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Bridging the legal gap: Rethinking the status of gig and platform workers in India’s evolving economy

Delivery rider on a scooter wearing a yellow helmet and carrying a yellow insulated bag.

The article discusses the legal ambiguity surrounding India’s gig economy, comprising workers like drivers and delivery personnel, and the lack of clear laws governing their employment and social security benefits. Despite central and state laws being enacted to recognize and protect these workers, they remain largely unenforced or partially implemented. The judiciary is currently dealing with cases related to gig workers’ rights, and the Supreme Court’s decision in a pending case may bring much-needed clarity on their status. The article suggests that authorities could draw inspiration from the Motor Vehicle Aggregator Guidelines, 2025, which provide benefits to drivers, to strike a balance between traditional employment relationships and new-age work arrangements, ultimately creating modern and equitable working relationships.

Tags App-Based Services, Delivery Workers, Digital Economy, Employment Rights, Gig Workers, Indian Economy, JSA Thought Leadership, Judicial Trends, Labour Law, Labour Policy, Legal Status, Platform Economy, Platform Workers, Policy Reform, Social Security, Worker Protections

JSA Prism | Employment | July 2025

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Please click here to download the Prism as PDF.

Delhi High Court rules against defamatory termination letter: A case of contractual termination versus reputational harm

In a significant judgment addressing the limits of employer discretion and the boundaries of reputational harm within private employment relationships, the Hon’ble High Court of Delhi (“Delhi HC”) recently in the case of Abhijit Mishra vs. Wipro Limited[1] ruled in favour of an individual who had challenged the defamatory language used in the termination letter issued by his ex-employer. While the Delhi HC upheld the employer’s contractual right to terminate employment under a determinable agreement, it found that the employer had exceeded the permissible bounds of administrative communication by including stigmatic and unsubstantiated assertions that impugned the employee’s professional integrity.

Brief facts

The case arose from a suit filed by an individual (“Plaintiff”) against his ex-employer (“Employer”) who was terminated from services on June 5, 2020. Upon cessation of employment, the employer had issued a termination letter that described the Plaintiff’s conduct as ‘malicious’ and referred to a ‘complete loss of trust, and confidence’ alleging a breakdown of the employer-employee relationship.

The Plaintiff contended that these remarks were defamatory, untrue, and unsubstantiated, causing grave harm to his reputation and future employability. He argued that the letter went beyond a mere administrative act of termination and constituted a personal attack that cast aspersions on his professional conduct without any supporting evidence. Seeking redress, the Plaintiff filed a civil suit seeking the issuance of a fresh termination letter expunging the stigmatic termination, along with damages for reputational harm.

The Employer in defence, argued that the statements were a factual account of the employee’s conduct and were made internally without publication to third parties. It asserted that the remarks were justified in light of the individual’s insubordination, underperformance, and repeated complaints to senior management.

Issues

Whether the termination of the Plaintiff was in violation of the employment contract.
Whether the language used in the termination letter amounted to defamation, thereby causing reputational harm to the Plaintiff.

Analysis and findings

Termination Under a Determinable Contract:

The Delhi HC began its analysis by interpreting Clause 10 of the Plaintiff’s employment contract, which allowed either party to terminate the employment without assigning any reasons, subject to a 1 (one) month notice during probation or a 2 (two) month notice post-confirmation. The Delhi HC observed that this clause reflected the essence of a determinable contract, i.e., one that may be unilaterally terminated without cause or breach.
Drawing from a well-established body of precedents, the Delhi HC reiterated that contracts of private employment, unless governed by statutory protections or public law obligations, do not warrant specific performance or reinstatement as a remedy for wrongful termination. Such relief is limited to 3 (three) narrow exceptions: (a) dismissal of a public servant in violation of Article 311 of the Constitution of India (“Constitution”); (b) reinstatement sought by a worker under industrial law; or (c) where a statutory body has acted in breach of a mandatory obligation imposed by statute.
Accordingly, even if the Plaintiff’s termination was arbitrary or tainted with procedural infirmities, the Delhi HC held that such a claim could only result in monetary compensation, not reinstatement. The right to terminate, said the Delhi HC, stood unaffected by the presence or absence of cause, and the mere inclusion of reasons in a termination letter does not transform the nature of the termination or invite a higher standard of scrutiny.
Therefore, the first issue, on whether the termination was in violation of the employment contract, was decided against the Plaintiff.
While the Delhi HC upheld that a determinable employment contract permits either party to terminate the engagement without assigning reasons, thereby insulating the Employer from a claim of wrongful termination, it did not equate this with an endorsement of arbitrary or unregulated dismissal. Indian employment law does not recognise the doctrine of at-will employment as understood in the United States. Even within private contractual arrangements, a termination must not be arbitrary, vindictive, or procedurally unfair, and must generally rest on reasonable cause or demonstrable misconduct.

Defamation and the right to reputation:

While the Delhi HC upheld the Employer’s contractual right to terminate, it took a sharply different view of the language used in the termination letter. The Plaintiff argued that phrases such as ‘malicious conduct’ and ‘complete loss of trust’ were defamatory, lacked any factual basis, and amounted to character assassination.
The Delhi HC acknowledged the right to reputation as a fundamental right under Article 21 of the Constitution. While a termination letter can validly state the employer’s reasons for cessation of employment, any assertions that are false, unsubstantiated, and injurious to a person’s standing in society may amount to civil defamation.

The Delhi HC laid out the essential ingredients for defamation under civil law: (a) a false statement, either written (libel) or spoken (slander), which tends to lower the Plaintiff’s reputation; (b) publication of that statement to at least 1 (one) person other than the Plaintiff; (c) reference or identification of the Plaintiff in the statement (whether expressly or by implication); and (d) absence of a valid defence such as justification, truth, privilege, or fair comment.

Keeping in mind the above parameters, the Delhi HC analysed whether the statements/remarks made in the termination letter would qualify as defamation.

Whether the purportedly defamatory remarks are false and defamatory, and is there an absence of a valid defence?
On perusal of the record, the Delhi HC compared the stigmatic phrases ‘malicious conduct’ and ‘complete loss of trust’ with the employee’s contemporaneous performance appraisals, all of which categorised him as a highly valued contributor. Basis the said documentary evidence on record, the Delhi HC held the above remarks as unsubstantiated remarks which would inevitably lower the employee’s reputation in the society.
The Delhi HC observed that nowhere was there any mention of ‘malicious conduct’ or even substandard performance by the Plaintiff. In fact, the Employer had failed to place on record any disciplinary records, warning letters, or internal inquiries that would justify the remarks made in the termination letter.
The Delhi HC concluded that the defamatory assertions were not merely unsupported but also directly contradicted by the Employer’s own internal documents. These remarks, according to the Delhi HC, were intended to stigmatise the Plaintiff’s reputation and damage his credibility in future professional settings.
Accordingly, the Delhi HC concluded that the impugned statements were factually baseless, defamatory in nature, and made without any valid justification or defence. The Delhi HC held that the elements of falsity and absence of a valid defence stood clearly satisfied.
Whether the defamatory remarks are identifiably referring to the Plaintiff?
The Delhi HC held there was no ambiguity with respect to identification of the Plaintiff as the person alluded in the termination letter.
Whether the Employer published the defamatory remarks?
Judicial precedents have held that publication is a sine qua non for the tort of defamation and it must be the case that the defamatory statement is brought to the awareness of a third party. Although the Employer argued that there was no third-party publication of the termination letter and that the letter was issued solely to the Plaintiff, the Delhi HC rejected this defence by invoking the doctrine of compelled self-publication, a concept which is widely recognised in American jurisprudence.
Before the Delhi HC, foreseeability, not physical dissemination, became the fulcrum for the publication limb. Because employers universally know that background-check protocols oblige candidates to share prior separation documents, the Delhi HC held that the employer ought to have foreseen that the defamatory remarks would reach third parties.
The Delhi HC observed that the Employer must have been fully aware that the Plaintiff would be required to furnish details of his exit in subsequent employment. The Delhi HC likened this situation to several international precedents, including the Minnesota Supreme Court’s ruling in Lewis vs. Equitable Life Assurance Society[2], where in cases of compelled self-publication, an employer cannot claim absence of publication. The Delhi HC also cited other similar rulings involving compelled disclosure of termination reasons to future employers.
Therefore, the Delhi HC held that the element of publication was satisfied, even in the absence of direct transmission to a third party. The foreseeability of compelled self-disclosure made the employer liable for the natural and probable consequences of its defamatory statements.

Quantum of Damages

Having established that the termination letter was defamatory and unsupported by evidence proving the contrary vis-à-vis the statements made, the Delhi HC turned to the assessment of damages. It acknowledged that Indian law generally does not favour punitive or exemplary damages in routine defamation claims. Instead, courts seek to award general compensatory damages, aimed at achieving 3 (three) core objectives: (a) console the Plaintiff for emotional suffering, (b) repair the damage to his personal and professional reputation, (c) vindicate the Plaintiff’s standing in society.

The Delhi HC emphasised that there is no fixed formula for calculating damages in defamation claims, and the amount must reflect the gravity of the defamatory remarks, the extent of their dissemination, and their impact on the Plaintiff’s career and emotional well-being.

In view of these considerations, and the absence of any documentary evidence to substantiate the statements made in the termination letter, the Delhi HC found it appropriate to award the Plaintiff a sum of INR 2,00,000 (Indian Rupees two lakh) in general compensatory damages.

Conclusion

This judgment establishes a crucial precedent for the intersection of employment law and defamation, particularly in private sector employment relationships. While the Employer had the contractual right to terminate the Plaintiff, it breached the bounds of propriety by inserting stigmatic and unsupported allegations in the termination letter which amounted to defamation.

By recognising the doctrine of compelled self-publication and drawing on both Indian and international precedents, the Delhi HC signalled a maturing judicial sensitivity to the reputational fallout of termination practices and the lasting harm caused by defamatory employment communications. The Delhi HC acknowledged the practical reality that employees are often compelled to share their termination letters with future employers during background checks or interviews, making the damaging content effectively ‘published’ even when not formally circulated.

By way of this judgment, the Delhi HC also laid down the 4 (four) essentials of civil defamation: (a) false and stigmatic statement; (b) publication (including through compelled self-publication); (c) clear identification; and (d) absence of any sustaining defence. In essence, the Delhi HC held that termination letters were not privileged documents and statements/remarks made therein (without any substantial proof) would amount to defamation.

This judgment establishes that whilst companies invest heavily in protecting their own reputational interests, they cannot carelessly damage employee reputations through internal communications.

For employers, this ruling is a cautionary precedent. It makes clear that termination communications must remain factual, measured in tone, and substantiated by documented evidence if they venture into reasons for dismissal. The inclusion of defamatory language, especially without due process or supporting records, could attract civil liability, even in private employment arrangements. The case thereby establishes that defamation in employment is not shielded by the veil of contractual autonomy.

The Delhi HC’s application of defamation principles, combined with its adoption of international legal doctrines, makes this judgment an invaluable precedent for employment law practitioners and an essential reference for understanding the evolving landscape of workplace defamation in India.

This Prism has been prepared by:

Preetha Soman
Partner

Ahsan Allana
Senior Associate

Rebecca Thomas
Associate

For more details, please contact [email protected]

[1] CS (OS) 31/2021

[2] 389 N.W.2d 876 (1986)

Tags Contract Termination, Defamation, Delhi High Court, Employment Law, JSA, JSA Legal, Labour Law, Leading Law Firm, Leading Lawyers, Legal Update, Reputational Damage

JSA Prism | Employment | July 2025

Please click here to download the Prism as a PDF.

