IN THIS ISSUE

IN EVERY ISSUE Response Threatening one’s way to 03 prominence & dumping business From the Editor’s Desk 04 Guest Column by Dr. Vinayshil Gautam 05 In which three categories of I N T E R V I E W Time to burst 06 managers are you? myths about 10 team work

Lot of us have certain belief and mindset around what good teams and team members should possess for effective In today's digitalized enterprises, the roles of team work. employees and managers are changing rapidly. Dr. Sanjay Muthal Organizations' working culture is also Executive Director, INSIST transforming through smart and hard working Executive Search, Mumbai managers. If the managers work smartly with hard work, organizations sustainability is bound to enhance in terms of long term profitability, Ushering a cultural shift growth and prosperity. An article by Professor (Dr.) Prem Lal Joshi. 13 This younger generation not only has a different understanding of the workplace as well as expectations from it, they are also People Analytics : The future of more likely to voice their opinions strongly 08 HR and change jobs if not happy. An article by Rajeev Bhardwaj. People analytics uses data and analysis - often provided by recruiting software - to understand a broad range of issues Being a boss : The balancing act related to employees including performance management, leadership 15 Being a boss requires a perfect people and recruiting. With the use of people management and balancing skills that keeps analytics, business leaders are able to the employees highly motivated to work utilize resources efficiently to fuel the hard and perform to deliver their best. An progress of the business. An article by article by Dr. Himani Sheth. Surabhi Mittal.

LAYOFFS: Layoffs and job loss : An objective Can't there be an approach alternative? By Alok Nigam The critical role of HR during layoffs By Haresh Chaturvedi Preventing layoffs and how? By Vikas Khokha Removing barriers, creating opportunities By Naveen Kumar Looking beyond the obvious By Dr. Prashant Rao 16-37 Where optimism prevails, nothing COVER FEATURE COVER fails By Suhas Mukherjee Layoffs has to be the last resort Layoffs and the By Sanjeev Bhatia Lay-offs and the law - How it plays hidden truth out in the Information Technology Sector -BM Editorial Team By Archana Balasubramanian

BUSINESS MANAGER SEPTEMBER 2018 1 IN THIS ISSUE

Team cohesion with E.P.F. Act 38 differences 59 Is contributions on higher pay weird? As a leader in any field, the key is to be open to Contribution payable and consultation. When membership by pay limit for people know that there contribution does not have is someone to go to in independent meaning but times of need, someone depends on membership how who will not dismiss their an employee has been enrolled concerns and ideas, it is as PF member. Except reassuring. An article by paragraph 26 (6) all provisions Rajeev Shroff. deal with different conditions of becoming P.F. member. An article by Ram Niwas Bairwa. 40 Driving your car-eer The steering of your career like your car is in CASE STUDY 61 your hands so you gain varied experiences, visit beautiful places, overcome roadblocks, Why Amit said NO? cross speed bumps and sometimes a dead By BM Editorial Team end but life moves on and so should your career. An article by Neetubala Raina Koul. CASE ANALYSIS 62

LABOUR LAW Prakash has to shed his ego! 42 By Pramod K Tripathi LINE 63 HR NEWS Unless convicted by court, gratuity cannot be forfeited for 'Acts Involving Moral Turpitude’: SC When author talks about his book! Subramanian Iyer on “Propel yourself to magnificence” before his book launch

RECENT HR PROFESSIONALS from the COURT ROOM 64 MOVEMENT

Recent Important Labour Judgments 44-54 Hilton India appoints Mallika Rao Bedi, as Regional Director, Human Resources, Hilton India Wages/allowances for ESI Animesh Kumar moves to Zee as CHRO 55 contributions Emrana Sheikh joins Johnson & Johnson as enterprise HR Head An analysis of the definition of wages reveals Ajay Bhatt moves from Abbott to Intas Pharma as that it consists of four president-global HR parts. The first part refers to all Rajesh Hurkat elevated to HR Head South East Asia of Mattel's remuneration paid or India payable in cash to an Indrajeet Sengupta moves to Coca-Cola employee if the terms of the contract of employment, express or implied, 64 HR NEWS are fulfilled. An article by H.L. Kumar. Companies to declare about existence of committee under POSH Act

BUSINESS MANAGER SEPTEMBER 2018 2 Worth reading RESPONSE It's really good content was really useful to me for discussing in the class as case studies. Please include new areas also to get more insights for research purpose for academicians. All the best. Worth reading it. Dr. Sowdamini Secret sauce It is about the views of Usha Chirayil on Chemistry of Teamwork. Fully endorse this 'secret sauce'. Continual, if not continuous, learning is key to sustaining top team performance. Rajan Sinha SEPTEMBER 2018 Interesting read The case study on teamwork is interesting and the analysis done by all AUGUST 2018 ISSUE three is equally keep readers engaged. CHIEF EDITOR Rajaram C. ANIL KAUSHIK Catchy Read much articles on team and teamwork but Passionate the dimension of decoding the element of Anil jee you are true and passionate solider ASSOCIATE EDITOR chemistry in teamwork is very catchy. who represent and front HR voice and it's ANJANA ANIL All the contributor’s have analysed given their importance when few of us propagating anatomy which makes sense. Usha Chirayil, that HR future going to be limited... Keep it Aman Attree and Sujoy Benerjee have taken a up. dive and brought something very interesting EXECUTIVE EDITOR Gajendra Harishanker for us. JAYSHREE DUTT I really liked it. Your each issue has some element of relevance, interest and richness. Really serving the community through print Always a pleasure to write in Business DESIGN & DIGITAL magazine is appreciable where in times of Manager. SATENDER TEJ ARUN social media platforms reading habits are Sujoy Banerjee diminishing. Keep continuing. Thanx Anil ji. Good to be part of the Kamal Kishor larger family... SUBSCRIPTION Vijay Kumar Shrotryia GIREESH KUMAR DIXIT Valid point Article on maternity benefit increase by H.L. Kumar Team work is tool to update self and has raised a very valid point. It is fact that increased team skills. liability on employers in terms of maternity benefit Ravindra Pareek may be out of proportion to borne by small What a useful magazine... I request to HON'Y EDITORIAL BOARD employers. all HR guys to have subscription of Dr.T.V.Rao In all probabilities, in long term small employers Business Manager ASAP. Dr.Vinayshil Gautam will avoid employing female employees. A balance Pramod Kumar Tripathi H. L. Kumar between the benefits and financial liability should Regular impresive team of have been created by the government before Dr. Rajen Mehrotra contributors in all issues! enforcing the law. Ultimate impact of this change in law will be on employment prospects of women Simrat Kapoor employees. very good work . Keep it going. Chetan Saugat Vineet Kaul

Owned, Published and Printed by Anil Kaushik at Sun Prints, Ganpati Tower, Nangli Circle, Alwar - 301001and Published From B-138, Ambedkar Nagar, Alwar - 301001 (Raj.) India. Editor : Anil Kaushik BUSINESS MANAGER The views expressed in the articles published in Business Manager are those of the authors only and not necessarily VALUES YOUR FEEDBACK. WRITE of the Publisher/Editor. TO US WITH YOUR SUGGESTIONS While every effort is made to have no mistake in the magazine, errors do occur. Publishers do not own any responsibility for the losses or damages caused to any one due to such ommissions or errors. AND IDEAS AT [email protected] This issue of Business Manager contains 68 pages including cover Annual Subscription Rs. 1300/- through DD (by ordinary Book-Post) (by Courier/Registry Rs. 1600/-) Visit us on: favouring Business Manager may be sent to: B-138, Ambedkar Nagar, Alwar - 301001 (Raj.) India Mob.: 09785585134, 07665913854 www.businessmanager.in E-mail : [email protected], [email protected] https://www.facebook.com/businessmanagerhrmagazine Published on 1st of Every Month BUSINESS MANAGER SEPTEMBER 2018 3 From the EDITOR’S DESK

Painless surgery!

Recent past has witnessed huge numbers of layoffs in Indian organisations specifically on IT, telecom and other sectors. When we talk of lay off, it is not in strict legal terms because in legal sense as enumerated in employment regulations, it does not mean termination of jobs as we refer here in common understanding. Reorganisation, restructuring, downsizing, right sizing, by whatever name we call this exercise, it leads to termination of employment of people with the belief that it will cut costs, increase revenues and improve efficiency. Some surveys have indicated that layoffs may continue till 2022.

When economy grows, why Layoffs are there -is a question-employee who suffers the burn of job loss asks quietly. Why the company managers were lying or unrealistically upbeat some time before this incident of lay off? Why an employee who scored highest in appraisal and got promotion few days before was asked to leave? Not answering and handling these issues intelligently with sensitivity brings bad name and ill will to the organisation. The maximum layoffs happened in the IT sector is due to the reason that this sector is shifting from the concept of high volume to high value. It is moving towards non- linearity delinking the revenue growth with headcount. AI, machine learning and other new age technologies have drastically changed the skill set requirements. In some cases Layoffs may also be there due to inability of the team to generate required profits on projects. Digitilisation and automation have actually brought about disruption in traditional roles which compelled the industry to re assess their employees' capabilities to remain relevant in business.

Whatever may the background and reasons of the organisations to resort to layoffs, the main issue is of successful execution. For any organisation, letting people go is an unfortunate and unpleasant event full of high negative emotions. Since this exercise involves human element, CEO, HR and all functional managers need to demonstrate high level of sensitivity and positivity in handling employees. It has two dimensions. One is - to communicate and make psychologically acceptable with least pain that he has to go; another is - to maintain the morale of remaining employees who are not axed. Their doubts and fears about the future must be addressed honestly. Managers handling layoffs should have high quality of communication skills with empathy and compassion otherwise whole exercise may back fire. Legal compliances are also to be ensured. Managers should provide all possible physical and psychological support with dignity to help them rehabilitate as early as possible because in long time it is not remembered why the person was laid off but he will remember how he was treated. You cannot make a pig beautiful by putting lipstick.

This time, cover story is all about this painful phenomenon which is reality of the present time in changing business world. Experts offer their advice on how to avoid and choose it as last resort, how to handle and how to regain the confidence of remaining talent and much more...

If you like it let us know. If not, well, let us know that too.

Happy Reading!

Anil Kaushik

@ tdanil anilkaushik anilkaushik September 2018 Vol. 21, No. 3

BUSINESS MANAGER SEPTEMBER 2018 4 There was a time not so long ago when on many emotive issues political careers were being rejuvenated or made on the threat of 'if the demand is not accepted there will be threat to Indian unity'. Issues of employment, reservation, etc were feeders. That rhetoric had its day and sunk without leaving a trace. In a so called new era the threat is of 'civil war and bloodshed'. Release of NRC got a CM agitated. How far this threat will go is for future to unfold. In the meanwhile, life goes on. In the last four years much seminal action has been generated by the powers that govern at the Centre. The writer of these lines had an occasion to interact with Shri Narendra Modi in his closing years as Chief Minister of Gujarat. Shri Modi came across as a man who meant business. This is not the same thing as saying that he invariably managed to get his bureaucrats on board or that all his statements and intentions had a logical follow through to a conclusion. This applies to NRC. The purpose here is, also, to highlight how social discourse can affect business. If the launch of the second draft of Assam's National Register of Citizens can lead the Chief Minister of a neighbouring state to threaten bloodbath and civil war,business is entitled to ask her which way business should to turn? The story doesn't end there. With release of NRC another line of business has been launched. The writer of these lines received in mail the call of a Forum called 'Citizens for Justice and Peace'. This forum does not name anyone as office bearers of the Forum, claims to be based in Mumbai and asks for donations. In its request brochure it has got pictures of five individuals from the same community.It is well known that the so called 40 lakhs people who are left out from the register do not all belong to the same community. It is well recognised that Koch Rajbongshis; people of Nepalese origin and many Hindus also do not figure in the NRC. The brochure of this forum refers to how Monuwar Hussain, just 8 years old or a ShamshulHaq or a Saken Ali have all been unfairly treated. It is being claimed that Saken's name was misspelt as 'Sakhen' and that caused trouble for him. All this may be true. Such errors are known to happen, do happen and are not unlikely in the case of NRC. Fortunately,in case of NRC, there is forum for appeal. The problem is that, often, there is no workable platform for reprieve. The writer of these lines was issued a voters identity card reading Vinay shitGautam. On approaching the person for correction, the person retorted, 'How does it matter,after all you remain the same person'. That was some years ago. Since then, in the social and business landscape monitoring has

Internationally acclaimed management expert.Chairman, DKIF become far more ubiquous but inefficiency remains the same. One has to keep re-establishing one's identity,especially in business, over and over again. The list is long, repetitive and keeps multiplying. In one case, a person was asked to submit copy of the passport, copy of the PAN card, copy of the Aadhaar card, copy of the latest mobile bill, get it certified by a practising Company Secretary,etc. etc. Yes, this is doable. It can take multiple hours if not days. But the systems must work. There are numerous cases where getting one address changed on the Aadhaar card has been responded to by multiple 'technical errors'. The system says that the new Aadhaar Card may take up to 90 days. The computer systems of the service desks of Aadhaar Card update

Threatening one’s way to prominence way one’s Threatening & dumping business are often manned by those who are otherwise unemployable or the system itself is so slow Dr.Vinayshil Gautam, Dr.Vinayshil that it takes about 10-15 minutes per case. In the meanwhile the line of people waiting keeps getting longer and the antics of protest ensure that the key functionary of the office disappears. HR WITHOUT PREJUDICE How does business function under such circumstances? Of the many slogans that this government has, one is, 'ease of doing business'. Does the situation need any comment? There is no existing training institution or skill formation institution which is even claiming to train in basic efficiencies. Indeed if someone desires efficiency,he soon gets termed as an 'odd ball'. In the meanwhile, the political rhetoric keeps getting shriller. In the last four years, the dynastic leader of a major political party has 'hugged' and 'winked' but always failed to find anything worthwhile that the government has done. Obviously, the compliments have been reciprocated. The creature who wants a job done feels hapless and business gets stuck at several new points. The Minister for IT, like many other Ministers features on select television channels to show how digitisation is sweeping the country.No one wants to make issues with him. The reprisals are short and swift. In the meanwhile, business is finding its own ways of coping. They are not waiting for reforms to reform. As the election date come nearer,the likelihood of more and more populist actions increases. Business in the middle of 2019 may be left as hapless as it was in 2014. The fate of business may have not changed even though factors causing the haplessness may well have changed. This is one of the few cases where one hopes that one's analysis and conclusions would need to be revisited. BM

BUSINESS MANAGER SEPTEMBER 2018 5 Professor (Dr.) Prem Lal Joshi, Multimedia University, Cyberjaya, Malaysia In which three categories of managers are you?

In today's digitalized enterprises, the roles of employees and managers are changing rapidly. Organizations' working culture is also transforming through smart and hard working managers. If the managers work smartly with hard work, organizations sustainability is bound to enhance in terms of long term profitability, growth and prosperity.

n today's fast changing business environment in Iwhich technology and 1. SWM = Smart working managers (20%) digitalization are playing key 2. HWM = Hard working managers (60%) role, successul managers need 3. HWM = Hardly working managers (20%) the blending of both operating skills (doing things) and skillset They may also be termed as excellent managers, good managers and for managing things. However, bad managers. the key for a successful manager Smart working managers (SWM) believe in change and delegate is to understand clearly the their power. They use their sound knowledge and skills in executing mindset shift needed moving their work. These managers may strongly believe in rethinking work from doer to manager. Managers practices to leverage employees' innovation potential and create value may be of many categories. addition for the organization. They work on successful strategies. Such However, in a simple manner, managers, can achieve their goals in an accelerated manner, embrace most of them perhaps may be time management, have high level thinking skills, and use innovative categorized into three : brain to make things easier. They may even know how to overcome

BUSINESS MANAGER SEPTEMBER 2018 6 IN WHICH THREE CATEGORIES OF MANAGERS ARE YOU?

stress and try to be both mentally and physically fit and stress on sheer hard work. They may be seeking advisory of the confident consultant. They strongly believe that considered as non - performers. working smartly saves time, efforts, money required to get results and do They may nag around and often the things efficiently. Additionally, they may also create an energetic may be protected by management and highly motivated work place. SWM show care and empathy to their or union. They may also be union subordinates and drive them towards connecting to organization's leaders. They may visit purchase vision. and finance departments to Being the strong propoent of empowerment, they may try to delegate inquire about the billing and 80% of their power and authority to the subordinates and focus on payment status of some of the managing 20% of value added activities which generate 80% of suppliers for self interest. They organization's revenues. They may be self motivated and may believe in may also be closely connected the "mantra" if "I want to achieve success, I need to work smart". It is with core management who may also posited that smart work brings a lot of recognition from the protect them or they may be society. These things allow smart working managers to grow faster in whistle blowers or engage in the organization and industry they belong to. They may also be spying and pass on the rewarded with lucrative bonus because being smart takes a lot of effort information to such managers and creativity.Companies in consumer goods giant Unilever hires such who utilize them in smart managers. Some articles claim that Unilever has been hiring organizational conflict and employees using brain games and artificial intelligence which resulted politics. in huge success for the company. Other example is Colgate Polmolive They may possess human which is considered a great place to work, high remuneration, reliable relations skills, communication and friendly environment, supportive culture, flexibility, great skills and spying skills. However, management that encourages work/life balance. Telecom Italia is an a few work sociologists may be of excellent example for smart working people. Microsoft, Apple, Google, the view that non-work at work is Tata group of companies, Larsen & Toubro, Digital companies etc. are a marginal, if not negligible, other examples. phenomenon in actual practice. Smart managers implement strong team building concept. They As managers, you may have understand the strengths of each individual manager and put each two options to deal with such person in place to shine. They believe in transparency,set ground rules people i.e. either transform them for team to act as solution oreinted managers, and provide inventives. into hardworking managers done I would say that such managers may follow a combination of through coaching, training and consultative, and democratic styles or even 'management by walking retraining on selected areas such around'. These managers may possess conceptual, leadership, as managing performance, communication, analytical, problem solving skills or even spiritual understanding work place roles, skill. Some of the skills may be overlapping. Some professionals argue working as a team. It can also be that combination of hard work and smart work complement each other done through other ways of for managers to be successful. changing attitude and behaviour likewise supporting your It is said that good management doesn't happen by itself. Capable and superiors and organization etc. effective managers need to be trained on the latest updates particularly otherwise retrench them. on government polices affecting their company and industry, laws, competitors position, environmental issues, new development in Conclusion : management theories and trends etc. In today's digitalized Hard working managers (HWM) delegate less and do the things enterprises, the roles of themselves such as accountants. They may consider the things they do employees and managers are are of confidential in nature. They do work with lots of effort, taking changing rapidly. Organizations' more time and hard work. Perhaps they focus on performing activities working culture is also more as compared to less on results. Some HWM may do the same thing transforming through smart and twice or thrice not sticking to time management. hard working managers. Most of the employees in the organization George Dinwiddie (2008) in her article on "Working Hard or Hardly put all efforts to salvage and Working" remarks in this context : "My experience is that some people improve positive work have to work harder to accomplish the same results that another person environment, however, all roads can accomplish easily. Some people look like they are working mighty lead back to the managers who hard, but are not accomplishing much." ultimately have the Hard working managers tend to exhibit the traits of productivity, accountability. If the managers motivation, dedication and self - reliance. They may have impressive work smartly with hard work, work ethics, willing to do whatever needs to be done and may be trusted organizations sustainability is more. Additionally, they may report their work progress to superiors bound to enhance in terms of more frequently. The percentage of such managers may vary between long term profitability, growth 55%-65%. Companies such as Southwest Airlines, Screwfix, Warby and prosperity. BM Parker, Birla group of companies, Nitro practise these styles. References HWM may follow a consultative and persuasive type of managerial Dinwiddie, G., (2008) Working hard or styles. They may possess human relations, technical, communication, hardly working, http://www.estherderby.com/2008/12/workin administrative and spiritual skills. Such managers are rewarded with g-hard-or-hardly-working.html normal bonus. Holtzclaw, E., (2013)5 Things smart Hardly working managers (HWM) may remain within the managers know about building teams, https://www.inc.com/eric-v-holtzclaw/5- organizations for a leisure or looking for opportunities in other things-smart-managers-know-about- organizations. They may know the art of not working at work. Their building-teams.html percentage may vary between 10 to 20%. They do not get any where by

BUSINESS MANAGER SEPTEMBER 2018 7 People Analytics : The future of HR

People analytics uses data and analysis - often provided by recruiting software - to understand a broad range of issues related to employees including performance management, leadership and recruiting. With the use of people analytics, business leaders are able to utilize resources efficiently to fuel the progress of the business.

Surabhi Mittal, Vice President HR, LANXESS, Thane (W)

positive work environment through effective employee-employer relations. Corporates are developing a workplace that integrates dimensions like engaging culture and performance management with the help of insights found through analyzing employee data. This data significantly provides a better understanding of employee's perception and posses the ability to bolster employee engagement and productivity at a day-to-day level to deliver business results. In the era of big data, the HR professionals are also adopting a data - driven approach to gain valuable insights into their workforce. Analyzing employee data with an objective to contribute towards the growth of the business is known as people analytics. People analytics uses data and analysis - often provided by recruiting software - to understand a broad range of issues related to employees including performance management, leadership and recruiting. With the use of people analytics, business leaders are able to utilize resources efficiently to fuel the progress of the business. Many companies have scaled their public analytics capability by mergence of the using cloud - based analytics as part of its strategy to take more of its employee experience human capital decision - making on facts. People analytics shows how Ewhich is now something each business - unit is performing relative to key performance that many HR leaders and indicators which are primarily around talent retention, personnel costs, executives around the world are and headcount. focusing on. Companies are The companies are investing heavily in programs that utilize data for nurturing their human capital workforce planning, talent management, and operational improvement. through the creation of Companies are using interview data, candidate screening data to reduce management programs, policies, unconscious bias in recruiting. New tools to look at social and local and procedures, by fostering a

BUSINESS MANAGER SEPTEMBER 2018 8 PEOPLE ANALYTICS : THE FUTURE OF HR

hiring data help companies identify people who are likely to look for new jobs much before they are even approached by competitors. The use of external data for people analytics has grown significantly, as more than 50 percent of companies now actively use the social network and If companies in India have to external data to understand attrition, retention, and other performance metrics. attain their growth targets, In 2017, according to a Forbes survey, 69% of the companies studied compete with multinationals, and have taken various steps to improve utilization of people data but few have been able to derive an optimum output of the analysis. One of the thrive in an immensely major reasons behind this is the separation of public analytical capabilities from the rest of the business which restricts its application competitive market, they need in the organization. HR staff does not have a grasp on basics of analytics that are essential to share insights generated by the public to optimize their workforce with analytics team with the rest of the business. To bridge this gap it is important for the HR staff to acquire basic data literacy skills to have a the use of people analytics. better understanding of the business issue. Including analytical curriculum to teach analytical skills and knowledge can develop average analytical capabilities of HR practitioners. Taking analytics into consideration while making the decision is a habit that companies work culture should incorporate. HR leaders should champion the data - driven decision - making culture and enlist the support of their senior executives in communicating the importance of data - driven decision - making. The data generated by the PA team does little good if it can't be easily accessed and translated into compelling stories that move business leaders to action. To improve the results, data and insights generated by public analytics team must be shared throughout the organization. HR leaders need to develop sharing mechanisms, such as a self - service model, shared services, or automated dashboards. In high-performing analytics functions, these delivery mechanisms are robust and frequently used and form a critical part of the analytics ecosystem. Without a good delivery method, people analytics won't scale. To identify and pursue critical business projects, Public analytics team should create strong working partnerships. Such strategic partnerships can create connections needed to identify the most do so consistently and pressing and relevant problems in the business, such as improving sales rigorously can not only take performance or assessing the quality of internal versus external hires. proactive actions to correct and Organizations need to build an extended people analytics system - resolve issues but also make one that enables data and analytics to be broadly embedded in everyday work more enjoyable and work streams and decision - making processes. Such an ecosystem meaningful to their employees. features data infrastructure, strategic partnerships with business The experiments going on in leaders, analytics capabilities throughout the HR function, mechanisms the analytics space are expected to share data and insights with a wider audience, and a companywide to bring robust analytical data culture. models which will drive high In India, analytics is gaining importance for its capability to predictability and impact. provide insights on talent acquisition and retention. India produces People analytics will implement millions of graduates every year, but there is a gap between evidence - based decision qualification of majority of the graduates and the skill set required making - removing the reliance by the companies. Thus, employability of fresh out of college on gut feeling which will enable workforce is questionable and a war for talent acquisition is ongoing. HR professionals to talk Even if an organization manages to hire the right people, retaining confidently about workforce them for a long term is a huge struggle. High attrition can needs at the highest level. It will significantly affect the goals of a company in short as well as long- predict possible scenarios term. If companies in India have to attain their growth targets, related to workforce issue so the compete with multinationals, and thrive in an immensely competitive companies can anticipate effects market, they need to optimize their workforce with the use of people of its policies on the employees. analytics. Companies who efficiently The challenge of scaling is the critical next step in capturing the utilize this analysis coupled full potential of people analytics, but it isn't the conclusion. Using with the way in which workforce people analytics to enhance the employee experience and spur metrics influence their bottom employees' productivity on a daily basis, as part of their regular line and help to drive and predict workflow, are certainly business imperatives. Organizations that can future success will have the edge over their competitors. BM

BUSINESS MANAGER SEPTEMBER 2018 9 INTERVIEW Lot of us have certain belief and mindset around what good teams and team members should possess for effective team work. For me, there are few myths that I continue to see leaders grapple with or fall prey. It is high time to burst the myths about teams and team work to set the right direction.

Dr. Sanjay Muthal, Executive Director, INSIST Executive Search, Mumbai

Time to burst myths about team work

How do you define teamwork in contemporary terms? collaborative team work in SM Team work as we know is a collaborative effort of a team to disruptive world? In such achieve a common goal or to complete a task in a most effective complex situation for me way. In contemporary terms, the context have changed. The what work best for better business models have changed. This has had a profound effect on team work is to think how we do things at work. Technology is a most important part of 'Simplicity is the best form this change. All around us Technology is influencing every aspect of sophistication'. Team of life. Work life is no exception. People/processes etc in leader must take all the organizations have been impacted. The linear thinking business choices and ways of doing models are dead and gone. Today you have disruptions happening things & simplify them for at work place and it has profound effect on the way you used to team. work and now how you need to work. Therefore it has had impact on our people and hence the teams. You have people of multi- Struggling between art and generational background in one team, you also have multi-leveled science form of team work, have technology friendly people at work and in teams. Some are ever thought over the chemistry technology friendly, some are far from it. How does one create and mathematics of team work ?

