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and Recommendations
Harkawaljit Cheema
PGSEM, 1212019
Iqbal Khan
PGSEM, 1212021
Sandip Jalan
PGSEM, 1212047
Supriya Thengdi
PGSEM, 1212062
Ta le of Contents
1 Introduction................................................................................................................................3 2 Problem Statement.....................................................................................................................3 2.1 Challen e! "aced b# e$ecuti%e em&lo#ee!.............................................................................................3 2.2 Current Le al redre!!al mechani!m! "or e$ecuti%e em&lo#ee!.............................................................3 3 Le al 'e!earch and Anal#!i!.....................................................................................................( 3.1 Le al act!) uideline! "or em&lo#ment..................................................................................................(
3.1.1 Workmens work - defined by standing orders........................................4 3.1.2 Executives work defined by code of conduct.........................................4 3.2.1 3.2.2 3.2.3 3.2.4 3.2. Working conditions................................................................................... !erformance management" increments" #romotions................................ $ermination.............................................................................................. % &ig't to contest........................................................................................ % (#ecia) com#)iance c)auses for executives...............................................*
3.3 Proce!! o" di!&ute re!olution.................................................................................................................+ ( 'ecommendation! ) Conclu!ion................................................................................................+ * 'e"erence!.................................................................................................................................., - A&&endi$..................................................................................................................................1. -.1 Act!/ ri ht! and &ro%i!ion! in Indian la0 0ith re!&ect to em&lo#ment...............................................1. -.2 Code o" conduct uideline! in other countrie!.....................................................................................1. -.3 Le al &recedent! ) Ca!e re"erence!......................................................................................................11 -.( Em&lo#ment related le al "rame0or1! in other de%elo&ed countrie!..................................................12
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! "ntroduction
,ndias workforce 'as undergone ma-or c'anges in )ast decades. ,t is governed by )abor )aws .1/ w'ic' on)y cover a 0Workman wit' a strict definition of someone t'at -ob inc)udes ski))ed" unski))ed" manua) or c)erica) work. 1owever" 0workmen does not inc)ude em#)oyees engaged in manageria) or administrative ca#acity or su#ervisory ca#acity .1/. ,n t'e know)edge economy t'e ro)e of software engineer" biotec' engineer is t'at of a worker of t'e information age" but t'ey are seen as 2executive3 rat'er t'an as 2workmen3 We assume t'at an executive em#)oyee is someone w'o is 45$ e)igib)e to be termed as a workman under t'e )abor )aw.1/" and is em#)oyed on t'e basis of an em#)oyment contract. ,n ,$" 6$ com#anies etc. a)) t'e em#)oyees for core business are em#)oyed on t'e basis of an em#)oyment contract" 'ence t'ey are exc)uded from t'e )ega) #rotection and su##ort offered to 0workmen. "n this report we have analy#ed the status and rights of executive employees and the gaps in their employment contract vis-a-vis the "ndian la or laws for workmen$ %inally, the report covers the group&s recommendations for improvements in employment contracts$
issues re)ated to )abor )aws and workmen t'ere is no s#ecia) act or a s#ecia) court to cover executive em#)oyees dis#utes.
) Legal Research and Analysis 3.1 Legal acts/ guidelines for employment
3.1.1 Workmens work - defined by standing orders
Workmen as defined by t'e ,ndustria) 9is#utes :ct are covered by standing orders defined by t'e em#)oying industry; organi<ation. $'e ,ndustria) Em#)oyment =(tanding 5rders> :ct" 1?4* is designed to #rovide service ru)es to workmen. 0(tanding 5rders means ru)es of conduct for workmen em#)oyed in industria) estab)is'ments. .see a##endix/
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,n turn if t'e ex#ectations;be'avior of t'e com#any are against t'e #ub)is'ed code of conduct t'e em#)oyee can raise ob-ections or initiate )ega) #roceedings against t'e organi<ation. :)t'oug' codes of conduct are not )ega))y binding and enforceab)e t'roug' t'e courts" t'e courts may nonet'e)ess take into account t'e standards set by t'e code in ascertaining w'et'er an organi<ation;individua) is )iab)e. .(ee &eferencesE*/
3.2.1.1 Time
Working 'ours for workmen are defined in t'e @actorys :ct" 1?4G for factory workmen and in s'o# and estab)is'ment act for offices. $'us t'e working 'ours are fixed and any additiona) time s#ent is com#ensated. 1owever in case of t'e executive em#)oyee" a)so referred as 2w'ite co))ar3" t'ere is no time )imit. $'e executive em#)oyees are usua))y not com#ensated for extra working 'ours or days as it is assumed t'at t'ey are #utting t'ese extra efforts #rimari)y to cover t'eir back)og.
