August Newsletter

1. Ministry of Labour and Employment notified the Employees’ Deposit-Linked Insurance (Amendment) Scheme, 2025

Notified by the Ministry of Labour & Employment via G.S.R. 476(E) dated 18 July 2025, the Employees’ Deposit-Linked Insurance (Amendment) Scheme, 2025, came into effect from the same date of publication in the Official Gazette

Key Amendments (Paragraph 22 of EDLI Scheme, 1976)

• Minimum assurance benefit of ₹50 000: The Amendment inserts a new sub‑paragraph (1A), guaranteeing a minimum assurance benefit of ₹50,000, even when the deceased employee’s average PF balance is below that amount, if death occurred during service or in the prior 12 months.

• Applicability under EPF Act: The benefit applies to employees who were members of the Employees' Provident Fund Organization (EPFO) fund or an exempted provident fund under Section 17 of the EPF Act, and who died in service or within the preceding 12 months, thus ensuring coverage independent of contribution history.

• 60‑day service gap relief: A proviso now treats breaks of up to 60 days between two employment spells as continuous service for calculating the 12‑month eligibility period under sub‑paragraph (3).

• Coverage for death within six‑month lapse after last PF deposit: A new sub‑paragraph (5) ensures EDLI benefits if an employee dies within six months of their last PF contribution, provided they remain on the employer’s rolls.
  

Implications:

• Employees with very low PF balances now receive a minimum benefit of ₹50 000 regardless of contribution history.

• Those who switch jobs or have temporary gaps up to 60 days are still eligible as if service was uninterrupted.

• Death occurring within six months of the last PF contribution still entitles beneficiaries to EDLI cover, provided the employee was formally employed at that time.
  

2. The Employees’ State Insurance Corporation issued an ESIC Amnesty Scheme 2025, for one-time opportunity of legal dispute settlement

The Employees’ State Insurance Corporation (ESIC) rolled out a new Amnesty Scheme 2025 aimed at resolving long-standing legal disputes under the Employees’ State Insurance Act, 1948. The scheme will be operational from October 1, 2025, to September 30, 2026, and applies to all legal matters, pending before ESIC courts, criminal courts, or High Courts (under Article 226) as of March 31, 2025. It empowers Regional Directors to settle cases directly without central ESIC approval.

Key Amendments / Changes Introduced

Coverage Disputes (Sections 75 & 82)

• Closed units (non-functional for over 5 years and litigation pending >5 years): ESIC may withdraw cases without insisting on damages or prior assessment.

• Active units: May seek withdrawal by paying due contributions and interest (based on available records); damages waived.

• Self-declared coverage through Form-01 is excluded from this scheme.
  

Contribution Disputes (Section 45A/45AA)

• Employers can request out-of-court settlement with court permission.

• If records exist: contributions and interest must be paid accordingly.

• If records are missing: EPFO, IT filings, or other reliable sources may be accepted.

• No reliable records: minimum 30% of assessed dues plus interest to be paid; no damages levied.
  

Damage Disputes

• Where principal dues and interest are already paid: only 10% of the assessed damages need to be paid for full settlement and case withdrawal.
  

Criminal Prosecution Cases (Sections 84, 85, 85A)

• Insured Persons (Section 84): Cases may be withdrawn if excess benefits are refunded and no criminal conspiracy is involved.

• Employers (Sections 85/85A): Cases can be dropped if contributions and interest are fully paid; damages waived.
  

Old Cases (Section 85(a & g))

• Cases pending for over 15 years with dues ≤ ₹25,000 (excluding interest/damages) may be closed.

• For active establishments: 30% of dues plus interest must be paid.
  

Late Declaration Cases (Section 85(e))

• Pending for over 3 years may be withdrawn if the employer has updated compliance, settled all employee claims, and paid dues with interest.
  

Administrative Process

• Cases must be resolved within 6 months of application.

• Regional offices are given full authority to act.

• Incentives to field officers: ₹2,500 for civil matters and ₹1,000 for criminal cases settled under this scheme.
  

Implications

This scheme provides employers and insured persons a cost-effective and time-bound route to settle legacy disputes with ESIC, reducing litigation and improving compliance. By waiving damages and allowing flexible documentation, ESIC is clearly aiming to ease the compliance burden, particularly for closed or struggling units. It also indicates a decentralised, pragmatic enforcement approach, enabling quicker resolutions and clearing legal backlogs. For employers with pending cases, this is a strategic window to close liabilities, regularise records, and avoid long-term exposure.

