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STRICTLY STATUTES A Newsletter from ADP India

EDITOR’S NOTE

TABLE OF CONTENTS Pages

Hello Readers, We are happy to present the Strictly Statutes issue for April 2014.The important compliance dates for the month of April 2014 are listed for your convenience. There have been several important judgements that we would like to bring to your notice. The Supreme Court has held that authorities who act irresponsibly in contesting trivial labour disputes will be personally liable for the expenditure incurred on cases. The High Court of Calcutta has held that it is the duties and not the designation that will determine whether the employee is a workman or a manager. In another judgement by the same court, the ruling of the tribunal that ‘resignation’ and ‘termination’ were separate and distinct was overruled. The Madras High Court has held that compensation on accident under ESI is essential than under the Employees’ Compensation Act. In other news of note, the wrong declaration of dependency for medical benefits by an employee is liable for criminal action. With regard to the elections, IT firms will not be exempted from declaring a holiday on polling day. Employers will have to reconcile international workers data with Foreign Regional Registration Office (FRRO) on a periodic basis with effect from 1st April, 2014. We hope you find the contents of this newsletter relevant and useful. We welcome your suggestions and inputs for enriching content as well as your feedback. Please write to: contactadp@adp.com

APRIL 2014

Compliance Calendar for April 2014

02

Irresponsible authority, in contesting trivial Labour disputes..

03

Manager without managerial power, held to be a workman and nature of duties..

03

‘Resignation’ is initiated by Employees and ‘Termination’ by Employer

04

Wrong Declaration of Dependency for Medical Benefit

05

Holiday on polling day: IT firms not exempted

05

Mandatory registration of digital signature for PF activities

06


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STRICTLY STATUTES

A Newsletter from ADP India

Compliance Calendar for April 2014 Due Date

Scope

Due Under

Mode

Professional Tax Remittances 10th Apr 14

Andhra Pradesh & Madhya Pradesh

State-wise regulations

By Challan

15th Apr 14

Gujarat

Gujarat PT regulations

By Challan

20th Apr 14

Karnataka

Karnataka PT regulations

By Challan

21st Apr 14

West Bengal

WB PT regulations

By Challan

Apr 14 28thth Aug 30 13

Kerala, Maharashtra, Assam Maharashtra, Assam & Orissa& Orissa

State-wise State Wise regulations regulations

By Challan

30thth Aug Apr 14 13 30

Karnataka Maharashtra, Assam & Orissa

State-wise State Wise regulations regulations

Annual Renewal By Challan

Kerala

Kerala State Labour Welfare Fund

By Challan

15th Apr 14

Central - Remittance of Contribution

EPF & MP Act 1952

By Challan

15th Apr 14

Central - International worker with wages and nationality

EPF & MP Act 1952

Statement in IW1

Main Code & Sub Codes - Remittance of Contribution

ESIC Act 1948

By Challan

Labour Welfare Fund Remittances 20th Apr 14 PF

ESI 21st Apr 14

Employment Exchange 30th Apr 14

Strength Returns

Employment Exchange (Compulsory Notification of Vacancies) Act, 1959 By Return in ER - I


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STRICTLY STATUTES

A Newsletter from ADP India

Important Judgements Irresponsible authority, in contesting trivial Labour disputes, will be liable to pay the expenditure personally In a case of Haryana Diary Development Cooperative Federation Limited Vs Jagdish Lal, the Honourable Supreme Court of India under bench comprising Honourable Justice Dr. BS. Chauhan and Honourable Justice Mr. J Chelameswar pronounced that the attitude of Government Officials, not to take responsibilities even for petty issues wasting public money by approaching court spending more than the total amount involved is not justified as it is not only increases the burden of the court without any financial benefit but also unnecessary harassment to general public at large. Where the attitude of the government official is found to be irresponsible in dealing with small matters involving petty amounts without just and reasonable cost, burdening concerned official with heavy cost or directing such officials to pay personally the litigation expenses to the sufferer party is justifiable.

Manager without managerial power, held to be a workman and nature of duties, not designations will determine the status of workman In a case of Ranbaxy Laboratory Limited Vs State of West Bengal and others, the Honourable Calcutta High Court under Honourable Justice Mr. Sambudhha Chakrabarti pronounced that the decisive factor for deciding an employee to be a workman should be the nature of duties irrespective of Managerial Designation or handsome salary. An employee having the designation of District Manager, discharging the function of sales promotion, having authority only to recommend the leave application of other employees and not having authority to sanction the leave, to appoint, promote or taking disciplinary action or exercising an independent decision making power has been held to be a workman. It is settled principle of law that consent of employee in employment contract does not confer jurisdiction on a Court which otherwise lacks jurisdiction will not confer any authority on such court to try the dispute.


