Facing Unfair Termination? How to Navigate Legal Notices and Arbitration Delays

Legal Notice and Company Response

I had sent a legal notice through a lawyer to the company regarding illegal termination. I demanded reinstatement of employment and recovery of unpaid salary. However, the company did not reply within the timeframe mentioned in the legal notice, so I filed a complaint with the labor department. The management was not present at the first hearing. The labor department then sent another notice, stating that if the management did not appear on May 11, 2018, the labor department would take unilateral action against them.

Company's Response and Next Steps

Suddenly, I received a reply to the legal notice after 50 days, in which the management informed me that they had appointed a sole arbitrator to resolve the issue. The date has not been finalized yet.

What should I do now?

Formal Termination Confirmation

Are you sure that you were formally terminated, i.e., by means of written orders from your company? If "yes," you can simply write back to the company stating that since the dispute raised by you is being handled by the Labor Officer/Assistant Commissioner of Labor, a competent authority under the Industrial Disputes Act, 1947, you are not interested in any alternative redressal through a third party.

If you are not skeptical about the current actions of the company or need an immediate resolution of the dispute at any cost, irrespective of its nature, you can cooperate with the management. It is up to you to decide.

Dear Rupal,

Please provide your designation, nature of duties performed, last drawn gross salary, contents of your termination letter, and whether your appointment letter includes a clause for arbitration. Also, share details about your employer.

Thank you.

Thank you for your reply. My appointment letter includes a clause on arbitration. Can I communicate to management via email that I am not interested in any alternative redressal through a third party, i.e., a sole arbitrator, as the matter is pending with the Labour Department?

What actions can the Labour Department take if the management does not appear at the hearing after receiving multiple notices?

Dear Rupal, I believe that your correct response to the pertinent question raised by our knowledgeable friend Srinath regarding the classification of your employment status, whether as a workman, supervisor, or manager, will dictate the subsequent actions in light of the recent decisions made by your management, especially considering the presence of an arbitration clause in the employment contract. It is a standard practice of the Labor Department to notify the management upon receiving any complaints of unemployment, initiating a preliminary inquiry. Fortunately, should the management opt for a peaceful resolution of the matter, the Labor Officer may facilitate the parties in resolving the issue, even if the complainant is not classified as a workman. Conversely, if the management responds negatively, presenting evidence regarding the complainant's employment status and questioning the Officer's jurisdiction on that basis, they would likely suggest that you seek recourse from the appropriate authority and close the case.

Please let me know if you need further clarification or assistance.

Best regards

Dear Madam, I think we are not hitting the bull's eye in our replies due to the absence of relevant information such as your designation, responsibilities, and the exact clause relating to the so-called arbitration in the appointment letter. The Industrial Disputes Act provides for an arbitration process, and the appointment of an arbitrator requires joint consent; no single party can unilaterally appoint an arbitrator in labor disputes. However, all of this can be addressed after receiving the above and other related information.

Regards,
Vinayak Nagarkar
HR Consultant

Thank you all for the response. I worked as a process associate in a BPO. The arbitration clause states, "Any and all disputes arising in connection with the appointment letter and service shall be referred to arbitration, which shall be conducted following the Arbitration and Conciliation Act, 1996, by a sole arbitrator appointed by the General Council of the company. The venue of the arbitration shall be Delhi, and the language shall be English. You agree to submit yourself to the exclusive territorial jurisdiction of the courts in Delhi.

Can I reply to management via email?

Can I reply to management via email, stating that I am not interested in any alternative redressal through a third party, i.e., the sole arbitrator, as the matter is pending with the Labour Department?

What action can the Labour Department take?

What action can the Labour Department take if the management does not appear at the hearing after receiving multiple notices?

Dear Rupal,

Understanding Your Role in a BPO

Well, you were a "Business Associate" in a BPO. Still, we are not able to understand from that nomenclature whether the incumbent of the post would be a "workman" as defined under section 2(s) of the Industrial Disputes Act, 1947, or not. Simply speaking, a BPO organization performs any process or part of any process of another organization through its own employees. Therefore, right from the General Manager down to the entry-level employee performing the outsourced process activities in such a BPO would be its "business associate" only; hence decide for yourself where and how you fit in.