3.  Revision of minimum wages – Jharkhand

On 23 July 2025, the Government of Jharkhand issued Notification No. 2/MW-2071/20210 L&T-2119 from Ranchi, revising the minimum wages for employees in Shops and Establishments across the state. The revised rates take effect retroactively from 1 April 2025 and are structured by area category (A, B, C) and skill level (unskilled to highly skilled). Each category specifies the Basic Pay, Variable Dearness Allowance (VDA), and Total Monthly Wages.

Key Changes

1.  Across-the-board Increase – Both Basic Pay and VDA have been increased, leading to higher total wages in all skill and area categories.

2.  VDA Revision – The VDA component now ranges from ₹774 (Unskilled, Area C) to ₹1,358 (Highly Skilled, Area A), reflecting inflation adjustments

3.  Area-based Differentiation Maintained – Area A continues to have the highest wage slabs, followed by B and C, preserving the cost-of-living hierarchy.

4.  Notable Gains for Higher Skills – Highly skilled workers in Area A now have a monthly wage of ₹20,754, crossing the ₹20,000 mark for the first time in this sector in the state.

5.  Retroactive Applicability – Employers must calculate and pay arrears for the period from 1 April 2025 until the date of implementation.

Implications

This scheme will raise payroll costs, especially in Area A, pushing employers to update wage structures, adjust payroll systems, and pay arrears to stay compliant. Employees will benefit from greater income security and purchasing power, while SMEs may need to revise budgets or operations. Non-compliance can lead to legal action, and higher wages in Area A may attract skilled workers from lower-paying regions.

4.  Revision of minimum wages – Andaman & Nicobar

Overview The Andaman & Nicobar Islands has revised the minimum daily wages across six scheduled employments under the Minimum Wages Act, 1948. This revision, effective 1 July 2025, is based on the average All India Consumer Price Index from October 2024 to March 2025, in line with the requirement to update rates every six months as per Notification No. 133/2023/F dated 27 December 2023. The new rates apply to all sectors covered under the Act, including government departments, offices, and industrial establishments.

Key Changes

• Daily wage rates increased across all categories:

  • Unskilled: ₹647

  • Semi-Skilled/Unskilled Supervisory: ₹728

  • Skilled/Clerical: ₹851

  • Highly Skilled: ₹934

• No change in other terms and conditions from the previous notification.

• Rates continue to be indexed to CPI, ensuring inflation-linked adjustments.

Implications This scheme will increase wage costs for employers across the Union Territory, requiring payroll updates to reflect the new rates from 1 July 2025. Employees benefit from higher earnings and inflation protection. Non-compliance could attract penalties under the Minimum Wages Act, 1948. Government departments and industrial establishments will need to budget for the revised rates, and regular six-monthly revisions mean businesses must plan for recurring adjustments.

Judgments

Amrik Dass Bhatti vs. Presiding Officer, Central Govt. Industrial Tribunal-cum-Labour Court-II, Chandigarh & Another

The Punjab & Haryana High Court, in Amrik Dass Bhatti vs. Presiding Officer, Central Govt. Industrial Tribunal-cum-Labour Court-II, Chandigarh & Another (CWP-15140-2019), upheld the dismissal of a bank employee found guilty of embezzling ₹500 from a customer’s account.

The Court reiterated that under Article 226, its role in disciplinary matters is limited to examining procedural fairness and the presence of some evidence, and it cannot reassess or reweigh that evidence. Relying on State of Rajasthan vs. Bhupendra Singh, it held that interference is justified only if findings are perverse, arbitrary, or unsupported by evidence. Emphasizing that embezzlement in banking is a grave breach of trust, it rejected the argument that refunding the money erased the misconduct. Citing Union of India vs. Const. Sunil Kumar, it found the penalty proportionate and dismissed the petition.

The ruling reinforces a strict approach to financial misconduct in trust-based professions, clarifies that refund or restitution does not mitigate proven charges, and reaffirms that judicial review in such matters will remain narrow and deferential to disciplinary authorities.

Smt. Munni vs. State of U.P. and 2 Others

The Allahabad High Court, in Smt. Munni vs. State of U.P. and 2 Others (2025:AHC:110984), held that an appeal against a departmental enquiry does not automatically abate upon the employee’s death, and the legal heirs are entitled to pursue it where the outcome affects post-terminal dues, pension rights, or other inheritable benefits.

