Labour & Employment

wage gap

What if the wage gap means everyone earns less?

By Economy, Labour & Employment No Comments

What if the wage gap means everyone earns less?

Wage Gap Pay transparency has been a contentious issue for managers around the world. Companies, including Starbucks, whole foods, and many more have been scrutinizing the raging problems by touting their pay transparency policies as an effective means of ensuring fairness in the workplace.

wage gap

It is no news that pay transparency is a touchy topic for employees, especially when gender and race are involved. Thus, conscious steps to avoid such irregularities have gained top priority for many top-notch firms. But, as it odiously turns out in many cases, pay transparency doesn’t necessarily ensure or effectively increase workers’ wages.

Such a revelation comes as a piece of disturbing news for the employees as more than 10 European Union countries and 20 US states have enacted wage transparency laws that emphatically seek to give workers more bargaining power in the workspace.

This is ensured by making it mandatory for the firm to disclose employee salaries. Given, the law had been enacted for increasing the wage of the workers or to provide them with an instrument to bargain, it has been found out, that strategically opening your pay books for others to scrutinize and read has actually led to 2 to 3 percent less cash in workers’ pockets. This is especially true for the workers in the US private sector.

how does the wage gap work

wage gap

So one might ask what has led such discrepancies to seep into the welfare policymaking? It is to be noted that rather than empowering the workers, these laws have encouraged companies to set lower salaries for their workers in order to preserve their profits and to highly prevent any expensive renegotiations that might come through.

In earlier times, proximity between workers did the work that wage efficiency laws are trying to achieve at the moment. It is to be noted that the workers with comparable similar jobs in the same locations effectively earned around similar amounts.

In contrast, the pay for the same work was different given the varied geographical locations of the work. Thus, given the proximity between the workers, it helped them immensely to talk to one another about their wages. This, unlike today, helped the workers to re-negotiate and thus create opportunities for themselves to increase their odds of earning more.

One might argue, that such a strategy was much more effective than the wage transparency laws to re-negotiate one’s offer for his or her services.

This is due to a pertinent and a threatening fact that though the legal landscape has shifted positively towards the welfare of the workers in recent years through the inculcation of transparency, on the other hand, laws, and policies that had always protected the workers’ ability to discuss their compensation with their colleagues without fear of repercussions have also gained popularity in recent years.

But this still doesn’t concretely or statistically prove that workers in their workspace earn less due to transparency wars. Such a riddle can be resolved by studying how the labor market adjusts itself depending on pay transparency. This can be done by thoroughly analyzing and scrutinizing shifts in wages after transparency laws took effect.

According to the American Community Survey, which analyzed 4 million people living in the states with new transparency laws that were enacted between 2000 and 2016, found that a year after the transparency laws were passed, wages had effectively dropped by 2.2 percent.

What is more interesting is the fact that after three years of enactment of laws the wages had declined by 2.6 percent. Thus, one can state that the wages, after the enactment of the law, have shown a downward trend that indirectly or directly affected the wages and the bargaining power of the employees in the market.

The ultimate reason that such laws push wages lower is the fact that managers who are required to disclose salaries can credibly state unsettling facts about low-profit margins and unwillingness to give a raised pay to everyone if the concerned person is given the same. This effectively and strategically allows the profit-mongering employers to set overall salaries much lower.

what is the gender pay gap

This usually leads to lower bargain power of the employees which in turn leads to lower pay for all in a certain workspace. This allows employers to set overall salaries lower and hold firm on initial offers when employees are hired—which tends to give companies an advantage in salary negotiations.

It is also worthy of noting here that salaries are not always, monotonously handled in the same way at all companies. This is especially true when the company might not hold the law true for large superstar employees who bring exceptional talent to the table.

Thus, one might actually not have as much bargaining power as he or she might think so. This is also due to the fact that the law is not absolute in nature that guarantees the right to re-negotiate your worth.

Thus, in totality, one can argue that though the law is helping gain pay equity in the workspace, the same is being achieved at the expense of workers’ purchasing power and adequate pay. Thus, can we still appreciate the wage transparency laws in place? Hard to say when your pockets are comparatively less filled now.

new labor codes in india

Changes in New Labor Codes in India

By Labour & Employment No Comments

Understanding Labor Laws & New Labor Codes in India

A labor-intensive country like India has revisited its new labor codes in India and its labor laws. In 2019, the Ministry of Labor and Employment had effectively introduced four Bills to strategically amalgamate 29 central laws.

It is to be noted that these 29 central laws were related to labor laws which were consequently simplified and modernized. Thus, the revision of the laws led to the much-needed revisal and simplification of the labor regulations in a labor-intensive country, like India.

To get a gist of what was strategically regulated in the laws, it is to be noted that wages, social security, and Industrial Relations were thoroughly scrutinized and regulated. On the other hand, attempts were also made to regulate the laws pertaining to health, Occupational Safety, and Working Conditions.

new labor codes

All such aforementioned provisions were codified and enacted effectively as the Code on Wages, 2019; the Occupational Safety, Health and Working Conditions Code, 2020; The Industrial Relations Code, 2020 and the Code on Social Security, 2020

Given the aforementioned acts, what actually were the changes on the ground level that were made by the government? In the labor laws, it was established that the Central Government will be emphatically the ‘appropriate government’. The central government will act as an “appropriate government” for the public sector undertakings.

