End Semester Examination

Name: Vaishnavi Prasad

Semester: VIII

Roll No.: 1598

Subject: Labour Law II

Pages: 14

20th May, 2021

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 1)

Introduction to the Informal Sector

The International Labour Organization (ILO) observed that a bulk of new employment over
the past decade or so, in developing and transition countries happened to be in the informal
sector. The informal economy encompasses a diverse group of workers in rural and urban
settings. They include street vendors, agricultural labourers, house help, workers in sweatshops
etc. The informal sector in the past has largely been perceived as a convenient, low-cost way
of creating employment. However, with that comes the exploited and inhumane working
conditions of the sector: wages are not standard and minimum wage isn’t guaranteed, working
hours are flexible, bordering on exploitative and job security is unpredictable. Therefore, the
reason why these individuals are lumped in the “informal” sector is because they are not
recognized or protected under legal or regulatory frameworks and are economically vulnerable.

They are unlikely to be able to collectivize and represent for their rights and have virtually no
voice for recognition. It is rare for them to have access to public infrastructure and benefits.
While it’s presumptuous to say that all people working in the informal sector are poor, it is
definitely true on a comparative level that more people who work in the informal sector happen
to be poor, as compared to those working in the formal sector. It is true that there exists criminal
activities such as trafficking of narcotics or human beings in the informal sector. However,
even individuals who do not engage in these activities are vulnerable to persecution by law
enforcement due to the stigma surrounding the informal sector.

Social Protection of the Informal Sector

It is ironic that the informal sector is characterized by a lack of social protection as individuals
working in this sector often have the most need of them: poor employment conditions, health
and safety hazards, and presumably poor quality of life would be considerably improved by a
safety net by the State. There are also gender dimensions to this exclusion from social
protection. In several countries, a majority of working women and transgender persons happen
to be in the informal economy. The lack of social protection also reinforces their social
exclusion. Further, due to patriarchal notions of gender roles, women are more likely to be
caregivers in their households. If these women and their children are not given the social
protection they need, they are exposed to greater physical and moral dangers. It is also

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extremely likely that children in these households start working at younger ages thus
jeopardizing their education.

The ILO identified nine areas of social insurance that come within the ambit of social security:
medical care, unemployment compensation, old-age pension, employment injuries, family
benefits, maternity benefits, disability benefits, social insurance schemes and tax-financed
benefits. The broader concept of social protection adopted by the ILO (something that can
service individuals in the informal economy as well) aims to protect workers against all risks
and contingencies that arise at work, irrespective of what kind of work it is and where it is
performed.

i. Adapting this to include the informal sector

In developing countries, social insurance schemes have not reached the informal economy
because they struggle with identifying, registering, educating, persuading and monitoring
individuals in the informal sector vis-à-vis these schemes. Social insurance can be extended to
the informal sector by primarily revising statutory schemes to include self-employed persons,
domestic workers, agricultural workers and those with income from informal activities.
Further, with more inclusion into these schemes comes a greater need to upgrade the
administration and the management of these social security schemes (for example, record
keeping and financial management).

It is important to ensure that workers in the informal sector are aware of their rights and the
benefits they can avail of. This can be improved by undertaking education and public awareness
programmes and disseminating information in accessible means. For example, translating
government orders into local languages would improve access.

ii. Strengthening micro-insurance schemes

Micro-insurance is when groups of informal workers contribute money and save it in order to
help its members meet any unpredictable expenses such as medical expenses. It is based on the
premise that individuals who are excluded from these social security systems can define their
own set of needs and insure them. These micro-insurance schemes can be strengthened by
financing these groups, and encouraging them to form organizations that workers can ipt into.
For instance, in India the Self-Employed Women’s Association is one of the largest
contributory social protection scheme for informal workers in the country. It covers health

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insurance, maternity benefit, life insurance and asset insurance for its members. It is financed
partly by the members, and partly by different organizations.

iii. Cost-effective tax-based social security

This includes setting up category based social assistance schemes for different groups of
people. They are usually contingency based and give support through cash or in kind to specific
groups. For instance, in India, the Mahatma Gandhi National Rural Employment Guarantee
Act strived to provide employment but if individuals were not able to get jobs, they received
an unemployment pension.