Employees’ State Insurance Corporation launches special scheme for voluntary registration

With the objective of widening compliance coverage under the Employees’ State Insurance Act, 1948 (“ESI Act”), the Employees’ State Insurance Corporation (“ESIC”), during its 196^th meeting held on June 27, 2025, approved a special scheme titled ‘Scheme to Promote Registration of Employers and Employees’ (“SPREE”).

SPREE notified on July 1, 2025[1], marks a proactive move by ESIC to bring more employers and workers into the fold of statutory benefits, setting the stage for a more inclusive and secure workforce.

Applicability of SPREE

Under the Employees’ State Insurance (General) Regulations, 1950 (“ESI Regulations”), every employer whose factory or establishment falls under the scope of the ESI Act is required to apply for registration within 15 (fifteen) days of the ESI Act becoming applicable to them. Despite this provision, a considerable number of establishments to which the ESI Act applies to, across various sectors, remain unregistered.

SPREE aims to address this gap by offering a one-time opportunity to encourage employers to voluntarily register themselves and their employees under the ESI Act. It applies to all factories and establishments, including shops, hotels, restaurants, cinema halls, road motor transport establishments, newspaper establishments, private medical and educational institutions, and contract or casual employees working under municipal corporations, with 10 (ten) or more employees, located in areas where the ESI Act has been implemented[2]. It covers such entities that have remained unregistered despite qualifying the applicability threshold under the ESI Act.

Notably, as per the ‘Frequently Asked Questions’[3] issued by the ESIC, the applicability of SPREE also extends to employers who are already registered under the ESI Act but have not registered all their eligible employees, such as temporary, casual, or contractual workers. SPREE encourages such employers to bring all eligible employees under the ESI coverage without facing penalties or legal consequences for past non-compliances.

Key highlights of SPREE

SPREE has been conceptualised as a compliance-facilitation initiative. It provides employers with an avenue to register under the ESI Act without the burden of retrospective coverage or fear of punitive actions for previous non-compliance. SPREE is operational from July 1, 2025, to December 31, 2025, during which eligible employers are encouraged to voluntarily register themselves.

Any establishment registering during this period will be treated as covered from either the date of registration or the date specifically declared by the employer, whichever is applicable. Similarly, employees registered during this timeframe will be considered as covered from the date of their respective registration.

Notably, SPREE ensures immunity from inspection of past records, and there will be no demand for contribution liabilities for any period prior to the chosen date of registration. Having said that, any proceedings or actions already initiated under the ESI Act before July 1, 2025, will remain unaffected by SPREE. In other words, if the ESIC had already taken any enforcement action, such as issuing demand notices or initiating recovery proceedings, before this date, those actions will continue. In essence, SPREE does not offer immunity or relief for cases already under litigation, investigation, or enforcement.

Registration mechanism

Employers may register their establishments through the ESIC portal, the Shram Suvidha portal, or the Ministry of Corporate Affairs (MCA) portal. Under SPREE, the registration will take effect from the date voluntarily declared by the employer. There will be no requirement to pay contributions, nor will any benefits or liabilities accrue under the ESI Act, for any period prior to this declared date.

Conclusion

The launch of SPREE by ESIC marks a crucial initiative to bridge longstanding gaps in social security coverage under the ESI Act. Despite the clear mandate under the ESI Regulations, requiring employers to register within 15 (fifteen) days of the ESI Act becoming applicable to them, a large number of eligible establishments remain unregistered. This has been largely attributed to a combination of factors, including lack of awareness, ambiguity regarding the district-wise implementation of the ESI Act, administrative hurdles, and apprehension about retrospective liabilities or punitive enforcement.

By offering a clear and time-bound window of opportunity, from July 1 to December 31, 2025, SPREE presents a practical and forward-looking compliance facilitation mechanism. It allows unregistered employers, including those who have partially complied by omitting certain categories of employees (such as casual, contractual, or temporary workers), to voluntarily regularise their registration status without fear of retrospective contribution demands or inspections of past records. Importantly, it ensures immunity from enforcement actions for the period prior to registration, provided no proceedings were already initiated before July 1, 2025.

Employers are encouraged to view this scheme as a proactive step toward responsible employment practices. Extending ESI benefits to employees not only enhances workforce welfare and morale but also mitigates future legal and compliance risks for the employer. Establishments that have so far remained outside the scope of formal ESI coverage now have a meaningful opportunity to come forward, align with statutory requirements, and play a more constructive role in fostering social security for India’s working population.

This Prism has been prepared by:

Preetha Soman
Partner

Madhur Khandelwal
Senior Associate

Rebecca Thomas
Associate

For more details, please contact [email protected]

[1] https://www.esic.gov.in/attachments/circularfile/Scheme_to_Promote_Registration_of_Employers_Employees_SPREE_1752493312.pdf.

[2] https://www.esic.gov.in/attachments/circularfile/226907cad2d9ad8f02645adea2a27952.pdf

https://www.esic.gov.in/attachments/circularfile/164b824c726be51e234825b9e3756135.pdf.

[3] https://esic.gov.in/attachments/circularfile/SPREE_2025_FAQs_Awareness_on_SPREE_2025_1752145706.pdf.

Tags Employer Friendly Scheme, ESI Act, ESIC, JSA, JSA Legal, Leading Law Firm, Leading Lawyers, Social Security India, Voluntary Registration, Workplace Welfare

JSA Prism | Employment | July 2025

Please click here to download the Prism as a PDF.

Procedural framework issued by the Tamil Nadu Government for the prevention and redressal of sexual harassment of women at workplace

The Tamil Nadu Government (“TN Government”), through its Social Welfare and Women Empowerment Department had earlier issued an order[1] dated November 11, 2016, appointing District Collectors as the officers under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”), to exercise powers and discharge functions under the same in the relevant districts. This was supplemented by the order[2] dated November 23, 2017, through which the TN Government appointed the Commissioner of Social Welfare (“Commissioner”) as the state nodal officer to oversee the implementation of the POSH Act. The Commissioner, vide letter dated November 29, 2024, shared a draft Standard Operating Procedures (“SOP”) for its approval. In furtherance thereof, after careful consideration the TN Government, vide order[3] dated June 18, 2025, issued the SOP to be followed by all departments/establishments in the state of Tamil Nadu for proper and effective implementation of the POSH Act. The SOP aims to provide clear guidelines for the implementation of the POSH Act, clarity on the roles of stakeholders and streamline the process.

Findings and analysis

Scope

The SOP covers various aspects, including actions to be taken for:

prevention of sexual harassment;
formation of Internal Complaints Committee (“ICC”) under Section 4 of the POSH Act;
receipt of complaints under Section 9 of the POSH Act;
inquiry and reliefs possible to be directed under Sections 11 and Section 15 of the POSH Act; and
statutory filings to be complied with under the POSH Act.

The SOP has identified prevention and redressal as the 2 (two) core facets of the POSH Act and provide detailed guidelines for stakeholders involved within the purview of the POSH Act to ensure its effective implementation.

Preventive measures

Besides the statutory safeguards provided for women under legislations inter-alia such as Factories Act, 1948, the Tamil Nadu Shops and Establishments Act, 1947, the Payment of Wages Act, 1936 and Equal Remuneration Act, 1976 etc. that will have to be complied with by companies, the SOP also stipulates that the human resource departments of the companies must create policies on safe working space for women providing inter-alia the following:

declare that sexual harassment will not be tolerated or condoned under any circumstances (zero tolerance policy);
what actions/behaviour constitutes sexual harassment attracting punishment in a time-bound manner;
encourage all employees to report sexual harassment as early as possible and educate all employees about the redressal mechanisms; and
steps taken to prevent sexual harassment and promoter a gender-equal workplace;

The employer must also conduct periodic training for its existing staff to sensitise and create awareness of the internal policies, besides the statutory requirement per Section 11 of the POSH Act.

The SOP has also clarified that the internal policy of a private institution can address harassment of all genders.

Grievance redressal under the POSH Act

While the redressal mechanism under the POSH Act is only applicable to women, persons of other genders may seek redressal under:

human resource policy, if any; and
other civil/criminal remedies.

A transgender person may seek redressal through complaints officer under Section 11 of the Transgender Persons (Protection of Rights Act), 2019.

The POSH Act includes ‘minors’ within the definition of an ‘aggrieved woman’ and if a complaint is received, it must be mandatorily reported to the local police per Section 19 of the Protection of Children from Sexual Offences Act, 2012, (“POCSO Act”) as failure to report this constitutes an offence under the POCSO Act.

The POSH Act provides for formation of quasi-judicial bodies namely for grievance redressal:

the ICC that is formed in every workplace or administrative unit; and
the Local Committee (“LC”) that is formed at the district level, headed by the Collector.

Both committees are required to have 50% women representation.

Receipt of complaints

Complaint can inter alia be submitted by an aggrieved woman/any person having knowledge of the incident with written consent of the aggrieved woman/legal heirs (in cases of death of aggrieved woman)/relative or friend, co-worker, special educator, qualified psychiatrist (in cases of physical and mental incapacitation).
The POSH Act can only consider complaints that is duly signed with identification of the author of the complaint.
The perpetrator can be of any gender.
All complaints must be addressed within 90 (ninety) days from the receipt of the complaint.

Inquiry mechanism

The SOP sets out a detailed inquiry mechanism.

Step 1 – Conciliation: Upon receipt of complaint, the ICC must attempt conciliation between the parties if the aggrieved woman wants to mediate/settle the matter. The 2 (two) main requirements for conciliation is: (a) conciliation can be initiated only upon request from an aggrieved woman; and (b) no monetary compensation is paid as a form of conciliation.
The aggrieved woman can seek to initiate enquiry if the terms of the settlement are not complied with.
Step 2 – Inquiry procedure as per Section 11 of the POSH Act: If the aggrieved woman does not wish to attempt conciliation or in the event conciliation fails, the ICC can if the respondent is an employee take action as per the service rules and if there are no service rules, then follow the principles of natural justice. If the respondent is not an employee, inform the respondent’s employer and seek their co-operation in conduct of inquiry, approach the LC if the respondent is not employed, assist the complainant with criminal compliant if the compliant chooses to do so.
The ICC must forward the complaint to the Respondent within 7 (seven) days of its receipt. The Respondent must tender their written response along with documents and witnesses within 10 (ten) days from their receipt of complaint.
Step 3 – Interim orders: The ICC will have the power to take the following interim measures pending inquiry:
- transfer of aggrieved woman/ respondent to any other workplace;
- grant of leave to the aggrieved woman for up to 3 (three) months; and
- where the respondent is in a supervisory position, the ICC/LC may restrain the respondent from reporting on the work performance or writing the confidential report of the aggrieved woman. In educational institutions, this protection extends to restraining the respondent from supervising any academic activity of the aggrieved woman.
Step 4 – Conducting Inquiry:
- The ICC sends a written notice to the complainant (aggrieved woman) indicating the date, time, and venue of the inquiry hearing. If the complainant does not appear, a second and third notice (for 3 (three) consecutive hearings) are issued.
- If the complainant remains absent after 3 (three) notices, a final notice is sent granting a 15 (fifteen) day grace period, warning that failure to appear may lead to the termination of the inquiry due to non-appearance.
- If the respondent is absent for 3 (three) consecutive hearings, a 15 (fifteen)day notice is issued informing them that the proceedings will continue ex parte. The complainant and respondent are not required to appear together in the same room before the ICC. The respondent can submit a list of questions for cross-examination; these questions are posed by the ICC rather than directly, or the respondent can nominate someone to conduct the cross. The ICC has discretion to reject irrelevant or repetitive questions and must record reasons for doing so.
- If witnesses are cited by either party, they are summoned, and cross-questions are submitted in advance for the ICC to review and ask as appropriate. Both parties are prohibited from engaging legal counsel for representation during the inquiry. Where service rules exist, they must be followed. Otherwise, the inquiry must comply with the principles of natural justice, ensuring a fair hearing and opportunity for response for both parties.
Step 5 – Inquiry Report as per Section 13 of the POSH Act: The inquiry report, signed by the presiding officer, must summarise dates, evidence, findings, witness accounts, and reasoning. The employer is provided with 2 (two) copies of the inquiry report , one of which is also forwarded to the District Social Welfare Officer. Other copies are shared with both the complainant and respondent if both are employees.