Here, it is worthy of mentioning that the government will act in such capacity even if the central government’s holding in the entity is less than 50%. Certain industries that have qualified where the central government will act as the appropriate government are the specific industries banking, mines, telecom, and railways.

Talking about the occupational safety and health of the workers, an ‘Inspectnew changes in labour laws in indiaors-cum-Facilitators’ shall be established. This shall be effectively established as the new authority under the Code on Social Security, 2020, the Occupational Safety, Health and Working Conditions Code, 2020, and The Industrial Relations Code, 2020.

The duty of an inspector-cum-facilitator will emphatically be to provide information and reports to industry employees. Thus, the newer labor codes take into consideration the well-being and the interests of the laborers in the economy.

Given that India is a labor-intensive country, with a high contribution of the manufacturing sector in the economy, the address of core issues of the laborers will help in addressing the deep-seated problems and discrepancies that might threaten the efficiency of the labor.

labour law codes

Talking about the social security code, 2020, the code was emphatically introduced to provide social security benefits to the labor class, which are the most deprived social class. This has been strategically done by extending the goals of social security goals to employers and employees.

The code has also worked to emphatically simplify the labor laws by effectively amalgamating various enactments. such as:

The code positively states that the central government will be responsible to frame the social security schemes. This will be done by giving utmost importance to providing benefits under Employees‘ State Insurance Corporation (ESIC) for platform workers, gig workers, and unorganized workers.

In fact, the code also strongly empowers the central government to extend its social security benefit schemes to self-employed persons in the economy. Thus, given that the reins are in the hands of the government, one can maintain that welfare will be positively delivered as the state’s main motive is to deliver justice and protect the welfare of the society.

Thus, given the aforementioned changes and alterations in the new labor codes in India, one can emphatically state that it will lead to redressal of widespread hostilities and discrepancies in the labor system which has been haunting the efficiency and welfare of the labor class.

Given that the government will be gaining reins in the matters of labor laws, one can expect significant improvement in the conditions of the labor class in India, which is thoroughly deprived of justice and rightful means of survival and sustainability.

The act garners all the more important due to the fact that the labor class has suffered inexplicably due to the pandemic that has exacerbated the woes of the labor class. Thus, the new labor code emphatically introduces various special provisions for accommodating better regulations for industries.

This is being done by establishing flexible norms and allowing the industries to be flexible to foster efficiency and commitment to the work. Further, one can state that the ambiguity surrounding certain provisions has been cleared with clear codification and consolidation of the laws.

In fact, it can be positively stated that the codification and consolidation of such laws have positively led to the expansion of the ambit and effective applicability of the laws. Thus this has increasingly helped with ease of compliance and removal of an unnecessary multiplicity of definitions.

Thus, consequently, the reluctance that had seeped into the system due to inefficient and uncodified roles of the overlapping of authorities has been thoroughly removed.

What is more one can positively state about the newer labor code is that the new set of rules will definitely and positively empower the relationship between the employee, the employer, and the government, which will lead to faster resolution of the issue that plague the labor class.

impact of new labour codes in india

This will also be bn=beneficial for the employees if the labor class is appreciative of the system and thus, ultimately their employer. Thus, in totality, the newer laws will definitely lead to a positive long-term impact on the labor industry and will strengthen further contribute towards the idea of ease of doing business in the economy.

Given that the economy is still in the nascent stage of its recovery and is under threat from the newer variant namely omicron, a little breather for the employees and the employers will contribute highly to the industry’s revival.


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retail inflation

Retail Inflation for Industrial Workers Rises Marginally to 4.5 PC in October

By Labour & Employment No Comments

Rising of Retail Inflation for Industrial Workers

Inflation is burning a hole in the consumer’s pocket. The claim can be corroborated by the recent shreds of evidence that suggest that there was a marginal rise in retail inflation. Industrial workers had to significantly bear the brunt as food inflation was soaring making the means of livelihood difficult.

Retail inflation for industrial workers rose marginally to 4.5 percent in October as compared with 4.41 percent in September.

The reason for the rise of retail inflation

Given the unconventional year that the world had witnessed, the aftereffects of the same have been lurking across the economy. With high stimulus packages that were rolled out last year, for liquidity and growth, inflation was an apparent threat from the very start. Given, the case of India, a developing economy, the stimulus was all the more needed for sustained growth and recovery in order to get the growth engine on track.

retail inflation in indiaWith a high accommodative stance that was adopted by the RBI and startup culture that was soaring, liquidity in the economy was bound to rise. Though initially the inflation was assumed to be of transitory nature, recent data shows that the need to curb the same is crucial.

What makes the matter all the more sensitive is the fact that given the discovery of the newer variant around the world, the accommodative stance of the central bank might have to be continued. With the high potential of lockdowns that can be placed in the economy, the stimulus will once again gain center stage. This, emphatically will not materialize well for the economy.

But is the stimulus and excess liquidity a sole contributor to the burgeoning inflation in the economy? Apparently not. Given supply constraints in the market in the form of crippled semiconductors and raw materials, inflation effects have been felt by the consumer. With slow supply and high demand, due to recovering economy, inflation has been seen growing and gnawing at the expenses of the workers and the consumers.

