November 2023 National News
Union Of India v. K. Suri Babu
Civil Appeal No.1323 of 2010
Facts:
K. Suri Babu, the respondent, was hired as a helper at the Nuclear Fuel Complex-Hyderabad (NFC), which is part of the Indian government’s Department of Atomic Energy. He was accused of providing a forged Class VI certificate to obtain an appointment. Disciplinary action was taken against him under the Central Civil Services (Classification, Control, and Appeal) Rules of 1965 (CCA Rules). He contested the procedures before the Central Administrative Tribunal (CAT), claiming that he was bound by the Standing Orders certified under the Industrial Employment (Standing Orders) Act of 1946 ( hereinafter “1946 Act”), not the CCA Rules. The CAT dismissed his application, stating that he was bound by the CCA Rules under his appointment order and a department circular. On appeal to the High Court, it quashed the proceedings. The present appeal was filed by the UOI to challenge the High Court order.
Issues:
The main issue the court considered was:
Can Standing Orders or the CCA Rules be used to initiate disciplinary proceedings against the respondent?
Arguments of the parties:
1. Appellant:
According to the respondent’s appointment order and the Department’s circular, the appellant claimed that the respondent was subject to the CCA Rules. The appellant further contended that the respondent was unable to take advantage of the benefits and refute the validity of the Rules in the disciplinary proceedings because the CCA Rules granted employees a variety of benefits, including pensions and gratuities. The appellant additionally contended that because Section 13B of the 1946 Act barred the Act’s application to NFC workers, the Standing Orders did not apply to the respondent.
2. Respondent:
The respondent contended that the 1946 Act’s definition of a workman applied to him and that the Standing Orders, which included disciplinary procedures clauses, applied to him. He maintained that the 1946 Act’s protection could not be taken away from him only because he was receiving other military benefits under the CCA Rules, and that the Standing Orders were unique rules that took precedence over the ordinary CCA Rules. Additionally, he said that the appointment order could not set terms of service that were in conflict with the Standing Orders because the Standing Orders were statutory and required of the employer. He also argued that Section 13B of the 1946 Act required the relevant government to notify in order to exclude the Act’s applicability, and that in his case, there was no communication of this kind.
Reasoning of the court:
The respondent was found to be subject to the Standing Orders, which were deemed special rules, while the CCA Rules were deemed general rules and did not apply to him. The court noted that the 1946 Act, a worker-friendly piece of legislation, had established the Standing Orders in order to give industrial workers a collective voice, define their terms of employment, and have quasi-judicial authorities review those terms. The court further noted that the employer had not changed or revoked the Standing Orders in accordance with the 1946 Act’s authorised procedure, despite the fact that they addressed a wide variety of issues pertaining to the workers. The court further noted that in order to exclude the Act's applicability, Section 13B of the 1946 Act required a notification from the government, and in the case of the NFC, there was no such communication. The court cited its precedents set in the Oil and Natural Gas Corporation Ltd. v. Petroleum Coal Labour Union & Ors. (2015) 6 SCC 494 in which it held that any modification to the service conditions of a temporary workmen could only be done as per Section 10 of the 1946 Act. Relying on U.P. State Electricity Board and Another v. Hari Shankar Jain and Others, AIR 1979 SC 65, the court held that ‘Standing Orders’ being in the nature of special Rules will override any other general Rule including CCA Rules, 1965. ‘Standing Order’ will in any case prevail until modified under Section 10 of the 1946 Act, which has not been done in this case.
Conclusion:
The court upheld the High Court’s order and dismissed the appeal.
Harish B T v. Life Insurance Corporation Of India
Writ Petition No. 31445 of 2015 (Karnataka High Court)
Facts:
The petitioner is the son of Sri B.M. Thippeswamy, who was fired from his job by the respondent Life Insurance Corporation of India (LIC) on August 12, 1990. The petitioner’s father filed a challenge to his dismissal with the Central Government Industrial Tribunal-cum-Labour Court in Bangalore (the Tribunal) but died while the proceedings were still pending on October 23, 1999. On October 1, 2007, the Tribunal set aside the dismissal judgement and awarded full back wages, continuity of service, and other benefits to the deceased employee’s legal representatives. The LIC contested the Tribunal’s verdict in the High Court, which modified it by decreasing the back wages to 50% while upholding the rest. The LIC then appealed to the Division Bench of the High Court, which denied the case on September 18, 2012. The petitioner applied for an appointment on compassionate grounds on July 12, 2013, however, it was denied by the LIC due to a delay. The petitioner filed a writ petition, appealing the rejection ruling.
