
Active
Its Principal Place of Business, office and factory all have the same registered address.
* Sir, can now it be determined, whether it falls under the Factories Act,1948 or under the Gujarat Shops and Establishments Act,1948?
* Which specific labour law will be applicable to it?
* What types of leave can be encashable in this case? How to calculate it without any documentary proofs?
* Also, as this employee was among the initial employee's recruited, even before the company was officially registered? So, from which period can he actually claim for gratuity benefits i.e. from the start of his EPF deduction (as EPF deduction was started after 1-2 years) or from when the company was actually started, as documentary evidences are missing?
* Apart from gratuity, encashable leaves and EPF, is their anything else which he can claim as a retirement benefit?
Thanks in advance Sir.
From United States, Cambridge
It is a GST registered factory in Ahmedabad urban area of Gujarat.
{under Form GST REG-06 [see Rule 10(1)]}
Its details obtained from GST website is as follows:
Nature Of Core Business Activity
Manufacturer
Nature of Business Activities
1. Factory / Manufacturing 2. Wholesale Business
Trade Name
*** EXPORTS PRIVATE LIMITED
Constitution of Business/ENTITY TYPE
Private Limited Company
NATURE OF BUSINESS
Factory / Manufacturing
DEPARTMENT CODE
RANGE II
Taxpayer Type / REGISTRATION TYPE
Regular
Effective Date of registration
01/04/2017
GSTIN / UIN Status
Active
Its Principal Place of Business, office and factory all have the same registered address.
* Sir, can now it be determined, whether it falls under the Factories Act,1948 or under the Gujarat Shops and Establishments Act,1948?
* Which specific labour law will be applicable to it?
* What types of leave can be encashable in this case? How to calculate it without any documentary proofs?
* Also, as this employee was among the initial employee's recruited, even before the company was officially registered? So, from which period can he actually claim for gratuity benefits i.e. from the start of his EPF deduction (as EPF deduction was started after 1-2 years) or from when the company was actually started, as documentary evidences are missing?
* Apart from gratuity, encashable leaves and EPF, is their anything else which he can claim as a retirement benefit?
Thanks in advance Sir.
From United States, Cambridge
Since this is a manufacturing organisation the only leave available is earned leave or annual leave with wages. The same can be accumulated only upto 24 days unless otherwise provided for in any separate settlement with the workers/ unions. The unavailed leave can be encashed in full.
Other than the gratuity and the PF accumulation and the Pension due from the EPFO, there is no other benefits available to a retired person.
The employer will be ready to offer a gratuity but the thing is that what is the amount and how is it arrived at. That is to be carefully studied. Regarding gratuity, the calculation should be at least on the latest minimum wages.
He can also get the ESI extended by paying the required annual contribution of ₹120. This will be of much helpful to him.
From India, Kannur
Other than the gratuity and the PF accumulation and the Pension due from the EPFO, there is no other benefits available to a retired person.
The employer will be ready to offer a gratuity but the thing is that what is the amount and how is it arrived at. That is to be carefully studied. Regarding gratuity, the calculation should be at least on the latest minimum wages.
He can also get the ESI extended by paying the required annual contribution of ₹120. This will be of much helpful to him.
From India, Kannur
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