The need for government intervention

retail inflation meaningIt is to be noted that given the recent situation of burgeoning prices, the government needs to step in, soothe the apprehensions of the spenders in the economy. Given the massive recession that was witnessed by India last year, the country is still in the process of recovery.

Thus, consumer confidence is needed to ramp up the growth engine of the economy. But with given burgeoning prices, it is arduous to garner consumer or investors’ confidence, especially when the financial state of many in India is crippled. This assumes all the more important as the bulk of inflation pressure is being exerted through food and beverages.

It is to be noted that according to the reports, the maximum upward pressure in the current index is effectively coming from the food and beverages group contributing 1.31 percentage points to the total change. Given the nature of the commodity, one can emphatically argue that the inflation pressures cannot be avoided. This is due to the fact that on the item level, tomato, mustard oil, brinjal, cabbage, onion, cauliflower, etc., form the basis of the inflation pressures.

The conundrum

But is the solution of government intervention the sole savior for the debt-laden consumers? Is it as unadorned as it sounds? The answer is more complex than expected. It is no news that finances are needed for the healthy functioning of the authorities.

retail inflation rate in india

To top it all extra finances are needed to finance the growth and recovery process. Given, that the government has already given up on its crude oil excessive revenue, it is quite a possibility that the government will not try and reduce its finances through intervention and simple tax cuts. Thus, the government faces the conundrum to emphatically reduce inflation and maintain growth.

Given the complex nature of redressal by the government, it makes us seriously question the fact that is the inflation as high as we are anticipating it to be? It is to be noted that if upward pressure on the index was felt, the downward pressure was felt as well.

According to the reports, the increase in the index was effectively checked by moong dal, grapes, fish fresh, oranges, apple, and ginger, which helped in putting downward pressure on the index.

But is India the only country that is facing such inflation pressures? The answer is negative. Given the reports that are coming from across the world, it has been reported that America recently witnessed the highest ever increase in its inflation.

In fact, the market was in a little frenzy with the anticipation that the FED will increase the interest rates and the liquidity will be brought into control in the economy.

But is India’s comparison with America appropriate given the different natures of the economies? Perhaps not. It is solely due to a characteristic that America enjoys and India doesn’t, which is of free fiscal space. India doesn’t have the luxury to expand liquidity the way that can be afforded by America. Thus, comparing the redressal mechanism by two quite different nations will provide inaccurate results.

Thus, in totality, given the seriousness of the situation and the conundrum that the government faces, what will be the final choice of the authorities be? Guess, we’ll have to patiently analyze the market and wait till the government ponders on its next course of action.


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esop benefits for employees

SEBI’s New ESOP Based Benefits For Employees

By Labour & Employment, Others No Comments

SEBI’s Employee Stock Ownership Plan – New ESOP Benefits For Employees

SEBI’s Issue of ESOP  Regulations in 2002 and SEBI’s Share Based Employee Benefit 2014 were effectively notified in 2002 and 2014 respectively.

It is to be noted that the Sweat Equity regulations had emphatically provided an elaborate efficient framework for the issuance of Sweat Equity shares by various listed companies.

new esop benefits for employees

On the other hand, the SBEB Regulations introduced the framework to regulate Employee Stock Option Scheme. This also led to the introduction of other share-based employee benefits for employees and the Employee Stock Purchase Scheme benefits.

With various recommendations and suggestions from the stakeholders, the SEBI constituted an Expert group to give recommendations in order to further streamline the provisions of these regulations.

The recommendations from the Expert Group made several emphatic and significant policy recommendations which included effectively combining both the regulations. These regulations combined were the Sweat equity regulations and the SBEB regulations.

This led SEBI to present the proposal to effectively merge and amend the Share Based Employee Benefits Regulations of 2014 and the Issue of Sweat Equity Regulations of 2002 into a single regulation. This single regulation came to be known as Share Based Employee Benefits and Sweat Equity Regulations of 2021.

The regulations that have been provided for regulation of all employee benefit schemes of the company and the sweat equity shares have been done to help employees to involve in dealing in shares, either directly or indirectly.

This has been emphatically done to effectively and significantly facilitate the smooth operation of such schemes by the employees and for their convenience. But this doesn’t mean that the regulations have been made less vigilant and stringent. In fact, the newer regulations have been promulgated keeping in mind to prevent any possible manipulation or any other matter connected with the Securities and Exchange Board of India.

sebi esop regulationsWhat Does The Law State?

It is to be noted that the provisions of these regulations will effectively apply to the employee stock purchase scheme, stock option scheme, stock appreciation rights, retirement benefits scheme, and many more. Moreover, the promulgated regulations shall effectively be applied to any company whose equity shares have been listed on a recognized stock exchange in India. It will be also applicable to companies that seek to effectively issue sweat equity shares or has a stipulated scheme for the direct or indirect benefit of employees.