BUSINESS MANAGER SEPTEMBER 2018 10 TIME TO BURST MYTHS ABOUT TEAM WORK

SM It's a classical dichotomy to cultural organizations. This naturally leads to individual team say whether team work is an members complaining a sense of isolation and lack of connection art or science. To me it is with other team members due to geographical distance, different both. First what makes a time zones and sometimes very different mix of communication great team? There is an styles due to cultural lineages. In such a situation, it is extremely entire scientific field to important that organizations choose right team members. To me, support that team building there are few essential traits a virtual team member must in science. Like high possess : He needs to be a team player, keen collaborator, culturally performing teams share sensitive, extremely good in communication, flexible in his similar attributes like outlook, be it around time zones, culture etc and last but not the energy, creativity, mutual least, has to be competent in usage of technology. For an effective commitment which can be virtual team, role coordination is extremely important. Virtual qualified and measured. teams are generally flatter in organizational structures. They are Fair enough to suggest the formed for a specific duration, may be for a project and can face science part of the team difficulties in managing individual tasks due to the time zone work. Now let us look at the differences or sometimes due to cultural differences. In a virtual art side, we know high team, members play three important types of roles : performing teams have few (1) Task oriented or functional roles - viz. Expert in particular field common characteristics viz or function. everyone in a team talks and listens to in roughly equal (2) Socio-emotional roles - viz. Help build trust, collaboration. measure, everyone talks to (3) Individual roles - Generally around personal needs of the team each other and not only member - viz. Recognition need or control need. team leader. Team members Hence for a successful and collaborative virtual team where carry out 'back channel' or technology can neutralize the team work, it is important that side conversation and so on. every team member is selected carefully who performs efficiently Here is where the art of the task oriented and socio-emotional roles well and avoids team work comes to play. negative individual roles. Team leader has to depend on his expertise of picking the members of the above traits and this is a gut Ethics in business is at center stage more decision. Here lies the art of team building. The science than ever and hence leader must set a comes from the brain, the team culture which is values driven and neuro faculty of human being whereas art emerges doesn't compromise on company's stated from the emotion which lets mission and purpose. say emerges from the heart. Team building needs both, the science and emotion to come to the fore in delivering great team work. Do you believe that apart from popular traits of effective team and team Lagan the movie depicted workers, something more is required in changing fast paced business perfect blend of science and environment? What should be that "something"? art while becoming SM Team work is second most googled word after leadership. We all victorious at the cricket know how good team work is central to the success of every game. Aamir Khan knew organization. Classically a successful team is meant to be having who had the scientific team members who communicate well with each other, they focus capabilities and skills to on goals and results, each team member does his or her own work deliver results and hence and contributes to team's goal. They offer each other support. chose a perfect team while Teams are diverse but united by purpose and are led by a leader he exploited emotions to whom they trust and respect. They show genuine commitment and ensure that team gets madly are flexible. However apart from the classical team qualities and motivated to defeat the abilities listed above, in today's dynamic and disruptive business British team and win the environment, the team leader needs to go beyond the traditional game to ensure the whole mindset. You need a few more things to be a successful leader and village and area don't have lead a great team : to pay lagan, i.e. taxes. 1. Shared values & culture : As people operate in different geographical zones, different time zones and in dispersed What does it really mean to be a teams, they need guidelines and value system to help them team player in times when virtual make right and ethical decisions. Ethics in business is at center teams and robots are taking over stage more than ever and hence leader must set a team culture the workplace where technology which is values driven and doesn't compromise on company's neutralizes the chemistry of stated mission and purpose. teamwork? 2. Open transport feedback and free flow of information : SM Virtual teams have become Gone are those days when information only flew top to bottom reality in today's multi- in the organization. Org structures today are becoming more geographical, multi- flat and collegiate in nature. Hierarchies are evaporating. locational and multi- Hence transparency within the team is extremely central to its success. Inclusion is the mantra here. In digital world,

BUSINESS MANAGER SEPTEMBER 2018 11 TIME TO BURST MYTHS ABOUT TEAM WORK

dashboards, digital information centers and types play important role in creating that free flow of information and help team bond better. 3. A new mindset of team members getting recognized and rewarded for their contributions and not position : All team members are equal as team members. They don't carry their position to the team. Hence what you contribute to team is more important than who you are and what your title is. This also drives a message that everyone is important and no one is indispensable. 4. Help them help themselves : Allow people to fail. Every failure is a beginning of new learning. If you don't try, you will never succeed and failure is set for the team. integral part of the success. Leader in today's context must Individual team understand that there is another path and that could be more members must subscribe effective. That perhaps can lead to faster resolution of a to the team and its goals. problem. A leader must play a role of enabler and help team Here HR can play a very members help themselves. meaningful role. 2. Measuring the team What are some of the myths behind effective teams and team workers? performance : What gets measured, gets done. SM Lots of us have certain belief and mindset around what good And whatever is done teams and team members should possess for effective team work. also has an opportunity For me, there are few myths that I continue to see leaders grapple to improve. Hence HR with or fall prey : can help set up clear 1. Harmony & peace is good for team work : Contrary metrics to measure team harmony can be detrimental to a good team. Conflict is likely to performances and report get you more creative solution in many situations. them to leaders. This will 2. Collective intelligence is better than individual also help if any intelligence : Not true. In every situation a team can have an corrective action needs to individual who gets some intelligent ideas to solve the problem. be taken mid-course. A leader must recognize that and harness that. The leader must 3. Setting up a reward take that call in ensuring that collective wisdom is also mechanism : Sound recognized while harnessing individual wisdom. reward policies like 3. Bigger the team better the performance : Not true at all. variable pay linked to Sometimes the bigger size can be an impediment to a good team performance can collaboration and team work. On the contrary, small teams help motivate teams to could be more efficient and effective. achieve the team goals. 4. Technology & digitalization is now a solution to face-to- 4. Support team work face meetings : While this could be a reality for large, diverse, through effective HR multi-geographical organization but one cannot recognize the strategy via value of face-to-face meetings wherever feasible to drive Recruitment & collaboration. Retention; Training & development; 5. Successful teams always get along : True mostly but Engagement sometimes most productive teams fight productively about new initiatives : HR can ideas. It is good to agree to disagree and move ahead to find help create team work newer solutions. enabling people 6. Bring in a new member to bring in new ideas and energy : architecture. On the contrary, longer the association, better it is for 5. Coming up with team improving team performance. building initiatives : These initiatives are What is the role of HR in accelerating chemistry for teamwork? classical HR interventions but are SM HR can support effective team working and accelerating chemistry still very effective, of team work by few basic steps : especially to improve 1. Define a clear purpose and agenda for each team : For any interpersonal team to be successful, they must have a clear purpose. Purpose relationships, defining drives individuals to excel in a team. HR must define clear goals roles and encouraging and outcomes. Involve team members in setting goals for the teams to collaborate. BM team. People will always own their goals which they themselves

BUSINESS MANAGER SEPTEMBER 2018 12 This younger generation not only has a different understanding of the workplace as well as expectations from it, they are also more likely to voice their opinions strongly and change jobs if not happy. They value not just monetary compensation but also job satisfaction, a large part of which flows from the workplace culture. Elements such as workplace flexibility, greater autonomy and being able to do things differently play an important role in determining workplace culture. Ushering a cultural shift

RAJEEV BHARDWAJ, Vice President, Human Resource, Sunlife Financial Asia Service Centre, Gurugram

sharp shift. Changing demography drives an inevitable change in workplace dynamics. Our organization, where as many as 90 percent of the employees are millenials below the age of 40 years is practically run by people who grew up in the 1990s and 2000s, who witnessed the Internet revolution while growing up, and are completely at home in a world where distances have shrunk and communication technology is all pervasive. They are a generation who have wide exposure to the happenings around the world including the way leading international corporations work and treat their employees. Understandably their demands and expectations from their workplace are much different from the previous generation. It is therefore incumbent on managers to ensure their organizations change to meet the requirements of a changing workforce. Organizational culture is a critical factor that attracts and binds employees to their company.The more amenable the work culture, the longer an employee is likely to stay put. Unless and sk any individual who until the top management reinvents itself with changing time, it will has been part of the not be able to provide the right leadership. Acorporate work force The millennial surge for around two decades, and they India is expected to become the youngest country by 2022, with an would tell you that the most average age of 29 and a millennial population of 400 million. In fact, indistinguishable shifts at their India's millennial generation is bigger than China's or the U.S., and it workplaces have been the will boost the nation's labor force to the world's largest by 2027. dramatic change in demographics and the intensive With the Generation X closing in onto retirement gates, the world's penetration of technology! With a corporate workforce is largely turning into a millennial juggernaut. new generation of young Easily the largest generation in history and an influencial force today, professionals entering the millenials, however, are not a uniform block. There are multiple market, not just the median age generations within this category - a new employee who has joined an but the shape, colour as well as organization at 21 is a millennial, so is a senior manager who has 10 gender balance of workforce has years of work experience. It is extremely important for human resource changed radically in recent years. managers to take into account this reality and work towards re- Add to it the rapid onslaught of scripting organizational policies. technology, increased This younger generation not only has a different understanding of connectivity and easy familiarity the workplace as well as expectations from it, they are also more likely of the workforce with new to voice their opinions strongly and change jobs if not happy. They technological innovations, the value not just monetary compensation but also job satisfaction, a large way we work has also witnessed a part of which flows from the workplace culture. Elements such as

BUSINESS MANAGER SEPTEMBER 2018 13 USHERING A CULTURAL SHIFT

Flexible work timings and work- from-home settings allow employees greater space and room to balance work and personal lives, and increasingly organizations are adopting these approaches to give precedence to employee convenience.

workplace flexibility, greater autonomy and being able to do things the focus today has turned more differently play an important role in determining workplace culture. on a result - oriented approach to work rather than a process - Spontaneity and Flexibility over Protocol oriented one. Organizations must Twenty years back it was difficult to visualize an important corporate understand that the working meeting taking place over pizza and breadsticks at a casual food joint. generation of the day wants However, today this is a norm rather than an exception. While the greater freedom and autonomy to classical concept of work dictated a serious and highly formal approach finish projects in their own when it came to clothes, addressing people and adhering to protocols, a lot unique ways. of these things are considered redundant today.This is a generation that Focus on Health & Wellness might be some serious work while simultaneously being plugged to their MP3 and sipping coffee at the cafeteria; they might be discussing a crucial A key area organizations campaign idea while also running over a treadmill. More organizations today must give priority is focus today are adopting the idea of open offices that are characterized by on the overall health and wellness minimal cabin spaces and dividing walls. This more democratic, less of employees by ushering in a hierarchal approach gives way to a free interplay of ideas and greater culture of care and comfort. intermingling of creative juices - the environment the young generation Health and wellness policy must finds ideal for work. Offices today are brighter, colourful and visually not end with sick leave, health happy places rather than the black and white monochrome settings that insurance and the customary defined the formal office look earlier. annual health checkup, it must go beyond towards ensuring the The formal settings of the conference rooms have in many places physical, mental and made way for more informal and practical collaboration spaces where a psychological well - being of group of people from different teams can deliberate together while employees. working on a common project. Easy accessibility of laptops and round the clock connectivity has ensured that even employees working remotely or In a rapidly changing world in different offices can conveniently join important meetings through where social and family support video calls without the need for physically being present all the time. is shrinking, it becomes a Flexible work timings and work-from-home settings allow employees responsibility of the greater space and room to balance work and personal lives, and organization to keep a check on increasingly organizations are adopting these approaches to give your employees’ mental well - precedence to employee convenience. being as well. Has the performance of one of your A lot of formal approaches to work have also become redundant in a bright and productive employees workplace driven by spontaneity and convenience. Skipping formal suddenly taken an unexplained communication through mails in favor of on-the-go updates on whatsapp beating? There might be nagging groups and one-on-one communication has become a norm. In a nutshell, mental health issue behind it. BM

BUSINESS MANAGER SEPTEMBER 2018 14 Being a boss requires a perfect people management and balancing skills that keeps the employees highly motivated to work hard and perform to deliver their best which in turn add to their personal, professional and ultimately the organization's growth. Being a boss : The balancing act

DR. HIMANI SHETH, Assistant Professor, L J Institute of Management Studies, Ahmedabad

The difference between a good boss and a bad boss : Someone says our boss keeps us happy,highly motivated and is a real caring person and so we rate him a good boss. But here the story does not end. What is the productivity that that boss is yielding from these happy employees, what is the value addition to the employees working with him? If there is a positive response to these questions then definitely the boss is a good boss. But then again who is a bad boss. Somebody,who is extremely strict, task master, not bothered about employee motivation and employee engagement? Happiness of the employees is not on the priority list. But somehow, he manages to get productivity from the employees and adding to their career graph. So can we consider him a bad boss? Well, from the company's perspective he may be a good boss but from employee's perspective he may be a bad boss. So the point here is, a boss has to perform a perfect balancing act and has to be a good boss both from the company's and employee's perspective. A happy employee is a productive employee and thus happiness of the employee has to go hand in hand with a number of other aspects. Talking about the balancing act of a boss, 70% of the boss's time and he definition of efficiency is utilized in managing people, leading them in the right management : direction, solving their conflicts (within or outside the organization) and TManagement is the "Art keeping them highly motivated to work and add value. And of all these of getting things done". And most above mentioned task, the most important and appreciated task is to of us have an ambition of getting differentiate between a performer and non performer and both these things done. When asked, many categories of performers have to be treated in a different way. It doesn't of the young graduates say "I mean that there is no room for average or non performers. The boss has to want x number of employees to take along all the employees together, whether he/she is a fast track work under me. Well, we all want performer, advance performer or a slow performer. He has to focus on to someday become a boss. And various aspects like capacity building as well as capability enhancement. He what seems to be so beautiful has to get the work done from a slow performer without making him realize from the bottom and middle of that he is a slow performer and appreciate the advance performer within the the ladder is certainly not that best possible limits. He has to study the strength and weakness of all his beautiful as it seems. The team members and understands the fact that a perfect team is a not a team position at the top is extremely full of all performer and efficient people, but a perfect team is a combination tricky and dangerous at times. of people who can complement each other's strengths and weaknesses. We all work hard to cross all the Capitalizing the strength of each team member in their own capacity, hurdles up the ladder and reach keeping in mind their limitations, is the trait of a perfect boss. And it is very the ultimate destination. But the important to mention here that the task of managing people becomes even struggle here is not finished but more challenging when they come from a diverse background with different the real struggle starts now. A age, gender, educational background, organizational tenure, work well known author once said experience, religion, region, caste, nationality.Needless to say that keeping "Business is people" and dealing one employee happy at times leads to dissatisfaction to other employee who with people cannot be taught but is again equally important as the first one. So then concluding here the it comes through your own ultimate thing is that being a boss requires a perfect people management personal and professional and balancing skills that keeps the employees highly motivated to work hard experiences and here comes the and perform to deliver their best which in turn add to their personal, real controversial question. professional and ultimately the organization's growth. BM

BUSINESS MANAGER SEPTEMBER 2018 15 COVER FEATURE LAYOFFS: Can't there be an alternative? Layoffs and the hidden truth

-BM Editorial Team

While layoffs have always been part of corporate life, they have increasingly became common today - where companies are laying off employees in good times as well as bad. Why is it so? Are we getting a new culture where hire and fire is just another routine for the organisations? Or, is there a truth behind these layoffs which is yet to be unearthed? BM explores it for you here…

BUSINESS MANAGER SEPTEMBER 2018 16 COVER FEATURE COVER FEATURE

ompanies have always cut back on workers during economic Cdownturns, but over the last few decades layoffs have become an increasingly common part of corporate life. Companies now routinely cut workers even when profits are rising. Some troubled industries seem to be in perpetual downsizing mode. This not so perfect world, puts pressure on companies to cut of its staff, sometimes at the cost of loosing their very best employees. Unfortunately, there are certain factors over which HR managers have little- to-no control, which affect even the best and highest performing employees. Why layoffs? There are circumstances in which layoffs are necessary for a firm to survive. If your industry is in a mode of permanently shrinking, layoffs may be necessary to adjust to the new market size. Sometimes changes in technology makes layoffs feel like the only alternative. But the majority of the You can also avoid layoffs by layoffs that have taken place during the last few years aren't the result of a broken business model. Today organisations requiring employees to take few are mindlessly hiring and firing - but its is not doing so to ensure survival. weeks or months unpaid leaves per Is there something that can be done? There are many circumstances (often unfortunate and year. These unpaid leaves or unavoidable) that cause employers to let good employees go. But the cost of losing great employees can go beyond the vacations give your payroll costs a actual cost of doing business. If not handled correctly, a layoff can leave a dent on your organisation’s image, which break while allowing your staff to can go on to impact your brand and cost you in terms of future talent acquisition, customer and partner relations, keep their jobs. and even legal backlash. However, there are ways by which companies can help make the layoff experience easier for its valued employees. Benefit cuts : Try reducing the benefits you offer as Providing outplacement services is one such way. long as you remain within your legal rights. Cut employee A company that invests in an outplacement service has perks that drain necessary funds from the company chest. major advantages over others who didn't do so. This allows Sell assets : Remember your human resource is your a company to live up to its commitment to taking care of its biggest asset. The honest truth is you don't need fancy employees, thereby also protecting the employer brand, gadgets and machinery but the skills that can operate any reducing legal risk, and potentially restraining the machine and still give you results. Start selling off assets to remaining employees from getting demotivated. reduce storage costs, bring in some cash flow, and protect Some other alternatives to layoffs are : your valued workforce. Freeze hiring : Many of the companies that deploy Take feedback : Your employees need to know if the mass lay-offs are still placing job postings at the same time. company is in trouble. It's the time for transparency in In other words, they're getting rid of valuable human leadership. Let your team know about your company's capital to save money while bringing in fresh blood at lower struggles, then ask for their feedback. How would they salaries. But the fact is - it costs less to retain employees prefer you to handle the situation? Most certainly there than to replace them, so consider a hiring freeze as an suggestions would be far more logical and doable than alternative to layoffs. layoffs. Unpaid leaves : You can also avoid layoffs by requiring In all possibilities and under all circumstances layoffs employees to take few weeks or months unpaid leaves per has to be the last resort (if possible not even the last one). year. These unpaid leaves or vacations give your payroll Human capital is a company’s biggest asset, they are the costs a break while allowing your staff to keep their jobs. ones who have made your company - who have made you Shorter work weeks : Global researches have proved 'the desirable ones'. It is unethical in every sense of the that shortening the work week by just one day can cut costs world to ask them to leave for no fault of theirs, moreso, by a significant margin. In fact many companies outside when you have so many other options to get you put the India have already started practising the same. situation you are in. Work-from-home : Keeping employees in the workplace High performing organisations manage things and lead costs money. People consume electricity, water, and other people. That means working together when the financial utilities, as well as office supplies. Work-from-home heat is on to reduce costs, through initiatives which are opportunities help reducing these costs and also helps in practical, ethical and humane.BM retaining good talent.

BUSINESS MANAGER SEPTEMBER 2018 17 COVER FEATURE

LAYOFFS: Can't there be an alternative? Layoffs and job loss : An objective approach

For any good organisation the layoffs should be done only when all other alternatives have been exhausted. The biggest challenge in conducting the layoffs is explaining to employees underlying causes and reasons behind it.

ALOK NIGAM, Group CHRO, Bhartiya Group, Gurgaon

ajiv had planned for a decisions will continue to be taken and people cost will get effected in nice weekend with his proportion. Rsmall family when he The more and more fierce competition in the market place will make the walked into the office that Friday corporations cost conscious will look at scaling down the wasteful the and was suddenly called into the expenditure and people cost easily becomes the first step to target. In the boss's room for a meeting, and entire process sometimes, the transparency and objectivity take a back then it happened! He was told that seat. The corporations need to look at laying off the employee as a last the management has decided to resort. There are surely more and enough avenues to look at for cutting the shut down his SBU due to low costs and expenditure such as materials, unwanted processes, fancy market sentiments and his job overheads etc. has gone. He had been laid off by The biggest challenge in conducting the layoffs is explaining to his company. employees underlying causes and reasons behind it. The other challenges This scenario has been a such as statutory approvals, wherever applicable, compensation etc. are reality for many. Getting laid off insignificant. Employees have a reason to know why the organisation had without adequate notice is a to take a step like conducting layoffs and what else could have been done to dreadful condition. The very avoid the same. The whole issue of proactive employee communication thought of it makes our hearts assumes significance. skip a bit. It's nothing personal The organisation must step up the employee communication processes though (well, most of the time), in this foreseeable eventuality. The right explanation and perspective, if companies simply choose this as they are presented to the employee groups will help the companies to tide an easy way out whenever their over laying off process in a much smoother manner which is otherwise economies start going south. You quite painful one. The organisation need to be more predictable towards call it cost-cutting, re- their employees. The decision to shut down any business, department or organisation, right sizing but the even the company is not an overnight phenomenon in majority of case but reality is that every business has a well though through one and, therefore it is very much desirable that a need and to remain relevant employee should get early sight of it in a positive and constructive manner. and viable, these business Once the intentions are right, perspectives are set, and transparency is

About the Author Alok is a senior People Management Professional with over 25 years of comprehensive & hands on human resource experience. He heads the Human Resources function at Group level with Bhartiya Group and is responsible for building the organization with distinctive capabilities. Before joining Bhartiya, he worked with Bharti Airtel in leadership roles, the last being CHRO of the Network Services Group for India and South Asia.

BUSINESS MANAGER SEPTEMBER 2018 18 COVER FEATURE - ALOK NIGAM

observed, employees will understand the process with a positive frame of changed; or people who were mind and will see a fair play. terminated via a formal email. For any good organisation the layoffs should be done only when all other Managers should treat every alternatives have been exhausted. The large organisation, business groups, individual with respect and conglomerates look at redeployment, relocation, transfers etc. to save jobs of protect each person's dignity. employees. Other progressive organisation proactively invest in re-skilling Managers should treat each and training of their human capital. The companies also innovatively look person as if he or she is the only at offering alternate career opportunities like becoming suppliers, person being affected. Each consultants albeit at lower cost consideration. There have been instances employee deserves a private globally where employees have been advised to take short breaks from full meeting with a manager, a chance time jobs and wait for downturn to be over. Surely one can look at many to ask questions, and be informed more options before arriving at this dreadful decision to layoff the people. of any transition support, verbally and in writing. Deliver There is always this big debate on the role of HR in layoff process. Is it the news with kindness and HR's call or not? HR today is a true business partner and therefore, cannot compassion, remembering that wash away its hands from current business realities. Like any other the layoff has a compounding function in the company, HR is equal partner in ensuring robust business effect on family. success and advise/forewarn the management the impact on people in case of failures. Communicate clearly and honestly. Rumours are often HR today is part of all business meetings and discussion and is in solid more damaging than reality. position to see where the business is going, and the signals should be good There is some information that is enough for HR to proactively think and act on people front. HR must be first confidential, and it changes daily to realize the need for re-skilling, redeployment, relocation etc. and start until the day of the reduction. taking action towards it of course in due consultation and confidence of And yet the status of the business. The HR should also ask the business leaders to find avenues for company, its finances, and its redeployment of laid off workforce in their networks of suppliers, vendors, future are pieces of information customers etc. each employee should have. If Laying off people is surely not a HR call but a collective business call and managers don't control the once the call is taken HR is expected to play a crucial role in conducting and message, fear and rumour can executing it. As custodian of talent and people, the call that HR needs to take rule the day, and negatively is adopting and instituting a transparent and fair process to it. The aspects influence people's behavior. Tell like who goes when, notice periods, adequate compensation, avenues of re- what the company is doing to employment amongst others have to be dealt with by HR and they should avoid eliminating positions and appear to be just, transparent and fair. remind people of assistance for Empathy and sensitivity is the name of game when dealing with layoff those in transition and support process. HR must take the best foot forward to demonstrate this and must for those remaining. educate the businesses and leaders too to exemplify this. Ensure resilience. Following The leadership and HR should make it as simple and painless as possible. a lay off process, consider an alignment of structure, people, Here are few strategies : and process. Create plans for Recognize it will be painful. Job losses are upsetting for everyone. moving the business forward. Leaders and HR managers should not be expected to smile through it. Doing Retention and engagement of key so might make light of the layoff's impact and belittle people's feelings. talent becomes a priority, and Acknowledge that it is painful for all employees - those being let go, those managing change becomes the who are staying, and for the HR managers who have to implement the focus. HR ensures resilience. reduction. It is also stressful on the organisation, as people go through this Look to the future. Focus on difficult transition. what will happen next. Are Remain objective. It can be easy to personalize a layoff, but it's not strategies, goals, and roles productive. Managers should remain objective when selecting aligned? What will the new positions/jobs to reduce. They need to be mindful of their words when incarnation of the company look speaking about the reduction. People are not being cut-positions are cut, and like? Is there a communication the people are affected. strategy to re-engage people? Have a well-thought-out plan. The lay-off must be well planned and Does the culture need to be executed. Address every detail. HR needs to help leaders ask probing reinforced? How can leaders questions to determine how positions/jobs will be selected for reduction. If support employees in managing the downturn only affects one area, will that department be the only one to change? The sooner you speak to face cuts, or will the entire company face restructuring? What will the the future, the sooner you can criteria be for position elimination? Will it be last in, first out? Will it be recover. performance - based? Has information been documented? Consult with legal HR professionals need to be counsel to know legal risks and implications of every activity involved in experts in conducting job losses the process. Consider what talent, skills, and experience will be needed in to ensure that the people affected the future. What teams need development to expand or refine needed skill are treated with respect and sets? supported in making a smooth Come to a consensus. Whatever the reasons for the layoff, the transition. When leaders handle management team needs to come to agreement and move forward as a team. the process well, they can also Managers should avoid casting blame or making side-line deals. The reinforce their commitment to leadership team needs to develop a clear message and present a united front. remaining staff, and Treat employees with respect. We've all heard lay-off horror stories - communicate the mission so that people who arrive at work to find boxes on their desk and security standing the organisation continues to nearby; people who try to get into their office and realize the locks have been thrive. BM

BUSINESS MANAGER SEPTEMBER 2018 19 COVER FEATURE

LAYOFFS: Can't there be an alternative? The critical role of HR during layoffs

Communication, support and trust among the individual employee are the major factor HR can influence and make layoff seamless.

HARESH CHATURVEDI, Vice President HR, Reliance Industries Limited, Dahej Unit

n my 30 years of Job, 2008 employees will leave, who are actually the ones organisation needs the the year of recession, was most. They are the employees who get the job easily in the market. Imy first experience asking Secondly, overall moral of the employee go negative and productivity people to rest at home without goes for a toss in tough time. any of their fault, the bitter truth In actual sense, we need to look for other avenues from HR point of - layoff. We have read and heard a view and the last resort should be layoff. The various creative options lot about layoff but this we worked out were : experience made me think about Employee Exchange Program, where the task force given task to find the end-to-end process and the out opportunity (permanent or temporary) where we can place role of HR which apparently is neglected from management side. employees who are to be laid off. Looked for virtual office or work from home to curtail overhead cost During the rough weather, when an employee works from home. which was in 2008, management look for cost reduction. Hence the Encouraged sabbaticals which is for a long period and an employee question arises whether layoff knows he/she has a job once come back. can be used as a tool for cost Forced Vacation where all the employees were told to plan vacation reduction? for specific period without pay. Layoff is easy to say but For some time, post discussion with employees, there was a small cut difficult to practice. There are in the salaries for few months. various challenges which needs Apart all that, we had stopped all the other facilities like canteen, late to be addressed before asking seating, overtime, change full time working to part time for few and employees to go. many more. We also started job search facilities, and volunteer First, the moment layoff is retirement scheme for those were waiting for a push to leave. announced, the high potential Over all the philosophy was to reduce cost to the extend and having

About the Author With diverse industry experience of 28 years in the field of HR, Haresh Chaturvedi has note-worthy industry experience in Textiles, Cement, EPC and FMCG industries. He is also Founder of HR FORUM - HR Milestone.