Social Security for Informal Workers in India

The Code on Social Security was passed by the Parliament in 2020. Social Security was
extended to unorganized workers, gig workers and platform workers. It has proposed the
formulation of national and state-level Social Security Boards to recommend schemes for
unorganized workers. The Code pushes for schemes such as the Employees Provident Scheme
and the Employees Pension Scheme for the benefit of unorganized workers.

Further, the Government has in place several schemes for the benefit of social workers. For
instance, the National Family Benefit Scheme provides a payment of Rs. 10,000 on the death
of the primary earner of the family; the Janani Suraksha Yojana provides conditional cash
transfer on the institutional delivery of children by pregnant women in order to prevent
maternal and neo-natal mortality; and the Indira Gandhi National Old Age Pension Scheme
covers senior citizens below the poverty line.

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2)

a. Applicability of POSH Act in Work from Home set-up

The POSH Act, 2013 has an exhaustive and all-inclusive definition of workplace. Section 2(o)
of the Act defines “workplace” to include dwelling places or a house. While the objective was
to apply to house helpers, the act can be read to include this as well. Therefore, sexual
harassment that occurs virtually, but at home, falls within the scope of POSH. Further, Section
2(n) of the Act defines sexual harassment itself to include expressed/implied unwelcome acts
or behaviour that includes asking for sexual favors, making sexually coloured remarks,
showing pornography without consent or other verbal/non-verbal conduct of a sexual nature.
The term during employment has been interpreted by courts by applying the theory of notional
extension. So this cannot necessarily be limited to a specific time or form, and can be read to
include office-hours at a work from home set-up as well.

Due to work-from-home set ups, women have the opportunity to file complains online. There
is a website called she-BOX where women can file complaints of harassment and it acts as an
intermediary to transfer the complaint to the requisite authority. Further Section 12 and 13 of
the Act that provides interim relief and compensation can be extended to remove working
where a woman has the choice to be transferred or given leave.

Redressal Mechanisms will continue to be Internal Complaints Committees or Local

Complains Committees as per the schema of the Act itself. However, it is the duty of different
organizations to modify their internal policies on sexual harassment to include working from
home.

b. Concept of bonus under the EPF Act

Section 2(b) of the EPF Act defines basic wages as emoluments earned by an employee while
on duty. In Bridge and Roof Co. v. Union of India, the Supreme Court decided whether
production bonus was included within the ambit of “basic wages” under Section 2(b) of EPF
Act. They stated that production bonus was extra payments made to an employee for superior
performance over and above basic wages and standard for production. In which case, it is
excluded from the ambit of Section 2(b).

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In Jay Engineering case, the Court relied on Bridge and Roof v. Union of India and held that
payments for producing above the required quota does not fall within basic wage. They stated
that the minimum wages and the dearness allowance are payable for production upto their
predetermined quota and any additional payments are made on a piece-rate basis. This is not a
part of the minimum wage. Finally, Manipal Academy of Higher Education v. Provident Fund
Commissioner reaffirmed both of the above.

c. Directors as employees within the ambit of the EPF Act

In Saheli Marbles Private Limited v. Assistant Provident Fund Commissioner, Udaipur, the
High Court of Delhi decided on whether Directors can be considered employees within the
scope of the EPF Act. In this case, a list of employees availing EPF benefits was made and this
included Directors of the Company. Section 2(e) of the EPF Act defines employer as the owner
or occupier of the factory, the agent of such owner or occupier, and the legal representative of
a deceased owner or occupier. In relation to other establishments, an individual who has
ultimate control over the affairs of the establishment and if such affairs are entrusted to a
manager, managing director or managing agent, then them.

Section 2(f) of the EPF Act defines employees as individuals who are employed for wages and
who gets their wages directly or indirectly from the employer. This includes people who are
employed via a contractor in connection with the work if the establishment or individuals who
are engaged as apprentices.