The Employee Stock Ownership Plan Benefits

The changes had led the Securities and Exchange Board of India to significantly relax the minimum vesting period. This requirement was changed for the employee stock option plan in the event of the death of an employee of a company.

 as per various scrutinization and speculations, such regulations are effectively aimed at providing relief to the families of the deceased employees of the various listed companies. This has been done to provide assistance and benefits to the deceased employees’ families in times of the covid already has crippled the financial standing of many in India. As per the regulation, the recommended relaxation would effectively be available to all the employees who have deceased on or after April 01, 2020.

 to provide financial backing to various families in India, Sebi’s rules have effectively stated that there should be a minimum vesting period of at least one year. This has been done in accordance with employee stock options and stock appreciation rights. Also, as aforementioned, it also states that in the event of death of any employee in any listed company, the benefits of SAR or any other benefit that had been previously granted to the employee under a scheme will be vested in the legal heirs or nominees of the deceased employee.

employee stock ownership plan benefits Secondly, the newer SBEB Regulations will be effectively applied to all permanent employees of a company. Thus, the range of applicability has been widened. In the previous regulations, these employees also included employees of the holding company or the subsidiary of such a company that could have effectively been working in or outside of India.

Thus, it was a system where an employee that was in dual employment could have widely partaken in the share-based benefit scheme.

Thus, such a benefit could have been availed from either its subsidiary company or the holding company. However, in the recent amendments of the 2021 regulations, the scheme now only applies to employees who are exclusively working for a company.

Now the exclusive company here means that the employee could even be working exclusively for a group company of such company.

On the other hand, further amendment shows that independent directors will effectively not be eligible to participate under the equity-based benefit schemes. But several clarifications have been provided that non-executive directors would be effectively and significantly be eligible to participate in such schemes.

A series of other welcome changes that has been emphatically brought about by SEBI in its 2021 amendment law is that it has provided an increase in the time limit for appropriating inventory.

Under the recently amended regulations, if a company has effectively implemented a stock appreciation rights scheme that significantly involves purchasing shares from the market via trust, then the time limit has been increased from 1 financial year to 2 financial years.

employee stock option planThe benefit of the same is that this will significantly give companies sufficient time to identify employees. This identification of employees will include those employees to whom grants can be made while making the purchase of the shares of the company (via the trust) at an opportune time.

Thus, the short-term benefits of the amendment look quite promising but what the future holds is still a mystery.

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employee stock ownership plan benefits, share based employee benefits, advantages of esop to employees, esop to employees, esop benefits for employees

economic stimulus packages

India’s Economic Stimulus Packages: A Saving Grace For MSMEs or Lopsided Solution to a Larger Fiscal Problem?

By Economy, Labour & Employment, Others No Comments

India’s Economic Stimulus Packages: A saving grace for MSMEs

The COVID-19 pandemic has hurled some of the world’s most intrinsically strong economies into a financial abyss, and India is no exception to that. India’s economy was on its way south due to low investments, weak domestic demand, and falling exports before the onset of the pandemic. The pandemic exacerbated operational and financial constraints in terms of a decrease in working capital, unavailability of raw materials, and labor crunch due to mass migration. Evidently, MSMEs have faced a disproportionate impact of COVID-19 and the concomitant economic downturn.

With over 11 crore persons employed in the MSME sector, the Finance Ministry has, on numerous occasions, introduced a number of measures to detangle MSMEs from financial gridlocks during the crisis. In doing so, the government announced an economic stimulus package of Rs 20 lakh crore for reviving COVID afflicted MSME businesses.

Subsequently, the government revealed an array of initiatives for MSMEs, including Rs. 3 lakh crore worth of collateral-free automatic loans for businesses, Rs. 20,000 crore subordinated debt for stressed MSMEs, a Fund of Funds for equity infusion of Rs 50,000 crore followed by a revision in the MSME definition to widen the quantum of beneficiaries under the aforesaid government initiatives. Collectively, these supply-side measures are aimed at providing buoyancy to MSMEs and accelerating growth despite the current economic gloom.

At the surface, the quantum of economic packages aggregating to nearly Rs. 6 lakh crore are indicative of a fast-drying Indian treasury, however, some experts believe that the amount of money actually spent by the government could be far lower, at anywhere between Rs 16,500 crore to Rs 55,000 crore. This is because most measures are credit-focused or aimed at solving liquidity concerns of MSMEs and the NBFC sectors.

By promoting the financial institutions to lend more, none of these announcements actually involve the government spending a great deal in this financial year. However, with no end in sight to the pandemic, the resilience of financial institutions is likely to be tested over time and the numbers may vary greatly with the prolonged subsistence of the pandemic-induced lockdown.

The real requirement at this stage is to figure out the finest ways for MSMEs to stay afloat and paddle through the crisis with the least impact. A one-time economic reform can provide a preliminary push to MSMEs, but survival and growth are largely dependent on the individual borrower’s capacity to bounce back to normality. F

urther, the RBI-approved loan moratorium option for businesses provides temporary relief, however, interest on outstanding loan amounts continues to accrue during the moratorium period and further exacerbates the financial woes of distressed MSMEs in the long run.

The Brazilian government has announced part-payment of salaries of MSME employees, while Canada and New Zealand have offered wage subsidies. However, the Indian government has not announced any wage support or subsidy package to incentivize MSME employers to retain employees during this crisis although the government has directed businesses to continue paying wages in a timely manner without deductions.

