Shocking but
true!
L.I.C of India betrays its resigning employees’ Good Faith!
It repudiates Arrears’ payment and difference in Retirement dues to its resigning employees.
The Life Insurance Corporation of India, the number one life insurer in the whole world, has not paid arrears of wage payments and arrears of difference payable under Statutory retirement benefits like Provident Fund and Gratuity, due to its resigning employees; since the 1st of August 1997, as revealed by answers to my RTI application. Revision of the wage bill in the Corporation is done after a period of every five years, but the notification is invariably delayed and the arrears are always paid after a gap of three years after they are actually due.
The Board of Directors of LIC of
India has taken the decision to repudiate the arrears and sent it to the
Finance Ministry for approval, though it is a purely administrative decision
and not a policy decision. Only policy decisions involving public interest need to be referred to
the Finance Ministry. The decision of
the Finance Ministry also needs to be analyzed as to why it approved the
Corporation’s decisions without due consideration of their legality and Court
Judgments on the issue.
The
Corporation has adopted a strategy of depriving its voluntarily resigning
employees, that is those who are retiring before twenty years of service, of
their legitimate dues by simply resorting to announcement of the notification
after inclusion of a clause in a Gazette notified by the Finance Ministry of
India, that such employees will not be eligible for payment of arrears. This effectively means that even if a
resigning employee has been in service, that is, on roll of the Corporation on
the date from which the arrears were effective, he/she will not be eligible to
get arrears’ payment. This is illegal as wages are rights of an employee,
according to our Indian Constitution and Labor Laws.
For
instance, I had resigned after 18.5 years of service on 2nd July
2010 and the notification for payment of arrears due from 1st August
2007 was announced on 11th October, 2010. Legally, I was entitled to the
arrears of difference in my wages from 1st August 2007 to 2nd
July 2010 but it was denied on the basis of this Gazette and subsequent Circular’s
notification by the Corporation.
Similarly,
the Provident Fund and Gratuity being Statutory retirement benefits, their
difference will also have to be paid as per the revised, enhanced wages. All
the allowances, perks, etc. would also have to be calculated accordingly and
the difference would have to be paid to that resigning employee.
The
Corporation wrongly differentiates between the two classes of voluntarily
resigning employees as those who have completed 20 years of service and those
who have resigned before completing 20 years of service. The first class is
entitled to the Wage Revision Arrears’ Payments and the second class isn’t
entitled to it! Since the wage revisions were announced for all the employees
of the Corporation, as a class, the Corporation should not deny the benefits to
the resigning employees.
Besides, the Minutes of the
Corporation’s Board Meeting with points regarding recommendations made to the
Finance Ministry, for repudiation of arrears and retirement benefits; have not
been given to me as they are not available with the Corporation! There is also no
rationale on record; of this decision by the Corporation, as revealed by the
replies received from the Corporation, in response to the RTI Application made
by me; to L.I.C of India.
The Corporation has also replied that the
Central Government takes this decision to repudiate arrears’ payments and hence
it has repudiated arrears’ and other allied retirement benefits. In fact, it is the Managing Board of Directors of LIC of India, which takes this decision.
LIC of India
has 115 Divisional Offices, 8 Zonal Offices, 9 Audit Centres, MDC and Central
Office, as per the RTI replies. The total number of resigning employees whose
arrears have been repudiated, since 1997 will be in thousands, and the total
repudiated amount since 1997 will surely amount to crores of rupees.
The
Corporation has refused to answer my RTI queries for details regarding the
names, addresses, phone numbers and number of employees who have been denied
the arrears payments and difference in retirement and other benefits due to
them, as also the actual amount repudiated. The Central Office has given a list
of 40 resigning employees, for 2010; and given an affidavit dated 4th April,
2014, that no other information apart from that given to me in response to my
RTI queries, is on its records.
Interestingly,
it refuses to part with this vital information on the grounds that it does not
have this information in a centralized form in its Central Office. This is not
true as all the information is sent by all the subsidiary offices of the
Corporation to its Central Corporate Office in Mumbai regularly on a monthly
basis. The Corporation’s Central Office compiles, consolidates and prepares the
Final Trial Balance, Balance sheet and other Accounting Statements on a monthly,
quarterly and yearly basis and annually presents the same in the Parliament as
it is a Public Sector Organization.
The Central Office server in its I.T.
Department has the entire record of all the employees, (in the form of
‘Employee Masters’) of the Corporation and the details of all the resigning
employees of the Corporation are updated as and when they retire from service.
The
Corporation has a highly organized and computerized set-up and all its records
are computerized, hence it is hard to believe that it cannot reply to those
queries in my RTI Application which pertain to information about such employees
who have been short-changed by it; and the mind-boggling amounts involved.
The amounts repudiated haven’t even
been accounted for, by the LIC of India in its books of accounts. Had these
arrears payments been made, the Income-tax against these payments would have
been sent to the Income-Tax Department. Thus this action of LIC of India has
even led to a revenue loss to the Central Government exchequer. The Balance Sheet of LIC of India, a
reputed Public Sector organization, will also not reflect the correct picture
of its financial status.
Interestingly,
the Gazette notifications G.S.R. 824 (E), 825 (E), 826 (E), 2470 (E), issued by
the Ministry of Finance, dated 8th October, 2010; contain a point in
their Explanatory Memorandum stating: “It is certified that no employee of the
Life Insurance Corporation of India is likely to be affected adversely by the
notification being given retrospective effect.”
Besides, the Supreme Court has
already passed a judgment asking the Corporation to pay such arrears to retired
employees, in its 2008 judgment. Thus, wasn’t the Corporation guilty of
Contempt of Court, if it still persisted in referring to the Finance Ministry
for approval, subsequent Gazette notification with the same clause 3 1) b) regarding repudiation of arrears (send
proviso of Para 3 of the Notification dated 21st December 2005 is
struck sown being ultra vires to the extent it deprives the petitioner and
other similarly situated persons to get the benefit of revised pay scale with
effect from 1st August 2002 after applying the principle of
severability. Supreme Court's decision- Petitioner VS GIC) and then issuing an official
Circular dated 11th October, 2010?
The evasive and lackadaisical
response of the Corporation shows that it lacks transparency in its dealings,
its records are not maintained properly; it does not follow standard accounting
procedures and fair HR practices.
The
Corporation is a trustee of trillions of public money. To its credit, it has
been regularly making Claim payments to the beneficiaries of its insurance
policies, and has the lowest ratio of claims repudiated, in the whole world.
Why can’t it play fair with its resigning employees and pay them their dues,
gracefully? Is it too much to ask for?
Hence I request all those employees
who have resigned from the Public Sector Insurance companies (LIC, GICs and
LICHFL) and not been paid arrears and other retirement benefits and allied
dues, to come forward, send their names, phone numbers, e-mail ids, addresses
and employment particulars (in these companies), etc. to me; so that we can
collectively fight for justice. You may post your comments and details online on this blog.
I have also started a new thread of discussion- 'LIC of India repudiates wage arrears' payment'; on the website www.lawyersclubindia.com/Labour and Service law/Service. You may also post your feedback there.
I have also started a new thread of discussion- 'LIC of India repudiates wage arrears' payment'; on the website www.lawyersclubindia.com/Labour and Service law/Service. You may also post your feedback there.
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