BA 7107 LEGAL ASPECTS OF BUSINESS

Unit III Industrial Law 1) What is a factory? A factory is a premises where on 20 more persons are engaged if power is used, or 20 or more persons are engaged if power is not used, in a manufacturing process. 2) Give any three objectives of factories Act? - To regulate working conditions if factories. - To ensure that basic minimum requirements for the safety, health and welfare of the factory workers are provided. - To regulate the working hours, leave, holidays, overtime, employment of children, and young persons, etc. 3) Define the term worker used in factories Act?. Worker means a person employed directly or by or through any agency with or without the knowledge of the principal employer, whether for remuneration or not on any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to or connected with, the manufacturing process, or the subject of the manufacturing process but does not include any member of the amended forces of the union. 4) Write short note on the word Occupier as defined under factories act. Occupier of a factory means the person who has ultimate control over the affairs of the factory. 5) What are the provisions of the factories act, 1948, Relating to Health of workers? 1) Cleanliness and disposal of wasted and effluents 2) Ventilation, temperature and Humidity. 3) Prevent Dust and fumes 4) Avoid overcrowding 5) Lighting and Drinking water 6) Latrines urinals ands spittoons 6) List out the provisions of the factories act regarding the employment of Young persons. 1) Prohibitions of employment of Young children 2) Non-adult workers to carry tokens 3) Certificate of fitness. 4) Time of work 5) Working hours and notice of period of work for children. 6) Register of child workers 7) Power to require medical examinations. 8) Safety provisions for young persons.
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7) State the provisions of the factories act regarding the employment of women. 1) Expose the women to risk in any injury from any morning part. 2) Separate cotton opener and partitioned free and 3) Suitable rooms. 4) working hours 5) Restriction on employment of women 6) Certificate of fitness 7) Dangerous operations. 8) Define Wages as per the payment of wages act? Wages means all remuneration expressed in terms of money or cables of being so expressed which would/ if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or work done in such employment. 9). State any four objectives of payment of wages Act. - To ensure regular and timely payment of wages to the employed person - To prevent the evils of withholding wages to the employed persons - to avoid delays in paying wages - To prevent unauthorized deductions from wages 10). What are the medium of payment of wages? 1. All wages shall be paid in current coin or currency notes or both. 2. Payment of wages in kind is not permitted 3. The employer may offer obtaining the written authorization of the employed person, pay him the wages either by cheque or by crediting the wages in his bank account. 11) What are the payments to the employees which are not considered a wages? Any bonus The value of any house accumulation Contribution to any pension or provident fund Any traveling allowance Any gratuity payable on the termination of the employment Any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment

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12). List out the time of payment of wages 1. Wages to be paid before 7th day of the following months is less than 1000 persons are employed 2. Wages to be paid before 1oth day of the following month if more than 1000 persons are employed 3. If any person is terminated from his employment, his wages to be paid before the expiry of the 2nd working day from the day on which his employment is terminated. 4. All wages shall be paid on a working day 13). State any four permissible or authorized deductions under the payment of wages act. a. Fines b. Deductions for absence from duty c. Deduction for damage to or loss or goods or for loss of money d. Deduction for house accommodation. 14). What are the limit on deductions? The total amount of all categories of deductions from the wages of any employed person in any wage period, should not exceed the following limits prescribed by section 7(3) i) 75% of wages payable in case where such deductions are wholly or partly made for payment to co-operative societies under section 7(2)(j) of the Act. ii) 50% of the wages payable in any other case 15) Describe the meaning of the word Bonus The term bonus is not defined in the payment of Bonus Act, 1965 or in any other enactment. However, it means an annual payment obligatory on the employers to employees on the basis of profits or on the basis of production or productivity. 16). State the objectives of the Bonus Act. The objectives of the payment of Bonus Act is to maintain peace and harmony between labour and capital by allowing the employees in recognition of their right, to share in the prosperity of the establishment reflected by the contributions make by capital, management and labour. 17). What is minimum Bonus? A minimum bonus of 8.33 percent of the wage or salary (upto Rs. 1600) of an employee (Rs. 60 in case of employees below the age of 15 years is payable irrespective of the fact whether the establishment has made a profit or loss

