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Raj Narayan Prasad
The right of workers to form, join, and assist labor unions is a statutorily protected right in the United States.
• The act of negotiating contract terms between an employer and the members of a union. • Collective Bargaining Agreement – the resulting contract from a collective bargaining procedure. • The employer and the union must bargain with each other in good faith.
Subjects of Collective Bargaining
• Compulsory Subjects
– Wages – Hours – Other terms and conditions of employment
• Illegal Subjects
– Closed shops – Discrimination
• Upon proper notification by the union, union shop and agency shop employers are required to:
1. Deduct union dues and agency fees from
employees’ wages, and 2. Forward these dues to the union.
x This is called a check-off provision.
• the union call a strike if a collective bargaining agreement cannot be reached. • A majority vote of the union’s members must agree to the action before there can be a strike.
• • Individual members of a union do not have to honor the strike. They may:
1. Choose not to strike, or 2. Return to work after joining the strikers for a
• They can be hired on either a temporary or permanent basis. they do not have to be dismissed when the strike is over.Replacement Workers • Workers who are hired to take the place of striking workers. 8 . • If replacement workers are given permanent status.
• They are not protected by federal labor law. 9 . • Illegal strikers may be discharged by the employer with no rights to reinstatement.Illegal Strikes • Several types of strikes have been held to be illegal.
10 .Employer Lockout Act of the employer to prevent employees from entering the work premises when the employer reasonably anticipates a strike.
Illegal strikes are: Violent Strikes •• Violent Strikes Sit-Down Strikes •• Sit-Down Strikes Partial or Intermittent •• Partial or Intermittent Strikes Strikes •• Wildcat Strikes Wildcat Strikes •• Strikes during the 60Strikes during the 60day Cooling-Off Period day Cooling-Off Period •• Strikes in Violation of Strikes in Violation of a No-Strike Clause a No-Strike Clause 11 .
Picketing • The actions of strikers walking in front of the employer’s premises carrying signs announcing their strike. • An employer may seek an injunction against unlawful picketing. 12 . • The right to picket is implied from the NLRA.
THE CONTRACT LABOUR (REGULATION AND ABOLITION) ACT. 1970 .
OBJECT OF THE ACT An Act to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith. 14 .
Section 1 . Extent.Short Title. Commencement And Application.
It applies:(a) To every establishment in which twenty or more workmen are employed or were employed on any day of the preceding twelve months as contract labour (b)To every contractor who employees or who employed on any day of the preceding twelve months twenty or more workmen 16 .2. It extends to the whole of India 4.
5. Act does not apply to:a) Intermittent nature b) Work not perform for more than 120 days c) Seasonal nature d) Establishment situated in SEZ 17 .
Definition Section 2 .
means a person who undertakes to produce a given result for the establishment. other than a mere supply of goods or articles of manufacture to such establishment. in relation to an establishment.Sec 2 (c) CONTRACTOR "contractor". 19 . through contract labour or who supplies contract labour for any work of the establishment and includes a sub-contractor.
supervisory. semi-skilled or un-skilled manual. but does not include any such person. whether the terms of employment be express or implied. 20 .Sec 2 (i) WORKMEN "workman" means any person employed in or in connection with the work of any establishment to do any skilled. technical or clerical work for hire or reward.
or (C) Who is an out-worker. functions mainly of a managerial nature. being employed in a supervisory capacity draws wages exceeding five hundred rupees per mensem or exercises. or (B) Who. either by the nature of the duties attached to the office or by reason of the powers vested in him. 21 . a person to whom any articles or materials are given out for certain process to return them back.(A) Who is employed mainly in a managerial or administrative capacity. that is to say.
CHAPTER III Registration Of Establishments Employing Contract Labour SECTION 6-10 .
APPOINTMENT OF REGISTERING OFFICERS SECTION 6 23 .
SECTION 7 : REGISTRATION OF CERTAIN ESTABLISHMENTS 2. 24 . Every principal employer of an establishment to which this Act applies shall. make an application to the registering officer in the prescribed manner for registration of the establishment If the application for registration is complete in all respects. the registering officer shall register the establishment and issue to the principal employer of the establishment a certificate of registration containing such particulars as may be prescribed.1.
If The Registering Officer Is Satisfied That. The Registration Of Any Establishment Has Been Obtained By Misrepresentation Or Suppression Of Any Material Fact. Or That For Any Other Reason The Registration Has Become Useless Or Ineffective SECTION 8: REVOCATION OF REGISTRATION 25 .
then punishment will be given as per section 36. SECTION 9: EFFECT OF NONREGISTRATION 26 .In case an establishment required to be registered under Section 7 is not been registered within the time fixed for the purpose under that section.
as the case may be. after consultation with the Central Board or. The appropriate Government may. 27 . by notification in the Official Gazette. operation or other work in any establishment. prohibit. employment of contract labour in any process. a State Board. SECTION 10: PROHIBITION OF EMPLOYMENT OF CONTRACT LABOUR.1.
business. business.The appropriate Government shall have regard to the conditions of work and benefits provided for the contract labour in that establishment and other relevant factors. that is to say. manufacture or occupation that is carried on in that establishment 28 . it is of sufficient duration having regard to the nature of industry. trade. trade. such as – a) Whether the process. operation or other work is incidental to. or necessary for the industry. manufacture or occupation that is carried on in the establishment b) Whether it is of perennial nature.
29 .c) Whether it is done ordinarily through regular workmen in that establishment or an establishment similar there off d) Whether it is sufficient to employ considerable number of whole-time workmen.
CHAPTER IV LICENSING OF CONTRACTORS Section 11.15 .
SECTION 11: APPOINTMENT OF LICENSING OFFICERS 31 .Appoint such persons define the limits. within which a licensing officer shall exercise the powers conferred on licensing officers by or under this Act.
SECTION 12: LICENSING OF CONTRACTORS 32 .1. With effect from such date as the appropriate government shall undertake or execute any work through contract labour except under and in accordance with a licence issued in that behalf by the licensing officer.
• Hours of work • Fixation of wages • Other essential amenities 33 .2. Provisions of this act may contain such conditions including.
The licensing officer may make investigation 3. Every application for the grant of a licence under subsection(1) of section 12 shall be made in the prescribed form and shall contain the particulars 2.1. A licence granted shall be valid for the period specified therein and may be renewed from time to time SECTION 13: GRANT OF LICENCES 34 .
SUSPENSION AND AMENDMENT OF LICENCES. If the licensing officer is satisfied. The licensing officer may vary or amend a licence granted under Section 12. thata) Obtained by misrepresentation or suppression of any material fact b) Failed to comply with the conditions subject to which the licence has been granted 2.1. either on a reference made to him in this behalf or otherwise. 35 . SECTION 14: REVOCATION.
Chapter 5 Welfare And Health
1. Appropriate Government may make rules (a) to which this Act applies, (c) wherein contract labour numbering one hundred or more is ordinarily employed by a contractor, one or more canteens shall be provided and maintained by the contractor
Section 16: Canteen
2. Without prejudice to the generality of the foregoing power, such rules may provide for:(a) The date by which the canteens shall be provided; (b) The number of canteens that shall be provided, and the standards in respect of construction, accommodation, furniture and other equipment of the canteens; (c) The foodstuffs which may be served therein and the charges which may be made thereof.
In every place wherein contract labour is required to halt at night in connection with the work of an establishment:-
Section 17: Rest-rooms
(a) To which this Act applies, and (b) In which work requiring employment of contract labour is likely to continue for such period as may be prescribed,
2. The rest rooms or the alternative accommodation to be provided under subsection (1) shall be sufficiently lighted and ventilated and shall be maintained in a clean and comfortable condition.
It shall be the duty of every contractor employing contract labour to provide and maintain: a) A sufficient supply of wholesome drinking water b) A sufficient number of latrines and urinals situated as to be convenient and accessible to the contract labour and c) Washing facilities
Section 18: Other facilities
There shall be provided and maintained by the contractor so as to be readily accessible during all working hours a firstaid box equipped with the prescribed contents at every place where contract labour is employed by him.
Section 19: First-aid facilities
such amenity shall be provided by the principal employer within such time as may be prescribed. Section 20: Liability Of Principal Employer In Certain Cases 43 . If any amenity required to be provided for the benefit of the contract labour employed in an establishment is not provided by the contractor within the time prescribed thereof.1.
2. All expenses incurred by the principal employer in providing the amenity may be recovered by the principal employer from the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor. 44 .
1. A contractor shall be responsible for Payment of wages to each worker employed by him Shall be paid before the expiry of such period as may be prescribed. Section 21: Responsibility For Payment Of Wages 45 .
Duty of principle employer Shall nominate a representative to be present at the time of disbursement of wages Shall be the duty of such representative to certify the amounts paid as wages in such manner 3. 46 .2. It shall be the duty of the contractor to ensure the disbursement of wages in the presence of the authorized representative of the principal employer.
4. Recover the amount so paid from the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor. In case the contractor fails to make payment of wages within the prescribed period or makes short payment. 47 . Then the principal employer shall be liable to make payment of wages in full or the unpaid balance due.
or with both • Sec.punishable with imprisonment for a term which may extend to 3 months. willful refusal to produce documents .22 . rules or condition of a licence granted • Sec.Obstruction to inspector. 100/day 48 . 500. 24 – Other Offences. 1000. 3 Months or/& Rs.PENALTIES AND PROCEDURE • S. Continuation attracts additional.Contravention of provisions – Act. or with fine which may extend to Rs. fine upto Rs. 23 .