Issues:
The main issue the court considered is:
Whether the petitioner’s application for appointment on compassionate grounds can be denied due to delay, given that his father’s dismissal was litigated until 2012.
Arguments of the parties:
1. Petitioner:
The petitioner stated that he was entitled to be considered for appointment on compassionate grounds because the LIC had established a policy for this purpose. He stated that he could not have filed a claim earlier since the LIC refused to admit that his father’s termination was unconstitutional and continued to litigate the case until 2012. He stated that his application was filed within one year of the Division Bench’s dismissal of the appeal, which was under the policy of LIC.
2. Respondent:
The respondent contended that there was no rationale for hearing the petitioner’s claim because it was filed 14 years after his father’s death. The respondent contended that the Tribunal’s award was issued in 2007, and the petitioner did not file a claim until 2013. The respondent also claimed that the petitioner’s family was not in financial trouble because they had received the deceased employee’s back wages and other benefits.
Reasoning of the Court:
The court held that the petitioner’s claim could not be dismissed based on delay, because the ability to seek appointment on compassionate grounds existed for the first time only when the case over his father’s unlawful firing was ultimately resolved in 2012. The court noted that the petitioner filed an application within one year of the dismissal of the writ appeal, which was consistent with the LIC’s policy specifically in conformity with the time limit outlined in the Recruitment (of Class III and Class IV staff) Instructions, 1993. The court also ruled that the age limit for appointment on compassionate grounds should be reduced in favour of the petitioner, noting that the LIC had been pursuing the action since 2007.
Conclusion:
The court allowed the writ petition.
Ashok Bhikanrao Deshmukh v. State Of Maharashtra And Ors.
2023 SCC OnLine Bom 2603
Facts:
After being employed under the Employment Guarantee Scheme (EGS) for limited durations from 1985 to 1986, the petitioner was orally terminated from the position of Mustering Assistant. The Labour Court granted him reinstatement. The State challenged this grant in the High Court, which quashed the order of the Labour Court. It also directed the state to consider the case of the petitioner based on the Government Resolution passed on 01.12.1995. According to the resolution, only those EGS workers who were on continuous service as of 31.05.1993 would be given absorption in the service.
Issues:
1. Is the petitioner entitled to absorption in the service under the Government Resolution passed on 01.12.1995?
2. Is the petitioner entitled to compensation for his service on the EGS for litigating in the past 37 years?
Arguments of the parties:
1. Petitioner:
The petitioner claimed that he was entitled to absorption in the service on EGS, as he was in continuous service from 1985 to 1986. He also argued that some of his juniors were also given absorption in the service who were not employed on the date of cut-off, i.e. 31.05.1993.
2. Respondent:
The state argued that the petitioner was a temporary worker on EGS for limited durations between 1985 and 1986. He was not in continuous service on the cut-off date, i.e. 31.05.1993. So, he has no right to continued employment or regularisation. The argument of the petitioner that some juniors were given absorption in service even though they were not in continued service on the cut-off date is also flawed as they were given reinstatement based on the court orders and those orders were not set aside in the appeals.
Reasoning of the Court:
The High Court of Bombay, relying on the precedents set out by this court in the cases of Chief Executive Officer, Zilla Parishad, Ahmednagar v. Daulat Narsingrao Deshmukh and another, 2001 and Arvind G. Chaudhari and another v. Dhanraj Nathu Patil and another, 2008, held that EGS workers or workers working under the Maharashtra Employment Guarantee Act, 1977 are neither governed by the provisions of MRTU and PULP Act, 1971 nor by the Industrial Disputes Act, 1947 and the Labour Court and Industrial Courts have no jurisdiction in granting relief to regularize the service. The court mentioned that workers working on EGS do not have any right to continued employment and are not entitled to raise claims under the above enactments seeking regularisation or permanency when they are discontinued from the service from the EGS. It also held that as the petitioner was not in continuous service as on 31.05.1993 he is not entitled to absorption in the service according to the Government Resolution dated 01.12.1995. Therefore, his plea for regularisation of his service falls short.
On the question of compensation, the court granted a compensation of 2 lakh rupees (1 lakh per year of service) based on the Supreme Court precedents and on the fact that the petitioner has been litigating for the past 37 years.
