Labour Laws for | Recently FAPCCI conducted a Seminar on “Labour Laws for IT Industry” and questions raised by participants were answered by: Sri M Radhakrishna Murthy, Advocate. Some of them are published hereunder for the benefit of FAPCCI Review readers. Q1. The IT industry in AP, like its global counterparts usually works on § days a week. However the AP Shops and Establishments Act, limits the working hours to 8 hours per day and max of 6 days in a week. Can the ITATES companies demand longer working hours in lieu of 5 day week? Is there, any way to increase working hours to 48 while retaining 5 day week? Yes, though Section 16(1) of APS & E Act, says no employee shall be required or allowed to work more than 8 hours a day and 48 hours in a week, the Government of AP vide GO Ms.No.53, dated 20.06.2007 granted exemption to Section 16(1) in respect of daily hours of work while keeping the weekly hours of work in tact. Therefore, you can organise working hours per day as per’ your convenience for 5 days. However, the weekly hours of working should not exceed more than 48 hours. Ans: Q2. Is there any law, which specifically prescribes the space / area to be provided to each employee working in an IT/ITES company? * Can the space stipulations of the Factories Act, apply to IT/ ITES employees working in AC offices? Ans: Provisions of Factories Act, are not applicable as per as IT Software Industries are concerned. The Provisions of Factories Act are applicable for IT (Hardware Units). For IT Software it is APS &E Act, which is applicable and there is no provisioh under APS&E Act in respect of space stipulations. 10 || raPoet Seview|| 30 September 2008 Q3. Ans: Q4. Ans: T Indust Is there any legally stipulated retirement age? Is it OK for an IT/ITES company to employ 2 65 year old person? Or to retire a 50 year old as per company policy? Under the Shops and Establishments Act. there isno mention about the Retirement Age. Rule 24(1) of the A.P.E (SO), Rules, 1953, deals with the provision of retirement, but the age of retirement is not mentioned. The APS&E Act and the |.E(SO) Act applicable only to the non-managerial category, i.e., to those employees, who come under the Gefinition of employee. For the non-employee category the retirement age is as per the terms of appointment between the employer and the employee. As there is no specitic provision dealing with the age of retirement under the APS&E Act. The age of the retirement can be fixed by the employer. There is no restriction of age for employment. IT/ATES companies usually offer vastly varying contracts to different employees. Is this valid in Law? Can this be interpreted as discrimination by the employer? Can varying terms (based on experience, productive value) be portrayed as discrimination on sex, caste, religious or other grounds? How can such situations be avoided? No, any contracts a valid contract only where there is free consent by the party who signs the contract. The contract is nothing but an offer and-acceptance. After accepting the terms there cannot be any complaint of discrimination, No Rule or Provision of Law, that the contract of all the employees should be alike, Therefore, the contracts can differ depending upon the nature of employment and employee.Ans: 6. Ans: a7. Ans: there any legal difficulty in asking engineers to work at such hours? Ita company requires providing 24 hours support and work in shifts, what are the provisions it has to comply? There is no legal difficulty. The G.O.Ms.No.53, dated 20.08.2007, gives liberty to the employer to fix/organise the daily hours of working. Even the young and women employees also can be asked to work during the night shift subject to the conditions stipulated in the said GO. What are the minimum leaves and holidays applicable to the IT industry in AP. Specify for Privilege Leave (Ean Leave), Casual Leave, Sick Leave, Other statutory ieaves and Minimum company holidays? As per Section 30 of APS&E Act, every employee who serves for 240 days or more during continuous period of 12 months shall be entitled during the subsequent period of 12 months one leave for every 15 days of working and such leave can be accumulated up to maximum period of 60 days. Encashment up to 8 days in a year, Sick leave 12 days in a year, Casual leave 12 days ina year, Holidays Section 31 of the Act says that, the employee is entitled to 9 holidays in a year which includes 26th Jan, O1st May, 15th Aug, 02nd Oct and O1st Nov. Employees punch in and punch out their arrival and departure in the company. They are supposed to do & hours of work and have 1 hour lunch break. Since the company offers recreational facilities, employees play table tennis, use gym, do yoga and so on in the facility and thus their time in office shows 10-11 hours per day. Can this be used by an employee to claim over time, particularly if no overtime was asked by employee or approved by manager? Wages need to be paid for the performance but not for the mere presence without performance of duty. However, itis advisable to take necessary precautions in respect of record of-total hours of presence. Confine record only to the extent of hours worked. Ans: ag. Ans: Qi0. Ans: uits peo anihs. 