International Labor & Employment Law Committee Newsletter

Issue: May 2012

Editor: Tim Darby | European Editor: Paul Callaghan |Canada Editor: Gilles Touchette |Asia and Oceania Editor: Ute Krudewagen

India

Requiring a Non-Workman to Perform Certain Duties of a Workman Does Not Amount to Unfair Labor Practice, Supreme Court Holds

Sajai Singh, Partner & Chair--Employment Law Practice, J. Sagar Associates, Bangalore, India

Introducing an internal promotional program in which individuals in a "junior executive officer" position (non-workman position) perform certain duties usually performed by workmen does not constitute an unfair labor practice, the Supreme Court of India held.1

Management had invited applications from workmen to appear for a selection process to undergo a two year training program, carrying the designation - Officer Trainee. On successful completion of the training, the trainees would be designated as 'Junior Executive Officers.' The trade union questioned the 'Junior Executive Officer' designation on grounds that these employee would perform the same duties as workmen, and contended that this misclassification amounts to an unfair labour practice. The trade union relied on an earlier settlement between the workmen and the management that prohibited employees, officers, or members of the staff of the company from doing normal production work that would usually be done by the workmen. The trade union's objections were based on the fact that while the designation was that of an officer belonging to the management cadre, it was in fact only a nomenclature, with negligible managerial work. The job description of a 'Junior Executive Officer' was the same as that of a 'workman,' the union argued, with little in the way of additional duties, and such promotion would deny the benefits associated with the position of a 'workman' to these employees and would also result in reducing the number of workmen required in the establishment, hence, amounting to an unfair labour practice.

The first instance Tribunal, Single Judge, and second instance Division Bench of High Court both concluded that the action of management would be considered an unfair labour practice. However, the Supreme Court held that neither had any malafide been alleged against the company nor did the reorganization of the company's working pattern result in workmen being either retrenched or rendered surplus. Thus, introduction of the scheme of promotion, to which the workers overwhelmingly responded, cannot be said to be an unfair labour practice. Further, the Supreme Court held that the promoted employees cannot be held to be 'workmen' only because they may be required to perform certain production line work, since the majority of their work would be different.

1Siemens Limited v. Siemens Employee Union and Anr., on October 12, 2011.

Supreme Court Rules against Deemed Confirmation of Employment of a Probationary Employee

Sajai Singh, Partner & Chair--Employment Law Practice, J. Sagar Associates, Bangalore, India

Where a letter of appointment provides for a probationary period, with possibility of extension and the employee continues engagement beyond the initial probationary period but not past the end of the extension period, employment has not been confirmed and the employee can be terminated as if he or she were still on probation, the Indian Supreme Court1 held March 16, 2012. Correspondingly, where there is a maximum period of probation and employment extends beyond that period, the employee is deemed to have been confirmed upon expiry of the maximum period of probation. However, in cases where a maximum period of probation is prescribed but confirmation of the employee requires a specific act on the part of the employer (e.g., an order of confirmation or a test), if the maximum period of probation has expired and no order of confirmation has been passed or the requisite test has yet to be taken, the employee cannot be deemed to have been confirmed merely because the maximum period of probation period has expired.

In the case at issue, the plaintiff had been appointed as a Mistress in the School, via a letter of appointment, on probation for a period of two years with a stipulation that the probation could be extended by another year. The employee had been appointed in 1993, and was terminated in 1997 pursuant to the alleged misconduct of receiving money from an individual. Therefore, at the time of termination, the employee had already exceeded the maximum probationary period of three years. The letter of appointment did not expressly state that after the expiry of the period of probation, the respondent would be treated as a confirmed employee. Based on these facts, the Supreme Court held that the employee's employment was not confirmed and the discharge could be sustained.

The decision of the Supreme Court in the present case was based on a contextual interpretation of the words 'if confirmed' in the rules of employment, which stated that "if confirmed," the employee shall continue upto the age of superannuation, that is, 55 years. The Supreme Court observed that the phrase "if confirmed" requires a positive and affirmative act on the part of the employer to confirm the probationer. Therefore, although a maximum period of three years has been prescribed in the rules, the employee would not be deemed to obtain the status of a permanent employee, merely by expiry of time, where no order of confirmation has been issued.

The court of first instance, Single Judge of the High Court of Madras had ruled that the order of termination in respect of the teacher was stigmatic in nature and that since termination occurred without a disciplinary enquiry, the termination warranted quashing. On appeal, the Division Bench of the same High Court held that the order of termination did not cast any stigma but concurred with the ultimate conclusion on the basis that the employee was a confirmed employee and hence, holding a disciplinary enquiry before passing an order of termination was imperative. However, based on the aforementioned reasoning, the Supreme Court of India quashed the High Court order and held that since the employee could not be deemed to have been confirmed by mere efflux of time, she remained a probationer, thus negating the requirement of a disciplinary enquiry to be held by the employer prior to her termination.

The issue of whether a probationer acquires the status of a permanent employee merely by expiry of time, had been debated in various prior judgments of the SC, and the following three principles had emerged:

  1. Where in the letter of appointment, a period of probation is specified and power to extend the same is also conferred upon the authority, without prescribing any maximum period of probation, and if the employee continues beyond the prescribed or extended period, he or she cannot be deemed to be confirmed;
  2. Where there is a provision in the employment rules for initial probation and extension thereof, and a maximum period for such extension is also provided, beyond which it is not permissible to extend probation, the employee is deemed to have been confirmed upon expiry of the maximum period of probation in case he or she has not been terminated beforehand;

Where under the rules, however, a maximum period of probation is prescribed, but the rules require a specific act on the part of the employer, by issuing an order of confirmation or passing of a test for the purposes of confirmation, the employee cannot be deemed to have been confirmed merely by expiry of the maximum probationary period prescribed in the rules.

1 Head Master, Lawrence School Lovedale Vs. Jayanthi Raghu & Anr.

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New Legislation Passed Protecting Older Employees in Corporate Reorganizations | National Regulations Push for "Democratic Management" of All Enterprises | Continued Work after Termination Deemed by Shanghai Court as New Employment | Requiring a Non-Workman to Perform Certain Duties of a Workman Does Not Amount to Unfair Labor Practice, Supreme Court Holds | Supreme Court Rules against Deemed Confirmation of Employment of a Probationary Employee | Establishments Are not to be Grouped Together for Retirement Provident Fund Purposes Merely Because Different Family Members Own Them All, Court Holds | Allowances to all Employees Are to Be Included in Calculating Provident Fund Retirement Plan Contributions, Court Holds | Backpay Agreed on In Settlement is to Be Paid Without Employee Proof He Did Not Obtain Further Employment Following Termination, Supreme Court Rules | Proposed Law on Sexual Harassment at Workplace Delayed | Employee Consent Is Pre-Requisite to Business Transfer Deals | Rules for Issuance of Employment Permits to Foreign Nationals Amended | Fixed Bonus to Be Included in Ordinary Wage, Supreme Court Rules | Amendments to Labor Code Proposed Reducing Some Employee Protections and Increasing Some Employee Benefits

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