Designations in the Private Sector

Interestingly, nowadays, in the private sector, particularly in IT and ITES companies, the designations are rendered more attractive and fashionable by the usage of catchy phrases like business associate, sales executive, team lead, etc., though the duties they discharge are either basically technical or clerical or simply with some incidental supervisory functions. It is not the designation but the predominant nature of the work performed by the employee that is the decisive factor in deciding whether he is a workman or not to seek redress under the ID Act, 1947.

Arbitration Clause in Appointment Orders

Coming to the arbitration clause in your appointment orders, you've not mentioned whether such a clause is included in the appointment orders issued to all employees in the BPO. The objective of the Arbitration & Conciliation Act, 1996, as I understand, is to comprehensively cover international commercial arbitration and conciliation as well as domestic arbitration and conciliation.

I have sent an email to the HR manager yesterday stating that this matter is pending in the Labour department, so I am not interested in resolving the dispute through a sole arbitrator. However, there has been no response from the management yet.

Is a lawyer allowed in the Labour department during the hearing?

Dear Friends,

An Associate in a BPO is considered a workman under Section 2(s) of the ID Act, and therefore falls under the jurisdiction of the Labour Department. This means that an industrial dispute can be raised by such an employee.

Warm Regards,

Bharat Gera
HR Consultant
9322404765

Management's Response to Labour Department Summons

Management submitted a reply to the Labour department, challenging the jurisdiction of the Labour office. They stated that "there were no documents annexed with the summons despite there being a specific averment in this regard in the summons signed by the Labour inspector." It is submitted that this seems to be a regular practice of this department to issue summons without providing documentation of the case, leaving the management at a total loss to understand why the summons have been sent before it.

The summons are also completely silent about the provision of law under which they have been sent and the nature of the enquiry that is contemplated. It is submitted that if these summons are for conciliation proceedings, the management is not interested in any such conciliation, and the matter ought to be closed and dismissed on this date of the hearing itself.

I need a response to this reply from the management along with the format.

Concerns Regarding Labor Officer Notices

What is described in the post is indicative of the haphazard manner in which notices are sent to the parties involved in disputes by certain Labor Officers. Whenever a notice for inquiry is sent to the employer, it is essential that a copy of the complaint is enclosed to enable the employer to offer their remarks. Otherwise, one cannot find fault with such responses from employers. However, at the same time, the stand of the management regarding the maintainability of the complaint as well as the jurisdiction of the Labor Officer is totally wrong. The arbitration clause in the appointment orders cannot take away the jurisdiction of conciliation under the Industrial Disputes Act, 1947. In the case of a dispute raised under the ID Act, 1947, the very question of whether the complainant is a workman or not is, in sum and substance, a dispute that should be decided in adjudication only.

Therefore, I would advise you to file a rejoinder setting forth the above position and request the conciliation officer to issue a conciliation notice under section 12(1) of the ID Act. If the management is not forthcoming with any other option, the officer can declare that the conciliation failed. Upon receipt of that failure report, you can file a case under section 2-A(2) of the Act before the Labor Court for the area.

Management's Response to Labour Department Summons

Management mentioned in their reply that the Labour department did provide a reason for the summons. The management requested to terminate the conciliation proceedings by stating, "Respondent management is not aware of the reason for the summons." However, they did provide a detailed response based on the complaint lodged by me. Additionally, there is always a reason given in the notice.

Questions Regarding Labour Department Actions

1. Can the Labour department take action against the management in this case?

2. What will happen to the arbitration proceedings as the hearing is currently ongoing in the labour department? Will it be automatically canceled after a specific time?

Management's Response to Labour Department Summons

Management mentioned in their reply that the Labour department did provide a reason for the summons. The management requested to terminate the conciliation proceedings by stating, "Respondent management is not aware of the reason for the summons." However, they did reply in detail as per the complaint lodged by me. Moreover, there is always a reason given in the notice.

Possible Actions by the Labour Department

Can the Labour department take action against the management in this case? What will happen to the arbitration proceedings as the hearing is ongoing in the labour department? Will they be automatically cancelled after a specific time?

