No mention of repudiation in the appointment letters!

         In the appointment letters to the employees, nowhere is it mentioned that the employees can't leave service, or that their arrears' payments will be repudiated if they leave service of the Corporation. So how can this clause be introduced, that too with retrospective effect? If at all it has to be introduced, it could be with prospective effect and the same should be mentioned in the appointment letters.
          In fact, some employees who joined LIC in the recent years, have been given appointment letters stating that the wage revisions are due, meaning that they will be eligible for the same when they are notified. But when they resigned from LIC, they were denied the arrears' payments! Shouldn't they have been informed about the repudiation's clause, beforehand, so that they could've made an informed decision?
          Likewise, even after their resignation letters were received by LIC, they should've been intimated accordingly, with respect to this clause. The fact that LIC regularly accepts resignations without doing so, indicates that LIC is not playing fair. It can easily keep the resignations pending and accept them after the notification is made public, so that they aren't deprived of their hard-earned dues.
         The Supreme Court has declared this clause itself to be ultra vires, meaning 'beyond reach' of the Chairman's powers. But obviously, LIC's management thinks that it is beyond any law of the Nation! It is a law unto itself!
          Besides, the Finance Ministry too ratifies this unjust clause in the Wage Arrears' Notification, every 5 years, since 2000; without considering the Supreme Court's judgement.
          LIC, (and the Finance Ministry), it's time for some serious introspection!

A news report

Source: Internet

Ex-agent wins 10-yr battle against LIC for 

Rs. 44L dues

Jayanta Gupta, TNN | Mar 17, 2013, 01.35AM IST

KOLKATA: A star agent of the Life Insurance Corporation of India serves the insurer for 27 years, sells so many policies that at one point he is exempted from generating the minimum quantum of business required, and then quits to join another insurance firm as a regional manager. Can the LIC withhold renewal commission that is due to him for joining a rival firm?

In a judgment that has a bearing on the careers of nearly three million LIC agents across the country, the Calcutta high court has ruled that it can't.

Former LIC agent Rajeev Lohia from Kolkata fought a legal battle against LIC for nearly 10 years and got a ruling in his favour last October. LIC was directed by the division bench of Justice Kalyan Jyoti Sengupta and Justice Asim Kumar Mondal to pay Lohia his entire dues within three months. The insurer, however, didn't do so and when Lohia moved a contempt petition against the company in January this year, it prayed for time to move a Special Leave Petition (SLP) in the Supreme Court. The Supreme Court admitted the SLP on March 1 on condition that LIC deposit Rs 44 lakh that was due to Lohia till 2011 with the court registry.

Son of an LIC agent, Lohia joined the profession in 1975, when he was barely 18 years old. "I would get up at 4 am, attend classes at St Xavier's College till 9.30 am then go around 'cold canvassing'. This meant knocking on the doors of people I didn't know and asking them if they required a policy. I remember when I met my first client and produced my college identity card to prove that I wasn't a fraud, the man told me his mother, a nominee to his policy, had died 10 years ago. I told him that these are the small issues that can cause problems later on. He was my first client. After my rounds, I would attend management classes in the evenings," said Lohia, who went on to become the youngest Chairman's Club member ever.

In his career spanning 27 years, Lohia claims to have sold 2,764 policies to about 1,000 people. The premium per year for these policies amounts to Rs 2.25 crore. "My father would get magazines on the insurance industry from the US. These were of great help. From there we came to know of the Million Dollar Round Table (MDRT) and started communicating with it. The MDRT used the purchase price parity index to fix a barrier. Any agent who wished to qualify for MDRT needed to earn a commission of Rs 1.25 lakh per year. This was in 1985. For 15 years, I remained a life and qualifying member of MDRT and attended 12 conferences in the US and Canada. In 1986, for the first time, the Indian flag was hoisted at a MDRT meet due to our efforts," Lohia said.

On March 7, 2002, he resigned from LIC to join a private firm as regional manager. His agent's licence was also due to expire on March 31 that year. The very next day, he was asked by his branch manager to furnish the name and address of the private firm that he had joined. Lohia refused to do so as he had already resigned and the principal-agent relationship between LIC and him had ceased to exist. On April 22, 2002, he received a show-cause notice for alleged misconduct and LIC threatened to terminate his agency. Lohia replied that he had already resigned and his agency stood terminated. On August 16, 2002, he was informed that the renewal commission due to him would be withheld as penalty for termination of agency. The former agent preferred a departmental appeal but nothing came of it.

"I had never expected such a reaction from the company that I had served with such commitment. This was when I realized that the company treats agents as bonded labourers who have no rights to seek better opportunities in life. I went to court, not only for myself but for the three million LIC agents across the country. Under law, even after an agent's death, his next to kin are eligible to receive the renewal commission. By withholding my commission, was LIC trying to establish that agents would rather die than join other companies?" Lohia said.

On August 13, 2003, he moved a writ petition in the high court. He told the court that the renewal commission can't be withheld save for commission of fraud. In his case, termination of agency was not due to fraud, Lohia submitted. The court then wanted to know from LIC how much the company owed the former agent. The company submitted that the renewal commission due till June, 2011, was excess of Rs 44 lakh. A further Rs 32 lakh was also due apart from Rs 1 lakh as gratuity.

According to the judges, someone's right can't be taken away on 'mere presumption or assumption'. "We hold that the petitioner-appellant is entitled to get all benefits of renewal commission as well as gratuity. We accordingly direct the respondent Corporation to quantify the same and make payment and we permit three months time to do so," the court ordered.

What is renewal commission?

It is the commission paid to an after the. Renewal commissions generally form a substantial portion of an agent's income and serves as an important incentive for him or her to keep the policies going. After his/her death, his wife/children continue to receive the renewal commission.

**********************************************************************************