Conclusion:
The court while dismissing the petition awarded the petitioner a compensation of 2 lakh rupees.
M/S Nicholas Piramal India Ltd. And Ors v Presiding Officer Labour Court Lko. and Ors
WRIT-C No. 1004529/2007 (Allahabad High Court)
Facts:
The petitioner, a pharmaceutical corporation, dismissed the respondent, a medical representative, for providing false call reports of visiting Doctors and Chemists on two occasions in 1996. The petitioner’s domestic inquiry was unlawful and arbitrary, and the respondent’s charges were unproven, according to the Labour Court, which heard Respondent no. 2 - workman’s dismissal case. The respondent was reinstated with full back pay and benefits, according to the Labour Court’s ruling. The petitioner appealed the Labour Court’s decision in a writ suit brought before the High Court.
Arguments of the parties:
1. Petitioner:
The petitioner claimed that the domestic enquiry was carried out in accordance with the principles of natural justice; the respondent was duly heard and given sufficient opportunity to submit his documents and explanation; the enquiry officer proved the charges against the respondent, concluding that he had acted dishonestly and negligently in his work; and the respondent had submitted false call reports of visiting doctors and chemists on the dates he had attended a union meeting. It contended that he couldn’t visit or call the Doctors or Chemists for the promotion of the sales products of the petitioner in such a short time. Consequently, the Labour Court lacked jurisdiction to consider the respondent’s claim because he was engaged in sales promotion, which was neither manual nor clerical work. He, being a medical representative, could not be considered a “workman” as per Section 2 of the Industrial Disputes Act, 1947.
2. Respondent:
Respondent no. 2 – workman argued that he was not given a fair chance to explain himself, and the domestic inquiry was biased and unjust. The doctors and chemists were located in Lucknow, where the alleged misconduct took place, while the inquiry was conducted in Delhi. The petitioner failed to document the doctors’ and chemists’ declarations, nor did they take into account the certificates they provided attesting to the respondent’s visits on the pertinent dates (05.10.1996 and 18/10/1996).
The accusations against the respondent were founded only on assumptions and suppositions, and they were not supported by any substantial proof. The petitioner had awarded the respondent a gold medal for his outstanding performance, and he had a good service track record since the date he was employed. Additionally, the respondent showed that his call reports were accurate and that he had enough time to visit the physicians and chemists on the days of the union meeting.
He also argued on the jurisdiction of the Labour Court that the Sales Promotion Employees (Conditions of Service) Act, 1976, which applied to medical representatives as per the precedents of the Supreme Court considered them to be workmen for the purposes of the Industrial Disputes Act, made the respondent a “workman” under the Industrial Disputes Act, 1947.
Issues:
1. Did the respondent have a sufficient chance to defend himself, and was the domestic inquiry fair and appropriate?
2. Whether the petitioner’s allegations against the respondent were supported by the evidence on record?
3. Whether the respondent qualified as a “workman” for the purposes of the Industrial Disputes Act of 1947, and whether the Labour Court had the jurisdiction to hear the case?
Reasoning of the Court:
The High Court of Allahabad upheld the Labour Court’s conclusions that the domestic inquiry was illegal and arbitrary and that the petitioner’s charges lacked sufficient evidence. The petitioner had not presented any substantial proof to back up their allegations, and the court noted that they had disregarded the doctor’s certificates, which supported the respondent’s account. The court further stated that the respondent has a good track record and a lengthy history of working with the petitioner. The petitioner’s witness going contrary to them stated in favour of the respondent and said that the respondent had enough time to call and visit the doctors and chemists. The petitioner contended that they should have been allowed to substantiate the allegations before the Labour Court and provide leading evidence, but the court dismissed this argument since the petitioner had not demonstrated that they had any new or pertinent material to provide that was unavailable for production during the domestic inquiry.
The Sales Promotion Employees (Conditions of Service) Act, 1976, which applied to medical representatives and deemed them to be workmen for the purposes of the Industrial Disputes Act, was cited by the court in rejecting the petitioner’s argument that the respondent was not a “workman” under the 1947 Industrial Disputes Act. The definition of “sales promotion employee” as per Section 2(d) of the 1976 Act is that any person by whatever name called (including an apprentice) employed or engaged in any establishment for hire or reward, to do any work relating to the promotion of sales or business, or both, but does not include any such person-
(i) who, being employed or engaged in a supervisory capacity, draws wages exceeding sixteen hundred rupees per mensem; or
(ii) who is employed or engaged mainly in a managerial or administrative capacity.
