A SSI factory in Maharashtra having less than 50 workers, a worker employed without an appointment letter, and the factory does not have standing orders or a union. At what age can such a worker be retired, or will they have to be employed until they are physically and mentally fit? Please advise on applicable laws and court cases for similar situations.
From India, Mumbai
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2From India, Mumbai
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In the absence of any retirement age fixed either in the appointment order or standing order, an employee can work until he is fit to work. In such a case, if the employer wants an employee to retire at a certain age, it shall attract the provisions of Section 25F of the Industrial Disputes Act, which deals with retrenchment and the compensation to be paid for retrenchment.
Madhu.T.K
From India, Kannur
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Madhu.T.K
From India, Kannur
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What Mr.Madhu said is correct. He has to be continued till he is physically and metally fit or opts him self out by submitting resignation. B.Saikumar Mumbai
From India, Mumbai
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From India, Mumbai
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Dear question raiser,
As seen from your query, it is very strange that the SSI factory you described does not want to follow any law or rule while recruiting a person or thereafter during the service but wants to follow the provisions of labor laws and court judgments while terminating one's services. As a general rule, you may retire a person on reaching 58 years of age. In case you intend to retire a person on the ground of physical and mental fitness, you have to prove the same by asking him to present himself before a Medical Board of a recognized hospital, which can be questioned by a court of law if disputed. As suggested by Sh. B. Saikumar, it is better to obtain a resignation from such a person to avoid legal complications later on.
I am sorry; I have certain reservations to agree with the suggestion given by my colleague Madhu.T.K. In my opinion, the provisions of Section 25F of the Industrial Disputes Act have wide implications and cannot be applied to an individual case. There is a set procedure for resorting to retrenchment, for which the employer should have cogent reasons or grounds.
BS Kals
Member since Aug 2011
From India, Mumbai
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As seen from your query, it is very strange that the SSI factory you described does not want to follow any law or rule while recruiting a person or thereafter during the service but wants to follow the provisions of labor laws and court judgments while terminating one's services. As a general rule, you may retire a person on reaching 58 years of age. In case you intend to retire a person on the ground of physical and mental fitness, you have to prove the same by asking him to present himself before a Medical Board of a recognized hospital, which can be questioned by a court of law if disputed. As suggested by Sh. B. Saikumar, it is better to obtain a resignation from such a person to avoid legal complications later on.
I am sorry; I have certain reservations to agree with the suggestion given by my colleague Madhu.T.K. In my opinion, the provisions of Section 25F of the Industrial Disputes Act have wide implications and cannot be applied to an individual case. There is a set procedure for resorting to retrenchment, for which the employer should have cogent reasons or grounds.
BS Kals
Member since Aug 2011
From India, Mumbai
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Dear fellows,
Where there is no mention of retirement age in the appointment letter, nor does any standing order exist, the model standing order of the state prevails. There is no need to apply any provision of any other act to retire the employee.
Rgds.
From India, Mumbai
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Where there is no mention of retirement age in the appointment letter, nor does any standing order exist, the model standing order of the state prevails. There is no need to apply any provision of any other act to retire the employee.
Rgds.
From India, Mumbai
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Dear All,
If an employee is not fit for the work for which the employee is employed for a continuous period of 2 years, the employee can be terminated for continued ill health. This ill health can be physical, mental, or any other. The important thing is that the employee is unable to perform the work for which the employee is employed. In such cases, there is no question of age and retirement.
Otherwise, although there are no Model Standing Orders applicable, it does not mean there can be no rules. The employer can adopt the Model Standing Orders. Even when nothing is done, it is reasonable that the employee is superannuated at the age of 60.
Vibhakar Ramtirthkar.
From India, Pune
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If an employee is not fit for the work for which the employee is employed for a continuous period of 2 years, the employee can be terminated for continued ill health. This ill health can be physical, mental, or any other. The important thing is that the employee is unable to perform the work for which the employee is employed. In such cases, there is no question of age and retirement.
Otherwise, although there are no Model Standing Orders applicable, it does not mean there can be no rules. The employer can adopt the Model Standing Orders. Even when nothing is done, it is reasonable that the employee is superannuated at the age of 60.
Vibhakar Ramtirthkar.
