April Newsletter

NOTIFICATIONS

New EPF, EPS & EDLI Schemes Approved to Align with Code on Social Security, 2020

The Central Board of Trustees (CBT) has approved the introduction of the Employees’ Provident Fund (EPF) Scheme, 2026; Employees’ Pension Scheme (EPS), 2026; and Employees’ Deposit Linked Insurance (EDLI) Scheme, 2026, as part of a broader effort to modernise India’s social security framework in line with the Code on Social Security, 2020. These new schemes are intended to replace the existing frameworks governing provident fund, pension, and insurance benefits for employees.

Key highlights of the approval include:

• The new EPF, EPS, and EDLI Schemes, 2026 will replace the existing schemes currently in force.

• The schemes are designed to ensure full alignment with the provisions of the Code on Social Security, 2020.

• The reform seeks to harmonise and consolidate social security laws into a unified and simplified structure.

• The updated framework aims to enhance clarity, consistency, and ease of compliance for employers and employees.

• The move is part of a broader policy shift towards modernising labour welfare and social security administration in India.

The approval of the EPF, EPS, and EDLI Schemes, 2026 marks a significant step towards creating a cohesive and contemporary social security regime, ensuring better regulatory alignment, improved administration, and enhanced coverage under the Code on Social Security, 2020.

Ministry of Labour Issues Clarifications on Labour Codes to Facilitate Implementation

The Ministry of Labour & Employment has released updated FAQs and clarifications in March 2026 to address key interpretational and compliance-related aspects under the new labour codes. The guidance aims to provide greater clarity to employers and stakeholders on the practical application of statutory provisions, particularly under the Code on Wages, 2019 and related frameworks.

Key highlights of the clarification include:

• The definition of “wages” under the Code on Wages, 2019 has been clarified to ensure uniform interpretation across sectors.

• The application of the 50% wage threshold rule has been explained, particularly in relation to the inclusion and exclusion of various salary components.

• Guidance has been provided on the treatment of overtime payments and allowances in the computation of wages.

• Clarifications have been issued regarding the applicability of gratuity under the revised definition of wages.

• The scope of fixed-term employment has been defined, confirming its applicability to direct employees engaged for a fixed duration.

  
  

These clarifications are expected to reduce ambiguity and support smoother implementation of the labour codes by enhancing compliance certainty, promoting uniformity in interpretation, and aligning employer practices with the statutory framework.\

JUDGMENTS

Rahul Pandey v. Badarpur Service Station

In Rahul Pandey v. Badarpur Service Station, the Hon’ble Delhi High Court upheld the principle that prolonged and unexplained absence from duty may constitute voluntary abandonment of service rather than illegal termination. The Court affirmed the findings of the Labour Court, which had denied reinstatement to the employee on the ground that the cessation of employment was attributable to the employee’s own conduct.

The case arose from a dispute where the workman alleged wrongful termination and sought reinstatement with back wages. However, the employer contended that the employee had remained absent from duty for an extended period without any intimation or justification. The Labour Court, upon examining the evidence, concluded that the absence was neither authorised nor explained, and therefore amounted to voluntary abandonment of service. The Delhi High Court, on review, found no infirmity in this conclusion and declined to interfere with the Labour Court’s award.

The ruling reinforces the legal position that continuous and unexplained absence can be treated as a conscious relinquishment of employment, disentitling the employee from reliefs such as reinstatement. It also underscores the importance of maintaining proper communication and adherence to service conditions by employees, while affirming judicial deference to factual findings of Labour Courts in industrial disputes.

The General Secretary v. The Management, J & J Leather Enterprises Ltd.

In The General Secretary v. The Management, J & J Leather Enterprises Ltd., the Hon’ble Madras High Court reiterated the limited scope of judicial interference in matters decided by Labour Courts and Industrial Tribunals, holding that such findings cannot be disturbed unless they are shown to be perverse or unsupported by evidence. The Court upheld the industrial adjudication in the present case, finding no grounds to interfere with the conclusions reached by the Tribunal.

The dispute arose from an industrial adjudication where the Tribunal had examined the evidence and rendered findings on the issues in contention between the workmen and the management. The petitioner challenged the award before the High Court, seeking reappreciation of facts and reversal of the findings. However, the Court observed that the Tribunal is the final fact-finding authority in such matters, and its conclusions, when based on evidence and proper appreciation of material on record, do not warrant interference under writ jurisdiction.

The ruling reinforces the principle that High Courts, while exercising supervisory jurisdiction, will not act as appellate bodies over Labour or Industrial Tribunal decisions. It underscores that interference is justified only in cases of perversity, patent illegality, or violation of principles of natural justice, thereby preserving the autonomy and finality of specialised industrial adjudicatory forums.