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STRICTLY STATUTES

A Newsletter from ADP India

‘Resignation’ is initiated by Employees and ‘Termination’ by Employer In a case of G.I.S Limited Vs State of West Bengal and others, the Honourable Calcutta High Court under Honourable Justice Mr. Harish Tandon pronounced by over ruling the direction by the tribunal that the resignation and termination are separate and distinct terms as resignation is initiated by the employee whereas termination of service of an employee is to be initiated by the employer. This was pronounced in case of employee rendering his resignation and on removal from employment, contesting that the removal was a termination. Also advised that the Industrial Tribunal is statutorily bound to act within the precincts of reference and those points which are incidental to the terms of reference and it cannot travel beyond the same. An order if reference is quashable by the high court if the same is found to be made without application of mind by the appropriate government

Compensation on accident under ESI is essential and substantial than under Employees’ Compensation Act. In a case of Manager, Kannan Jubilee Coffee Company Vs Kalimuthu, Rani and the Deputy Director, State Insurance Corporation, the Honourable Madras High Court under Honourable Justice Mr. GM Akbar Ali, on a claim petition by the respondents before the Deputy Commissioner of Labour, Coimbatore claiming compensation of the death of their son employed under the appellant, where the deceased employee was also an Insured person under ESI Act through the appellant pronounced that the as per section 2(14) of the Employee State Insurance Act, 1948, the corporation is liable to pay compensation to the dependents of the deceased, irrespective of date of registration or non-payment of contribution by the employer at the time of accident as the date of payment of contribution is not material. Benefit under ESI Act is more than the under Employees’ Compensation Act as held by Supreme Court of India.


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STRICTLY STATUTES

A Newsletter from ADP India

News to note Wrong Declaration of Dependency for Medical Benefit Employees State Insurance Corporation through its

circular

No.

13/2/Serious

Discrepancy/2011-Bft.I, instructed for a criminal case/civil suit against employees who give a wrong dependent declaration to extract undue benefit and thus resulting in loss to ESI Corporation fund. In case, it is found that the employer also accomplice of such an offence then he should also be prosecuted.

Holiday on polling day: IT firms not exempted Election Commission of India through its circular No, 78/2014/EPS , dated 18th Mar 2014 called the attention for a reminder on Section 135B in The Representation Of The People Act, 1951 for the declaration of Holiday with wages on Poll day for General Elections to the Lok Sabha, 2014 & General Election to the Legislative Assemblies of Andhra Pradesh, Odisha, Sikkim and Arunachal Pradesh and Bye Elections. The extract of the said section is as follows 135B. 5 [Grant of paid holiday to employees on the day of poll] Every person employed in any business, trade, industrial undertaking or any other establishment and entitled to vote at an election to the House of the People or the Legislative Assembly of a State shall, on the day of poll, be granted a holiday, No deduction or abatement of the wages of any such person shall be made on account of a holiday having been granted in accordance with sub- section (1) and if such person is employed on the basis that he would not ordinarily receive wages for such a day, he shall nonetheless be paid for such day the wages he would have drawn had not a holiday been granted to him on that day. If an employer contravenes the provisions of sub- section (1) or sub- section (2), then such employer shall be punishable with fine which may extend to five hundred rupees. This section shall not apply to any elector whose absence may cause danger or substantial loss in respect of the employment in which he is engaged.


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STRICTLY STATUTES

A Newsletter from ADP India

RECONCILIATION OF INTERNATIONAL WORKERS DATA WITH FOREIGN REGIONAL REGISTRATION OFFICE ( FRRO ) Employee Provident Fund Organisation called the attention of employers through its circular No. IWU/7(15)2011/general/23 dated, 01 April 2014, for a self- reconciliation of IWs. It was not done in the past and it will be done for the first time by 30 June 2014 and hence forth every three months or any other period as module agreed with Foreign Regional Registration Office. It also directs its officials to connect with such Foreign Regional Registration Office and obtain a list of foreign nationals employed in the establishments covered in their jurisdiction. The officials will also reconcile the FFRO data with the IW-I return filled by the employers and ensure compliance.

EXEMPTION OF KA INDUSTRIAL EMPLOYMENT STANDING ORDERS ACT 1946 Karnataka Government exempts IT / ITES / Startups / Animation / Gaming / computer graphics / telecom / BPO / KPO / Other knowledge based industries from the applicability of Karnataka Industrial Employment Standing Orders Act 1946, (Central Act of 1946) for a period of five years from the date of publication of the Karnataka Government Notification No. LD 53 LET 2013, dated 25 Jan 2014, with a few conditions like Each Exempted establishment to constitute Internal Committee as per Sexual Harassment of Women at Work place (Prevention, Prohibition, Redressal) Act 2013 and Rules formed there under Each Exempted Establishment shall intimate information about the cases of disciplinary actions like suspension, discharge, termination, demotion, dismissal etc. of its employees to the Jurisdictional Deputy Labour Commissioner of Labour in Karnataka.