Thus, it is evident that the recently introduced reforms overlook the woes of the workforce employed in the MSME sector and are not adequately addressed therein. While the recently introduced reforms do not directly provide wage support, the secondary beneficiaries of government measures are people employed in the MSME sector, who can be relatively at ease with the potential accelerated growth of MSMEs in the post-COVID era.

It is undisputed that GST and demonetization have tested the resilience of MSMEs in the last couple of years. Although the financial disruption induced by the COVID-19 pandemic is a larger threat, MSMEs are diversifying their product portfolio to paddle through the crisis and accelerate business growth.

Naturally, the collective effect of the measures introduced by the government to provide access to funding will enable numerous MSMEs to keep their heads above the water muddled with financial gridlocks on account of COVID-19. While the pièce de résistance of the Finance Ministry’s economic package was its push for micro, small and medium enterprises (MSMEs), its benefits may percolate into various interlaced industries and benefit the economy at large.


Tags: india economic stimulus, fiscal problem, fiscal stimulus, stimulus package india, global stimulus packages, economic stimulus packages, economic stimulus package india

prevention of sexual harassment

Re-Thinking Human Resources (HR) Post-COVID-19: Addressing Cybersecurity Risks and Prevention of Sexual Harassment (PoSH) Concerns During WFH

By Labour & Employment, Others No Comments

Cybersecurity Risks and Prevention of Sexual Harassment

The nationwide disruption led to one of the largest Work From Home (“WFH”) experiments in the world thereby making it the new “normal” amidst the pandemic. Since workplaces moved into people’s homes, an uncharted territory for companies to regulate their employees, the bigger question is what exactly constitutes these concerns?

Across the globe, this novel working style has been plagued with issues that largely remain unaddressed such as cybersecurity, work ethics, and sexual harassment at workplaces. This nebulous situation may impact companies in the long run and so organizations are required to make long-term adjustments to adapt working practices and culture until the COVID-19 dust settles. 

Cybersecurity Risks

With every institution shifting to digital space, companies have been steadily witnessing a rise in cyber-attacks, frauds, and crime that can seriously and negatively affect the already ailing business enterprise. With the lack of IT expertise and data security protocols, employees working from home are particularly vulnerable to phishing scams due to human errors and allow hackers easier access to the network’s traffic.

However, proprietary confidential data and information pertaining to businesses are being accessed from such unsecured laptops and desktops, thereby leading to increased exposure to phishing, email scams, and ransomware attacks by cybercriminals. Managers are in dire straits to reassess the legal, technical, and personal dimensions of the cyber-security threats to their data, and proactively evaluate loss prevention processes.

The combination of flawed technology and human errors makes WFH a cybersecurity concern. there is a need to develop good cyber-security habits to reduce associated risks amidst the mass digitization of businesses.

The present data protection regime namely, the Information Technology Act, 2000 and Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011, fail to protect the individual interest in today’s time thus making it imperative for businesses and employees to strengthen data security protocols and etiquettes.

Using personal email on the laptops/computers authorized by the organization can create data thefts and raise concerns. This is because emails from unknown sources may pose a threat to the data downloaded and transferred from these emails. Therefore, it is mandatory to use only the emails provided by the organization while handling any sensitive data. The workplace should make it mandatory for the employees to either use the systems provided by the organization or one that has been approved by the organization.

All these systems, then, must necessarily have a pre-installed and authentic anti-virus program (either at the cost of the organization or otherwise) to avoid any loss of data or third-party malware to access sensitive data. Thus, stakeholders involved must ensure highly secure working platforms for employees, create awareness of good security habits, conduct due diligence and be vigilant, so as to quick action to salvage any loss.

Preventing Sexual Harassment at Work (From Home)

It goes without saying that employees must adhere to the organization’s code of conduct and sexual harassment policies irrespective of the place of work. This raised a pertinent question – whether the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”) is applicable to harassment occurring through an online platform.

The legislation was enacted as a comprehensive one to provide a safe, secure and enabling environment, free from sexual harassment. Another question that arises is even if the harassment is recognized, are there any legal remedies available to the victims of sexual harassment online while the courts have partially shut down? 

Firstly, Section 2(o) of the Act defines “workplace” in an inclusive and non-exhaustive manner which under its sub-clause (vi) includes ‘a dwelling place or a house. Although, the spirit of the Act refers to the domestic servants and helpers who are employed in a dwelling place or a house when it means that the workplace includes a dwelling place or a house.

However, given the unprecedented situation, and on the application of the literal rule of interpretation, the meaning of workplace shall also encompass Work From Home for most job roles thereby broadening the definition of a workplace from the traditional ‘registered office’ to ‘any place visited by the employee arising out of or during the course of employment including their dwelling place or house. 

What accurately consists of sexual harassment online has been defined in section 2(n) of the Act, which is yet another non-exhaustive and inclusive clause defining “sexual harassment”, which deals with the expressed or implied unwelcome acts or behavior demanding or requesting sexual favors, making sexually colored remarks, showing pornography and any other unwelcome verbal or non-verbal conduct of sexual nature, respectively.

This was reiterated in the case of Jahid Ali vs.Union of India & Ors. in 2017, wherein the Delhi High Court considered sexually colored messages over the mobile phone, as sexual harassment of a woman under the POSH Act.  