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18) Define an Employee in the Bonus Act? An employee, means any person employed on a salary or wage not exceeding 3500 rupees per mensem in any industry to do any skilled or unskilled, manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied. 19) State the Bonus formula given in the payment of Bonus Act, 1965. The following schematic view gives the simple bonus formula
Compute the Gross profits

Calculate the Available surplus

Determine the Allocable surplus

Distribute the allocable surplus as bonus

20). Define the concept of minimum wages. According to the committee on fair wages, a minimum wage a minimum wage must provide not merely for the bare sustenance of life but the preservation of the efficiency of the worker 21) State the methods for fixing and revising minimum wages (section 5) i) Committee method ii) Notification method 22) Define Industry in industrial disputes Act? Industry means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft or industrial occupation or avocation of workmen. 23) What is an Industrial Dispute? An Industrial dispute means any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms and conditions of employment of any person.

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24) What are the modes of settlement of disputes under the Industrial dispute Act? 1. Voluntary settlement and conciliation - Works committee - Conciliation officers - Boards of conciliation - Courts of Inquiry 2. Adjudication Machinery - Labour courts - Industrial Tribunals - National Tribunals 3. Arbitration 25). What is lock out? Lock out means the temporary closing of a place of employment, or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him
26.Write short notes on strike and lockout `Strike: Industry acting in combination or in concert, refusal to work or accept employment with a common understanding among the employees. Lockout: Temporary closing of a place of employment or the suspension of the work, or the refusal by an employer to continue to employment.

16 marks
1. what are the permissible deductions under payment of wages act? Fines Deductions for absences from duty Deductions for damages or loss of goods or loss of money Deductions for house accommodation Deductions for other amenities and services Deductions for recovery of advances Deductions for the recovery of loans Deductions for income tax Deductions under the order of a court of authority Deductions in respect of provident fund Deductions for payment to co-operative societies Deductions for payment to a scheme of insurance of a post office Deductions for payment of life insurance premium Deductions for payment to post office savings bank Deductions for payment of contribution to certain funds M.Arivazhagan, Assistant Professor, Shivani School of Business Management Page 5

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Deductions for payment of certain fees Deductions for payment to Prime Ministers national relief fund or any other fund 2. Describe the machineries provided industrial dispute act for investigation and settlement of disputes? Work committee Conciliation officer Board of conciliation Courts of enquiry Labour court Industrial tribunal National tribunal Safety officer

3.State & explain the provisions of factories act regarding employment of young children and women?
General prohibition as to employment of children Employment of children and adolescents Certificate of fitness Working hours for children Register of child worker The appropriate government shall fix the minimum rate of wages payable to employees employed in an employment. a) Not exceeding five years b) Whole state less than one thousand employees The appropriate government may fix a) A minimum rate of wages for time work b) A minimum rate of wages for piece work In fixing or revising minimum rate of wages under this section. Different minimum rates of wages may be fixed for a) Different scheduled employments b) Different classes of work in the same scheduled employment c) Adults, adolescents, children and apprentices d) Different localities.

4.

Describe the fixation of minimum wages act?

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5. Give the brief overview of factories act? Rules relating to health of workers i.Cleanliness ii.Disposal of waste and effluents iii.Ventilation and temperature iv.Dust and fume v.Artificial humidification vi.Overcrowding vii.Lighting viii.Drinking water ix.Latrines and urinals x.Spittoons Rules relating to welfare measures: i. Washing facilities ii. Storing and drying of clothes iii. Facilities of sitting iv. First-aid appliances v. Canteens vi. Shelters, rest rooms and lunch rooms vii. Creches viii. Welfare officer Rules relating to the safety of workers i. Fencing of machinery ii. Safety measures in case of work on or near machinery in motion iii. Restrictions on woman or young person to work on such machines iv. Employment of young persons on machines v. Striking gear and devices for cutting off powers vi. Self-acting machines vii. Casing of new machinery viii. Prohibition of employment of women and children near cotton openers ix. Hoists and lifts x. Revolving machinery xi. Pressure plants xii. Floors, stairs and means of access xiii. Pits, sumps, opening in floors etc., xiv. Excessive weights xv. Protection of eyes xvi. Precautions against dangerous fumes, gases, etc., xvii. Precautions in case of fire xviii. Safety of building and machinery xix. Safety officer M.Arivazhagan, Assistant Professor, Shivani School of Business Management Page 7

