Thursday, April 1, 2010

Private Organisations not bound by Disability Act: Says Supreme Court

Dear Friends,
This post is with respect to a recent judgement by Hon'ble Supreme Court in  Civil Appeal No. 1886/2007 titled Dalco Engineering Private Ltd. Vs. Shree Satish Prabhakar Padhye and Ors with another Civil Appeal No. 1858/2007 titled Fancy Rehabilitation Trust and Anr. Vs. Union of India and Ors.


The employee Mr. Padhye acquired hearing impairment during the period of service and was terminated by the employer. Employee got a favourable suggestion from Disability Commissioner Pune for his re-instatement under Section 47 of Disabilty Act which says:

“47. Non-discrimination in Government employment.—(1) No establishment shall dispense with, or reduce in rank, an employee who acquires a disability during his service:

Provided that, if an employee, after acquiring disability is not suitable for the post he was holding, could be shifted to some other post with the same pay scale and service benefits:

Provided further that if it is not possible to adjust the employee against any post, he may be kept on a supernumerary post until a suitable post is available or he attains the age of superannuation, whichever is earlier.


(2) No promotion shall be denied to a person merely on the ground of his disability:


Provided that the appropriate Government may, having regard to the type of work carried on in any establishment, by notification and subject to such conditions, if any, as may be specified in such notification, exempt any establishment from the provisions of this section.”

 
The word "Establishment" has been defined by Section 2( k)( i) of the Persons with Disability (Equal Opportunities, Protection of Rights and Full Participation) Act 1995 defines the word "Establishment as :-

"Establishment" means a corporation established by or under a Central, Provincial or State Act, or an authority or a body owned or controlled or aided by the Government or a local authority or a Government company as defined in section 617 of 'the Companies Act, 1956 and includes Departments of a Government;


On a simple reading of the definition of the word "establishment", it is clear that any organisation established under a central, provincial or state act will be an establishment. Thus any organisation registered and established under the provisions of the Societies Registration Act or the Indian Trust Act or The Companies Act should ordinarily get covered under this.

However over insistence here on the Government share/ownership or control indicates that the intention of creators of this statute was to only include organisations which are largely government or local authorities created under central or state statutes or has a government stake of 51% (read section 617 of Companies Act which has been specifically referred to indicate that this has to be read in exclusion of the Companies Act). Also the heading of Section 47 of Disability Act is "Non-discrimination in Government Employment" which clarifies the intention of the legislature that it did not wanted to include private companies under the word "establishment".

The Hon'ble Supreme Court has indicated that similar phrase in the Indian Penal Code and the Prevention of Corruption Act meant "government companies".  The reason put forward by the Court is "A ‘company’ is not ‘established’ under the Companies Act. An incorporated company does not ‘owe’ its existence to the Companies Act. An incorporated company is formed by the act of any seven or more persons (or two or more persons for a private company) associated for any lawful purpose subscribing their names to a Memorandum of Association and by complying with the requirements of the Companies Act in respect of registration. Therefore, a ‘company’ is incorporated and registered under the Companies Act and not established under the Companies Act.


It further clarifies that inclusion of only a specific category of companies incorporated under the Companies Act, 1956 (Govt. Companies registered under Section  617) within the definition of ‘establishment’ necessarily and impliedly excludes all other types of companies registered under the Companies Act, 1956, from the definition of ‘establishment’.


A counter argument to this would be that while IPC and Prevention of Corruption Act are punitive in nature and should be interpreted in restrictive and strict sense, the Disability Act is a benevolent, socio-economic and empowering legislation and must be interpreted in a way which favours the marginalized section of the society.

However, now a decision of the learned judges of the Supreme Court is out here clarifying the meaning of word establishment, removing the clouds of doubt on the existing legislation and leaving no room for its benevolent interpretation in future. Therefore, it would be worthwhile now that the disability activists address this issue in the New Law that is being suggested and be categorical that the provisions of the disability act would apply to all establishment including those private initiatives which are registered under any of the Central or State statutes like companies, trusts, societies and cooperatives etc.

This has larger force of argument because when a labour legislation related to PF, Minimum Wage etc. is applicable to private employers with a certain number of employees then why can't disability legislation be applicable - for the objective of both legislations is to empower the weak, vulnerable and marginalized members of our society?

On second thought, it comes to my mind as to why the exploitation of an employee with disability by an employer could not be taken up through labour legislations read in conjunction with disability Act and why alone under Section 47 of the Disability Act? The last line of the judgement - "This will not come in the way of employee of any private company, who has been terminated on the ground of disability, seeking or enforcing any right available under any other statute, in accordance with the law." -  gives a hint that it could have perhaps been better fought under labour legislations. 


Here is the news report on the issue from the Mail Today.



regards



SC Vashishth
Advocate-Disability Rights
09811125521


SC says disability Act not binding on private firms

Mail Today, 01st April 2010


THE SUPREME Court on Wednesday held that a law enacted in 1995, to prevent exploitation of the disabled by their employers, could not be enforced on the private sector.

A three- judge bench, comprising justices R. V. Raveendran, R. M. Lodha and C. K. Prasad, said the Persons with Disabilities ( Equal Opportunities, Protection of Rights and Full Participation) Act, 1995, did not cast any obligation on private companies and schools.

The bench rejected a contention that the Act covered all companies incorporated under the Companies Act.

A private company had approached the apex court, against a high court order holding that the disabilities commissioner had jurisdiction over any company incorporated under the Companies Act. The high court had said it could direct the company to reinstate an employee who was dismissed on account of disability.

The second appeal was filed by a trust — on behalf of the employee — which had approached the apex court after the high court refused to pass any such direction to the company and admitted that the first judgment was incorrect.

Opposing the company’s appeal, the dismissed employee pointed out that section 2( k)( i) of the disability Act brought “ a corporation established by or under a central, provincial, or state Act” within its ambit.


But the apex court said a similar phrase in the Indian Penal Code and the Prevention of Corruption Act meant government companies.