Employment Law

Should Reinstatement with Back Wages be an Automatic Right?

[By Rangin Halder] The author is a student of West Bengal National University of Juridical Sciences.   INTRODUCTION  One of the fundamental principles governing labour jurisprudence has been that of social justice, which aims at creating a fair and equitable working environment for workers in the country. In this regard, the Labour Courts and Industrial Tribunals have been given the discretion to use principles of “justice, equity and good conscience” to protect the interests of the workers in the market. Keeping this principle as the fundamental bedrock of the arguments furthered, this paper normatively proposes that reinstatement with back wages should be made an automatic right.  DEFINING THE SCOPE OF THE PAPER.   The order of reinstatement of services is usually perceived as the common rule in cases of wrongful dismissals. It is, however, pertinent here to flesh out the constituting elements of wrongful dismissals. For the purpose of this paper, “wrongful dismissal” is to be construed as when the dismissal is either directly contravening a statute, is tainted with malice and illegality or is violating the principles of natural justice and is used as a tool for the victimisation of the worker. It is, however, necessary to point out that such a term will not encompass situations where the underlying cause has been upheld and the court adjudicates that only the punishment meted out is unduly harsh. This has two significance, the first one being that only after determining that it is indeed a wrongful dismissal the automatic right of reinstatement with back wages will accrue and secondly, given that the paper primarily furthers a principled reasoning for such a right to exist, it will not be logically consistent to argue for this in cases where the employee or the worker has been found guilty of the charges of wrongdoings and the only difference has arisen pertaining to the degree of punishment meted.   WHY REINSTATEMENT WITH BACK WAGES SHOULD BE CONSIDERED AN AUTOMATIC RIGHT  The right of reinstatement brings two remedies: first, that the dismissed worker is reinstated back to his/her previously held position and second, they are reinstated with wages and benefits from the time of dismissal.  The fundamental basis for the existence of this right resides in the idea of “equity”. Essentially, it was to bring the employee back to the same position as if he had never been dismissed. This is, in essence, aiming to remedy the harm that was caused directly as a result of the wrongful dismissal. It is as if the employee had never been dismissed. Argued that reinstating the worker with back wages seems like the only logical choice.  NECESSITY OF AN AUTOMATIC RIGHT  The most important question here is, however, not the need for reinstatement with back wages. It is about asking why this remedy needs to be given the status of an automatic right. The primary reason for this is the “burden of proof”.  Many courts have held that after the charge of wrongful dismissal has been upheld, it is upon the worker to prove that he/she had attempted to get work but could not get gainfully employed. Without such proof, the worker is not entitled to receive back wages. The author believes that this additional burden being imposed on the worker after his/her dismissal has been proved to be wrongful and is, in essence, proving a premium to the employer. It is thus going against the principle of fairness.  But even taking in practical considerations and realities of the Justice system in India, it adds an additional burden on the worker when he/she is already dealing with undue long delays in court hearings, legal fees and an additional burden of unemployment. It is also much easier to prove the existence of employment than to prove a period of unemployment or no gainful employment.  The elevation of reinstatement with back wages as an automatic right makes it an inherent right of the worker, similar to the one which exists with copyright holders. The burden to prove that such a right should not accrue, thus, will naturally fall on the employer.   It is, however, necessary to clarify that the author agrees with the Supreme Court in claiming that before the accrual of the right of back wages, a declaration of a lack of gainful employment post-dismissal should be given by the employee.  REBUTTING COMMON ARGUMENTS AGAINST SUCH A RIGHT  Argument 1: The duration of the work   A common argument against the right of reinstatement with back wages is that such a remedy should be accorded subjectively based on the period of tenure of the dismissed employee and that back wages should only accorded to those workers who had been permanent or had been working for a long time. The flaw, however, is that this right exists independent of the duration of the employee’s tenure. The right is only remedying a wrongful dismissal, which, if it did not happen, the worker would have still presumably been employed. Thus, the right to reinstatement with back wages should not selectively accrue to employees based on their tenure as the nature of wrong suffered is similar for all dismissed employees independent of their tenure.  Argument 2: No work, No Pay.  Another common principle used to deny wages is “No work- No Pay”. It is essentially the idea that since the worker did not work for the duration of his dismissal, he is not entitled to receive wages for the same. However, such reasoning is giving an unfair premium to the employer when his act of dismissal is deemed illegal and the direct consequences of which have been unfairly borne by the worker. Also, it is pertinent to note that the idea of “no work, no pay” only kicks in when the worker chooses not to work and thereby forgoes his wages. However, in the present case the employee is forced to leave as a direct consequence of an illegal dismissal and not, in fact, choosing not to work.  Argument 3: The Need for Judicial Discretion 

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Deregulatory Trust: Unraveling Corporate Autonomy in Whistleblower Policies