BUSINESS MANAGER SEPTEMBER 2018 20 COVER FEATURE - HARESH CHATURVEDI

HR is to put all effort to help with placements support internal opportunities or with some related industries or through reference also provide a social support system and help take away the potential stigma attached to the decision.

and we can arrest rumors which help us prevent good talent to leave in hast. Lastly, HR has a important role of recall. Once the economy comes back on the track, we need to connect the one got affected to provide with opportunity. Having said that, the role of HR, the most critical part which is given to HR to play is to communicate 'the bad news'. No business leader would like to face a win - win situation where we can save talent who are an asset for the and deliver 'the bad news' to the organisation. employee and ultimately the task As an organisation, it is more often observed, in the event of cost is given to HR. Its basically I reduction pressure we find Manpower a soft target. Believe me if you consider is an art where we take consider various cost and compare with manpower cost, its no where. ownership and in the larger The impact of touching upon manpower reduction, we in turn increase interest of organisation and other cost. employee we need to share Good Lets take waste management, procurement of raw material, or bad news. Culturally, the inventory management, preventing penalties, reduction in recovery,re- grooving is done in our mind negotiating the contracts etc are the measure which will help us even with help of Satyanarayan Katha once the turmoil of cost reduction is over. Once we lose good talent, which summarize the result of which is often happen during layoff, getting them back would always procrastination, and we the has additional cost. leader out of fear delay the communication in framing what HR has the important role to play. HR is the bridge between people to say, how to say, how to handle and profit. HR works on helping talent reach their maximum potential reaction, why should I take and employees in turn contribute to the bottom line of the organisation responsibility as I am also as we believe we are Business Partners. However, we should not forget employee etc., and in turn we dig our most important job: taking care of our people. our own grave by delivering 'the To make implementation of layoff seamless, from my experience I bad news' more badly. can share few of my learnings. I believe, in business, ups and First, is to plan layoff - it should not be too big, and also should not downs are inbuilt. The be too small. If it's too big, then we are impacting too many damaging excitement is to handle situation the reputation and damaged our ability to execute. If it's too small, we and where the real leadership run the risk of having to do it again, that creates huge amounts of plays vital role. As far layoff is anxiety among employees. concern, again it can be handle Second, if layoff is inevitable, it makes sense to convey the same to fearlessly, seamlessly and with all employees, but also the affected employees to be told in private. lots of positivity. We should keep in mind few those are going to get Third, parting away is never easy.As everyone was informed, it did impacted, are going to criticize not lead to rumors or put the remaining employees under stress. HR is the decision. Right time to put all effort to help with placements support internal opportunities communication, right type of or with some related industries or through reference also provide a communication, with conviction social support system and help take away the potential stigma attached and detailing keeping in mind to the decision. real reason and way forward Forth, we as HR should stick to some unbiased methodology, like, helping impacted employee today last-in-first-out principle or the function not performing, or the skill not and tomorrow including required. This would provide us with more co-operation, and gain trust families. BM

BUSINESS MANAGER SEPTEMBER 2018 21 COVER FEATURE

LAYOFFS: Can't there be an alternative? Preventing layoffs and how?

Realistic business plans and more valued assessment of market situation could help in avoiding lay-offs as a gradual adherence to the plans.

VIKAS KHOKHA, Director - HR, Zimmer Biomet India, Gurgaon

Do you think layoffs are strange as a most inappropriate way to arrive at a long term sustenance way of dealing with cost-cutting or and achieve desired results. It is a clear indicator of work force re-organisation? dynamics not in sync with the organisation processes and a adhoc VK I would not consider layoff resultant to the desired result which is being obtained through a as a cost cutting measure re-organisation. Re-organisation could also be treated as creating rather I would consider more efficiency in the processes and the systems and the resultant layoff as a measure of faulty should be better results and more appropriate way to arrive at the planning. This could also be solution and lay-offs could relate to dealing with an alternate categorised to the lack of problem and not the solution to the problem at hand. synergy in the processes which would lead to an What is the biggest challenge in conducting layoffs? exigency like a lay-off. In a VK There are a few challenges I observe as after effects of a lay-off scenario where there is a scenario which has led organisation to have a long term impact on consistent effort to drive their sustainability : performance, layoff becomes as a last resort to a. Cultural Impact is quite intense in such a scenario where seek the desired operational people in the organisation feel threatened to lose their jobs expense figures because of anytime. I would rather say it would be a cultural barrier for human capital being one of future if not handled appropriately. the biggest contributors to b. I always categorise the employer branding as a critical the cost component. Focus challenge which would have a long term impact on how the on excessive efficiency organisation is treated as a future employer for the talent to measures demarcate lay-off hire.

About the Author An avid speaker with over 18 years of experience, Vikas has impacted in the area of competency mapping and development, frontline productivity, sales improvements etc. He has interacted with multicultural environment across the globe and conferred with HR Excellence award in 2015.

BUSINESS MANAGER SEPTEMBER 2018 22 COVER FEATURE - VIKAS KHOKHA

c. Evolving entrepreurship models could also help such retrenchment as we support our existing manpower to work as a third party with us either as an outsourced partner or a dealer which would help in engaging them in a much better way. d. Realistic business plans and more valued assessment of market situation could help in avoiding lay-offs as a gradual adherence to the plans. e. Employee sabbatical for education or some other projects could also prove beneficial in situation where the time-frame could help in engaging back with the employee once the situation HR can certainly be a gate-keeper in monitoring whether stabilises. the decisions on people is right or wrong. This could be Whose call is it anyway? Does HR easily substituted by getting employee performance data have a say in the layoff process? and business data from managers and the past VK HR plays a very important role in this process as communication around the same in order to help building setting context and guidelines in a critical objectivity in the process. component of assessing the correct platform. There are few highlights which helps HR to play a role of true c. There could be an immediate financial repercussion as the business partner in such a appropriate severance cost may shoot up depending upon the scenario : years of the workforce. a. Guidelines around d. Communication in the organisation becomes a very big employee handling and challenge as there is a struggle around the message across the management really helps organisation. business managers to execute their respective e. Dealing appropriately with labour laws is also a very important plans well. factor which needs to be kept in mind which defining the lay-off policy and conditions related to the same. b. Arranging town-halls or smaller employee forums f. Process of conducting lay-off comes out as another critical generally help employees parameter to arrive at a success which is intended to. in knowing the reasons g. Change Management also need to be focussed very critically of this disorder and get a while executing the plan as it may have a long term impact into correct perspective this scenario. which helps in maintaining a positive Are there alternatives to layoffs? Can organisations think of some creative environment despite all ways to downsize without letting the employees lose their jobs? odds. c. Getting more focussed VK I would categorise lay-offs as a damage which is done primarily approach into the due to lack of planning and effective execution. I would propose business strategy and the following measures to manage this well : deriving people action a. Careful planning while manpower forecast which is done either helps in placing the quarterly or bi-annually would help in determining the issues in right business situation and accordingly prevent hiring. perspective than the b. Stricter performance measures and assessments done through issue itself. frequent team interactions can help managers to churn out the d. HR can be critical in manpower basis their performance records and their inability breaking the to shape up to the future business needs. communication barriers amongst managers and

BUSINESS MANAGER SEPTEMBER 2018 23 COVER FEATURE - VIKAS KHOKHA

pre-defined channels. e. HR can play a very critical role in proactively identifying the re-organised structure looking at the span of control norms and the revised definition of roles and responsibilities basis the business need at that point of time. f. HR can certainly be a gate-keeper in monitoring whether the decisions on people is right or wrong. This could be easily substituted by getting employee performance data and business data from managers and the past communication As HR leaders we should always remember around the same in order to help building that for few employees who are exiting, we objectivity in the process. cannot put the current organisation's culture As an HR manager - what has been and existing employees at risk. the most difficult decision that you have ever made in a layoff process? VK Whenever I had to lay off or even to execute the VK HR plays a very critical role in creating a positive web around this separation process of a team fraternity as it's very critical to sustain employer branding despite member basis line all the odds. Few tools would certainly help the team members to recommendation but without carry a positive message forward : any appropriate data or any past communication to the a. HR should facilitate such employees with the outplacement employee by the manager, I services which should help them in grooming for further did feel hard pressed in continuity and not considering them "Goof for Nothing". communicating the reason b. Ensure managers provide extensive in depth feedback for such along with the business team members for them to perform better in future rather than manager. It's very critical for making same mistakes. us as HR leaders to create a c. As the case may suggest, ensuring an authentic calculation of a process around the feasible severance which would certainly help in providing involuntary exit so that a requisite financial support to the exit employee. philosophy is followed by line managers and leaders to d. Very critical component is maintaining the positive have check in balance of the environment around them to make them still feel a part of the situation properly in tune group and ensuring the deserved respect to them considering with the business goals. For that this could happen to anyone including themselves. me the decision gets even e. Last but not the least, making their full and final payment and tough if it's not having a closures on utmost priority ensuring that they do not have to consistent back-up with follow-up for the same. business results and synchronised with their goals & objectives. The Do you think a dreaded thing like layoff can be dealt with positivity or decision gets difficult to be optimism? implemented if it's not VK Maintaining the environment which is friendly to the employees backed by sufficient and also ensuring that the right feedback is given to them would communication by the help in maintaining the optimism and better environment in the respective manager and organisation. A critical lever in this regard is the communication there is an understanding which is spread around this in the workspace and outside which gap. could have a ripple effect on the environment that we would be dealing with in the future. As HR leaders we should always remember that for few employees who are exiting, we cannot put What is the role of HR in meeting the current organisation's culture and existing employees at risk. employee expectations - of those It's upon us as HR leaders, we would help in graduating lay-off who are being asked to go and of termed from a negative note to an opportunity it presents to the those who remains but may lose employees who are a part of it. BM faith in the organisation?

BUSINESS MANAGER SEPTEMBER 2018 24 COVER FEATURE

LAYOFFS: Can't there be an alternative? Removing barriers, creating opportunities

Market shifts, new technologies and disruptions caused by competitions can require companies to do major restructuring. However, HR professionals always need to show the way of how the process is effectively handled.

NAVEEN KUMAR, VP - Human Resources, JSW Infrastructure, Mumbai

Do you think layoffs are strange We have seen many such cases in India during the 2008 recession way of dealing with cost-cutting or and even as we speak. A leading e-retail firm, axed 100s of jobs as re-organisation? part of their so called "austerity measures" this year. However, the NK There are various kinds of press was informed that the employees were relieved for non - layoffs. While the obvious performance. I think investors get to hear a different story and the trigger for a layoff can be a world, in general - just the opposite. This is indeed a very unusual re-organization, no two way of dealing with layoffs. organizations go about this This brings to the second point - most Managers and CFOs in exactly the same way. typically overestimate the savings they will achieve on account of What would be "strange" such measures. CFOs can give us employee costs to the last rupee, here? Here one can talk but they can't measure the value of employee contribution, which about two aspects - the creates a bias toward cutting. A recession cycle usually last 12-18 manner in which it has been months, after which demand picks up, so it's pretty common for a done and a sound business company to have to start hiring about a year or so after its big case for doing it. In the first layoff, undoing the savings it began realising just 6-8 months category perhaps, laying off earlier (assuming a typical 3 - 6 months' worth of severance pay). So good talented people and let me state at the onset that layoffs are no longer a default informing them and the response to cost cutting or re-organisation. world around, that they have been relieved on What is the biggest challenge in conducting layoffs? "performance grounds" is like adding insult to the NK Communication is the biggest barrier in handling layoffs. For one, injury. consistent and authentic communication is far more respectable than speaking in many voices about the event. A loss of a job has a About the Author Naveen Kumar having impeccable experience of over 24 years, currently Heads HR Function for JSW Infrastructure across its India and Overseas Operations. Naveen is also on the Board of the Organisation. He holds bachelor’s degree in Chemistry and a master’s degree in Human Resources from XLRI. He has done his Executive MBA from Cornell University. He is a Certified Coach a facilitator on variety of leadership and professional skills subject.

BUSINESS MANAGER SEPTEMBER 2018 25 COVER FEATURE - NAVEEN KUMAR

equally crucial. One of the research found that downsizing a workforce by 1% leads to a 31% increase in voluntary turnover the next year. Layoffs apparently tend to cause a feeling that they have lost control, workplace morale takes a beating because the fate of their peers sends a message - that hard work and good performance do not guarantee their jobs. Hence a sustained communication and connect with the remaining employees is paramount.

Are there alternatives to layoffs? Can organisations think of some creative ways to downsize without letting the employees lose their jobs? NK One does hear about some attempts being made to look for alternatives - both in global arena and back at home. But for me it all begins with asking the "Why" of the actions? What metrics should the organisation use to determine whether layoffs were effective or not effective? Like any other good strategy, an effective workforce change strategy should include goals against As the company has implemented various best practices like 5S, which success can be Kaizen, GMP, TQM and so on, over many years, these employees measured. Hence before we look at were conversant with the same. So, a separate entity was formed alternatives, a disciplined hiring strategy is key. and these employees were advised to offer consultancy and Hiring freely during good times and then cutting jobs training services to small and medium businesses in these areas. in downturns, cannot be a Nobody lost their job here - on the contrary they were asked to smart strategy. Furloughs, both unpaid or diversify their skills without worrying about their monthly pay partially compensated checks. leaves have been a widely accepted practice. This may depend on local labour legislations though. I remember when I was in major psychological cost for the individual and the family.Owners Hewlett Packard, the of various small and medium businesses in India understand this practice of furlough during cost far better than many poster boys of the industry - which is the Christmas month was so why, they are extremely sensitive to downsizing. I have come deeply cemented in the across many untrained HR Leaders who tend to templatize this culture that the Global process just like they do most of their other projects. So checklists CHRO would announce it as and FAQs take precedence over spending quality time to early as in March, urging understand and discuss about the needs of the employees being the company employees to laid off. Layoffs are a very much emotional process and only plan for it in advance. Over trained select individuals should be entrusted with the task. I the years this practice alone recall when the first signs of downturn hit IT in 2002, there were had led to substantial cost hardly many senior business leaders who had the knowledge of savings for the company. conducting the layoff conversations. I took on myself to lead the way and in the process trained few of them. The much talked about Nokia's Bridge program not Communication back to the survivors - "employees not affected" is

BUSINESS MANAGER SEPTEMBER 2018 26 COVER FEATURE - NAVEEN KUMAR

withstanding Re - skilling is restructuring exercise, I had to encounter an employee who had another alternative which distributed his "wedding card" to many of us, just a week ago. The prepares the talent for guy was going on a leave to get married. As one can guess it was a future. Developing quality difficult moment. The conversation went off way beyond the improvements initiatives, stipulated time. I vividly remember his Project Manager who was scrap reduction programs, sitting alongside with me, also broke down during the meeting. I R&D projects, and saw somehow managed to make him absorb the consequences of maintenance of plant and the company's stated decision. In hindsight more than that machinery are some other difficult conversation, my proactive follow up in ensuring that he ways to utilise the bad gets re-employed was far more satisfying. He has done well, times. married to the same girl he had planned, albeit a month late. The owners of Reliable Enterprises (a Nashik based What is the role of HR in meeting employee expectations - of those who manufacturer of auto- are being asked to go and of those who remains but may lose faith in the components with plants organisation? across India and the US) held on to 100s of employees NK There are various things that need to be done. Timing and when it was near certain sequence helps tremendously. For one, we need to handhold both their jobs would be lost to sets of employees. Perhaps, those who stay back need more the last recession. As the attention. There are numerous studies to show that whatever gains company has implemented business make from handing out pink slips is quickly offset by various best practices like major losses in productivity and efficiency that follow a mass 5S, Kaizen, GMP, TQM and layoff. This is because organizations do not think much of what so on, over many years, happens to those who are left behind. These people are left to fend these employees were for themselves - perhaps, the Organization thinks these employees conversant with the same. should be grateful for their jobs and continue working with the So, a separate entity was same level of engagement. formed and these employees Market shifts, new technologies and disruptions caused by were advised to offer competitions can require companies to do major restructuring. consultancy and training However, HR professionals always need to show the way of how the services to small and process is effectively handled - in the most humane and respectful medium businesses in these manner possible. The ensuing changes on a personal level must be areas. Nobody lost their job supported for as long as is necessary to ensure that the departing here - on the contrary they employees find a satisfactory solution in terms of standard of were asked to diversify their living, stability,family life and self - esteem. skills without worrying about their monthly pay checks.

Whose call is it anyway? Does HR have a say in the layoff process? NK Yes and No. The Business side takes the first call but HR can challenge the same. In many cases, HR folks would know what is going to hit their employees in advance, if they were plugged into the finance, sales and operations side of the business. Major decisions don't happen in one day - various triggers and alarms go off before finance begins to look at headcount closely. So, I strongly believe that HR still Do you think a dreaded thing like layoff can be dealt with positivity or has room to change a optimism? decision, if it can act proactively and quickly. NK At the end of the day, both employees and HR dread layoffs. But done right, you can help employees digest the termination in a positive way. If employees are in the loop and trust the As an HR manager - what has been management's decisions, they would be more open to swallowing the most difficult decision that any bitter pill. you have ever made in a layoff process? Sometime, employees want something as basic as a place to sit in for a month, after termination. One company had a senior NK During one of the IT executive continue working in the same building even after he was downturns around 2002- relieved. Apparently, his wife was a cancer patient and he felt he 2003, while I was needed some time to break the news to her. BM implementing a token

BUSINESS MANAGER SEPTEMBER 2018 27 COVER FEATURE

LAYOFFS: Can't there be an alternative? Looking beyond the obvious

Layoffs are similar to the change management process as deployment needs sharpening of the saw to manage and balance the business reasons and the emotional aspects not just for those being laid off but for those who continue with the organisations.

DR. PRASHANT RAO, Managing Business Partner & Asst. Vice President - Human Resources With Reliance Industries Limited, Vadodara

Do you think layoffs are strange when required and issues of managing the social and way of dealing with cost-cutting psychological aspects of the after effects of the layoff. or re-organisation? In the present context there is a dire need to think beyond the PR Layoff has been one of the people cost for cost cutting and with the advent of the change in ways of dealing with cost the whole ecosystem, various measures have been deployed by cutting or reorganisation. the organisations to look beyond layoffs as a cost cutting This method has been measure. There has been many success stories where in deployed umpteen number innovations, digitization, technology, automation outsourcing of times, moreover with an and customized people policies project based appointments, objective to save costs. The work week plans have been deployed to focus on cost reduction implementation had been a measures. big challenge wherever the The organisations structures have moved from hierarchical nature of employment had structures to lean structures, so as to ensure delivery of value direct correlations with job propositions from all the stakeholders. The roles are being security. The scenario has analyzed with a view point of relevance, impact, changed to a great extent purposefulness, alignments with the business objectives & wherein the new methods direct value propositions to the outcome, as well as delivery of & nature of employment the end results. are being redefined to meet There has been a continual focus on restructuring with an end not only the cost challenges objective of making the structures as simple and free flowing but also the sustainability seamless compatible structures with a view to enable free flow of aspects of the business. know-how, skills, capacities and capabilities which provides There has always been a organisation with an ease, flexibility with creativity & challenge of managing innovation to flow in the work dynamics as well as a vast people costs, rehiring of opportunity to build on the multifunctional diverse skill sets. required critical skills

About the Author Dr.Prashant Rao is currently with Reliance Industries Limited, Vadodara Manufacturing Division as Managing Business Partner & Asst Vice President-Human Resources. Prior to this he has worked at leadership positions with Schneider Electric, Areva T & D, Essar Group, Vedanta Resources and Aditya Birla Group.

BUSINESS MANAGER SEPTEMBER 2018 28 COVER FEATURE - DR. PRASHANT RAO

Apart from above focus on technology, hierarchical to lean structures, knowledge management, cross functional skill development programs can surely help the organisations to manage the costs.

What is the biggest challenge in conducting layoffs? and is ingrained in the PR The biggest challenge is conducting the layoffs is to manage the cultural framework which is process of communication with the stakeholders as the layoff as a demonstrated and role process very personal, social, psychological and emotional aspects modelled and demonstrated which needs to be managed and addressed sensitively. in deployment of all initiatives and processes. There are various stakeholders in conducting the layoffs as it's not only the people who are part of the layoff process gets impacted The ideation, suggestions, but also the survivors who get impacted. the innovation framework for the improvement The biggest challenge is to have a blue print with the micro detail projects and ownership of the contents and context of the layoff which is communicated mindset help the with a common framework of understanding the way it needs to be organisations to embark understood & deployed, with possible answers of the frequently them sustainable in the asked questions and the possible answers, a risk mitigation plan, journey of the cost the anticipated opportunities inside and outside the organisation sustenance. The recognition and the way that this whole process is managed as a process framework for developing intervention and not as a standalone transactional the cost consciousness can communication. The decisions on who will break the ice is very result into motivation and important and needs to be decided in accordance with the cultural inspiring employees for artifacts of the organisation so as to ensure that the expectation being the pioneers in are managed in the most structured and focused manner to developing the cost address the emotional, social and psychological aspects. consciousness approach and building the required Are there alternatives to layoffs? Can organisations think of some creative cultural shift. ways to downsize without letting the employees lose their jobs? Apart from above focus on PR The condition arising the call of layoffs is not a spontaneous call, technology, hierarchical to there is a trend, history and indicators which warn the lean structures, knowledge stakeholders of the potential measures, The risk mitigation plans management, cross need to be in the integral part of the overall operating model and functional skill philosophy and the way the organisation takes the initiatives to development programs can embark upon to mitigate the future risks. surely help the organisations to manage the The alternate way to layoff is to be continually aware, sensitive costs. and build continual measures to ensure cost sustenance initiatives and programs which helps the organisations in minimizing the The hiring strategies, cost beyond people cost. There are organisations where cost building the skills not for consciousness is being practiced as an organisational competency today but for tomorrow, the talent management

BUSINESS MANAGER SEPTEMBER 2018 29 COVER FEATURE - DR. PRASHANT RAO

initiatives and the Performance Management The role of HR manager becomes diversified and collaborative as interventions can create a key difference in managing HR has to play a collaborative and partnering role in managing all the people cost. There are the stakeholders. HR needs to partner with the managers on many organisation today which focus only hiring the communication and deploy the process to ensure that the entry talents, and put them in a developmental roles for process deployed is fair and meets the overall objectives. the future middle level roles with objective of overall sustaining the people costs. Layoffs are similar to the change management process as Being a high performer on a deployment needs sharpening of the saw to manage and balance sustainable basis is a the business reasons and the emotional aspects not just for those challenge, how do we being laid off but for those who continue with the organisations. manage the high performers The HR can definitely play a very critical and facilitating role in and the low performers, and transition to new employment and also in also ensuring the how do we help the people to positivity as required for the employees to make them understand look out for challenges, the strategic reasons. inspire them to ensure that they remain cost As an HR manager - what has been the most difficult decision that you competitive. The challenge have ever made in a layoff process? is to diagnose the cost indices and derive the HR PR In one of my earlier organisations I had an opportunity to be a implications and work out part of the team for the design & execution of the communication people intervention of the layoff process and I realized that the (What, When, Where, strategies and processes Why and How) of the communication process is the most which can help the important and the difficult part which brings the success or the organisations to sustain on failure to the whole process. Had witnessed the diverse emotional the people cost framework. aspects with few of them had taken the same with lot of positivity and passion to challenge and few of them had anticipated the same and had some preparations and some of them felt as everything Whose call is it anyway? Does HR was over for them. The most difficult aspect was to prepare a have a say in the layoff process? customized communication strategy and to ensure that the line PR Today each and every managers deliver the message as planned and the process is decision made is a business deployed. decision form an organisations perspective and What is the role of HR in meeting employee expectations - of those who I see HR as a part of the are being asked to go and of those who remains but may lose faith in the business team as an HR organisation? Business Partner and HR needs to play the strategic PR The role of HR manager becomes diversified and collaborative as role in helping line managers HR has to play a collaborative and partnering role in managing all not only in the design but also the stakeholders. HR needs to partner with the managers on partner with the business communication and deploy the process to ensure that the process managers in the effective deployed is fair and meets the overall objectives. execution of the whole As an HR manager it is important to have details of each and process. everything that matters to the employee about the personal and To make it happen, there are social dynamics and there has to be a customized and personalized certain prerequisites, HR strategy to share the process. Once we know the people and the needs to know and social and psychological patterns and it is relatively easier to understand the business as share the content and context of the process and help the employee much as the business to overcome this change with an optimistic and positive managers know which shall orientation. The plan needs to be prepared well in advance, need to help in establishing the ensure that the context is rightly built which revolves around the required say in the layoff purpose of the process and there is nothing personal and ensuring process. The HR can add that there is a well - defined intervention and a robust value in the process with communication programmes to manage the anxieties and the way formulation of the design, forward of building the positivity and moral for the people who deployment and execution of shall stay enabling them to continually create value propositions. the communication strategies for the layoff process, Do you think a dreaded thing like layoff can be dealt with positivity or ensuring no information optimism? gaps, helping and guiding the managers in, delivering the PR Indeed a dreaded thing like layoff is a challenging process and message, providing much efforts are required to be dealt with positivity and optimism. placement support in terms of The most important part is the state of mind, how do we build the making the employees aware thought process, the quality of the input shall determine the about the opportunities, quality of the output, the assimilation and the acquisition of the counselling in collaboration right content and the real context shall help the stakeholders in with the line managers. dealing with positivism and optimism. BM

BUSINESS MANAGER SEPTEMBER 2018 30 COVER FEATURE

LAYOFFS: Can't there be an alternative? Where optimism prevails, nothing fails

HR being the spokesperson from both the ends is supposed to play a very neutral and vital role. Layoffs is not a pleasant situation; hence, implementation is undoubtedly difficult.

