Date : 19-02-2013 CIRCULAR No.09/2013
To
All Members of the Association
Sub:- Enhancement of Age of Retirement prescribed under
Industrial Employment (Standing Orders) Rules (Model
Standing Orders)
The operating Trade Unions in various Factories of late, have started applying for amendment to the existing certified Standing Orders of the respective companies and seeking enhancement of the retirement age 58 to 60 years. In this connection the KEA has written a letter to the Secretary, Department of Labour, Govt of Karnataka and the Labour Commissioner seeking their intervention not to dilute the provisions of Model Standing Orders’ which has prescribed 58 years of retirement age. The reasons for the same have been mentioned in said letter. A copy of the same is sent as an attachment for the information of our members.
The KEA would like to make further representation on the issue. Members are requested to intimate their views and indicate the existing retirement age as per the certified Standing Orders and the terms of appointment or policy of the company.
for KARNATAKA EMPLOYERS' ASSOCIATION
(B.C. PRABHAKAR) PRESIDENT
KARNATAKA EMPLOYERS' ASSOCIATION
NO.74, SHANKARA ARCADE, VANIVILAS ROAD, BASAVANAGUDI BENGALURU - 560 004
Reg. No. TU 507 / 20-3-1962
Fax : 080-26500284 Email : kea@kea.co.in Web : www.kea.co.in
Date: 16-2-2013 To
Secretary to the Government, Labour Department,
Vikas Soudha,
BANGALORE – 560 001. —————————————-Sir,
Sub: Enhancement of Age of Retirement prescribed under Industrial Employment (Standing Orders) Rules (Model Standing Orders) 1. The Government of Karnataka, Department of Labour had published
draft Rules vide Notification No. LD 282 – LET 2009 dated 7.12.2009 proposing to amend the Schedule – 1 of the Industrial Employment (Standing Orders) Rules, 1961, proposing enhancement of age of retirement from 58 years to 60 years.
2. The Industry Associations in Karnataka had submitted their objection to the above proposal. No further action had been taken by the Government in respect of the above Notification.
3. Now there is a very strange development in the matter. Some of the trade unions are seeking amendment of the standing orders in which the age of retirement is fixed at 58 years and are seeking enhancement of the same to 60 years. The certifying officers are allowing the amendment by overruling the relevant and legal objections taken by the employers. The certifying officers have been proceeding in a highly arbitrary and indiscrete manner. Some of the employers have already challenged the amendment of standing order enhancing the age of retirement. In one case the appellate authority under the standing order itself has set aside the amendment. In another case the Hon’ble High Court of Karnataka has stayed the amendment allowed by the certifying officer. Despite these the certifying officers are proceeding with allowing the amendment without even considering the relevant and valid objections raised by the employers. We seek the intervention of the government in this behalf.
4. We submit that such enhancement is totally uncalled for in the present circumstances when there is huge unemployment and the per centage of unemployment is raising every year and the statistics shows that there is no creation of employment on account of various reasons. Any e n h a n c e m e n t o f a g e o f r e t i r e m e n t w o u l d o n l y c r e a t e f u r t h e r unemployment and thus create unrest among the youth with attendant consequences.
5. The Association would like to submit that prior to 1982, there was no clause in the Model Standing Orders prescribing the age of retirement.
6. The Government of Karnataka inserted clause 15A to the Model Standing Orders by Notification No. GSR 29 dated 11.3.1982 which was published in the Karnataka Gazette dated 18.3.1982. The Clause 15A reads as under:
-“The age for retirement or superannuation of the workman may be 58 years or such other age as may be agreed upon between the employer and the workman by any agreement, settlement or award which may be bind on the employer and the workman under any law for the time being in force.”
The above Clause in the Model Standing Order clearly indicate that the age of retirement may be 58 years or such other age as may be agreed upon between the employer and the workmen by any settlement, which may bind on the Employer and the workmen under the law for the time being in force.
7. The above Clause clearly recognizes the right of the employer and the workmen to discuss, to negotiate and to arrive at a settlement with regard to age of retirement having regard to the requirement of each industry. The above Clause clearly leaves it open to the Employer and the employees to agree by way of collective bargaining the age of retirement in a given unit or the industry. The law recognizes that the employer and the employees are in the best position to judge the requirement of each Unit having regard to the job requirement and the physical standards and fitness required to perform the job at the factory or other industrial Establishments. Thus the above Clause in the Model Standing Order protect the interest of the employees as well as the employers and above all recognizes the necessity of prescribing the age of retirement having regard to the nature of work at each factory or establishment.
