FOR PRIVATE CIRCULATION FREE OF CHARGE

Vol.1 Issue 1

September 2013

IN THIS ISSUE
Role of Line Mangers in HR P.2 Self Assessment Tool Find out Fundamental Leadership Skills in You P3 What components constitute Basic Wage for PF Contribution? P5 Legal Interpretation P6 Tips on Listening P6

EDITORIAL

Looking forward..
From the past 65 years in India HR profession has transformed from welfare concept with statutory force to todays Human Resource Development and Management. It has emerged from various disciplines like, social sciences, psychology, commerce, business management, economics and legal congregating to address people management and development in industry. Organizations now are looking ahead with futuristic view of HR to become a business partner and not confined to routine administration function of people management and compliances. However, it is HR Professional who has to interpret employment laws in day to day work to protect the interest of employers while ensuring employees a fair process. It is very aptly said that every line manager is a HR Manager. Line Mangers are the ones who directly interact with employees daily and have to play a pivotal role in employee development. But in practice, it seldom happens. Keeping in view the responsibilities and need for the enhancement of capabilities of People Development and Management cast on HR Professionals and Line Managers, this e-zine has come into being to contribute on its part, a small portion of the whole gamut of requirement.

QUOTE OF THE MONTH

Knowledge is gained by learning, skill by practice - Thomas S. Szasz

SURVIVAL DURING DOWNTURN A HR PERSPECTIVE

Communicate changes in priorities. Form cross functional teams to simplify processes and reduce cost. Revise goals according to market focus. Modify individual goals to align with the revised goals of the organization. Track employee performance. Give feedback to employees continuously. Assign multi tasking for high performers Train good performers

EDITOR

Do you know?
To enforce 8 days deduction of wages for absence in concert by 10 or more employed persons under Payment of Wages Act, 1936, there must be a provision in the Certified Standing Orders.

FUTURISTIC HR OUTLOOK - SEPTEMBER 2013

Role of Line Managers in HR In

any organization frontline managers have a crucial role to play to get business results and there is no second thought about it. These line managers usually perceive their line responsibilities and accountability as the only aspect of their job even though they have to lead a team of employees with them through whom they have to get results. In practice, these managers interact with employees in day-to-day operations by communicating and supervising their performance. In fact they are the leaders for them by allocating work and directing. In todays, economic downturn, industries are facing problems of not only marketing their products effectively but also importing material and technology at very high prices. In these circumstances, it is but natural for organizations to think to downsize the strength. In this process a good talent will be lost and cannot get back immediately when markets improve. The best way of looking at this crisis is to improve the capabilities and

competencies of employees at all levels so that their services can be better utilized in increasing productivity which is essential. Though conventionally, it is the primary role of HR in any organization to initiate learning and development initiatives, one should not forget the role expected of line managers for a successful implementation of such initiatives. They can be successful only with the strong front line managers and need of the our for Hr is to support the line managers since they are needed to communicate effectively with employees the changing scenario of markets and use their influence to make them perform. Line managers have to be developed in a leadership role rather than confining them only to their managerial role of conventional controlling. Traditionally, the need of the line managers is recognized only during labour unrests. But, these vital links with enormous influence over employees can play a major role in developing attitudinal changes among them to get desired results. Any number of good training programs with outside trainers will have only a minimal outcome at the most. If line managers take active role in employee development the results will be identified by the behavioural aspects of employees with outcomes in

increase of productivity. Employees believe their immediate managers more than the outside trainers however effective they may be. If trained, they can demonstrate as levers for driving performance through employee engagement. The following are the areas where they need to be strengthened: Exhibit Commitment Honest and Integrity Adaptability to Change Communicate company goals with clarity Allocate right people to the right tasks Coach employees Inspire employees with passion Communicate performance expectations Now, the onus lies with HR to develop one of the most valuable assets called the front line managers to ensure a performing culture with effective employee engagement and to support these line managers.
Tail Piece: In a Front-Line Manager Communication Study. It was found that Frontline Leaders are the most sought out, yet uninformed, ill-equipped, and under-utilized communication vehicle of an organization. (reference: http://www.crainc.com/archive s/front-line-managercommunication-study/ )