SUHAS MUKHERJEE, Head - Corporate HRD, Ambuja Neotia Group, Kolkata

Do you think layoffs are strange the desired impact. However, there are many ways you can downsize way of dealing with cost-cutting or your workforce permanently or for a short period of time to allow re-organisation? your business to bounce back and achieve the financial success you SM A layoff is a termination of need. employment at the will of the Layoffs are one of those tasks that HR has to perform that is no fun employer. It may be across the board. It's stressful for HR manager, stressful for them temporary or permanent and those who are directly affected and staffs who remain after the event. can occur for several reasons At the end of the day,it largely depends on your corporate culture as including downsizing, to what path you take. Just because a plan looks good on paper changes in market doesn't mean it's a good fit for your organisation. Also, if you do conditions, or new choose to implement any of these changes, make sure to lean on your technology. legal counsel to ensure everything you are doing is compliant with When a company faces a local, state, and federal laws. short-term economic slowdown, lot of cost savings What is the biggest challenge in conducting layoffs? measures are available. Layoff is an unpleasant and SM The layoffs fail to create an efficient organisation as because the not very well taken process to layoffs are often targeted to job cuts and emphasis is given to reduce reduce cost. However, it's numbers, eliminating a specific job description instead of very easy to think 'headcount considering the individual employee. When layoffs fail to consider reduction' as a top-of-the list the individual and their links with the organisation, gathered solution. through their years of experience, rapport with certain customers or other department members and their intelligence about the Of course, layoffs are organisation. Therefore, layoffs can cause reductions in productivity. sometimes needed to achieve

About the Author Suhas Mukherjee, Head, Corporate HRD at Ambuja Realty Development Limited is a veteran in the field having spent 35 years contributing to the HR policies of diverse organizations across sectors. He has been conferred with 100 HR Super Achievers, 100 Most Talented Global HR Leaders and HR Leader of the years 2014 Awards.

BUSINESS MANAGER SEPTEMBER 2018 31 COVER FEATURE - SUHAS MUKHERJEE

Though the initial downsizing announcement comes from the top management, however, HR needs to implement the same and is supposed to keep employees informed.

Are there alternatives to layoffs? Can organisations think of some creative are given proper respect ways to downsize without letting the employees lose their jobs? before leaving the organisation and paid their SM There are various alternatives against layoffs, like - cut temporary dues on time. staff, offer voluntary retirement packages, eliminate overtime, cut expensive/unnecessary perks, freeze salaries, delay raises, freeze hiring, raise employee contributions to benefit plans, reduce work As an HR manager - what has been hours (for hourly paid employees), implement work furloughs the most difficult decision that (with or without incentives), reduce business travel, postpone or you have ever made in a layoff eliminate bonuses. process? Creative ways to downsize : SM It was one of my most Freezing salary : Temporary freezing of salary or little reduction difficult situations I had of it, however, people prefers reduction of salary than loosing job ever faced in my HR career. permanently. We had recruited a middle level manager for one of our Offer voluntary retirement packages : Downsizing employees filling station in Bengal. He without much of financial difficulties to the employees. had been posted in a remote Reduce the cost of training; You can cut training costs by place with his family and bringing in temporary employees who already have the skills and doing reasonably good. The experience you need. person was working with a Freeze hiring : No further recruitment for the time being, it helps good organisation with to maintain the employee cost constant. respect and honour. He had accepted the offer for independent charge and Whose call is it anyway? Does HR have a say in the layoff process? obviously for better pay SM This is as decided by the higher management, communicated package. through the representatives of HR. HR is only supposed to execute However, suddenly within a the same as a facilitator. very short period of time Though the initial downsizing announcement comes from the top from the time of his management, however, HR needs to implement the same and is appointment into the supposed to keep employees informed. HR has the responsibility to organisation, some decision explain the reasons and the effects of restructuring and keep the had been taken by the higher management up to date on progress. While terminating an higher management for employee, HR must ensure that the employees' immediate downsizing and reporting head delivers the news in person and in a appropriate restructuring the manner. HR must also ensure that the employees being separated organisation and

BUSINESS MANAGER SEPTEMBER 2018 32 COVER FEATURE - SUHAS MUKHERJEE

accordingly, I had been Being the HR personnel, it's the informed to communicate responsibility to keep motivated him for his separation from the organisation. I was the remaining employees and completely shattered, absolutely no clue how to make them understand the communicate the same to positive side of the layoffs. him as I had given lots of hope and rosy picture about his carrier and the status of the organisation while recruiting him. The young What is the role of HR in meeting employee expectations - of those who person was living with his are being asked to go and of those who remains but may lose faith in the family and his small kid of organisation? hardly 5-6 years of age. SM HR being the spokesperson from both the ends is supposed to play One fine morning I travelled a very neutral and vital role. Layoffs is not a pleasant situation; to the place where he was hence, implementation is undoubtedly difficult. However, HR is posted with his direct only to implement the same with lot of cautions and grace. reporting head and eventually communicated HR has to ensure that the employees are intimated properly and the most unwanted news. It with due respect. was not a very pleasant Full and final settlements with the benefits if any to be cleared on moment, though immediate basis. If possible, provide them some relevant training communicated very which may help them to start something on their own and at the gracefully and same time get enough confidence to go-ahead in life. professionally. HR has to play a very sensitive role towards the employees, who This was one of the most are retained after downsizing the organisation. Employees become difficult situations I had demoralized and demotivated, they naturally start losing ever come across in my long confidence upon the organisation and start looking for a change 33-34 years of professional as per their convenience. They cannot concentrate on their jobs, life. which may eventually cause a serious downfall of the organisational growth. Being the HR personnel, it's the responsibility to keep motivated the remaining employees and make them understand the positive side of the layoffs. How it would help the organisation to grow further! What are the future strategies of the organisation and how it would help the organisation to grow and at the same time add value to their immediate carrier growth. Take them for various motivational training and team building sessions. If possible may be take them for some out bound training to come out from the confined situation. It may help them to get rid of frustrations, anxiety and help them to rebuild their confidence level high.

Do you think a dreaded thing like layoff can be dealt with positivity or optimism? SM Everything has its own positive and negative both sides. Now, how you see it and from which angle depends. Termination can make someone upset immediately as the person was not ready to face the situation, however, it gives a new hope to the person and he tries to improve himself than before. The best thing to remember is that everything happens for a reason, those reasons may not be clear at that point of time but that doesn't mean they don't exist. The person laid off has to remain optimistic and start thinking positively. A layoff could mean a new and exciting opportunity waiting right around the bend. Sometimes one door closes and another open. Someone with the right attitude can find opportunities in the midst of a crisis. The rewards may be even greater than before. BM

BUSINESS MANAGER SEPTEMBER 2018 33 COVER FEATURE

LAYOFFS: Can't there be an alternative? Layoffs has to be the last resort

The biggest challenge in conducting layoffs is to deal with employee emotions. Despite of any kind of golden handshake you offer, handing over pink-slip is always painful for all stake holders.

SANJEEV BHATIA, Co-Founder, Onlymobiles.com, Surat

Do you think layoffs are strange way What is the biggest challenge in conducting layoffs? of dealing with cost-cutting or re- SB The biggest challenge in conducting layoffs is to deal with organisation? employee emotions. Despite of any kind of golden handshake you SB Yes and No. This is very offer, handing over pink-slip is always painful for all stake holders. tricky question. While As mentioned earlier, we consider layoffs as the last option. We sometimes, because of internally analyse and try to accommodate the employee(s) into changes in business newer functions. Sometimes, even invest into their re-skill dynamics, we may feel that development. certain skill manpower become redundant all sudden Are there alternatives to layoffs? Can organisations think of some creative and we may not be able to fit ways to downsize without letting the employees lose their jobs? them within the organisation in any other department. At SB Sensible hiring is the only solution. When we are having start-up that time, layoffs become a culture, management tend to be super excited even with smaller very strange way of dealing success and suddenly talks starts revolving expansion. Now with cost-cutting. Sometimes, sudden expansion plans always resulted into bigger recruitment we may able to upgrade the than the required. Because you are running against time and I skill set and make them have seen in Indian companies that we believe that more the adjusted to other division. manpower, more the business. But that is not true in today's Layoffs are the last resort to scenario. So the first alternative is to avoid excessive and us. We strongly believe in lean emotional hiring. culture and we try to keep our Second alternative is to invest into skill development. If your recruitment as less as hiring is right, then each of your employees deserve to be with possible. That's the best way you. So, simply you can explore the option of re-train them for forward. some other functions and see how it goes.

About the Author Sanjeev Bhatia is the Co-Founder of Onlymobiles.com, an online and offline omni-channel marketplace, selling pocket gadgets such like Mobile Phones, Wearables, Tablets & Accessories.

BUSINESS MANAGER SEPTEMBER 2018 34 COVER FEATURE - SANJEEV BHATIA

were recruited. Fortunately, we were having some vacancies and we were able to accommodate those employees with the same skill set. But yes, this incident added pressure over us for a while.

What is the role of HR in meeting employee expectations - of those who are being asked to go and of those who remains but may lose faith in the organisation? SB HR plays a very vital role in meeting employee expectations - either in the case of those who are being asked to go and of those who remains but my lose faith in the organisation. So, here is what we do - We conduct one-to-one meetings with those employees who are being asked to go and explain them the actual scenario, where the organisation forced to hand over pink slips. We also offer generous golden handshake and in most cases, we are Hiding anything from the employees is uncalled for able to accommodate them to other organisation via and we must share all details with the existing references. We also conduct a small employees who have trust on the organisation and open-house with the employees who are still staying with us. part of the organisation and we make them aware about the real scenario. I believe that hiding anything from the employees is uncalled for Another alternative is to refer our own employees to other and we must share all organisations. In the past we have done that and we have got details with the existing good response. When an employer recommends their own employees who have trust employees to other organisation, value of a particular set of on the organisation and employees also increases. The end objective is to ensure that staying with us. your employees get the steady income. Do you think a dreaded thing like Whose call is it anyway? Does HR have a say in the layoff process? layoff can be dealt with positivity or optimism? SB It's always a joint call between HR and the respective department head. Its always important to have HR say in the layoff process. SB Yes, I don't only think but I It's the HR department, who get the employees on board, groom strongly believe that a them, develop them - so there is absolutely no way that HR do not dreaded thing like layoff have a say.HR opinion are mostly unbiased and that helps. can be dealt with positivity or optimism as long as it is conducted with unbiased As an HR manager - what has been the most difficult decision that you approach and compassion have ever made in a layoff process? for employees. Employees SB I am lucky enough that I have not gone through such kind of are always wise. They difficult situation. But I do remember one incident where a understand. We just need to particular mobile handset brand asked us to recruit 7 people be truthful with them. Help when they were entering into India. We have recruited them and them to upgrade their skill- they joined. Suddenly, their India management has decided not sets. Deal with them as a to launch a particular product line for which, these employees true stake-holder. BM

BUSINESS MANAGER SEPTEMBER 2018 35 COVER FEATURE

LAYOFFS: Can't there be an alternative?

Lay-offs and the law - How it plays out in the Information Technology Sector The confusion is clear now. Employees working in IT sector fall under Industrial Disputes Act and are workmen. Wrongful termination offers employees the right to seek back wages with continuity of service.

ARCHANA BALASUBRAMANIAN, Partner, AGAMA Law Associates, Mumbai

shocking study legal issues surrounding such retrenchment policies/termination released a couple of policies for people left holding the can - the HR Managers. Ayears ago found that Retrenchment is largely governed by Section 25F of the IDA. Section one out of every two employees in 25F of the Act has been drafted more as a negative covenant on the corporate India shows signs of employer and stipulates that "no workman may be retrenched except in anxiety and depression. The top compliance with the conditions mentioned therein." most cause of depression has been believed to be fear of It can be read to mean that on compliance with the three conditions retrenchment or termination1. mentioned therein, the employer shall have a virtually unrestricted right to retrenchment of the workman. These are conditions precedent Termination flows from and have to be complied with for ensuring retrenchment is legal. The regulative legislations such as the principle therefore appears to be that so long as you have monetarily Industrial Disputes Act, standing compensated someone (as per the formula in the section), no one can orders and local shops and have a guarantee of their job. establishment laws and where the ID Act doesn't apply, contracts. The three conditions stipulated in Section 25F are as follows : Employment retrenchment/termination issues are governed under Industrial Disputes Act, 1947 (IDA) and the Model Standing Orders of the Industrial Employment Standing Orders Act, 1946 read with the shops and establishment legislations in the states. The objective of this article is to provide brief insights into the

About the Author Archana is the founding partner of Agama Law Associates. She has versatile experience of over 12 years where developed profound legal skills and acumen. Archana completed her B.L.S., LL.B from Government Law College, Mumbai in 2006. She is a member of the Bar Council of Maharashtra and Goa and is a qualified non-practicing company secretary.

BUSINESS MANAGER SEPTEMBER 2018 36 COVER FEATURE - ARCHANA BALASUBRAMANIAN

Since 2013, news of IT employees asserting their Again termination for misconduct should be made after rights has being doing the rounds. TCS, following due process as contained in the employment Cognizant, Infosys, HCL and Tech Mahindra to handbook or service rules. The name a few, are giants that have been in the news process should be fair and transparent. Interestingly, for laying off people. In this background, performance issues may need to be included in the definition of employees are resorting to unionisation. misconduct under standing orders or employment handbook in order for termination on account of performance to be Retrenchment compensation is "equivalent to fifteen days 'average accepted by courts. pay' for every completed year of continuous service". "Average Pay" of Consequences of monthly, weekly or daily-rated workman for the purposes of section termination 25F(b) and for certain other purposes in this Act. There are three categories set-forth, and a residual category. The first is the case of a Wrongful termination offers monthly-paid workman; the second is the case of a weekly-paid employees the right to seek back workman and the third is the case of a daily-paid workman. Then there wages with continuity of service. is a residual category and it is of those persons whose "average pay" Termination for cause should be cannot be calculated upon any of these three basis. In such cases, the carefully done following a pay is to be calculated as the average of the wages payable to a workman process. Often courts call into during the period that he actually worked. question termination of employees on account of poor To put it differently, the right to retrench the un-economic dead - processes rather than facts. As weight of surplus labour is inherent in the right of management of the per a recent amendment under business of the employer provided the conditions precedent to the IDA any workmen may retrenchment are complied with. This has also been endorsed by the directly approach the Labour current Law and IT Minister who has stated in his interview to Court/Tribunal without any Economic Times that "Routine retrenchment is part of any commercial conciliation in case of or industrial operation" (May 2017). Of course employers need to termination, discharge or intimate the competent authority as a conditionality for retrenchment. dismissal from the services as IT companies in Gurgaon (Haryana) can heave a sigh of relief as some against the same being a dispute exemptions from notification have been provided in 2016, where the only when referred by the threshold has been increased to 300 as compared to 100 for other states. appropriate government. In addition to Section 25F, the employment termination provisions Recent past under the state - specific statutes applicable to shops and establishments, standing orders, the employment contract and HR Until the path breaking policies also need to be complied with. In case of a conflict, the Chennai Additional Labour provision that is more favourable to the employee would need to be Court judgment that IT adhered to. employees were "workmen" within the meaning of the IDA, Know your employees the applicability of the IDA was a Employers should know at all times what are the categories of grey area. But that judgment has employees that would fall under the definition of workman under the brought the 4 million plus IT IDA. employees within the definition Workmen as defined under the IDA exclude the following classes of of workmen permitting the employees : workmen to raise their voice a) Those earning over INR 10,000 and discharging supervisory nature against random termination or of duties. benching and then phasing them out. b) Those employed in managerial capacity. Since 2013, news of IT c) Those employed in administrative capacity. employees asserting their rights The protection under Section 25F also applies only employees who has being doing the rounds. TCS, have been in continuous employment for atleast 1 year. Under section Cognizant, Infosys, HCL and Tech 25B, a workman, who during the period of twelve calendar months has Mahindra to name a few, are actually worked in an industry for not less than 240 days, is to be deemed giants that have been in the news to have completed one year's service in the industry. for laying off people. In this Termination under employment contracts background, employees are resorting to unionisation. Employment contracts have termination for convenience clauses, Recently, the labour where someone can be asked to go for no apparent reason - at the whims commissioner of Karnataka, of the management, by giving notice of X days. A similar right is also home to the country's largest tech offered to an employee. However, termination for cause i.e. default hub in Bengaluru, has certified /breach by the employee is subjective and quite a tricky situation. the formation of the Karnataka Immediate termination for misconduct State IT/ITES Employees Union The standing orders offer a whole host of causes for termination for (KITU) under the Trade Union misconduct. Employers should carefully include all such provisions Act, 1926, and Karnataka Trade either in their employment contracts or in the employment handbook. Unions Regulations, 1958. BM

1. https://yourstory.com/2016/09/depression-corporate-india/

BUSINESS MANAGER SEPTEMBER 2018 37 As a leader in any field, the key is to be open to consultation. When people know that there is someone to go to in times of need, someone who will not dismiss their concerns and ideas, it is reassuring. The more comfortable the team is to approach the leader, the easier it is for members of the team to approach each other.

Team cohesion with differences

RAJEEV SHROFF, Transformational Coach & Founder, Cupela, Hyderabad

putting together a traditionalist who is a stickler for rules, with a risk-taker who looks at rules as only something to be broken. This is not as fearsome a scenario as one would think. It is in fact a perfect balance of ideation, to ensure that ultimately the team is neither being to run-of-the-mill, nor so reckless that the entire venture is sabotaged. However, it's not enough to appreciate the power of differences if we cannot get a diverse set of individuals to work together in harmony. So, how can you get your team to work cohesively despite their contrasting thought processes? Listen to absorb, not to come up with an answer Do you ever find yourself listening to someone speak, with the sole motive of having a response or retort ready? How often do we listen to those around us with an open mind? When we ignore our default attack mode, we absorb what is said for what it is, not with the end goal of show that we know better or are more eams are an competent than the other person. To achieve this, we must amalgamation of consciously quell those voices in our head that tell us to forcibly T various types of disagree with or one-up someone. Everyone has their strengths, people. Everyone has a and everyone must be allowed a voice. Many voices in tandem different outlook, yes, but how make an orchestra and not a lone voice ringing out over all the can we bring all these schools others. That just makes for noise. Try not to be the intellectual of thought together and noise in your next team discussion. channel the differences in a positive manner? That's where the first mistake lies in this very question. Differences are not meant to come to one unanimous consensus. We do not have to view them as something that needs countering. Rather, we must view them as fresh new perspectives that act as building blocks for a bigger picture - one that is unique and brilliant. Consider

BUSINESS MANAGER SEPTEMBER 2018 38 TEAM COHESION WITH DIFFERENCES

Ownership drives efforts beyond boundaries, because each and every person in the team is fully aware that the responsibility lies with them as much as with anyone else and so the consequences will affect them just as much.

Learn to GIVE constructive feedback and TAKE feedback knowledge. The more amicable constructively you are to the team, the more An outsider's opinion can give us new insight into ourselves you will be in-the-know of and we need to learn to embrace the positive that can come from daily happenstances. this. Not only this, we also need to learn to give others feedback The key is to bond, bond with their growth in mind. This does not mean finding fault, it outside of work as well means furthering the other person. It is also a good exercise to This is perhaps not possible learn from introspection. Looking within ourselves on how to in every team or company, but become better professionals and individuals is crucial. To reach wherever possible, it is a out to team members and enable ourselves to think differently, useful practice. When people we must carry this introspection to the level of discussion and see each other in a different ask for suggestions to address the problems we have found within light from their professional us. Imagine the fulfilment you would feel if someone approached garb, they become more you with a genuine work problem and through your insight, they relatable. The first step to learnt something new. It's all a matter of give and take. Much like human bonding is finding a life. common thread that helps Maintain transparency, encourage ownership relate to another person. Ease A huge part of caring about what we do knows why we are possible friction between doing it in the first place. Once the rationale behind an initiative teammates by going on a or project is communicated to the team, a sense of ownership is casual lunch or dinner, where automatically instilled. People understand the rationale, agree everyone has a chance to know with it, and perhaps even feel strongly about it. Ownership drives and appreciate each other for efforts beyond boundaries, because each and every person in the much more than work. team is fully aware that the responsibility lies with them as Observe the change the next much as with anyone else and so the consequences will affect day. Suddenly people are less them just as much. Ask yourself, would you put your heart and wary of each other and more soul into something if you were unclear what the larger purpose forthcoming with sharing was? Probably not. Motivation needs to come from within and ideas, opinions and without, and ownership is the key to self - motivated efforts. constructive feedback. It's all in the approach, so stay approachable Perhaps as an exercise, each of us should spend a As a leader in any field, the key is to be open to consultation. work day in a colleague's When people know that there is someone to go to in times of shoes. We would better need, someone who will not dismiss their concerns and ideas, it is understand the positives of reassuring. The more comfortable the team is to approach the everyone's school of thought leader, the easier it is for members of the team to approach each and work ethic. other. This in turn strengthens the bond, enabling people to share ideas without hesitation and to accept each other's ideas, And understanding is the ultimately leading to smoother functioning of the team effort. No first step to cohesive leader wants insurmountable troubles escalating without their teamwork. BM

BUSINESS MANAGER SEPTEMBER 2018 39 The steering of your career like your car is in your hands so you gain varied experiences, visit beautiful places, overcome roadblocks, cross speed bumps and sometimes a dead end but life moves on and so should your career. Key is to be able to create a U-turn to re-navigate your way out as the steering of your career is in your control.

Driving your car-eer

NEETUBALA RAINA KOUL, HR Professional, Pune

sometimes a dead end but life moves on and so should your career. Key is to be able to create a U-turn to re-navigate your way out as the steering of your career is in your control. You will agree that organizational dynamics are not very different than dynamics on the roads, while driving. Beginning a drive - You start to drive your car/career with an excitement to visit places, gather experiences and suddenly you start to face traffic. If you decide to drive on easy routes, your drive would be smooth but a lot of exposure which could prepare you to face all possible challenges on a busy/competitive road would be missing out. So, lack of varied exposure may put the longevity of your career at risk. As a new driver of your car/career, be open to learning and stay flexible, patient, optimistic and determined; Just as traffic signals and laws are to ensure your safety, obey the legalities of your career. You will witness inebriated drivers on the road like unengaged employees who trigger accidents as they do not know the direction riving your car is very they want to head to or lack proper skills. Beware of such similar to driving your drivers/colleagues as they could be unpredictable and dangerous. Dcareer! Develop capability to build your confidence for a clear vision. When driving a car, how Keep learning to build your convictions to be able to lead yourself. often do you allow the person Identify role models to learn from but do not fall into the trap of sitting next to you or in the sycophancy". It is like following a striking Vehicle on the road back seat of your car to control blindly till you realize you have not only lost the way but are stuck your car steering? And the between that vehicle and an alarming bulldozer, with no outlet to response is, "I don't, it could escape. So, learn to drive your own path. lead to an accident". So, why During the drive -You will come across speed bumps in your would you expect the people career but those help you avoid accidents, increase control over your around you to control the unwanted speed and make you reflect on your actions; this helps you steering of your career when to plan a better drive for a better learning curve with a better pick- you are the driver? up ability.Also, you would realize that changing gears is about your Well! The steering of your prioritization skills, which is important to stay balanced and safe. career like your car is in your Be careful of your company while you drive; a mentor with hands so you gain varied knowledge of that route will guide you whereas sometimes you will experiences, visit beautiful have a manager/colleague hitchhiking with you for a few miles to places, overcome roadblocks, meet their own goals. If you meet people not aligned with your cross speed bumps and

BUSINESS MANAGER SEPTEMBER 2018 40 DRIVING YOUR CAR-EER

Like different seasons, you will hit many different milestones on your career journey and each milestone will have a lesson to learn. You may run into slow drivers, bad drivers and principles and value system, ignore and drive on! Sometimes you drivers who rub against would also have to pick up and drop off people on your way and in doing so you would build relationships. These friends may help you your car, oblivious that to find new directions and short-cuts too, cherish their presence in your life. Identify, keep and nurture true relationships. Your they attracted emotional health is your magic potion to all your challenges and scratches too. only true relationships will enrich this potion. Practice introspection, sometimes driving your car all alone has a soothing effect as you tend to reflect in your own company without any external influence. Both you and your organization must enrich each other's "emotional-ecosystem". Though one may choose to be in the comfort Developing proper driving zone and accept the monotony of career drive but do not become a behaviors would require you to cribbing spot to people in an organization. Keep track of the petrol have enough patience and the stations to fill in the gas before you run out of it else your ability to endure, but in the end, drive/career health would suffer for lack of energy. Get your car it is all worth it. On your serviced regularly to eradicate the deterrents "in your control" journey, you are shaping and because obstacles "not in your control" would exist too and you have influencing personalities of to deal with those. Learn and unlearn to stay agile. Meet the right those around you as well. At the mentors/coaches and build the right network for a strong EQ/longer end of your career, you may mileage that would help you deal effectively with the trying times of have people looking to you for your drive. driving tips and advice from Honking on the road for every little reason is pointless. Pick your your career journey. While it is battles by honking or speaking up on subjects that are worth your natural for you to attract time. Time is precious, there are no time-banks. Also on a chaotic attention while driving a classy road, reverse gear is a foolish move. Choose brighter paths to build car/having a fancy title but memories and pursue a passion to stay positive. remember that it's the person behind the wheel that is Toward an accomplished drive, your road to success - Like important. Respect cannot be different seasons, you will hit many different milestones on your demanded and a fancy title will career journey and each milestone will have a lesson to learn. You not command it but the may run into slow drivers, bad drivers and drivers who rub against class/content within. Hence, in your car, oblivious that they attracted scratches too. Move ahead to due course, you will realize the hit your next destination, your values will shape your integrity and only journey that matters is the infuse rigor to succeed. If you are distracted by annoying drivers, one within! Who you become at you lose your opportunities to navigate on the road. Stay determined the end of your journey and celebrate small successes but define stretch goals till you are set determines the true success of to embark on an accomplished route to be accepted as a coach or the drive. mentor. BM

BUSINESS MANAGER SEPTEMBER 2018 41 LABOUR PROBLEMS & SOLUTONS LINE

Anil Kaushik Management Expert -HR & IR

Solutions provided here are in context to narrated facts & not in general.

Mere Acquittal of a workman on the same charge by the criminal Court shall not automatically result in departmental enquiry being set aside.