The respondent was found to be covered by the 1976 Act’s definition of “sales promotion employee” and not excluded by any of the definition’s stated terms it covered medical representatives too, the court decided.
The decision of Supreme Court in May and Baker (India) Ltd. v. Their Workmen, AIR 1967 SC 678, which was determined prior to the implementation of the Act of 1976, was also distinguished by the court, which concluded that it was no longer good law regarding the question of whether or not medical representatives were workmen.
The Court affirmed the view taken by the Bombay High Court in the case of S.G. Pharmaceuticals Division of Ambala Sarabhai Enterprises Ltd. v. U.D. Pademwar (decided on 7 August 1989) which clarified that as per section 6(2) of the Sales Promotion Employees (Conditions of Service) Act, 1976, the medical representatives are “workmen” under the Industrial Disputes Act, 1947. Thus, the Labour Court had the required jurisdiction based on the above reasoning of the court.
Conclusion:
The petition was dismissed and the order of the Labour Court was upheld.
Ashok Agarwal v UOI & Ors
W.P.(C) 841/1998 (Delhi High Court)
The petitioners sought strict enforcement of the Prohibition of Employment as Manual Scavengers and their Rehabilitation Act, 2013 (PEMSR Act) and the Rules framed thereunder, and the eradication of manual sewer cleaning and the rehabilitation of sewer workers and their families.
The High Court directed the Government of NCT of Delhi, the Delhi Jal Board, the Municipal Corporation of Delhi and all other authorities to strictly comply with the judgment delivered by the Hon’ble Supreme Court in Balram Singh v. Union of India and Others, 2023 SCC OnLine SC 1386. The Supreme Court in the above judgment issued various directions to the Union and the States for the implementation of the PEMSR Act and the enhancement of compensation for sewer deaths and disabilities. It enhanced the compensation amount for sewer deaths from Rs. 10 Lakhs to Rs. 30 Lakhs, and in case of sewer victims suffering disabilities, the compensation must be fixed depending on the severity of the disabilities. The minimum compensation to be awarded to sewer victims suffering from disabilities has been fixed at Rs. 10 Lakhs and in case the disability is permanent and renders the victim economically helpless, the compensation must not be less than Rs. 20 Lakhs. The Apex Court has issued various other directions to ensure that the practice of manual scavenging stands completely eradicated.
The Supreme Court directed the Union, State and Union Territories to ensure that full rehabilitation measures are taken for sewage workers and their families, including employment, education and skill training. The NCSK, NCSC, NCST and the Secretary, Union Ministry of Social Justice and Empowerment, should draw modalities for the conduct of a National Survey on manual scavenging within 3 months and complete it in the next one year. The NALSA should be involved in the planning and implementation of the survey and frame appropriate models for easy disbursement of compensation to sewer victims. The court also directed the Union to develop and launch a portal and a dashboard containing all relevant information on sewer deaths, victims, compensation and rehabilitation.
Sita Kumari v. Bharat Coking Coal Ltd. and Ors
W.P.(S) No. 2178 of 2021 (Jharkhand High Court)
Facts:
The petitioner, a married daughter of a deceased BCCL employee, applied for compassionate appointment following her brother’s death who was initially appointed as “dependent” on his deceased father. Her application was rejected on the grounds of her marital status and dependency on her husband and she was not considered a “dependent” under the purview of the National Coal Wage Agreement (NCWA). During the pendency of the writ petition, her husband also died in a road accident.
Arguments of the parties:
1. Petitioner:
The petitioner claimed that because of her married status, her application was unfairly denied.
2. Respondent:
The respondent argued that the petitioner was ineligible for a compassionate appointment since she was a married daughter and she did not come under the purview of the definition of dependent for being considered for appointment on compassionate grounds as per the provision of the National Coal Wage Agreement (NCWA).
Issue:
Whether the married daughter of an employee of BCCL entitled to employment and can she be considered the “dependent”?
Reasoning of the Court:
The court noted that the petitioner was unmarried at the time of her father’s death and her husband died during the pendency of the writ petition. It observed that the purpose of compassionate appointment is to provide sustenance to the bereaved family and prevent destitution.