Standard of proof

The inquiry follows the ‘preponderance of probability’ standard guided by the ‘reasonable woman’ standard, whereby the effect of the conduct on the aggrieved woman is determinative, rather than the intent of the respondent.

The inquiry report must provide a clear, reasoned, and structured account. It must include: (a) chronology of the case; (b) evidentiary details; (c) reasoning for decisions; and (d) standard of proof.

The ‘preponderance of probability’ standard is applied, meaning that the finding is based on whether, on a balance of the evidence, it is more likely than not that the alleged acts occurred.

The ‘reasonable woman standard’ mandates an assessment from the perspective of a reasonable woman placed in circumstances similar to those of the aggrieved woman, rather than focusing on the alleged perpetrator’s intent.

If sexual harassment is not proved, no action is taken against the respondent. If sexual harassment is proved: (a) service rules are applicable; and (b) if no service rules exist, the ICC/LC may recommend written apology, warning or reprimand, censure, withholding promotion, pay rise, or increments, termination from service, mandatory counselling sessions, or community service. Compensation may also be recommended for the complainant.

Appeal

Any party aggrieved by the recommendations or non-implementation of the ICC/ LC’s recommendations may appeal as per service rules or to the appropriate Appellate Authority under the Industrial Employment (Standing Orders) Act, within 90 (ninety) days from the date of recommendation.

Statutory filings under the POSH Act

The employer must mandatorily submit annual reports for every calendar year on or before January 31 of the next year providing details of:

number of complaints received;
number of complaints disposed off;
number of cases pending more than 90 (ninety) days;
number of awareness programmes carried; and
nature of action taken by the employer/district officer.

The SOP has clarified that withdrawn complaint details as well as absence of complaints will be included/indicated, as may be applicable, in the annual report.

The TN Government, if necessary in the interest of public or of women employees, can order the following in writing:

direct the employer or collector to furnish information relating to sexual harassment as may be required; and
authorise any officer to conduct inspection or records or workplace and have a report be submitted in a time-bound manner.

Penalties under the POSH Act

The employer is liable to pay a penalty of up to INR 50,000 (Indian Rupees fifty thousand) in case of committing the following contraventions:

failing to constitute an ICC;
fails to act upon the recommendation of the ICC;
fails to file the annual report before the District Officer; and
contravene or attempt to or abet contravention of the POSH Act or rules thereunder.

The employer will be liable to pay twice the penalty if convicted for the second time or more, including cancellation/withdrawal/non-renewal or registration/license required for carrying on business.

Conclusion

The SOP ensures a comprehensive, standardised framework for prevention, reporting, inquiry, and redressal of sexual harassment allegations at the workplace, emphasising fairness, timeliness, and the protection of complainants’ rights. It comprehensively addresses both prevention and redressal aspects, ensuring that all stakeholders including employers, employees, committees, and government bodies, understand their roles and responsibilities. Through detailed procedures for complaint submission, inquiry, interim measures, and outcome enforcement, the SOP prioritises fairness, procedural integrity, and the protection of aggrieved women. It also sets forth strong penalties for non-compliance, reinforcing the seriousness with which these obligations should be taken.

This Prism has been prepared by:

Bhavya Sriram
Partner

Mahemaa Senthilkumar
Associate

Pratiksha Easwar
Associate

For more details, please contact [email protected].

[1] G.O. (Ms) No. 80.

[2] G.O (D) No. 249.

[3] G.O.(Ms) No. 64.

Tags Gender Equality, JSA, JSA Legal, Leading Law Firm, Leading Lawyers, Legal Updates, POSH Act, Sexual Harassment Law, Tamil Nadu Government, Women At Work, Workplace Safety

JSA Prism | Employment | July 2025

Please click here to download the Prism as a PDF.

The High Court of Madras upholds an employer’s right to cancel conditional employment offers based on material discrepancies

In an important ruling that underscores the importance of honesty and transparency in the hiring process, the Hon’ble High Court of Madras (“Madras HC”) in P. Karthikeyan vs. The General Manager, State Bank of India and Ors.[1] has upheld the cancellation of the appointment of a selected candidate (“Candidate”) due to adverse credit entries found in his TransUnion CIBIL Limited (“CIBIL”) Report (“CIBIL Report”) dated March 12, 2021 and on account of false and untrue declarations made by the Candidate.

This ruling affirms the lawful right of an employer to revoke conditional employment offers, when candidates fail to meet the stipulated conditions or otherwise conceal material facts.

Brief facts

The instant case arises out of a writ petition filed by the Candidate whose appointment was revoked by the employer bank. The employer bank had issued a notification dated July 27, 2020, inviting applicants for the post of a circle based officer (“Recruitment Notification”).

The Recruitment Notification clearly specified that: “Candidates with record of default in repayment of loans/credit card dues and/or against whose name adverse report of CIBIL or other external agencies are available are not eligible for appointment.” It further stated that “Candidates against whom there is/are adverse report regarding character & antecedents, moral turpitude are not eligible to apply for post.”

The Candidate who successfully cleared the selection process was issued an appointment order dated March 12, 2021. As part of the pre-appointment verification process, the employer bank obtained the Candidate’s CIBIL Report, which was reviewed and verified by them. Following this, the employer bank identified concerns regarding the Candidate’s credit history, particularly noting instances of delayed repayment of past loans as reflected in his CIBIL Report.

Although the Candidate submitted an explanation clarifying the personal circumstances surrounding such past defaults, the employer bank issued an order cancelling the Candidate’s appointment, citing adverse credit history and on account of the fact that the Candidate had given false and untrue declarations.

Issue

The core issue for consideration before the Madras HC was whether the cancellation of the Candidate’s appointment on the grounds of poor credit history and an adverse CIBIL Report constituted a valid and legally sustainable ground for disqualification.

Analysis and key observations

Interpretation of eligibility clause

Although the Candidate asserted that as of the date of the Recruitment Notification, he had no outstanding loans or credit card dues, the Madras HC noted that the Recruitment Notification had explicitly cautioned applicants to carefully ensure their eligibility before applying. One of the key eligibility conditions thereunder categorically disqualified candidates with any record of loan defaults, adverse credit reports, or negative financial indicators. The Candidate’s CIBIL Report, obtained during the verification process, revealed a poor credit history, including delayed repayment of loans multiple times and irregularities in credit card usage.

The Madras HC interpreted the eligibility criteria in the Recruitment Notification to mean that the requirement was not merely the repayment of loans as on the date of the notification. Rather, it was about maintaining a consistent record of loan repayment without any default or having an adverse credit report from CIBIL or other external agencies. This distinction is critical, as the emphasis lies on the candidate’s financial discipline and overall creditworthiness, not just on a snapshot of loan status as on the job application date.

Internal guidelines and exceptions

The Madras HC also referred to a Circular dated March 20, 2021, issued by the employer bank (“Circular”), which provided clarification on handling cases involving default or adverse remarks. This Circular outlined certain exceptions where defaults had been regularised or rectified prior to joining and allowed candidates to join in exceptional circumstances. These included situations such as overdue credit card dues under INR 5,000 (Indian Rupees five thousand) arising from disputes or litigation, and overdue equated monthly instalments (EMIs)/instalments not exceeding 1 (one) instalment. This letter essentially established a narrow window of leniency while underscoring the importance of financial discipline.

Findings from the CIBIL Report

The employer bank argued that the Candidate’s CIBIL Report was severely poor, showing multiple defaults in loan repayments, which reflected a troubling financial history. The Candidate had 9 (nine) irregular credit facilities and more than 10 (ten) credit inquiries between 2016 and 2021, ranging from small loans of INR 1,000 (Indian Rupees one thousand) to larger sums of INR 30,00,000 (Indian Rupees thirty lakh). The employer bank regarded this pattern as a serious risk factor, given the nature of the banking job that involves handling of public funds.

Candidate’s explanation and court’s view

Although the Candidate explained that the personal loans had been availed for his brother’s business and that the defaults were on account of an unforeseen accident involving his brother, the employer bank and the court found this explanation unpersuasive due to the prolonged history of multiple defaults over an extended period.

Relevant Supreme Court precedents

The Madras HC also cited the Supreme Court judgment in Chief Manager, Punjab National Bank and Anr. vs. Anik Kumar Das[2], emphasising that a candidate who participates in a recruitment process in accordance with the published notification cannot later argue for a different interpretation of the eligibility criteria, especially when they have not legally challenged the clause itself. The Madras HC also referred to the Supreme Court judgment in Yogesh Kumar and Ors. vs. Government of NCT of Delhi and Ors.[3], which held that the recruitment to public service must strictly adhere to the terms set out in the advertisement and the applicable recruitment rules. Any deviation from these rules may result in the selection of ineligible candidates and unfairly exclude other eligible candidates who could have competed for the post.

Assessment of the employer’s actions

The employer bank also emphasised that the issuance of the appointment letter did not confer a vested right to employment, as the appointment was expressly made subject to verification of various credentials, including the CIBIL Report, at the time of joining. The Madras HC found the employer’s stand to be both reasonable and legally tenable. Accordingly, it noted that the criteria requiring a clean repayment record and a satisfactory CIBIL Report served as a clear and necessary purpose. In the banking sector, where employees are expected to handle public money responsibly, financial discipline is not only relevant but essential. A candidate who has demonstrated poor credit behaviour and frequent borrowing tendencies may not inspire the level of trust required in such roles and cannot be entrusted with such responsibilities without risking inefficiency or misconduct.

No discrimination found

Regarding the Candidate’s claim of discriminatory treatment, the Madras HC found that the employer bank had consistently applied the standards outlined in the Circular. Only those candidates who met the conditions laid out in the Circular, such as a default of not more than 1 (one) instalment, were previously considered for appointment. The Candidate, having defaulted on more than 1 (one) instalment, clearly fell outside this bracket.

Final ruling

Ultimately, the Madras HC dismissed the writ petition, holding that the Candidate’s poor credit history, supported by his own admissions and a pattern of defaults besides the false and inaccurate declarations made by him, provided sufficient grounds for the employer to cancel his appointment order.