Offences by companies • S. is also liable if it is proved that the offence is committed with the consent or connivance • Exemption: If established that exercised without knowledge or diligently handled 49 . Manager etc. 25 .Company as well as every person in charge/ responsible to the Company for the conduct of its Business is treated as guilty & liable to be proceeded against and punished • Director.
But. if a written order of an inspector disobeyed .26 • 1st class Magistrate Court on complaint or with pre-sanction of the inspector • Complaint to be made within 3 months.Cognizance of offences & limitation – s.6 months 50 .
nature of duty etc. (in prescribed manner). • Within the premises Principal Employer & contractor requires to exhibit hours of work. the rates of wages paid etc. the nature of work performed by them. 51 . 29 • Principal Employer & contractor requires to keep particulars of contract labour employed.Registers & Maintenance of Records – s.
may give directions to the State reg.Exemption. the carrying of execution 52 . Protection & Power • The appropriate Government (in special cases) may exempt • The appropriate Government has power to make rules • The Central Govt.
get license in Form No. Temp provision (8-11) 53 . 1. 6 • Contractor & Principal Employer to notify start & completion of work in form No 6A & 6B respectively • Renewal in form No 7. 3 • The Contractor has to obtain License depositing the required fees on Form No. get Certificate in Form No. 5. 4 along with the PE Certificate on Form No. 2 and maintain register in Form No.Important Forms • The Principal Employer to apply to registered in Form No.
24) 54 . Wage Slip Form No. 14 & 15 (contractor) • Muster roll. 25). Form No. 16 to 23. Etc.Important forms and Returns • Register of Contractor Form No. 19 • Principal Employer to file annual return by 15th Feb to D/ALC (Form No. 12 • Employment card & Service certificate Form No. Contractor to file half yearly return by 31st Jan & Jul of year ( Form No. wage.
A Quick recap • Advisory Committee & Apprt. License required by Princpal Employer & Contractor by application • Sub-contractor is also a contractor • Amenities. • 20 no. • Witnessing. Penalty • Regulation & Abolition (Sec 10 only) 55 . liability & recovery by Principal Employer • Maintenance of records. Payment of wage. of employee. Govt.
Qs’ If any… 56 .
THE MINIMUM WAGES ACT. 1948 .
58 . the State Governments have been empowered to add schedules or to give directions. • As per the Central Government Act.APPLICABILITY OF THE ACT • Applicable to Whole India • Central Government Act of 1948 and Rules made there under will be applicable and the directions given in the Act should be followed.
DEFINITIONS • CHILD • ADOLESCENT• ADULT Age less than 14 Age more than 14 less than 18 Age more than 18 59 .
does not include any member of armed forces 60 .DEFINITIONS • EMPLOYEE (1) Employed for Hire or Reward (2) To do skilled or unskilled work (3) Manual or Clerical (4) Job Worker (5) Any person declared by the appropriate Government as Employee but.
DEEMED EMPLOYER IN THE CASE OF GOVERNMENT AUTHORITY – The person appointed by the Government to Supervise and Control the Employees. In case no person was appointed then the Head of the Department will be the Deemed Employer DEEMED EMPLOYER IN THE CASE OF LOCAL AUTHORITY – The person appointed by the Local Authority to Supervise and Control the Employees.DEFINITIONS • EMPLOYER – Who employs persons directly or indirectly through other person. In case no person was appointed then the Chief Executive Officer of the Local Authority will be the Deemed Employer DEEMED EMPLOYER IN OTHER CASES – Any person responsible to the owner for the supervision and control of the Employees or for the Payment of Wages • • • 61 .
62 .DEFINITIONS • SCHEDULED EMPLOYMENT – Any employment specified in Part – I and Part – II of the Schedule provided in Minimum Wages Act. – Part – I specifies certain types of Industries – Part – II deals with persons working in Agriculture. Horticulture and Live Stock or Poultry.
flour mill or dhal mill. 63 . tea or coffee.PART – I • Employment in any woollen carpet making or shawl weaving establishment. • Employment in stone breaking or stone crushing. • Employment in any oil mill. • Employment in any mica works. • Employment in any lac manufactory. that is to say. rubber. any estate which is maintained for the purpose of growing cinchona. • Employment under any local authority. • Employment in any plantation. • Employment in any rice mill. • Employment on the construction or maintenance of roads or in building operations. • Employment in any tobacco (including bidi making) manufactory.
• Employment in China clay mines • Employment in kyanite mines • Employment in Copper mines 64 . Employment in tanneries and leather manufactory. Employment in the maintenance of buildings and employment in the construction and maintenance of railways.PART – I • • • • • • • Employment in public motor transport. Employment in gypsum mines Employment in barytes mines Employment in bauxite mines. Employment in Manganese mines.
1952. • Employment in Mangnesite Mines covered under the Mines Act. • Employment in Fire clay Mines. • Employment in Ochre Mines.PART – I • Employment in Clay Mines covered under the Mines Act. 65 . • Employment in Chromite Mines. • Employment in white clay mines • Employment in stone mines • Employment in Steatite Mines (including the mines producing Soeapstone and Talc). • Employment in Asbestos Mines. 1952.
Employment in Graphite Mines. Employment in Quartz Mines.PART – I • • • • Employment in Quartzite Mines. 66 . Employment in Silica Mines.
the raising of live-stock. cultivation. including the cultivation and tillage of the soil. in any form of farming. dairy farming. and any practice performed by a farmer or on a farm as incidental to or in conjunction with farm operations (including any forestry or timbering operations and the preparation for market and delivery to storage or to market or to carriage for transportation to market of farm produce). or poultry. growing and harvesting of any agricultural or horticultural commodity.PART – II • Employment in agriculture. that is to say. bees. 67 . the production.
Water and Provision of Medical Attendance and Other Amenity or Service specifically excluded by the Appropriate Government. – Contribution made to Pension Fund or Provident Fund or under any scheme of Social Insurance – Travelling Allowance or the value of any Travelling Concession – Special Allowances provided based on the nature of Employment – Gratuity Payable • 68 .DEFINITIONS • WAGES – Expressed or Implied Monetary Payment in terms of Contract of Employment and includes House Rent Allowance. Supply of necessities like Light. WAGES DO NOT INCLUDE – House Accommodation.
DEFINITIONS • APPROPRIATE GOVERNMENT – The Central Government will be the appropriate Government in the case of scheduled employment provided by Central Government. 69 . – The State Government will be the appropriate Government in relation to any other scheduled employment other than mentioned above. Major Ports or any Corporation established by Central Government. Railway Administration. Oil-fields. • COMPETENT AUTHORITY – The Authority appointed by the appropriate Government by notification in its Official Gazette to ascertain from time to time the cost of living index number applicable to the employees employed in the scheduled employments.
• GUARANTEED TIME RATE – Those employed under the scheme of Piece Work but. Guaranteed Wages will be paid on the basis of Time.FIXING OF MINIMUM RATE OF WAGES BY APPROPRIATE GOVERNMENT • MINIMUM TIME RATE – The Minimum Wages paid for Time Work. 70 . • OVERTIME RATE – Time Rate of Piece Rate will apply where the Employee has worked overtime over and above his normal working hours. • MINIMUM PIECE RATE – The Minimum Wages paid for Piece Work.
FIXING OF MINIMUM RATE OF WAGES BY APPROPRIATE GOVERNMENT • MINIMUM RATE OF WAGES WILL BE FIXED FOR – Employments provided in Schedule – I & II – Different Types of Employments provided in Schedule – I&II – Adults. Adolescents. – Different Localities • WAGE PERIODS FIXED UNDER MINIMUM RATE OF WAGES – By the Hour – By the Day – By the Month – By such other larger wage period as may be prescribed 71 . Children and Apprentices.
– The appropriate Government is empowered to fix the Minimum Wages irrespective of the strength (even below one thousand employees) – The Minimum Wages will be fixed based on the Nature of Work and Quantum of Work. – The Minimum Wages has to be paid irrespective of availability of workmen willing to work on lower wages – The Committees appointed will recommend the Minimum Wages to be paid which is recommendatory. the Employee can move to Labour Courts before proceeding to High Courts – Minimum Wages has been fixed for the bare subsistence of life and also to preserve the efficiency of the worker which will provide education.FIXING OF MINIMUM RATE OF WAGES BY APPROPRIATE GOVERNMENT • FIXING OF MINIMUM WAGES – The Minimum Wages has to be paid irrespective of the extent of Profit or Financial Condition of the Establishment. – In case the Employers have not adhered to Minimum Wages then. medical requirements and amenities of himself and his family. The final decision has to be made by the appropriate Government. 72 .
• Value of Supply of Essential Commodities The Value will be computed by the Competent Authority Periodically as per the directions given by the Appropriate Government. Cost of Living Allowance or Cash Value of Concession. 73 .COMPONENTS OF MINIMUM WAGES • Method 1 – Basic Rate of Wages + Special Allowance called as Cost of Living Allowance • Method 2 – Basic Rate of Wages without any Cost of Living Allowance • Method 3 – Consolidated Pay without splitting into Basis Rate of Wages.
