The FCRA Act was enacted to regulate the acceptance and utilisation of foreign contribution by individuals, associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest. Annual inflow of foreign contribution has doubled between 2010 and 2019 Many recipients did not utilise foreign contribution for the stated purpose as per registration or prior permission Government cancelled FCRA Registration of more than 19,000 organizations between 2011 and 2019 FCRA Amendment enacted to streamline the provisions of the FCRA & strengthen the compliance mechanism KEY CHANGES - FCRA AMENDMENT Exclusion of Public Servant - A public servant as defined in Section 21 of the IPC shall not be allowed to accept any foreign contributions and therefore is best excluded from non-profit boards that receive FC. Definition of Organisation of a Political Nature – Organisations having association with a political party in the Official Gazette, organisations of farmers, workers, students, youth based on caste, community, religion, language or otherwise and those who habitually engages itself in or employs common methods of political action in support of public causes shall also be considered to be of political nature, if they participate in active politics or party politics. No Transfer/Sub-grant of Foreign Contribution - No organisation, registered under FCRA can transfer the foreign contribution to any other organisation/ person even if the second recipient or sub-grantee has an FCRA-registration or prior permission under the FCRA. Cap on Administrative Expenses - Reduction in the cap on using FC towards administration expenditure from 50% of foreign funds received during the fiscal year to 20% of the funds received. Restrictions on Utilization of Funds – Under the Act, an organization found guilty of violation of any of the provisions of the FCRA was not allowed to utilize the unutilized or unreceived amount of foreign contribution except with the prior approval of the Central Government. A proviso added allows the Government to even restrict usage of the unutilized foreign contribution if, based on a summary inquiry the Government believes that organization/ person has contravened provisions of the FCRA. Mandatory Aadhaar Number, Religion – Organisations applying for registration or renewal of FCRA registration have to mandatorily provide Aadhaar number (along with PAN) of all its office bearers or Directors or other key functionaries, a copy of the Passport or PIO/OCI card, in case of a foreigner. The officer’s relationship with other member(s) of the executive council/governing body/ office bearers must also be provided. Details of any current office bearers or directors or other key functionaries of the association, who, in the discharge of his/her official functions or private conduct been has any prosecution for any offence pending against him/ her must be provided. Election, resignation or death of any new key member must be intimated to the Ministry of Home Affairs (MHA) within 15 days and the change shall be effective only after MHA approval. If the nature of an organisation is designated as religious, it must be stated whether the association is Hindu, Sikh, Muslim, Christian, Buddhist, or others. Suspension of FCRA registration - Earlier, the FCRA-registration of an organization which violates the provisions of FCRA could be suspended for such period not exceeding 180 days. This has been increased to 360 days. Voluntary surrender of FCRA registration -Under the earlier FCRA, there was no provision for an organization to voluntarily surrender its FCRA registration. The Amendment allows for voluntary surrender of FCRA registration if, such organization has not contravened any of the provisions of FCRA and the management of foreign contribution and asset has been vested in the competent authority prescribed under the FCRA. Renewal of FCRA registration - Under the FCRA, no prior inquiry was conducted for renewal of the FCRA registration. The Amendment requires the Central Government to make inquiries to satisfy itself that the organization has fulfilled all conditions specified under Section 12(4)[1] of the FCRA. The certificate needs to be renewed at least 6 months prior the expiry of the period of the original certificate, failing which the certificate will expire 5 years from date of grant. FCRA Account with SBI, New Delhi - Organisations are required to open their designated FCRA Bank account with New Delhi Main Branch (NDMB) of the State Bank of India (SBI), 11, Sansad Marg, New Delhi 110001. The Ministry of Home Affairs has issued a Public Notice dated October 13, 2020 providing the procedure and for opening and operating the designated “FCRA Account” and clarified that personal visits to Delhi are not warranted. The latest circular clarifies the following changes with respect to banking: New Delhi Main Branch: New Delhi Main Branch (NDMB) of the State Bank of India (SBI), 11, Sansad Marg, New Delhi 110001 is the designated bank for the purposes of opening the “FCRA Account” to receive Foreign Contributions (FC). All existing FCRA Account holders or persons with prior permission whose present accounts are in banks other than NDMB shall have to open an FCRA Account in NDMB by March 31, 2021. The existing FCRA Account holders or persons with prior permission shall be eligible to receive FC in the “FCRA Account” w.e.f April 1, 2021 or from the date of opening of the “FCRA Account” in the NDMB whichever is earlier. All fresh applicants for certificate of registration or prior permission shall have to first open the “FCRA Account” in NDMB. The NGOs/associations need not have to visit the NDMB. They can visit the nearest SBI Branch or any other SBI Branch of their choice to open the “FCRA Account” in NDMB. A Standard Operating Procedure (SOP) to facilitate the opening of the “FCRA Account” in NDMB is uploaded in the MHA portal. The NGOs/associations can retain their present FCRA Account and link it to the “FCRA Account” opened at the NDMB. No transfer fee or charges will be levied by NDMB for transferring the FC from the “FCRA Account” to another FCRA Account or utilization account/ accounts in a branch of any scheduled bank. NGOs/associations may visit fcraonline.nic.in for further updates. Impact of amendment on Indian Social Sector The FCRA Amendment brings with it a set of new problems - the main being the ban on sub-grants. This will mean that more grass-roots NGOs will now directly access foreign contribution from foreign philanthropy/Foundation/HNI rather than than through an Indian intermediary of a foreign funder. This means all grass-roots non-profits will compete for funds in the global philanthropy market. To succeed, every such NGO should demonstrate robust compliance, governance & impact. Therefore NGOs must build capacity in these domains to succeed in the long run. This may also result in larger foreign philanthropies winding down verticals that were implemented exclusively through grass roots partner NGOs. In the same breath, Indian non-profits with a healthy endowment and traction may consider opening foreign charities to receive international funding and make down stream grants in India. This also lines up with the ideology proposed by the SEBI's working committee on the social stock exchange - i.e improve transparency & accountability of Indian non-profits so as to attract and retain social & impact funding. We might be heading towards globalisation of a charitable kind!