The court agreed with the judgment of the High Court of Calcutta in Dipali Mitra & Others Versus Coal India Limited & Others in W.P.A.14349 of 2018 which held that the married daughter was entitled to compassionate appointment and the same cannot be rejected solely on the ground that she was married. It must be assessed if the married daughter was dependent on the deceased employee. The court relied on the Supreme Court decision in Umesh Kumar Nagpal v. State of Haryana, (1994) 4 SCC 138 stating that the whole object of granting compassionate employment is to enable the family to tide over the sudden crisis caused by the death of sole bread earner.
The court decided the case while granting the compassionate appointment to the petitioner as she was a widowed daughter and a “dependent” as per clause 9.3.3 of the National Coal Wage Agreement (NCWA) and entitled to appointment on compassionate grounds.
Conclusion:
The court allowed the petitioner’s claim.
Serum Institute of India Private Limited v Union Of India
Writ Petition No. 3735 Of 2021 (Bombay High Court)
Facts:
Serum Institute of India, a biotechnology company, challenged the constitutionality of a 2016 amendment inserting sub-clause (xviii) of Section 2 (24) to the Finance Act which was contrary to the provisions of the Income Tax Act of 1961, which listed various subsidies, grants, incentives, waivers, concessions, or reimbursements provided by the Central or State Governments as taxable “income”. The petitioner argued that such subsidies were capital receipts rather than income and that the challenged subclause violated Articles 14, 19, 246, 265 and 289 of the Constitution.
Arguments of the Parties:
1. Petitioner:
The petitioner contended that the challenged subclause of the Income Tax Act was arbitrary, discriminatory, and unfair because it intended to tax all subsidies, regardless of their type or purpose, and overturned established legal precedents that held capital subsidies were not taxable. The petitioner also claimed that the challenged sub-clause constituted an indirect taxation of the State’s revenue, which was not permissible under Article 289 of the Constitution, and that it violated the petitioner’s right to conduct business under Article 19(1)(g) of the Constitution by reducing the profitability and viability of the petitioner's project.
2. Respondent:
The respondent, Union of India, contended that the challenged sub-clause fell under Entry 82 of List I of the Seventh Schedule, which granted the Parliament the authority to tax income. The respondents further contended that the challenged subclause did not violate any basic rights because it was based on a rational and valid classification of income, and because taxing subsidies did not constitute a restriction on the right to trade or taxation of the State’s revenue.
Issues:
1. Whether the challenged sub-clause in violation of the Constitution and Income Tax Act due to a lack of legislative competence?
2. Did the challenged subclause infringe the petitioner’s fundamental rights under Articles 14, 19, and 289 of the Constitution?
3. Did the challenged sub-clause eliminate the distinction between capital and revenue receipts and neglect the purpose test for evaluating the type of subsidies?
Reasoning of the Court:
The court confirmed the constitutional validity of the challenged subclause of the amendment. The court ruled that the impugned subclause was a permissible exercise of Parliament’s legislative power because it was consistent with the constitutional framework of income taxation and that Parliament had the ability to define and increase the definition of “income” under the Income Tax Act. The court also determined that the challenged subclause did not violate Articles 14, 19, or 289 of the Constitution because it did not create any arbitrary or unreasonable classification, or impose any undue hardship or restriction on the petitioner’s right to trade or tax the State’s revenues. Relying on its precedent in the State of Madhya Pradesh v. Rakesh Kohli & Anr (2012), the Court noted that there are only two grounds on which a legislative enactment can be struck down:
(i) that the appropriate legislature does not have the competence to make the law, and (ii) that it does not take away or abridge any of the fundamental rights enumerated in Part III of the Constitution or any other constitutional provisions.
The court also determined that the challenged subclause did not eliminate the distinction between capital and revenue receipts, but rather established a new category of income that included various subsidies, grants, incentives, waivers, concessions, or reimbursements, regardless of their nature or purpose. The court noted that the “purpose test” for identifying the nature of subsidies was not a constitutional mandate, but rather a judicial interpretation that might be modified or overridden by the legislature. The court also stated that the challenged sub-clause was consistent with the state’s economic and fiscal goals, and that the court would not interfere with legislative wisdom and discretion in areas of taxes unless there was a clear infringement of constitutional norms.
Conclusion:
The petition was dismissed.
