International Labor & Employment Law Committee Newsletter

Issue: March 2014

Editor: Ute Krudewagen, Associate Editor: Amie Aldana | Africa and Middle East Editor: Karen Seigel | Asia and Oceania Editor: Jason Noakes | Canada Editor: Gilles Touchette | European Editor: Paul Callaghan | Latin America Editor: Juan Carlos Varela | Law Student Editor: Liam Woods | USA: Trent Sutton

India

No Disciplinary Procedure Necessary in Case of Termination not Relying on Alleged Abandonment and Burden of Proof for Abandonment

Sajai Singh, Partner & Chair, Employment Law Practice, and Garima Jhunjhunwala, Associate, J. Sagar Associates, Bangalore, India

If the employer does not consider an abandonment of employment to be misconduct, the law cannot force the employer to regard such abandonment as misconduct and hold a disciplinary procedure (so-called enquiry), the Delhi High Court has held in a recent case.1

The workman in the case alleged that the employer terminated his employment without giving any notice or notice pay or without assigning any reasons.

The employer, on the other hand, contended that the workman was engaged only for a short period for a specific work and his engagement would have been over upon completion of the work. The workman left the employer's service voluntarily and therefore, his services were never terminated by the employer.

The workman claimed that if it was an abandonment of employment, the employer ought to have issued him a letter recalling him to work or proceeded against him for remaining absent by way of departmental enquiry or by way of any other manner calling upon him to resume his duties.

The Court, however, held that an enquiry is required to be held only where an employer intends to impose punishment on the employee for alleged misconduct and, if an employer does not intend to impose any punishment on the employee and is content that the employee has left its service, the law cannot compel the employer to hold an enquiry and punish an employee for the misconduct.

The Court therefore held that, in view of the fact that the workman was only engaged for a short period and failed to produce any cogent evidence to establish an employer employee relationship or illegal termination by the employer, the workman's allegation of illegal termination was dismissed.

In another recent case, the Delhi High Court had held that abandonment of employment is a question of intention. Abandonment can only be inferred in cases where there is clear evidence to demonstrate that, despite grant of reasonable opportunity to the employee by the management, the workman failed to join his duties without sufficient reason.2

In this case, the workman had claimed illegal termination of employment in violation of Section 25-F of the Industrial Disputes Act, 1947, which necessitates issuance of a notice. The employer alleged that it had issued letters to the workman asking him to resume duties, but the workman failed to respond to the notices or show up for work. The Court held that the letters sent from a postal service were not sufficient evidence and, considering the total facts and circumstances of the case including the fact that the employer did not issue any memo or set up an enquiry for the unauthorized absenteeism of the petitioner from his duties, it was evident that the employer was attempting to circumvent the legitimate rights of the petitioner in relation to termination of employment.

The Court held that, in order to establish abandonment of employment, there has to be clear evidence on record to show that, despite granting of a reasonable opportunity to the employee by management, he failed to recommence his duties without sufficient reason. Therefore, in the absence of any such cogent and convincing evidence, voluntary abandonment on the part of the employee cannot be readily inferred. The Court therefore ordered reinstatement of the workman with continuity of service and a grant of 50% of back wages.

1Mehtab vs. Municipal Corporation of Delhi W.P. (C) 1397/2011

2Shri Shiv Kumar vs. Hansita 2011LLR13

Gratuity during Training Period Payable in Case of Conversion to Employee

Sajai Singh, Partner & Chair, Employment Law Practice, and Garima Jhunjhunwala, Associate, J. Sagar Associates, Bangalore, India

An employee working as a trainee in an organisation, if then converted to be a regular employee, will be entitled to receive gratuity in respect of the training period also, the High Court of Calcutta has held in a recent case.1

The term "gratuity" refers to the amount payable to an employee on termination of employment after the employee has rendered continuous service to the employer for not less than five years, and where the employment has terminated:

  1. due to retirement on superannuation benefits, or
  2. upon retirement or resignation, or
  3. upon death or disablement of the employee due to accident or disease.

It is essentially a payment of a percentage of the wages received by an employee from the employer in gratitude for the services rendered by the employee to the employer.

The employer in this case contended that the employee in question was engaged purely as a trainee on a temporary basis without any guarantee of future employment, and was given a consolidated stipend. He was never given a promise of appointment in the establishment which would permit him to claim the status of an employee.

The Court emphasized the distinction between a trainee and an apprentice, on the basis that an apprentice is expressly excluded from the definition of an employee under the Payment of Gratuity Act, 1972 whereas a trainee employee is not. The Court held that a trainee employed under a contract of employment is not an apprentice unless he is undergoing apprenticeship training in a designated trade pursuant to a contract of apprenticeship. A promise to offer absorption (i.e. employment as a regular employee) does not necessarily have to be given initially to a trainee. The Court also took into consideration an earlier decision of the Madras High Court distinguishing a trainee employee from an apprentice.2

In this case, the employee did not work as an apprentice under the Apprenticeship Act, 1961 under a particular contract but was appointed as trainee blacksmith, and other similarly situated employees had been given the benefit of a training period and gratuity during the period they spent training.

On this basis, the Court held that the employee in question was also entitled to gratuity for the period spent by him during training, and any such non-payment would amount to discrimination.

1Sambhunath Chatterjee vs. Eastern Coalfields Ltd & Ors, 2013(139) FLR646

2S. Arunachalam vs. The Managing Director, Southern Structurals, Pattabiram, Madras (W.P. 18346 of 1994)
In this case the Court held that while nomenclature was irrelevant, a trainee employee under a contract of employment is not an apprentice under the Apprentices Act unless he is undergoing apprentice training in designated trade in pursuance to a contract of apprentice.

 

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