[By Neeraj Kumar] The author is a student of WBNUJS, Kolkata.   Introduction  The idea of blowing the whistle has its meaning on a spectrum, ranging from  hero to snitch to martyr to traitor. Assuming, it is noble to attempt save lives and livelihood, the illegal consequences must be eliminated. However, this comes with a need to balance interests within employment law. The same has always been stringent regarding maintenance of confidentiality of information obtained in the course of employment through duty of fidelity or express obligation in the employment contract. Over time, this obligation has developed a defense of public interest in jurisdictions such as United Kingdom (‘UK’), commonly referred to as ‘protected disclosures’ so as to create the required balance.  Whistleblowing is defined as the reporting by employees or former employees of illegal, irregular, dangerous or unethical practices by employers. The first Indian but ineffective attempt of the legislature narrowly defines it as any person to report an act of corruption, willful misuse of power or discretion, or a criminal offence by a public servant. Despite the already limited scope of this definition in the Whistleblower Protection Act, 2014 (‘the Act’), the same could not come into force due to national security concerns like sensitive military data leaks, and legislature sought to amend and expand the exceptions.   The history of whistleblower regulations and the initial efforts by the US prompted a remark that don’t put your head up, because it will get blown off. Foreign jurisdictions have sought to avoid this ethical fatality by navigating technicalities to achieve their goals. However, India lags behind despite several setbacks. One infamous instance is the murder of whistleblower Satyendra Dubey in the NHAI scam case. This murder, among others, brought the foreign debates of anonymity and protection from retaliation.   In light of this, this article analyses the current regime of whistleblower protection in India. The article then attempts to further the present regime in the Private Sector followed by a succinct discussion on plausibility of labour law to further and streamline the protection or employer retaliation.   Inroads in the corporate sector   After tacit public outcry, in conjunction with that of the Supreme Court ‘(SC)’ in the Satyendra Dubey case and several committees, the government established the Central Vigilance Commission ‘(CVC)’ to act upon complaints. This body exhibited numerous imperfections in its core structure and functioning, including an extremely narrow jurisdiction limited to PSUs and Central officials. However, these attempts failed to safeguard and thus promote whistleblowing, primarily due to opposition by large corporates in India.   Nevertheless, several attempts have been made to expand the scope of Whistleblower regime, i.e., the CVC, Companies Act, 2013 and the SEBI LODR, 2015. However, the scope of these stretches only to listed companies.   Even with regard to listed companies, this practice is mostly self-driven and has given leeway to companies to exclude vital features of any whistleblower policy. For instance, organizations like CPRI, Bangalore only allow permanent employees to raise complaints; thus, excluding most of their workforce.   Inclusion of Private Sector   It is argued that the private sector be included in whistleblower protection regime since unethical practices are beyond the listing agreement or public sector. As early as in 2007, the ARC recommendations boldly proposed inclusion of private sector in whistleblower protection regime. One bold move, borne out of lack of action to preclude banking related scams, was the issuance of a circular by RBI titled “Protected Disclosures Scheme for private and foreign banks operating India”. The same was formulated in effect of CVC as the authority to receive complaints. This was the first instance of coverage of any private sector organization even before the SEBI LODR brought listed companies within its ambit.  What then primarily guides the whistleblower regime in Indian corporate sector is LODR, 2015 read with Section 177 of the Companies Act. Initially, it was suggestive in nature, however, an amendment later on mandated the vigil mechanism to be set up by all the listed companies. The clause requires the mechanism to be effective but there exists no streamlined authority/body to ensure the same, thus allowing the companies to shape their whistleblower policies as it suits their interests. However, there is nothing to keep checks and balances on these internal policies except a requirement to report details of any disclosures in annual corporate governance report of the company.   Even internationally, G20 Anti-Corruption action plan, while citing the 2009 OECD recommendations, calls for ensuring protections in private sector. In its analysis of protections in G20 countries, it highlights the different paths taken for same end goal. For instance, as specified in the action plan, Canada does not make any distinction at all, covering both the sectors.1 Additionally, Germany has specifically used its labour law regime to further whistleblowing and crafted good faith as a protection from dismissal. With this, let us delve into interaction of Indian Labour law with the whistleblowing and retaliation associated with it.    Indian Labour Law: Navigating the Limits  The inadequacy evident in the preceding sections, prompts considerating whether the labor law regime provides any form of protection—albeit limited to livelihood if not life.  The current regime does not inherently safeguard whistleblowers. However, at its core, labor law is grounded in the protection of workers against unfair treatment. Otto Kahn Freund articulates that the primary goal of labor law is to rectify the inherent inequality of bargaining power within the employment relationship. This power imbalance permits employers to dictate the terms of employment contracts, offering jobs on a “take it or leave it” basis. Such an imbalance is a contractual flaw that overlooks the socio-economic realities of societal relations. Hugh Collins further asserts that acknowledging wealth inequalities necessitates sociological intervention in the traditional freedom of contract.  With this objective in mind, labor law legislations globally aim to shield workers from ‘victimization’ and ‘unfair dismissal.’ In India, the validity of dismissal is explored under Schedule V of the Industrial Disputes Act, 1947 (ID Act). Clauses 5(a) and (b) of the

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