Charitable activities are defined differently under the Income Tax Act (IT) and Goods & Service Tax Act (GST) Acts and are taxed differently. In this issue, we’ll analyse tax liabilities under the direct and indirect tax regime of entities carrying out charitable activities. Under the Income Tax Act since ‘object of general public utility’ can be interpreted widely to include a plethora of activities. Therefore the scope of “charitable activities” is certainly broader under the IT Act than GST Act. Some Latest Decisions Taxability Under GST As per the Notification No. 12/2017 - Central Tax (Rate) dated 28/06/2017 [1] , under Entry 1 the services by an entity registered under Section 12AA [2]  of the Income Tax Act by way of charitable activities are exempted from GST. It is essential for the entity to be engaged in ‘charitable activities’ to claim exemption. As per Section 23(1)(a) of GST Act a person engaged in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax are not liable for registration. In the latest case of  Re All India Disaster Mitigation Institute [3] ,(vide advance ruling) the Memorandum of Association and the bye-laws of the trust reflected that it was engaged in training/ research relating to disaster prevention, mitigation and management. Such activities qualified as charitable activities. The trust was also registered as a charitable trust under Section 12AA and Section 80G [4]  of the IT Act. This meant that the entire income of the trust was exempt from income tax. Therefore, it was held that a non-profit entity engaged in charitable activities which attracts a nil rate of GST is not liable for GST registration. Taxability of Corpus Grants under IT Act: Entities carrying out charitable activities receive voluntary contributions in multiple forms that form the basis for either levy of taxes or exemption from taxes. One such form of contributions is corpus donations.  Section 11(1)(d) [5]  enumerates that the voluntary contributions made with a specific direction that they shall form part of the corpus of the institution shall be excluded from the computation of total income. The question of corpus donation came before the Income Tax Appellate Tribunal in the recent case of Income Tax Officer (Exemption) v Hosanna Ministries [6]  wherein the tribunal while reflecting upon the nature of corpus donations opined that it denotes a form of voluntary contribution wherein the donor provides specific directions to the donee on the purpose and use of funds. It indicates that the funds should not be depleted and retains its original character as a principal amount. It is for the Assessing Officer to examine if the donations received are voluntary in nature and for a specific purpose. Thereafter, the officer should decide the nature of donations being in the nature of corpus donation or income.    Is Sec. 12AA Registration Mandatory for Corpus Grant Exemption? As per Section 12A [7] , to assert the exemption to corpus donation under Section 11(1)(d), the non-profit entity must be registered under Section 12AA of the Act. If the entity is not registered under Section 12AA, reference can be made to Section 12 [8]  which excludes contributions made with a specific direction that they shall form part of the corpus from the ambit of “income” of the entity.  This was upheld by ITAT Pune Bench ‘B’ in the case of  ITO (Exemptions), Ward-2, Pune v. Serum Institute of India Research Foundation [9]  that corpus specific voluntary contribution being in the nature of capital receipts cannot be computed as income and taxed even if the trust is not registered under Section 12AA of the Act. The exemption to corpus donations can be claimed by virtue of Section 12 and it is in the nature of capital receipts even if received prior to the registration. Therefore, if a non-profit entity has received voluntary contributions with a specific direction that they shall form a part of the corpus of the trust or institution can claim the exemption even if not registered under Section 12AA of the Act.

