10 Solved Problems (IRAC Method) — Labour Law II

These ten problems are worked in the IRAC method — Issue, Rule, Analysis, Conclusion — the way a KSLU answer sheet expects; the full Question Bank has 40+ more.

Problem 1 — A workman, on the employer’s duty, dies in an accident (Unit 1)

Problem: A workman, on the employer’s duty, dies in an accident; it is proved he was under the influence of intoxication at the time. Is the employer liable to pay compensation?

I — Issue. Whether an employer is liable to pay compensation for a workman who died in an accident on duty while under the influence of drink.

R — Rule. 1. Under Section 74 of the Code on Social Security, 2020, an employer is liable for personal injury caused by an accident arising out of and in the course of employment, regardless of fault. 2. The intoxication defence — that the injury was directly attributable to the worker being under the influence of drink or drugs — applies only where the injury did not result in death or permanent total disablement.

A — Analysis. 1. The accident happened while the workman was performing the employer’s duty, so it arose in the course of (and, on these facts, out of) the employment. The trigger for liability is met. 2. The employer relies on the planted decoy — “he was intoxicated”. But the exception cannot be used here because the workman died. Once death results, the drink defence falls away entirely, however drunk the worker was. 3. Intoxication is therefore legally irrelevant on these facts; it neither breaks the causal connection nor engages the exception.

C — Conclusion. The employer is liable to pay compensation to the dependants. The intoxication is no defence because the accident caused the worker’s death.

Problem 2 — An ex-prisoner contracts tuberculosis from the dust to which… (Unit 1)

Problem: An ex-prisoner contracts tuberculosis from the dust to which he was exposed while working in a prison. Can he succeed in getting compensation?

I — Issue. Whether a disease (tuberculosis) contracted from workplace dust, with no single accident, can be compensated as an employment injury.

R — Rule. 1. Compensation ordinarily needs an accident, but a notified occupational disease contracted in the corresponding employment is deemed an injury by accident arising out of and in the course of employment (Section 74 read with Schedule III), so no specific accident need be proved. 2. There must be an employer–employee relationship and the disease must be one scheduled for that kind of dusty/hazardous work.

A — Analysis. 1. The disease was contracted from the dust of the work — a gradual harm, not a sudden accident. The absence of an “accident” is therefore no bar if the disease is a notified occupational disease. 2. If tuberculosis (or the relevant lung disease) is scheduled for that dusty employment and the claimant was employed to do that work, the disease is treated as an employment injury and he need not prove more. 3. The claim turns on two facts: that the disease is notified for the employment, and that the working relationship existed.

C — Conclusion. He can succeed in getting compensation provided the disease is a notified occupational disease for that employment and the employment relationship is established; the lack of a single accident does not defeat the claim.

Problem 3 — Ajay dies in a fatal factory accident (Unit 1)

Problem: Ajay dies in a fatal factory accident; the employer pays his widow ₹1 lakh directly. Is it a valid payment?

I — Issue. Whether an employer’s direct payment of compensation to a deceased worker’s widow is a valid payment discharging his statutory liability.

R — Rule. 1. Under Section 81(1) of the Code on Social Security, 2020, compensation payable on the death of an employee must be deposited with the competent authority, which then distributes it among the dependants. 2. The same section provides that no payment made directly by the employer shall be deemed a payment of compensation. 3. The amount itself must be calculated on the Section 76 formula (50% of monthly wages × the age-based relevant factor, subject to the minimum), not fixed by the employer at will.

A — Analysis. 1. Ajay died in the accident, so the death-compensation regime applies and the money must go through the competent authority, not into the widow’s hands directly. 2. The employer bypassed the authority and himself fixed ₹1 lakh. That is neither a valid mode of payment nor necessarily the correct amount under s.76. 3. The widow is not bound by the direct payment, and the employer’s liability is not discharged by it.

C — Conclusion. The direct payment is not valid. The employer must deposit the correctly-calculated compensation with the competent authority for lawful distribution; the ₹1 lakh handed over does not discharge his liability.

Problem 4 — An employee dies due to natural lightning while working at… (Unit 1)

Problem: An employee dies due to natural lightning while working at the employer’s premises. Is the employer liable to pay compensation?

I — Issue. Whether death by natural lightning at the workplace arises out of employment so as to make the employer liable.