The specific date should not be less than two months from the date of notification.PROCEDURE FOR FIXING AND REVISING MINIMUM WAGES • Committees and Sub-Committees appointed by the Appropriate Authority will hold enquiries. • The Appropriate Authority after perusing the proposal will publish its decision by notification in the official gazette and the specific date from which the revised wages has to be paid. collect information and will submit the proposal for Revision of Minimum Wages to the Appropriate Authority. 74 .
CENTRAL ADVISORY BOARD The Central Advisory Board Consisting of the persons nominated by the Central Government representing employers and employees in the scheduled employments who shall be equal in number. The Central Government will nominate independent persons not less than 1/3rd of the total number of members. The independent person will be The Chairman of the Committee. • • 75 . The Central Government will nominate independent persons not less than 1/3rd of the total number of members. COMMITTEES The Committees or Sub-Committees shall consist of the persons nominated by the Central Government representing employers and employees in the scheduled employments who shall be equal in number.COMMITTEES OR BOARD • ADVISORY BOARD An Advisory Board will be appointed by the Appropriate Government for coordinating the work of Committees and Sub-Committees and also the Advisory Board will provide its valuable suggestions and recommendations to the Appropriate Government. The independent person will be The Chairman of the Board.
Minimum Wages has to be paid partly in cash and partly in kind or wholly in kind. • The Minimum Wages has to be paid without any deductions other than Statutory Deductions. essential commodities provided to the employees by issuing a notification in the official gazette. in those circumstances the Appropriate Government by issuing a notification in the official gazette will authorize for Payment of Wages in kind. • The Appropriate Government will decide the value for the concessional.PAYMENT OF WAGES • Minimum Wages payable under this Act. 76 . shall be paid in Cash. • Where it is customary that.
The Day can be any day but it should be adhered for every week. • Where a person has worked on a Holiday either a Compensatory Holiday may be provided or An Overtime Wages will be paid. The same should be displayed in the notice board of the Factory.NORMAL WORKING HOURS • For an Adult Worker. Working in Factories the number of Working Hours should not exceed 48 Hours in a week. 77 . • The Daily Hours should not exceed more than 9 Hours with 1 Hour Rest Interval. • One Day should be given as a holiday as Weekly Holiday.
(2) Whose Employment is dependent on Natural Factors (3) Employees those who have not completed their duty in time for technical reasons.EXCEPTIONS TO NORMAL WORKING HOURS • The Normal Working Hours need not be adhered in the following cases: (1) Where the persons were employed to meet emergency or urgent work. 78 . (4) Where the Nature of Duties has to be necessarily carried out beyond Normal Working Hours.
If the person has worked for more than 48 hours in a week then. 79 . the excess hours worked will be treated as Overtime. the excess hours worked will be treated as Overtime • Where the Fixed Normal Working Hours for any day is in excess of 8 Hours we have to go by the method of weekly worked hours.OVERTIME WAGES • Where a person has worked more than the Normal Working Hours for any day.
WAGES FOR A PERSON WHO HAS WORKED LESS THAN NORMAL WORKING HOURS • Where an Employee worked on any day less than the Normal Working Hours due to the fact that. Employee has not worked due to his unwillingness then. the employee is not entitled to receive full salary. the Employee is entitled to receive full salary. Employer could not provide the activities of the job then. • Where an Employee worked on any day less than the Normal Working Hours due to the fact that. 80 .
Where working hours cannot be allocated on a minute basis a reasonable method can be adopted.WAGES FOR TWO OR MORE CLASSES OF WORK • Where an Employee does two types of works which has different Minimum Wages then. the Employer shall pay to such Employee based on working hours allocated to each type of job. 81 .
MINIMUM TIME RATE WAGES FOR PIECE WORK • Where the Payment is Fixed on a piece-rate basis by the Employer and which does not find place in the Act for piece rate then. 82 . the Employer should pay him Wages at not less than the Minimum Time Rate.
(3) Overtime Register for Workers (4) Muster-Roll • The Registers shall be preserved for a period of 3 years after the date of last entry made therein. age. father’s name. sex. 83 . the wages paid to them. • Every Employer should display the above particulars in the premises where the Employee works. the work performed.RECORDS TO BE MAINTAINED • Employer should maintain a Register of Employees containing the details such as the name. address. • The other Registers to be maintained are: (1) Register of Fines. by the neglect / default of the employed persons. (2) Register of Deductions for Damage / Loss caused to the employer.
• The inspectors have right to examine any person they find in the premises. • The Inspector shall be deemed to be a Public Servant. • The inspectors have right to enter the premises of employers at all reasonable hours and have right to verify all the records as required to be maintained by law. the Inspectors feel that the Employee has committed any mistake.. • Inspectors have right to enquire about the work given to workers and have right to get information from the employers about the payment of wages. 84 .INSPECTION • The Appropriate Government through notification in the official gazette appoint inspectors and also define the local limits for such inspectors. • The Inspectors have right to cease or take copies of registers maintained by the Employer in case. etc.
85 .CLAIMS • The Appropriate Government by notification in the official gazette appoint any commissioner for workmen compensation or labour commissioner for any region or any officer of the State Government not below the rank of Labour Commissioner or Judicial Magistrate to be Authority to hear and decide for any specified area all claims arising out of payment of less than the Minimum rate of Wages to Employees employed in that area.
In case the Appropriate Authority finds that the Employer is guilty then.PROCEDURE FOR CLAIMS • • • • • • • An Employee who has claim over the Employer through his legal practitioner or a official of a registered Trade Union or Employee himself may apply to the Authority for claims for getting a direction. 86 . no Compensation is payable. In case the Appropriate Authority finds that the Employee is guilty then. The direction given by the Appropriate Authority shall be final. The proceedings before the Authority will be treated on par with Civil Courts. The Compensation directed by the Appropriate Authority shall be recovered from the Employer as if the Authority is a Magistrate. Employee has to pay Rs. In case the Appropriate Authority finds that both Employer and Employee is not guilty then. The Appropriate Authority will hear the applicant and the Employer and after giving both the persons a reasonable opportunity to hear and after making such further inquiry will pass an order.50/.to Employer. the Appropriate Authority will direct the Employer for Payment of Compensation which may not exceed 10 times of the actual Compensation.
OFFENCE • • • • • • Any employer who had violated the provisions of the Act will be treated as he had made an offence and Rs.500 fine will be collected from the employer. No Court shall take any case directly. In the case of a Partnership Firm. 87 . The Appropriate Authority will pass orders for any claims made by Employee against Employer. No Court shall take up a Case of Appeal against the order of the Appropriate Authority not more than 30 days from the date of order. the Managing Partner at the time of Offence happened will be responsible to discharge the liability under this Act. In the case of a Company. the person incharge at the time of offence happened will be responsible to discharge the liability under this Act.
parent. • The Act will not be applicable to the Wages payable by an Employer to a member of his family who is living with him and dependent on him.EXEMPTIONS AND EXCEPTIONS • The Appropriate Government depending on the situation may direct that this Act shall not be applicable in relation to Wages payable to disabled Employees. • The Appropriate Government for any special reasons by notification in the official gazette direct that the Act shall not be applicable to any specific locality or specified group of Employees. 88 . child. brother or sister. Family includes his / her spouse.
the manner of filling of casual vacancies in membership and the quorum necessary for the transaction of business of the Central Advisory Board. • The Appropriate Government is having the powers of the Central Government to make rules for the purposes as mentioned above. • The Central Government is empowered to make rules prescribing the terms of office of the members. • The Central Government is empowered to make rules from time to time through notification in the official gazette. 89 . the procedure to be followed in conduct of business. the method of voting.POWER TO MAKE RULES • The Central Government may give directions to the State Government for the execution of this Act.
Qs’ If any… 90 .
1936 • • • • • • Introduction Applicability Important Definitions Rules relating to Payment of Wages Compensation & Penalties Case Law Studies 91 .The Payment Of Wages Act.
Introduction • Preamble – To regulate the proper and timely payment of wages to different classes of workers. • Important features of the Act– Remedies & compensations relating to: Wrongful deductions made from wages Delay in payment of wages Non-payment of wages – Provisions in the Act: Permissible deductions from wages Timely payment of wages Mode of payment of wages Reasonable rates of recovery 92 .
including those who are employed through a sub-contractor. or any other Establishment stated under Sections [2(i)(a) to 2(i) (g)] of the Payment Of Wages Act. It is also applicable to employees working in any Industrial or Other Establishment.6500 93 . The Act is applicable to any employee in a factory. The Act covers all those employees who draw a monthly salary of less than Rs.Applicability The Payment Of Wages Act is applicable to the whole of India. employees of the railway industry.
or jetty. d) Mine. mechanically propelled. quarry or oil field. e) Plantation. or motor transport service for passengers or goods or both by hire or for reward.. wharf. 94 . c) Inland vessel. b) Dock.2(ii)] means anya) Tramway service.2(i)] is the Central Government in relation to: a) Railways b) Air transport services c) Mines and oil fields The State Government is the Appropriate Government in all other cases.Important Definitions Appropriate Government [S. Industrial Establishment [S.
or iii. transport.2(vi)] means all remuneration (whether by way of salary. or sale.Important Definitions f. Manufactured. Produced. Adapted. if the terms and conditions of employment. Wages [S. or other establishment. whether expressed or implied. and includes95 . be payable to a person in respect of his employment or any work done in such employment. Workshop. or capable of being so expressed which would. with a view to their use. where articles are i. ii. allowances or otherwise) expressed in terms of money.