3.2.1.2
el!"ati!n
: factory worker is considered as son of soi) " and workmen come from t'e )oca) community for a factory. $'e transfer c)auses were revoked ; de)eted from t'e standing orders. $'e workmen can be asked for re)ocation but its workmen discretion to acce#t or re-ect. 5n contrary" t'e executive em#)oyee is reHuired to re)ocate based on t'e organi<ations business needs. $'e under)ying #rinci#)e is t'at executive em#)oyee is considered to be key contribution for t'e furt'er growt' and ex#ansion of t'e com#any to ot'er countries and regions. :)so" t'e executive em#)oyee 'o)d s#ecia)i<ed ski))s w'ic' are not easi)y avai)ab)e and 'ence t'eir re)ocation is reHuired. ,f t'e executive em#)oyee re-ects t'e business reHuest to re)ocation it can be considered vio)ation of t'e Code of conduct.
3.2.2.1 #er$!rman"e%
,n case of workmen t'e #'ysica) #resence and individua) activities are #aramount" and 'ence #erformance is measure based on t'e work out#ut. 1owever" in case of executive em#)oyee w'o by definition are res#onsib)e for administrative and management activities" t'eir -ob is getting t'ings done from ot'ers. $'e #erformance indicators are not on)y resu)ts but a)so be'aviora) as#ects.
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:s an exam#)e" a #ersons management sty)e can im#act t'e outcome of ot'ers e.g. consider dictators'i# vs consensus driven )eaders'i# sty)e.
3.2.3 "ermination
Bnder t'e ,ndian )ega) regime" t'ere is no s#ecific )egis)ation w'ic' governs t'e em#)oyment of executive em#)oyees. ,n t'e absence of any s#ecific statute or #rinci#)es governing em#)oyment of executive em#)oyees exce#t t'e basic #rovisions a##)icab)e under t'e ,ndian Contract :ct" 1G*2 and -udicia) #recedents" t'e termination of suc' em#)oyees becomes a tricky issue for t'e em#)oyer. Bnder t'e ,ndian )ega) regime" t'e basis on w'ic' t'e em#)oyer-em#)oyee re)ations'i# is governed is #ure)y contractua) and based u#on -udicia) #recedents. $'e courts 'ave considered mismanagement" misconduct" )oss of confidence" dere)iction of duty" c'ange of business as common grounds of termination of em#)oyment. &efer to :##endix for #ast -udgments in suc' cases.
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* Recommendations + Conclusion
6ased on our ana)ysis we 'ave observed t'at t'ere is no we))-defined :cts or )aws t'at su##ort executive em#)oyees. ,t is genera))y considered by t'e organi<ations and )aw t'at t'ese em#)oyees are em#owered and ;or educated sufficient)y to re#resent t'emse)ves before t'e organi<ation and in case of disagreements or dis#ute t'ey are ca#ab)e to contest for t'emse)ves.