The general rule is that teachers of unaided private schools are to be paid and provided benefits at par with government school teachers. This is substantiated by Rule 3(1)(b) of Karnataka Educational Institutions (Certain terms and conditions of service of employees in Private unaided Primary and Secondary and Pre-University educational institutions) Rules, 2005 (the “Rules”). A circular by the Department of Public Instruction, Karnataka, based on the above rules has said that failure to adhere to this will result in penalty. However, no specification on the type or quantum of penalty has been provided.  We have summarised below legal provisions of minimum pay, leave - including maternity and paternity leave, gratuity and other statutory benefits under various laws and rules: I. Minimum Salary The categories of Primary School teachers and their respective salaries [1]  are in the following range: Primary School Teacher for Class 1 to 5 – Rs. 13,600 - 26,000 Graduate Primary Teacher for Class 6 to 8 – Rs. 14,550 -26700 However, based on the Right to Education (RTE) Act, the Department of Public Instructions (DPI) of Karnataka, in April 2019 has stated that all private schools must pay a minimum monthly salary of  ₹25,800/- to primary school teachers, ₹33,450/- to high school teachers, ₹27,650/- and ₹21,400/- to first and second division clerks respectively, and ₹17,000/- for cleaning and maintenance employees [2] . This dichotomy ostensibly created severe confusion about what must be complied with. Teachers employed in private schools  can complain to the District Education Regulatory Authority (DERA) if they have any concerns related to payment of salaries [3]   in line with DPI’s instruction. II. Leave  (teaching & non-teaching staff in educational institutions) Rule 4 of the   Karnataka Educational Institutions [Certain terms and conditions of service of employees in private un-aided Primary and Secondary and Pre-University Educational institutions] Rules, 2005 ,   provides following types of leave: a) Sick Leave.  Maximum of 12 days in each calendar year but not for more than 5 days at a time due to sickness or on any other reasonable reasons. This leave shall be credited to the account of the employee at the beginning of the calendar year, i.e., 1st January of every year;  b) Earned Leave . Where an employee has not put in a service of 1 year, he may be sanctioned leave in proportion to the period of his service at the rate of 1 day for each completed month of service; and c) For the purpose of (b) above, fraction of leave of half a day or more shall be treated as one full day’s leave and a fraction of less than half a day shall be omitted. An employee can carry over unavailed leave, subject to a maximum of 30 days.  Maternity Leave Female employees shall be entitled to maternity leave (with pay) in accordance with the Maternity Benefits Act, 1961, i.e., 26 weeks of leave.  In the education sector, this is a protracted length of time accounting to more than ½ of the school term. For the school it creates some logistical difficulties such as - recruitment of a new teacher, additional remuneration to the substituting teacher, additional burden on an existing teacher, acclimatisation of the students to the new teacher, especially when the leave is taken in the middle of term in higher classes or finding suitable roles when the old teacher is to reinstated mid-term. While the practical difficulties of this in the education sector can be understood and appreciated, this is a mandatory benefit that has to be provided by all schools.  Paternity Leave The   Karnataka Civil Service Rules   (which applies to Karnataka State Government teachers) allows a male Government servant paid paternity leave of 15 days from the date of its commencement. However, this is not available to a male Government servant who has two or more living children.  This can serve as a guideline for schools to allow for paternity leave.  III. Other Statutory Benefits Gratuity The High Court of Karnataka, has made the payment gratuity to private school teachers compulsory [4] .  It further held that, following the 2009 amendment of Section 13-A of the Payment of Gratuity Act, although the schools may incur a financial burden for paying gratuity to all the teachers retiring/ retired after 3.4.1997, it was not a sufficient reason to set aside the retrospective operation of the amendment.    Provident Fund The Supreme Court of India has held that the Employees Provident Funds and Miscellaneous Provisions Act, 1952 is applicable to educational institutions [5] .    Bonus The Payment of Bonus Act, 1965 provides for the payment of bonus to persons employed in certain establishments on the basis of profits or on the basis of production or productivity. Since most schools are registered either as a society under the Societies Registration Act, 1860 or as a public trust of a charitable nature, payment of bonus will not be applicable to private unaided schools.   Institutional Autonomy or Teacher Welfare? The Minimum Wages Act 1948 stipulates the minimum wages payable for certain skilled and unskilled workforce. Teachers are not covered under the Minimum Wages Act. Therefore, it becomes essential to afford teachers some basic standards of social & financial security.  On the flip side, many small & budget private schools are unable to pay the minimum salaries as statutorily prescribed, as this is more than the students’ annual tuition fee and requires a hike of almost 200% - 300% of the tuition fees. This situation has worsened during the pandemic with schools not being able to re-open and collect the fee. Thousands of teachers lost their jobs.  There is also a counter view that schools should be given autonomy and that the government should not interfere and impose a minimum pay for teachers of private unaided schools. Despite challenges faced by private educational institutions, the courts of India have, in most occasions,  ruled in favour of the teachers since, for most, this is the primary and sole source of income. With an increase in the cost of living, the teachers have to be protected with the minimum entitlements. The financial security may also ensure better quality of education, benefitting the students and society at large. Therefore educational institutions must draft employee benefit policies in consultation with legal experts who are aware of the local & state specific laws.  [1]   The Karnataka Education Department Services (Department of Public Instructions) (Recruitment) (Amendment) Rules, 2017 [2]   https://www.educationworld.in/karnataka-pay-parity-shock/ [3]  Karnataka Education (Second Amendment) Act, 2017 [4]   Sarvodaya Education Trust v. Union of India  (2017)  [5]   Welham Girls High School Society, Dehra Dun vs. Union of India  (1988)

