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Kamalesh (PE)     31 January 2013

Change in employment conditions after joining - software co.

 

This query is with respect to employment in Software Companies. I am interested in knowing the legal aspects (only, not ethical or some other) in some scenarios. The appointment letter says that management has the right to change the rules. 

 

1. Can a company, taking in to account the above mentioned fact, arbitrarily/unilaterally reduce the compensation of an employee citing economic difficulty or any other reason? Would this stand legal scrutiny? Are there any judgments regarding this?

 

2. Can a company, taking in to account the above mentioned fact, arbitrarily/unilaterally increase the notice period? In most cases, this is done through an email circulated by the HR department informing the employees without obtaining concurrence of the employees. Is this legally valid? Again, are there any judgments in this regard?

 

3. Are there any specific laws covering the IT sector. If not, what are the other relevant laws covering employment?

 

4. Can a company introduce new terms in its policy. For example, no leaves will be allowed during the notice period.



 1 Replies

Kumar Doab (FIN)     04 February 2013

You have posted some questions.

Heartfelt opinion is as given below. However you may show copies of your appointment letter, SE Act, emails of the company etc to a competent and experienced labor consultant/service lawyer and give inputs in person. The opinion of your lawyer should be treated as final by you and you may proceed under expert advice of your lawyer.

 

  1. No. Employee can and must reject in writing.

 Fixed components of the salary are guaranteed cash ands can not be reduced.

Moreover statutory bodies like EPFO, ESIC won’t allow reduction in wages.

  1. No. In case of a negotiated contract any change should be mutually discussed and agreed upon.

However the employee must submit a gentle communication declining to accept the change in service conditions. As later employer may change the tune and may start singing that no reply was deemed as acceptance.

In your case the company has communicated the change. Ideally it should be by a letter addressed to individual employee.

Employee can always stand up and question the conditions which are detrimental to his interest and beneficial to employer.

  1. Few states in their IT policy has granted blanket exemption from the provisions of IESO Act amongst Labor Laws. State of Karnataka has ended this too.

Labor laws of the land are applicable to IT companies.

  1. Yes. Who can stop a company to introduce a new policy? However it has to be lawful.

Every company can introduce its leave policy.

In case of IT companies if there is anything unlawful employee can agitate under SE Act…..

 

 

Service conditions are regulated by Standing Orders of the company, appointment letter/contract of employment. The service conditions stated in standing orders can not be negated in appointment letter. Therefore you may obtain standing orders of the company extended to your designation e.g. if notice period as in standing orders one month it can not be 3 months in appointment letter.

The conditions in the appointment letter should ideally be same for employer and employee.

Employer has to display standing orders on notice board/prominent place/near entrance and shall be personally held responsible for faithful observance of standing orders.

  1. Liability of 17[employer].--The [1][employer] of the establishment shall personally be held responsible for the proper and faithful observance of the standing orders.

The state of Karnataka has ended the blanket exemption granted to IT companies from the provisions of IESO Act and within six months all companies should have framed certified standing orders and till then model standing orders shall apply.

You may check the status for your state.

It companies fall under the preview of SE Act applicable to the state. SE Act, IESO Act, Model Standing Orders might be available at Dept. of Labor/SE Inspectorate website of the state or you .may buy the latest version from market.

e.g. SE Act Delhi: Max notice period seems to be 1 month.

2. DEFINITIONS:

(7) “employee” means a person wholly or principally employed, whether directly or

otherwise, and whether for wages (payable on permanent, periodical, contract, piece-rate or commission basis) or other consideration, about the business of an establishment and includes an apprentice and any person employed in a factory but not governed by the Factories Act, 1948 (43 of 1948), and for the purpose of any matter regulated by this Act, also includes a person discharged or dismissed whose claims have not been settled in accordance with this Act

(8)  “employer” means the owner of any establishment about the business of which

persons are employed, and where the business of such establishment is not directly

managed by the owner, means the manager, agent or representative of such owner in

the said business;

30.    NOTICE OF DISMISSAL:

(2) No employee who has put in three months’ continuous service shall terminate his

employment unless he has given to his employer a notice of at least one month, in writing. In case he fails to give one month’s notice he will be released from his employment on payment of an amount equal to one month’s pay……….

COMMENTS

(a) Applicability of section 30

The protection of the provisions of the section is available to all persons who fall within the definition of the term “employee” as given in section 2(7) of the Act and who have put in three months’ continuous services.  In the absence of any standing orders or any contract between the employer and the contesting respondent containing any particular terms or conditions, the conditions of service of the employee relating to his employment in an establishment at Delhi are covered by section 30(1) of Delhi Shops and Establishments Act, 1954……

(b) Notice or wages in lieu thereof under section 30—When to be given?

(d) Section 30 of the Delhi Shops and Establishments Act, 1954 does not exclude the

application of the Industrial Disputes Act, 1947

 

The employer may shout that employee is not a workman however designation alone does not decide employee is a workman or not. Your lawyer and your union may opine that your designation falls under the preview of a workman.

Union for IT employees may be in a position to help you.

IT/BPO Voice of India | Facebook
UNITES Professionals

The Indian Headquarters at Bangalore

Prithviraj Lekkad - President, UNITES Professionals India
Karthik Shekhar - General Secretary, UNITES Professionals India
#6/2, 1st Main, Next to Kodava Samaj, Vasanthnagar, Bangalore - 560 052
Phone: + 91 - 80 - 2235 5959 . 4123 5499
Email: contact@unitespro.org / unitesprofessionals@gmail.com

Bangalore
N R Hegde - Regional Director, UNIDOC Karnataka
#6/2, 1st Main, Next to Kodava Samaj, Vasanthnagar, Bangalore - 560 052
Phone: + 91 - 80 - 2235 5959 . 4123 5499
Email: unidocbangalore@gmail.com / nr.hegde@unitespro.org

New Delhi
Angela D'Souza - Organising Secretary
B 4/234 (Ground Floor), Safdurjung Enclave,
New Delhi - 110029, INDIA.
Phone: +91-11-26182268/69/79
Fax: +91-11-26182267
Email: angela@unitespro.org

Balasubramaniam - Advisor, UNIDOC NCR
T-16, Atul Grove Road, New Delhi - 110 001
Email: unidocncr@gmail.com
 

 

Valuable advice of learned experts/members is sought.


Attached File : 826276614 model%20standing%20orders.doc, 826276614 delhi shops & establishments act, 1954.pdf downloaded: 198 times

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