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$'e ,ndustria) 9is#utes :ct 'as not evo)ved to consider t'e newer industries )ike ,$;6!5" te)ecommunications etc. w'ic' #ay more sa)aries to its )owest )eve) em#)oyees t'an t'e cei)ing im#osed by t'e ,ndustria) 9is#utes :ct =:mendments>" 2D12 =cei)ing is 2D"DDD&s.;mont'>. We 'ave tabu)ated t'e concerns due to w'ic' em#)oyees not covered under 2workmen3 'ence outside of t'e )abor )aws are not in a #osition to gain fair advantage in dea)ing wit' t'eir em#)oyers and our #ro#osa)s to amend t'is situation
Sr$ no$
Concerns Cum ersome Legal (rocess :)t'oug' t'e em#)oyee can #otentia))y initiate )ega) #roceedings against t'e em#)oyer in case of a dis#ute " t'e )ega) #rocess is cumbersome and time consuming Costly Legal (rocess $'e )ega) #rocess is cost)y and com#anies 'ave more finances to fig't t'e )ega) batt)es t'an em#)oyees -mployer favoring contracts $'e contracts are drawn by t'e com#anies and are designed to favor t'e com#anies a)so em#)oyees do not 'ave any bargaining #ower
,ur (roposals + Recommendations 1ave an o#tion for em#)oyees to a##roac' )abor courts for redressa). $'e )abor courts s'ou)d 'ave a time )imit ; fast track #rocess to address and reso)ve suc' issues.
$'e em#)oyees w'o decide to instigate )ega) #roceedings s'ou)d be #rotected by )aw suc' t'at t'ey cannot be fired or t'ey maintain t'eir sa)aries during t'e #roceedings Jovernment can #ub)is' standard Em#)oyment Contract tem#)ates de#ending on t'e industry" -ob descri#tion" sa)ary and ot'er as#ects of em#)oyment. Em#)oyer s'ou)d take #ermission from t'e government aut'ority if t'ere are any deviation from t'e standard guide)ines. Contracts s'ou)d be made non-confidentia) documents so t'at em#)oyees can get guidance and 'ave fair idea of w'at ot'er com#anies are offering. :)so" government can initiate e-mployment Contract mec'anism simi)ar to e-stam#ing w'ere a)) em#)oyment contracts to be registered wit' t'e government aut'ority. $'is wi)) bring in more trans#arency and wi)) ensure t'at t'e contracts are not broad and unfair. G+!age
Restrictive clauses in the contract C)auses in contracts t'at deny eHua) o##ortunity for em#)oyees in terms of em#)oyment in com#etitor com#anies .ispute resolution 4o -urisdiction to intervene in any 0#ersona) dis#uteA" e.g. management sty)e or )ack of sensitivity on t'e #art of t'e em#)oyer. Em#)oyee can a##roac' 'ig'er management but may face reta)iation from immediate manager.
,n case com#anies #ro'ibit em#)oyees from taking u# o##ortunities outside t'e com#any t'ey s'ou)d be reHuired to #ay some com#ensation for )oss of benefits 4on-reta)iation #o)icies" for raising concerns against managers or com#any #o)icies" s'ou)d be made mandatory as #art of t'e em#)oyment contract"
/ References
1 'tt#E;;www.actrav.itci)o.org;actrav-eng)is';te)earn;g)oba);i)o;code;main.'tm 2 'tt#E;;www.conference-board.org; 3 'tt#E;;www.mom.gov.sg;em#)oyment-#ractices;em#)oyment-rig'tsconditions;contract-of-service-termination;!ages;contracts-of-service-andtermination.as#x 4 'tt#E;;www.os)er.com;4ews&esources;$ermination-C)ause-in-Em#)oyment-Contract9eemed-Bnenforceab)e-9ue-to-!otentia)-Contravention-of-Finimum-(tatutory&eHuirements; 'tt#E;;#sa)ega).com;u#)oad;#ub)ication;assoc@i)e;8abor-6u))etin-,ssue,KD%D*2D1DD3 11%!F.#df % 'tt#E;;www.'astings)aw-ourna).org;w#-content;u#)oads;2D12;DG;&evakL%3-1871%4 .#df
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0 Appendix .1 Acts! rights and provisions in "ndian la# #ith respect to employment