Any remuneration payable under any award or settlement between the parties or order of court. amenities and travelling.Important Definitions a. b. Contribution paid by the employer to any pension or provident fund. medical and other allowances. Any special expenses and gratuity paid at termination of employment. Value of house accommodation. medical and other facilities. But. b. Any sum paid on the event of termination of employment. c. e. 96 . Any sum to which the a person is entitled under any scheme which is framed under a law currently in force. Any additional remuneration payable (bonus). Any remuneration to which the person is employed is entitled in respect of overtime work. c. or holidays or leave period. it does not includea. d.
the person designated by the employer as a person responsible for complying with the provisions of the Act. the person in the post having control and supervision in the establishment c. they are: a. In case of an Industrial Establishment.3]: Payment means transfer of money from one person to another to satisfy a debt or an obligation. the manager of the factory b. the person nominated for the payment of wages d.Rules relating to Payment of Wages Responsibility for Payment of Wages [S. 97 . Every employer is responsible for the payment of wages but this responsibility is also cast on other persons. In case of a contractor. the person designated by the contractor e. In any other case. In case of factories. In case of railways.
the wages shall be paid within 7 days after the expiry of the wage period. wages shall be paid before the expiry of the 10th day after the last day of the wage period. Wage period can be daily. wages are to be paid before the expiry of the 7th day on completion of final tonnage account of the material loaded or unloaded. All payment of wages shall be made on a working day.4&5] Every person responsible for payment of wages shall fix wage periods. or monthly. In case of docks. In case of a Factory or Industrial Establishment or Railways. fortnightly. wherein less than 1000 employees are employed. jetties and mines. weekly. In any other case. A wage period shall not exceed one month. wharfs. 98 .Rules relating to Payment of Wages Fixation of Wage Periods and time of Payment of Wages [S.
Thus. the Section 7 of this Act is critical.6] Under the Payment of Wages Act.7] The usual rule of the payment of wages is that the employed person shall be paid his wages without any kind of deductions except those authorized under this Act. after obtaining the written authorization of the employed person pay his wages either by cheque or by crediting the wages in the bank account. They must be paid in current coins or currency notes or both.Rules relating to Payment of Wages Mode of Payment of Wages [S. Deductions which may be made from Wages [S. wages cannot be paid in kind. if he desires. The employer may. 99 .
100 . Fine cannot be recovered in installments.Authorized Deductions Fines [S. the employer has to obtain prior approval from the Appropriate Government to the acts and omissions for which the fine many be imposed.8]: An employer may impose a penalty or fine on an employed person. Fine cannot be imposed on a person below the age of 15 years. The employed person will be given a chance to show cause against imposing of the fine. While imposing such fine. Fine should be recovered within 3 months from the date of imposition of fine. Fine cannot be recovered at a rate more than 3% of the total wages in the respective wage periods.
A person shall be considered as absent from duty. or In case of a stay-in-strike to carry out his work. i. or When he refuses for any unreasonable cause.9]: An employer has the power to deduct wages for absence from duty. or part of a day. iii. in case although present in the establishment. ii. 101 . When he is absent from the place of work where he is required to be present and work.Authorized Deductions Deductions for absence from duty [S. The deduction shall be in proportion to the time for which an employed person is absent from duty. The deduction may be for absence for a whole.
The employer shall give an opportunity to the employee to show cause against the fine before making deductions. where loss/damage is directly attributable to damage or neglect or the default on his part. The deducted amount shall not exceed the amount of the damage or loss caused to the employer. deductions from wages can be made. 102 .10]: If the goods are expressly entrusted to the employed person for custody or in case he loses money which he is required to account. Such deductions have to be recorded in the prescribed register and kept by the person responsible for payment of wages.Authorized Deductions Deduction for Damage or Loss [S.
such deductions cannot be made unless the employed person has accepted the amenity as term of employment and such deduction shall not exceed an amount equal to the value of actual house accommodation amenity. Deductions for such amenities and service supplied by the employer ad the Appropriate Government may.11 & 7(2)]: House accommodation: Supplied by the employer or the Government or any housing board. or protective measures required by nature of the employment. by a general or special order authorize. 103 . these deductions can be made only when such supply is accepted as term of employment by the employed person. The term ‘services’ does not include the supply of tools and raw materials.Authorized Deductions Deductions for Services Rendered [S.
12-A]: can be made as per the rules approved by the Appropriate Government regulating the extent to which such loans may be granted and rate of interest payable on it.12]: This is subject to the following conditionsa.Authorized Deductions Deductions for Recovery of Advances [S. 104 . b. c. Recovery of advances of wages not already earned shall be according to the rules made by the Appropriate Government including the installments by which they may be recovered. Recovery of advance of money given after employment began and of wages not already earned is subject to the conditions imposed by the Appropriate Government. Recovery of an advance of money given before employment began can be made from the first payment of wages in respect of complete wage period. Deductions for Recovery of Loans [S.
Deductions for Payments to Cooperative Societies and Insurance Schemes [S.13 & 7(2)]: These deductions shall includea. Deductions for payments to cooperative societies approved by the Appropriate Government or to a scheme of insurance maintained by the Indian Post office. b. Deductions made with the written authorization of the employed person fori. ii. iii. iv. v. Payment of any premium on his life insurance policy to LIC of India, or Purchase of Government securities, or Payment of contribution to any fund or a trade union. Payment of membership fees to trade union. Contribution to Prime Minister’s National Relief Fund
Deduction of Income Tax payable by an employed person. Deductions according to the order of a court or other authorities competent to make such order. Deductions for subscriptions to and repayment of advances from any provident fund approved by the Appropriate Government. Deductions for payment of insurance premium on Fidelity Guarantee Bonds.
Limit on Deductions [S.7(3)]: The deductions from wages for the permissible deductions shall not exceed 75% including payments to cooperative societies. 50% in any other cases In case of exceeds in limits of deductions, balance may be recovered in the manner prescribed by the Appropriate Government.
Remedy & Compensations
The Payment of Wages Act provides for the constitution of a separate authority for any specified area to hear and decide claims arising out of deductions from the wages or delay in the payment of wages. The authorities include:
a. b. c. d. e. f. Commissioner of Workmen’s Compensation, or Regional Labour Commissioner, or Assistant Labour Commissioner, Presiding officer of Labour Court or Industrial Tribunal, or Judicial Magistrate. Experienced Judge of a civil Court
Remedy & Compensations
Application: A person himself or any legal practitioner or any official of a Registered Trade Union authorized in writing to act on behalf of such person or any inspector under this Act Period: Such a claim is to be made within 12 months from the date on which the deductions were made, or from the date on which payment of wages was to be made. Compensation: If the authority is satisfied that there were wrongful deductions, it may in addition to the refund of the amount wrongfully deducted require the employer to pay compensation not exceeding 10 times the actual amount of deductions. In case of delayed wages, the employer may be directed to pay the wages immediately and also impose a penalty not exceeding Rs.3000, but not less than Rs.1500.
Case Law Studies
Arumugham V/s Jawahar Mills
HELD:- The expression in Sections [15-17] not only includes ‘delayed wages’ but also covers ‘refused wages’.
Upper India V/s J.C.Mathur
HELD:- The word ‘deduction’ in Section 15 appears to have been used in a very wide sense so as to include the ‘entire deficiency’ which the employee alleges to have been caused in the Payment of Wages as a result of withholding of the same by the employer partially or wholly.
Parmeshwar V/s Atti
HELD:- Payment signifies satisfaction of a claim.
The Payment of Gratuity Act, 1972
• • • • • • Introduction Important Definitions Authorities under the Act Payment & Provisions Nomination Case law Studies
the Central Government enacted the Payment of Gratuity Act. a matter of right for the employees.Introduction & Preliminary Originally gratuity was considered as an amount given freely and could not be demanded as a matter of right by the employees. in the later days. Various courts recognized the claim for gratuity and awarded gratuity schemes. In many cases gratuity was given as a matter of favor. continuous and meritorious service. With a view to ensure a uniform pattern of payment of gratuity to the employees throughout the country. This custom of payment of gratuity became. 112 . Employees used to pay gratuity as a reward for long.
Important Definitions Appropriate Government [S.2(g)]: meansi. ii.2(i)] is the Central Government in relation to: a) Railways b) Air transport services c) Mines and oil fields The State Government is the Appropriate Government in all other cases. 113 . Employer [S. In relation to an industry carried on by or on behalf of a local authority – the Chief Executive Officer of that authority. In relation to an industry carried on by or under the authority of any department of the Central Government or a State Government – the authority prescribed in this behalf.
Manual or clerical. Value of house accommodation. medical and other allowances. d. c. medical and other facilities. But. Contribution paid by the employer to any pension or provident fund. In Scheduled Employment. 114 . Skilled or unskilled. f. Who is employed for hire or reward.2(i)]: means any person: a. To do any work. b. it does not includea. Any special expenses and gratuity paid at termination of employment. e. amenities and travelling. In respect of which minimum wages have been fixed. b.Important Definitions Employee [S. c.