Finally, how does one tackle the situation? Organizations must maintain the robustness of ethics and rigor on the PoSH agenda to ensure that the value system and execution of policies remain true to intent. Employees must be advised on where to draw the line between work and private life and establish their own liability as employers. The problem arises when the woman has to explain the situation to HR, and virtually it becomes a minefield for them to either risk their employment in an already sensitive environment where people are laid off from their jobs every day.

Government intervention is essential in strengthening the POSH Act when sexual harassment has been pushed down in priorities of companies, who are more focused on rebuilding themselves in a crumbling economy. In the view above, the employer and employee are two sides of the same coin who must sail together during this difficult storm of Covid-19.


Tags: human resources, prevention of sexual harassment, cybersecurity risks, prevention of harassment at workplace, human resource management

ombudsman concept

Will The Ombudsman Concept by The SEBI Adversely Affect The Entities?

By Labour & Employment No Comments

ombudsman Concept by The SEBI

One of the most perplexing issues that SEBI faces is investor complaints. Verifying facts, solving legal issues, and finally reaching a conclusion may be extremely costly for SEBI if the conventional method is followed.

In terms of recognizing the virtue of time, the delay might be far worse. Sebi has also been criticized for effectively performing the function of a postman by just delivering the complaint to the Company without taking any further action. Of course, there are certain criticisms that are baseless. There may be several complaints filed against the company in which SEBI has no part.

Nonetheless, the current circumstances necessitated a new strategy, and Sebi has advised a whole new strategy in the form of the proposed “Ombudsman Regulations.” The notion of an ombudsman is not a novel one; it already exists in the banking industry. Based on all of the recommendations, SEBI suggested this regulation apply to the operation of the capital market sector.

It is, in essence, and even legally, a time-limited arbitration procedure. Many of the procedures, which are usually time-consuming, are and have been eliminated entirely. There will be just one and the last level of appeal, and it will be addressed to SEBI. No legal representation is permitted, and the major importance of this issue is emphasized, with severe consequences.

Given the core of the Act, the Ombudsman does not require any fancy credentials, and anybody with specific knowledge and competence in subjects such as “legal, finance, economics,” and so on would be considered competent for the post.

Apart from the usual disqualifications, one that bears special mention is that he should not have served as a full-time director of an intermediary or a publicly listed company. Surprisingly, his job is entirely at the discretion of the SEBI, and he may be dismissed and dismissed with just a day’s notice.

The proposed regulation included benefits as well as drawbacks for investors, some of which are outlined below. A residuary category of complaints includes any complaint made against an intermediary or a publicly listed firm. As a consequence of this chance, anybody with a compelling claim against a publicly listed company, whether an investor or not, or an intermediary, can apply to the Ombudsman for assistance.

Of course, no arbitrary limits should be placed, since this may lead to the rejection of real concerns for technical reasons. However, such wide breadth may not be required, resulting in some unusual and trivial complaints being brought and addressed before the Ombudsman.

However, when looking at the other half of the page, the broad definition supplied offers some advantages. Certain technological roadblocks are also removed by not requiring the complainant to be an investor (or even qualified in any other way). Additionally, avoiding the development of particular categories aids in preventing some attempts by corporations to dodge certain regulations. Such as the complaints claiming that they do not fit into any of the categories.

Therefore, the “Securities and Exchange Board of India (Sebi)” has now dropped its plan and scrapped the proposal to create an ombudsman to handle the investor complaints more quickly and feasibly. According to the regulator, the present mechanism for stock exchanges handling investor complaints looks to be pretty solid and to be operational, and functioning efficiently.

Investors are increasingly taking their complaints about all publicly listed businesses to specialized stock exchanges, which are also regarded as first-line regulators. After that, the bourses are allowed to take up the cases with the concerning corporations. Sebi is only notified of the complaints that have not been efficiently handled.

In the most perfect system, every stock market participant would have its own ombudsman.”

Thus, the decision to reject the idea was taken in the best interests of the whole investment community. Since SEBI was also having problems finding a qualified candidate for the position of ombudsman. However, the idea was met with opposition from the start, and hence SEBI decided to withdraw it.


Tags: the ombudsman concept, affect of ombudsman on entities, ombudsman concept, affect of ombudsman, ombudsman concept by the sebi

land acquisition in india

Impact of The Judgment on Land Acquisition Proceedings in India

By Labour & Employment, Media Coverage No Comments

Impact of The Judgment on Land Acquisition in India

It is widely perceived that the Indian state holds the right of “eminent domain,” which refers to the sovereign’s capacity to acquire private immovable property for public use, provided that the nature of the public purpose can be established beyond a reasonable doubt, and that the owner of such property receives fair and equitable compensation.

The most essential component of land acquisition jurisprudence in India is the payment of fair compensation to the landowners in exchange for the state’s expropriation of their land for public use.

In its March 6, 2020, verdict in the Indore Development Authority v Manoharlal & Ors., a five-judge constitution bench of the Apex Court decided that land acquisition proceedings would not expire if the state has unconditionally provided appropriate compensation.

The bench also clarified that if a person was offered compensation but refused to accept it, he cannot claim lapse of acquisition due to non-performance of payment or non-deposit of compensation.