Section 135 of the Companies Act, 2013 mandates that companies having a  net worth of INR 500 crore or more/ turnover of INR 1000 crore or more/ net profit of INR 5 crore or more  during any financial year,  spend at least two per cent of the average net profits of the company during the three immediately preceding financial years, towards CSR activities.  The CSR Rules provide for means of undertaking the CSR activities. Changes brought under the Companies (Amendment) Act, 2020 Bill passed by Lok Sabha on 19th September, 2020 Exemption to companies with a CSR liability of up to Rs 50 lakh a year from setting up CSR Committees. If the company spends an amount in excess of the requirements provided under the Act such company may set off such excess amount against the requirements of CSR spends in future years. Penalty for non-compliance of the CSR requirement decriminalized with only fines upto Rs.1 crore on the breaching Company & liability of officer in default upto Rs. 2 lakh. Key Changes Proposed in the Draft CSR Rules Not yet introduced in the Parliament – only released by the Ministry of Corporate Affairs for public comments CSR that benefits employees : Activities which benefit less than 25% of its employees as its beneficiaries will be covered as CSR activity. Board Responsibility : The responsibility is on the board of a company to give directions for selection, implementation and monitoring of activities based on the recommendations of the CSR committee. International Organizations : A company may engage international organizations for:  designing, monitoring and evaluation of the CSR projects or programmes as per its CSR policy  capacity building of their own personnel for CSR.  implementation of CSR project subject to prior approval of the central government. CSR Implementation not allowed through Trusts /Societies:  Proposes to restrict CSR to be conducted through the instrumentality of the company by itself through a Section 8 Company or any entity established under an “Act of Parliament” or a “State legislature”. The Draft Rules do not allow collaboration of one or more Companies for forming a Section 8 Company nor does it recognize a registered trust or registered society for the purpose of carrying out CSR activities. The entities which receive the CSR are to be specifically registered for this purpose.  Certification by CFO : Chief financial Officer or the person responsible for financial management shall certify that the funds so disbursed have been utilized for the purpose and in the manner as approved by the company. Action Plan : The Draft Rules calls for a more detailed and specific formulation of an annual action plan by the CSR Committee based on the CSR projects/programs undertaken by the company, the manner of execution of such projects/programs, modalities of utilization of funds, implementation schedules, monitoring and reporting mechanism and impact assessment undertaken by the company.  Companies can no longer look at CSR spending as a part of routine procedure to comply with the law but are now forced to strategize and select CSR activities and are held accountable by impact assessments.  Multi-year projects recognised:  A multi-year project is one that is undertaken by a Company in fulfilment of its CSR obligation having timelines not exceeding 3 years excluding the financial year in which it was commenced. Impact Assessment : This is an interesting introduction. Annual reports will now have to provide an impact assessment by companies which are spending an average CSR amount of Rs. 5 Crore or more in 3 immediately preceding financial years. This also lines up with the design of the proposed stock exchange.  Cap on Administrative overheads:  Administrative overheads incurred not to exceed 5% of the total CSR expenditure of the company for the financial year. In case of companies undertaking impact assessment, administrative overheads not to exceed 10% of total CSR expenditure for that financial year. Display of CSR activities on the website : In addition to displaying the CSR policy under the existing CSR Rules, 2014, the companies are now required to mandatorily display the composition of CSR Committee, and the projects approved by the board along with the CSR Policy on the company website. National Unspent Corporate Social Responsibility Fund : The Central Government shall establish a fund called the “National Unspent Corporate Social Responsibility Fund”. Any unspent CSR funds is required to be transferred to this Fund which will be utilized in accordance with the guidelines that will be prescribed by Central Government. The Draft Rules have not yet been notified, bit it appears that an alignment of multiple laws affecting non-profits are taking place. This includes laws on taxation, foreign contribution, CSR and SEBI’s proposed social stock exchange. Some are criticising this move as being more "control" than "regulatory" based. Excluding trusts and societies as being the instrumentalities of the CSR has created panic within the non-profit sector, causing many to incorporate Sec 8 companies. The existing law mandates that to receive CSR funds, the entity must be at least 3 years old.Traditionally in India and globally, philanthropy and charity is executed through public charitable trusts. We will have to see if the draft rules are modified before taking effect of a law.

“Children are our future” said Nelson Mandela. As the pandemic continues to grip the country and the future looks bleak, children’s rights must be first safeguarded.The Supreme Court took suo motu cognizance of the contagion of the virus among children of a child care centre in Royapuram, Chennai(Tamil Nadu)[1] and has since issued various directives to safeguard the health and safety of children in child care institutions(CCI). Let us take a closer look. Directives issued by the Supreme Court to CCIs following Covid-19 In its advisory dated 28 March,2020 the National Commission for Protection of Child Rights (NCPCR) advised childcare institutions to send back home children who are in conflict with the law & stated that this directive was in line with a Supreme Court order (writ petition (c) No 1/2020) directing all states to release prisoners on parole or interim bail to reduce overcrowding in jails. However CCIs house not only children in conflict with the law, but also children with nowhere to go.  The Supreme Court in In Re Contagion of Covid 19 Virus in Children Protection Homes, Suo Moto Writ Petition No. 4 of 2020, [11]   on 3rd April, 2020, issued directives for CCIs, by bringing to the fore the issue that the interest of children who are housed in CCIs needs to be looked into.   Directions to CCIs: The Person in Charge of the CCI and all other staff working to be proactive and diligent to keep the children safe from COVID-19.  New National Helpline number has been set up, for any help on COVID-19.  Spread awareness about the causes and spread of COVID-19. If the staff or any child residing in CCI develops symptoms they can call the helplines or go to a local doctor. No one exhibiting symptoms should be allowed to enter the premises of the CCI. Social distancing should be promoted. Measures related to hygiene such as regular washing of hands, clean toilets and kitchens should be enforced.  Proper disinfection, clean drinking water and sanitation facilities should be provided.  Reduce activities such as reading, dining and television at 25% participation.  Meetings to go virtual.  Extensive cleaning and disinfection of premises must be done.  Couriers and packages should be sanitised. If a staff or a child becomes unwell, procedures set up by the government should immediately be followed. A quarantine section should be provided where children or infected persons can be isolated. The person in-charge should have a pre-emptive emergency plan in place. Directions to State Governments [12] The Supreme Court advised all states to file affidavits regarding the compliance with above directives and steps that are being taken to protect the children in the CCIs. Upon submissions by certain states, the Court issued the following general directives and also state wise orders:  Providing for educational needs of children in CCIs including online education of released children Staying in touch with the children who have been released and follow up if institutionalization is required post Covid-19 Explore the possibility of re-uniting more children with families Assess the need for financial support for living and educational expenses Compliance of safety protocol against Covid-19 Child Care Institutions were already bridled by multiple challenges, as can be seen in the next section. The Supreme Court has pro-actively issued directives and is continuously following up on the implementation of the same, in the interest of the children of these homes. In addition to safety and welfare of the children, educational needs of the children will also need to be met. The hope is that civil society organisations carry out programs and interventions that benefit the inmates of these homes. The absence of examinations can be used as an opportunity facilitate joyful learning and fostering safe spaces for these children.   [1] https://timesofindia.indiatimes.com/city/chennai/coronavirus-in-chennai-15-more-boys-test-positive-for-covid-19-in-govt-reception-home/articleshow/76231095.cms [2]  Sec. 2(21), JJ Act, 2015. [3]  Sec. 2(19), JJ Act, 2015. [4]  Sec. 2(27), JJ Act, 2015. [5]  Sec. 2(40), JJ Act, 2015. [6]  Sec. 2(41), JJ Act, 2015. [7]  Sec. 2(56), JJ Act, 2015. [8]  Sec. 2(57), JJ Act, 2015. [9]   https://wcd.nic.in/sites/default/files/CIF%20Report%201.pdf [10]   https://www.childlineindia.org . in/pdf/MWCD-Child-Abuse-Report.pdf [11]  In Re Contagion of Covid 19 Virus in Children Protection Homes, Suo Moto Writ Petition No. 4 of 2020.  https://main.sci.gov.in/supremecourt/2020/10820/10820_2020_0_4_21584_Order_03-Apr-2020.pdf [12]   https://www.livelaw.in/top-stories/covid-19-sc-takes-stock-of-progress-made-by-states-in-protection-of-children-in-child-care-institutions-160214

With the Unlock III guidelines being released, in-school education is not poised to resume until August 31st . Covid -19 has had a strong impact on education: Online teaching/learning models are still evolving Many schools have been forced to shut down Pre-schools have suffered massive economic losses Teachers have lost their jobs and/or salaries Education for children from socially & economically disadvantaged groups has stopped Children have suffered the impact with decreased social interaction Non-school education has proliferated in an unchecked manner with little or no regulation While education during the pandemic might not be a top concern of the state, High Courts across the country have responded to pleas of maintaining the balance among – the social inequalities that are likely to grow deeper during these times. the economics of running an educational institution & the need for continued education, Let us look at some significant high court decisions: Karnataka High Court  The Department of Education had initially issued a circular directing all schools to stop online education. Upon writ petitions challenging this circular, on June 27, the government modified its previous order and allowed schools to conduct classes from lower KG to 5th standard while abiding by the guidelines that have been laid down by the authorities.  The state argued that this was an interim arrangement to ensure that noone is deprived of education on account of inaccessibility to internet. Eventually, the Court struck down the circular as being unconstitutional & held that: The orders issued are violative of Articles 21 and 21A of the Constitution.  The fact that the state cannot extend facilities of online education to all schools cannot be a ground to restrict the provision of online education by certain schools.  However the Court’s interim order should not be construed to mean that:  Online education should be made compulsory.  Extra fees should be charged for such education. Students who do not opt for this model of education should be deprived of their regular education when the schools re-start.  Madras High Court A PIL was filed asking the High Court to put a stay on the conduct of online education till proper guidelines regulating these are framed. However, the HC refused to stay the conduct of online classes.  In another matter the court while hearing a challenge to the government order dated April 20, 2020, which restrained private schools from collecting fees in view of COVID-19 lockdown, asked the Federation of Association of Private schools in Tamil Nadu to formulate a scheme with respect to collection of fees, not based on the fee structure framed by the Committee, but in installments for a while, without prejudice to the rights of the parents and children by way of detailed representations and submit the same to the Government. Bombay High Court The Bombay HC in a number of cases dealing with provision of education during COVID-19 has held as below: The Maharashtra government does not have the power to issue orders interfering with the fees structure of private unaided schools or schools of other boards. The management of the private unaided schools may allow parents/students to pay the fees in instalments and also to pay such fees through online mode.  Online education is permitted & the state government shall not take any coercive action against those schools who are conducting online classes for students up till class 2.  Schools cannot take any action against parents of students of class 2 and below, who do not want their children to attend online classes.  Delhi High Court Some observations of the Delhi HC are:  No fee (new or old) shall be charged except a monthly tuition fee.  Fee structure would continue as the last academic year.  Online education should be provided to all students without any discrimination.  Monthly salary of teaching and non-teaching staff should not be stopped citing shortage of funds.  Private schools can prevent students from attending online classes if they have not paid the fees.  The court has also laid down guidelines regulating the provision of ID and password for online classes.  Calcutta High Court Calcutta HC adjourned the case which pertained to alleged fee hike, charging of late fees and other such issues during lockdown, on account of a dialogue which is going on between the state government and the private schools in this regard.    Madhya Pradesh High Court The state government had passed an order asking the private schools affiliated to CBSE to charge only tuition fee. The MP HC stayed this order. However, it asked the private schools not to charge expenses such as transportation or mess fee, which are not being incurred during the lockdown.    Telangana/Andhra Pradesh High Court The Court refused to restrict the imparting of online education by private schools, however, it asked the state government whether clear guidelines regulating online education have been framed.    Are there any Guidelines Governing Provision of Online Education? General guidelines have been issued by MHRD called the  Pragyata Guidelines  which need to be taken into account while imparting digital education. Some of the key guidelines are:  A fixed number of hours of screen time for each level of school (primary, kindergarten, secondary etc.) should be determined.  A balance between on-line and off-line work Ensure child safety and welfare at all times including measure for cyber-safety Inclusive education for children with special needs Use of television/radio as an alternate medium where affordability is a concern. Despite such policy interventions, different schools are following different pedagogic practices. Educationists and psychiatrists are of the view that prolonged screen time will impact the physical and mental health of children. Parents are concerned that children are not productively engaged long enough. Children miss the social interaction that school offered. The efficacy of the online mode as a medium of education is yet to be formally assessed, and this pandemic offers a wonderful window of opportunity to do just that.