The Role of a Conciliation Officer under the ID Act of 1947

The duty of a Conciliation Officer under the ID Act of 1947 is to bring the parties to the dispute together, discuss the points of their differences in his presence, and help them reach an acceptable solution. When it is not possible due to the intransigence of either or both parties, he has to declare that conciliation has failed and submit his report to the Appropriate Government. This report sets forth the reasons for failure and recommends further action, such as referring the dispute for adjudication. Therefore, it is an administrative function only. No Conciliation Officer can take any penal action against any party to the dispute for their rigid stance or non-cooperation.

Respondent Management's Reply and Subsequent Actions

The Respondent management submitted a written reply to the notice sent by the Labour department. I also submitted a detailed response to that reply, along with supporting documents, during the next hearing. Now, they have refused to submit any further reply to my response.

1. Is it fair practice not to provide a response to the Claimant? What could be the reasons behind this?

2. Should I write a letter to the Assistant Labour Commissioner stating that the Respondent management refused to provide a response?

3. Is there any option left to settle the dispute outside of the court?

Dear Rupal,

Proceedings before a forum for the resolution of any dispute are not a seesaw game for the disputants to file a complaint, counter, rejoinder, additional counter, and so on endlessly for each and every imputation. You have raised a dispute, and the management filed their counter statement for which you filed a rejoinder—that's all. Now, you have to allow the Conciliation Officer to suggest alternative solutions, if any, from his side to bring down the points of dispute and persuade you both for an amicable settlement or declare his conciliation failed. Amicable settlement does not mean a win-win situation but a both-gain situation, which implies certain sacrifices on both sides. Therefore, do not try to hang on to empty formalities. Decide for yourself what you want finally—reinstatement or compensation for the wrongful termination. Only that can pave the way for an out-of-court settlement at any stage.

Dear Rupal, please clarify whether your application is in the Petition Stage or if it is treated as "ID" with a reference number. If it is in the Petition Stage, the Conciliation Officer will later convert it to an ID, hold conciliation proceedings, and send a Failure Report. The matter will then be referred to the Labour Court for adjudication by framing issues and determining the relief entitled to the petitioner.

Just because proceedings are held in the Conciliation Officer's office, it cannot be construed that conciliation proceedings are held. What stand has the management taken regarding your termination? Do they consider you an employee under the ID Act, or have they denied that you are a workman?

Respondent Management's Reply and Ongoing Proceedings

Respondent management submitted their reply in writing, stating that the Labour department did not mention the reason for the summons. Management requested to terminate the conciliation proceedings by claiming, "Respondent management is not aware of the reason for the summons." However, they replied in detail according to the complaint lodged by me. Moreover, there is always a reason in the notice.

Despite Respondent management's request to terminate proceedings, the hearing is still ongoing according to the complaint lodged by me. I was informed that perhaps in the next hearing, the Labour officer will make the final decision. Respondent management did not mention any ID Act in their reply. However, they stated that "Respondent is unwilling to take her back on their rolls."

Questions Regarding Labour Department Actions

1. Can the Labour department take action against the management as they made very serious allegations against the Labour office?
2. Will the Labour department refer this dispute to the Labour court, or would it be my prerogative?

Dear Rupal,

The allegation by the management against the Labour Office has nothing to do with your petition. If conciliation ends in failure, the Conciliation Officer will submit a failure report to the government. Thereafter, the matter will be referred to the Labour Court for adjudication.

Discussion on Workman Status and Arbitration

Very interesting discussion. If I am not mistaken, in another post by the same poster, I had suggested she trust the advocate appointed by her and proceed as per his advice. In this matter, I can see that the management is attempting to establish that the poster is not a Workman as defined under the ID Act and that she is governed by the clause of the contract on the arbitrator. Always keep in mind that the management is usually more knowledgeable than the individual employee. If I were in the place of the poster, I would opt for an amicable settlement by skillfully attending arbitration.

Potential to Establish Workman Status

Is there any potential for the poster to establish that she is a Workman as defined in the ID Act? If so, she should present her case in conciliation. However, it is important to note that the conciliation officer does not have the authority to decide on this matter, and he must refer this dispute to adjudication.