R — Rule. 1. Compensation requires an accident arising out of employment — a causal connection with the work (Section 74). 2. A natural act of God, such as lightning, does not arise out of employment unless the employment exposed the worker to a greater risk than the general public faced — the added-peril test.

A — Analysis. 1. If the work merely placed the worker where any member of the public might equally have been struck, there is no special risk and the death does not arise out of employment — the employer is not liable. 2. But if the work put him in a specially exposed position — on a high open structure, a metal tower, an exposed rooftop — the employment added to the risk of being struck, and the death then arises out of employment. 3. The decoy is to answer “act of God, therefore never liable”. That is wrong: liability turns on whether the work increased the risk.

C — Conclusion. The employer is liable only if the employment exposed the worker to a greater-than-ordinary risk of lightning (added-peril test). State the test and decide on the facts; a bare “act of God” answer earns nothing.

Problem 5 — ‘A’ is employed as a security inspector at the gate of the… (Unit 1)

Problem: ‘A’ is employed as a security inspector at the gate of the factory premises. Is he a “workman” / employee entitled to compensation?

I — Issue. Whether a security inspector employed at the factory gate is an “employee”/“workman” who can claim compensation.

R — Rule. 1. An “employee” under the Code on Social Security, 2020 is a person employed on wages to do any skilled, unskilled, manual, supervisory or other work — the definition is wide and contains no exclusion for security work. 2. The classic test of the relationship is the employer’s right to control how the work is done (Dharangadhara Chemical Works v State of Saurashtra, 1957).

A — Analysis. 1. ‘A’ is engaged on wages to guard the employer’s premises; the work is done for and under the control of the employer. 2. Nothing in the definition excludes a watchman or security guard; guarding the establishment is work done in connection with the employer’s business. 3. He therefore satisfies every ingredient of “employee”.

C — Conclusion. ‘A’ is an employee/workman. If he is injured in an accident arising out of and in the course of that employment, he (or his dependants) can claim compensation. — ## UNIT 2 — Employees’ State Insurance & Maternity Benefit

Problem 6 — An employer withholds an employee’s gratuity, claiming the… (Unit 3)

Problem: An employer withholds an employee’s gratuity, claiming the employee’s negligence caused damage/loss to the employer’s property. Can the employee recover the gratuity?

I — Issue. Whether an employer may refuse the whole gratuity because the employee’s negligence caused damage or loss to the employer’s property.

R — Rule. 1. Under Section 53(6) of the Code on Social Security, 2020, gratuity may be forfeited to the extent of the damage or loss caused where the employee’s negligence causes damage to, or destruction of, the employer’s property. 2. It may be forfeited wholly or partly only for riotous or disorderly conduct, an act of violence, or an offence involving moral turpitude in the course of employment — none of which is alleged here.

A — Analysis. 1. The ground alleged is negligent damage, which falls under the first limb — forfeiture only to the extent of the loss, not a blanket refusal. 2. The employer may therefore set off the proved value of the damage against the gratuity, but must pay the balance. 3. Refusing the entire gratuity is unlawful; it exceeds what s.53(6) permits.

C — Conclusion. The employee can recover his gratuity less the amount of the proved damage. A total refusal is not permitted (Jaswant Singh Gill v Bharat Coking Coal Ltd, 2007 — forfeiture only under the Act).

Problem 7 — ‘A’ is terminated for misconduct within 3 years of joining… (Unit 3)

Problem: ‘A’ is terminated for misconduct within 3 years of joining and claims gratuity. Is he eligible?

I — Issue. Whether an employee terminated for misconduct within three years of joining is eligible to claim gratuity.

R — Rule. 1. Under Section 53(1) of the Code on Social Security, 2020, gratuity is payable only after five years of continuous service. 2. The five-year requirement is relaxed only where the termination is due to death or disablement.

A — Analysis. 1. ‘A’ has served only three years — short of the statutory five. Eligibility, not conduct, is the first hurdle, and he fails it. 2. Neither exception applies: he was not terminated by death or disablement, but for misconduct, so the relaxation of the five-year rule is unavailable. 3. Because the eligibility threshold is not met, no question of forfeiture even arises — forfeiture presupposes an earned gratuity, and here there is simply no gratuity to forfeit or to claim. 4. The reason for the five-year rule is that gratuity rewards long and continuous service; a person who leaves within three years has not rendered the service the benefit is designed to reward.