Q. Whether teachers of a school can file claim before the Magistrate, directed his Authorities under the Payment of Wages Act against non- reinstatement which was payment of their salaries? challenged by the Management. Supreme Court in the case of Ans. No! Teachers cannot. Even though an educational institution The divisional Controller is treated as an industry, teachers in such institution cannot be KSRTC vs. MG Vittal Rao 2012 treated as workmen under Industrial Disputes Act, 1947, as LLR 8 has held that standard imparting of education is not skilled, unskilled, manual, of proof required in criminal supervisory or technical nor clerical work but is a mission or a trial is beyond reasonable noble vocation. doubt but not in domestic enquiry. Teachers employees are also not under section 2(i) of Minimum Wages Act, 1948. Hence, even if basic educational institution is Delhi HC in the case of Ishwari included in scheduled employment, teachers' employment cannot be Prasad vs. Reserve bank Of included in scheduled employment and Payment of Wages Act, 1936, India 2002 LLR 140 has also held therefore, not applicable to teachers. Supreme Court in the case of that scope and standard of U.P.B.S. Parishad vs. Pres. Auth. PWA., 2006 (4) LLN 2008; 2006LLR proof in an enquiry is quite 869 (SN) has held that prescribed Authority under the payment of different than in criminal trial. wages Act has no jurisdiction to adjudicate teachers' claim Karnataka HC in the case of regarding payment of wages. Yesupadam M vs. Bharat Gold Mines Ltd.2002 III CLR 495 Q. Where dispute of termination is pending in labour court, ;2002(95)FLR 395; 2002 LLR 1158 Criminal court has acquitted the employee from the offences on has held that acquittal of which he was charge sheeted and terminated. Can Labour Court employee in a criminal trial set aside the termination as illegal on this basis of acquittal? will not be binding upon the domestic enquiry.Madras HC in the case of S Anthonisamy vs. 1 Ans. NO! Labour court should not. Because both the proceedings P.O, Labour Court, Poddicherry are different and their basis of relying on the standard of proof are 2004 LLR 154 has held that Mere entirely different. As such, the Labour Court should not get Acquittal of a workman on the influenced from the order/ findings of the Criminal Court on the same charge by the criminal subject matter of industrial dispute. The Madras High Court in the Court shall not automatically case of Prasad Film Laboratories, Rep. by its Director, Madras vs. result in departmental enquiry Presiding Officer, Principal Labour Court, City, Civil Court being set aside. Building, Madras and another, 2001 LLR 407; 2001 (89) FLR 135 has set aside the award of the Labour Court by holding that the result of the criminal case should not be relevant either in the domestic Q. What is the difference in enquiry or before the Labour Court, particularly when the Enquiry abandonment and Officer has given the findings that the charge of theft has been termination of service proved against the employee. whereas in both situations there is severence of employer-employee It was further held that the quantum of property, as stolen, is not relationship? the criterion to condone the theft, particularly in the employer- employee relationship. In this case the employee guilty of theft of raw films was charge-sheeted and the criminal proceedings were Ans. The basic difference is of also initiated. The criminal proceedings, however, resulted into his the person by whom the action acquittal and as such the Labour Court in an industrial dispute as is taken. Abandonment of raised by the employee, while relying upon the order of the Judicial service is a consequence of action of the employee and the

BUSINESS MANAGER SEPTEMBER 2018 42 LABOUR PROBLEMS & SOLUTONS

Abandonment of service is a consequence of action of the employee and the employer has no role in it, whereas in termination, it is the employer who initiates the action of terminating the services of the employee either in accordance with the terms of employment or due to any act of misconduct committed by the employee.

employer has no role in it. There are few situations where compliance of retrenchment When employee himself provisions are not required. It inculdes automatic termination of remains absent from duty and fixed term contract where date of termination is already stipulated, does not come back inspite of termination of service because of continued ill health and due to various repeted calls from superannuation or resignation. Supreme Court in the case of Anand employer, it is presumed that Bharati and others vs. State of Rajasthan 2001 (91) FLR 429; 1991 employee has left the job of his LLR 101 has held that discharge of driver of corporation due to own without submitting formal defective eye sight does not amount to retrenchment since such resignation, whereas in termination is covered by ill health. termination, it is the employer who initiates the action of Q. As we have reached to 50 employees, I understand that we terminating the services of the need to have certified standing orders. My question is what is employee either in accordance the benefit of having certified standing orders and on whom it with the terms of employment will be applicable? or due to any act of misconduct committed by the employee. Ans. When there is a statute and it is applicable on any section of society, be it industry or otherwise, one is under legal obligation to So, both the actions are just make compliance of that statute. So there is no relevance of benefit opposite to each other whereas or loss in having certified standing orders. the consequence is the same i.e. severence of employer- Since it is applicable on your industry, you have to make employee relationship. Supreme compliance. However, as far as benefit is concerned, the standing Court in the case of Jeewan Lal orders certified under the Act become part of the statutory terms Ltd. vs. Its Workmen, 1961 (2) and conditions of service between you and your employees and they FLR 537 and Shahoordul Haque govern your employment relationship. As such, certified standing vs. Registrar Co-operative orders which statutorily prescribe the conditions of service shall be Societies Bihar." AIR 1974 SC deemed to be incorporated in the contract of employment of each 1890 has held that if an employee with his employer as also held by Supreme Court in the employee continues to be absent case of S.C. Sarkar vs. Tata Iron and Steel Co. Ltd., 1984 (49) FLR 1; from duty without obtaining 1984 (2) LLJ 223. leave and in unauthorized manner for such a long period of time, that an inference may Supreme Court in the case of Sudhir Chandra Sarkar vs. Tata Iron reasonably be drawn from such and Steel Co. Ltd., 1984 (49) FLR 1 has also held that on certification absence, that by his absence, he of standing orders they will bind all those who are in the has abandoned service. employment at the time of certification beside that all those who will be joining thereafter will be bound by the certified standing orders. Certified standing orders will be applicable on all workmen Whereas in case of termination of your industry and the definition of the workman is same as of service either it is to be mentioned in Industrial Disputes Act. through retrenchment or dismissal. In case of retrenchment, procedure as Q. Can we transfer daily wage worker from one place to another mentioned in Seciton 25F, G & H and whether his consent is necessary? has to be followed. While terminating the service Ans. On the very face of it, the transfer of daily-wager does not through dismissal means draw sence of justification because his appointment is on the basis punishment for an act of of daily requirment which does not indicate or confirm the long misconduct committed by the term employment relationship. Daily wager is a person whose employee. Before imposing employment contract starts at the start of the day and ends by the punishment of dismissal, evening. His engagement has no scope of transfer because he is not employer has to complete the bound to report back next day morning for work. process of providing opportunity of hearing to that M.P. High Court in the case of Ashok Tiwari vs. M.P. Text Book employee through domestic Corporation and another, 2010 LLR 894 has held that since the enquiry and complying with transfer is normally an incident of service, consent of employee is principles of natural justice. not required but transfer of a daily-wager will not be justified. BM

BUSINESS MANAGER SEPTEMBER 2018 43 RECENT IMPORTANT LABOUR JUDGMENTS

Compensation Contract Labour

In case of death of the claimant challenging his Contravention of CLR Act by the employer will not dismissal for unauthorised absence, compensation of lead to automatic grant of permanency to contractor 2 lakh would be proper to his legal representative. employees. The deceased was employee of respondent no. 1 and was Merely because employer violates provisions of Contract dismissed from service due to alleged unauthorized Labour (Regulation and Abolition) Act, 1970, there cannot absence from October 1994. On dismissal he raised be automatic regularization or grant of permanency to industrial dispute. The Labour Court held that the employee of contractors. punishment was disproportionate. Aggrieved by the order, Notification issued by the State/Appropriation the management moved the Industrial Tribunal who set Government suffers from application of mind, the same is aside the Award of Labour Court and took the view that liable to be quashed by the competent Court. punishment was not disproportionate. The same view was taken by the High Court in appeal. The workman died Gondwana Club, Nagpur vs. State of Maharashtra and during the pendency of proceedings before High Court so Another. 2018 LLR 827 (Bom. H.C.) his LRs were impleaded. The LRs have filed the present Reference of industrial dispute raised by union in appeal against the order of High Court. respect of contract labour for permanency against The Court examined so issue whether the punishment of principal employer is maintainable when such dismissal due to unauthorized absence was unjustified and demand was raised before conciliation during what relief the LRs of the deceased are entitled for. subsistence of employment contract. The Court observed that the deceased died in 2013 and also When the demand for regularization and absorption was owned a truck from which he was earning. The Court held made admittedly during subsistence of contract of that ends of justice would be served in case a reasonable employment whereas services of the workmen were amount of one time compensation of Rs. 2. 00 lakh in terminated during conciliation proceedings, reference of respect of entire claim of the deceased workman is paid in industrial dispute is maintainable since subsequent respect of service rendered by the deceased workman. termination forms part of dispute connected with absorption or regularization. Baburao Dadu Sankpal (Dead) Through LRs. vs. Kohlapur Zilla Sahkari Doodh Utpadak Sangh Kohlapur and others. Nothing is there in Section 2(k) of the Industrial Disputes CLR I 2018 P.1042 (S.C.) Act, 1947 suggesting that disputes or differences between employer and workmen engaged through contractor,

BUSINESS MANAGER SEPTEMBER 2018 44 RECENT IMPORTANT LABOUR JUDGMENTS

requires any sponsorship, espousal or support only of licence in a capacity of owner, agent or Manager named for permanent workmen. the particular mine. When the Union went to industrial adjudicator with an Engineering projects (India) Ltd. vs. State of Jharkhand and express plea that there was an employer-employee Another. 2018 LLR 850 (Jhar. H.C.) relationship between workmen whose cause is espoused by it, the same is sufficient espousal for raising an industrial dispute. Continuous Service Industrial Adjudicator is empowered to adjudicate as to Long service of years together itself cannot be whether the contract between principal employer and considered that the workman was in continuous contractor supplying manpower is sham or bogus or service for more than 240 working days during the genuine. preceding 12 calendar months, automatically. Workmen of contractor can raise an industrial dispute Burden to prove continuous service of 240 working days concerning contract to be sham and bogus but not for during the preceding 12 calendar months is upon the abolition of contract labour system. workman. If the contract is found to be genuine, the only course left Workmen engaged intermittently/temporarily on specific to Industrial Adjudicator is to refer the workmen to projects as and when required for several years but not appropriate Government for abolition of contract labour competing continuously 240 working days in any of the and keep dispute pending in the meanwhile. year, is not entitled to challenges his termination under When the contract is held to be sham or not genuine, the Industrial Disputes Act, 1947. employees are to be treated as employees of the principal Labour Court is not empowered to travel beyond terms of employer. reference unless it is shown that as to what specific term of When it is held by the Industrial Adjudicator that the reference is the base of relief sought. workmen were direct employees of principal employer and Unless it is shown that which specific term of reference is not of the contractor, in fact, he effectively holds that the the base of relief sought, Industrial Adjudicator cannot go contract was sham and bogus. into the question of that relief considering it as a matter Agreement between principal employer and contractor for incidental to terms of reference. supply of contract labour would prove that the work is of Mr. Ashok U. Nikam vs. Tata Power Company Ltd. 2018 LLR regular and perennial nature of the man-power to be 871 (Bom. H.C.) supplied is (i) for the purpose of providing services in fabrication from time to time at their factory, (ii) for the purpose of providing services in assembly work, (iii) for Court Jurisdiction the purpose of material handling' (iv) the work was to be performed with the help of machinery of petitioner with Labour Court/Tribunal of state government has no permanent employees, (v) under the supervision and jurisdiction to adjudicate upon the industrial dispute control of principal employer and not of contractor (s), (vi) of termination raised by Public Sector bank no production card or work card were issued by the employee. contractor to workmen (vii) principal employer was The petitioner was posted as Head Cashier with the Bank habitually engaging contractors or casual workers for and was charge sheeted for misconduct of shortage of cash regular work. and misappropriation. He was advised to submit his reply Written documents, wages registers, bills of contractors to the charge sheet within seven days but he did not submit have no significance since these documents are to be in any reply. The Enquiry Officer conducted the enquiry and support of agreement whereas the workmen were not submitted his report. Enquiry Officer found both the working only for the work indicated in the agreement but charges proved. Thereafter show cause notice was served for all purposes with permanent employees. upon the petitioner and he was provided opportunity of For establishing control and supervision of the principal personal hearing. After considering the material on record employer, the rejection of work of any of the workman is the Disciplinary Authority dismissed the petitioner from one of the major decisive factors. service. The petitioner preferred appeal before the If the Management witness was unable to prove contrary appellate authority who dismissed the appeal. He raised facts besides only wage register and bills of contractor industrial dispute. After failure of conciliation, the which do not meet the tests laid down by the Supreme petitioner filed the case directly before the Industrial Court, the evidence of the workmen will stand established. Tribunal. The Tribunal held the dismissal illegal and set aside the order of dismissal and directed the management M/s. Prabha Engineering Pvt. Ltd. vs. Sarva Mazdoor to reinstate the workman with all consequential benefits. Sangh & Ors. 2018 LLR 828 (Bom. H.C.) The Award of the Tribunal has been challenged by the Chairman-cum-Managing Director having under him management in the present writ petition. a large number of mines for supervision and control, The Court examined the issue whether the Tribunal could cannot be prosecuted for engaging contract labour in have entertained the case directly without any reference by a prohibited place of work. the appropriate government and whether the punishment Chairman-cum-Managing Director, having under him a awarded to the workman was sustainable. large number of mines for supervision and control, does The Court held that by virtue of amendment of section 2 of not come within the purview of definition of "Principal the Act, a workman may make an application directly to the Employer". A person cannot be criminally prosecuted on Industrial Tribunal/Labour Court for adjudication of the vague and unspecific allegations. dispute after expiry of 45 days from the date he made the A person responsible for the overall superintendence and application to the Conciliation Officer of the appropriate control, he cannot be prosecuted as 'Principal Employer' if government. However, the provisions under Section 2-A (2) there is no direct allegation making out a case of of the Act cannot be interpreted to mean that it gives a contravention of any provision of the Contract Labour discretion to a workman engaged in PSU Bank to approach (Regulation and Abolition) Act, 1970. Rule or condition of directly to the Industrial Tribunal, Patna which is State

BUSINESS MANAGER SEPTEMBER 2018 45 RECENT IMPORTANT LABOUR JUDGMENTS

Government. The Industrial Tribunal, Patna which is a Adjudicator/High Court unless the same is grossly State Industrial Tribunal, could not have entertained the disproportionate to the gravity of misconduct. dispute directly.It has exercised its jurisdiction illegally as Court while exercising power of judicial review, cannot it had never any jurisdiction to decide the case on merits. It normally substitute its own conclusion unless discretion was held further that the workman had resorted to the exercised by the Disciplinary Authority suffers from adjudication by participating in conciliation proceedings illegality or material procedural irregularity shocking the which ended in failure. It was not open to him to resort to conscience of the Court/Tribunal/High Court. filing of case under Section 2-A (2) before Industrial Tribunal Patna as there was no conciliation pending after Punishment imposed by the Management after conducting expiry of 45 days. The entire proceedings culminating in fair and proper enquiry cannot be subjected to judicial passing the impugned Award is illegal and unsustainable review unless the same is shocking to the conscience of the in law. Award passed by the Tribunal set aside and writ court. petition allowed. Pritam Pal Sharma vs. Life Insurance Corporation & Ors. UCO Bank vs. Union of India and others. LLN (2) 2018 P.264 2018 LLR 824 (Delhi H.C.) (Pat. H.C.) Labour Court is not empowered to usurp power of appeal against finding of the Enquiry Officer. An order of the Labour Court, if found perverse, is liable to Court Powers be quashed. Labour Court/Industrial Tribunal have powers to set A judicial or quasi judicial authority is not entitled to use aside the ex-parte award even after publication of his personal knowledge about any fact involved in any such award. Court can entertain such application. dispute without giving opportunity to parties for rebuttal of such personal knowledge. Industrial Adjudicator is not functus officio after the award has become enforceable as far as setting aside of an ex- M/s. Tata Engineering and Locomotive Company Ltd. vs. parte award is concerned. Presiding Officer, Labour Court and Another. 2018 LLR 842 (Jhar. H.C.) Industrial Adjudicator is empowered to entertain an application as per Scheme of the Industrial Disputes Act by When the workman did not raise the question of following the Rules of Natural Justice. fairness of the inquiry, labour court cannot go in to the findings recorded by the Inquiry Officer. The Industrial Disputes Act, 1947 is a Welfare Legislation intended to maintain industrial peace. The petitioner was member of TELCO Kamgar Sangathan (TKS). There was another Union namely, TELCO On an application by management for setting aside ex-parte Employees' Union (TEU). TELCO entered into an award, Industrial Adjudicator has to balance equities agreement with TEU in respect of certain pending between the rival parties. demands. This led to acrimony between members of the Industrial Adjudicator has to consider as to whether there Unions. On 14.3.1989, there was quarrel between two was sufficient cause for non-appearance of the workmen belonging to rival Unions which led to their management/ applicant. suspension from service pending enquiry. An Enquiry was In case a party is able to show sufficient cause within a initiated against the petitioner and the Enquiry Officer reasonable time for its non-appearance before the Submitted his report on 1.1.1991 holding the charges proved Industrial Adjudicator, when it was ex-parte, the Industrial against the petitioner as proved. Ultimately the petitioner Adjudicator is bound to consider the application for setting was dismissed from service. He raised industrial dispute. aside ex-parte award and it cannot be rejected on the After failure of conciliation, the matter was referred to ground that the Award had become enforceable. Labour Court. Labour Court passed the Award the petitioner. Aggrieved by the Award, the petitioner filed a Certain powers to do justice have to be conceded to the writ petition in the High Court. The learned single judge Industrial Adjudicator, i.e. ancillary,incidental or inherent declined to reinstate the petitioner with continuity of and that power cannot be circumscribed by limitation. service and back wages but granted compensation in the Merely because an award has become enforceable, does not form of 40 months wages and also granted gratuity and necessarily mean that it has become binding because for an provident fund. Aggrieved by the order, both the parties award to become binding, it should be passed in compliance have filed Letters Patent Appeals. with principles of natural justice. The Court dealt with the issue whether the Labour Court An award passed denying an opportunity of hearing when can decide upon the findings of the Enquiry Officer even if there was a sufficient cause for non-appearance, can be the workman has not questioned the fairness of the challenged on ground of it being nullity and an award, departmental enquiry. which is a nullity, cannot be and shall not be a binding The Court observed that the petitioner-workman raised no award. question about the fairness of the departmental enquiry.In What is sufficient cause and whether its jurisdiction is fact he conceded the issue regarding the procedural invoked within a reasonable time should be left to the fairness of the enquiry. It is well settled that if the judicious discretion of the Industrial Adjudicator. workman does not challenge the correctness, legality, Any party to the judicial proceedings should get an validity or fairness of the enquiry, it is not open to the opportunity of being heard and if such an opportunity has Labour Court to go into the findings recorded by the been denied for want of sufficient reason, the Industrial enquiry officer. In the present case the Labour Court has Adjudicator which denied such an opportunity, being rightly not interfered with the findings of the enquiry satisfied of the sufficient cause and within reasonable officer which was a correct approach. The learned Single time, should be in a position to set right its own procedure. judge should not have interfered with such findings. The Haryana Suraj Malting Ltd. vs. Phool Chand. 2018 LLR 815 reasoning given by single judge to reach such conclusions (S.C.) are neither reasonable nor supported by any material on record. The impugned judgment and order of single judge Quantum of punishment as imposed by the set aside and Letters Patent Appeal filed by the petitioner- Management, not to be disturbed by the Industrial workman is dismissed and the other Letters Patent Appeal

BUSINESS MANAGER SEPTEMBER 2018 46 RECENT IMPORTANT LABOUR JUDGMENTS

filed by Tata Motors is allowed. M/s. Tata Engineering and Locomotive Company Ltd. vs. Chandrakant Krishnaji Shewate Pune vs. Tata Motors Ltd, Presiding Officer, Labour Court and Another. 2018 LLR 842 Formerly Known as TELCO Pimpri, Pune. 2018 I CLR P 899 (Jhar. H.C.) (Bom. H.C.) Punishment of dismissal for commission of grave and Labour Court/Tribunal can interfere in cases where serious misconduct of misappropriation of money by dispute is related to discharge or dismissal and not in bus conductor is justified. respect of other punishments. Any leniency towards an employee, committing grave and Respondent workman was working as Conductor under the serious misconducts repeatedly is a misplaced sympathy, petitioner-corporation. On 20.8.1995, a surprise checking not appropriate in law. was conducted and it was found that the workman had not G.V. Hugar vs. Divisional Controller, KSRTC, Bangalore. issued tickets to six passengers and failure to collect the 2018 LLR 868 (Kar. H.C.) fare. On the basis of the report, the disciplinary authority issued Articles of Charges and punishment order of reducing of pay by one incremental stage with cumulative Employees’ Compensation Act effect was passed. The workman raised industrial dispute. After failure of conciliation, reference was made under the In the absence of pleadings, employer-employee Act. The Industrial Tribunal set aside the order of relationship cannot be decided. punishment awarded to the workman and modified it to Whether an accident had occurred in the course of withholding of one increment for one year without employment or not cannot be decided in the absence of cumulative effect which shall have no effect of postponing pleadings of the party concerned. the future increments. Aggrieved by the order of the A claim for compensation under the Employees' Industrial Tribunal Corporation has filed the writ petition. Compensation Act, 1923 is not sustainable if there is no The Court examined the issue whether the industrial proof of working with the alleged employer on the date of Tribunal while exercising powers under section 11-A of the accident is not there. Act modify the punishment awarded by Disciplinary Ramalingam vs. R. Thiyagarajan and Another.2018 LLR 861 Authority. (Mad. H.C.) It was held the Court that will exercising powers under Condonation delay of 3.5 years in filing claim is Section 11-A of the Act, the Tribunals can interfere only in justified because right of labourer to receive cases where the disputes relate to discharge of dismissal compensation cannot be denied at all. and no in respect of other punishments. The Tribunal have to either set aside the punishment in toto or accept in tooto. Condonation of delay of 1296 days in filing the claim The Tribunals have no power to modify the punishment. petition under the Employees Compensation Act, 1923, Case remanded to the Tribunal for reconsideration in before the Employees' Compensation Commissioner, is accordance with law. Writ punishment allowed. justified since the application for compensation was in respect of injuries received by the claimant and right of Divisional Controller, KSRTC vs. Mallikarjunaiah. LLN (2) labourer cannot be denied at all. 2018 P.223 (Kar. H.C.) Employees' Compensation Act, 1923 is a welfare Act and of compensation cannot be denied on technical grounds. Disciplinary Proceedings Since the Employees' Compensation Act, 1923 is a welfare Act, its provisions be interpreted in favour of the An enquiry is not fair and proper if the material labourers. witness has not been examined nor any cogent reason Srikanthan vs. Commissioner of Workmen Compensation- to support charge of misappropriation is recorded cum-dy. Commissioner of Labour-I, Chennai and Others. thereto. 2018 LLR 863 (Mad. H.C.) Punishment of dismissal is liable to be set aside when the same is not based upon finding of fair and proper enquiry. The enquiry which is not fair and proper is liable to be Employees’ Provident Fund vitiated, attracting reinstatement with back-wages and continuity of service. An establishment consisting of different departments or has branches, whether situated in the same place Reinstatement with back-wages is justified if the or in different places, all such departments or punishment imposed is found to be illegal. branches shall be treated as parts of the same Charge of misappropriation of money being a grave and establishment for coverage under the EPF Act. serious touching to the conduct of the workman needs to be EPF Authority by order may decide applicability of the Act proved on the basis of cogent evidence. to an establishment, decide such dispute, determine the When the writ court has considered the material on record, amount under the Act, and conduct such enquiry as may be analyzed the contentions of the parties, interference by the necessary. writ appellate court is not justified in absence of any legal Employees Provident Funds and Miscellaneous Provisions infirmity. Act, 1952 (Central Act) with notification No. s.o. 986 dated The Management of Syndicate Bank vs. Sri S.S. Deshpande. 19.2.1982 is applicable to all schools and 2018 LLR 866 (Kar. H.C.) colleges/educational institutions subject to provisions of Section 16 of the Act. Sections 16(1) (a) and 16(1) (b) of the Act of 1952 are Dismissal independent and having separate effectiveness. Punishment of dismissal for commission of Sections 16(1) (b) of the Act is attracted to any other misconduct of forging signature of the authorities is establishment belonging to or under the control of the justified and cannot be termed shockingly Central Government or a State Government. disproportionate. State or Central Government employees' covered by

BUSINESS MANAGER SEPTEMBER 2018 47 RECENT IMPORTANT LABOUR JUDGMENTS

contributory provident fund scheme, framed by state, are the order passed under Section 7-A of the Employees exempted from the applicability of Employees' Provident Provident Funds and Miscellaneous Provisions Act, 1952, Funds and Miscellaneous Provisions Act, 1952. needs a fresh consideration by the Appellate Tribunal. An educational institution like that of the appellant, Central Board of Trustees, Nagpur vs. M/s. Annapurna receiving 100% grant-in-aid form the State Government Restaurant. 2018 LLR 877 (Bom. H.C.) upon which the State is having power of financial control, When the property is transferred to the purchaser to take over or transfer the management of the institutions, free from all encumbrances, attachments, charges and in addition to power of superintendence, authority to any other claims, whatsoever, the purchaser becomes direct, restrict or regulate working of the institutions etc. is absolute owner of the same. He is not liable to pay not covered under the Act of 1952. EPF dues for the period prior to transfer of the When at the relevant time 1151 employees were covered property in his name. under Central Provident Fund Scheme of the State except The EPF Authority have to raise demand of EPF dues upon 16 part-time employees engaged with the permission of the the Official Liquidator in the proceedings of liquidation state, the exemption status of the appellant acquired under and if the amount lying with the Official Liquidator is not Section 16 (1) (b) of the Act of 1952, will not cease or stand found to be sufficient to discharge the liability, then all withdrawn automatically, because of 16 part-time other steps, as are permissible in law can be taken, except employees not covered under CPF Scheme of State. the recovery of such dues from the petitioner. Words "belonging to" or "under the control of" Central or Vibhu Drinks Pvt. Ltd. vs. Assistant Provident Fund State Government, as used in Section 16(1) (b) of the Act Commissioner,Nagpur and Others. 2018 LLR 878 (Bom. H.C.) have different cannotations. EPF contribution is payable on miscellaneous Words 'belonging to' signify ownership whereas the words allowances, regularly paid to the employees of 'under the control of' signify control other than ownership. transport contractors. The two words 'belonging to' and 'under the control of' are Payment to transport contractors, by deducting TDS is not separated by the word 'OR' which refers to two mutually sufficient to infer that contractors' employees were exclusive categories of institutions. employed by the petitioners. Yeshwant Gramin Shikshan Sansthan Sanstha vs. Assistant Demand of EPF contributions on the amounts paid to Provident Fund Commissioner and Others. 2018 LLR 922 transport contractors after deducting TDS is not justified. (S.C.) A fixed amount cannot be paid styling it as it being paid in Imposition of damages under Section 14-B of the EPF lieu of allowance just to extricate itself from the liability to Act is not sustainable when the unit has been declared pay the EPF dues. 'Sick'. Colgate - Palmolive (India) Ltd. and Another vs. Assistant Order imposing damages under the Act is liable to be set Provident Fund Commissioner SRO, Goa. 2018 LLR 880 aside if the same has been passed mechanically. (Bom. H.C.) EPF Authority is empowered to reduce or waive the 75% pre-deposit as per Section 7-O of the EPF Act is damages keeping in view facts and circumstances for applicable only in the case when the amount assessed delayed remittance of the EPF dues. is under Section 7-A of the Act and not damages Since the damages is penalty it be not recovered assessed under Section 14-B of the Act and/or amount mechanically in every case. assessed towards interest under Section 7-O of the Act Quantum of arrears has to be considered while imposing or otherwise. damages. EPF Authority has power to levy of damages, to reduce or to Opportunity of hearing is to be provided to the employer waive off the same, considering facts of case. before imposing damages or interest. Assessment of damages mechanically without giving When an order passed in review application would attain reasons is not sustainable. finality if not challenged within prescribed limitation. Mens rea on the part of employer must be considered If an objection is not raised before Tribunal and in the writ before levy of damages. petition, the same can not be entertained at the time of Aminul Islam vs. Assistant Provident Fund Commissioner arguments. and Others. 2018 LLR 883 (Cal. H.C.) When the interest is denied by the EPF Appellate Tribunal EPF Appellate Tribunal is empowered to waive off or only on the ground of want of particulars, the matter is to reduce the pre-deposit amount by recording reasons be remanded back to EPF Authority for fresh decision in thereto. accordance with law. Once such a discretion has been exercised by the Tribunal Central Board of Trustees, RPF vs. The Managing Director, and confirmed by the Writ Court, the Writ Appellate Court Rajgad Sahkari Sakhar Karkhana. 2018 LLR 874 is not to sit as a court of appeal and considered the merits (Bom. H.C.) of the case. Set aside of an order passed by the EPF Authority M/s. G4S Facility Services India Pvt. Ltd. vs. Regional without considering the entire material on record, by Provident Fund Commissioner-I. 2018 LLR 884 (Delhi H.C.) the EPF Appellate Tribunal is not sustainable. When the employer is not able to prove in clear terms When a finding is contrary to what was deposed by the on the basis of cogent documents that he had closed witness, the same is not sustainable. the establishment long ago, he would be liable to pay In light of substantial material considered by the EPF EPF contributions as assessed by the EPF Authority. Authority, it is necessary for the Tribunal to have adverted Once an employer has been covered under the Employees to those aspects which had found favour with the EPF Provident Funds and Miscellaneous Provisions Act, 1952, if Authority. he closes down his establishment, he has to inform the EPF Ignoring facts which had found favour with the EPF Authorities by completing all required formalities/ Authority and by giving importance to secondary factors, documents in this respect.

