The Hindu Business Line : `Employee' is a viable legal concept

WHEN a worker accepts VRS or voluntary retirement scheme, does the relationship of workman-and-management come to an end? With that question in the margin, the latest issue of Consolidated Commercial Digest summarises the Philips Employees Union case.

On behalf of the employees who had accepted VRS under a memorandum of settlement, a petition was filed by the recognised trade union, contending shortfall in payment of VRS amounts and that the employees were paid less commuted amounts and monthly pensions than what was promised in the settlement.

If that seems only natural, what came as a surprise was the argument of the Conciliation Officer - that after having accepted VRS, the relationship between the employee and the management had come to an end. However, to cheer the hearts of workers, the Bombay High Court upheld the employees' claim of shortfall in payment.

Another case of interest was of TNEB vs S. Sivamani. It was about an employee of the Electricity Board who had committed "a misconduct of neglect of work". After inquiry, "a punishment of stoppage of one increment without cumulative effect was imposed on the employee". Also, the Board proposed to recover from him the loss sustained by it. The employee went to the Madras High Court complaining of `double jeopardy'.

(The phrase refers to a procedural defence that forbids a defendant from being tried a second time for a crime, after having already been tried for the same crime, as explained in Wikipedia.)

Thus, the employee challenged the `recovery' saying that he had already suffered a punishment of stoppage of increment after the disciplinary action. He also complained that he had not been issued any show-cause notice before the recovery proceeding began. After hearing both sides, the High Court had something important to say: that when a disciplinary action was initiated and the charges were held proved, the management was empowered to recover its loss irrespective of the punishment imposed for the proven misconduct.

Therefore, "recovery proceedings could not be construed as double jeopardy". Some saving, however, for the employee was that the court accepted the need for due notice before recovery started. It said that the Board should serve a notice to the employee before deciding on the quantum of recovery.

Employment-related litigation is an evergreen area. For instance, on August 31, the apex court had to decide in the State Bank of India case about a 1986 incident where an employee had received money from an account-holder for depositing in his savings bank account; and a fictitious credit entry was made in the passbook of the account-holder, Queerly, one of the arguments by the employee was that the account-holder had later withdrawn his grievance, and that there was no loss to the bank.

Pooh-poohing the same as lacking in substance, the court had to advise, "A bank officer is required to exercise higher standards of honesty and integrity. He deals with money of the depositors and the customers. Every officer/ employee of the bank is required to take all possible steps to protect the interests of the bank and to discharge his duties with utmost integrity, honesty, devotion and diligence and to do nothing which is unbecoming of a bank officer."

Essential advice, because, as E. F. Schumacher says, while the ideal of the employer is to have production without employees, the ideal of the employee is to have income without work.

For the research-minded, there is Guy Davidov's recent paper titled, `The Reports of My Death are Greatly Exaggerated: `Employee' as a Viable (Though Overly-Used) Legal Concept' on www.ssrn.com.

"The basic premise on which the concept of employee is based - that some workers (but not others) are in a position of unequal bargaining power - is probably true, but too vague to be used as a yardstick," writes the author, Faculty of Law, University of Haifa, Israel. "The scope of the concept should be defined based on more specific (and less controversial) characteristics, such as democratic deficits and dependency," says Davidov.

But that may need some working to do!

E&OE@TheHindu.co.in

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page