Furthermore, once the state makes an award and publishes a memorandum, the landowner loses title to the property, and Section 24(2) of the new land acquisition legislation prohibits landowners from reopening settled cases, reviving time-barred claims, or challenging the legitimacy of ended processes.

The Court stated – “Overruling all precedents and resolving the ambiguity relating to the interpretation of Section 24(2) of the New LA Act, the bench held that the word ‘or’ used in Section 24(2), should be read as ‘nor’ or as ‘and’. Since Section 24(2) prescribes two negative conditions, even if one condition is satisfied, there is no lapse in acquisition proceedings.

Therefore, only if both the conditions mentioned under Section 24(2) have not been fulfilled before the New LA Act came into force, would the land acquisition proceedings lapse. The bench observed that the alternative interpretation would place an undue burden on the state in land acquisition proceedings.”

The bench responded by saying that under S. 24(2), the phrase “paid” does not include a court-ordered reparation deposit. If a person has been granted compensation under the Old LA Act, he cannot claim that the acquisition has lapsed owing to non-payment or non-deposit of compensation in court under Section 24(2).

The bench went on to say that if the state has issued the compensation under the Old LA Act, it has fulfilled its duty to pay. 

Thereby, it was held that S. 24(2) of the New Act does not allow landholders to reopen settled cases, revive time-barred claims, or challenge the legality of concluded proceedings. S. 24(2) applies only to pending proceedings where the award was made at least five years prior to the effective date of the 2013 Act.

Impact of the judgment on land acquisition

The Supreme Court’s ruling is anticipated to pave the way for the prompt settlement of issues arising out of current purchase processes under the Old LA Act.

One may fairly anticipate this to open the way for fast physical and associated infrastructure development operations in the post-COVID-19 period, which had previously been blocked or put on hold owing to a variety of litigations concerning outstanding acquisition actions.

More land parcels would be liberated from the clutches of long-standing litigation and given access to the purchasing state or authority for use in significant infrastructure development and construction operations, which would definitely enhance the government’s endeavors to fulfill its goals under the “Housing for All by 2022” program and hasten urban growth.


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emi moratorium

EMI Moratorium: Analysing Borrower’s Creditworthiness Amidst The Pandemic

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EMI Moratorium: Analysing Borrower’s Creditworthiness

Financial institutions are focused on risk now, more than ever before. The virus-induced lockdown has raised “Liquidity” and Non-Performing Assets (“NPA”) issues popularizing these buzzwords in financial circles and beyond.

Anticipating a domino effect on loan defaults amongst small to medium-sized businesses, the Finance Ministry in conjoined efforts with Regulators and the Reserve Bank of India (RBI), introduced numerous measures for the maintenance of equilibrium between the market forces of demand and supply during the pandemic.

With the widespread prevalence of the COVID-19 pandemic, they are increasingly recognizing that the rebuilding phase offers a unique opportunity to encourage action on the agenda of survival until the COVID-19 dust settles.

The acute phase of COVID-19 has drawn central banks’ attention from a crisis that was earlier restricted to some states and regions, to a global economic crisis riddled with challenges. The nature of the crisis has revealed basic vulnerabilities around the world, most importantly those surrounding individual borrowers.

The Finance Ministry directed Banks to roll out a loan resolution framework with the Loan Moratorium period ending on August 31st and the festive season around the corner. In doing that the Supreme Court directed that while Banks are free to restructure loans, they cannot penalize individual borrowers availing moratorium benefits.

The apex court held that charging interest on deferred EMI payments under the moratorium scheme during the COVID-19 pandemic would amount to paying interest on interest which is against “the basic canons of finance” and unfair to those who repaid loans as per schedule.

RBI’s move to restructure personal loans accord this benefit to consumer credit, education loans, loans for creation, or housing loans pursuant to a central bank notification.

Specifically, the relief may include “rescheduling of payments, conversion of any interest accrued, or to be accrued, into another credit facility, or, granting of a moratorium, based on an assessment of income streams of the borrower, subject to a maximum of two years”; however the exact contours of the resolution plan have not been clearly laid out and remain undecided.

The primary objective of this move at help borrowers on the pretext of mass unemployment, pay cuts, and lay-offs in light of the world’s strictest lockdown, thereby paralyzing economic activity. So a 2-year moratorium that RBI has now permitted under such restructuring proves to be a blessing in disguise for people experiencing cash crunch during the pandemic.

Clearly, it will boost households facing a cash crunch — especially those who lost their jobs or small businesses that are on the verge of a shutdown. RBI has moved consistently and quickly since the start of the pandemic to calm markets, to provide liquidity, and, now, these steps should go some distance in giving relief to the distressed liquidity-starved household.

However, each household should be wary of using this facility. At the outset, a loan moratorium was aimed at helping those in distress and was not meant to be used as an opportunity for the pre-existing defaulters of loan payments. At the other end of the spectrum, the moratorium extension is likely to provide a negative credit outlook for financial intermediaries in the shadow financing industry like Housing Finance Companies and Non-Banking Financial Companies.

Invariably, the deferment of EMIs will have an adverse impact on the cash flows of these financial institutions and test their resilience during the depressionary forces emanating from the COVID-19 pandemic.