BUSINESS MANAGER SEPTEMBER 2018 48 RECENT IMPORTANT LABOUR JUDGMENTS

If an employer is issued notice by the EPF Authority, it is Second wife cannot be treated as a family member of the in the interest of the employer to participate in the retired employee to whom the petitioner had married after proceedings by producing all related documents to satisfy his retirement and when he had ceased to be member of the the EPF Authority about his defence. Scheme. If an employer does not participate in the enquiry as Note: W.P. © No. 12095/2009 decided by Ld. Single Judge is directed by the EPF Authority in its notice (s), giving ample already published in 2017 LLR 1268 (Kel. H.C.) opportunities, the employer will have to face later on any Assistant Provident Fund Commissioner (Pension) Rani adverse order passed by the authority. Bodheswaran. 2018 LLR 899 (Ker. H.C.) If the EPF Authority on receipt of reply of the notice does First charge shall be of the PF Claims and all other not confirm about its decision for a long time, that would debts to be treated as secondary. favour the employer. Section 11(2) of the Employees' Provident Funds and EPF Authority while clubbing 2 or more establishments, Miscellaneous Provisions Act, 1952, is unambiguous that thereby treating them as one, for the purpose of coverage notwithstanding anything contained in any other law, PF under the Act, the Authority is required to issue notice(s) contributions are to be given priority to all other debts. to all concerned establishments, names of which have been provided by any of the establishment. The Welfare legislation is to be interpreted in a constructive manner so as to see that a social justice is C.P.Paul vs. The Regional Provident Fund Commissioner & achieved, particularly in respect of weaker section of the Another. 2018 LLR 887 (Ker. H.C.) society. When the review application is filed by the employer Phoenix Arc Private Ltd. vs. Assistant Provident Fund before authority against order passed under Section Commissioner & Recovery Officer and Others. 2018 LLR 903 7-A, it is for the authority to decide about the (Mad. H.C.) application and not to keep it pending even without informing the employer about the fate of the No writ can be entertained against a show cause application. notice in a routine manner. Amrita Institute of Medical Sciences & Research Center, Writ against a show cause notice can be entertained if the Elamakkara, Edappally vs. The Regional Provident Fund same is issued by incompetent authority or allegation of Commissioner. 2018 LLR 891 (Ker. H.C.) malafide are raised or if the same is in violation of statutory provision in force. After partition of the estate, all legal heirs will be independent entity. PF authority cannot club them all Statutory institution must be allowed to exercise its power in one and treat one unit. It is for PF authority to in accordance with law and intermittent intervention will collect sufficient material to establish single unit for create not only a chaos but unnecessary intervention of covering under EPF Act. powers conferred upon the statutory authority under statutes. After bonafide partition by way of execution of partition deed, each of the legal heirs will be an independent legal Writ petitioner is to submit his all defence before the EPF entity. Authority in reply to show cause notice and such litigations be deprecated and never be encouraged by the Functional integrity would cease between all shares having constitutional court. individual registrations and agricultural income tax assessment. K. Kaleeswarn vs. The Recovery Officer, The Employees Provident Fund Organisation and Others. 2018 LLR 907 EPF Authority under Section 7A of the Employees (Mad. H.C.) Provident Funds and Miscellaneous Provisions Act , 1952 is empowered to collect sufficient materials such as forensic EPF Authority is duty bound to consider and dispose support or legal sustenance, during enquiry to establish the representation made by aggrieved persons. and hold as to how all the 13 shares are to be treated as one When a representation is made by the aggrieved persons to before clubbing them into a single unit for covering them the public authority (EPF Authority), the Authority is duty under the Act. bound to consider the same and dispose of in one way or Assistant Provident Fund Commissioner vs. K.M. Eapen, the other. Proprietor, Kanjirappally Estate. 2018 LLR 893 (Ker. H.C.) Non-consideration of representation/grievance of the When arrears were allowed to deposit in instalments aggrieved person (s) amounts to dereliction of duties on the and employer did not deposit even a single instalment, part of the Authority concerned. EPF Authority will be justified in realising the whole If the public authority is found having committed amount in lumpsum. dereliction of its duties, it would justify interference of Permission to remit the EPF dues (outstanding arrears in writ court under Article 226 of the Constitution of India 24 equal monthly installments) is justified keeping in view directing the Authority concerned accordingly. facts and circumstances of the case. K. Sivaraj and Others vs. The Commissioner, Employees Failure on the part of employer to pay even a single Provident Fund Organisation. 2018 LLR 911 (Mad. H.C.) installment, will justify EPF Authority to realize the When the notifications issued exempting the Bank amounts in lumpsum. from coverage under the Act, have been set aside by Mangalam WEB Media Pvt. Ltd. vs. Employees Provident the Writ Court, all the money is to be returned to EPF Fund Organisation. 2018 LLR 898 (Ker. H.C.) Authority by the Bank since there is no stay by the Apex Court. Post retrial spouse and the children are not eligible for widow/widower pension or children pension, as Francis Benny and 18 Ors. vs. Ernakulam District Co- the case may be. operative Bank. 2018 LLR 912 (Ker. H.C.) A child adopted after withdrawal of pension is not eligible. Complaint against Management Officers by EPF Inspector without obtaining sanction is not Paragraph 7.10.1.15 of the Manual Accounting Procedure sustainable. and Rule 54(14) (b) of the Central Civil Services (Pension) Rules, 1972 are identical. Complaint, filed by Inspector/Enforcement Officer of

BUSINESS MANAGER SEPTEMBER 2018 49 RECENT IMPORTANT LABOUR JUDGMENTS

Employees Provident Fund Organisation against Director/ amount was being paid to defray special expenses entailed Managing Director/Deputy General Manager before by nature of the employment and the said amount is not Judicial Magistrate 1st Class, is not sustainable if the same included in the definition of wages as contemplated under has been filed without obtaining mandatory sanction, as Section 2(22) of the Act. The reply was rejected by ESIC and required under Section 14(AC) of EPF Act. an order was passed assessing and demanding the said When the complaint is not sustainable on account of legal amount. Feeling aggrieved, the respondent filed case before lacuna, the summoning order issued by the Judicial the Insurance Court seeking declaration of the order Magistrate are not sustainable and liable to be set aside. passed by ESIC as illegal and unsustainable. Insurance Court allowed the application of respondent and declared D.C. Mehandru and Others vs. Provident Fund Inspector the order passed by ESIC as illegal. Aggrieved by the order (Enforcement Officer). 2018 LLR 914 (P&H H.C.) of the Insurance Court, ESIC has filed the present appeal. Reduction in the amount of damages by the EPF The Court dealt with the meaning of the term 'wages' and Appellate Tribunal is not justified if the employer has whether the amount paid to the security guards/ not made any case for waiver of damages. supervisory officers as uniform wash/maintenance and Principle of mens rea is not attracted only on the ground inspection expenses form part of wages. that beneficiaries were not identified. The Court held that wearing of uniform for Security Applicability of 'principle of mens rea is to be considered Guards to perform his duty is indispensable. By nature of within the ambit of Proviso 2 of Section 14-B of the their employment they are required to maintain and keep Employees' Provident Funds and Miscellaneous Provisions their special identity.It is the duty of the employer to make Act, 1952. them in such pattern to give a special identity in Employer is not entitled to relief of reduction in damages appearance. It was held further that Security Guards are since he did not participate in the proceedings conducted required to work round the clock to carry out surveillance by the EPF Authority regarding determination of damages. and patrolling. So it is the duty of the employer to make them well equipped so as to meet any contingency and they Regional Provident Fund Commissioner vs. Employees are not expected to spend money for the same from their Provident Fund Appellate Tribunal and Another. 2018 LLR own pocket. Further the expenses incurred for travelling to 915 (P&H H.C.) the work site where security guards are deployed, are Petitioner was entitled to minimum pension since booked under the head 'Inspector Expenses'. These are the cessation of his service took place at the age of 52 actual expenses incurred for discharging the duties and years. hence these cannot be treated as wages. The contention of Deduction from payable pension is justified if the the respondent that the said amount is paid as 10% of the pensioner has received the same at higher rates that those basic pay is not tenable as the mode of payment is not applicable to him. significant. The nature of payment and reason for payment Legal Representatives of Late Bhanwar Lal Suthar vs. is relevant and decisive. These expenses are excluded from Assistant Provident Fund Commissioner. 2018 LLR 920 the term 'wages' under Clause (c) of Section 2(22) of the (Raj. H.C.) Act. No illegality or impropriety found in the order of Insurance Court. Appeal is devoid of merits and is dismissed. E.S.I. ESIC vs. Taurus Security Services. (D.B.) LLN (2) 2018 P.228 (Ker. H.C.) When directors and M.D. of limited company getting monthly remuneration working under control and supervision of board, director would be "Employee" Gratuity under ESI Act. Directors and Managing Director of a limited Company, Daily wager is entitled to get gratuity under Payment working under the control and supervision of Board of of Gratuity Act. Directors drawing monthly remuneration are covered The appellant appointed daily wager on 1.4.1986 by Water under the term "Employee" as defined under Section 2(9) of Resources Department of the Chhattisgarh State. the Employees State Insurance Act, 1948. Subsequently his service were regularized by order dated When the Directors and Managing Director fall within the 6.5.2008 and he attained the age of superannuation on definition of "employee" under Section 2(9) of the Act, they 30.7.2011. He was not paid gratuity so he filed application are amenable to the ESI Act so far as ESI contributions is before the Controlling Authority claiming gratuity. The concerned in view of Judgment in "Employees State Controlling Authority allowed the application and held that Insurance Corporation vs. Apex Engineering Pvt. Ltd., the applicant has rendered 25 years 3 months of service (22 (1998) 1 SCC 86. years and 1 month as daily wager and three years and two months as regular employee) so he is entitled for gratuity. Employees State Insurance Corporation vs. M/s. A.V. Auto The State filed appeal before the appellate authority under Industries (P) Ltd. 2018 LLR 835 (P&H H.C.) the Act. The appeal was dismissed. State filed writ petition. Uniform/Washing allowance paid to security guards Single Judge allowed the writ petition and set aside the are not part of wages under the Act. orders passed by Controlling Authority and appellant It is alleged by the appellants that the respondent omitted authority. The petitioner-employee filed appeal before the to pay contribution in respect of Rs. 36.70 Lakh odd amount Division Bench which was dismissed giving rise to the during the year 2004-05 and 2005-06 paid to the security filing of present appeal. guards/supervisory officers under the head uniform The Court dealt with the issues whether the High Court wash/maintenance cost, inspection expenses, special was justified in holding that the appellant was not entitled equipment cost and an amount of Rs. 238576/- is due to gratuity and whether the appellant be held to have towards ESI contribution. Notice was issued proposing to rendered qualifying service as specified in Section 2(e) read assess the contribution for the said amount. The with section 2-A of the Act to make him eligible to claim respondent submitted reply stating that the said expenses gratuity as provided under the Act. do not form part of wages remuneration and the said The Court held that the appellant has actually rendered

BUSINESS MANAGER SEPTEMBER 2018 50 RECENT IMPORTANT LABOUR JUDGMENTS

services for 25 years and the State regularized his services. settled in the case of Bangalore Water Supply and Having regularized his services, the appellant become Sewerage Board vs. A Rajappa, AIR 1978 SC 548 (SC) and entitled to claimants benefits regardless of the post and again in Management of Som Vihar Apartment Owners' capacity in which he worked. Court observed further that Housing Maintenance Society Ltd. vs. Workmen C/o Indian no provision under the Act brought to the their notice Engineering and General Mazdoor (SC). which disentitles the appellant from claiming gratuity nor Merely because of charging some extra charges from a few any provision shown which prohibit the appellant from members, the society cannot be treated as an industry taking the benefit of his long and continuous period of 22 carrying on business of hiring out of neon signs or years which he rendered prior to his regularization for allowing display of advertisements. calculating his continuous service of five years. Once the State regularized his services, the appellant become When there are multiple activities carried on by an entitled to count his total period of service for claiming establishment, what is to be considered, is the dominant gratuity subject to his proving continuous service of 5 function on the basis of which it is to be decided as to years as specified under section 2-A of the Act which the whether the establishment is covered under the term appellant has proved. It would be travesty of justice if the 'industry' or not as per Section 2(j) of the Industrial appellant is denied his legitimate claim of gratuity despite Disputes Act, 1947. rendering continuous service of 25 years. The question as M/s. Arihant Siddhi Co.Op. Hg. Soc. Ltd. vs. Pushpa Vishnu to from which date his services were regularized was of no More & Ors. 2018 LLR 869 (Bom. H.C.) significance for calculating the total length of service for claiming gratuity amount once the services were regularized. It is really unfortunate that the genuine claim Loss of Confidence of the appellant was being denied by the State at every stage and dragged him in fruitless litigation for all these Charge of forging signature of authorities is a valid years. Impugned judgment and order passed by High Court reason for the Management to lose confidence/faith are set aside and orders of the Controlling Authority and upon the employee. Appellate Authority under the Act are restored with cost of M/s. Tata Engineering and Locomotive Company Ltd. vs. Rs. 25000/- payable by the State to the appellant along with Presiding Officer, Labour Court and Another. 2018 LLR 842 gratuity amount. Appeal allowed. (Jhar. H.C.) Netram Sahu vs. State of Chhattisgarh. 2018 (157) FLR P.477 (S.C.) Misconduct Even if the employee is held guilty of misappropriation but not terminated, any amount of Dishonour of cheque issued by bank employee in gratuity cannot be withheld. favour of his brother cannot be misconduct for Any deduction from the payable gratuity amount in bank employer to issue charge-sheet and dismiss violation of provisions of Section 4(6) of the Payment of him. Gratuity Act, 1972 is not permissible being illegal. The allegation against the respondent was that while in- Any deduction to be made from the payable amount of charge of extension counter, he issued a cheque in gratuity is permissible as provided under the provisions of favour of his brother which was dishonoured due to Section 4(6) of the Payment of Gratuity Act, 1972. insufficient funds. The Bank-management issued charge sheet against the respondent on this count along with Deduction from the amount of gratuity,when the employee other counts, a few days prior to his superannuation by was not terminated from services, but was held guilty of invoking Reg. 20(3) (iii) of the UCO Bank Officers the charges of misappropriation, towards financial loss Service Regulations, 1979. After holding the enquiry, the caused to the employer, is not permissible and liable to be Enquiry Officer submitted his report to the disciplinary quashed. authority who imposed punishment of Dismissal on the H.P. State Co-operative Bank Ltd. vs. Naresh Kumar & respondent. The respondent-employee filed appeal Others. 2018 LLR 854 (H.P.H.C.) before the appellate authority of the Bank. During the Writ against order of controlling authority not pendency of appeal before the appellate authority, the maintainable without exhausting the remedy of respondent employee filed writ petition in the High appeal. Court challenging the order of punishment. Later the Writ petition challenging the order passed by the appeal of the respondent was dismissed by the appellate Controlling Authority under the Payment of Gratuity Act, authority of the Bank. Single Judge allowed the writ 1972 without exhausting the statutory remedy of appeal petition of the respondent-employee. The bank filed under Section 7(7) of the Act, within prescribed limitation, appeal before Division Bench against the order of single is not maintainable. judge which was also dismissed. Aggrieved by the order, the Bank has filed the present appeal before the Supreme Challenge to the order passed by the Controlling Authority Court. However, the Bank was agitated before the Court under the Payment of Gratuity Act, 1972 without only one charge of dishonor of cheque. depositing the ordered amount of gratuity,either by way of appeal or writ petition, is not sustainable. The Court examined the issues whether dishonor of cheque, issued by the respondent, constitute misconduct Management, Sri Sowdeswari Industries Coimbatore vs. and whether inordinate delay in issuing charge sheet Asstt. Commissioner of Labour,Coimbatore and others. 2018 was sustainable. LLR 864 (Mad. H.C.) The Court held that the learned single judge took the view that if a cheque issued by the bank employee was Industry dishonoured, action can be taken by the holder of the cheque under Negotiable, Instruments Act but the Bank Co-operative Housing Society is not an 'industry' could not take action under the UCO Bank Officer under I. D. Act. Employees' (Conduct) Regulations. The Division Bench A Co-operative Housing Society is not an 'industry' as held that the action by the respondent in issuing a cheque and its dishonor did not amount to misconduct

BUSINESS MANAGER SEPTEMBER 2018 51 RECENT IMPORTANT LABOUR JUDGMENTS

but was an action personal to him for which the The respondent was engaged as a daily rated worker in complainant could take suitable action but not the Bank. the establishment of the petitioner in the year 1986 and There is no reason to interfere with the judgment of the worked upto 25.7.2005 continuously. The services of the High Court. Moreover the charge sheet was issued after worker were terminated without assigning any reason. seven years of enormous delay for which no explanation Neither any enquiry was conducted nor mandatory has been put forth by the Bank. On this ground only the provisions of Section 25-N of the Act were complied charge sheet against the respondent is liable to be set with. The respondent-worker filed application for aside. The Court also observed that the respondent was reference before the Labour Commissioner. The Labour not paid any amount during the inquiry which Commissioner made reference for adjudication under prevented him from effectively participating in the Section 10(1) of the Act to the Labour Court. The Labour enquiry proceedings. On this ground also the Court passed Award in favour of the worker and directed proceedings against the respondent are vitiated. Bank the petitioner to reinstate the respondent worker was advised to follow the law rather than litigating without back wages. Aggrieved by the Award, the against the employee who has retired. Appeal of the petitioner has filed the present writ petition. Bank dismissed with cost of Rs. 1.00 Lakh to be paid by The Court dealt with the issue whether the services of the Bank to the respondent within four weeks. the respondent have been terminated in violation of UCO Bank vs. Rajendra Shankar Shukla. 2018 (157) FLR Section 25-N of the Act and whether the Labour Court P.482 (S.C.) has committed any error in passing the impugned Misconduct of non-issuance of tickets to bus Award. passengers, thereby misappropriating the funds of The Court observed that as per provisions of Section 25- the Corporation, is a grave and serious misconduct. N of the Act, before terminating the services of the G.V. Hugar vs. Divisional Controller, KSRTC, Bangalore. employee three months' in writing indicating the 2018 LLR 868 (Kar. H.C.) reasons for retrenchment and period of notice has to be specified. Before passing the order, prior permission of the appropriate government or such authority as may be Payment of Bonus Act specified by the State Government is required to be obtained. It is clear that before terminating the services Rights of a workman to receive minimum bonus of the respondent under Section 25-N of the Act, the and minimum wages are vested rights under the required notice has not been given to the worker and statute. For enforcement of these rights, an approval of appropriate, government was not taken employee can certainly file an application under before passing the impugned order of termination and section 33-C (2) of the I.D. Act and Labour Court is therefore, the Labour Court has not committed any error competent to direct the employer to compute the in passing the impugned Award. No ground for bonus due to employee. interference in the matter. Writ petition dismissed. Workman raised industrial dispute and the reference State of M.P. Anr. vs. Vijay Bahadur Singh. CLR I 2018 P. was answered by the Labour Court in favour of the 1002 (M.P. H.C.) workman on 24.3.1993. The Award was challenged by the management by way of writ petition and the Award was upheld by the High Court. Thereafter the workman Sexual Harassment moved an application under section 33-C (2). The application was decided in favour of the workman and Acquittal in criminal case will have no negative the management was directed to quantify the amount impact on departmental inquiry for misconduct of payable to the workman from 1.1.1991 to 28.2.2002. The sexual harassment and riotous behavior. management has approached the Court challenging the The petitioner was issued a show cause notice with direction. The Court examined the issue of jurisdiction regard to the acts of sexual harassment of a female of Labour Court to entertain petition under section 33-C officer. The reply to the show cause notice was found to (2) the Act to determine the amount due to the workman. be unsatisfactory and the petitioner was served with The Court observed that rights of a workman to receive memo of charges on 11.1.2015. The petitioner was also minimum bonus and minimum wages are vested rights charged for unauthorized absence, indulging in riotous under the statue. For enforcement of these rights, an acts on the premises of the Bank and assaulting the employee can certainly file an application under section Branch Manager with iron rod. Departmental inquiry 33-C (2) of the Act and Labour Court is competent to was initiated against the petitioner. The Enquiry Officer direct the employer to compute the due to employee in found the petitioner guilty of all the charges leveled this behalf. When a claim is filed by an employee it is not against him and submitted his report to the disciplinary necessary that it should be referred to industrial authority. The disciplinary authority awarded the Tribunal for adjudication. The Labour Court has punishment of dismissal from service. Aggrieved by the jurisdiction to entertain the application and decide the order, the petitioner filed appeal before the appellate matter. No error committed by the Labour Court. Writ authority which was dismissed. The petitioner has filed Petition dismissed. the present writ petition challenging the order of punishment awarded to him. Works Manager, Irrigation Workshop and Anr. vs. Presiding Officer, Labour Court and Anr. CLR I 2018 P. The Court examined the issues whether acquittal in 1067 (All. H.C.) criminal case does entitle the delinquent to exoneration of charges. Whether the writ court can reappraise the sufficiency or insufficiency of evidence on which Reinstatement findings are based. The Court observed that the petitioner was charged for Reinstatement without back-wages would be proper acts of unbecoming behaviour, sexually harassing a lady when the daily rated workman was terminated officer, riotous behaviour and assault. The petitioner without complying the retrenchment provisions of was arrested by the police for assaulting the lady officer. I. D. Act. The counsel for the petitioner was not able to show any

BUSINESS MANAGER SEPTEMBER 2018 52 RECENT IMPORTANT LABOUR JUDGMENTS

illegality in the order of punishment of the Disciplinary mentioned in the termination order simplicitor. Authority and rejection of show appeal by the appellate Moreover, the termination order has been passed in authority. There is no force in the contention of the accordance with the conditions mentioned in the petitioner that he was acquitted in the criminal case, so appointment order. Ordinarily and generally the Court the order of dismissal is not sustainable. In the criminal is required to look to the order on the face of it and find case he was acquitted as the prosecution was not able to whether it casts any stigma on the employee whose examine the witnesses. The acts of the petitioner services are terminated. It is well considered view of the towards the lady officer amount to gross misconduct and Court that when the termination is not punitive and is therefore the punishment awarded by the disciplinary not by way of punishment and the order of termination authority is not disproportionate to the charges. The on the face of it does not cast any stigma on the writ court has limited jurisdiction to look into the petitioner. In the present case the authorities chose not concurrent findings of the disciplinary authority and to hold enquiry against the petitioner but chose to appellate authority.The writ court cannot re-appraise or exercise powers under the terms and conditions of the look into the sufficiency or insufficiency of the evidence appointment order and issued simple termination order on which the findings are based. Writ Petition which does not cast any stigma upon the petitioner. The dismissed. termination order itself says that the petitioner is to pay Mohan Kumar Singh vs. Chief Manager (HRD) Central and allowances for one month in lieu of the period of Bank of India, Patna and others. 2018 CLR I P. 893 notice. The petitioner has failed to establish that after (Pat. H.C.) retrenchment some individuals were employed as Bungalow Peons and were later absorbed. The writ petition is devoid of merits and is dismissed. Termination M. Jangaiah vs. Chief Personnel Officer, O/O General Manager, SC Railways and Anr. 2018 I CLR P. 1052 In case of termination simplicitor as per terms of (Hyderabad H.C.) appointment, no inquiry is required. The petitioner was appointed as Bungalow Peon of the first respondent on 22.9.1992. He was removed w.e.f. Transfer 17.12.1993 without assigning any reason and was paid one month's notice pay and salary for seven days but no Termination for refusal to report at the place of retrenchment compensation was paid. It is alleged that transfer without enquiry will not be illegal. after his termination many persons were appointed as When workman has refused to join at the place of Bungalow Peons but the case of the petitioner was not transfer, holding of enquiry does not serve any purpose considered though he was entitled for such appointment for taking disciplinary action against the workman. under section 25-H of the Act. He filed O.A. before CAT Termination on account of refusal to report at the place Hyderabad. CAT opined that he ought to have availed the of transfer by the workman holding a transferable post, remedy under the Industrial Disputes Act. Then he without enquiry is not illegal or in violation of raised industrial dispute. After failure of conciliation, provisions of Industrial Disputes Act, 1947. the matter was referred to the Government recommending adjudication by industrial tribunal. But Holding of enquiry is not necessary for dispensing with no steps were taken by the Ministry. The petitioner filed the services of a workman, holding a transferable post, writ petition seeking directions to the Government. The who has refused to report for duty at the place of writ petition was disposed of with permission to the transfer. petitioner to file claim/petition before the Labour Court. H.P. State Co-operative Marketing and Consumers In the meantime the Government referred the matter. Federation Ltd. vs. Nain Sukh. 2018 LLR 852 (H.P. H.C.) Labour Court passed an Award directing the respondent When charter of demands, duly signed by the no. 1 to reinstate the petitioner with continuity in Petitioner as a President of Union was raised on service, back wages and other benefits. Respondent no. 1 21.08.2002, his transfer on deputation vide order did not implement the Award. The petitioner filed dated 24.08.2002, would be illegal and execution before the Tribunal. At this stage respondent unjustified. no. 1 writ petition challenging the Award. Writ petition When right to transfer from one place to another is a was dismissed with liberty to respondent filed condition of service in conformity with Standing application before the Tribunal for setting aside the ex- Orders having a proviso that if transfer is from one parte Award with application for condonation of delay. place to another, it must be with the consent of the However, the Tribunal declined to condone the delay. workman and subject to allowing him adequate time to This order of the Tribunal was challenged by move to transferred place, transfer of the petitioner respondent no. 1 by filing writ petition. Writ petition from Solan to Lucknow without consent, is illegal. was disposed of with the direction to the Tribunal to consider the matter afresh. Thereafter the matter was No doubt right to transfer from one place to another is taken up for hearing on merits. The Labour Court held a condition of service in conformity with Standing that the present petitioner is not entitled to any relief. Orders but transfer of an employee on deputation is The petitioner has filed the present petitioner not permissible being illegal. challenging the Award of the Labour Court. When reference was decided on merits, deputation by The Court examined the issue whether the termination way of transfer is held illegal, workman had retired on of the petitioner was justified and also when the superannuation, the workman was not under any termination is 'termination simplicitor' whether holding obligation to plead and prove that he was not gainfully of enquiry would be necessary. employed for entitling him to back wages. The Court observed that the order of termination does If the petitioner was not subjected to cross not indicate that it is punitive in nature as no reason examination that he was not President of Union, no like the services of the petitioner are unsatisfactory was suggestion in this respect was put to him, his