MANDATORY REGISTRATION OF DIGITAL SIGNATURE FOR PF ACTIVITIES The Central PF Commissioner in exercise of powers conferred on him under Para 36(7) of EPF Scheme1952, made it mandatory by order for registration of employers/its authorized signatories with digital signature (Class 2 and above), with EPFO through EPFO circular No. Coord/40(24)2010/DPG Review Meeting, dated 25 March 2014. Establishments with employee strength above 500 to comply with digital signature on or before 30 April 2014 and Establishments with employee strength between 100 and 500 to comply with digital signature on or before 30 June 2014.


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STRICTLY STATUTES

A Newsletter from ADP India

CSR RULES TO BE EFFECTIVE FROM APRIL 01, 2014 The ministry of Corporate Affairs has notified Section 135 and Schedule VII of the Companies Act 2013 as well as the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014 to come into effect from April 1, 2014 to bring every company, private limited or public limited, which either has a net worth of Rs.500 crore or a turnover of Rs.1,000 crore or net profit of Rs. 5 crore, to spend at least 2% of its average net profit for the immediately preceding three financial years in Corporate Social Responsibility (CSR) activities. ·

The CSR activities should not be undertaken in the normal course of business

·

Contribution to any political party is not considered to be a CSR activity

·

Only activities in India would be considered for computing CSR expenditure.

The activities that can be undertaken by a company to fulfil its CSR obligations include eradicating hunger, poverty and malnutrition, promoting preventive healthcare, promoting education and promotion gender equality, setting up homes for women, orphans and the senior citizens, measures for reducing inequalities faced by socially and economically backward groups, ensuring environmental sustainability and ecological balance, animal welfare, protection of national heritage and art and culture, measures for the benefit of armed forces veterans, war windows and their dependents, training to promote rural, nationally recognized. Paralympic or Olympic sports, contribution to the prime minister’s national relief fund or any other fund set up by the Central Government for socio economic development and relief and welfare of SC, ST, OBCs, minorities and women, contributions or funds provided to technology incubators located within academic institutions approved by the Central Government and rural development projects. A CSR Committee is required to formulate and monitor the CSR activities and the committee should consist of three directors including the independent director. The report of the Board of Directors attached to the financial statements of the Company would also need to include an annual report on the CSR activities of the company in the format prescribed in the CSR Rules setting out inter alia a brief outline of the CSR policy, the composition of the CSR Committee, the average net profit for the last three financial years and the prescribed CSR expenditure. If the company has been unable to spend the minimum required on its CSR initiatives, the reasons for not doing so are to be specified in the Board Report.

CLARIFICATION OF DEFINITION FOR A “PERSON” UNDER WEST BENGAL STATE TAX ON PROFESSIONS, TRADES, CALLINGS & EMPLOYMENTS ACT’1979 Government of West Bengal, Directorate of Commercial Taxes & Profession Tax clarified Consequent upon the amendment in section 2(f) of the West Bengal State Tax on Professions, Trades, Callings & Employments Act’1979, to consider every branch or office of a firm, company, corporation, or other corporate body, any society, club or association to be separate person, on a question which has come up whether a factory or godown / warehouse (of such entity) shall be treated as a separate person for the purpose of obtaining separate certificate of enrolment and payment of Tax. After careful consideration into the matter, it is now clarified that no factory or godown / warehouse of a firm, company, corporation, or other corporate body, any society, club or association, unless it acts person for the purpose of the Act.


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STRICTLY STATUTES

ADP Global

A Newsletter from ADP India

ADP India

With more than $11 billion in revenues and more than 60 years of experience, ADPÂŽ (NASDAQ: ADP) serves approximately 620,000 clients in more than 125 countries. As one of the world's largest providers of business outsourcing and human capital management solutions, ADP offers a wide range of human resource, payroll, talent management, tax and benefits administration solutions from a single source, and helps clients comply with regulatory and legislative changes, such as the Affordable Care Act (ACA). ADP's easy-to-use solutions for employers provide superior value to companies of all types and sizes. ADP is also a leading provider of integrated computing solutions to auto, truck, motorcycle, marine, recreational vehicle, and heavy equipment dealers throughout the world.

ADP India offers a wide range of payroll, statutory and HR solutions, both as managed services and on cloud. ADP partners with organisations to assist with their complex, yet critical functions of payroll, statutory compliance and HR administration tasks effectively. ADP’s proven Managed and On Cloud Payroll, Statutory Compliance, Leave Management and Time & Attendance solutions are designed to address the scalable and dynamic needs of an organisation. ADP partners with small, mid-sized and large enterprises to streamline their Payroll, Compliance and HR administration processes. ADP India is an ISO 9001:2008 and ISO 27001:2005 certified and SSAE 16 Type II compliant company and serves clients from all industries across the country. For more information about ADP India or to contact a local ADP sales office, reach us at 1-800-4190-237 or visit the company's Web site at www.adp.in

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Mandatory Registration of Digital Signature for PF Activities