Claw back clauses in Employment Contracts - A new tool to fight corporate misfeasance

The 2008 financial crisis made it possible to revisit contractual clauses of employees, especially those governing remunerations of executives in financial institutions. One of the clauses that gained prominence was the clause pertaining to ‘clawback’. Broadly speaking, clawback clause refers to an action for recoupment of a loss. It means the refund or return of incentive or compensation after they have been paid. The purpose of such a clause is to claim back unfair enrichment that has happened to an employee. Such a clause acts as a form of insurance and was originally applied in cases of misstatement of financial results or fraudulent acts by employees, but over time, the scope of this clause has gradually expanded.
Continue Reading Claw back clauses in Employment Contracts: A new tool to fight corporate misfeasance

Does the relaxation on PF contribution rates really benefit employers

As part of the ‘Atmanirbhar Bharat’ (Self-Reliant India) campaign, which is the Central Government’s initiative in its war against the Covid-19 pandemic, the Ministry of Labour and Employment (“EPF Amendment”) through a notification dated May 18, 2020, has introduced an amendment to the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (“EPF Act”).

The EPF Act is the key social security legislation in India, under which both the employer and employee are required to contribute a certain percentage of the employees’ salary to the Employees’ Provident Fund Organisation (“EPFO”) (or to a trust in case of exempted establishments). Pursuant to the EPF Amendment, read with the FAQs dated May 20, 2020 issued by the EPFO (“FAQs”)[1], the statutory rate of provident fund (“PF”) contributions under the EPF Act, for both employers and employees, has been reduced from the existing 12 percent to 10 percent, for the months of May, June and July, 2020. The EPF Amendment is applicable to all establishments except: (i) Central/State Public Sector Enterprises; (ii) establishments owned or controlled by the Government; and (iii) establishments covered under the Pradhan Mantri Garib Kalyan Yojana (for whom the Central Government is already contributing both the employer’s and employee’s share – at the rate of 12percent – for the period from March to August 2020). The EPF Amendment is expected to benefit more than 40 million members of the EPFO and more than half a million establishments.
Continue Reading Reduction in the rate of PF contributions: Some practical considerations

Introduction

In order to reduce the impact of termination of employment and to provide security to employees from sudden loss of job in the private sector, a private member bill, namely the Terminated Employees (Welfare) Bill, 2020 (“Bill”), was introduced by BJP MP Mr. Rakesh Sinha on February 07, 2020, in the Rajya Sabha. In the absence of any specific law imposing an obligation on employers to provide post-employment benefits for the period of unemployment, this Bill provides pecuniary benefits to dismissed employees to overcome the general economic hardships resulting from loss of employment. The key provisions of the Bill are summarised below:
Continue Reading Analysis of the Terminated Employees (Welfare) Bill, 2020- Good intentions but is it feasible?

Coronavirus - COVID19- Faqs

The World Health Organisation (WHO) declared COVID-19 as a “pandemic” on March 11, 2020.

The outbreak and the rapid spread of COVID-19 has sent shock waves across global markets. It has disrupted supply chains, leading to the closure of several manufacturing facilities globally; serious disruption of air and sea traffic and closure of vital air routes, like the one between the US and Europe. This is turn has led to the collapse of stock markets around the world, leading to the loss of billions of dollars, which got wiped out in a matter of days. A combination of all these factors has led to a decline in the overall volume of global economic activity, forcing the world economy towards a possible recession. It is forcing Boards across the globe to confront a host of difficult questions on how business should be conducted during a global public health crisis.
Continue Reading COVID-19 : OFFICIALLY A PANDEMIC

KARNATAKA-GOVERNMENT’S-LEGISLATIVE-ATTEMPT-TO-TACKLE-COVID-19-OUTBREAK

The Karnataka Government is reported to have notified the Karnataka Epidemic Diseases, COVID-19 Regulations, 2020 (“COVID Regulations”), on March 11, 2020, late evening, as an attempt to contain the outbreak and spread of coronavirus, COVID-19, which was incidentally declared as a ‘pandemic’ by the World Health Organisation the same day. Issued with immediate effect and for a period of 1 (one) year from its notification, the COVID Regulations empower the district administration to put in place containment measures and also ensure the public takes special measures to prevent the outbreak and spread of the potentially fatal disease, as fears around its ramifications have reached a feverish high worldwide.