2(s)] means all remuneration (whether by way of salary. allowances or otherwise) expressed in terms of money. if the terms and conditions of employment. e. 115 . b. or capable of being so expressed which would. be payable to a person in respect of his employment or any work done in such employment. Any sum paid on the event of termination of employment. Any additional remuneration payable (bonus). Any remuneration to which the person is employed is entitled in respect of overtime work. Any remuneration payable under any award or settlement between the parties or order of court. or holidays or leave period.Important Definitions Wages [S. c. Any sum to which the a person is entitled under any scheme which is framed under a law currently in force. d. whether expressed or implied. and includesa.
Important Definitions • Retirement [Section 2(q)]: It means the termination of service of an employee otherwise than on superannuation. as the age on the attainment of which the employee shall vacate the employment. It implies discharge of surplus labour. or conditions of service. 116 . This definition is framed in the widest sense. it means• The attainment by the employee of such age as is fixed in the sontract. • Superannuation [Section (2)]: In relation to an employee. Retrenchment is also termination of service.
c) Every inspector shall be deemed to be a public servant. record or notice or other documents. b) The Appropriate Government may define the area to which the authority of an inspector shall extend. shop or establishment for the purpose of examining any register.Authorities Under The Act Inspectors [Section 7(A)] a) The Appropriate Government may appoint as many inspectors as it deems fit. b) Enter and inspect any premises or place in any factory. in relation to the employment of any person or the payment of gratuity to the employees c) Examine the employer or any person who is present in such premises. 117 . Powers of Inspectors [Section 7(B)]: An inspector may a) Require an employer to furnish any information.
b)Requiring the discovery and production of documents.Authorities Under The Act Controlling Authority [Section 3] The Appropriate Government by a notification may appoint any officer to be the controlling authority who shall be responsible for Administration of this Act. 118 . Powers of Controlling Authorities [Section 7(5)] a)Enforcing the attendance of any person or examining him on oath. d)Issuing commissions for the examination of witnesses. c) Receiving evidence on affidavits. Different controlling authorities may be appointed for different areas.
the share of such minor shall be deposited with the controlling authority. resignation. If there is no nomination then to his legal heirs. retirement.Payment & Provisions Circumstances under which Gratuity becomes payable to an employee [Section 4] a) On termination of employment after he has rendered continuous service of not less than 5 years. c) If any nominee or heir is a minor. who shall invest the same for the benefit of such minor in such Bank or Financial Institution as may be prescribed. the gratuity payable to him shall be paid to his nominee. on his superannuation. until the minor reaches the age of majority. death or disablement due to accident or disease. b) In case of death of employee. 119 .
In the case of a daily rated employee. the rate of daily wages shall be calculated o the basis of average of the total wages earned by him for a period of 3 preceding months before the termination of his employment. the daily rate of wages is arrived at by dividing the rate of wages last drawn by 26. In case of an employee employed in as seasonal establishment.Payment & Provisions Rate of Gratuity [Section 4(2)] a) b) c) An employee who is eligible for gratuity shall be paid for every completed year of service or part of it in excess of 6 months. the rate of gratuity payable to him shall be 7 days wages for each completed season. gratuity at the rate of 15 days wages for each completed year of service. Such gratuity is to be calculated on the basis of the rate of wages last drawn by the employee. he is to be paid gratuity at the rate of daily wages multiplied by 15 for every year of service. In case of a monthly rates employee. d) e) f) 120 . In case of a piece rated employee. This rate is to be multiplied by 15 for deciding the quantum of gratuity payable for a year.
mine. the gratuity shall be calculated in 2 parts: a) For the period of employment before disablement and b)For the period after disablement at the reduced rate. 121 .000 Employment after disablement [Section 4(4)] In case of an employee employed after disablement. Better Gratuity Scheme [Section 4(5)] a)If the employer has his own gratuity scheme which is better than the scheme provided under this Act. factory.10. oil field. railway company or shop if the employees are gratuity and pensionary benefits under this Act. plantation.Payment & Provisions Maximum Amount of Gratuity [Section 4(3)] Payable to an employee shall not exceed Rs. then the employees shall be entitled to gratuity as per that scheme. b)The Appropriate Government has powers to exempt by a notification any establishment.00. port.
provided. 1)Partial Forfeiture: The gratuity of an employee whose services are terminated for any act. negligence causing any damage. loss to.Payment & Provisions Forfeiture of Gratuity [Section 4(6)] It gives the circumstances in which the gratuity payable to an employee may be forfeited either partly or wholly. 122 . only to the extent of damage or loss so caused. or destruction of property belonging to the employer. willful omission. or If the services are terminated for any act which constitutes an offence involving moral turpitude. that such an offence is committed by him in the course of his employment. 2)Full Forfeiture: The gratuity payable to an employee can be wholly forfeited: a) b) If the services of an employee are terminated for his riotous or disorderly behaviors or any other act of violence on his part.
Mode of Payment of Gratuity [Sections 7(3). c) No interest will be paid if the delay is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority.(3-A)] a) The employer shall arrange to pay the amount of gratuity within 30 days from the date it becomes payable to the person. 123 . the employer shall determine the amount of gratuity and give notice in writing to that person to whom the gratuity is payable. c) Calculation of gratuity is to be done by the employer whether an application has been made or not. b) Notice is also given to the controlling authority specifying the amount of gratuity so determined.Payment & Provisions Determination of Gratuity [Section 7] a) As soon as the gratuity becomes payable. b) If the gratuity is not paid in time the employer shall pay interest at the rate notified by the Central Government.
ii. as a result of the enquiry if any additional amount is payable to the employee. after making the enquiry and giving the amount of gratuity payable to the employee. Amount of gratuity payable to an employee. As to the person entitled to gratuity. to the person entitled. Further. c) The controlling authority. he shall direct the employer to pay the additional amount.Payment & Provisions Dispute as to Gratuity [Section 7(4)] a) If there is any dispute abouti. b) Where there is a dispute about the above matters the employee can also make an application to the controlling authority for taking necessary action. iii. the employer shall deposit the amount which he admits is payable with the controlling authority. d) The controlling authority shall pay the amount deposited including the additional amount. Admissibility of any claim. if any. 124 .
The collector shall recover the amount as arrears of land revenue. The controlling authority. shall give a reasonable opportunity for the employer of showing cause against issue of the certificate. before issuing a certificate. The amount of interest payable shall not exceed the amount of gratuity. The controlling authority. The interest becomes payable only when the collector issues a Certificate of Recovery of the dues as a public demand. shall issue a certificate for recovery of the amount to the collector. Such arrears are payable to the employee together with compound interest at such rate specified by the central government.Payment & Provisions Recovery of Gratuity a) If the employee is not paid gratuity by the employer the employee can make an application to the controlling authority for the same. if satisfied. This amount is to be recovered after the date of expiry of the prescribed time. b) c) d) e) f) g) 125 .
Dependent parents of her wife.naming the person or persons. Dependent parents of his wife. Widow and children of his predeceased son.Nomination Meaning. Herself. if any. Widow and children of her predeceased son. Her children (whether married or unmarried) Her dependent parents. Family [Section 2(h)]: in relation to an employee. His wife. if any. Her husband. 2) Female Employees: 126 . who shall be entitled to the amount of gratuity if the employee dies before receiving the amount. His children (whether married or unmarried) His dependent parents. shall be deemed to consist of: 1) Male Employees: a) b) c) d) e) f) a) b) c) d) e) f) Himself.
distribute the amount of gratuity between more than one nominee. 4) No Family: If the employee does not have a family. 3) Family members to be nominated: If the employee has a family at the time of nomination. 127 . then nomination can be made in favor of any person. is required to make a nomination as per the following rules: 1) Employee to make nomination: Every employee who has completed service of 1 year shall make a nomination within 30 days after completing 1 year’s service.Nomination Every employee under this Act. 2) More than 1 nominee: An employee can. the nomination can be made favoring member or members of his family. in his nomination.
Further. after giving a notice to the employer.Nomination 5) Family after nomination: If the employee acquires a family afterwards. it shall take effect from the date of receipt by the employer. The employee shall make a fresh nomination within 90 days in favor of family members. 8) Safe custody of nomination: Every: a) b) c) Nomination Fresh nomination Alteration of nomination. who shall keep the same in his safe custody. 128 . 6) Modification of nomination: Can be done by the employee at anytime. shall be sent by the employee to the employer. then employee shall make a fresh nomination. such nomination becomes invalid. as the case may be. 7) Death of Nominee: If the nominee does before the employee.