C — Conclusion. ‘A’ is not eligible for gratuity. He has not completed five years’ continuous service, and none of the death/disablement exceptions applies, so the claim fails at the threshold.

Problem 8 — Ravi is retrenched and claims gratuity, arguing that… (Unit 3)

Problem: Ravi is retrenched and claims gratuity, arguing that retrenchment is a termination of service. Can he claim?

I — Issue. Whether a retrenched employee can claim gratuity on the footing that retrenchment is a termination of service.

R — Rule. 1. Under Section 53 of the Code on Social Security, 2020, gratuity is payable on the termination of employment, and “termination” is read widely to include retrenchment. 2. The five years’ continuous service condition still applies (except for death/disablement).

A — Analysis. 1. Ravi is correct that retrenchment is a termination of service — it falls squarely within the wide meaning of “termination” in s.53, which is not limited to retirement or resignation. 2. His entitlement therefore turns on the length of service: if he has completed five years’ continuous service, he qualifies; if he has not, he does not, because retrenchment does not waive the five-year requirement. 3. The employer cannot defeat the claim by labelling the exit “retrenchment” rather than “termination”; the substance is that the employment has ended, which is what s.53 requires. 4. If the five years are made up, the amount is 15 days’ wages for each completed year (s.56).

C — Conclusion. Ravi can claim gratuity provided he has completed five years’ continuous service, because retrenchment is a termination of service within s.53. If he falls short of five years, the claim fails.

Problem 9 — Somu, aged 13, is made to work in a factory for more than 6… (Unit 4)

Problem: Somu, aged 13, is made to work in a factory for more than 6 hours without intervals, between 8 p.m. and 6 a.m., and is denied a weekly holiday. Examine the employer’s liability.

I — Issue. Whether the employer is liable for employing a 13-year-old, working him over six hours without intervals, at night, and denying a weekly holiday.

R — Rule. 1. A child under 14 cannot be employed at all in any establishment (OSH Code read with the Child and Adolescent Labour Act; Article 24). 2. Even for an adolescent, excessive hours without intervals, night work (broadly 7 p.m.–6 a.m.), and denial of a weekly holiday are prohibited.

A — Analysis. 1. Somu is 13 — below 14 — so his employment is itself illegal, whatever the conditions. This is the first and decisive point. 2. Independently, each condition breaches a protective rule: the night work (8 p.m.–6 a.m.), the more-than-6-hours stretch without intervals, and the denied weekly holiday are all unlawful. 3. There is no defence available to the employer on these facts, and the parent’s consent, if any, does not make a child’s employment lawful.

C — Conclusion. The employer is liable — first and foremost for employing a child under 14, and additionally for the hours, night-work and weekly-holiday breaches. He is open to penalty under the Code, and the child is entitled to be removed from the employment (M.C. Mehta v State of Tamil Nadu, 1996).

Problem 10 — A factory employs 35 women (Unit 4)

Problem: A factory employs 35 women; only two of them have children below five years, so the manager refuses to provide a creche. Is the refusal correct?

I — Issue. Whether an employer may refuse a creche on the ground that only two of the women employed have children below five.

R — Rule. 1. The creche duty is triggered by a threshold number of employees/workers in the establishment, not by how many workers actually have eligible children. Under the current OSH Code, s.24, the trigger is 50 workers (with a creche for the use of children under six); under the old Factories Act, s.48, under which this question was framed, the trigger was 30 women workers. 2. The number of workers who happen to have small children is legally irrelevant to whether the duty arises — it affects only how much the creche will be used.

A — Analysis. 1. The manager’s stated ground of refusal — “only two of the women have children below five” — is legally baseless, because the creche duty never depended on the number of eligible children. 2. On the facts, the factory employs 35 women, which crosses the 30-women threshold of the Factories Act (s.48) under which the problem is set, so the creche is mandatory; under the OSH Code the same duty arises once the 50-worker threshold is met. 3. Either way, the reason the manager gives for refusing is not a reason the law recognises — he has misread a threshold-of-workforce rule as a threshold-of-children rule.

C — Conclusion. The refusal is not correct. Once the threshold number of women is employed, the employer must provide a creche; the small number of eligible children is no excuse, and the facility is a welfare duty flowing from Article 42 (MCD v Female Workers, 2000).

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