1S fxtand the probation period? It yas, for how long and tor how many extensions? Are there any conditions for such extension? The company can extend the probation for such periods unilaterally. However, the company need to specify the reasons for extension of probation. The law doesn’t prescribe the probationary period. It is governed by the terms of appointment. The clause in terms of probation should be drafted in the appointment to suit the management requirements in an unambiguous manner. IT companies offer a high increment in salaries when the going is good. Similarly when a company is in financial crisis, can the company impose a cut back in salaries? Can this be done unilaterally? Does the company have to enter into fresh contracts? Does a provision to this effect have to be built into the original contract? Also can an employee claim an annual increment as a right? Does the law prescribe the periodicity of the hike? The statute / law guarantees only the minimum wage to the employee. Over and the above the minimum wage is always subject to the performance of the employee and paying capacity of the employer. The ‘employer is at liberty to incorporate a clause to the said effect in the appointment letter and obtain the consent of the employee. In such event, the employer can reduce the wages. Increment is only a reward for performance but cannot be claimed as a matter of right until unless the employer gives a scale of pay to the employee with the component of increment. No period is fixed for increment under law. What are the rights of an employee at the time of his termination? Can any of these tights be denied and under what circumstances? No employee who had put in 6 months of service shall be terminated without one month notice or pay in lieu of notice and 30 September 2008 || PAPC Aertcur |] 11Qit Ans: Q12. Ans: Q13. Ans: without sufficient cause. The terminal benef etc., cannot be denied and mus’ ed. An employee has disappeared without information, in violation of his employment contract / employment agreement / employees handbook provisions, without resignation or notice period. Can the company make deductions from his outstanding dues on account shortfall of notice period, bond amount, excess leave availed, property not returned, et. No recoveries can be made from provident fund, gratuity and retrenchment compensation. The recoveries can be done trom out of the other payable amounts other than the same. What is the difference (applicability of labour laws or legal rights) between a regular employee, probationer, trainee, consultant, employee on contract, intern in law? The applicability of labour laws are same to regular employee, probation, employee under contract, trainee. However, certain exceptions can be availed depending on the terms of appointment for the probationer / casual /trainee employees. Consultant is not an employee if he is not employed for full time exclusively for that company. Can the following clauses be legally valid in an employment contract? ~~ Non compete e Non solicitation © — Bond for specified amount for not completing contracted period ¢ Notice period of 3 months © Compensation offered caters for privileges and responsibilities of the position and therefore no overtime is allowable ‘The clauses like non-compete, non-payment of overtime are not valid. The clauses of non- solicitation, bond for specified period, notice period etc., are permissible. 12 || Pct! Sanew|| 30 September 2008 Ans: Q15. Ans: Q16. Ans: Qi7. Ans: Qe. nent / contrac separate agreement? Yes, While appointing a contractor for contract labour, what are the legal requirements which we should insist on the contractor following? What are the registers we have to maintain as Principal Employer under various acts and what are the registers under various acts which contractor is supposed to maintain and show us on demand? Principal employer required to register their establishment as per Section 7, read with Rule 17(1). Contractor need to obtain license as per Section 12 r/w Rule 21(1). Contractor should apply for renewal of license as per Rule 29(2). Principal Employer need to maintain the register stipulated under Rule 74 to 77. Contractor need to maintain the registers stipulated under Rule 78 and 79. Rule 81(1), contractor need to submit half yearly returns. Rule 82(2) Annual returns by Principal Employer before 15th Feb. Can an employee who has not paid gratuity, demand gratuity? Yes IT industry often follows the concept of ‘At Wit!’ employment. Is this valid in Indian Labour Law? Is an employment contract having ‘at will’ clause valid? No, for the non-managerial category. Yes, for the managers. ‘An employee has been employed on a 2 year contract. Due to oversight, the contact has ended without renewal but the employee is continuing to work in the company. What is the status of the employee now? Does he