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February 6, 2008
Employment law: Graveyard shift for CEOs
A recent decision of
the Supreme Court of India (“SC”)
is likely to cause some concerns
in the information
technology (“IT”)
sector in India. The SC, on January 29, 2008,
dismissed the appeal of Som Mittal, managing director (“MD”) of a leading IT company in Bangalore, against a lower court’s order,
declaring that the MD could be prosecuted for violating labour
laws. As a matter of background, in December 2005, a woman
employee of the company was raped and murdered while on her way
to the office from her residence, at 2.00 a.m. Following the
incident, a complaint was filed against the MD for violating
labour laws for employing women at night and the local
authorities took cognizance of such offence. The MD filed a
petition in the High Court of Karnataka to quash the complaint,
which petition was dismissed in 2006 by the High Court of
Karnataka, leading to an appeal to the SC.
Laws Violated:
The Karnataka Shops
and Commercial Establishments Act, 1961 (“KSCEA”),
which applies to shops and establishments located in the State
of Karnataka, inter alia
regulates the opening and closing hours of establishments.
Further, section 25 of the KSCEA prohibits employment of women
and young persons after 8.00 p.m. and before 6.00 a.m. However,
the State Government issued a notification in 2003 making an
exception for IT and IT-enabled services (“ITES”)
sectors with a view to facilitate this industry. As per the
notification, employers of IT and ITES establishments who wish
to employ women employees during night shifts are required to
make an application to the labour authorities for an exemption.
While granting an
exemption, the labour authorities prescribe several conditions
that need to be complied with by the employer, including
provision of transport facilities from the residence to
workplace and back with adequate security. In the present case,
the employee was allegedly not provided with such transport
facilities by her employer and was using local transport when
the offence was committed. As a result, the magistrate took
cognizance of the complaint directly against the MD of the
organisation. This was in
view of the fact that the definition of ‘employer’ under the
KSCEA includes a person acting in the general management or
control of an establishment.
Implications:
The SC judgment is likely to lead to greater
awareness among the management
to personally ensure that their organization complies
with all applicable labour laws. The management is also likely
to adopt certain best practices to ensure the safety of the
employees, not just in the workplace but also while traveling to
and from the office. On the other hand, this judgment may lead
to review of the existing policies of employing women during
night shifts due to the safety and security requirements
prescribed under law. There also continues to be some
uncertainty in the approach to be adopted by the management in
situations where women employees refuse to utilize the
transportation and/or security facilities provided by the
company. Source:
Criminal Appeal No. 206 of 2008 [SLP (Crl.) No. 1719 of
2006]
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