Hamsaanandini Nanduri v. Union of India

In Hamsaanandini Nanduri v. Union of India, the Hon’ble Supreme Court delivered a significant ruling expanding maternity benefits for adoptive mothers by striking down restrictive provisions under the Code on Social Security, 2020. The Court held that limiting maternity benefits based on the age of the adopted child is unconstitutional and violative of Articles 14 and 21 of the Constitution.

The case arose from a constitutional challenge to Section 60(4) of the Code on Social Security, 2020 (and its predecessor under the Maternity Benefit Act, 1961), which granted maternity benefits only to adoptive mothers of children below three months of age. The petitioner contended that this classification was arbitrary and discriminatory. Accepting this contention, the Court held that there is no rational basis to distinguish between adoptive mothers based on the age of the child, as the responsibilities of motherhood remain the same irrespective of when adoption occurs.

The Supreme Court emphasised that maternity benefits are rooted in the concept of caregiving and motherhood rather than the biological act of childbirth. It further recognised adoption as an integral facet of reproductive and decisional autonomy under Article 21, holding that an adopted child is no different from a biological child for the purposes of social welfare protections. Accordingly, the Court read down the provision to extend maternity benefits to all adoptive mothers, irrespective of the age of the child, thereby ensuring equal access to statutory benefits.

The ruling marks a progressive step in labour and social welfare jurisprudence by broadening the scope of maternity protection and eliminating discriminatory classifications. It reinforces the constitutional mandate of equality and dignity, while aligning social security benefits with evolving notions of family and parenthood under the Code on Social Security, 2020.

Vasantbhai Haribhai Gajera v. State of Gujarat

In Vasantbhai Haribhai Gajera v. State of Gujarat, the Hon’ble Gujarat High Court held that a resignation obtained under coercion or undue influence cannot be treated as a valid and final severance of employment, and does not bar a workman from raising an industrial dispute. The Court emphasised that the genuineness and voluntariness of resignation must be examined in substance, particularly where allegations of forced exit are raised.

The case arose from a dispute where the employee contended that the resignation was not voluntary but secured under pressure, while the employer relied on the resignation to assert that the employment relationship had lawfully ended. The Court observed that such disputes involve questions of fact that must be adjudicated by the appropriate industrial forum, which is best placed to evaluate evidence and determine whether the resignation was truly voluntary.

The High Court further clarified that if a resignation is found to be coerced, it would amount to termination in the eyes of law, thereby entitling the workman to seek remedies including reinstatement or compensation under the Industrial Disputes Act, 1947. It also reiterated the limited scope of writ jurisdiction, particularly in matters requiring factual determination.

The ruling reinforces the principle that substance prevails over form in employment relationships, ensuring that coerced resignations cannot be used to defeat statutory protections. It strengthens safeguards against forced exits and preserves the right of workmen to challenge involuntary separation through industrial adjudication.

Brij Mohan & Ors. v. M/s Lal Bahadur Shastri Hospital & Ors.

In Brij Mohan & Ors. v. M/s Lal Bahadur Shastri Hospital & Ors., the Hon’ble Delhi High Court reiterated that the burden of proving the existence of an employer–employee relationship squarely lies on the workman, particularly in cases involving indirect or contractual engagements. The Court upheld the findings of the Labour Court, emphasising that mere assertions or self-serving documents are insufficient to establish such a relationship.

The dispute arose where the petitioners claimed to be employees of the respondent hospital and alleged illegal termination. However, the management denied the existence of any direct employment relationship. The Court observed that in such circumstances, the initial onus is on the workman to produce cogent and positive evidence demonstrating employment such as appointment letters, wage records, or supervisory control. In the absence of such proof, the claim cannot be sustained.

The High Court further noted that determination of an employer-employee relationship is a question of fact, and findings of the Labour Court, when based on appreciation of evidence, do not warrant interference unless shown to be perverse or manifestly erroneous.

The ruling reinforces a settled principle of labour jurisprudence that the foundational burden lies on the claimant to establish employment. It also highlights the evidentiary challenges in cases involving contractual or indirect employment structures, underscoring the need for clear documentation to substantiate such claims.

Jaideep Kumar v. Commissioner of Police & Ors.

In Jaideep Kumar v. Commissioner of Police & Ors., the Hon’ble Delhi High Court held that in departmental proceedings, the guilt of an employee can be established on the basis of circumstantial evidence and statements recorded during a preliminary inquiry, even if key witnesses subsequently turn hostile during the enquiry. The Court emphasised that strict rules of evidence applicable to criminal trials do not govern disciplinary proceedings.

The case arose from a challenge to disciplinary findings where the petitioner contended that the enquiry was vitiated as material witnesses had turned hostile during the proceedings. However, the Court observed that preliminary inquiry statements and surrounding circumstances can still be relied upon to establish misconduct, provided they form part of a coherent evidentiary framework. It noted that departmental proceedings operate on the standard of “preponderance of probabilities” rather than proof beyond reasonable doubt.