129 .The general principle underlying gratuity schemes is that by faithful service over a long period the employee is entitled to claim a certain amount as retirement benefit.Case Law Studies • Indian Hume Pipe Co.The object of providing a gratuity scheme is to provide a retiring benefit to the workmen who have rendered long and unblemished service to the employer and thereby contributed to the prosperity of the employer. V/s Workmen HELD:. Ltd. V/s Workmen HELD:. • Delhi Cloth and General Mills Ltd.
he would be deemed in continuous service if he has been actually employed by an employer during the 12 months. immediately preceding the year for not less than 240 days in an establishment. Therefore. Chandbib Pirubhai HELD:.The workmen carrying raw materials from the employer’s premises to their home and rolling up bidis at their home for manufacturer are employees. Vs. Patel Hiralal Ramlal & Co. 130 .Cessation of work by the employee on these days cannot be said to be due to any fault of the employee. Smt.Case Law Studies DBR Mills Ltd. V/s Appellate Authority HELD:. and as such are entitled to claim and payment of gratuity.
Qs’ If any… 131 .
The Employees’ Provident Funds and Miscellaneous Provisions Act. 1952 .
Employees’ Provident Fund Scheme 1952 .Employees’ Pension Scheme 1995 (earlier known as Family Pension Scheme 1971) 133 . 1952 comprises of following three Schemes:- .Introduction Employees Provident Funds and Miscellaneous Provisions Act.Employees’ Deposit-Linked Insurance Scheme 1976 .
134 . To Employers: They provide a steady labour force. which is essential for the productivity and prosperity of the Establishment.OBJECTIVE To Employees: The Primary objective of above mentioned three schemes is to provide social security and to inculcate amongst the workers a spirit of savings while they are gainfully employed and to make provision for benefit after they retire from service and for their family members after their death. To Government: They provide funds of considerable magnitude for utilisation on various projects and programmes designed to promote economic and social development of the country and well being of its people.
all such departments or branches shall be treated as parts of the same establishment. Under section 2A where an establishment consists of different departments or has branches. • Central Government after giving two-months notice may apply the provisions of this Act to Establishments where less than 20 persons are employed.APPLICABILITY (Section 1) • Factories or Establishments (under specified class of establishments/factories mentioned in schedule . 135 . • Establishments to which this Act applies shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time falls below 20. whether situated in the same place or in different places.I) employing 20 or more persons are covered from the date of its setup under section 1(3) of the Act.
Any Establishment registered under the Cooperative Societies Act. employing less than 50 persons and working without the aid of power. 2. 3. Any other Establishment belonging to or under the control of the Central or State Government and whose employees are entitled to the benefit of contributory provident fund or old age pension in accordance with any scheme laid by Central/State Government governing such benefits.Exemptions of Establishments under this Act 1. 136 . Any Establishment setup under any Central. 1912 or under any other law for the time being in force in any State relating to Cooperative Societies. Provincial or State Act and whose employees are entitled to the benefits of Contributory Provident Fund or old age pension in accordance with any scheme or rule framed under that Act governing as may be specified.
where majority of the employees are in favour. 137 .VOLUNTARY COVERAGE Any Establishment not covetable under Employees’ Provident Funds and Miscellaneous Provisions Act (EPFMP). The Establishments covered on voluntary basis are required to comply with the provisions of the Act at par with other covered establishments and can not opt of coverage on a subsequent date. can also apply for coverage under the provisions of the Act on voluntary basis under Section 1(4) of the Act.
DEFINITIONS “Employer” as defined in Section 2(e) (i) & (ii) in relation to an establishment which is a factory. including the agent of such owner or occupier OR in relation to any other establishment. MD or managing agent. in or in connection with the work of an establishment and who gets wages directly from the employer and includes any person employed by or through a contractor in or in connection with the work of the establishment. the person who or the authority which. “Employee” as defined in Section 2(f) of the Act means any person who is employed for wages in any kind of manual or otherwise. Continued … 138 . has the control over the affairs of the establishment and where the said affairs are entrusted to a Manager. the owner or occupier of the factory.
repairing. packing. ornamenting. sale. finishing. whether with the aid of power or without the aid of power. transport. breaking up. in an apprentice. An “Apprentice” as defined under Section 2(f)(iv) means a person who. washing. altering. according to the certified standing orders applicable to the factory or establishment. any premises where a manufacturing process in carried on or is ordinarily carried on. or who is declared to be an apprentice by the authority specified in this behalf by the appropriate Government Continued … 139 . cleaning. demolishing or otherwise treating or adapting any article or substance with a view to its use. “Manufacture” or “Manufacturing Process” as defined in Section 2(h)(i)(b) of the Act means any process for making.“Factory” as defined in Section 2(g) of the Act. delivery or disposal. oiling.
“Family” defined in Section 2(g)(i) of the Act means In case of a MALE member – his wife. 140 Continued … .whether married or unmarried. his children. her husband’s dependant parents and her deceased son’s widow and children. and Section 2(g)(ii) In case of a FEMALE member . provided that if a member proves that if a member proves that his wife has ceased. her children. unless the member subsequently intimates by express notice in writing to the Commissioner that she shall continue to be so regarded. whether married or unmarried. his dependent parents and his deceased son’s window and children. her dependant parents.her husband. under the personal law governing him or the customary law of the community to which the spouses belong. to be entitled to maintenance she shall no longer be deemed to be a part of the member’s family for the purpose of this Scheme.
a major port. “Appropriate Government” defined Section 2(a) means in relation to an establishment belonging to. or under the control of the Central Government or in relation to an establishment connected with a railway company. by the said employee. of the age of 58 (Fifty eight) years. a mine or an oilfield or a controlled industry [or in relation to an establishment having departments or branches in more than one State] the Central Government and in relation to any other establishment. who is the member of the Pension Scheme means the attainment. “Superannuation” as defined under Section 2(ll) in relation to an employee.“Financial year” as defined under Section 2(h) means the year commencing on the first day of April. the State Government. 141 Continued … .
bonus. # House rent allowance. commission or any other similar allowance payable to the employee in respect of employment or of work done in such employment. 142 . overtime allowance. # Any presents made by the employer.“Wages” as defined under Section 2(b) means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of contract of employment and which are paid or payable in cash but exclude: # Cash value of any food concession.
EMPLOYEES PROVIDENT FUND (EPF) SCHEME Employees’ Provident Fund Scheme takes care of the following needs of the members: • Retirement • Medical Care • Housing • Family Obligations • Education of Children • Financing of Insurance Policy 143 .
The rate of contribution is 10& in the following establishments: .1997 in the Act. .HOW THE EPF SCHEME WORKS ? As per amendment dated 22. - Any establishment which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth. 144 .Any sick industrial company as defined in clause (O) of subsection (I) of Section 3 of the Sick Industrial Companies (Special Provisions) Act.9. both the employees and employers contribute to the fund at the rate of 12% of the basic wages. DA and retaining allowance.Any covered establishment with less than 20 employees. and Any establishment in the (a) Jute (b) Beedi (c) Brick (d) Coir and (e) Guar gum Industries / Factories. 1985 and which has been declared as such by the Board for Industrial and Financial Reconstructions.
2. 145 .EMPLOYEES’ PROVIDENT FUND SCHEME (Eligibility to Membership) 1. Continued. 4.. on request by him and his employer. 3.. Every excluded employee shall be entitled to become a member from the date he ceased to be such employee. Every member of an exempted Provident Fund on joining establishment to which the scheme applies. Every employee (including part-time workers and those employed by or through contractors) shall be entitled to members of the Scheme from the date of joining the factory or the other establishment. Any employee who is not otherwise eligible to become member of the scheme.
00 p.m. Every Cine worker other than an excluded employee shall be entitled to become a member of the Fund if he has not less three feature films with one or more producers provided his pay at the time of joining the Fund does exceed Rs. an employee is eligible for membership from the very first date of joining a covered establishment. . 1600. 6. 146 Continued.e..f.EMPLOYEES’ PROVIDENT FUND (EPF) SCHEME (Eligibility to Membership) 5. or Rs. Every newspaper employee other than an excluded employee shall be entitled to become member of the Fund after completion of 3 months continuous service or if he has actually worked for 60 days during 3 months or less (the wage ceiling in the case of newspaper employee). 15000.. 01-11-90.00 pa. Note: w.
3..1993-95 can also join the Employees’ Pension Scheme by submission of option. Note: The Employees’ Pension Scheme membership will cease from the date of the member attains 58 years of age. 2. Every employee who became member of the Employees’ Provident Fund Scheme or or after 16..11.EMPLOYEES’ PENSION SCHEME (Eligibility to Membership) 1.04. Every employee who was a member of Employees’ Provident Fund Scheme and has left service between 01. a member of Employees’ Provident Fund till he/she leaves the service and withdraws the Provident Fund accumulations.1995 (Employee above the age of 58 on the date of joining the Employees’ Provident Fund Scheme shall not be enrolled). However. . Every employee who is a member of Employees’ Provident Fund Scheme 1952 and who has not opted for erstwhile Employees’ family pension scheme. 147 Continued. May also become a member if he opts for Employees’ Pension scheme.
Every employee who becomes member of the Employees’ Provident Fund Scheme / Exempted Provident Fund Scheme.EMPLOYEES’ DEPOSIT LINKED INSURANCE SCHEME (Eligibility to Membership) . 148 .
33% Provident Fund Pension Fund Continued … 149 .CONTRIBUTION TOWARDS EPF & PENSION FUND Employee Employer 12% 3.67% 8.