From India, Pune
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Dear friend,
Absolutely no problem if you want to continue him in the absence of any SOPolicy. But you may face some manageable issues after the normal superannuation age of 55 or 58 or 60 (only Judges to retire at 65). This is regarding PF, ESI, Gratuity, and most importantly, what repercussions you may face from his colleagues who would be affected in terms of blocked promotion, importance, portfolio, etc., and he might deny an opportunity for a youngster who would have got a livelihood in his place.
Kumar S.
From India, Bangalore
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Absolutely no problem if you want to continue him in the absence of any SOPolicy. But you may face some manageable issues after the normal superannuation age of 55 or 58 or 60 (only Judges to retire at 65). This is regarding PF, ESI, Gratuity, and most importantly, what repercussions you may face from his colleagues who would be affected in terms of blocked promotion, importance, portfolio, etc., and he might deny an opportunity for a youngster who would have got a livelihood in his place.
Kumar S.
From India, Bangalore
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Dear all,
As is well known, the provision for retirement is mentioned in the applicable Standard Operating Procedure (SO). Neither the unit has its own SO, nor the Maharashtra Model SO is applicable since the same applies to industries employing 50 or more workers. Since there is no such provision mentioned anywhere in the unit's rule book, as opined by Shri Madhu, an employee has a right to continue in service until he is physically and mentally fit. Retiring him at 55/58/60 or at any later date could be termed as 'Retrenchment' with all the consequences flowing from it. Thus, it would be better for the Small Scale Industry (SSI) unit to have its rules and regulations clearly fixed, indicating the retirement age.
From India, Bhopal
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As is well known, the provision for retirement is mentioned in the applicable Standard Operating Procedure (SO). Neither the unit has its own SO, nor the Maharashtra Model SO is applicable since the same applies to industries employing 50 or more workers. Since there is no such provision mentioned anywhere in the unit's rule book, as opined by Shri Madhu, an employee has a right to continue in service until he is physically and mentally fit. Retiring him at 55/58/60 or at any later date could be termed as 'Retrenchment' with all the consequences flowing from it. Thus, it would be better for the Small Scale Industry (SSI) unit to have its rules and regulations clearly fixed, indicating the retirement age.
From India, Bhopal
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Dear Premakumar Nair,
I agree with you that model standing orders will apply in the absence of certified standing orders. However, in the instant case, the factory employs less than 50 workers, and hence the Industrial Employment (Standing Orders) Act is not applicable.
B. Saikumar
HR & Labour Law Advisor
Mumbai
From India, Mumbai
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I agree with you that model standing orders will apply in the absence of certified standing orders. However, in the instant case, the factory employs less than 50 workers, and hence the Industrial Employment (Standing Orders) Act is not applicable.
B. Saikumar
HR & Labour Law Advisor
Mumbai
From India, Mumbai
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An establishment employing fewer than 50 employees and having no standing rules regarding conditions of service is the main focus of this discussion. In such an establishment that operates solely based on the proprietor's decisions, I don't think there will be any repercussions from fellow employees who are also engaged without any service conditions. When there are no conditions of service, why should they worry about promotions and opportunities for younger employees?
The Model Standing Order is only a model that can be adapted for a period of six months from the date on which the establishment falls under the purview of the Industrial Establishment (Standing Orders) Act. Therefore, it does not mean that an establishment can follow the model standing order without proceeding to obtain certified standing orders.
BS Kals, a member since 2011, has misinterpreted section 25F, as I understand it. Section 25F applies to individual cases, and even a casual employee has the right to receive protection under section 25F if their service is terminated without following the provisions of section 25F or 25N (in cases of companies employing 100 or more workers falling under chapter VB). Therefore, if an employee's service is terminated due to reaching a specific age, such as 58 or 60, on the grounds of superannuation without any conditions of service either in the appointment order or certified standing orders of the company, the termination will be deemed as retrenchment as defined in section 2(oo) of the Industrial Disputes Act. It will be an illegal termination if the termination is made without following section 25F/25N of the Act.
Regards,
Madhu.T.K
From India, Kannur
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The Model Standing Order is only a model that can be adapted for a period of six months from the date on which the establishment falls under the purview of the Industrial Establishment (Standing Orders) Act. Therefore, it does not mean that an establishment can follow the model standing order without proceeding to obtain certified standing orders.