Conclusion

In many organisations, it is a standard practice to include clauses that require candidates to disclose material information such as financial standing or adverse credit histories before finalising employment. This is especially common for roles that require handling financial assets, budgets, or sensitive monetary information. A history of defaults, insolvency, or poor credit behaviour may indicate a potential risk for the employer, making such candidates less suitable for positions that demand high levels of financial responsibility. The Madras HC’s affirmation that employers have the legal right to revoke such offers when these conditions are not met or when false information is provided, offers a much-needed assurance.

It clarifies that employers are protected from legal challenges when acting in good faith to uphold the integrity of their recruitment process, ensuring that only candidates who meet the stipulated criteria are employed. Moreover, it emphasises that honesty and transparency are fundamental expectations in an employment relationship, particularly for sensitive roles including those involving financial responsibilities.

This judgment strengthens an employer’s authority to enforce pre-employment conditions and take corrective actions where necessary, thereby safeguarding the organisation’s interests, reputation and operational integrity. Having said that, in order to ensure a fair and legally sound hiring process, it is essential that employers clearly specify and communicate any applicable eligibility criteria in their job advertisements/postings as well as at the outset of the recruitment process. The conditional nature of the offers should also be made unambiguously clear, leaving no room for ambiguity about the terms and conditions attached to continued employment. Candidates should also be kept informed of the consequences of failing to meet any pre-conditions or providing false information.

Ultimately, transparency is key in ensuring a fair and legally sound hiring process. While for employers, clearly communicating the conditional nature of the offer along with the specific eligibility criteria helps withstand legal scrutiny; for employees, open disclosure of relevant information and understanding the conditions attached to their employment will help foster trust and accountability.

This Prism has been prepared by:

Preetha Soman
Partner

Rebecca Thomas
Associate

For more details, please contact [email protected].

[1] W.P.No. 11122 of 2021 and WMP.No. 11768 of 2021

[2] (2021) 12 SCC 80

[3] (2003) 3 SCC 548

Tags CIBIL Report, Employment Law, HR Compliance, Job Offer, JSA, JSA Legal, Leading Law Firm, Leading Lawyers, Legal Updates, Madras High Court, Recruitment Law

JSA Prism | Employment | July 2025

Please click here to download the Prism as a PDF.

The High Court of Delhi re-affirms un-enforceability of post-termination non-competes and emphasises the need for balance between an employer’s confidentiality interests and employee mobility

In a recent ruling of the High Court of Delhi (“Delhi HC”) in Varun Tyagi vs. Daffodil Software Private Limited[1] the Delhi HC has re-affirmed the well-established legal position under the Indian Contract Act, 1872 (“Contract Act”) regarding post-employment restrictions, particularly non-compete clauses. This judgement makes it clear that non-compete agreements that seek to restrain an employee’s right to work after leaving an organisation are inherently unenforceable.

Through this judgment, the Delhi HC makes it clear that although confidentiality breaches may be addressed through damages, this cannot serve as a pretext to impose sweeping restrictions on an employee’s right to employment or entrepreneurship.

Brief facts

The employee, an IT engineer (“Complainant”), was initially employed by an affiliate of Daffodil Software Private Limited (“Company”) and was subsequently transferred to the Company in January 2022. The Company was engaged by Digital India Corporation (“DIC”) in relation to a high-priority government initiative which was aimed at improving child nutrition nationwide. The Complainant was assigned to work on the said project as a full stack developer, with effect from January 2023. As per the contractual terms between the Company and DIC, the Intellectual Property Rights (“IPR”) for the project belonged to DIC and not the Company.

After resigning from employment in January 2025 and serving the requisite notice period, the Complainant accepted an offer of employment from DIC and joined DIC as a Deputy General Manager in April 2025. In light of the same, the Company filed a suit seeking an injunction to prevent the Complainant from working with DIC or the other Company’s business associates, relying on a clause in his employment agreement which restricted him from engaging with any business associate of the Company for a period of 3 (three) years post-termination of employment.

The District Court (“Trial Court”) granted an interim injunction in favour of the Company restraining the Complainant from working with DIC and the National E Governance Division until final disposal of the suit before the Trial Court. Aggrieved by such order, the Complainant approached the Delhi HC.

In the proceedings before the Delhi HC, the Complainant inter alia contended that:

The Company’s claim regarding misuse of IPR by the Complainant was invalid as the intellectual property pertaining to the project belonged to DIC and not the Company.
The post-termination obligations in the employment agreement were overly broad, amounting to a blanket prohibition impacting the Complainant’s right to livelihood.
Section 27 of the Contract Act unlike English law, does not distinguish between a partial and absolute restraint. Any agreement that falls within the scope of Section 27 of the Contract Act is rendered void, unless it is covered within the exception provided thereunder.

On the other hand, the Company contended that:

post-termination restrictive covenants in the employment agreement if reasonable, limited in scope and duration, and aim to protect the legitimate business interests of the employer, can be enforced; and
the Complainant had access to confidential information, proprietary techniques and internal know-how during his employment with the Company and accordingly, the disclosure of the same would cause irreparable harm to the Company.

Findings and analysis

Upon appeal, the Delhi HC examined the validity of the non-compete and non-solicitation clauses in the Complainant’s employment agreement in light of Section 27 of the Contract Act, which provides that any agreement restraining lawful trade, business or profession would be void. The only exception to Section 27 of the Contract Act is sale of goodwill. Accordingly, the Delhi HC overturned the Trial Court’s injunction order, by holding that:

any contractual term restraining an employee from lawful employment post-termination is void under Section 27 of the Contract Act, thereby reaffirming that post-termination non-compete provisions are unenforceable in India;
Indian law does not recognise partial or reasonable post-employment restraints; all such restraints, including a partial restraint, would be void. Hence, the question of reasonableness or whether the restraint is partial or absolute does not arise at all;
employees have a fundamental right to seek better employment opportunities, and they cannot be forced to choose between working for the former employer or remaining idle;
in employer-employee contracts, it is quite often the case that the employee has to sign a standard form contract or not be employed at all. Accordingly, any term of employment that imposes a restriction on the right of an employee to be employed post-termination of the contract of employment will be void, being contrary to Section 27 of the Contract Act;
IPR for the project belonged exclusively to DIC, negating claims of misuse by the Complainant; and
negative covenants post termination of the employment can only be enforced to protect the confidential and proprietary information of the employer or prevent solicitation.

In view of all of the above, the Delhi HC emphasised that restrictive covenants must be tailored and justified by legitimate business interests. Blanket prohibitions restricting future employment would be impermissible under Indian law. However, the Delhi HC clarified that in the event the Company is able to prove a breach of the employment agreement, for example, a breach of the confidentiality obligations, it can be compensated by way of damages.

Conclusion

The Delhi HC’s judgment affirms that while confidentiality and trade secrets are critical assets deserving protection, overarching restrictions that seek to prevent employees from joining competitors or starting similar businesses after separation of their employment are un-enforceable. It serves as a reminder to employers that post-termination restrictions must be carefully drafted, focussing on safeguarding confidential information, rather than relying on broadly drafted non-compete clauses that hinder an employee’s career progression.

This judgment can also significantly influence the enforceability and drafting of no-poaching or no-hire clauses in contracts with service providers and service recipients, business partners and other associates. For example, a clause preventing a partner from hiring any employee of the other party for an indefinite period could be viewed as unreasonable. In other words, overly restrictive clauses that are perceived as anti-competitive or that hinder free employment opportunities could be challenged and rendered un-enforceable. Employers should therefore ensure that such contractual restrictions are carefully tailored, reasonable and compliant with the principles laid down by Indian courts to avoid any potential legal challenges.

Ultimately, a balanced approach that respects employee mobility while protecting legitimate business interests will foster a sustainable and legally compliant employment relationship.

This Prism has been prepared by:

Preetha Soman
Partner

Madhur Khandelwal
Senior Associate

Tia Matthew
Associate

For more details, please contact [email protected].

[1] FAO 167/2025 & CM APPL. 36613/2025

Tags Confidentiality, Delhi High Court, Employee Rights, Employment Law, JSA, JSA Legal, Labour Law, Leading Law Firm, Leading Lawyers, Non Compete Clause

JSA Newsletter | Employment Law (Ratio Decidendi Series – Edition III) | July 2025

Please click here to download the Newsletter as a PDF.

As part of the JSA employment ratio decidendi series, we will explore ratios established by Indian courts under key labour statutes and provide an insight into the evolving landscape of Indian employment laws.

In this third edition, we discuss key principles laid down by various courts under the Factories Act, 1948 (“Factories Act”) and the Maternity Benefit Act, 1961 (“Maternity Benefit Act”). This edition also offers a brief overview of regulatory developments in the Indian employment space for the months of May and June 2025, released through amendments, notifications and orders.

PART A: Factories Act, 1948

Laundry services held to be ‘manufacturing process’ under Factories Act; held, welfare statutes must be liberally interpreted to protect workers

In State of Goa vs. Namita Tripathi[1], the Supreme Court of India (“Supreme Court”) clarified the scope and interpretation of ‘manufacturing process’ and ‘factory’ under the Factories Act and held that an establishment carrying out laundry services will qualify as a factory. This case arose out of proceedings initiated against a professional set up laundry operating under the name and style of ‘White Cloud’, alleging violations of the Factories Act on grounds that they were operating a laundry service (involving cleaning and washing of clothes using power-driven machinery and equipment) employing more than 9 (nine) workers, without obtaining the necessary factory approval and license, as required under the Factories Act read with the Goa Factories Rules, 1985.

The High Court of Bombay at Goa quashed the proceedings relying on certain precedents where courts earlier held that ‘dry cleaning’ and ‘laundry service’ do not amount to a ‘manufacturing process’ under Section 2(k) of the Factories Act if they do not transform the article into a new marketable commodity for commercial use. The Supreme Court reversed this decision on the grounds that: (a) the statutory definition of ‘manufacturing process’ under Section 2(k) of the Factories Act clearly includes ‘washing’ and ‘cleaning’ of articles with a view to their use, delivery, or disposal, and hence, laundry services employing requisite number of workers using power would clearly fall within the purview of ‘manufacturing process’; and (b) the Factories Act is a welfare statute intended to ensure safety, health, and welfare of workers, and if it contains its own comprehensive definition, that should be interpreted liberally to advance these objectives.

The Supreme Court also relied on previous precedents which discussed that where a statute under consideration itself defines for the purposes of the said Act a certain phrase, a court of law is bound to apply the term as defined except in exceptional cases where the opening part of a definition, “anything repugnant in the subject or context” applies. Accordingly, the Supreme Court held that the proceedings against the laundry services were maintainable and directed the trial court to proceed in accordance with law.

Economic hardship from pandemic not ‘public emergency’ under Factories Act; Supreme Court strikes down Gujarat notifications relaxing labour protections during COVID-19 lockdown

In Gujarat Mazdoor Sabha vs. State of Gujarat[2], the Supreme Court examined the scope of ‘public emergency’ under Section 5 of the Factories Act in the context of 2 (two) notifications issued by the State of Gujarat exempting all factories from certain statutory provisions on working hours and overtime wages in response to the COVID-19 pandemic, and held that economic hardships would not amount to a public emergency. The notifications, issued on April 17, 2020 and July 20, 2020, respectively, purported to relax statutory limits on daily and weekly working hours; rest intervals available to workers; as well as total spread over period; and limit obligations relating to overtime compensation, with a view to reduce economic hardships caused by the lockdown.