The Court referred to Regional Director, ESI Corporation (supra) and stated that unlike the
case of a partner receiving renumeration it cannot be said that a Director or Managing Director
of a company cannot be an employee. Therefore, since there is no evidence to show an absence
of an employer-employee relationship between the Directors, they are eligible for EPF.

d. Fundamental Right to health and medical care

The Constitution of India does not directly guarantee a fundamental right to health. However,
there are several references to the same within the Constitution: Article 39(E) of the
Constitution, a part of the Directive Principles of State Policy, directs the state to secure the
right to health of workers. Article 42 states that there must be just and humane conditions of
work and maternity relief. Article 47 states that there is a duty to raise the nutrition levels and
standard of living of people and improve public health.

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Further, Article 21 is a fundamental right that guarantees the right to life. The Supreme Court
in Bandhua Mukti Morcha v. Union of India and ors. interpreted this to include the right to
health and healthcare. Further, State of Punjab v. Mohinder Singh Chawla places an obligation
on the Government to provide health care services. This was reaffirmed in State of Punjab v.
Ram Lubhaya Bagga. The right to health is especially important in the context of workers.
Social Security provisions must ensure they have healthcare insurance and medical services
provided, something that is reflected in the Social Security Code, 2020. Workers must be
prevented from working in exploitative conditions that are harmful to their health as well.

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3)

Relevant Facts

- Baron Nemo Private Limited (Company) is covered by the Employees State Insurance
Act
- James Barnes is a driver with the company. When he was filling fuel in his vehicle, a
rash truck collided with James.

Issue 1: Whether James is entitled to claim compensation under the Employees State Insurance
Act?

James is an employee of the Company. According to Section 2(8) of the Employees State
Insurance Act (ESIA), an employment injury is a personal injury to the employee caused by an
accident arising in the course of his employment, providing it is an insurable employment. In
this case, the Company is covered by the ESIA. It is to be determined whether James filling
fuel in his vehicle can be construed as within the course of his employment.

In Regional Director, ESI Corporation v. Francis De Costa, the Supreme Court held that an
injury is an employment injury if it is caused by an accident which was originated from the
employment i.e. during the period of employment namely officer hours. In Saurashtra Salt
Manufacturing Company v. Bai Valu Raja, the Court decided on what constitutes “in the course
of employment”. In that case, the salt works could be reached via a creek which has to be
crossed by a boat. However, one day, the boat capsized due to bad weather and some of the
workmen drowned.

The Court held that while normally, the employment of the workman only commences when
they reach the place of employment and does not include the journey, there are some exceptions
to this. A workman in a public place is there in the course of their employment if the very
nature of their job makes it necessary for them to be there.

In the present matter, James who was instructed to deliver a consignment to another city,
existed in the public place in the course of his employment. He is entitled to claim
compensation under ESIC.

Issue 2: Whether James can simultaneously proceed against the owner of the truck?

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Section 53 of the ESIA places a bar against receiving compensation on damages under any
other law in respect of an employment injury sustained by the injured person under the ESIA
Act. Section 61 bars a person entitled to any benefits under the ESIA from receiving any similar
benefit from any other enactment.

A pertinent Supreme Court decision that dealt with the interpretation of these provisions is
Western India Plywood Limited v. P. Ashokan. In this case, Ashokan, the respondent met with
an accident which resulted in one of his hands getting amputated. Notwithstanding this,
Ashokan was allowed to continue with his services without any reduction in renumeration.
Further, Ashokan also received a disability benefit of Rs. 260 per month due to a decision by
the Employees State Insurance Corporation. However, Ashokan decided to file a suit against
Western India Plywood Ltd. for Rs. 1,50,000 compensation for the injuries sustained by him.

The Court acknowledged the decision of K.S. Vasantha v. Karnataka State Road Transport
Corporation where a workman travelling to work on a transport provided by the employer was
injured due to a road accident to the vehicle. However, their remedy was limited to that of
getting compensation from the Employees State Insurance Corporation. The Supreme Court
examined Section 53 and stated that the use of the expression “or otherwise” indicates that the
bar on remedies by this section is not limited to just other statutes but also includes Tort claims.
In Mangalamma v. Express Newspapers, the Madras High Court said that the object of Section
53 of the Act was to save the employer from facing more than one claim in relation to the same
accident. Therefore, this bar is solely limited to multiple claims against the employer.