BUSINESS MANAGER SEPTEMBER 2018 53 RECENT IMPORTANT LABOUR JUDGMENTS

Examination-in-Chief would remain unshattered proving the fact that he was President of Union. Workman M/s. Mohan Meakin Limited, Solan Brewery vs. Mere filing of affidavits of few persons in court to President Mohan Meakins Staff Union & Ors. 2018 LLR claim that they were working under the person 856 (H.P. H.C.) whom management claimed as supervisor will not be sufficient to prove that person was working as Unauthorised Absence supervisor. If none of the workmen, allegedly working under Termination of service of an employee on supervision and control of the petitioner-workman, has account of unauthorized absence for 76 days in 5 been produced before the Industrial Adjudicator to months is justified since habitual absenteeism depose such a fact giving opportunity to the petitioner- disturbs the discipline in the establishment at work-man for cross examination of that workman, the work place. management would fail to prove that the petitioner was not a workman. Repeated unauthorized absence by an employee justifies punishment of removal from service to avoid Simply filing an affidavit in evidence by the indiscipline at the work place. Management that the petitioner was supervising and controlling the other workmen would not be sufficient to Pritam Pal Sharma vs. Life Insurance Corporation & prove that the petitioner was not a workman. Ors. 2018 LLR 824 (Delhi H.C.) When the Company Secretary has admitted that he did Dismissal on account of unauthorised absence is not know whether the petitioner was final authority in not sustainable when the charge was vague signing cheques or inviting quotations, would also prove without dates of absence in charge-sheet and that the petitioner was not having any administrative employee explained his absence because of authority i.e., out of the purview of definition of illness supported by medical certificates. workman. The petitioner appointed as Gangman/Peon and M/s. Mohan Meakin Limited, Solan Brewery vs. President worked satisfactorily. In 2004-05 he fell ill repeatedly Mohan Meakins Staff Union & Ors. 2018 LLR 856 and applied for sick leave with medical certificate. (H.P. H.C.) Principal of the College got annoyed and market his absence n the attendance register. He was also not paid Anganwadi workers are not workmen under salary for several months and set up an enquiry and Section 2(s) of I.D. Act. issued charge sheet on two counts (i) that he took loan The appellant was serving as Anganwadi worker with from SBI of Rs. 4.00 lakhs without prior permission of respondent no. 1 under Integrated Child Development the employer, (ii) unauthorized absence of 280 days Scheme (ICDS) and was paid only honorarium. Her between June, 2004 to December, 2005. The petitioner services were put to an end w.e.f. 3.11.2009. She raised an submitted his reply to the charges and denied having industrial dispute. After failure of conciliation, the taken loan from SBI. Regarding absence from duties he matter was referred to Labour Court, Rajkot. The submitted that he fell ill frequently during the period Labour Court dismissed the reference on the ground that and submitted the medical certificates also. He further the petitioner was working as Anganwadi worker under submitted that the Principal due to some personal ICDS and was paid only honorarium, she cannot be dislike did not allow him to sign the attendance treated as workman within the meaning of Section 2(s) register even if he was ten minutes late on some of the Act. Aggrieved by the Award, the petitioner filed occasions. The enquiry officer submitted his report Special Civil Application before Single Judge of High holding first charge not proved and found that the Court. The learned Single Judge confirmed the Award petitioner was guilty of unauthorized absence. Order passed by Labour Court and dismissed the application. challenged by the petitioner before Commissioner, Aggrieved by the order the petitioner has filed the Kanpur Division which was dismissed. Aggrieved by present letters Patent Appeal challenging the order of the order the petitioner has filed the present petition. Single Judge. The Court examined whether the disciplinary action The Court examined the question whether Anganwadi and punishment on account of illness supported by Workers working under ICDS and getting honorarium medical certificates can be sustained. can be treated as workman within the meaning of The Court observed that the disciplinary proceedings Section 2(s) of the Act. The Court held that the post of against the petitioner were not conducted in a fair Anganwadi Workers are not statutory posts. They have manner as the charge of unauthorized absence is itself been created in terms of the ICDS programme/scheme vague as no dates of absence have been mentioned in under which Anganwadi workers are appointed and paid the charge sheet. The Petitioner admitted his absence honorarium cannot be said to be 'industry' under the and explained it is specifically. The said explanation Industrial Disputes Act1947. It has been held further ought to have been considered sympathetically. In case that the ICDS has been formulated in pursuance of of doubt the medical certificates could have been sent National Policy for Children. As such it is a benevolent for verification which was not done. The punishment scheme evolved to make coordinated effort for imposed upon the petitioner is arbitrary and is liable betterment of the children. The workers appointed to be set aside. The matter remanded to the appointing under the said scheme cannot be said to be 'workman' authority to consider afresh with regard to the within the meaning of Section 2(s) of the Act. The punishment keeping in mind that the petitioner has Labour Court has rightly rejected the reference and the already been denied wages for 357 days. Writ Petition same has been rightly confirmed by Single Judge. No disposed of. interference of this Court is called for. LPA dismissed. Maqsood Ahmed vs. State of U.P.and others. LLJ II 2018 Manjulaben Meghjibhhai Bagada vs. Bal Vikas Adhikari P. 45 (All. H.C.) and others. CLR I 2018 P. 1029 (Guj. H.C.) BM

Courtsey - Labour Law Reporter,FLR,CLR ,LLJ & APS Labour Digest

BUSINESS MANAGER SEPTEMBER 2018 54 H.L. KUMAR, Advocate, Supreme Court, New Delhi Wages/allowances for ESI contributions

he term 'wages' has been defined in many statutes in contract of employment, express or implied, are fulfilled. The as many ways. Section 2(22) of the Employees' State second part of the definition of wages includes any payment to TInsurance Act defines 'wages' in entirely different an employee in respect of any period of authorised leave, lock- manner and is produced below : out, strike which is not illegal or lay-off. The third part of the 2(22) "'Wages' means all remuneration paid or payable in definition includes other additional remuneration, if any,paid cash to an employee, if the terms of the contract of at intervals not exceeding two months. The fourth part of the employment, express or implied, were fulfilled and includes definition of the term 'wages' does not include any any payment to an employee in respect of any period of contribution paid by the employer to any pension fund, or authorised leave, lock-out, strike which is not illegal or layoff provident fund, or under the Act, the travelling allowance or and other additional remuneration, if any,paid at intervals not the value of any travelling concession, or any sum of the exceeding two months, but does not include - person employed to defray special expenses entailed on him by the nature of his employment, or any gratuity payable on (a) any contribution paid by the employer to any pension fund discharge. or provident fund, or under this Act; It will be seen that the above definition starts with the (b)any travelling allowance or the value of any travelling words 'all remuneration' and as such it has been attracting concession; controversy more particularly when it does not clarify which (c) any sum paid to the person employed to defray special of allowances or perks will form the part of 'wages'. Although expenses entailed on him by the nature of his employment; the definition is inclusive and exclusive both, yet this issue has or repeatedly gone to courts for interpretation in innumerable (d)any gratuity payable on discharge." cases. An analysis of the definition of wages reveals that it In view of the above, it becomes imperative to know the consists of four parts. The first part refers to all remuneration implications of judicial interpretations of the term 'wages' paid or payable in cash to an employee if the terms of the besides clarification made by ESI Corporation.

BUSINESS MANAGER SEPTEMBER 2018 55 WAGES/ALLOWANCES FOR ESI CONTRIBUTIONS

TO BE TREATED AS WAGES NOT TO BE TREATED AS WAGES

HOUSE RENT ALLOWANCE WASHING ALLOWANCE House Rent Allowance is a part of the salary provided by an employer to It is a sum paid to defray special expenses entailed by the nature of his employee for his rented accommodation. House Rent Allowance is employment and as such this amount does not amount to wages. wage in cases where it is being paid. Notional amount of house rent (In lieu of old instructions issued vide Memo No.Ins.III/2/1/65 dt. 8.2.1967) cannot be presumed as wages for deciding the coverage. In cases where an employee is being paid house rent allowance, the same will be ANNUAL BONUS included both for coverage and contribution. In cases where the staff Bonus paid to the employees could not be treated as wage for the purpose quarters have been allotted the amount of salary and wages paid will of charging of contribution under Sec.2(22), provided the periodicity of count for coverage and contribution and no notional house rent the payment is more than 2 months. The said issue was also considered allowance is to be presumed in such cases. In the cases of Braithawait & in the meeting of the ESI Corporation held on 19.12.1968 and the Co. vs. ESIC, AIR 1968 SC 413 and M/s. Harihar Polyfibres vs. ESIC, Corporation agreed to the recommendations of the Standing Committee Bangalore, 1984 (49) FLR 371 Supreme Court has also held that house that bonus may not be treated as wage. Hence no contribution is payable rent allowance is a wage under Sec.2(22) of the ESI Act. on annual Bonus. As per section 17 of the Payment of Bonus Act, 1965 (Earlier instructions were issued vide memo No.T-11/13/11/15-Ins.III dt. 28.9.75, there is no prohibition in paying bonus every month but it should be No.Ins.III(2)/15/15/74-Ins.Desk.I dated Dec., 76, No.T-11/13/53/19-84/Ins.IVdt. 19.9.84 stated bonus under Payment of Bonus Act in order to avoid any hassle or & No.D.Ins.II/11/3087/303 dated 1.3.1985). harassment. WAGES PAID DURING LAYOFF (Earlier instructions were issued vide memo No.Ins.III/2(2)-2/67 dt. 8.2.1967). During the period of layoff though the employee is not given actual work ANNUAL COMMISSION and is also not given full remuneration but certain wages are paid to the employee by way of remuneration for remaining attached to the Sales Commission would fall within the 3rd category of wages as defined factory/establishment of the employer, therefore, such payments paid under the Act as additional remuneration and there has to be actual for the period of layoff are also wages for the purpose of Sec.2(22) of the payment as the word used is paid and not payable, at intervals not ESI Act and hence contribution is payable on such payments. exceeding two months. The question as to why the period of 2 months is (Earlier instructions were issued in 1968). fixed was debated in Supreme court in the case of Handloom House, Ernakulam vs. RD, ESIC, 1995 (82) FLR 618 when it was held that no OVERTIME ALLOWANCE employer shall have the permission to draw the payment of contribution Overtime means time spent working that is more than one usually works on the premise that annual payments have to be work out. Normally,the in a day or a week. In the case of the employer as and when the employer wage period is one month, but the Parliament would have thought that finds the need to have work done expeditiously,in addition to the normal such "wage period" may be extended a little more but no employer shall work during the course of the working hours, the employer offers to the make it longer than two months. This could be the reason for fixing a employee to do the overtime work after the working hours. When period of two months as the maximum period for counting the additional employee does overtime work it amounts to the acceptance for the same, remuneration has to make it part of 'wage' under the Act. Therefore, the hence there emerges concluded implied contract between the employer annual commission is excluded from the definition of the wages and and the employee. Both the remuneration received during the working hence no contribution is payable on the annual commission. hours and overtime constitutes a composite wage and thereby it is a (Earlier instructions were issued vide Hqrs.letter No. Ins.III(2)-2/71 dated 10.8.71). wage within the meaning of Sec.2(22) of the ESI Act. Therefore, the contribution is payable on the overtime allowance. However, overtime EXGRATIA PAYMENT DURING STRIKE FOR TRAVELLING allowances will be considered as wage for the purpose of charging the EXPENSES contribution only and will not be considered for the purpose of the Like conveyance allowance if any exgratia payment is made during the coverage of the employee under the Scheme. period of strike to some of the employees to incur certain travelling The same view was held by the Supreme Court in its judgment delivered expenses such amount will neither be considered as wage under Sec.2(9) on 6.11.96 in the case of Indian Drugs & Pharmaceuticals Ltd. vs. ESIC, nor under Sec.2(22) of the ESI Act and no contribution is payable on such 1997 LLR 1 (SC). amount. High Court of Bombay in the case of ESIC vs. Willman (India) (Old instructions issued vide memo No.3-1(2)/3(1)/68 dt. 31.5.68). (P) Ltd. in case No.210 of 1976, held the same view. NIGHT SHIFT/HEAT/GAS & DUST ALLOWANCE SERVICE CHARGES It is an additional remuneration paid to the employee for performing Service charges are collected by management of the hotel on behalf of duty at night time during the hours of darkness. This amount is paid by their employees in lieu of direct tips and the same is paid to their way of incentive under the scheme of settlement entered into between employees at a later date. the Management and its workmen and hence are wages within the Such amount collected as service charges will not constitute wages meaning of Sec.2(22) of the ESI Act. This view was observed by the Full under Sec.2(22) of the ESI Act. In the case of ESIC Vs. M/s. Rambagh Bench of Karnataka High Court in the case of NGEF Ltd. vs. Dy. Palace Hotel, Jaipur,1977 (34) FLR 12 the Rajasthan High Court has held Regional Director, ESIC, Bangalore, 1979 LLR 463. Supreme Court in the that service charges are not wages under Section 2(22) of the ESI Act. case of M/s. Harihar Polyfibers vs. RD ESIC, Bangalore, 1984 (49) FLR 371 This verdict of the High Court of Jaipur was accepted in the ESIC and has also held the same view. Hence, Night Shift Allowance, Heat, Gas & hence no contribution is payable on service charges. Dust allowance are wages under Sec.2(22) of the ESI Act and contribution is payable on the said amount paid by the employer to the (Earlier instructions were issued vide letter No.P-12/11/4/79-Ins.Desk.I dt. 18.9.79) employees. NEWSPAPER ALLOWANCE (Earlier instructions were issued vide Memo No.T-11/13/53/19/84-Ins.IV dated In certain factories/establishments the employees are reimbursed the 19.9.94). cost of Newspapers while in some other factories/establishments the WAGES AND DEARNESS ALLOWANCE FOR UNSUBSTITUTED employees are paid monthly newspapers allowance instead of HOLIDAYS reimbursement of the cost of the Newspapers. Where the amount is Such wages and dearness allowance paid to the employees for the being paid regularly to the employees by the employer as Newspapers unsubstituted holidays are to be treated as wages under Sec.2(22) of the allowance the same will be treated as wages under Sec.2(22) of the ESI ESI Act and the contribution is payable. High Court of Gujarat in the Act and the contribution is chargeable. However, where the cost of case of ESIC vs. New Assarw Manufacturing Co. Ltd., 1981 Lab. IC 90 held Newspapers is reimbursed to the employees, no contribution is to be the same view. charged on such payments. INTERIM RELIEF SAVING SCHEME Interim relief paid to the employees is normally paid when either the Certain factories/establishments are contributing towards the saving wage is under revision or when the payment of Dearness Allowance is scheme for the welfare of the workers. Such amount paid by the delayed due to any reason. Whatsoever may be the case, if the interim employer as his contribution to the saving scheme, will not constitute relief is paid to the employees by any employer, the same will amount wages under Sec.2(22) of the ESI Act and the contribution is not payable. the wages within the meaning of Sec.2(22) of the ESI Act and (Earlier instructions were issued vide Memo No.P-12/11/4/77-Ins.IV dt. 15.11.80) contribution is payable thereon. EXPENDITURE ON ANNUAL/PERIODICAL SERVICES SUSPENSION ALLOWANCE/SUBSISTENCE ALLOWANCE CONTRACT Suspension connotes temporary cessation of something as right, work In the factories/establishments certain amount is being paid by the or labour. During the suspension period the employee is not allowed to employer to the supplier of machines or to the firms of repute for the actually work and he is not given full remuneration but the permissible annual/periodical servicing of the machines and for such purposes the subsistence allowance is paid to the employee by way of remuneration contract is awarded. In such cases no contribution is payable on the for remaining attached to the services of the employer as per the amount paid for annual/periodical service contracts. relevant service regulations governing his contract of service, therefore,

BUSINESS MANAGER SEPTEMBER 2018 56 WAGES/ALLOWANCES FOR ESI CONTRIBUTIONS

TO BE TREATED AS WAGES NOT TO BE TREATED AS WAGES the subsistence allowance is part of wage as defined under section 2(22) COMMISSION TO DEALERS/AGENTS of the ESI Act and consequently on the amount of subsistence Where dealers/agents are appointed by the employers but no regular allowance paid to the suspended employee, contribution is payable. The wages are paid and it is not obligatory on the part of such dealers/agents Supreme Court has also held in the case of RD, ESIC vs. M/s. Popular to attend to the factories/establishments and they are paid commission Automobiles etc., 1997 LLR 1146 (SC) that suspension/subsistence only on the quantum of sales, in such cases the amount paid by the allowance is wage and contribution is payable under section 2(22) on the employer as commission/dealership does not constitute wage under said amount. Section 2(22) of the ESI Act and hence no contribution is payable. (In lieu of earlier instructions were issued vide Memo No.3(2)-1/67 dt. 3.6.67 & letter No.Ins.III(2)-2/71 dt. 10.8.1971) EXPENDITURE ON SERVICING OF MACHINES Short period contract for service - electrician, carpenters, mechanics, No contribution is payable on the servicing of machines where the job plumbers etc./repair work done on shop. awarded is to the Engineer and instead of contract of service, there is a In such cases also contribution is payable on the amount paid by the contract for service for servicing of machines. Employer if the services are rendered within the premises. This view was also held by Punjab and Haryana High Court vide its judgment SERVICE CONTRACT dated 29.3.84 in the case of Modern Equipment vs. ESIC in Civil Appeal Amount paid to an organisation for maintenance of No.3218 of 1989. Machinery/Equipments as part of service contract will not attract ESI ADDITIONAL ALLOWANCES FORMING PART OF WAGES contribution. The following items will form part of the wage both under Section 2(9) i.e for considering the employee for the purpose of coverage and section PAYMENT MADE TO LABOUR CONSULTANTS, LAWYERS, 2(22) of the ESI Act for the purpose of charging of contribution :- ENGINEERS, COUNSELS, CHARTERED ACCOUNTANTS : Matinee allowance which is being paid to employees in Cinema The amount paid by the employer to labour consultants, lawyers, Houses Shift allowance paid to employees who work on shift duty at engineers, counsels, chartered accountants does not constitute wage as odd shifts Location allowance paid, in addition to Dearness Allowance per provisions under section 2(22) of the ESI Act and hence no to meet the high house rent, Compensatory allowance Cash handling contribution is payable. allowance paid to Cashier, Supervisory Allowance, Additional pay paid to training staff Charge allowance Steno/Typist allowance Plant THE FOLLOWING ITEMS WILL NOT FORM PART OF THE WAGE allowance Honorarium for looking after the hospital/dispensary EITHER UNDER SECTION 2(9) OR UNDER SECTION 2(22) OF THE Computer allowance Gestetner/Photocopier/Printer allowance ESI ACT :- Personnel/Special allowance Machine allowance Convassing Payment made on account of un-availed leave at the time of discharge allowance First-aid allowance Personnel allowance - Pay over and Commission on advertisement secured for Newspapers, if not paid to above the basic wage and Dearness allowance for skill, efficiency or past the regular employee Fuel allowance/Petrol allowance good records Area allowance - given to employees living in a Entertainment allowance Shoes allowance Payment made on particular area to meet the high cost of living in that area Exgratia account of gratuity on discharge/retirement Payment made on payment if payment is made within an interval of two months. encashment of leave.

AMOUNT/ALLOWANCES WHICH MAY OR MAY NOT Industries Ltd., 1986 LLN 515. However, the periodicity BE TREATED AS 'WAGES' FOR CONTRIBUTION aspect has to be kept in mind. In case the periodicity is more Gazetted Allowance than 2 months, the same will not constitute wages and no contribution will be payable as in the case of incentive Certain factories/establishments are paying gazetted bonus. allowance to its employees in lieu of duties performed by them on gazetted holidays. Such gazetted allowance is not Payment made to rickshaw pullers, hathrairy wage for the purpose of Sec.2(9) of the ESI Act. However, it pullers and truck operators (including loading & will be wage for the purpose of Sec.2(22) of the ESI Act and unloading charges when the loaders/unloaders are the the contribution are to be recovered on such payments. employees of the truck operators : Conveyance Allowance Rickshaw pullers, Hathrairy pullers and Truck Operators (who bring labour with them) no contribution is Fixed conveyance allowance flowing out of a wage payable on the amount paid by the employer if the amount settlement or as per terms and conditions of employment paid is lumpsum amount including loading/un-loading should be treated as wages under section 2(22) for all charges and no separate wages are paid by the employer. purposes except : Similar view was held by Bombay Division Bench in 1990 1. Amount towards conveyance paid or reimbursed to any in the case of Raisaheb Tekchand, Mohate Mills vs. R.D. employee for incurring expenses for specific duty related ESIC, 1990 LLR 264. journey. Incentive Bonus 2. Reimbursement of actual cost of conveyance for coming to work and going from work on production of ticket or As per the decision of the Supreme Court delivered on season ticket and subject to proof of actual expenditure. 8.3.2000 in the case of M/s. Whirlpool India Ltd. vs. ESIC, 2000 LLR 431, additional remuneration to become wages has 3. Payment of certain amount for maintenance of vehicle to be paid at intervals not exceeding two months as depending upon cadre of the official and category of distinguished from being payable. Thus, there has to be vehicle and subject to production of records for actually actual payment and the payment of production incentive maintaining the vehicles. does not fall either under the 1st part or last part of the 4. Fixed allowance paid at an interval exceeding 2 months, definition of the term wages as defined in Sec.2(22) of the unless such payment is made as per contract or Act, hence no contribution is payable on the incentive agreement. bonus, provided the periodicity of payment is more than 2 Attendance Bonus months. It is a special allowance being paid by certain employers to (Earlier instructions were issued by this office vide Memo No.T-11/13/53/19- 84-Ins.IV dt. 19.9.84, Memo No.Ins.III-2(2)/2/69 dt,. 26.12.73, Memo No.T- their employees to discourage the workers from absenting 11/13/54/18/82-Ins.IV dt. 14.7.82 & Memo No.D/Ins.5(5)/68 dt.18.9.88.) from the job. Any amount paid by the employer to its Production Bonus employees as Attendance Bonus will constitute wages under Sec.2(22) of the ESI Act and the same opinion was held by Production Bonus like incentive bonus is paid to the Bombay High court in the case of ESIC vs. Indian Dyestuff workers as additional remuneration and hence like

BUSINESS MANAGER SEPTEMBER 2018 57 WAGES/ALLOWANCES FOR ESI CONTRIBUTIONS

incentive bonus such additional remuneration in order to become wages has to be paid at intervals not exceeding 2 months as distinguished from being payable. Thus, there has to be actual payment and hence no contribution is payable, provided periodicity of the payment is more than 2 months. (Earlier instructions issued vide letter dated 4(2)/13/74- Ins.IV dated 2.9.85) INAM/Ex-gratia Payment Inam represents a payment made by the employer to any employee as a reward for the services rendered by him for which he is/was not under obligation to render the same under the contract of service which is expressed or implied but does not include the payment which have been made to an employee in fulfillment of contract of service. This may include exgratia payment. Where Inam is being paid for special skill or higher responsibilities/additional duties, it may be taken as remuneration and contribution is payable. Where the employer has introduced the scheme of Inam but according to terms and conditions the employed as employees are being paid drivers' allowance per employer has no right to withdraw it or revise it, the same month. This allowance is being paid to enable the officers to may be treated as wages and contribution is payable. appoint a driver at their own level and such drivers Where the employer has introduced the scheme of Inam employed are not being paid salary directly by the and he has right to revise or withdraw it at his discretion, factories/establishments. Where such allowance is being the payment of Inam under such scheme may not be treated paid to the employees and the drivers are not engaged by the as wages and contribution is not payable provided the employees, in such event the allowance paid as such will be payment is made at an interval exceeding two months. considered as wage under Section 2(22) of the ESI Act and Where there is no scheme of Inam in writing but still contribution will be chargeable provided the employee is employer might be making payment under the head Inam on coverable under the Scheme. the basis of some understanding between the parties, in However, where the services of the drivers are being such cases, the nature of payment and its periodicity may be utilised, in such event the drivers so engaged will be covered ascertained and whether payment of Inam is an exgratia as employee and contribution will be payable on the amount payment which is not covered by the contract of service. In paid to the drivers as salary and booked in the ledgers of the case the periodicity is more than 2 months, no contribution employer under the heading "Drivers' Allowance". may be charged. Food/Milk/Tiffin/Lunch Allowance (Last instructions were issued vide letter No.D-Ins.5(5)/68 dated 21.2.1975) Each case of payment of Food, Milk, Tiffin and Lunch Medical Allowance Allowance has to be examined on its merits depending on The employees working in factories/establishments are the following conditions under which the allowance is being provided medical services in kind by the employer but payable :- in certain factories/establishments instead of providing Tiffin/Food/Milk/Lunch Allowance paid in cash at a medical services in kind, the amount spent by the employees fixed rate irrespective of whether the person is absent or on medical care is reimbursed while in some other on authorised leave etc. may be treated as wages. organisations, employees are being paid monthly cash Tiffin/Food/Milk/Lunch allowance paid in cash with allowance in lieu of medical aid/reimbursement of medical expenses. Where such payments are made by the employer deduction for leave or absence etc. may not be treated as in lieu of the medical benefit, the same are to be treated as wages. wages under Sec.2(22) of the ESI Act and the contribution is Tiffin/Food/Milk/Lunch allowance paid in kind i.e. chargeable. canteen subsidy/food subsidy etc. may not be treated as (Earlier instruction were issued vide letter No.Ins.5(5)/68-Ins.III dt. 21.8.71 & wages. Ins.III/2(2)2/68 dated 24.6.71) (Earlier instructions were issued vide letter No.P-11/13/97-Ins.IV dated Education Allowance 2.2.1999) Employees are being paid monthly Education allowance Hamals/Coolies Employed at a Particular Time for the children studying in the Schools/Colleges. Where Where Hamals & Coolies are employed at a particular such education allowance is being paid monthly,the same is place and a particular time, outside the premises of the to be considered as wages under Sec.2(22) of the ESI Act and factory/establishment to perform a specific job on the spot the contribution is chargeable on the said amount. in such cases no contribution is payable on the amount paid However, in such cases where instead of paying the to such Coolies/Hamals, however the contribution is education allowance on monthly basis, the amount spent as payable on the amount paid to the coolies and hamals for fee is reimbursed to the employees and booked under services rendered within the premises of the employer. The education allowance, in such cases no contribution is Bombay High Court in the case of Parley Bottling Co. Ltd. payable. vs. ESIC, Bombay, 1989 (59) FLR 320 and Supreme Court in the case of ESIC vs. Premier Clay Products, have held this Drivers Allowance view. BM In some of the factories/establishments the officers

BUSINESS MANAGER SEPTEMBER 2018 58 Contribution payable and membership by pay limit for contribution does not have independent meaning but depends on membership how an employee has been enrolled as PF member. Except paragraph 26 (6) all provisions deal with different conditions of becoming P.F. member.