These notifications were challenged on grounds that: (a) economic downturn caused by the pandemic does not amount to a ‘public emergency’ within the meaning of Section 5 of the Factories Act; (b) Section 5 of the Factories Act requires inter alia an ‘internal disturbance’ that threatens the security of India or any part of the territory thereof; (c) the notifications violated workers’ rights to humane working conditions under Articles 21 and 23 of the Constitution of India (“Constitution”); and (d) such action amounted to forced labour as workers were denied lawful overtime wages.

The Supreme Court held that the COVID-19 pandemic, though resulting in grave economic hardship, did not constitute an ‘internal disturbance’ threatening the security of India to justify invocation of Section 5 of the Factories Act, emphasising on the fact that such provision is meant to be used sparingly and not in economic slowdowns. The Supreme Court reaffirmed that the Factories Act is a welfare statute securing just and humane conditions of work and that any curtailment of these protections must meet the stringent threshold prescribed by law. Accordingly, the Supreme Court quashed the impugned notifications and held that the concerned workers were entitled to be paid overtime wages under Section 59 of the Factories Act who have been working since the issuance of the notifications and directed payment of such dues in accordance with law.

Diagnostic centres not covered under ESI Act; held, medical testing and diagnosis does not constitute ‘manufacturing process’ under the Factories Act

In Vijaya Diagnostic Centre and Anr. vs. Employees State Insurance Corporation[3], the Andhra Pradesh High Court (“Andhra Pradesh HC”) clarified that diagnostic laboratories engaged solely in medical testing and reporting do not carry on a ‘manufacturing process’ under Section 2(k) of the Factories Act, and hence, cannot be treated as ‘factories’ for the purpose of coverage under the Employees’ State Insurance Act, 1948 (“ESI Act”). The case involved diagnostic centres that performed pathology, radiology, and scanning services (such as X-rays, urine and blood tests), and were sought to be brought under the ESI Act based on administrative instructions issued by the Employees State Insurance Corporation (“ESIC”), without any formal notification.

The diagnostic centres contended that their operations involved no manufacturing activity or sale of any processed substance, and that they merely collected biological samples for diagnostic purposes. The ESIC argued that activities such as scanning, MRI, and blood processing fell within the meaning of ‘manufacturing process’ under the Factories Act.

The Andhra Pradesh HC held that: (a) ‘manufacturing process’ under Section 2(k) of Factories Act must involve making, altering, repairing, treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal; (b) the mere conducting of diagnostic procedures, such as analysing blood or urine samples and issuing reports, does not involve any such treatment or transformation of a substance for commercial use or sale; and (c) coverage under the ESI Act cannot be extended to such establishments in the absence of a specific notification under Section 1(5) of the ESI Act. Accordingly, the Andhra Pradesh HC allowed the appeal and held that the diagnostic centres were not liable for coverage under the ESI Act.

Settlement cannot override statutory right to overtime wages; held, Section 59 of Factories Act will prevail over contrary agreements

In Hindustan Machine Tools Ltd. vs. Labour Court and Anr.[4], the Rajasthan High Court (“Rajasthan HC”) held that any settlement between employer and workers that contravenes the mandatory provisions of Section 59 of the Factories Act regarding overtime wages is not binding on the workers. The case arose when 71 (seventy-one) employees of Hindustan Machine Tools Limited (“Hindustan Machine”) filed applications under Section 33C (2) of the Industrial Disputes Act, 1947 seeking computation and payment of overtime wages under Section 59 of the Factories Act. Hindustan Machine opposed the application on the ground that overtime payment was governed by a 1977 tripartite settlement with unions, under which the workers had been receiving benefits for a sufficiently long period without any objection.

The labour court of Rajasthan (“Labour Court”) upheld that Section 59 of the Factories Act is mandatory and cannot be overridden by a settlement that provides lesser benefits to workers. The Labour Court directed Hindustan Machine to pay overtime wages prescribed at twice the ordinary rate, and as mandated under law, but did not set off benefits already received under the settlement.

On appeal, the Rajasthan HC upheld the Labour Court’s finding that the settlement was contrary to the Factories Act and could not deprive workers of statutory benefits, and reiterated that Factories Act is a welfare legislation, and any interpretation curtailing worker rights must be avoided. However, the Rajasthan HC held that workers could not claim double benefits and directed the Labour Court to recompute the dues after deducting benefits already availed under the settlement.

Strict liability of managers under Factories Act reaffirmed; held, duty to ensure safety guards on dangerous machinery is absolute and continuous

In State of Gujarat vs. Jethalal Chelabhai Patel[5], the Supreme Court clarified the strict liability of occupiers and managers under Factories Act in ensuring compliance with statutory safety provisions, particularly concerning dangerous machinery. The case involved a manager of an oil mill whose worker suffered an accident resulting in the amputation of his hand while greasing an exposed spur gear wheel. At the time of the accident, the machine’s protective cover was missing. The prosecution under Section 92 read with Section 21(1)(iv)(c) of the Factories Act alleged that the manager failed in his statutory duty to keep the dangerous part securely fenced while in operation.

While the trial court and the High Court of Gujarat acquitted the manager, reasoning that the removal of the cover by someone without his knowledge absolved him of liability, the Supreme Court reversed this finding on the rationale that the manager’s duty to ensure dangerous parts being securely fenced is absolute and continuous while machinery is in motion or use. The mere fact that someone else removed the safeguard without the manager’s consent or knowledge does not constitute a defense. The occupier or manager bears the burden to prove they exercised due diligence to ensure continuous compliance, including preventing removal of safeguards.

The Supreme Court underscored that the Factories Act is a welfare statute aimed at protecting workers, and its provisions must be interpreted strictly to impose liability on those responsible for safety. On account of failure to provide evidence of due diligence or measures taken to prevent the guard’s removal, the Supreme Court found the manager guilty under Section 92 of the Factories Act.

Part B: Maternity Benefit Act, 1961

Denial of maternity leave for third child unconstitutional; held, reproductive rights form part of Article 21 of the Constitution of India

In K. Umadevi vs. Government of Tamil Nadu and Ors.[6], the Supreme Court clarified that a woman’s right to make reproductive choices is an essential part of the right to life and personal liberty under Article 21 of the Constitution. The case involved a government school teacher who had 2 (two) children from her first marriage, both of whom remained in the custody of her former husband after their divorce. After remarrying in 2018, she conceived a child in the second marriage and applied for maternity leave in 2021. This maternity leave request was rejected by the Government of Tamil Nadu on the ground that Rule 101(a) of the Fundamental Rules of the Tamil Nadu Government (“Fundamental Rules”) as applicable to State Government employees in Tamil Nadu permitted maternity leave only for women with fewer than 2 (two) surviving children, and that there is no provision for grant of maternity leave for the third child. Challenging this decision, the employee filed a writ petition before the Madras High Court (“Madras HC”). While a Single Judge of the Madras HC upheld her right, the Division Bench of the Madras HC reversed this on appeal holding that the Fundamental Rules must be strictly applied and that maternity leave was not a fundamental right.

On further appeal, the Supreme Court placing reliance on: (a) its earlier ruling in Deepika Singh vs. Central Administrative Tribunal and Ors.[7], where maternity leave was granted despite a woman having 2 (two) children from a previous marriage, and (b) international conventions such as the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) and the ILO Maternity Protection Convention, rejected a strict numerical interpretation of the 2 (two) children limit under the Fundamental Rules, and held that the Fundamental Rules must be interpreted purposively and in a rationale manner to advance the objectives of maternal health. Observing that the child in question was the employee’s first biological child from the subsisting marriage and born during her period of service, the Supreme Court held that the employee was entitled to maternity leave and directed the Government of Tamil Nadu to release all admissible benefits to the employee within 2 (two) months.

Maternity leave cannot be denied to commissioning mothers; held, surrogacy-based motherhood is entitled to equal recognition and benefits

In Smt. Chanda Keswani vs. State of Rajasthan and Anr.[8], the Rajasthan HC held that a mother who becomes a parent through surrogacy is entitled to maternity leave at par with biological and adoptive mothers. The case involved a government employee, who gave birth to twins through a recognised surrogacy process and applied for 180 (one hundred and eighty) days of maternity leave under Rule 103 of the Rajasthan Service Rules, 1951. However, the said leave request was rejected by the employer on the ground that the Rule did not provide for maternity leave in cases where the child was begotten through surrogacy.

Contrary to the employer’s stance, the Rajasthan HC observed that: (a) motherhood is not limited to biological delivery and includes commissioning mothers who raise a child born through surrogacy; (b) newborns born through surrogacy require the care, presence, and affection of the mother during the crucial early stages of life, and cannot be left to the care of others; and (c) maternity leave is a protective measure grounded in constitutional values of dignity and social justice, intended to safeguard the mother–child bond. On this basis, the Rajasthan HC held that denying maternity leave solely because the child was born through surrogacy violates Article 21 of the Constitution, which guarantees both the right to motherhood and the child’s right to care and development, and accordingly directed the employer to grant the employee 180 (one hundred and eighty) days of maternity leave along with all consequential benefits.

Maternity benefits not co-terminus with contract; held, entitlement under the Maternity Benefit Act continues beyond contractual tenure if eligibility conditions are satisfied

In Dr. Kavita Yadav vs. Secretary, Ministry of Health and Family Welfare Department and Ors.[9], the Supreme Court clarified that maternity benefits under the Maternity Benefit Act are not limited by the tenure of contractual employment and can extend beyond the expiry of such contracts. The case involved a senior resident doctor appointed under a yearly contractual residency scheme, extendable on yearly basis upto a maximum of 3 (three) years, in a government hospital in Delhi. During the period of third extension of her services, the appellant applied for maternity leave from June 1, 2017. However, the employer granted only 11 (eleven) days of leave, stating that her contract was scheduled to end on June 11, 2017, and no further contractual extension was permissible under the residency scheme. Challenging this, the appellant approached the Central Administrative Tribunal and later the Hight Court of Delhi (“Delhi HC”), both of which dismissed her claim, holding that maternity benefit could not extend beyond the contractual period.

On further appeal, the Supreme Court held that: (a) once a woman has completed 80 (eighty) days of service in the 12 (twelve) months preceding her expected delivery, as prescribed under Section 5(2) of the Maternity Benefit Act, her entitlement to maternity benefits becomes a statutory right and cannot be denied merely because her fixed-term contract has ended; (b) denying such benefits on the ground of contract expiry would amount to a ‘discharge’ under Section 12(2)(a) of the Maternity Benefit Act, which states that if a woman is discharged or dismissed during pregnancy, she cannot be deprived of maternity benefits or medical bonus that she would otherwise be entitled to, unless the discharge is due to prescribed gross misconduct, and in such cases, the law creates a legal fiction by treating the woman as being in employment for the limited purpose of receiving maternity benefits; and (c) by invoking Section 27 of the Maternity Benefit Act, the Supreme Court reaffirmed that the Maternity Benefit Act overrides any contractual terms that are inconsistent with its provisions. Accordingly, the Supreme Court set aside the decision of the Delhi HC and directed the hospital to grant the employee full maternity benefits within 3 (three) months, after deducting any amounts already paid under the same head.