The Division Bench further clarified that subsequent hostility of witnesses does not automatically nullify earlier statements or the overall evidentiary value of the record. What is required is a holistic assessment of all materials, including contemporaneous records and circumstantial evidence, to determine whether the charges stand proved.

The ruling reinforces the distinct evidentiary standards applicable to service jurisprudence, ensuring that disciplinary proceedings are not frustrated merely due to witness hostility. It affirms that employers can rely on preliminary inquiry material and circumstantial evidence to sustain findings of misconduct, thereby preserving the efficacy of internal disciplinary mechanisms.

Dr. Lalchand N. Jumani v. Municipal Corporation of Greater Mumbai & Ors.

In Dr. Lalchand N. Jumani v. Municipal Corporation of Greater Mumbai & Ors., the Hon’ble Bombay High Court held that acquittal of an employee in a criminal case does not automatically entitle them to full salary and back wages for the period of suspension. The Court emphasised that such entitlement is not a matter of right, but must be determined based on the facts of each case and the applicable service regulations.

The case arose from a claim by a medical officer who, after being acquitted of corruption charges, sought full pay and allowances for the suspension period. The employer, however, declined to treat the suspension period as duty. The Court observed that while acquittal removes criminal liability, it does not automatically invalidate administrative or service-related consequences arising during the pendency of proceedings.

The High Court further clarified that the competent authority retains discretion under service rules to determine how the suspension period is to be treated, including whether full wages, partial wages, or no wages are payable. Such decisions must be based on a holistic assessment of the circumstances, including the nature of allegations and conduct of the employee.

The ruling reinforces the settled distinction between criminal proceedings and service jurisprudence, affirming that acquittal does not automatically translate into service benefits. It underscores the discretionary powers of employers under service regulations, while adopting a fact-specific approach to claims for back wages and salary during suspension.

Monu Kumar & Ors. v. State of Bihar & Ors.

In Monu Kumar & Ors. v. State of Bihar & Ors., the Hon’ble Patna High Court held that the sealed cover procedure cannot be invoked merely on the basis of the pendency of an FIR, reiterating that denial of public employment on the basis of untested allegations violates constitutional guarantees under Articles 14 and 16.

The case arose from a writ petition filed by candidates who had applied for teaching positions pursuant to a recruitment advertisement issued by the Bihar Public Service Commission (BPSC). The authorities had withheld consideration of certain candidates by applying the sealed cover procedure solely on account of pending FIRs. The Court observed that mere registration of an FIR does not establish guilt and cannot form the basis for depriving candidates of employment opportunities.

The Court further emphasised that such a blanket approach undermines the presumption of innocence and results in arbitrary exclusion from public employment. It held that the sealed cover procedure is an exception and must be applied cautiously, typically in cases where disciplinary proceedings or charges have reached a more advanced stage, rather than at the stage of mere allegations.

The ruling reinforces constitutional safeguards in public employment, affirming that unproven allegations cannot be used to deny appointment. It underscores the need for a balanced and rights-oriented approach in recruitment processes, ensuring that procedural mechanisms like sealed cover are not misused to the detriment of candidates.

INTERNATIONAL UPDATES

South Korea’s “Yellow Envelope Law” Comes into Force Expanding Worker Protections

In March 2026, amendments to South Korea’s Trade Union and Labour Relations Adjustment Act, commonly referred to as the “Yellow Envelope Law” came into force, significantly expanding protections for subcontracted and non-regular workers. The reform seeks to address structural imbalances in the labour market by extending collective bargaining rights to workers who are indirectly employed but whose working conditions are effectively controlled by principal employers.

The law is expected to strengthen the bargaining power of platform workers, subcontracted labour, and other non-standard workers by enabling them to negotiate with entities that exercise real control over their employment conditions. It also reflects a broader policy trend towards recognising evolving employment relationships and ensuring that labour protections keep pace with non-traditional work arrangements.

The reform is likely to reshape industrial relations in South Korea by reducing disparities between direct and indirect employment, while enhancing accountability of principal employers in complex labour supply chains.

European Union Advances Platform Work Framework to Regulate Gig Economy

In March 2026, developments continued across the European Union towards implementation of the Platform Work Directive, a landmark regulatory framework aimed at improving working conditions for gig and platform workers. The directive introduces mechanisms to determine employment status, enhance transparency in algorithmic management, and ensure accountability in automated decision-making processes.

The framework is designed to address challenges arising from digital labour platforms, including misclassification of workers, opaque work allocation systems, and lack of social protections. It requires platforms to disclose how algorithms influence working conditions and enables workers to challenge automated decisions affecting their employment.

The directive represents a significant step towards formalising rights in the gig economy, promoting fair classification, and strengthening labour protections in digitally mediated work environments across EU member states.

The content provided in this update is for educational and informational purposes only and should not be construed as legal advice or opinion. Lex Alliance, Advocates & Legal Consultants, will not be liable in connection with the use of this information without seeking appropriate legal counsel