The Supreme Court concedes that Section 53 cannot be construed in a way that prevents the
insured person from raising a claim against a third party. In those cases, tort claims are
permissible and Section 53 of the ESIA is not applicable.

Similarly, in TATA AIG General Insurance Company v. Ram Avtar and ors., the respondent’s
son died after an accident caused by the truck in the highway. The appellants are the insurance
company of the offending truck who denied its liability due to compensation already having
being paid under ESIA. However, this argument was rejected by the Court.

Therefore, in this case, James can simultaneously proceed against the owner of the truck.

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5) Jaya Kodate v. Rashtrasant Tukdoji Maharaj Nagpur University

Facts of the case:

Jaya Kodate is an Assistant Professor of Geology in Shri Shivaji Science College. She wants
to initiate a departmental inquiry against the Head of Department in Geology and had made
allegations of sexual harassment against this person. She has prayed before the High Court of
Bombay to Constitute an Internal Complaints Committee under Section 4 of the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
(POSH, 2013).

The other Petitions that have all been clubbed together in the present matter raise similar issues:
Women in academia in the same college, have made allegations of sexual harassment against
the same professor.

These Petitioners were all transferred on the grounds of gender discrimination and harassment.
The Management claimed that it was purely on an administrative ground and since these
petitioners are relieved, they are not in a position to go and work anywhere. The guidelines set
in the Vishaka v. State of Rajasthan case regarding the setting up of an internal complaints
committee was not adhered to.

The complainants were then directed to appeal before a newly constituted Internal Complaints
Committee. However, two reports came into existence: A report by the ICC members and
another report by the Presiding Officer and Chairperson of the Committee.

Issues

(i) Whether the law deals with sexual harassment of an employed woman alone?

(ii) Who is an ‘employee’ under law and who is an ‘employer’?

(iii) Whether the LCC or the ICC has jurisdiction in the present matter?

(iv) What constitutes a ‘workplace’ and how are internal committees required to be
constituted?

(v) How do internal committees work and how are reports required to be prepared?

Decision

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The Court examined Section 2 of POSH, 2013 and stated that the act does not envisage an
“aggrieved woman” to be a woman who is employed always. The scope of employee is wide
and as long as there exists some kind of contract of employment or wages, it is applicable. So
this can also include a Head of Department or an employer who has a contract with a manager.
As long as they some traits of an employee, they qualify there. Therefore, the criteria of
employee and employer are not mutually exclusive.

In the present matter, since the President or Secretary of the Educational Trust remain
answerable to either the managing committee or the principle of the college, then Section 6 of
the POSH Act, 2013 that recommends relying on a Local Complaints Committee is not
applicable here. Therefore, the ICC will have jurisdiction over the respondent in the present
matter unless context requires otherwise. Regarding whether a senior college and a junior
college are two separate workplaces, the POSH Act, 2013 defines workplace in Section 2(o)
and has kept the definition extremely wide. Clause (v) pertains to any place visited by the
employee arising out of or during the course of employment including transportation provided
by the employer for undertaking such a journey. While a senior and a junior college are separate
entities and should ideally warrant separate ICCs, in the present matter, convenience states
otherwise and therefore should get precedence.

The Court directed that the ICC is obligated to give a single report as one entity, even if there
is internal disagreement between the members it is composed of. If every individual member
gives their own report without dialogue or consultation with the other members, it defeats the
purpose of a multi-membered body. Therefore, submitting two reports, or a report signed and
submitted by majority members of the ICC without consulting and deliberating with all the
members is not acceptable.

Comments

At the outset, it is important to acknowledge the difficulty faced by victims of sexual

harassment in getting justice. The facts of the case reflect how hostile the deeply patriarchal
system is to a woman, even multiple women seeking justice; how easily they were dismissed
from their jobs before any action at all could be taken; how the word of multiple women is not
equivalent to that of one man. It would also be amiss to not acknowledge the long-drawn out
procedure this is and how that is detrimental to the mental wellbeing of the victim who is forced
to confront her trauma and have it callously disregarded in multiple fora. Having to plead before

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the High Court to constitute an Internal Complaints Committee, having to present before that
Committee (with members choosing not to appear), and having to once again move before the
High Court to ensure the functioning of the Internal Complaints Committee is exhausting.

