NOTIFICATIONS BY CENTRAL GOVERNMENT
Constitution of Committees from framing draft schemes under the SS Code
On June 2, 2023, the EPFO constituted 3 (three) different committees for framing the draft schemes as mandated under the Section 15 of the Social Security Code, 2020 (“SS Code“), namely: (a) Employees’ Provident Fund Scheme; (b) Employees’ Pension Scheme and (c) Employees’ Deposit Linked Insurance Scheme. The first draft of the said schemes to be submitted by the respective committees to the Central Provident Fund Commissioner (CPFC) by June 23, 2023. The details of the committees may be accessed by clicking on the following link: https://www.epfindia.gov.in/site_docs/PDFs/Circulars/Y2023-2024/CommitteeSSCode-95074.pdf.
Couple of Indian Origin for the purpose of Surrogacy Rules
On June 8, 2023, the Ministry of Health and Family Welfare by framing the Surrogacy (Regulation) Amendment Rules, 2023 provided the definition of “Couple of Indian Origin” under the Surrogacy (Regulation) Rules, 2022 (“Surrogacy Rules“). After clause (a) of the Surrogacy Rules, clause (aa) has been inserted, namely,
“Couple of Indian Origin means the couple where both husband (male) and wife (female) are Overseas Citizens of India cardholders in accordance with the Acts/Rules/Instructions/Guidelines being followed by the Ministry of Home Affairs from time to time subject to fulfillment of various criteria as per the Surrogacy (Regulation) Act, 2021“.
New standards for public buildings
On June 5, 2023, the Ministry of Social Justice and Empowerment amended the Rule 15 of the Rights of Persons with Disabilities Rules, 2017 (“Disability Rules“) by introducing the Rights of Persons with Disabilities (Amendment) Rules, 2023. As per the said amendment the standard for public buildings of 2016 as contained under clause (a) of the Rule 15 of the Disability Rules shall be replaced by the “standard for public buildings as specified in the Harmonised Guidelines and Standards for Universal Accessibility in India – 2021, notified by the Government of India in the Ministry of Housing and Urban Affairs, vide notification number O-17/4/2022-works-3-UD dated the 18th October, 2022, as amended from time to time.“
Revised instructions for validation of option/joint options for higher pension
On June 14, 2023, the Employees’ Provident Fund Organisation (“EPFO“) after observing that join request/undertaking/permission under Para 26(6) of the Employees’ Pension Scheme, 1995 (“Pension Scheme“), are not readily available with most of the applicants who have filed applications for validation of option/joint options covered under the Hon’ble Supreme Court judgment dated November 4, 2022, EPFO and ors. vs. Sunil Kumar B. CA N. 8143-8144/2022, introduced the following roadmap to be followed by the field officers for verifying the applications:
- Employer share of provident fund contribution has been remitted on employee’s pay exceeding the prevalent statutory wage ceiling of INR 5000/6500/15000 per month from day the pay exceeds the wage ceiling or November 16, 1995, whichever is later, till date/ till the date of retirement or superannuation as the case may be; and
- Administrative charges payable by employer have been remitted on such higher wages; and
- Provident fund account of an employee has been updated with interest as per Para 60 of the Employees’ Provident Fund Scheme, 1952, on the basis of such contribution received; and
- Any of the following documents have been submitted along with applications for validation of option/joint options as proof of joint option and permission under Para 26(6) of the Pensions Scheme:
- Wage details submitted by the employer along with the applications for validation of option/joint options;
- Any salary slip/letter from employer authenticated by employer;
- Copy of joint request and undertaking from employer;
- Letter from EPFO issued prior to November 4, 2022, indicating provident contribution on higher wages.
Further details may be accessed by clicking on the following link:
Guidelines to meet the timelines for scrutinizing application for higher pension
On June 2, 2023, the EPFO directed all its Central Provident Fund Commissioners (CPFCs’) of zonal officer and Regional Provident Fund Commissioners (RPFCs’) of regional offices to expeditiously scrutinize application of joint option within 20 (twenty) days of its receipt in the login of the dealing assistant and ensure that demand letter to employer/communication to employer is issued for providing the any additional proof or evidence or correct any mistakes/errors (including made by employers/pensioners) in respect of each application. Further details may be accessed by clicking on the following link: https://www.epfindia.gov.in/site_docs/PDFs/Circulars/Y2023-2024/PensionPoHWPartFile-101123Scrutiny-e-103310-1375.pdf
ESIC online registration through MCA portal and inspection of the units
On June 2, 2023, the Employees’ State Insurance Corporation (“ESIC“) in view of receiving concerns from the employers registered through the Ministry of Corporate Affairs (“MCA“) portal having zero employees on their roll that the ‘dormant option’ is not reflecting on their employer ID and therefore they are unable to exercise the dormant option on the portal, clarified that portal has been developed in such a manner that companies registered in ESIC through MCA portal have to declare the status of the company within 6 (six) months of registration to avoid defaulter action. Also, before the end of the ‘inactive’ mode, the company can further extend the inactive mode for 6 (six) months and continue to extend in similar manner as per the status of the company. The option of declaring the ‘inactive mode’ is not available to employer after the expiry of 6 (six) months.