Justice Ajit Kumar observed that in service jurisprudence governed by statutory rules, heirs automatically succeed to monetary dues and can challenge disciplinary orders that have adverse civil consequences, including denial of family pension or compassionate appointment. The Court rejected the Commissioner’s view that the appeal abated on the employee’s death, noting that Rule 11 of the U.P. Government Servant (Discipline and Appeal) Rules, 1999 provides for the appeal process without such limitation, and no law of abatement applies in such cases.

This ruling clarifies that service appeals with financial or succession-linked implications survive to the heirs, ensuring that disciplinary findings can still be challenged to protect family entitlements and prevent wrongful denial of benefits.

Abhijit Mishra Vs Wipro Limited

The Delhi High Court, in Abhijit Mishra vs. Wipro Limited (July 14, 2025), held that Wipro’s termination letter, which described the employee’s conduct as “malicious” and suggested an irreparable breakdown of trust, was defamatory as it lacked any substantiating evidence.

Justice Purushaindra Kumar Kaurav observed that the letter’s stigmatic language, unsupported by warnings, inquiry reports, or disciplinary findings, amounted to actionable defamation, harming Mishra’s professional reputation, employability, and dignity. The Court emphasised that in the absence of a plea of truth or corroboration, such remarks could not stand and would perpetuate continuing injustice. It discussed the broader impact of unverified allegations in termination letters, noting how they can amount to character assassination and cast a long shadow over an individual’s career prospects. The Court awarded ₹2 lakh in damages for reputational harm and directed Wipro to issue a fresh termination letter with the defamatory content removed.

This ruling underscore that employers must ensure termination communications are factual, evidence-based, and free of unsubstantiated stigma, signalling stricter judicial scrutiny over language that could damage an employee’s future employment opportunities.

Nand Lal Luhar and Others vs. Western Railway and Others

The Delhi High Court, in Nand Lal Luhar and Others vs. Western Railway and Others, held that Western Railways and its Recruitment Cells cannot deny reservation to candidates with 100% visual impairment under the Rights of Persons with Disabilities Act, 2016 (RPWD Act) merely because certain posts have not been “identified” for them.

Justice emphasised that non-identification of posts cannot override the statutory mandate of reservation under Sections 33–35 of the RPWD Act and that the principle of reasonable accommodation is integral to implementing such reservation. The Court discussed the jurisprudence in Vikash Kumar v. UPSC, National Federation of the Blind v. UPSC, and Rajeev Kumar Gupta v. Union of India, reaffirming that reasonable accommodation is a substantive and enforceable right, and the burden lies on the employer to prove that duties cannot be performed even with such accommodation. It rejected the Railways’ stance that non-availability of “suitable posts” justified exclusion, noting that reasonable accommodation is not charity but a legal obligation. The ruling directed the Railways to reconsider the petitioners’ applications under the visually impaired quota and explore accommodation possibilities within six weeks.

The ruling reinforces that statutory reservations take precedence over administrative barriers, making it clear that any refusal must be supported by evidence showing the job cannot be done even with reasonable accommodation, and establishing a benchmark for public sector hiring to comply with the RPWD Act’s principles of equality and non-discrimination.

Subha Prasad Nandi Majumdar v. State of West Bengal & Ors

The Supreme Court, in Subha Prasad Nandi Majumdar vs. State of West Bengal & Others, held that the West Bengal government’s denial of retirement age extension to the appellant on the ground that part of his teaching experience was outside West Bengal was arbitrary, discriminatory, and violative of Articles 14 and 16.

The Bench of Justices P.S. Narasimha and Manoj Misra ruled that the 2021 notification extending the retirement age from 60 to 65 years for certain university officers used the term “any State-aided university or college,” which must be given its plain and inclusive meaning, covering eligible teaching experience regardless of geographical location. The Court discussed the unconstitutionality of creating artificial classifications based on the place of prior service, especially at the verge of retirement, holding that such restrictions lacked any rational nexus to the policy’s object. It relied on precedents including J.S. Rukmani v. State of Tamil Nadu and Harshendra Choubisa v. State of Rajasthan to reaffirm that region-based distinctions in service benefits cannot withstand constitutional scrutiny.

The judgment underscored the role of constitutional courts in identifying and striking down subtle administrative decisions that erode the principles of equality and fraternity. The decision has wider implications as it curbs parochial interpretations of service rules, reinforces uniform application of benefits across states, and signals that executive policies must be interpreted in line with constitutional values rather than narrow local definitions.