5/-. • 1% of total wages towards EDLI contribution if EDLI scheme is not taken by the employer. the employer equally pays 12% of contribution to Pension Fund (8. Charges subject to a minimum of Rs.33%) and Provident Fund (3. Continued … 150 .05% of total wages.10% of total wages towards PF Admin.EDLI & PENSION FUND Like employee. Beside this.67%) towards the Employee Provident Fund and Pension scheme every month. employer is need to pay the followings: • 1. • Administration charge @ 0.CONTRIBUTION TOWARDS EPF.01% of total wages towards Employee Deposit Linked Scheme (EDLI) scheme (if this scheme is taken) subject to a minimum of Rs. 2/-. • Rate of contribution of EDLI is @ 0.
CONTRIBUTION TOWARDS EPF & PENSION FUND • 0. • There is no fee paid by employer towards pension fund.005% of total wages towards EDLI Inspection charges and minimum of Rs. 50 paise or more to be counted as the next higher rupee and fraction of a rupee less than 50 paise to be ignored.18% of the total wages towards Employee Provident Fund Scheme Inspection charges. NOTE: Each contribution shall be calculated to the nearest rupee. 151 . • 0. 1/-.
Continued … 152 . Send initial returns in Form 5A. To comply with all the directives issued by the Central Board for proper implementation of the scheme. accompanied by challans and annual returns in Form 3A accompanied by Form 6A. Form 9 (Revised). EMPLOYEES’ PROVIDENT FUND SCHEME (Para 36 & 36A) 1. 5. 2. 4. 3. Maintain such accounts in relation to the amounts contributed to the fund and by his employees. Pay to the fund within 15 days of the close of the month both the shares of contribution and administrative charges or inspection charges. To maintain the inspection note book for an inspector to record his observation.DUTIES OF EMPLOYER a). accompanied by Form 10. Enroll the eligible employees as Employees’ Provident Fund subscriber from the right date. Form 12A.
EMPLOYEES’ PENSION SCHEME (Para 20 EPS ’95) There is no need to furnish a separate return by the employers.DUTIES OF EMPLOYER b). Pay to the Fund within 15 days of the month Pension Fund contributions. 153 . c). Pay to the Fund within 15 days of the close of the month both the contributions and administrative charges or inspection charges. EMPLOYEES’ DEPOSIT LINKED INSURANCE SCHEME (Para 10) There is no need to furnish a separate return by the employers.
The interest is credited to the members account on monthly running balance with effect from the last day in each year. Note: The total amount of interest shall be rounded to the nearest whole rupee (fifty paise counting as the next higher rupees) 154 . Employees’ Provident Fund every year during March/April.5% p.EPF INTEREST RATE The rate of interest is fixed by the Central Government in consultation with the Central Board of Trustees.a. The rate of interest in FY 2006 – 2007 has been notified as 8.
Full amount in Provident Fund can also be withdrawn by the member under the following circumstances:(i). (iii). In case of mass or individual retrenchment. (ii). A member who has not attained the age of 55 years at the time of termination of service. On migration from India for permanent settlement abroad or for taking employment abroad. Continued … 155 . A member is retired on account of permanent and total disablement due to bodily or mental infirmity. (iv).BENEFITS UNDER EPF SCHEME • A member of the Provident Fund can withdraw full amount at the credit in the fund on retirement from service after attaining the age of 55 years.
In case of the following contingencies. the payment of provident fund be made after completing a continuous period of not less than two months immediately preceding the date on which the application for withdrawal is made by the member : (a). Where a member is discharged and is given retrenchment compensation under the Industrial Dispute Act. (b). Continued … 156 . 1947. which is not covered under the Act.(v). Where employees of closed establishments are transferred to other establishment. WITHDRAWAL BEFORE RETIREMENT A member can withdraw up to 90% of the amount of Provident Fund at credit after attaining the age of 54 years or within one year before actual retirement on superannuation whichever is later.
Under abnormal conditions such as damage to movable or immovable property by calamity of exceptional nature.PARTIAL WITHDRAWAL / ADVANCES A member of Provident Fund is allowed non-refundable advances for the following contingencies: (i). 157 Continued… . Financing of member’s Life Insurance Policy. where a member has challenged the retrenchment/dismissal by the employer in a Court of Law. (vi). For marriages or post matriculation education of children. (iii). For acquiring immovable property. (v). For treatment of illness. (iv). Advances in special cases such as lock out in factory /establishment. (ii).
WITHDRAWAL OF FUND (Section 69) (1) A member may withdraw the full amount standing to his credit in his fund –(b) On retirement from service after attaining the age of 55 years [Provided that a member. Continued158 … . shall also be entitled to withdraw the full amount standing to his credit in the Fund if he attains the age of 55 years before the payment is authorized. who has not attained the age of 55 years at the time of termination of his service. (c) On retirement on account of permanent and total incapacity for work due to bodily or mental infirmity duly certified by the medical officer of the establishment or where an establishment has no regular medical officer. (d) Immediately before migration from India for permanent settlement abroad (or for taking employment abroad). by a registered medical practitioner designated by the establishment.
inter alia. that notwithstanding the provisions contained in sub.1947. provided the actual payment shall be made only after completing a continuous period of not less than [Two months] immediately preceding the date on which a member makes the application for withdrawal :- Continued … 159 .(d) On termination of service in the case of mass or individual retrenchment: (dd) On termination of service under a voluntary scheme of retirement framed by the employer and the employees under a mutual agreement specifying.clause (a) of clause (oo) of section 2 of the Industrial Dispute Act. (e) In any of the following contingencies . excluding voluntary retirements shall for the purpose be treated as retrenchments by mutual consent of the parties.
(i) Where a factory or other establishment is closed but certain employees who are not retrenched. Continued … 160 . or transferred by the employer to other factory or establishment. (ii) Where there is no medical officer in the establishment. 1947. not covered under the Act. (ii) WHERE A member is transferred from a covered factory or other establishment to another factory or establishment not covered under the Act. the certificate of any registered medical practitioner may accepted. Under Section (1A): On retirement on account of permanent and total incapacity for work due to bodily or mental infirmity:(i) Where an establishment has been closed. the employer shall designate a registered medical practitioner . but is under the same employer and (iii) where a member is discharged and is given retrenchment compensation under Industrial Disputes Act.
medical certificate from a medical officer of the ESIC dispensary with which or from the Insurance Medical Practitioner with whom the employee is registered under that scheme. of membership of the fund and such other certain conditions for house building and 7 years of membership in other cases. (see bare act) (iv) A member suffering from tuberculosis or leprosy [or cancer even if contracted after leaving the service of an establishment on grounds of illness but before payment has been authorised shall be deemed to have been permanently and totally incapacitated for work. 5 yrs. shall be produced.] Note: Partial withdrawals are allowed on completion of min.(iii) Where the establishment is covered by the ESIC. Continued161 … .
ACCUMULATION OF A DECEASED MEMBER Amount of Provident Fund at the credit of the deceased member is payable to nominees/legal heirs. TRANSFER OF PROVIDENT FUND ACCOUNT Transfer of Provident Fund account from one region to other. from Exempted Provident Fund Trust to Unexempted Fund in a region and vice-versa can be done as per Scheme. 162 .
… The member may furnish the particulars concerning himself and his family. These particulars furnished by the member of Provident Fund in Form 2 will help the Organisation in building up the data bank for use in the event of death of the member.
ANNUAL STATEMENT OF ACCOUNTS
As soon as possible and after the close of each period of currency of contribution, annual statement of accounts will be sent to each member through employer of the factory or other establishment where the member was last employed. The statement of accounts in the fund will show the opening balance at the beginning of the period, the total amount of interest credited at the end of the period or any withdrawal during the period and the closing balance at the end of the period. Members should satisfy themselves as to the correctness of the annual statement of accounts and any error should be brought through employer to the notice of the concerned Provident Fund Office within 6 months of the receipt of the statement.
BENEFITS UNDER EMPLOYEE PENSION SCHEME
Employee is not required to contribute separately under the Employees’ Pension Scheme 1995. Employer share of Provident Fund Contribution at the rate of 8.33% is diverted to Pension Fund every month. 1. Monthly Member pension – Superannuation pension/ retirement on attaining the age of 58 years. 2. Pension Scheme Certificates – Document indicating pensionable service and the amount of reduced pension on the date of exit from employment which shall be counted for determination of pension along with fresh service where the member has not attained the age of retirement. 3. Invalidity Pension – In case of permanent and total disablement during the course of employment. 4. Widow Pension – Pension from the date following the date of death of the member whether in service or after exit of employment or after retirement/commencement of monthly member pension.
5. Children Pension – Pension to two children of deceased member up to the age of 25 years in addition to widow. 6. Orphan Pension – Two orphan children up to the age of 25 years entitled for monthly orphan pension equal to 75% of the amount of widow pension. 7. Nominee Pension – In case of unmarried members, a person nominated by the member will get pension equal to widow pension.
DETERMINATION OF ELIGIBLE SERVICE
1. The eligible service shall be determined as follows:(a) In the case of “new entrant”the “actual service” shall be treated as eligible service. The total actual service shall be rounded off to the nearest year. The fraction of service for six months or more shall be treated as one year and the service less than six months shall be ignored.
Explanation – In the case of employees employed seasonally in any establishment the period of “actual service” in any year, notwithstanding that such service is less than a year shall be treated as a full year. (b) In the case of “existing member” the aggregate of actual service and “past service” shall be treated as eligible service.