Method of calculation of higher pension
On June 1, 2023, the EPFO released the method of computation of pension in accordance with the Pension Scheme in respect to employees exercised option/joint options, which are as follows:
- In cases found eligible for pension on higher wages where the date of commencement of pension is prior to September 1, 2019, the pension will be calculated on the average monthly pay drawn during contributory period of service in the span of service of 12 (twelve) months preceding the date of exit from the membership of the pension fund;
- In cases found eligible for pension on higher wages where the date of commencement of pension is post September 1, 2019, the pension will be calculated on the average monthly pay drawn during contributory period of service in the span of 60 (sixty) months preceding the date of exit from the membership of the pension fund.
NOTIFICATIONS STATE SPECIFIC
Minimum Wages Goa
On May 30, 2023, the Government of Goa revised the minimum rates of wages of employees engaged in scheduled employment which shall be effective from April 1, 2023, in the entire state of Goa.
SOP’s for elimination of child labour
On June, 12, 2023, the Officer of Labour Commissioner of Gujarat released the Standard Operating Procedure (“SOP’s“) for elimination of child labour in Gujarat and for effective implementation of the Child and Adolescent Labour (Prohibition and Regulation) Act, 2016. The SoP’s contains the following 4 (four) chapters, namely: (a) legal framework for elimination of child labour; (b) pre-rescue, rescue and post rescue process; (c) legal provisions and (d) procedure to be followed in specific situations.
Minimum Wages in Maharashtra
On June 7, 2023, the Labour Department of Maharashtra revised the basic minimum rates of wages payable to workers employed in the construction or maintenance of roads or in building operations which shall be effective from June 7, 2023, in the entire state of Maharashtra.
KARNATAKA HIGH COURT – Disputes arising out of the employment agreement cannot be filed before the commercial court
In Mr. Sanjay Kumar vs. Elior India Food Services LLP, WP No. 2584/2023, the Karnataka High Court vide its judgment dated June 2, 2023, while answering to the question as to whether an employment agreement would come within the meaning of Section 2(1)(c)(xviii) of the Commercial Courts Act, 2015 for the agreement to become a commercial dispute, observed that a pure and simple employment contract cannot be given a colour of a commercial dispute by dressing it to be a provision of services. If every employment agreement of the kind that is the subject matter in the case at hand is brought within the ambit of commercial dispute, it would then be opening a pandoras’ box or will be opening flood gates of litigation before the commercial court/s that would clog the said court. In the present case the Court observed that what the employee’s claims is the incentive that was assured in the agreement. The agreement is an offshoot of the employment agreement. Therefore, it cannot but be held to be a contract of employment or a contract of incentive. It is a money claim arising out of an employment agreement.
BOMBAY HIGH COURT – Sales, services and repairs of computers and software development are manufacturing process for the purpose of applicability of the ESI Act
In Academy of Computer Technology vs. The Deputy Director, Employees State Insurance Corporation FA No. 199/2009, the Bombay High Court, observed that institute of computer technology engaged in imparting computer education carrying the activities not only of training, but dealing with sales, services and repairs and dealing with development of software and networking are covered under the definition of manufacturing process under Section 2(a) of the Factories Act and therefore, the institution is covered under the ESI Act and liable to pay the contribution. In this regard, the Court has relied on its own judgment given in the Assistant Director Employees’ State Insurance Corporation and ors. vs. M/s. Western Outdoor Interactive Pvt. Ltd. of 2012, wherein it was held that the Factories Act was enacted in year 1948 and at the relevant time, use of computer and software was aliened to the legislature. Naturally, the words which are more appropriate precisely defining the activities carried on with the help of computers that is development of software, programming of data were unknown or nor in practice. Therefore, though computer related activities like development, programming and applications are not mentioned in the definition and to that effect there is no amendment in the section, the definition takes care of activities like development and application.
KERALA HIGH COURT – The amount of gratuity is calculated from the day it becomes payable and not from the date of disbursement
In K. Rajendra Prasad vs. State of Kerala WP(C) No. 19171/2012, the Kerala High Court vide its judgment dated May 22, 2023, while rejecting the employee’s claim of maximum gratuity of INR 10,00,000/- (Indian Rupees Ten Lakhs) with effect from May 17, 2010 [due to insertion of Payment of Gratuity (Amendment) Act, 2010, under the Section 4 of the Payment of Gratuity Act, 1972 (“Gratuity Act“)], observed that the gratuity shall be payable to an employee on the termination of his employment. The employment of the employee was terminated on May 31, 2002, on his superannuation from service. The gratuity thus became payable to the employee with effect from superannuation date. In the present case the employee had an option to claim gratuity either under the Gratuity Act or under the service rules. The Court observed that even if it is assumed that the employee’s claim for gratuity was under the Gratuity Act, the maximum amount of gratuity payable under the Gratuity Act has to be determined with respect to the date on which the gratuity became payable and not on the date on which sanction was accorded for payment of employer.
Disclaimer: The contents of the above publication are based on interpretation, analysis and understanding of applicable laws and updates in law, within the knowledge of authors. Readers should take steps to ascertain the current developments given the everyday changes that may be occurring in India on internationally on the subject covered hereinabove. This is not a legal opinion, analysis or interpretation. This is an initiative to share developments in the world of law or as may be relevant for a reader. No reader should act on the basis of any statement made above without seeking professional and up-to-date legal advice.