Work-from-home cannot be claimed as a matter of right; held, may be denied where duties involve confidentiality or require on-site presence

In Mrs. Prachi Sen vs. Ministry of Defence and Ors.[10], the High Court of Karnataka (“Karnataka HC”) clarified the scope of entitlement to work-from-home (“WFH”) under the Maternity Benefit Act. The case involved a senior executive engineer employed at Semi-Conductor Technology and Applied Research Centre (“STARC”), an arm of the Ministry of Defence, Government of India, who availed maternity and personal leave until May 23, 2021, but did not return to work thereafter. After 2 (two) months of absence, STARC issued a notice treating her continued absence as unauthorised and warning of disciplinary action. The employee challenged the communication before the Karnataka HC, contending that she was entitled, inter alia, to continue working from home after maternity leave, relying on Section 5(5) of the Maternity Benefit Act and government advisories issued during the pandemic.

While arriving at the decision, the Karnataka HC noted that the employee’s responsibilities involved sensitive and technically complex defence-related research, the nature of which was confidential and not intended for public dissemination. Given the classified character of the work and the operational requirements of the organisation, the Karnataka HC held that the assigned duties could not reasonably be performed from home. It also relied on the employer’s submission that even during the COVID-19 lockdown, officials of equivalent seniority continued to work on-site due to the critical nature of the operations. Accordingly, the Karnataka HC held that WFH under Section 5(5) of the Maternity Benefit Act is not an automatic entitlement, depends entirely on whether the nature of employee’s duties permits remote work, and may be denied where physical presence is essential or confidentiality constraints apply.

Maternity leave cannot be denied to contractual workers; held, principal employer responsible where work is performed under its supervision on its premises

In Manorama Singh vs. State of U.P. and Ors.[11], the Allahabad High Court (“Allahabad HC”) held that a principal employer is obligated to extend maternity benefits to the female contract worker engaged by or through a contractor. The case involved a female contract worker, engaged through a contractor, working on the premises of the government department (“Principal Employer”). Following the birth of her child via caesarean section, the contract worker applied for maternity leave, which was denied. The Principal Employer contended that the contract worker is an employee of the contractor, and therefore, she has no right against the Principal Employer.

Rejecting this contention, the Allahabad HC observed that: (a) the contract worker was working under the day-to-day supervision of the Principal Employer and discharging duties within its premises; and (b) her wages were routed through the Principal Employer, which established economic dependence on the Principal Employer. The Allahabad HC also relied on the Supreme Court’s judgment in Municipal Corporation of Delhi vs. Female Workers (Muster Roll) and Anr.[12] to reaffirm that welfare legislations like the Maternity Benefit Act must be interpreted purposively to safeguard women in all forms of employment, regardless of the contractual arrangement.

Accordingly, the Allahabad HC held that the Principal Employer cannot avoid liability by citing the contractual route of employment and directed it to process and grant the contract worker’s maternity benefits in accordance with Maternity Benefit Act.

Regulatory Updates

Haryana revises working conditions for women

The Government of Haryana, vide a notification[13] dated May 8, 2025, in supersession of all prior notifications, issued revised conditions for seeking exemption to employ women during night shifts (i.e. 08:00 PM to 06:00 AM) in certain notified sectors, including IT, ITeS, banking, logistics, warehousing, hundred percent export-oriented units, and three-star or higher-rated hotels.

The exemption is granted subject to adherence to the following conditions: (a) submission of the exemption application at least 1 (one) month in advance to the Labour Commissioner or Chief Inspector of Shops; (b) submission of a declaration confirming that written consent has been obtained from each woman employee proposed to work the night shift; (c) provision of secure transport (with GPS/CCTV and security personnel); (d) adequate lighting at and around the workplace; (e) minimum batch strength of 4 (four) women employees per shift (with limited relaxation in senior IT/ITeS roles); (f) access to medical support through tie-ups with hospitals; (g) compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 Act (“POSH Act”); (h) ensuring exclusive boarding and lodging arrangements for women under the control of women wardens or supervisors (wherever such facilities are provided). The exemption will remain valid for 1 (one) year, subject to continued compliance with the stated conditions, including those under the Employees’ State Insurance Act, 1948 and Punjab Labour Welfare Fund Act, 1965 (as applicable to Haryana).

For a detailed analysis, please refer to the JSA Prism of May 8, 2025.

Government of Tamil Nadu extends permission for 24×7 operations for shops and establishments under the Tamil Nadu Shops and Establishments Act, 1947

The Government of Tamil Nadu, vide a notification[14] dated May 8, 2025, extended the general permission granted under Section 7(1) of the Tamil Nadu Shops and Establishments Act, 1947 (“TN S&E Act”), which governs the opening and closing hours of shops and prohibits them from operating beyond the hours fixed by the State Government. The permission allows all shops and establishments employing 10 (ten) or more persons to operate on a 24×7 basis across all days of the year, and is extended for a further period of 3 (three) years, effective from June 5, 2025.

The permission is subject to compliance with specific conditions, including (a) maintaining Form S, detailing weekly offs provided to the employees, and displaying the same at a conspicuous place in the establishment; (b) daily display of employee leave status at a conspicuous place in the establishment; (c) crediting wages and overtime payments directly to employee bank accounts; (d) ensuring that working hours do not exceed 8 (eight) hours per day and 48 (forty eight) hours per week, with a maximum limit of 10.5 (ten and a half) hours per day and 57 (fifty seven) hours per week (inclusive of overtime); (e) refraining from engaging employees on holidays or beyond prescribed hours without proper overtime records; (f) women employees may be engaged beyond 8:00 PM only upon obtaining their written consent and subject to adequate protection of their dignity, honour, and safety; (g) transport arrangements must be provided to women employees working in shifts, with a notice regarding such availability prominently displayed at the establishment’s main entrance; (h) provision of adequate safeguards, including restrooms, safety lockers, and other essential workplace amenities; and (i) constitution of an Internal Complaints Committee in accordance with the POSH Act. Any violation of these conditions may attract penal action under the TN S&E Act and applicable rules.

For a detailed analysis, please refer to the JSA Prism of June 20, 2025.

Delhi Government issues public notice directing private sector organisations to register on SHe-Box portal in compliance with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Department of Women and Child Development, Government of NCT of Delhi, vide a public notice, directed all private sector organisations operating in Delhi to mandatorily register their establishment details on the SHe-Box portal (https://shebox.wcd.gov.in), an online platform developed by the Government of India to provide single-window access for women to file workplace sexual harassment complaints.

The notice reinforces the obligation of private sector employers to ensure effective implementation of the POSH Act, in line with the judgment of the Supreme Court of India in Aureliano Fernandes vs. State of Goa and Ors.[15]. The platform enables any woman, regardless of employment status or sector, to lodge a complaint, which is then routed to the appropriate authority (i.e. Internal Committee or District Officer) for redressal.

Government of Karnataka notifies welfare framework for platform-based gig workers under the Karnataka Platform Based Gig Workers (Social Security and Welfare) Ordinance, 2025

The Government of Karnataka, vide ordinance[16] promulgated on May 27, 2025, introduced a comprehensive framework aimed at securing the rights and welfare of platform-based gig workers in the state. Notably, the ordinance mandates: (a) registration of all gig workers and platforms with the Karnataka Platform Board Gig Workers Welfare Board; (b) issuance of unique identity cards to workers, applicable across platforms; (c) implementation of general and sector-specific social security schemes; (d) constitution of grievance redressal mechanism accessible through the Board and platforms; (e) transparent and fair contractual terms, including prior notice for any modification and reasonable grounds for termination; (f) safe working conditions, weekly payouts without delay, and prevention of discriminatory practices through automated systems; (g) clear disclosure obligations and provision of human points of contact for gig workers in languages such as Kannada, English or any other language; (h) establishment of the Karnataka Gig Workers Social Security and Welfare Fund funded through – a welfare fee between 1 %–5% of gig worker payouts per transaction; contributions from gig workers and grants governments; and other sums such as grants, gifts, donations, benefactions, bequests or transfers or other sources as may be prescribed; and (i) integration of Payment and Welfare Fee Verification System to track payments and fee deductions of gig workers.

Benefits under this framework are in addition to any protections gig workers may enjoy under existing laws. Aggregators or platforms failing to comply with the provisions of the ordinance may be subjected to fine in the range in of INR 5,000 (Indian Rupees five thousand) to INR 1,00,000 (Indian Rupees one lakh).

Corporate governance enhanced through mandatory workplace harassment disclosures under new company law amendments

On May 30, 2025, the Ministry of Corporate Affairs notified the Companies (Accounts) Second Amendment Rules, 2025, revising Rule 8(5)(x) of the Companies (Accounts) Rules, 2014. Effective July 14, 2025, these amendments expand the scope of mandatory disclosures in the annual board report, requiring companies to report detailed data on sexual harassment complaints under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, including number of complaints received, disposed, and pending (beyond 90 (ninety) days) as well as gender-wise employee demographics. Further, companies must now affirm compliance with the Maternity Benefit Act, 1961.

Government of Punjab extends permission for shops and establishments under the Punjab Shops and Commercial Establishments Act, 1958 to remain open on all 365 (three hundred and sixty-five) days of the year

The Government of Punjab, vide a notification[17] dated June 17, 2025, exercised its powers under Section 28 of the Punjab Shops and Commercial Establishments Act, 1958 (“Punjab S&E Act”), to exempt all establishments registered under the Punjab S&E Act from the application of Sections 9 and 10(1), which govern the opening and closing hours and the weekly closing day of establishments. The permission allows all shops and establishments to remain open on all 365 (three hundred and sixty-five) days of the year and is extended for a further period of 1 (one) year, effective till May 31, 2026.

The permission is subject to compliance with specific conditions, including (a) providing 1 (one) paid holiday per week and displaying in advance the list and timetable of holidays on the notice board; (b) providing a 1 (one)-hour rest period after every 5 (five) hours of continuous work and ensuring that no employee works beyond 10 (ten) hours in a day or 48 (forty-eight) hours in a week, with a maximum spread-over of 12 (twelve) hours in a day; (c) ensuring safety and security of employees and visitors in establishments operating beyond 10:00 PM and engaging additional staff for extended hours; (d) providing separate lockers, security, and restrooms for female employees and constituting an Internal Committee under the POSH Act; (e) not engaging female employees beyond 8:00 PM without their consent on record and providing adequate safety and security arrangements for them during and after work until they reach home safely; (f) implementing the Child and Adolescent Labour (Prohibition and Regulation) Act, 1986, as amended from time to time; (g) ensuring compliance with other provisions of the Punjab S&E Act and relevant labour laws, and providing all statutory facilities under applicable labour laws; and (h) providing national and festival holidays with wages and crediting employee wages along with overtime wages (where appliable) to their savings bank accounts. Any violation of these conditions or other provisions under the Punjab S&E Act may result in cancellation of this exemption, after providing the employer an opportunity of being heard before competent authority.

Case law ratios

Supreme Court upholds enforceability of employment bond requiring minimum service or liquidated damages for premature exit

In Vijaya Bank and Anr. vs. Prashant B. Narnaware[18], the Supreme Court upheld the enforceability of an employment bond requiring the employee to either serve a minimum period of 3 (three) years or pay INR 2,00,000 (India Rupees two lakh) as liquidated damages in the event of premature resignation. The Supreme Court held that such an employment bond related clause does not amount to a restraint of trade under Section 27 of the Indian Contract Act, 1872 (“Contract Act”), nor is it opposed to public policy under Section 23 of the Contract Act, as long as it serves a legitimate business purpose, is reasonable in amount, and is not arbitrary or punitive in nature.

