The Supreme Court of India in its recent judgement inVijaya Bank and Ors. v. Prashant B. Narnawareconsidered the legal standing of employment bonds in India. This note analyzes the Court’s affirmation of a differential approach in respect of restrictions effective during employment and those post-termination. It further highlights the Court’s stance on unequal bargaining power and its view on public policy considerations in India’s employment law paradigm.
The Supreme Court of India recentlyreaffirmed the enforceability of exclusive jurisdiction clauses in employment contracts. InRakesh Kumar Verma v. HDFC Bank Ltd.the Court held that where multiple courts may have territorial jurisdiction under Section 20 of the Code of Civil Procedure, 1908, parties are free to contractually select one such court as the exclusive forum for dispute resolution, provided that the chosen court has a legitimate nexus to the dispute.
This decision is particularly relevant for corporations with large numbers of employees working across jurisdictions or employers with remote or hybrid workforces, as it provides clarity on how to mitigate forum shopping risks and ensure consistency in dispute resolution. The Court’s ruling also offers practical guidance on how employers can structure jurisdiction clauses to withstand legal scrutiny.
The Karnataka High Court (“Court”), in its judgement dated September 30, 2024 in Ms. X v. Internal Complaints Committee, ANI Technologies Private Limited and Ors., held that the relationship between ANI Technologies Private Limited (“OLA”) and its driver subscribers was an employer-employee relationship for purposes of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”) and such driver subscribers could not be considered as independent contractors.
The judgement, which closely scrutinizes OLA’s subscription agreements with its driver subscribers and customers, states that OLA cannot, on one hand, exercise complete control over the activities performed by the driver subscribers, while, on the other hand, onboard them as independent contractors to evade its responsibilities under relevant statutes. The judgment also analyzes the intent and objectives of the POSH Act and the wide ambit of the definitions of employer, employee and workplace under the POSH Act in furtherance of these objectives.
OLA has filed an appeal against the judgment before the Division Bench of the Court, which has issued an interim order staying its operation, stating that the issues raised in the judgement require further consideration. While the outcome of the appeal is awaited, the Court’s judgment of September 30, 2024, through its detailed reasoning, assumes significance in contributing to the discourse on the status of gig workers in the current labor economy and the responsibilities and liabilities of companies who engage such workers on a contract basis.
Internal investigations may need to be carried out in India by employers in relation to a wide range of issues and/or situations. In case of Indian subsidiaries of MNCs, investigations may be carried out for the purpose of satisfying compliance requirements under law(s) applicable to the parent entity, like the Foreign Corrupt Practices Act of 1977 of the US or the UK’s Bribery Act 2010.
In the course of such internal investigations, large amounts of personal data related to accused persons and other relevant individuals may need to be processed by the employer – either by itself or through its advisors and agents. Accordingly, an informed assessment of the rights of such individuals, as well as the obligations of the employer and its advisors/agents, becomes crucial from the perspective of applicable data protection law.
This note specifically discusses the processing of personal data in the context of internal investigations, including with respect to allegations or suspicions of economic and criminal offences. While necessary rules under the Digital Personal Data Protection Act, 2023 are yet to be notified, provisions of this new law, as published in August 2023, indicate key considerations for employers (each of which is likely to be treated as a “data fiduciary”), including with respect to consent, legitimate use and potential exemptions.
In a significant move, the Government of India implemented a nationwide lockdown in India in a bid to contain the COVID-19 pandemic with effect from March 25, 2020. The lockdown was initially expected to last until April 14, 2020 but has been extended until May 3, 2020. During the lockdown period, all private and commercial establishments are required to be closed down, with certain exceptions. While several employers have been providing work from home facilities to their employees during the lockdown period, due to the uncertainty over the scope of the COVID-19 public health emergency and the impact on the economy, employers are now considering options for saving labour costs for business viability reasons, including by reducing salaries of employees and/or terminating their employment. We discuss these options in the attached note.