Despite the slew of measures announced by the RBI and government to alleviate liquidity woes of financial institutions, these measures may have less impact in the short to medium term, but the operative word being “defer” of loan installments, and not a complete waiver or discount thereof should be of prime importance in the personal finance industry and be availed only if absolutely required.

A growing number of central banks and banking supervisors are starting to work together to progress a global approach and agenda. In doing so, the central banks need to develop a clear strategy for the way forward. A monetary policy needs to be forward-looking.

Given the slowdown in the economy and that the transmission of rate cuts takes time, there is a need for further monetary policy easing. This will also be helpful as uncertainty remains over COVID-19 having a deflationary or inflationary impact on the Indian economy in the medium run.

While the temptation to adopt aggressive measures may be high, crossing the traditional boundaries between fiscal and monetary policies, but are feasible for central banks in advanced economies with high credibility stemming from a long track record of stability-oriented policies. Thus this strong medicine should only be taken with extreme care.


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Navigate The Sea of Job Loss With Confidence

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Job Loss With Confidence

Mass layoffs are an impending consequence of this pandemic, which is likely to further rupture our already ailing economy. In response to the global and national economy taking a hit and financial difficulties brought on by the lockdowns necessitated by the need to curb the spread of the pandemic, employers have altered traditional working methods to limit contact between employees.

They are embracing remote working methodologies, bonus/salary cuts while mass layoffs have become the order of the day. Even as we are oblivious to the depth of the virus’ impact on the economy, one thing is abundantly clear — the workplace will never be the same again.

With lockdown 2.0 in effect, the cash reserves will further plummet, creating additional strain on employers and will subsequently aggravate the problem of layoffs in a company’s pursuit to save depleting resources from the further drain.

This is especially true for organizations that cannot function remotely owing to the nature of their business. In such a scenario, one can only imagine the plight of white-collar workers, the condition of blue-collar employees, contractual laborers, and those belonging to the unorganized sector.

 Anticipating joblessness brought on by the pandemic, the Government on March 20 issued an advisory to all private and public companies, dissuading them from wage deduction and employment termination. It further stated that the salaries of workers shall not be deducted even if they were compelled to stay at home due to the pandemic.

On March 29, the Government invoked the Disaster Management Act, 2005, and issued a notification under Section 10(2)(1) to State Governments and Union Territories requiring all industrial and commercial establishments to refrain from wage deduction, retrenchments and to ensure timely payment of wages.

However, mere announcements in the absence of Government Ordinances for payment of wages to employees are not legally binding in nature and lack effectiveness. Like in the case of Maharashtra, the notification is advisory in nature and should not be misconstrued as absolute or legally enforceable, by the employees.

The rationale behind the order was to provide some financial respite to employees during a crisis. Unfortunately, State Governments have not issued any legally-binding Ordinances, therefore giving employers the liberty to lay their employees off.

 In the interim, employers should take into account alternatives to outright termination — such as reduced schedules, furloughs, or salary cuts. To further mitigate the stress emanating from job losses, there is severance pay, which serves as a temporary cushion for employees while they look for another job.

Severance packages are taxable in the hands of the employee as profit in lieu of salary under Section 17(3) of the Income Tax Act. However, it may be exempt by virtue of Section 10(10C) of the said Act if compensation is received under a Voluntary Retirement Scheme, subject to certain conditions.

Unfortunately, there are no special relief packages for employees laid off on the pretext of the pandemic, though partial relief afforded under Section 89 may be claimed if s/he is liable to pay tax in respect of compensation received on termination of employment. So, what should you do if you get laid off by your firm?

Consult your Human Resource department: This could be done even before you receive a letter of termination, just to know about the company’s future plans. If and when you receive a termination letter, you must consult the HR and find out whether it is a temporary or permanent measure.

Get a written acknowledgment: Irrespective of the nature of your notice, it is your duty to secure a written acknowledgment of the same. It is advisable to ask for the reason for such termination in the letter or e-mail itself.

 Consult your lawyer: You may approach your lawyer with the employment contract and letter of termination so that you are apprised of the potential remedies available to you. If in the future, the Government plans to give any relief package or implement a process of re-employing all those laid-off because of the lockdown, all the documentations will come in handy.

 Look for opportunities: In these distressing times, many organizations are resorting to collaborative practices by hiring laid-off employees so that the talent pool is not lost. This is termed as “People + Work Connect”, which is an employer-to-employer partnership. Keep yourself abreast of changes in the economy, specifically industries that directly impact your nature of work.

Know your situation: The best way to start planning for the future is to see your present situation — as is. Make a note of your basic expenses and chalk out a plan to be financially independent in tough times.

 Crashing economies, plummeting sales figures, coupled with the uncertainty of business redemption, are prompting many companies to terminate employment so as to save themselves from running out of business.

People scarred by unemployment are asking themselves, “What now?” Job loss can be a disturbing and difficult time, psychologically and financially, particularly with so many unknowns in our world right now.

But professionals terminated by their employers must keep abreast of the key developments introduced by the Government and handle the forthcoming chapter in their career with confidence. The key to navigating the rough waters of COVID-19 is to remember that this is temporary and we are in this together.


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