For a detailed analysis, please refer to the JSA Prism of May 28, 2025.

Termination on grounds of misconduct, without conducting disciplinary inquiry held unsustainable

In Sharvan Choudhary vs. State of Rajasthan and Ors.[19], the Rajasthan HC held that the termination of a substantively appointed physical training instructor on grounds of misconduct, without initiating a disciplinary inquiry under the Rajasthan Civil Services (Classification, Control and Appeal) Rules, 1958, was legally unsustainable. In this case, the employee was selected through a regular recruitment process and was later terminated on grounds of alleged discrepancies in his qualification documents. Although the employee was issued a show-cause notice and submitted a detailed reply, the employer being dissatisfied with the explanation, proceeded to terminate his services without framing charges or conducting a formal disciplinary inquiry.

The Rajasthan HC held that the employer had bypassed mandatory procedural safeguards by terminating the employee without conducting a formal inquiry to establish misconduct. Emphasising that termination in service law is akin to capital punishment, the Rajasthan HC highlighted that such action must be preceded by a proper disciplinary inquiry to avoid punishing an innocent person. Accordingly, the termination order was quashed, and the employee was directed to be reinstated, without prejudice to the employer’s right to initiate disciplinary proceedings in accordance with law, if the appointment was obtained by submitting incorrect, forged, or manipulated documents.

Non-compete clause unenforceable post-employment; held, restraint on joining client violates Section 27 of the Indian Contract Act, 1872

In Varun Tyagi vs. Daffodil Software Private Limited[20], the Delhi HC set aside an injunction restraining an ex-employee from joining a client of his former employer, holding that post-termination non-compete restrictions are void under Section 27 of the Indian Contract Act, 1872 (“Contract Act”).

The case involved a former employee of Daffodil Software Private Limited who joined another company which was a business associate and client of the former company, shortly after his resignation. The employment agreement contained a non-compete and non-solicitation clause prohibiting employees from working with any business associate of the company for 3 (three) years post-employment. Therefore, former company filed a suit seeking to enforce this clause and obtained an interim injunction from the trial court restraining the employee from joining the competitor company.

In further appeal to this injunction, the Delhi HC held that under Section 27 of the Contract Act, any restraint on trade, whether partial or complete, is void unless it falls within the statutory exception. The Delhi HC rejected the argument that the restriction was limited and reasonable, noting that Indian laws do not recognise partial restraints on trade. Since the apprehension of disclosure of confidential information was also unfounded, the Delhi HC emphasised that an employee’s right to seek better employment cannot be curtailed under the guise of protecting confidential information, citing settled jurisprudence that negative covenants extending beyond the term of employment are unenforceable restraints on trade. Accordingly, the Delhi HC quashed the injunction, allowing the employee to continue his employment with the new company.

Termination due to prolonged absence from employment will not amount to retrenchment

In Rashtrasant Tukdoji Maharaj Technical and Education Society vs. Smt. Indira Madhukar Muraskar and Ors.[21], The Bombay HC held that the act of striking off employees from the muster rolls due to their prolonged unauthorised absence following an illegal strike did not constitute ‘retrenchment’ under the Industrial Disputes Act, 1947, but rather amounted to abandonment of service, arising from the employees’ own voluntary and unilateral conduct. The Bombay HC observed that the employer had issued repeated notices asking the employees to rejoin duty, which went unanswered. It further clarified that abandonment of service results from the voluntary and unilateral act of employees themselves, and thus, no disciplinary inquiry was necessary before removing them from muster rolls. Consequently, the Bombay HC set aside the orders of lower courts which had directed reinstatement and payment of back wages.

This Newsletter has been prepared by:

Gerald Manoharan
Partner

Sonakshi Das
Partner

Mitali Jain
Associate

Ananya Sharma
Associate

For further details, please contact [email protected]

[1] 2025 SCC OnLine SC 480 (decided on March 3, 2025)

[2] AIRONLINE 2020 SC 749 (decided on October 1, 2020)

[3] (2006) IILLJ443AP (decided on September 26, 2005)

[4] (1993) IILLJ1219RAJ (decided on March 11, 1993)

[5] 1964 AIR 779 (decided on December 6, 1963)

[6] Civil Appeal No. 2526/2025 (decided on May 23, 2025)

[7] Civil Appeal No. 5308/2022 (decided on August 16, 2022)

[8] Civil Writ Petition No. 7853/2020 (decided on November 8, 2023)

[9] Civil Appeal No. 5010/2023 (decided on August 17, 2023)

[10] Writ Petition No. 22979/2021 (S-RES) (decided on March 3, 2022)

[11] Writ Appeal No. 4235/2021 (decided on March 23, 2021)

[12] Special Leave Petition (Civil) No. 12797/1998 (decided on March 8, 2000)

[13] No. 11/26/2025-4 Lab

[14] No. II (2) LWSD/441(a)/2025

[15] Civil Appeal No. 2482/2014 (Decided on May 12, 2023)

[16] Karnataka Platform Based Gig Workers (Social Security and Welfare) Ordinance, 2025 (Ordinance No. 04 of 2025)

[17] No. LabOPSCA/2/2024-5L/495

[18] Civil Appeal No. 11708/2016 (decided on May 14, 2025)

[19] Civil Writ Petition No. 4298/2025 (decided on May 8, 2025)

^[20] FAO 167/2025 & CM APPL. 36613/2025 (decided on June 25, 2025)

[21] 2025 SCC Online Bom 2055 (decided on May 9, 2025)

Tags Employment Law, Factories Act, JSA, JSA Newsletter, Labour Law India, Leading Law Firm, Leading Lawyers, Legal Updates, Maternity Benefit Act, Ratio Decidendi, Workplace Compliance

JSA Prism | Employment | July 2025

Please click here to download the Prism as a PDF.

Telangana rolls out operational relaxations for commercial establishments

In a significant move, the Government of Telangana, has vide notification dated July 5, 2025 (“Telangana Exemption 2025”), rolled out certain relaxations for commercial establishments (other than shops) in the State by exempting them from select provisions of the Telangana Shops and Establishments Act, 1988 (“Telangana S&E Act”), specifically those governing daily and weekly work hours[1] and rest intervals[2].

This exemption has been granted under the government’s ease of doing business initiative and follows a similar notification issued on June 12, 2024, which granted a 4 (four) year relaxation to all Information Technology (“IT”) and IT-enabled service (“ITeS”) establishments in the State, effective May 30, 2024, from certain provisions of the Telangana S&E Act, subject to conditions stipulated therein (“IT Exemption”).

Key features and conditions of the Telangana Exemption 2025

The Telangana Exemption 2025 provides relaxations to commercial establishments from Section 16 (weekly working hours) and Section 17 (Rest Intervals) of the Telangana S&E Act. However, these relaxations are subject to the following conditions:

Daily and weekly working hours: While the Telangana S&E Act prescribes a standard workday of 8 (eight) hours and 48 (forty-eight) working hours per week, under the Telangana Exemption 2025, the permissible daily working hours have been extended up to 10 (ten) hours. However, the weekly work-hour limit of 48 (forty-eight) hours remains unchanged.
Overtime: As per the Telangana S&E Act, subject to payment of overtime wages (i.e., wages at twice their ordinary rate of wages), employers may require employees to work in an establishment for any period beyond the regular working hours, subject to a maximum of 6 (six) hours of overtime work in any week. This limit has been replaced with a quarterly cap of 144 (one hundred and forty-four) hours of overtime hours per quarter. The Telangana Exemption 2025 also makes it clear that any work performed in excess of 48 (forty-eight) hours a week will attract overtime wages.
Interval for rest: The Telangana S&E Act mandates that no employee will be required or allowed to work more than 5 (five) hours in a day without a rest interval of at least 1 (one) hour. The Telangana Exemption 2025 modifies this requirement, allowing employees to work up to 6 (six) hours a day without a break, provided that any period exceeding 6 (six) hours is followed by a rest interval of not less than 30 (thirty) minutes.
Spread over of working hours: Both the Telangana S&E Act and the Telangana Exemption 2025 stipulate that the total spread-over period of work, including the rest interval, will not exceed 12 (twelve) hours on any given day.

Any violation of the above conditions will result in immediate revocation of the exemption for such an employer, without any prior notice. Unlike the IT Exemption, which has been granted for a specific duration, the Telangana Exemption 2025 does not specify a time limit, implying its applicability until further notice.

Interplay between IT Exemption and Telangana Exemption 2025

The Telangana Exemption 2025, while broad in scope with respect to applicability to all commercial establishments (other than shops), does not expressly override or refer to the earlier IT Exemption dated June 12, 2024. While the Telangana Exemption 2025 may appear to be overlapping with the IT Exemption in terms of scope, their core intent remains aligned to ensure smooth and hassle-free operations for businesses. As a result, a harmonised reading of both notifications would be imperative. Therefore, IT/ITeS establishments, which are already covered under the IT Exemption, can enjoy the relaxations under the Telangana Exemption 2025 as well.

Conclusion

Building on the IT Exemption, the State Government of Telangana has now extended similar operational relaxations to other commercial establishments across the state, aiming to create a more business friendly ecosystem. However, it is interesting to note that since the definitions of ‘commercial establishment’ and ‘shop’ under the Telangana S&E Act encompass places where trade and business is carried out, there could be instances where a shop may also qualify as a commercial establishment, making the scope and application of the exemption potentially complex in practice.

Overall, this move by the Government of Telangana reflects a progressive intent to modernise labour regulations in line with evolving business needs. By allowing extended daily working hours, reduced rest intervals, and a rationalised overtime framework, it offers employers with greater scheduling flexibility while maintaining core worker protections. While this is definitely a positive move, it is essential that these relaxations are put to the right use by employers, by leveraging these provisions to improve operational efficiencies, enhance workforce productivity and foster a compliant yet flexible work environment.

This Prism has been prepared by:

Preetha Soman
Partner

Madhur Khandelwal
Senior Associate

Rebecca Thomas
Associate

For more details, please contact [email protected].

[1] Section 16, Telangana S&E Act.

[2] Section 17, Telangana S&E Act.

Tags Business India, Commercial Establishments, JSA, Labour Laws, Leading Law Firm, Leading Lawyers, Legal Update, Legal Updates, Operational Reforms, Shop Act, Telangana, Telangana Government, Workplace Policy

JSA Prism | Consumer Protection | July 2025

A businessman holding an umbrella over miniature shopping bags and parcels in a cart, symbolizing online consumer protection.

Please click here to download the Prism as a PDF.

New guidelines to control illegal listing and sale of radio equipment on e-commerce platforms

On May 27, 2025, the Central Consumer Protection Authority (“CCPA”) has issued the Guidelines for Prevention and Regulation of Illegal Listing and Sale of Radio Equipment including Walkie Talkies on E-Commerce Platforms, 2025 (“Guidelines”). These Guidelines are intended to reinforce compliance with existing telecom laws and ensure that radio frequency devices sold online conform to the licensing and technical requirements laid down by the Wireless Planning and Coordination (WPC) wing.

Compliance requirements for e-commerce platforms and sellers

E-commerce platforms are prohibited from listing or selling radio equipment that requires a frequency assignment from the Department of Telecommunications (“DoT”) for lawful use. Such equipment can only be purchased from DoT-authorised dealer possession authorisation holders listed on the Saral Sanchar portal. Online platforms will also strictly prohibit the listing or sale of mobile signal boosters and wireless jammers.