8. No doubt that the age of the retirement of Civil servant in Government has been enhanced to 60 years. However, the employment in the Government and industry particularly in the manufacturing sector cannot be treated as the same. The physical and manual work involved in carrying out the work is to be taken into account. The workmen / employees may not be able to carry on the work at the factory which involves not only physical strength but mental alertness. The physical and mental efficiency declines as the workman advances in his age. The workmen may not be able to work effectively and efficiently beyond 58 years. Their reflexes would also come down may result in accidents while on duty which will put the employer to a grave risk in continuing the workmen in service.
9. Further, various studies undertaken clearly establish that such of the workers who are engaged in manual labour and monotonous jobs would lose their efficiencies along with age. It is a proven fact that industrial workers have proved to be a less efficient particularly those engaged in manual labour after crossing the age of 50. There are many workers who seek voluntarily retirement after reaching the age of 50’s or mid
50’s. The such instances only further strengthen the finding research that the workers would lose their efficiencies as they advance in their age. Any further enhancement in the age of retirement would only aggravate the situation.
10. We would also like to submit that the post retirement benefit available to the employees have improved over the year.
• There is no salary limit for coverage under the Payment of Gratuity Act and the maximum amount of Gratuity payable has been enhanced to Rs. 10 Lakhs.
• Pension has been introduced since 1995 and the industrial employees would also get the benefit.
• With a constant raise in the wages, the amount of Contribution to the provident fund has gone up substantially and thus the employees would get refund of provident fund much higher than what their predecessor got.
• There has been enlargement of coverage under the ESI S c h e m e . C e r t a i n b e n e f i t p a r t i c u l a r l y t r e a t m e n t a n d hospitalization benefits are available to the retired employees also.
• Some organizations have also introduced non statutory superannuation benefits to their employees.
11. We may also refer to the decision of the Hon’ble Supreme Court in the case of Guest, Keen, Williams Pvt. Ltd., vs. P.J. Sterling – AIR 1959 SC 1279, wherein it has been held as
under:-“We would, however, like to add that this conclusion should not be taken as a decision on the general question of fixing the age of superannuation in the case of industrial employees. In fixing the age of superannuation Industrial Tribunals have to take into account several relevant factors.
What is the nature of the work assigned to t h e e m p l o y e e s i n t h e c o u r s e o f t h e i r employment?
What is the nature of the wage structure paid to them?
What are the retirement benefits and other amenities available to them?
What is the character of the climate where the employees work and what is the age of s u p e r a n n u a t i o n f i x e d i n c o m p a r a b l e industries in the same region?
What is generally the practice prevailing in the industry in the past in the matter of retiring its employees ?
These and other relevant facts have to be weighed by the Tribunal in every case when it is called upon to fix an age of superannuation in an industrial dispute.”
12. The Employer and his workmen are in a better position to take into account, all the above factors and decide the age of retirement in the process of collective bargaining. The existing Clause in the Model Standing Order 15-A, rightly recognizes the position and has left it to the discretion of the Employer and employees to fix the age of retirement in cases where the age of retirement is not 58 years. The existing clause has apparently been drafted having regard to the interest of the industry and the right of the workmen to collectively bargain the age of retirement having regard to the requirement of each organization. 13. We therefore submit that the existing Clause in the Model Standing
Order meets the requirement of industry. The action of the certifying officer is beyond the model standing order and defeats the very purpose of introduction of clause 15A of the Model Standing Order introduced by the Government of Karnataka. The basic object of clause 15A is to leave the age of retirement in case it is not 58 years to the employers and the employees to bargain collectively and decide. The whole purpose is again to encourage collective bargain at unit level. The action of the certifying officers defeats the basic purpose of clause 15A. 14. We therefore seek the intervention of the government and issue appropriate instructions to the Labour department/Certifying Officers to not to dilute the provisions of the Model Standing orders and thus defeat the basic purpose of clause 15A of the Model Standing Order.
Thanking you, Yours faithfully ,
For KARNATAKA EMPLOYERS ASSOCIATION,
(B.C. PRABHAKAR) President