FUTURISTIC HR OUTLOOK - SEPTEMBER 2013

Self Assessment

One has to develop leadership skills to be successful in every phase of life. Here is a tool to make self analysis of how you have surmounted the challenges faced by you at some point or the other in your life, both personal and professional. When we face a crisis we enter into the fundamental state of leadership and immediately have new thoughts and engage in new behaviours. This tool will help you understand how you have transcended your greatest life challenges by entering the fundamental state of leadership. This self assessment tool was used in a leadership workshop at the University of Michigans Ross School of Business. Take a print out of this tool and recollect the most significant challenge you faced. After writing the crisis you faced in the space provided, please write details in the first column under each query and then in the opposite column of each row write down in simple terms like intention, integrity, trust, inter personal relations, motivation, collaboration, communication, adaptability etc. Crucial crisis

How did you become more results centred?

How did you become more internally directed?

How did you become more focussed on others?

How did you become more externally open?

Inspired by the article Entering the Fundamental State of Leadership by Robert E. Quinn originally published in July 2005 issue of Harvard Business Review. This is not meant for commercial use.

In the October 2013 issue :

HR Competencies Tool for Assessing Employee Development 3

FUTURISTIC HR OUTLOOK - SEPTEMBER 2013

In Company Programs For Line Managers

Change Management People Skills For New Supervisors/Managers Influencing Employees Leadership Skills Coaching Skills Giving Feedback Skills for Presenting Officer Role of Line Managers in Discipline & Industrial Relations HR Skills for Line Managers
Internationally Certified Behavioural Analyst and Certified Management Trainer Mr. Surendranath.A, will design and deliver the programs customized to the needs of the organization. Call Us: +918050103450 To know more about us, please visit www.nulinehr.weebly.com
4 Advt.

FUTURISTIC HR OUTLOOK - SEPTEMBER 2013

Basic Wage is defined under Section 2 (b ) of the Employees Provident Fund & Miscellaneous Provisions Act, 1952 as all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in accordance with the terms of the contract of employment which are paid or payable in cash but does not include the cash value of any food concession, any dearness allowance ( that is to say all cash payments by whatever name called paid to an employee on account of cost of living), house rent allowance, overtime allowance, bonus, any commission or similar allowance payable to an employee in respect of his employment or of work done in such employment and any presents made by the employer. However, the exception given to dearness allowance is corrected by including it in Section 6 for the purpose of contribution. Similarly, explanation 1 under Section 6 says dearness allowance shall be deemed to include also the cash value of any food concession allowed to employee by which exemption given under Section 2(b) is corrected under Section 6. As such any subsidy given on food provided in canteen or lunch coupons in lieu of canteen food or food allowance will also attract PF contribution. In practice, it may not be happening.

While overtime allowance is exempted, any allowance received for extra work done on time it is not considered as overtime vide Amal Kumar Ghatak v. Regional Provident Fund Commissioner and Others, 1980-II-LLJ-308 (Cal). Good work allowance or reward done during extra hours is also not considered as overtime since it has not been consider in the nature of overtime vide D.C.M. Limited v. Regional Provident Fund Commissioner, 198 I- LLJ979 (Raj). Since the word bonus is used without any qualification, it covers every kind of bonus paid to employees which is excluded from basic wage. Any incentive paid under an incentive scheme in pursuance of the settlement reached is an incentive bonus or production bonus in the nature of reward for labour not arising out of contract of employment but depending upon the excess production over and above the norms specified. As such incentive bonus and production bonus are excluded form basic wage under Section 2(b) vide Greysham &Co. v The Regional Provident Fund Commissioner, New Delhi, 1978-II-LLJ-95 (Del). A full bench of Supreme Court in the case of Bridge and Roof Company (India) Limited v. Union of India and Others held that bonus of all kinds are excluded

