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 2007 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 had also started
a 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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Mrs.
Priya Ramesh Swaminathan