Introduction The Government of Karnataka on June 30, 2020, introduced an Amendment[1] to the Karnataka Industrial Employment (Standing Order) Rules, 1961 (hereinafter referred to as the “Rules”) enacted under the Industrial Employment (Standing Orders) Act, 1946 (hereinafter referred to as the “Act”). The main object of the Amendment was to bring the concept of fixed term employment (FTE) to Karnataka. Karnataka is not the first to have taken up this employment model. Maharashtra, Gujarat,[2] Bihar,[3] Goa[4] and Punjab[5] have also relied on this model for employment. Key Changes New Category: Fixed Term Employment Workman Schedule-1 of the Rules provides a classification of workmen. Existing Classification is - permanent, casual, temporary, badli, apprentice & probationers. Schedule I will now include, a new category i.e ‘fixed term employment workman’. A FTE workman is defined as, “a workman who has been engaged on the basis of written contract of employment for a fixed period”. FTE brought on Par with Permanent Workmen hours of work, wages, allowances and other benefits of a fixed term employment workman should not be less than that of a permanent workman. eligible for all statutory benefits available to a permanent workman on a pro rata basis irrespective of the period of employment. Notice and Termination FTE shall not be entitled to any notice or pay if his/her services are terminated as a result of non-renewal of contract of employment or upon expiry of the period of such a contract. This requirement is subject to the provisions of the Industrial Disputes Act, 1947 (“ID Act”). However, services of a FTE workman shall not be terminated as a punishment without giving him an opportunity of being heard on the alleged charges. Who is a workman? Section 2(s) of Industrial Disputes Act defines a workman as an individual who is engaged in a technical, skilled, unskilled, operational, manual or clerical work but excludes those who are in a managerial or supervisory position. Are Non-Profits covered? Yes – in Karnataka, all establishments including non-profit – trusts, societies & Sec 8 companies having 50 or more employees are included under the ambit of the Act. But the IT & ITES, KPO & BPO sector is exempted. Eg, a field worker/researcher whose main job comprises going in the field to collect data may be considered a workman if he/she is working under an employment contract, is reporting to a superior, is working under that superior’s directions, does not lead a team and is rendering services mainly of a technical, skilled/unskilled, operational, manual or clerical nature. Advantages of this amendment? FTE provides a flexible alternative - employers can employ workers on need basis. No obligation on employers to keep workers on their payroll beyond their requirements. Increase the ease of doing business in the state & specifically benefit the MSMEs. For workers, it helps to avoid long term unemployment. It will open more employment opportunities. Disadvantages of this amendment? Can be a blow to permanent employment and job security.[6] Trade unions in Karnataka apprehend that employers will hire and fire labourers at will, & the middle-aged working class will be the worst affected. Trade unions also apprehend that FTE model would dilute the collective bargaining power of the workers[7]. For employers, it could lead to problems like loss of productivity, increase of administrative burden, etc. What remains unclear? Tenure-based statutory benefits: Amendment is unclear regarding tenure based statutory benefits for FTE. It seems from the language that the purpose is to cover benefits like gratuity for fixed term workers as well. This idea also resonates in the draft code on Social Security. Therefore, it is likely that payment of gratuity is to be extended to fixed term workers with contracts of less than five years. Will retrenchment compensation be payable to workmen particularly on termination prior to expiry of contract term? The Amendment is also silent on the option of termination simpliciter prior to the expiry of the term of the fixed employment. As the Amendment does leave some gaping holes, legal consultation is recommended, to draw contracts of FTE, structuring statutory benefits, conversions of full time to FTE and terminations of FTE, in a manner that is legally compliant. [1] Karnataka Industrial Employment (Standing Orders)(Amendment) Rules, 2019 https://complianceuncovered.com/wp-content/uploads/2020/07/Karnataka-introduces-%E2%80%9CFixed-term-Workmen%E2%80%9D-amending-the-Standing-Order-Rules.pdf [2] Anil Gejji, Karnataka allows flexible hiring across industry, Times of India (Jul 7, 2020, 07:21 AM), https://timesofindia.indiatimes.com/city/bengaluru/karnataka-allows-flexible-hiring-across-industry/articleshow/76824844.cms . [3] Draft Notification, EGazette Bihar (May 15, 2020), http://egazette.bih.nic.in/GazettePublished/314_2_2020.pdf#page=1 . [4] AZB Partners (July 9, 2020), https://www.azbpartners.com/wp-content/uploads/Amendment-To-The-Industrial-Employment-Standing-Orders-Central-Rules-1946-In-Goa.pdf . [5] AZB Partners (July 9, 2020), https://www.azbpartners.com/wp-content/uploads/The-Draft-IESO-Punjab-Amendment-Rules-2020-as-applicable-to-the-UT-of-Chandigarh-Introduction-of-Fixed-Term-Employment-2.pdf [6] Akram Mohammad, 'Fixed term workmen' will hit jobs for middle-aged: unions, Deccan Herald (July 7, 2020, 20: 43 PM), https://www.deccanherald.com/state/top-karnataka-stories/fixed-term-workmen-will-hit-jobs-for-middle-aged-unions-858277.html . [7] Sharat S. Srivatsa, ‘Fixed-term workmen: trade unions fear for collective bargaining power”, https://www.thehindu.com/news/national/karnataka/fixed-term-workmen-trade-unions-fear-for-collective-bargaining-power/article32006450.ece