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6.Write a detailed note on bonus formula given in the payment of bonus act 1965? or Enumerate the important provisions of payment of bonus act? Introduction An Act to provide for the payment of bonus to persons employed in certain establishments on the basis of profits or on the basis of production or productivity and for matters connected therewith. Bonus - Applicability (a) Every factory (as def. in Factories Act), & (b) Every other establishment in which 20 or more persons (less than 20 but 10 or more if appropriate Govt. notifies) are employed on any day subject to certain exemptions. (b) Bonus to be paid within eight months from the expiry of the accounting year. Establishments to include departments, undertakings and branches Where an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus Bonus Eligibility Every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year. Computation for Number of Working Days An employee shall be deemed to have worked in an establishment in any accounting year also on the days on which,(a) he has been laid off under an agreement or as permitted by standing orders under the Industrial Employment (Standing Orders) Act, 1946, or under the Industrial Disputes Act, 1947, or under any other law applicable to the establishment; (b) he has been on leave with salary or wages; (c) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment, and (d) the employee has been on maternity leave with salary or wages, during the accounting year
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Payment of minimum & Maximum bonus A minimum bonus which shall be 8.33 per cent of the salary or wage earned by the employee during the accounting year. Where in respect of any accounting year referred to in section 10, the allocable surplus exceeds the amount of maximum bonus payable to the employees. be bound to pay to every employee in respect of that accounting; year bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of 20 per cent, of such salary or wage. CALCULATION OF BONUS The method for calculation of annual bonus is as follows: Calculate the Available Surplus. Available Surplus = Gross Profit ( deduct) the following : Depreciation admissible u/s 32 of the Income tax Act. Development allowance Available Surplus (Deductions) Direct taxes payable for the accounting year (calculated as per Sec.7) Sums specified in the Third Schedule. Direct Taxes (calculated as per Sec. 7) in respect of gross profits for the immediately preceding accounting year. Allocable Surplus = 60% of Available Surplus, 67% in case of foreign companies. Make adjustment for Set-on and Set-off. For calculating the amount of bonus in respect of an accounting year, allocable surplus is computed after considering the amount of set on and set off from the previous years Set On & Set Off Where in any accounting year any amount has been carried forward and set on or set off under this section, then, in calculating bonus for the succeeding accounting year, the amount of set on or set off carried forward from the earliest accounting year shall first be taken into account.

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The allocable surplus so computed is distributed amongst the employees in proportion to salary or wages received by them during the relevant accounting year. Time-limit for payment of bonus (a) where there is a dispute regarding payment of bonus pending before any authority under section 22, within a month from the date on which the award becomes enforceable or the settlement comes into operation, in respect of such dispute; (b) in any other case, within a period of eight months from the close of the accounting year: Employees not eligible for Bonus (i) Employees employed by any insurer carrying on general insurance business and the employees employed by the Life Insurance Corporation of India; (ii) Seamen (iii) Employees registered or listed under any scheme made under the Dock Workers (iv) Employees employed by an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or a State Government or a Local authority; (v) Employees employed by (a) the Indian Red Cross Society or any other institution of branches); (b) universities and other educational institutions; (c) institutions (including hospitals, chambers of commerce and social welfare institutions), established not for purposes of profit; (vi) Employees employed through contractor on building operations; (vii) Employees employed by the Reserve Bank of India; (viii) Employees employed by - The Industrial Finance Corporation of India; Any Financial Corporation established under section 3, or any Joint Financial Corporation established under section 3A, of the State Financial Corporations Act, 1951 (63 of 1951);
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BA 7107 LEGAL ASPECTS OF BUSINESS

the Deposit Insurance Corporation; the National Bank for Agriculture and Rural Development;] the Unit Trust of India;
Eligibility for bonus: Not less than thirty working days in the accounting year. Disqualified for receding bonus: Fraud Violent behavior while on premises Misappropriation

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