from the definition of term basic wages. 1962-II-LLJ490 (SC)(FB). But in some instances the PF Inspectors remarked in the inspection books that special allowance paid to employees are to be covered under basic wage attracting contribution to be paid. Usually, this type of special allowance or any similar name is provided in pay structure to adjust the amount which is not fitting into the salary structure and it will be a regular payment constituting payment in terms of contract of employment. In case of unionized employees such components will arise in wage settlements which are also constitute payment in terms of contract of employment. Therefore, such special allowances paid are covered under the definition of basic wage and contributions have to be paid on such allowances. But in practice PF contributions are not paid on special allowances generally due to misinterpretation to avoid employers liability to lessen the cost. However, any special allowance which is not paid under any contract of employment, settlement or award purely out of employers own will and pleasure will not form part of wage as held by Madras High Court in the case of R. Ramanathan Chettiar Jewellers, Madurai v. Regional Commissioner, Employees Provident Fund, 5 Madurai, 1988-II-LLJ-945.
Contd. on Page 6

FUTURISTIC HR OUTLOOK - SEPTEMBER 2013

Legal Interpretation

Rs 1.44 crores Legal Expenses

According to news released by Indo-Asian news service on 15th May 2013, a reply to a Right to Information application has revealed that Rs. 1.44 crore fees have been paid as in the last six months for a Senior Lawyer from Delhi, hired by the Hayana Government to fight the case against 167 workers prosecuted by Police for violence at Marutis Manesar unit last year which claimed life of a senior company official while around hundred others were left injured.

What components constitute Basic Wage for PF Contribution? Contd. FromPage 4 Again, Madras High Courts has delivered judgment that conveyance, educational allowance, food concessions, medical, special holidays, night shift incentives and city compensatory allowances attract PF contributions as they fall under the definition of basic wages under Section 2(b). Similarly, Madhya Pradesh High court in the case of Surya Roshini Mills held that conveyance allowance and special allowance to be included in basic wages quoting Supreme Court judgment in the case of Manipal Academy of Higher Education v. Provident Fund Commissioner (2008) 5 SCC 428 Currently, the case of Surya Roshini Mills is before Supreme Court for judgment We have to wait and see the outcome. Originally written for the blog on www.nulinehr.weebly.com

Principal Employer Not Liable To Pay Bonus To Contract Labourers under Payment of Bonus Act, 1965
In the case of M/S Hindustan lever Ltd., Mangalore, Factory Manager and Unit HR Head were prosecuted by the Officials of Labour Department Government of Karnataka in a criminal case for the alleged violation of Section 11 of the Payment of Bonus Act, 1965 for an offence p/u/s 28 of the said Act before JMFC (II Court), Mangalore. which is punishable under Section 28 of the said Act. The allegation was that contract labourers were not paid bonus on par with regular employees. A writ petition was filed by both Factory Manger and Unit Head of HR in the Karnataka High Court which found .the claim of the Labour Department that the contract labourer are also entitled for payment of bonus on par with the regular employees, as contended in the complaint has no legal basis and it does not amount to violation of Section 11 of the Act attracting punishment under Section 28 of the said Act. The prosecution launched before J.M.F.C. (Court-II), Mangalore was quashed by Karnataka High Court. Mr Shachindra Kumar vs State Of Karnataka on 22 February, 2013

Tips On Listening
Listening means hearing, interpreting, evaluating and responding. Be poised and emotionally controlled Never lose temper Listen coolly Let off the steam

Edited and published by Surendranath. A on behalf of Nuline HR Consulting and circulated electronically.

Nuline HR Consulting #5, Anjanadri Plaza Girinagar Circle Bangalore-560085