November 2023 International News
OMAR V. EPPING FOREST DISTRICT CITIZENS ADVICE
[2023] EAT 132
Facts:
Mr. Omar, the claimant, worked as an advice session supervisor for the respondent, Epping Forest District Citizens Advice. On February 19, 2020, he submitted his resignation from the company following a confrontation with Ms. Skinner, his line manager. He later attempted to revoke his resignation, but the respondent rejected it. He filed allegations with the tribunal of unjust and unfair dismissal. Having been dismissed in the Employment Tribunal, he appealed to the Employment Appeal Tribunal (EAT).
Arguments of the parties:
1. Petitioner:
The claimant contended that the respondent should not have relied on his resignation, which was made in a hurry. He stated that he instantly rescinded his resignation and that, on February 19, 2020, the respondent extended an offer of employment, which he turned down. Additionally, he asserted that the respondent’s email to him on February 21, 2020, indicating that Ms. Skinner had changed her mind and was unable to collaborate with him, amounted to an unjust dismissal. Alternatively, he contended that the respondent’s acts preceding his resignation constituted a repudiatory breach of contract, which would have entitled him to regard himself as dismissed.
2. Respondent:
The respondent contended that the claimant had submitted their resignation on February 19, 2020, without any ambiguity. They said he did not try to rescind his resignation right away and that on February 19, 2020, they didn’t extend an offer to him for a different job. Additionally, they contended that since the claimant had already resigned, their announcement of Ms Skinner’s change of heart about working with him could not be construed as a dismissal because it had to do with arrangements made during his notice period. They refuted the possibility that any of their acts before the claimant’s employment was terminated might be considered a repudiatory breach of contract.
Issue:
Whether the respondent had fired the claimant in violation of Section 95(1)(a) of the Employment Rights Act, 1996 (ERA 1996), or if the claimant had resigned and was unable to retract it?
Reasoning of the Court:
The Employment Appeal Tribunal (EAT) decided that the tribunal had erred in law by failing to make adequate findings of fact and failed to lead itself properly in conformity with the relevant legal principles. The court decided that the issue of violation of Section 95(1)(a) of the ERA 1996 depended on whether the claimant had resigned or been dismissed by the respondent.
The EAT, relying on the principles used in Sothern v Frank Charlesly [1981] IRLR 278, set down the following tests for implementing the “special circumstances exception”:
Reasonable Bystander Test: The EAT determined that the words of resignation must be objectively construed in all circumstances, and that the speaker must have really intended to quit and have been in their right mind at the time. The EAT published a two-limb guide for administering this test.
Special Circumstances Exception: The EAT reiterated that there is no such exception and that the same rules apply to all resignations and dismissals. The EAT acknowledged that stress or emotional elements can influence a speaker’s intention or logic, but they are not decisive.
Unilateral Retraction: The EAT ruled that a notice of resignation cannot be revoked without the other party’s approval. It also stated that the claimant attempted to withdraw his resignation multiple times but was not in his right mind.
Standard Principles: According to the EAT, words of resignation must be construed under standard contractual interpretation standards and the context of the case.
Based on the above tests, the EAT allowed the claimant’s appeal and remitted the case for a fresh hearing.
Conclusion:
The appeal was allowed.
Independent Workers Union of Great Britain v. Central Arbitration Committee and Anr
[2023] UKSC 43 (Supreme Court of the UK)
Facts:
The petitioner attempted to represent a group of Deliveroo riders in Camden and Kentish Town during collective bargaining. Deliveroo denied the request, prompting the IWGB to seek arbitration from the Central Arbitration Committee (CAC) under the Trade Union and Labour Relations (Consolidation) Act 1992. The CAC denied the application because riders were not workers under Section 296 of the 1992 Act. The IWGB filed a judicial appeal of the CAC’s decision, saying that it breached riders’ rights under Article 11 of the European Convention on Human Rights (ECHR), which guarantees freedom of association and trade union activities.
Issue:
Whether the delivery riders had an employment relationship with Deliveroo under Article 11 of the ECHR, and whether Article 11 guaranteed the right to compulsory collective bargaining?
Arguments of the parties:
1. Petitioner:
The IWGB contended that the domestic definition of workers under the 1992 Act should be narrowed down to include riders to meet their Article 11 rights, as required in Section 3 of the Human Rights Act, 1998. Alternatively, the IWGB contended that riders had an employment relationship with Deliveroo under the autonomous idea of Article 11, based on the facts of their job and compensation. The IWGB further claimed that Article 11 guaranteed the right to forced collective bargaining and that the UK had failed to preserve that right by exempting the riders from the statutory procedure under Schedule A1.