Product listing regulations

Product listings must include the below mentioned technical specifications, such as operating frequency ranges, and provide proof of regulatory approval, including Equipment Type Approval (“ETA”). All listings must clearly state the operating frequency range and include valid regulatory approvals, particularly the ETA issued by DoT:

for equipment operating only in unlicensed frequency bands (e.g. wi-fi, bluetooth), listings must, (a) mention the ETA details; (b) provide a downloadable copy of the ETA; and (c) include a test report from an accredited lab;
for equipment using licensed bands but exempt from individual user licences (e.g. broadcast receivers), listings must show the relevant DoT or Directorate General of Foreign Trade notification number and date; and
for dual-band devices (e.g. mobile phones, point of sale machines), both sets of requirements under para 1 and b must be met.

Sellers of license-exempt equipment must certify that:

the device has not been altered to operate beyond ETA parameters; and
the test report is genuine and unaltered from the original report prepared by the accredited test laboratory.

Any listing which does not comply with the conditions or the required certification as set out above will be taken down.

Monitoring and reporting

There will be an automated keyword and frequency-based scanning implemented by the platforms to detect non-compliant listings. A user-friendly reporting mechanism for public to report illegal or suspicious listings mustbe provided.

Responsibilities of sellers:

Sellers registered with the e-commerce platforms will ensure that (a) the radio equipments listed for sale do not operate on frequencies which are not exempted by DoT; (b) the frequency bands on such radio equipments are clearly labelled; and (c) the laws of wireless communication equipments are complied with in relation to their import, possession, and distribution within the country.

Responsibilities of e-commerce platforms:

E-commerce platforms will ensure that (a) the sellers of the radio equipment (exempt from license requirements) verify and certify personally that the test report has not been altered from the original report prepared by the accredited test laboratory; and (b) any non-compliant listing are removed from the platform within 24 (twenty-four) hours of receiving directions from the DoT.

Enforcement and penalties

Non-compliance of these regulations by such e-commerce platforms or sellers will attract consequences and penalties as per Consumer Protection Act, 2019 and other applicable laws and authorities such as the DoT, including blacklisting of such persistent defaulters.

Collaboration with regulatory authorities:

E-commerce platforms will cooperate with the regulators to ensure: (a) real-time takedowns and enforcement actions; and (b) regular audits and compliance reports are submitted to the authorities as may be required by law in force.

Public awareness

E-commerce platforms will display notices on the risks and legal implications of purchasing unauthorised walkie-talkies and encourage informed consumer behaviour by educating users on frequency compliance.

Conclusion

The Guidelines issued by the CCPA aims to safeguard consumers and uphold telecom regulations by curbing the unauthorised sale of radio equipment on e-commerce platforms. By mandating strict compliance with licensing, technical approvals, and transparent product listings, the Guidelines reinforce accountability for both sellers and platforms.

This Prism has been prepared by:

Bhavya Sriram
Partner

Mahemaa Senthilkumar
Associate

Pratiksha Easwar
Associate

For more details, please contact [email protected].

Tags CCPA, Consumer Protection, DoT India, ECommerce Regulation, JSA News, Leading Law Firm, Leading Lawyer, Leading Lawyers, Legal Updates, Radio Equipment, Telecom Compliance, Walkie Talkie Ban, Wireless Safety

JSA Prism | Employment | July 2025

Please click here to download the Prism as a PDF.

Continued move towards women empowerment: Madhya Pradesh revises conditions for allowing women to work night shifts

For years in India, statutory provisions prohibiting employment of female employees in night shift have been argued as denying them the same opportunity as male employees. It has been established through judicial precedence[1] that employers cannot deny job opportunities to women workers on the grounds of ‘night shift’ work requirements. With a view to secure an inclusive workspace, several Indian states continue to issue notifications permitting employers to employ female employees in night shifts. These notifications prescribe several conditions to be satisfied by employers for engaging female employees in night shifts, with a continued focus on their safety and security, in order to enjoy the benefit of these exemptions.

Recently, in exercise of its powers under Section 3(2) of the Madhya Pradesh Shops and Establishments Act, 1958 (“MP S&E Act”) and Section 66(1A) of the Factories Act, 1948 (“Factories Act”), the State of Madhya Pradesh vide notifications dated June 27, 2025[2], in supersession of its earlier notifications[3] dated August 1, 2022 and June 24, 2016 respectively, directed (a) that provisions under Section 25 of the MP S&E Act (which restricts women from working in inter alia commercial establishments between 9:00 PM and 7:00 AM) will not apply to shops and commercial establishments in the state of Madhya Pradesh (“2025 S&E Notification”), and (b) measures for the safety of women required or allowed to work in any factory or manufacturing processes between 8:00 PM and 6:00 AM (“2025 Factories Notification”), subject to compliance with the prescribed conditions.

Notification under the MP S&E Act

Section 25 of the MP S&E Act prohibits employers from requiring or allowing inter alios women employees from working between 9:00 PM and 7:00 AM in shops and commercial establishments. In August 2022, the State of Madhya Pradesh issued a notification allowing employers to engage women employees during the above shift, subject to compliance with the prescribed conditions. These conditions largely focused on ensuring the safety and security of women employees, with a deeper compliance mandate around prevention of acts of sexual harassment and ensuring appropriate complaint redressal mechanisms, largely revolving around compliance mandates under the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013 (“POSH Act”). Notably, the compliance measures did not mandate employers to seek explicit written consent from women employees working night shifts.

In supersession of this notification, the 2025 S&E Notification prescribes revised compliance mandates for employers intending to engage women employees in night shifts. These include:

Sr. No.	Key conditions
1.	Provision of mandatory written consent of women employees for working in night shift, with a mandatory batch size of not less than 5 (five) women working during such shift.
2.	Compliance with provisions of Maternity Benefit Act, 1961 and other related prevailing laws.
3.	Ensuring safe and secure workplace, with provision of women guards at entry and exit points where 10 (ten) or more women are employed.
4.	Ensuring the prescribed sanitation requirements, including provision of closed-circuit television (CCTV) surveillance where 10 (ten) or more women are employed.
5.	Compliance with requirements under the POSH Act.

Notification under the Factories Act

Similar to the MP S&E Act, the Factories Act also prohibits employment of women workers during night shifts, unless otherwise exempted by notifications from applicable State Governments. The 2025 Factories Notification allows for similar relaxation for employers to permit women workers to work during night shift i.e. between 8:00 PM and 6:00 AM, subject to compliance with the following key conditions:

Sr. No.	Key conditions
1.	Provision of mandatory written consent of women employees for working in night shift, with a mandatory batch size of not less than 5 (five) women working during such shift.
2.	No women are to be employed against maternity benefit provisions under applicable laws.
3.	Women employees are to be provided with adequate transportation facilities of pick-up and drop at their residence, and employers are to provide safe and secure working conditions in a manner such that women employees are not disadvantaged in connection with their employment.
4.	Ensuring the prescribed sanitation requirements, including provision of well-lit areas in the passage to work facilities and closed-circuit television (CCTV) surveillance.
5.	Provision of women security guards at entry and exit points of workplace, and provisions of women wardens and supervisors where a factory provides boarding and lodging arrangements for female employees.
6.	Provision of 1/3^rd of the strength of supervisors, shift-in-charge, foreman or other supervisor staff to be women during night shifts.
7.	The period of rest or gap between 2 (two) shifts should not be less than 12 (twelve) consecutive hours.
8.	Compliance with requirements under the POSH Act.

Conclusion

Both the 2025 S&E Notification and 2025 Factories Notification provide streamlined compliance measures aimed at enhancing women participation in shops, commercial establishments as well as factories. While the 2025 S&E Notification streamlines conditions issued under the erstwhile notification in so far as prescriptive measures around prevention of sexual harassment at workplace are concerned, the 2025 Factories Notification provides more onerous conditions on employers of factories, particularly with respect to stipulations around minimum women supervisory staff and rest intervals. Taken together, these notifications certainly highlight the State Government’s continued measures towards ensuring a more progressive approach at facilitating an enhanced and more equitable workforce participation, while ensuring the safety and dignity of women employees in night shifts in Madhya Pradesh.

This Prism has been prepared by:

Sonakshi Das
Partner

For more details, please contact [email protected].

[1] Treasa Josfine vs. State of Kerala, WP(C).No.25092 OF 2020(J)

[2] Notification No. 734/1/0016/2025/A-16 and 736/1/0015/2025/A-16.

[3] Notification No. 1283/443/2022/A-16 and F-4E-2/2015/A-XVI.

Tags Factory Law India, Gender Equality, Inclusive Workplace, JSA Update, Labour Law Update, Leading Law Firm, Leading Lawyer, Leading Lawyers, Legal Reforms, Madhya Pradesh, Night Shift Policy, Women Empowerment, Women Workforce

New Filters: Employment and Labour

Delhi High Court rules against defamatory termination letter: A case of contractual termination versus reputational harm

Brief facts

Issues

Analysis and findings

Conclusion

Employees’ State Insurance Corporation launches special scheme for voluntary registration

Applicability of SPREE

Key highlights of SPREE

Registration mechanism

Conclusion

Procedural framework issued by the Tamil Nadu Government for the prevention and redressal of sexual harassment of women at workplace

Findings and analysis

Conclusion

The High Court of Madras upholds an employer’s right to cancel conditional employment offers based on material discrepancies

Brief facts

Issue

Analysis and key observations

Conclusion

The High Court of Delhi re-affirms un-enforceability of post-termination non-competes and emphasises the need for balance between an employer’s confidentiality interests and employee mobility

Brief facts

Findings and analysis

Conclusion

PART A: Factories Act, 1948

Part B: Maternity Benefit Act, 1961

Regulatory Updates

Haryana revises working conditions for women

Government of Tamil Nadu extends permission for 24×7 operations for shops and establishments under the Tamil Nadu Shops and Establishments Act, 1947

Delhi Government issues public notice directing private sector organisations to register on SHe-Box portal in compliance with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Government of Karnataka notifies welfare framework for platform-based gig workers under the Karnataka Platform Based Gig Workers (Social Security and Welfare) Ordinance, 2025

Corporate governance enhanced through mandatory workplace harassment disclosures under new company law amendments

Government of Punjab extends permission for shops and establishments under the Punjab Shops and Commercial Establishments Act, 1958 to remain open on all 365 (three hundred and sixty-five) days of the year

Case law ratios

Supreme Court upholds enforceability of employment bond requiring minimum service or liquidated damages for premature exit

Termination on grounds of misconduct, without conducting disciplinary inquiry held unsustainable

Non-compete clause unenforceable post-employment; held, restraint on joining client violates Section 27 of the Indian Contract Act, 1872

Termination due to prolonged absence from employment will not amount to retrenchment

Telangana rolls out operational relaxations for commercial establishments

Key features and conditions of the Telangana Exemption 2025

Interplay between IT Exemption and Telangana Exemption 2025

Conclusion

New guidelines to control illegal listing and sale of radio equipment on e-commerce platforms

Compliance requirements for e-commerce platforms and sellers

Conclusion

Continued move towards women empowerment: Madhya Pradesh revises conditions for allowing women to work night shifts

Notification under the MP S&E Act

Notification under the Factories Act

Conclusion

Deals & Matter Corner

Articles & Publications

JSA Live

Blogs

Disclaimer & Confirmation