BS Kals, a member since 2011, has misinterpreted section 25F, as I understand it. Section 25F applies to individual cases, and even a casual employee has the right to receive protection under section 25F if their service is terminated without following the provisions of section 25F or 25N (in cases of companies employing 100 or more workers falling under chapter VB). Therefore, if an employee's service is terminated due to reaching a specific age, such as 58 or 60, on the grounds of superannuation without any conditions of service either in the appointment order or certified standing orders of the company, the termination will be deemed as retrenchment as defined in section 2(oo) of the Industrial Disputes Act. It will be an illegal termination if the termination is made without following section 25F/25N of the Act.
Regards,
Madhu.T.K
From India, Kannur
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Dear All,
In my organization, I am also facing the same problem. As an HR professional, I have tried my best to bring about change, but the management didn't support my efforts. Would it be a problem if a labor officer ever visited here?
Regards,
Tupai
From India
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In my organization, I am also facing the same problem. As an HR professional, I have tried my best to bring about change, but the management didn't support my efforts. Would it be a problem if a labor officer ever visited here?
Regards,
Tupai
From India
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I believe that the employees of the said organization are covered under the Payment of Gratuity Act. Please check the deed your organization has signed with the insurance company as the age of retirement is the most important clause of the deed without which a deed cannot be signed. If the age of retirement is mentioned in the deed, then that document will have the final say on the matter.
Regards,
Kamal
From India, Pune
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Regards,
Kamal
From India, Pune
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Dear Kprasoon,
Your clue to retiring an employee is interesting. However, the age of retirement is a condition of service and thus will be the subject matter of a contract between the employer and employee and cannot be a subject matter of an agreement between the employer and third parties. It also implies that if the employer and the employees cannot agree upon any service condition, the employer can indirectly control and regulate the service conditions of the employees by entering agreements with third parties, which is unknown to service law and industrial law. Nevertheless, I appreciate the effort on your part to look for helpful solutions.
B. Saikumar HR & Labour Law Advisor Mumbai
From India, Mumbai
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Your clue to retiring an employee is interesting. However, the age of retirement is a condition of service and thus will be the subject matter of a contract between the employer and employee and cannot be a subject matter of an agreement between the employer and third parties. It also implies that if the employer and the employees cannot agree upon any service condition, the employer can indirectly control and regulate the service conditions of the employees by entering agreements with third parties, which is unknown to service law and industrial law. Nevertheless, I appreciate the effort on your part to look for helpful solutions.
B. Saikumar HR & Labour Law Advisor Mumbai
From India, Mumbai
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Dear B. Saikumar,
I agree with your views on the matter that conditions of an employer's agreement with a third party cannot be enforced on the employee.
To maintain transparency on service rules and regulations, we, in our organization, provide a document (duly signed by the authorized person) containing basic information about our gratuity policy to new entrants at the time of joining. We also obtain acceptance of the same from the new entrants. Consequently, that document becomes part of the service conditions acceptable to both parties.
In the basic information provided, we include details such as eligibility for gratuity, how gratuity is calculated, what will be considered as basic salary, and the retirement age.
Regards,
Kamal
From India, Pune
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I agree with your views on the matter that conditions of an employer's agreement with a third party cannot be enforced on the employee.
To maintain transparency on service rules and regulations, we, in our organization, provide a document (duly signed by the authorized person) containing basic information about our gratuity policy to new entrants at the time of joining. We also obtain acceptance of the same from the new entrants. Consequently, that document becomes part of the service conditions acceptable to both parties.
In the basic information provided, we include details such as eligibility for gratuity, how gratuity is calculated, what will be considered as basic salary, and the retirement age.
Regards,
Kamal
From India, Pune
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I too agree with Madhu ji. Still, I wish to draw your kind attention to one very old case in which the Supreme Court in GM Talang and others Vs. Shaw Wallace relied upon the report of the Norms Committee. According to the Norms Committee, the age for retirement for workmen in all industries should be fixed at 60.
From India, Mumbai
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From India, Mumbai
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In many small organizations, appointment orders are not given. They may not be covered under standard operating procedures (SOP) or model SOP. In such organizations, retirements will result in retrenchment. It is important for such organizations to have appointment orders or contracts of appointment with the employees. These documents should contain all terms and conditions, specifically outlining the age of retirement.
VARGHESE MATHEW
09961266966
From India, Thiruvananthapuram
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VARGHESE MATHEW
09961266966
From India, Thiruvananthapuram
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Extension of retirement age of teachers in Maharashtra 25.2.2011.pdf