2. Respondent:
Deliveroo contended that the riders were not workers under the 1992 Act and that this classification was consistent with Article 11. Deliveroo also claimed that the riders did not have an employment relationship with Deliveroo under Article 11, citing the contractual terms and practical functioning of the partnership, which provided the riders with a high level of flexibility and autonomy. Deliveroo also claimed that Article 11 did not include a right to compelled collective bargaining and that the UK has a broad margin of discretion in determining how to preserve trade union freedom.
Reasoning of the Court:
The Supreme Court held that the riders did not have an employment relationship with Deliveroo under Article 11 and that the article’s restrictions governing trade union activities did not apply to them. The Court followed the approach of the European Court of Human Rights, which requires a court to consider the factors outlined in the International Labour Organisation Employment Relationship Recommendation, 2006 No. 198, while also focusing on the practicalities of the relationship and how it operates in practice. The Court also held that some of the CAC’s findings were particularly noteworthy, such as the riders’ right to appoint a substitute, their freedom to work when it was convenient for them, and their capacity to work for Deliveroo’s competitors simultaneously. The Court determined that these circumstances were inconsistent with an employment relationship. The Court also determined that Article 11 did not include a right to compulsory collective bargaining and that the UK had not violated its positive responsibilities under that article by implementing Schedule A1.
Conclusion:
The court dismissed the appeal and upheld the CAC’s decision.
Steel v. Spencer
[2023] EWHC 2492 (Ch) (England and Wales High Court)
Facts:
The appellant, Mr Steel, was employed by the respondent, Omerta, a multinational executive search agency. His income included a discretionary bonus that was conditional on him remaining with Omerta for three months from the date of payment and not giving or receiving notice to quit his employment during that time. After receiving a bonus in January 2022, he gave notice of termination in February 2022, and Omerta demanded restitution of the bonus under his contract’s clawback clauses. The appellant sought to strike aside Omerta’s statutory demand for the restitution of the bonus, claiming that the clawback clauses were an unfair restraint of commerce or a penalty clause.
Arguments of the Parties:
1. Petitioner:
The appellant claimed that the bonus clawback provisions were a restraint of commerce since they served as a deterrent or golden handcuff for him to resign and work elsewhere. He further claimed that the terms constituted a punishment clause because they required a disproportionate and unjustified forfeiture of the bonus.
2. Respondent:
Omerta contended that the bonus clawback rules did not constitute a restraint of commerce because they did not limit the appellant’s freedom to work elsewhere. They further contended that the clauses were not punishment clauses because they represented a genuine estimate of the loss sustained by Omerta as a result of the appellant’s resignation.
Issues:
1. Whether the bonus clawback rules were a restriction of trade and thus susceptible to the reasonableness test.
2. Whether the provisions were penalty clauses and hence unenforceable.
Reasoning of the court:
The court upheld the lower court’s conclusion that the bonus clawback provisions were neither a restraint of commerce nor a punishment clause. The court held that the bonus clawback rules did not limit the appellant’s ability to trade, but rather offered a financial incentive for him to remain loyal to Omerta. It also distinguished the case of 20:20 London v Riley [2012] EWHC 1912 (Ch) and found that there was no factual basis for Mr Steel’s argument that the provisions were out of proportion to the benefit received. The court also determined that the bonus clawback clauses were not out of proportion to the advantage conferred and did not require justification based on Omerta’s loss.
Conclusion:
The appeal was dismissed.
Right To Strike Under ILO Convention No. 87
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The ILO has requested an advisory opinion from the International Court of Justice (ICJ) on the scope and limits of the right to strike under ILO Convention No. 87, which includes freedom of association and the right to organise.
The International Court of Justice has not yet rendered an opinion, but it has issued an order to organise the proceedings. The decision requests that ILO and UN member states, as well as six other organisations, make written statements on the matter by September 15, 2024.
The order also indicates that the Court reserves the power to decide whether to hold oral hearings on the issue and would notify the parties and organisations accordingly. The order also states that the Court will consider the question in light of the relevant provisions of ILO Convention No. 87, other ILO conventions and recommendations, ILO supervisory body jurisprudence, ILO member states practice, and general international law principles.