Employee Permitted To 'Work From Home' As A Concession Can't Claim Change In Territorial Jurisdiction : Kerala High Court

The Kerala High Court recently held that mere permission to work from home is not sufficient to confer jurisdiction on the Court within whose jurisdiction the employee is working. 

Justice Sunil Thomas answered the question of jurisdiction for legal claims of remote employees and ruled that merely because they are permitted to work from home and the employer was aware that the employee was within a different jurisdiction was not sufficient to confer jurisdiction.

"The legal position seems to be very clear that when a person is permitted to work from home merely as a concession or a convenience, place from where the person so work is not sufficient to confer any jurisdiction."

The Judge while deciding the case noted that there were hardly any decisions from Indian courts on this issue. Therefore, reliance was placed on the consistent views taken by the US courts in remote work cases.

After perusing a bunch of precedents, the Court asserted that there was a clear distinction between instances where the employee was permitted to work from a different jurisdiction and when the employer knowingly facilitated it, promoted the business at that place or conferred benefits for such business. 

The latter was held to be an instance of a positive act, thereby the forum state acquired jurisdiction.

However, if an employee is merely permitted to work from his or her own, without anything more provided by the employer by itself, will not confer jurisdiction to the forum state to adjudicate in case of a dispute between the employer and the employee.

Justice Thomas noted that this principle could be adopted properly in the Indian context based on the principles of cause of action.

The Court was dealing with a petition filed by a chartered accountant, who was working as Deputy General Manager (Finance) at HIL (India) Ltd, Rasayani, Navi Mumbai. She was also was given additional charge of the Udyogmandal unit at Ernakulam.

Due to the spread of the COVID 19 pandemic in Maharashtra, she was permitted to work from her home in Mumbai. Later, due to the increase in the number of COVID cases, the petitioner left Maharashtra, came to her native place at Ernakulam and continued to work from home.

Thereafter, she resigned in 2020. Claiming that she was not paid one month's salary and the terminal benefits, she moved the Court.

Advocate Pooja Menon for the respondent/company vehemently contended that the petitioner was not transferred out of her office at Navi Mumba and that she remained in the payroll of the company at Navi Mumbai.

She reported online for duty at Navi Mumbai office and received instructions from that office. Her work report was submitted to the office at Navi Mumbai. Considering the peculiar circumstances arising out of the COVID pandemic, as a concession, she was permitted to work from home, it was submitted. 

The only contention put forth by Advocate R. Sreehari for the petitioner was that, since she worked from home at Ernakulam and was holding the additional charge of the Udyogmandal unit at Ernakulam, that would confer territorial jurisdiction to this court.

The Court noted that the pandemic has changed the way of functioning of businesses throughout the world.

"Remote working, telecommuting, teleconference and work from home have become common under compulsive circumstances. This definitely can generate complex issues relating to jurisdiction, law that is applicable, nature of transactions, binding nature of contracts entered by the employees at distant places and other vexed issues, which need to be addressed by the court."

The Court also observed that it is a well recognized, long-standing jurisdictional principle, that a company or a corporation can be sued at its seat of headquarters.

However, if it is accepted that, in the absence of any express or implied clause regarding jurisdiction to the contrary in the contract of employment, an employee is entitled to sue the company in the court within whose jurisdiction employee works from home, the company may have to face litigation at various territorial jurisdictions wherever each employee works from home.

In the case of a multinational company, which has its workforce in different countries, definitely, it will have to face jurisdictions trans-nations, the Judge remarked. 

"This is likely to create more complex situation, wherein, the entire workforce or a majority of them are permitted to work from their respective homes, spread over within different national borders. This question needs to be answered on the basis of the legal principles" 

Conventionally, the question as to whether the person claiming jurisdiction on the basis of work from home alone is answered with reference to the office where he remains in the payroll, the office where he stood posted, the office to which he reports for duty, receives instructions, reports about duty and the office to which he remain answerable etc.

However, in the case at hand, there is nothing to show that the petitioner was given permission based on any term in the contract of employment enabling her to continue to work from home.

Similarly, there was nothing to show that, a contract of employment provided that a permanent or temporary employee would be governed by the territorial jurisdiction from where he or she works.

"In this situation, if each person who works from home is permitted to raise their objection from his territorial jurisdiction, definitely, it may confer jurisdiction on umpteen number of Courts and may call upon the employer to face litigation in different jurisdictions."

As such, the petition was dismissed for want of jurisdiction with liberty granted to the petitioner to approach the appropriate forum to get the case decided on merits. 

Case Title: Mangala v. Union of India & Ors. 

Citation: 2022 LiveLaw (Ker) 93

Click Here To Read/Download The Order