Continue Reading Karnataka Government’s Legislative Attempt To Tackle Covid-19 Outbreak

EPFO tightens norms around Provident Fund inquiries under Section 7A

The Employees Provident Fund Organisation (EPFO) has recently issued Guidelines for Initiation of Inquiries under Section 7A (“Guidelines”) of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (“EPF Act”)[1]. Section 7A is the provision under which PF commissioners (who are vested with the powers of a civil court), can initiate an inquiry, by order, to determine (i) the applicability of the EPF Act to an establishment in case of a dispute; and (ii) to determine amounts due from any employer under the EPF Act and its schemes.

The EPFO has recognised that currently, assessing officers are following different yardsticks for initiating inquiries under Section 7A, which often leads to inquiries being initiated for wholly insufficient and untenable grounds, causing general resentment among the employers on one hand and prolonged pendency of inquiries on the other. The Guidelines have been issued to prevent such deleterious effect.
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 Indian Labour Laws Recap 2019 and Outlook 2020

The year 2019 can be said to be a watershed year in relation to the employment law regime in India. The Indian government took various steps to simplify and streamline the dated employment legislations, veritably in a bid to rise up in the index of Ease of Doing Business in India. The courts in India too played their part in interpretation of the existing legal regime. Here, we not only look at some of the key, impactful developments, but also look forward to what 2020 may have in store for India Inc., in relation to the same:
Continue Reading Recap of Key Labour Law Developments of 2019 & Looking Forward to 2020

The Karnataka Maternity Benefit (Amendment) Rules, 2019

The Maternity Benefit Act, 1961 (the Act) was introduced to regulate the maternity and related benefits that are extended to women in certain establishments for a period before and after childbirth.

In 2017, by way of the Maternity Benefit (Amendment) Act, 2017 (Amendment Act), various progressive changes were brought about to the law, such as an increase in maternity leave from 12 to 26 weeks, provision for maternity leave for adopting mothers and commissioning mothers, and the introduction of a work-from-home concept as part of an employee’s conditions of service.

Section 11A of the Act, which was introduced under the Amendment Act, made it compulsory for every establishment employing 50 or more employees to provide a crèche facility for its employees. The Amendment Act uses the term “employees” and not “women” thus leading to varied interpretations – for example, does “employees” include employees of all genders and does the Act apply to both permanent as well as contract employees?
Continue Reading The Karnataka Maternity Benefit (Amendment) Rules, 2019: Good Intentions But Can It Be Implemented?

The Maternity Leave Incentive Scheme, 2018 for working women in India

The Maternity Benefit Act, 1961 (MB Act) was amended in 2017 (Amendment), to enhance/ increase the maternity leave period to 26 weeks from the previous 12, for a woman employee, for the first two children. This blog follows on from our previous posts wherein we discussed the obligations under the Amendment that were solely applicable to an employer. Read our previous post here.

Since the Amendment was aimed to ensure the health of women employees pursuant to giving birth, and to also ensure safety of the new born child, it appeared to be a positive development for women employees in the private sector. However, the implementation of the Amendment has been inadequate and ineffective.
Continue Reading The Maternity Leave Incentive Scheme, 2018: Blessing in the Pipeline for Working Women in India

Human Immunodeficiency Virus and Acquired Immune Deficiency Syndrome (Protection and Control) Act, 2017

The Human Immunodeficiency Virus and Acquired Immune Deficiency Syndrome (Protection and Control) Act, 2017 (the Act) was enacted on September 10, 2018.

The Act was introduced since India is a signatory to the United Nations’ Declaration of Commitment on Human Immunodeficiency Virus and Acquired Immune Deficiency Syndrome, 2001.

The Act provides for the prevention, control and protection of human rights of persons affected by the human immunodeficiency virus (HIV) and acquired immune deficiency syndrome (AIDS).
Continue Reading Introduction to the Human Immunodeficiency Virus and Acquired Immune Deficiency Syndrome (Protection and Control) Act, 2017