Unskilled and semi-skilled workmen cannot be reclassified on the basis of their experience: SC
The Supreme Court(“SC”), in the case of Hindustan Sanitaryware and Industries Ltd vs. The State of Haryana struck down a notification issued by the Haryana Labour Department whereby:
- Unskilled workers who have more than 10 years of experience would be considered as semi-skilled workers; and
- Semi-skilled workers with more than 3 years of experience would be considered as skilled workers.
The SC held that such reclassification of workmen belonging to one category to another category is in direct contravention of the contractual relation that exist between the employer and the employee and is therefore, beyond the jurisdiction of the government.
Quick View:
- The intention behind the notification was that after a point of time, a worker has enough experience to be categorized as either a semi-skilled worker or a skilled worker, as applicable. The SC, by striking this notification down, has indirectly held that no matter how much experience a person has, a workman cannot be recategorized for the purpose of the Minimum Wages Act unless the worker’s employer decides otherwise. This will definitely impact the condition and morale of workers as there is no incentive for the employers to recategorize workers as it will end up increasing the employer’s operational expenses as the minimum wages for semi -skilled and skilled workers is more than the minimum wages for unskilled workers.
Quick Update: MCA extends time limit for Directors to file their KYC details with the Central Government
The Ministry of Corporate Affairs (“MCA”) recently issued a notification whereby it amended to Companies (Appointment and Qualification of Directors) Rules, 2014 whereby directors will now need to submit their KYC details with the central government on or before the 30th of June in the immediate next financial year.
Prior to this notification, directors were required to share their KYC details with the Central Government on or before the 30th of April in the immediate next financial year.
MCA Amends the penalties to be paid for late filing of forms under the Companies Act effective from August 1, 2019
The Ministry of Corporate Affairs (“MCA”) recently introduced a notification whereby it has increased the penalties for late filing of forms form August 1, 2019. The amended rates are as follows:
| Period of Delay | Penalty for a small company and a one- person company | Penalty for companies other than a small company or a one- person company |
| Upto 30 days | 3 times the normal fees | 6 times the normal fees |
| More than 30 days and upto 90 days | 3 times the normal fees plus an ad valorem fee of 0.025% of the amount of the charge (for example, if there is an increase in the authorized share capital of the company by INR 1 lakh, an ad valorem amount of INR 25 will need to be paid in addition to the penalty), if applicable, subject to a maximum penalty of INR 1 lakh. | 6 times the normal fees plus an ad valorem fee of 0.05% of the amount of the charge (for example, if there is an increase in the authorized share capital of the company by INR 1 lakh, an ad valorem amount of INR 50 will need to be paid in addition to the penalty), if applicable, subject to a maximum penalty of INR 5 lakhs. |
| More than 90 days and upto 180 days | 10 times the normal fees | 10 times the normal fees |
| More than 180 days | 12 times the normal fees | 12 times the normal fees |
Prior to August 1, 2019, the applicable penalty rates are as follows:
| Period of Delay | Penalty to be paid by all types of companies |
| Upto 30 days | 2 times the normal fees |
| More than 30 days and upto 60 days | 4 times the normal fees |
| More than 60 days and upto 90 days | 6 times the normal fees |
| More than 90 days and upto 180 days | 10 times the normal fees |
| More than 180 days | 12 times the normal fees |
Quick View:
- We believe that the increase in the stipulated penalty will increase the compliance of companies and ensure that more companies fill all the required forms under the Companies Act, 2013 on time.
- Also, it is encouraging to see that the MCA has imposed smaller penalties on small companies and one person companies. Till now, there was no distinction made and a small startup and a big multinational company would have to pay the same penalty for late filings. The Companies Act, 2013 defines a small company as any non -public company with a paid- up share capital of less than INR 50 Lakhs and a turnover of lesser than INR 2 Crore in the previous financial year.
Disclaimer: This post has been prepared for informational purposes only. The information/or observations contained in this post does not constitute legal advice and should not be acted upon in any specific situation without seeking proper legal advice from a practicing attorney.