International Updates

Australia: Increases to Minimum Wage and Other Important Changes starting 1 July 2025

Overview On 3 June 2025, the Fair Work Commission released its annual wage review decision, announcing increases to Australia’s National Minimum Wage and award rates, alongside upcoming changes to employer superannuation contributions. These adjustments, effective from 1 July 2025, will directly impact payroll obligations and compliance requirements for employers across the country.

Key Changes

• National Minimum Wage: From 1 July 2025, the adult National Minimum Wage will rise from $24.10 to $24.95 per hour and from $915.90 to $948 per 38-hour week.

• Award Rates: Minimum rates under modern awards will increase by 3.5% from the same date.

• Superannuation: The compulsory employer superannuation contribution rate will increase from 11.5% to 12% on 1 July 2025 and remain at this rate until at least 30 June 2027.
  

Implications for Employers These changes will increase overall employment costs from July 2025. Employers must ensure payroll systems are updated to reflect the new rates and superannuation percentage to avoid underpayments. Given the significant penalties for non-compliance, including fines and reputational damage, in-house counsel and HR teams should conduct proactive wage audits, review employment contracts, and communicate changes to staff. The rise in superannuation also impacts long-term workforce cost planning, particularly for industries with high headcount or award-based employees.

UK Employment Law Reform Roadmap Published – Major Changes Ahead

Overview The Employment Rights Bill (ERB), described as the most significant overhaul of UK employment law in a generation, is now in the final stages of the parliamentary process and is expected to become law by autumn 2025. The Bill lays out a broad framework for change, with most measures to be introduced gradually following further consultations. The government’s roadmap, published on 1 July 2025, sets out the planned consultation and implementation dates for key proposals, signalling a phased approach rather than an immediate overhaul.

Key Changes

• Day one unfair dismissal – Removes the current qualifying service requirement by 2027, allowing claims from the first day of employment, subject to an “initial period of employment” with lighter dismissal processes.

• Fire and rehire restrictions – To be implemented in October 2026, limiting its use except in cases of severe financial distress.

• Sexual harassment prevention – From October 2026, employers must take “all” reasonable steps to prevent harassment and will again be liable for third-party harassment.

• Collective redundancy – Protective awards for non-compliance will double to 180 days’ pay from April 2026, with threshold changes in 2027.

• Employment Tribunal time limits – Extension from three to six months for most claims from October 2026.

• Zero hours contracts and guaranteed hours – Reforms to be introduced in 2027.

• Trade union measures – Various changes, including easier recognition processes, enhanced rights for representatives, and repeals of certain existing union laws.
  

Implications for Employers This phased reform package will significantly alter workplace rights, dismissal processes, redundancy obligations, and union relations over the next two years. Employers will need to prepare for earlier exposure to unfair dismissal claims, rethink contract variation strategies in light of fire and rehire limits, and strengthen anti-harassment policies. The increased redundancy awards and extended tribunal deadlines will raise litigation risks and costs. Changes to zero hours contracts and union rights will require updates to workforce management and employee relations strategies. Early planning, close monitoring of consultation outcomes, and regular policy reviews will be essential to remain compliant and manage risk during this transition period.

Unions in Nepal co-create tailored training tools to support informal workers

Overview On 25 July 2025, the ILO Country Office for Nepal, ILO’s Bureau for Workers’ Activities (ACTRAV), and the International Training Centre of the ILO (ITCILO) launched a hybrid design sprint aimed at strengthening trade unions’ ability to support informal workers. With 84.6% of Nepal’s workforce in informal employment (many of them women) this initiative focuses on the sanitation and domestic work sectors, which are among the most vulnerable. Fourteen trainers from Nepal’s major trade union confederations (ANTUF, GEFONT, NTUC) took part in the launch.

Key Provisions

• Target Groups: Domestic and waste management workers in the informal sector.

• Training Development: Co-creation of practical, interactive, and inclusive training modules tailored to local realities.

• Content Areas: Labour rights, social security, freedom of association, collective bargaining, violence and harassment prevention, and promotion of decent work.

• Partnerships: Collaboration with trade unions, Solid Waste Management Association of Nepal (SWMAN), and municipal authorities.

• Project Framework: Part of the ILO’s Promoting Rights and Social Inclusion (PRS) Phase 2 project covering India, Nepal, and Pakistan.
  

Future Implications This programme could significantly boost the capacity of trade unions to organise and advocate for informal workers, laying the groundwork for their transition into formal employment. By embedding rights-based and participatory training, it is likely to improve working conditions, strengthen social protection coverage, and influence national labour policy reforms. The approach also creates a replicable model for other vulnerable sectors, potentially expanding its impact across South Asia.