Bootstrapped start-ups and VC funded ventures alike, have been forced to cut jobs. In schools, teachers have been asked to resign or take indefinite leave. But is this legal? Initially, the Ministry of Labour & Employment & Ministry of Home Affairs had issued advisories appealing to all employers not to terminate their employees or cut wages of its workers in view of the lockdown. This was however not feasible. Several writ petitions were filed before the Supreme Court challenging these advisories. In this issue, we will examine the interim order issued by the Supreme Court and its impact on the employers in terms of termination, severance, notice period and unpaid leave. Supreme Court Order In view of the several disruptions faced by businesses, the Supreme Court issued interim orders on the batch of writ petitions stating that no coercive action can be taken against employers until further orders are passed. The Supreme Court ordered the following: Private establishments, industries, employers who are willing to enter into negotiation and settlement with their employees regarding payment of wages for 50 days or for any other period as applicable in any particular state during which their establishment was closed down due to lockdown, may initiate a process of negotiation with their employees’ organisation to enter into a settlement. If they are unable to settle between themselves, the affected parties can submit a request to the appropriate labour authorities who can call the affected parties to appear on a date for negotiation, conciliation, and settlement. Establishments proceeding to take such steps shall publicize and communicate these steps to employees for their response/participation. The interim order applies to establishments which worked, and which remained closed during the lockdown. The Supreme Court has called for a detailed response on the legality of MHA’s order and the matter is listed for hearing in the last week of July. In the light of the interim order by the Supreme Court, we will examine the following concerns of employers: Can employers terminate employees whose roles are redundant? The Industrial Disputes Act, 1947 (ID Act), is the governing legislation for "retrenchment". Section 2(oo) of the Act states Retrenchment means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action. The interim order by the Supreme Court is silent on termination of employees for redundancy. So until the Supreme Court delivers a final judgment in the impugned case, it is advisable for the employers to tread cautiously before terminating any employees and retrenchment must be considered as a last resort. Whether notice must be given? Yes. In case of 'workmen' (as defined in the ID Act), employers must provide 30 days' prior notice for termination for convenience or make a payment in lieu of the notice period. In case of other employees, such as administrative and managerial personnel, the shops and establishments act of most states require employers to provide for 30 days' notice for termination for convenience or payment in lieu of the notice period. Whether there is a severance pay that must be paid? Yes. The workman (as defined in the ID Act) has to be paid compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months. Can employees be asked to go on unpaid leave? Employers can request employees to go on unpaid leave with the consent of the employees. However, if the employees do not consent to it, the employers cannot force such employees to go on such unpaid leave. However, employers must check any applicable Central and State laws, before taking any measures and take into account the impact of any new and developing COVID-19-related directives and regulations issued by the Central or State Governments. Before taking any decisions on termination of employment, it is suggested that you consult with legal counsel so as to structure legally compliant solutions.

As the world is passing through unprecedented times with the COVID-19 pandemic, educational institutions and universities are facing multiple challenges. Schools, colleges and universities world over have had to close and examination schedules were disrupted. UGC Guidelines on Examinations in view of COVID-19 UGC set up an expert committee to recommend guidelines for modes of teaching-learning process, academic calendar for the session 2019-20, 2020-21, modes of conducting examinations and functioning of laboratories.These are some of the significant guidelines provided by the expert committee for conducting examinations: Include MCQ/ OMR based examinations, Open Book Examination, Open Choices, assignment/ presentation-based assessments etc Reduce the time from 3 hours to 2 hours assigned to each examination Conduct Terminal / Intermediate Semester / Year examinations in offline / online mode, while observing the guidelines of “social distancing” If social distancing is not possible, grading of the students could be composite of 50% marks on the basis of the pattern of internal evaluation adopted by the universities and the remaining 50% marks can be awarded on the basis of performance in previous semester. For first year students, 100% evaluation may be done on the basis of internal evaluation The scheme of “Carry forward” will be allowed for the current academic year in the universities Universities may consider assigning review-based/ secondary data-based projects or software-driven projects, instead of laboratory-based experiments or field/ survey-based assignments to these students Conduct practical examinations and Viva-Voce examinations through Skype or other meeting apps, and in case of intermediate semesters, the practical examinations may be conducted during the ensuing semesters Universities may conduct the Ph.D. and M. Phil. Viva -Voce examinations through Video Conferencing using Google, Skype, Microsoft Technologies or any other reliable and mutually convenient technology M.Phil. or Ph.D. students, whose maximum period for submission of M. Phil./ Ph.D. Dissertation/ Thesis is expired/ expiring during the Corona pandemic period, may be allowed to submit their Dissertation/ Thesis, including completion of pending formalities, within six months from the date of expiry of regular prescribed period. The committee has also suggested the academic calendar for 2019-2020 and has provided general guidelines for universities to follow. Online Degree Courses UGC is finalizing a proposal to offer online degree courses to universities which fulfills one of the two criteria – Naac 3.01 and above CGPA (Grade A) or universities with top 100 NIRF rankings. The HRD ministry is likely to announce the new norms once the UGC finalizes the criteria. Karnataka High Court on Online Classes Writ petitions were filed before the High Court of Karnataka by parents of students studying in classes 1 to 5 challenging the ban imposed on conducting online classes for children from LKG to class 5 by schools across all boards in the state and restraining the schools from collecting fees for the same. The Karnataka High Court has asked the state government to immediately consider