1 Industrial Disputes (Standing Orders) Act, 19472 $'e sc'edu)e to t'e :ct reHuires t'at fo))owing s'ou)d be s#ecified in (tanding 5rders =a> c)assification of workmen i.e. tem#orary" bad)i" casua)" #ermanent" ski))ed etc. =b> manner of intimating to workmen working 'ours" s'ift working" transfers etc. =c> 1o)idays =d> :ttendance and )ate coming ru)es =e> 8eave ru)es =f> 8eave e)igibi)ity and )eave conditions =g> C)osing and reo#ening of sections of industria) estab)is'ment ='> termination of em#)oyment" sus#ension" dismissa) etc. for misconduct and acts or omissions w'ic' constitute misconduct =i> &etirement age =-> Feans of redressa) of workmen against unfair treatment or wrongfu) exactions by em#)oyer =k> :ny ot'er matter t'at may be #rescribed. 1 (rocess of dispute resolution etween a workman and employer $'e ,ndustria) :ct #rovides for 0Works Committee in factories em#)oying 1DD or more workers. $'e committee wi)) consist of eHua) number of re#resentatives of em#)oyer and em#)oyees. &e#resentatives of em#)oyees wi)) be se)ected in consu)tation wit' &egistered $rade Bnion. $'e Works Committee wi)) first try to sett)e dis#utes. ,f dis#ute is not so)ved" it wi)) be referred to 0Conci)iation 5fficer. 1e is a##ointed by Jovernment.$'e matter may a)so be referred to 06oard of Conci)iation. 1e wi)) try to arrive at fair and amicab)e sett)ement acce#tab)e to bot' #arties. ,f 'e is unab)e to do so" 'e wi)) send re#ort to a##ro#riate Jovernment. $'e Jovernment may t'en refer t'e industria) dis#ute to 6oard of conci)iation" 8abour Court or ,ndustria) $ribuna). Em#)oyer and em#)oyees can vo)untari)y refer t'e matter to arbitration. $'is #rovision is very rare)y used by em#)oyer and workmen. Jenera))y" t'ey #refer t'e Court route 1 Article 14 (Equality bef re la!), 19 (freed " f e#pressi n and inf r"ati n), $1 ( pr tecti n f life and pers nal liberty) f Indian % nstituti n 1 &'e (act ries Act, 194) 1 Industrial Disputes Act (A"end"ents), $*1$
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f c nduct guidelines in
t'er c untries
$'e Bnited (tates 8abour 9e#artment made a distinction between t'e fo))owing kinds of formatsE M (#ecia) documents =ty#ica))y referred to as Ncodes of conductN> out)ining com#any va)ues" #rinci#)es and guide)ines in a variety of areas. $'ese 1D + ! a g e
documents are a means for com#anies to c)ear)y and #ub)ic)y state t'e way in w'ic' t'ey intend to do business to t'eir su##)iers" customers" consumers and s'are'o)ders. M Circu)ated )etters stating com#any #o)icies on a certain issue to a)) su##)iers" contractors and;or buying agents. M Com#)iance certificates" w'ic' reHuire su##)iers" buying agents" or contractors to certify in writing t'at t'ey abide by t'e com#anyAs stated standards. M !urc'ase orders or )etters of credit" making com#)iance wit' t'e com#any #o)icy a contractua) ob)igation for su##)iers.
em#)oyment was terminated. 1owever" t'e #etitioner contended t'at t'e enHuiry was conducted wit'out any basis. $'e management was unab)e to estab)is' t'at t'e 4ova#an s'eets were removed from t'e com#any #remises and were never re#)aced. $'e court ru)ed t'at a com#any cannot make out c'arges of t'eft and fraud" un)ess evidence is #rovided to s'ow t'at materia) )oss was caused. $'e Court ordered fres' enHuiry and set aside dismissa) order of t'e #etitioner. O 8$9 Sethi vs :AS% "ndia
5inistry of 5anpower, Singapore goverment2 we)) defined em#)oyment :ct covering workmen and executives. ,t a)so #rovides an em#)oyment contract w'ic' a)) com#anies 'ave to ad'ere to. 'tt#E;;www.mom.gov.sg;EF!85QFE4$-!&:C$,CE(;!ages;defau)t.as#x ii Canada La or code2 'tt#E;;)aws-)ois.-ustice.gc.ca;eng;acts;82;index.'tm) iii -mployment rights Act in ;92 'tt#E;;www.)egis)ation.gov.uk;uk#ga;1??%;1G;contents
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