E.P.F. Act Is contributions on higher pay weird?

RAM NIWAS BAIRWA, Ex-Regional P.F. Commissioer (II), Jaipur

5[Provided that in respect of any employee to whom the Scheme applies, the contribution payable by him may, if he so desires, be an amount exceeding 2[ten per cent, or twelve per cent.], as the case may be, of his basic wages, dearness allowance and retaining allowance (if any) subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under the Act.] 6[(3) The contributions shall be calculated on the basis of 3[basic wages, dearness allowance (including the cash value of any food concession) and retaining allowance (if any)] actually drawn during the whole month whether paid on daily, weekly, fortnightly or monthly basis.] 7[(4) Each contribution shall be calculated to 3[the nearest rupee, 50 paise or more to be counted as the next higher rupee and fraction of a rupee less than 50 paise to be ignored.] Sub-para (1) opens with the words "The contributions payable by ection 6 of the EPF & MF act 1952 the employer under the Scheme shall be at the rate of 2[ten per provides for contribution payable. cent.]…" The wording means that under the EPF Scheme, it is the SScheme framed under the Act employer, who is to pay contribution; whereas, Sub-paragraph (2) provides quantum of contribution and how the provides for the quantum of PF contribution to be paid by an contribution to be paid to the authorities. employee i.e. the contribution payable by the employee under the Paragraph 29 of the EPF scheme 1952 scheme shall be equal to the contribution payable by the employer in provides for the quantum of contribution. It respect of such employee. In this paragraph, there is no limit of pay reads - laid down for contribution payable. 29 CONTRIBUTION - (1) The contributions Paragraph 30 opens with the words "the employer shall, in the payable by the employer under the Scheme shall first instance, pay both the contribution payable by himself and also be at the rate of 2[ten per cent.] of the 3[basic on behalf of members employed by him directly or by or through a wages, dearness allowance (including the cash contractor." value of any food concession) and retaining In this paragraph too, there is no reference of any ceiling of pay allowance (if any)] payable to each employee to for contribution. whom the Scheme applies : Para 2(f) and proviso to para 26A(2) talk of situations about 4[Provided that the above rate of contribution exempted/excluded employee who draw pay above the ceiling of Rs. shall be 2[twelve per cent.] in respect of any 15,000/ per month. It says about member exempted under paragraph establishment or class of establishments which 27 or 27A transferred to an un-exempted establishment. In that the Central Government may specify in the proviso, it is mentioned that such exempted employee, on joining an Official Gazette from time to time under the first un-exempted establishment will be enrolled as PF member, but proviso to sub-section (1) of section 6 of the Act.] contribution of the employer shall be limited to ceiling amount, (2) The contribution payable by the however, if such employee and his employer jointly agree to pay employee under the Scheme shall be equal to contribution on higher salary, then it is allowed by competent the contribution payable by the employer in authority as per provisions laid down in Para 26 (6). respect of such employee : This shows that the pay limit for contribution is applicable only

BUSINESS MANAGER SEPTEMBER 2018 59 E.P.F. ACT IS CONTRIBUTIONS OH HIGHER PAY WEIRD?

Para/Provision Pay Remarks Para 26 (1) (a) every employee eligible except an Not defined Excluding excluded employee hence limited excluded employee. to Rs. 15000. Para 26 (1) (b) deals with every employee other than an Not defined Excluding excluded employee hence limited excluded employee of an establishment having his own to Rs. 15000. P.F. scheme and also cancellation of an order of exception U/S 17 of the act on the date of coming in force of this Para, all employees/members of the private P.F. Para 26 (2) deals with employee joins an establishment Not defined Excluding excluded employee hence limited after this Para comes into force, i.e. all new employees to Rs. 15000. except excluded employee. Para. 26 (3) deals with such excluded employees, who cease Not defined On ceasing to be excluded, hence pay limit to be excluded employee and to be enrolled as P.F. member. is Rs. 15000. Para 26 (4) deals with such employee who is exempted U/P 27 Not defined Refer Proviso to para 26B (2) where pay or 27A and re-elects to join E.P.F. scheme, 1952 will become limit is mentioned as Rs. 15000, if no joint member of P.F. Compulsorily. application for contribution on higher pay is given/allowed under para 26 (6). Para 26 (5) deals with some members of a private PF of an Not defined Refer Proviso to para 26B (2) where pay exempted establishment join an establishment un-exempted limit is mentioned as Rs. 15000, if no joint will become member on joining such establishment. application for contribution on higher pay is given/allowed under para 26 (6). Para 26 (6) deals with excluded members simultaneously and Pay higher Deals with case where pay is separately, one-to enrolled such employee who is excluded on than Rs. 15000 beyond Rs. 15000. the basis of pay,which has an inherent permission for contributing beyond ceiling pay of Rs 15000/- and the other, employee who is already a PF member but his pay exceeds ceiling amount of Rs 15000 (at present) may be allowed to contribute on such higher pay. to those employees who are not excluded employees but, choose to to the ceiling amount. It is hardly appreciable that when become a PF member with the agreement of his employer under contribution on higher salary is based on the nature how an Para 26 (6). As such, the employer and employee become under employee qualifies for PF membership. From the above discussion, obligation to pay contribution beyond ceiling of Rs 15000 per month. it obvious that employees' contribution is to be equal to the In that situation, no choice is left for employer to limit his employer's share of contribution. But when employer's share of contribution up to 15000 per month as Para 29 demands contribution is limited to 15000 (or 6500 then), how employee's contribution from employer and equal to that in respect of his contribution can be more? employee. The above case came up subsequent to denial of payment of PF Para 29 (2) says that an employee may choose to contribute his PF contribution on a pay above Rs. 6500 (prior to 01.09.2014) by the contribution above the rate prescribed (10% or 12%) in such case the Bank management. The employees went to court seeking employer shall not be under obligation to pay contribution on such protection under section 12 of the PF Act. On failure, in Bombay higher rate. High Court, employees knocked the doors of Apex Court which Above referred provision of paragraphs 26(6), 26 B, 29, 30 deals rules so. In this case, PF authorities were not made a party nor they with contribution payable and membership as well. It means pay intervened at any stage except diluting its wisdom. limit for contribution does not have independent meaning but Proviso to para 29 (2) says that Provided that in respect of any depends on membership how an employee has been enrolled as PF employee to whom the Scheme applies, the contribution payable by member. Except paragraph 26 (6) all provisions deal with different him may,if he so desires, be an amount exceeding ten per cent, or conditions of becoming P.F.member. twelve per cent, as the case may be, of his basic wages, dearness From the above analysis, it is clear that there is no restriction to allowance and retaining allowance (if any) subject to the condition contribute on a pay higher than the ceiling fixed for the purpose of that the employer shall not be under an obligation to pay any excluded employee or where a member's pay exceeds the limit contribution over and above his contribution payable under the prescribed for an employee to be treated as excluded, but for his Act. continuing membership. In such a case, contribution is restricted to It means that if a member desires to contribute at a higher rate the ceiling amount of Rs. 15000 if he is not allowed to contribute on (than 10% or 12%), he is permitted for such higher contribution, higher pay as per provision of paragraph 26 (6). but his employer will not be under any burden to contribute at such This is the very reason that in special provisions relating to a higher rate of contribution. There seems to be overlapping of News Paper establishments and News Paper employees (paragraph provisions related to higher contribution to end the justice. It's all a 80) and relating to International Workers (paragraph 83) there is no matter of interpretation of provisions-in isolation or mention of ceiling of pay in any clause which attracts contribution comprehensive, conservatively to put embargo or widely to on the full salary to qualify for PF contribution in both the cases; enhance the meaning of social security. whereas, special provisions relating to Cine Workers (paragraph 81) So, the case of contribution on higher pay to the Pension Fund and relating to Physically Handicapped (paragraph 82) specific is weird. BM mention of ceiling of pay superseding the mainstream provisions 1. Subs. by S.R.O. 2387, dated 13th July, 1957. of the EPF Scheme, 1952 is there. 2. Subs. by G.S.R. 406, dated 27th October,1997 (w.r.e.f. 22-9-1997). 3. Subs. by G.S.R. 201, dated 8th February, 1961 (w.e.f. 31-12-1960). A decade ago, the Supreme Court has given judgment in the case 4. Ins. by G.S.R. 1756, dated 12th December,1962. of Marathwada Gramin Bank Karmchari Sanghathana and 5. Subs. by G.S.R. 690 (E), dated 30th June, 1989 (w.e.f. 1-7-1989). 6. Ins. by G.S.R. 164, dated 30th June, 1989 (w.e.f. 1-7-1989). Another vs. Management of Marathwas Gramin Bank and others- 7. Ins. by S.R.O. 3375, dated 10th October,1957. 211 LLR 1130 (SC) that the employer may reduce his contribution up 8. Subs. by GSR 548 dated 27.10.1997 (w.e.f. 22.9.1997).

BUSINESS MANAGER SEPTEMBER 2018 60 CASE STUDY

- BM Editorial Team Why Amit said NO?

t is now one year has passed from after some time he may be moved to other level for understanding and learning supervisory the day Amit was taken on board as skills but that did not happen. Idiploma holder in Electrical stream Neither Prakash devoted time with him during this one year to review his performance, for this manufacturing unit engaged in nor guided him in case of complex issues. He left everything on Amit to handle of his own. cable wires productions. Whenever Amit sought some support or guidance, Prakash used to reply, "if you are asking Amit belonged to a family where his for support or guidance, then why management has kept a qualified person like you in place financial situation was not good. He had of operators on high salary. Do of your own. Don't come to me on small issues". "But Sir, I will to take the burden of the family. Father not be here for all the time to come, I have to move forward. I am not here to operate was disabled and recently discharged machines for all the times to come", said Amit at one occasion. from the services, since not able to work After one year, Amit was expecting to be elevated as supervisor, but to his utter surprise, properly. He had limited resources. instead of supervisor, he was appointed as process operator only. He could not argue much Amit was told at the time of selection with Prakash. He quietly took the letter from HR department where Prakash was also sitting that after training of one year he will be along with HR manager. His face was expression less. HR manager asked Amit whether was put in supervisory position. But even after he was not happy to get a regular job after completion of training? Amit said, "which training one year, he was continuing running the Sir? From day one I am running the machines only. Nothing new and exciting". "But you salary machine as operator along with other is increased Amit, come on. Cheers"! HR manager commented to which Amit replied, "money workers who were merely ITIs or simple is not everything Sir. Thank you very much." 10th pass and learned the job while After few days, Prakash noticed and got feedback from other supervisors that Amit has working. Amit's manager Prakash was a stopped filing production and breakdown reports. On asking, he replied that it was not his kind of person who only believed in job but of the supervisors, moreover he was not qualified and competent to fill the reports. He delivering tasks and production target. He was operator only to run the machine which he will do. On some occasions, Amit also came hardly gave time to Amit to support in with problems for supervisors compelling them to devote time in production department times of crises. Amit tried many times to while earlier Amit used to handle all issues of his own with almost no troubling to supervisors. seek time from Prakash to give feedback but whenever he attempted, he was It was Time of Diwali, when company had a big prestigious order to be completed and either ignored, or avoided or even delivered. Most of the workers were to go on holidays and leave. With remaining skeleton snubbed. The net result was that Amit did staff, Prakash called Amit and instructed him to forgo Diwali festival leaves, stay in factory day not get any meaningful support from and night and complete the order with the help of casuals and contractual labours. But Amit Prakash. Whatever he learnt about job expressed his inability. Amit had already applied for leaves two months earlier, because he was either through self learning or with was to take his father for medical operation and it was not possible for him to miss this. He the help of co-workers who were was alone in his family to take care of his father and he got the confirmed dates from the supportive of Amit because of his helping hospital after much efforts. Moreover, Amit was assured by his supervisors to club his Diwali nature. Amit being qualified, apart from festival holidays with leaves. operating machines in shifts, also took up Prakash got angry. He shouted on Amit, "you idiot, how dare you to refuse to me? Nothing the responsibility of filling all production, doing, you have to stay. Get some other dates for father operation. Heaven will not fall, if not breakdown and shifts reports on behalf of operated at this time. Understand the importance of work. This factory has given you the other workers station too because they means of livelihood. Otherwise you would have been on roads in the crowd of unemployed were not capable of writing and reading people. I can bring hundreds of people like you tomorrow, but you can't get a job even of the in English. This initiative actually relieved same salary if you are ousted." Prakash and other supervisors from their With this Prakash handed over the details of activities to Amit which were to be carried jobs which Amit took of his own. Amit out during holidays for completion of the order. made his supervisors and Prakash Amit politely kept the papers back on the table of Prakash and left by saying, sorry Sir! dependent on him in respect of other activities too which were not his job. I have to go. I cannot leave this chance for my father's life. I got this operation date after one year. Amit was confident of elevation from operator job to supervisor job after one Prakash was alone in his cabin and was perplexed. He was not able to accept the change year though at the time of joining, he was in attitude of Amit. never told that he will be required to run Questions for Discussion the machines in shifts like other worker 1. What kind of problem exists in this case? Supervisory, motivational or both? operators, but was to be groomed as supervisor in management cadre. In initial 2. What steps should Prakash take to address the problem? days, Amit though that running machines 3. Had you been in place of Amit, how would you have responded to the incident? like operator may be a part of training and 4. Had you been in the place of Prakash, how would you have handled Amit? BM

BUSINESS MANAGER SEPTEMBER 2018 61 CASE ANALYSIS

Pramod K Tripathi Asstt.General Manager - HR,Bajaj Energy Limited (BEL),Lucknow

Prakash has to shed his ego!

Amit was appointed for Prakash neither discharged his supervisory duties well nor made efforts to supervisory work after keep Amit motivated. completion of one year The assurance given by Management to Mr. Amit during acquisition (that successful Training. During the he will be elevated in supervisory after 01 yrs of successful training) would be said training he was allotted the executed rather than taking other reasons so far. Mr. Amit has tried many job to operate the machine with times to convince his reporting Manager Mr. Prakash to take call of his other ITI passed workers under concern but he never bothered to take it into cognizance. Such kind of supervision of Mr. Prakash, Leaders' attitude would surely diminish the morale & motivation of employees who is not extending his and also spread an off beam message amongst the other employees by an assistance and sustenance to apprehension - their concern would never be resolved by the front Leader of learn more for comfortably Management. handling of supervisory work. On getting over one year Virtue of Job & Mobility of human resource : On the occasion of training tenure, Mr. Amit has Diwali festival, maximum workers went on planned leave and Mr. Prakash was involved himself in other's responsible to focus on production to complete the orders of supply of clients, supervision work willingly. The he appears did not care for that planning. Mr. Amit has taken leave two month other operative staff was not ago clubbing Diwali holidays to get operation done of his unwell father. Mr. comfortable to write English Prakash instructed Mr. Amit to cancel his leave and profoundly engross in language and prepare the daily production to fulfil the order of client supply. It is very decisive situation for report desired for management. Mr. Amit. Human necessity is as important as production, since Mr. Amit is Mr. Amit at his own efforts did alone male family member, who can take care of his father. Mr. Prakash should the work of writing and retain or convince to other shift workers who can assist in production and reporting on behalf of others simultaneously Mr. Amit should be allowed to proceed on leave and to take supervisory staff after carrying care of his father. As Amit has no option to leave the work as doctor's out his own assigned daily task. appointment pre-decided and got the operation date from Doctor after 01 years It illustrates that he was keen to continuous marathon efforts. excel himself by putting and Mr. Amit is on precise conduit, first he should attend predetermined devoting his extra time and operation date and come back as soon as possible on duty to meet the make himself always ready to production target/deadline of delivery of the Company or can request to his switch over to supervisory work colleagues to perform his assigned job in his absence due to critical situation dispensed to others. In industry, of his father. support of superior is required Mr. Prakash should have widen his vision and make plan of production as to give the best output/ per previous data base to meet festival demand of employees leaves and keep productivity from available ready the other human resource as backup by providing training to other co- talents which were not seen in workers. Since Mr. Prakash has experience to deal festival demand and leave this case. Amit was neglected by request of employees, there is some missing in planning to get over from such Mr. Prakash in term of delivery, type of critical situation. behaviour, motivation, Management Perspective : Mr. Prakash should provide and maintain knowledge sharing and brain appropriate resources & environment to his deptt. employees for the storming daily activities. To effectiveness, efficiency,satisfaction and motivating them to apply and develop develop the employee assets, abilities and capacities to achieve the target & objective of the Co. It should be mentor & Leader's role is more the policy of the Co. to provide appropriate opportunities, encouragement and significant. Mr. Prakash should career growth consistence with their contribution to the growth of the make his own availability to company. To cope up such situation, Mr. Prakash should try to hold regular understand the concern and the morale boosting meetings, especially if the work is full of deadline & stress. opportunity of Mr. Amit in the The meetings to support staff helps put everyone minds at ease. job of reporting, decision making, interacting with junior Once Lincoln said "A drop of honey catches more flies than a gallon of staff, workers and seniors gall." BM which is missing in this case.

BUSINESS MANAGER SEPTEMBER 2018 62 HR NEWS

Unless convicted by court, When author talks about his book! gratuity cannot be forfeited for Subramanian Iyer on “Propel yourself to magnificence” 'Acts Involving Moral Turpitude’: before his book launch SC I chose Magnificence as the title of my book which is scheduled to launch on the 8th Interpreting Section 4(6)(b)(ii) of the Payment of Gratuity September at Mumbai. Act, the Supreme Court has held that forfeiture of gratuity on Magnificence means to dazzle & the ground of misconduct which constitutes an offence leave people stunned. involving moral turpitude, is permissible only if he is con- We are in an era of global victed by a court of competent jurisdiction for the said uncertainty and thus handling & offence. taking our jobs to a brilliant level The bench of Justice Kurian Joseph and Justice Sanjay is alright. You will certainly be Kishan Kaul (in Union Bank of India vs. CG Ajay Babu) applauded & compensated decided on 14.08.2018 also observed that forfeiture of rightfully but in order to sustain, gratuity is not automatic on dismissal from service; but it is you will have to take yourself to subject to sub-Sections (5) and (6) of Section 4 of the Payment a very new level that is The Level of Gratuity Act, 1972. of Magnificence. Any of us can Background drive this path & the journey is as important as/more important While serving as a branch manager, disciplinary than the result. Listed are some proceedings were initiated against Ajay Babu which of the invaluable tips for the professionals of HR & Non HR. culminated in his dismissal. Later the bank also forfeited the gratuity on account of proved misconduct involving moral 1. Increase your Vocabulary. If you have a large vocabulary, you are turpitude. Though refused to interfere with 'dismissal', the bound to touch a large number of people at work. In our daily duty high court held that as per the bipartite settlement between of 8 hours or so, we communicate more than 5+ hrs plus with our the bank and its employees, forfeiture of gratuity is colleagues, subordinates, bosses, vendors face to face, telecom, and permissible only in case the misconduct leading to the mail. Bring more of you through your communication. dismissal has caused financial loss to the bank and only to that 2. Be Valuable to the Market. We all possess qualifications, extent. experience, and expertise & apply them in our work. In order to get The bench, agreeing with the high court view, noted that an increased pay & position, you will have to bring more of yourself in the settlement provides for forfeiture only if there is a loss terms of worth & utility to deliver quality results at a much higher caused on account of misconduct leading to dismissal, is also level. Thus, if you are designated as a Steward, the market expects you not in dispute. It also observed that Section 4(5) provides that to not only handle the duties & responsibilities of a Steward but also an employee is entitled to receive better terms of gratuity that of a Captain. In doing so, you have created a value amongst under any award or agreement or contract with the employer, customers & the organization considers you for a higher position notwithstanding other provisions of Section 4. seeing your value proposition. Court held that it is not the conduct of a person 3. Become a Star Performer. They are the kind of breed who involving moral turpitude that is required for forfeiture of doesn't wait for things to happen; they make things happen. They gratuity but the conduct or the act should constitute an believe in stretching themselves to such an extent that quite often they don't stay on their job description. They make their own job offence involving moral turpitude. To be an offence, the act descriptions defining themselves as High Potentials. Thus, they are should be made punishable under law.That is absolutely in the always employable irrespective if downturn or recession. realm of criminal law. It is not for the Bank to decide whether an offence has been committed. It is for the court. Apart from 4. Be Professional. Professionalism is not in one's attire but in one's the disciplinary proceedings initiated by the appellant Bank, thought, action & behaviour. Mr. Rajeev Dubey, President HR, After the Bank has not set the criminal law in motion either by Market & Corporate Services of M & M showcased what registering an FIR or by filing a criminal complaint so as to professionalism actually mean. He was the Chairman of one of Panel establish that the misconduct leading to dismissal is an "Ethics in Employee Relations." The quality of the discussion engaged offence involving moral turpitude. Under sub-Section (6)(b)(ii) with the other members was just impeccable. of the Act, forfeiture of gratuity is permissible only if the 5. Recognizing your Special Talents. Having the talent & skill in termination of an employee is for any misconduct which oneself & not recognizing, not exploring, not utilizing to your constitutes an offence involving moral turpitude, and advantage is as good as not having those characteristics in you. convicted accordingly by a court of competent jurisdiction." Human Beings are created by the Providence for a greater purpose The bench, on facts of this case, observed: "There is no contrary to animals, birds & insects which lives purely on instincts. We conviction of the respondent for the misconduct which are growth machines & we need to explore our full potential for being according to the Bank is an offence involving moral happy. Use those talents fully & explore those hidden talents turpitude. Hence, there is no justification for the fearlessly in your work to become magnificent. forfeiture of gratuity on the ground stated in the order dated Coming to office & discharging your functions well, helping your 20.04.2004 that the "misconduct proved against you amounts to colleagues & following the instructions of your boss, building good acts involving moral turpitude". At the risk of redundancy,we relationships & being punctual are great qualities of any individual. In may state that the requirement of the statute is not the proof order to sustain & progress in your career in today's scenario, you of misconduct of acts involving moral turpitude but the acts need to be a specialist, discharge more than what you are expected in should constitute an offence involving moral turpitude and your role, understand & get the best from people, build relationships, such offence should be duly established in a court of law." being techno friendly, being proactive in delivering quality results Source:livelaw.in will just make you unstoppable.

BUSINESS MANAGER SEPTEMBER 2018 63 RECENT HR PROFESSIONALS MOVEMENT

Hilton India appoints Mallika Rao Bedi, Animesh Kumar moves to Zee as as Regional Director, Human Resources, CHRO XLRI alumini of 1993 Animesh Kumar Hilton India with over 25 years of experience, now moves to Zee entertainment enterprises Mallika Rao Bedi brings with her as CHRO from Future Group where he a vast experience of over 22 years in was only for 5 months. Prior to that area of hotel operations. Prior to Animesh was will IDFC Bank heading HR joining Hilton, she was with the division since 2009. Oberoi and Trident in Gurgaon. In his 25 years of carrier Animesh She has been extensively spent his major part in banking industry involved in hotel operations and from Standard Chartered Bank to Yes garnered experience in recruiting, Bank to ABN Amro and then to IDFC Bank. He started with Marico selection, talent management, and then to Thomas Cook. employee on boarding, training & development, employee relations and process improvement in line Emrana Sheikh joins Johnson & with business requirements resulting in minimum attrition rate. At Hilton, her key areas of focus will be to work with the India Johnson as enterprise HR Head team to drive best practices as well as reinforce Hilton as amongst the best places to work. With over 25 years of reach experience in manufacturing and service industries ranging from FMCG, Automotive to Farm Equipment and Express Transformation, Ajay Bhatt moves from Abbott to Intas Emrana Sheikh has joined Johnson & Johnson as enterprise HR Head for India Pharma as president-global HR and South Asia. With experience of over 25 years, Ajay Earlier to this Emrana was Head HR of Bhatt has joined Intas Pharmaceuticals as Asian Paints for last about 3.5 years. In her president-global human resources. career spent Emrana has worked with FedEx, Mahindra & Mahindra. Prior to this, Ajay was in Abbott for about 13 years as Director HR in multiple HR leadership roles. He joined Abbott in 2005. Rajesh Hurkat elevated to HR Head Bhatt started his career in the industry with Sun Pharma in 1989, where he stayed for South East Asia of Mattel's India almost 13 years to lead several initiatives. In Rajesh Hurkat who joined Mattel India as HR Head in May 2017 2004, Bhatt joined Torrent Pharmaceuticals as vice-president - HR, where has now been elevated to the position of HR Head for South East he was responsible for steering the HR function to lead talent. He has Asia of the company. He has now also been associated with the Zydus Group as general manager - HR, in additional responsibility to lead for a 2002. much larger segment. An alumnus of Symbiosis Institute of Business Management, Hurkat began his career in 2004 and has Companies to declare about worked with companies such as existence of committee under POSH Vodafone India, LafargeHolcim, Aditya Birla and Mondelez Act International before joining Mattel. In order to ensure better implementation of the law against sexual harassment at workplace, the Centre has made it Indrajeet Sengupta moves to mandatory for companies to disclose whether they have con- stituted an internal complaints committee (ICC) to probe such Coca-Cola allegations. After working for about 8 years with J&J The Corporate Affairs Ministry has amended the as Head HR, Indrajeet has move to Companies (Accounts) Rules, 2014, governed by the Companies Act, 2013, mandating the disclosure. This has been Hindustan Coca-Cola Beverages (Coke a long-standing demand from Minister for Women and Child India) CHRO. He is XISS Ranchi pass out of Development Maneka Gandhi. 1995. The amended rules were notified on July 31. It adds a clause Prior to J&J, Sengupta worked with the to a rule on matters that should be part of the Board's report. food & beverages company, Mars, which The new clause says that the report will have to contain "a owns brands such as M&M, Pedigree, statement that the Company has complied with provisions Snickers and Orbit. He has spent a large relating to the constitution of Internal Complaints Committee part of his career with GE India. As HR man- under the Sexual Harassment of Women at Workplace ager at GE, he worked across brands and (Prevention, Prohibition and Redressal) Act, 2013." functions-covering GE Plastics, GE Lighting and GE Medical Systems.

BUSINESS MANAGER SEPTEMBER 2018 64