allowing conduct of online classes for primary school students. A committee of experts submits its report on the issue of online education rom Grade 6 and above. There is however no stay of the Education Department circular dated June 15, 2020. The matter is now adjourned for hearing on June 29, 2020, and hopes are running high. CBSE Board Exams The Supreme Court has accepted the notification issued by the CBSE confirming that Class X and Class XII Board exams would stand cancelled in light of the COVID-19 crisis. The notification provides that Class X students will be evaluated on the basis of a CBSE- formulated Assessment Scheme. However, Class XII students have an option to write the exams when the situation is conducive. This option is given in addition to the assessment scheme. Some of the important areas of the marks averaging mechanism would be: (a) For the students of both classes X and XII, who have completed all their examinations, their results will be declared based on their performance in the examinations. (b) For students who have appeared in the examinations in more than 3 subjects, the average of the marks obtained in best three performing subjects will be awarded in the subjects whose examinations have not been conducted. (c) For students who have appeared in the examinations in only 3 subjects, the average of the marks obtained in the best two performing subjects will be awarded in the subjects whose examinations have not been conducted. (d) For student who have appeared in only 1 or 2 subjects. The results will be declared based on the performance in the appeared subjects and performance in internal/practical/project assessment. Allahabad High Court A PIL has been filed before the Allahabad High Court seeking a direction to all private schools in the state to charge only tuition fee and detest from charging various other fee such as extra-curricular fee, library fee, computer fee etc. The PIL is pending with no stay orders yet. A similar PIL to waive of school fee for differently abled children who are unable to attend online classes due to their disability is pending before the Lucknow High Court.

The Right to Education is a fundamental right and this was formally notified under the Right to Education Act, 2010. Ten years later, the COVID- 19 pandemic is an acid test to prove the fundamentality of the right. Karnataka Confusion prevails, as there were press reports banning online education for students Grade 1-5 and below. Many private schools suspended virtual classes, while some schools chose to continue the classes in the absence of a formal education department circular. The schools have also been directed to conduct a survey among parents and the education department is likely to give further orders based on the outcome of the survey, handsome expert recommendations in this following week. Private schools and the parent community wait with baited breath. In Mahashtra too there seems to be a limit on the number of hours for imparting the online classes. One must also remember that in 2019 Karnataka passed an amendment to the Right To Education Rules, 2010 barring parents from seeking admission under RTE in private schools if there was a government or aided school in their locality. Madras High Court on Online classes A PIL was filed against conducting online classes by schools and colleges in Tamil Nadu, without framing proper schemes and guidelines as prescribed under various rules under the Information Technology Act, 2000.The Madras High Court has declined to issue a stay against the conduct of online classes by schools and issued notices to the respondents to file their respective counters. Kerala High Court on Online Classes In a tragic incident in Kerala, a 9th standard student committed suicide agonising over being left behind in academics while her peers were attending online classes because her dalit parents could not to afford to buy a computer or smart phone. The Kerala High Court ruled that schools are not to charge additional fees for the virtual classes. Delhi High Court on Online Schooling On the other hand, the Delhi High Court noted that the virtual learning initiated by schools was a welcome move and refused to stay the charging of fees for imparting the online classes. The High Court recognised that unaided schools, who received no funds from the government, are entirely dependent on fees, to defray their daily expenses. Therefore they cannot meet expenses like salary without charging the fees. Later the Court directed if Economically Weaker Section (EWS) category students in private schools are unable to access classes online during the lockdown due to lack of devices or internet, schools should ensure or provide the same for students. NCPCR Directives to Madhya Pradesh The National Commission for Protection of Children’s Rights (NCPCR) has directed the Madhya Pradesh government to facilitate education through digital means (online classes) for the underprivileged students of the state. Cancellation of CBSE exams to be held in July A PIL has been filed in the Supreme Court challenging the CBSE notification to hold class X and XII exams in July. The PIL highlights the growing concerns over the spread of COVID-19 and the risk involved in conducting the examinations at various exam centres. The petition highlights various practical difficulties in holding the exams, such as ensuring safety measures at various exam centres, students from containment zones, unavailability of private vehicles for all students to reach their exam centres etc. On these grounds, the petitioners have sought that the said CBSE notification be quashed and that results be announced on the basis of the examinations already conducted after factoring in the internal assessment marks of the remaining subjects. The PIL is pending with no stay orders yet. Measures taken in Children Protection Homes After 35 children were tested positive for COVID-19 in a government shelter home in Royapurum, Chennai the Supreme Court directed the Health and Family Department of Tamil Nadu to submit a report on steps taken to protect children in shelter homes. Directions were also issued to state governments to seek information in relation to care and protection given to children in various shelter homes. Undeniably, virtual schooling is slowly becoming the norm. The concern remains- whether school education will become more exclusive and accessible only to the privileged?