That being said, this judgement itself is valuable for several reasons. The POSH Act, 2013 has
an extremely wide ambit: the definition of aggrieved woman, employee, employer, workspace,
all of which have been made as broad as possible to encompass a wide range of people. This
judgement reaffirms that notion. It moves away from the concept of employers and employees
being mutually exclusive concept and in doing so, it acknowledges the multi-faced and
complex nature of power. The dynamics between people in a workspace is not limited to the
one-dimensional idea of “employers are powerful and employees are victims.” However, the
nature of power exercised within a workspace is complex and highly nuanced. This judgement
attempts to capture some of that nuance.

Yet another problem that women face when they press sexual harassment charges is having
their legitimate concerns sacrificed at the altar of procedural technicalities. This was seen in
this judgement: questions surrounding what exactly constitutes a workplace, whether a junior
college and a senior college are distinct entities act as a red herring, derailing the discourse
from the most pertinent issue: women being unjustly violated by an individual in a position of
power. This judgement prioritizes efficacy and not getting tangled up in procedural
technicalities when it allows for the junior and senior college to have the same internal
complaints committee.

Lastly, this judgement made valuable contributions when it clarified the role of an Internal
Complaints Committee versus a Local Complaints Committee. It laid down clear procedural
guidelines and how the ICC must function as a unit. It reaffirmed the purpose for the existence
of these organizations: to ensure that the victim gets justice in a speedy and impartial manner.
Therefore, this judgement is relevant, important and necessary.

6)

Facts

Ms. Diana Prince joined Justice League InfoTech Services via a contractor company on
January 1, 2021.

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She found out about her third pregnancy on April 10, 2021

Issue

(i) Whether she is entitled to maternity leave with wages?

In Rachna Chaurasiya v. State of UP and ors., a contractual employee applied for child care
leave for a period of three months. The Court was presented with the issue of whether maternity
leave is available for contractual employees. The Court examines Article 14 and Article 15 of
the Constitution that provides for equality before the law and non-discrimination on the basis
of religion, sex, gender etc. It states that specific provisions can be made for women and
children. Further, Article 42 of the Constitution provides the directive principles of state policy
which ensures that the State makes provision for just and humane conditions of work and for
maternity relief.

The Court relied on various provisions of the Maternity Benefit Act, 1961. It acknowledge that
it is a social insurance for women. They relied on Municipal Corporation of Delhi v. Female
workers where the Supreme Court held that the provisions of the Maternity Benefit Act is in
consonance with the directive principles of State Policy, especially Articles 39 and 42. There
is nothing in the act that excludes women who are engaged on a casual basis or on muster roll
on a daily age basis.

The Court finally held that the Maternity Benefit Act and all the rules are applicable to all
female employees, irrespective of the nature of their employment, whether permanent,
temporary or contractual.

Further, its relevant to note that in Ruksana v. State of Haryana, the Court held that a
differentiation cannot be made on the basis of whether it is a woman’s third pregnancy and she
will be entitled to maternity leave regardless.

Therefore, in the present matter, Ms. Diana Prince will be entitled to maternity leave with
wages.

(ii) Who is liable for this payment?

Section 5 of the Maternity Benefit Act, 1961 states that every woman shall be entitled to
maternity benefit from her employer. This shall be at the rate of average daily wage for the

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period of her actual absence immediately preceding and including the day of her delivery and
six weeks immediately following that day. However, she would be entitled to maternity leave
only after she works for like one hundred and sixty days in the twelve months immediately
preceding the date of her expected delivery.

(iii) What are the incentives she can avail as per the statute?

According to Section 8 of the MBA, 1961, women who are entitled to maternity benefit shall
also be entitled to receive a medical bonus of twenty-five rupees if no pre-natal confinement
and post-natal care is provided for by the employer free of charge. Section 9 provides that in
case of miscarriage, a woman shall be entitled to leave with wages at the rate of maternity
benefit for a period of six weeks following the day of her miscarriage. Section 10 allows for
leaves for illness arising out of pregnancy, delivery, premature birth of a child or miscarriage.
And lastly, Section 11 allows two breaks a day as nursing breaks for the woman.

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