Provided that if there is any period in the “past service” for which the contributions towards the Family Pension Scheme, 1971 has not been received, the said period shall count as eligible service only if the contributions thereof have been received in the Employees’ Pension Fund. Explanation – For the purpose of this sub-paragraph the total past service for less than six months shall be ignored and the total past service for six months and above shall be rounded to a year. Continued …
DETERMINATION OF PENSIONABLE SERVICE
(1) The Pensionable service of the member shall be determined with reference to the contributions [received or receivable] on his behalf in the Employees’ Pension Fund. (2) In the case of the member who superannuates on attaining the age of 58 years, and/or who has rendered 20 years pensionable service or more, his pensionable service shall be increased by adding a weightage of 2 years.
DETERMINATION OF PENSIONABLE SALARY
(1) Pensionable salary shall be the average monthly pay drawn [in any manner including on piece-rate basis] during the contributory period of service in the span of 12 months preceding the date of exit from the membership of the Employees’ Pension Fund. 167 Continued …
MONTHLY MEMBERS PENSION
(1) A member shall be entitled to –(a) Superannuation pension, if he has rendered eligible service of 20 years or more and retires on attaining the age of 58 years. (b) Retirement pension, if he has rendered eligible service of 20 years or more and retires on otherwise ceases to be in the employment before attaining the age of 58 years. (c) Short service pension, if he has rendered eligible service of 10 years or more but less than 20 years. (2) In the case of a new entrant the amount of monthly superannuation pension or retiring pension, as the case may be, shall be computed in accordance with the following factors, namely: Pensionable salary x Pensionable Service Monthly Member’s Pension =
BENEFITS UNDER EDLI SCHEME
Employees’ Deposit-Linked Insurance (EDLI) Scheme was notified with effect from 01.08.1976. The scheme is applicable to all the members of the Employees’ Provident Fund (EPF) scheme 1952. All members of EPF scheme are deemed to be the members of Employees’ Deposit-Linked Insurance Scheme 1976, unless exemption has been obtained for EDLI scheme, in favour of Life Insurance Corporation Policy as approved. Employees are not required to contribute under EDLI. The Employer is required to contribute at the rate of 0.5% of the wages of the members on which the Provident Fund has been paid.
60.000 rupees subject to a ceiling of Rs.000 rupees from Rs. the family of a member who dies in service.000 rupees plus 25 percent of the amount in excess of Rs. his family will receive Rs. 35.000 rupees. 35. 170 .000 rupees. According to the revised provisions.000 rupees. 35. if the average balance of the deceased subscriber exceeds Rs. Under the Scheme. is entitled to insurance benefit to deposit in the provident fund account of the deceased member.The maximum ceiling amount of the Employees’ Deposit-Linked Insurance benefit has been enhanced to 60. 35.
. 171 . Description Registration of Employer under EPF Act. 2. Form No. Return of new employees joining within the month (with monthly return) 4.INFORMATION ABOUT FORMS USED SN 1.To be submitted to the Provident Fund office by 30th of April every year. 5. Form 5 Form 5(IF) Application for claiming benefits under Employees’ Deposit-Linked Insurance (EDLI) Scheme Continued . Proforma Regn.. 3. to be prepared financial year wise. Form 2 Declaration and Nomination Form (To be (Revised) filled in a upon new joining) From 3A The details of wages & contributions in respect of each member.
8.This is to be submitted immediately after coverage. Form No. Form 10D For the withdrawal of Employee’s Pension Fund at the time of leaving or for pension/superannuation Continued . Form 10 Return of employees leaving the service during the month Form 10C For the withdrawal of Employee’s Provident Fund at the time of leaving 7.INFORMATION ABOUT FORMS USED S. Description Form 6A For submitting the Annual Return of contributions made by the Employee and Employer during a financial year Form 9 The details of employees enrolled as (Revised) members of EPF. 9.. 172 .No 6. 10. EDLI & Employees' Pension Scheme'95 on coverage of the establishment.. within 15 days of coverage.
Form 13 13. Form No.No 11.P. Description Form 12A Consolidated monthly statement of all contributions payable in a month Application for transfer of E. Form 31 173 .F.INFORMATION ABOUT FORMS USED S. Fund from One employer to another Application for Advance From the Fund 12.
2 months and above but less than 4 months ------.a.a.a.@ 22% p. 4 months and above but less than up to 6 months .DAMAGES IN CASE OF DEFAULT OR LATE PAYMENT OF EPF CONTRIBUTION Less than 2 months …………………………………. 6 months and above Less than 2 months -----------.a.@ 27% p. 174 .@ 37% p. @ 17% p.
2004 LLR 218 (Bombay) A partner of a firm having a status of beneficiary will not be an employee either to be covered or counted under the Act. 175 .IMPORTANT CASES # Manipal Academy of Higher Education V. Provident Fund Commissioner. Union of India. Shah V. 2004 LLR 321 (Karnataka) The contract of employment of the service conditions by which the employment are governed provides for encashment of earned leaves. there cannot be any doubt that it is an emolument paid to the employees which they earn while on duty hence for EPF contribution it will form “Basic Wages” # Prakash D.
Regional Provident Fund Commissioner. Regional Commissioner Haryana. then such employee cannot be permitted to switch over to the Employees’ Pension Scheme # K. Streetlite Electric Corp. P. V. separate registration is not required and as per the definition of the “employee” under sec.# Katari Colouring Factory V. 2000 LLR 169 (Delhi) In case of clubbing of two units which are closely interconnected. State of U. # Ram Singh V. 176 . 2001 LLR 712 SC Provident Where the amount due towards provident fund has already been deposited and an interim order of relief to the extent of 75% of damage is sought to be recovered and the rest 25% of the total amount of damage. 2(f) whether the employer pays the wages directly or indirectly is of no consequence. 2005 LLR 349 (All) Once an employee has opted for the Employees’ Provident Fund Scheme and had withdrawn the entire amount.
Regional Commissioner Haryana. will be treated as ‘employee’ under the EPF Act. eve though there are not directly connected with the establishment. Streetlite Electric Corp. Ltd. 2001 LLR 712 SC Provident Where the amount due towards provident fund has already been deposited and an interim order of relief to the extent of 75% of damage is sought to be recovered and the rest 25% of the total amount of damage. V.# K. Ramthel Ramanand AIR 1972 SC 1958 A sweeper who works twice or thrice a week. 177 . # Ahmedabad Manufacturing and Calico Printing Co. a night watchman keeps watch on other shops also and a gardener who comes for 10 days in a month. 2001 LLR 712 SC Provident Where the amount due towards provident fund has already been deposited and an interim order of relief to the extent of 75% of damage is sought to be recovered and the rest 25% of the total amount of damage. Regional Commissioner Haryana. Streetlite Electric Corp. V. # K. V.
this writ petition.. The petitioner filed a petition requesting the respondent to implead the contractors as parties. APFC Chennai 2006 LLR 507(Mad-HC) . Continued .Chennai Petroleum Corp.1. The petitioner pleaded that it is not possible for the company to produce the said documents as the records are available with the Contractor’s concerned. 178 .. it engage contractors. the respondent passed order directly to pay the contribution to the workmen employed by the contractors. Without considering the said petition. Ltd. Held.. The respondents directed to the petitioner company to produce attendance register in r/o employees employed by the Contractor from 1.Hence. V.1967 onwards.The petitioner is a public sector Corporation manufacturing petroleum product. having its factory at Manali employing 1700 permanent workmen and that apart. the respondent should have impleaded and proceeded against them for determining the quantum of PF contribution payable by them.
as both are the emoluments paid to an employee by way of compensation for his work. 179 . Therefore. there is nothing to show that the EPF Act does not apply to salaries servants.Therefore. The court also directed the respondent commissioner to implead the Contractors as parties to the proceedings. Mohammad Ali V Union of India. the respondent has committed an illegality is not considering the petition filed by the petitioner for impleading the Contractors. 1963 (6) FLR 251: 1963 (1) LLJ 536: AIR 1964 SC 980 .There is no distinction between salary and wages under the EPF Act.
expert guidance and advice of the establishment. if approaches the franchise under a contract that the franchise will have their own staff to work under the name.Frequently Asked Questions (FAQ) .. 2 (f) of EPF & MP Act.. A yoga center covered under the EPF & MP. Continued . .Employee engaged by franchises if covered ? The franchise type of arrangement involves pursuing the activities of establishment through Contract and as such are covered by the EPF & MP Act 1952 schemes. 1952 and are liable to be covered under the Act. 180 .Engaging of Consultants if covered ? Consultants who extend their services regularly to the establishment on remuneration are employees as per sec. shall attract the provisions of the Act.
Employee drawing salary of more than Rs.p..Any DA.Basic wages doesn’t include: -The cash value of any food concession . and .Basic wages means (I) All emoluments which are earned by an employee while on duty on leave or on holidays with wages in accordance with the terms of the contract of employment.. overtime allowance. commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment . 1952.m. bonus..Any presents made by the employer Continued .Which are paid or payable in cash to him . 181 . 6500 per month if employee ? An employee whose pay at the time when he is otherwise entitled to become a member of the fund. exceeds Rs. HRA. .What and what not consists in the Basic wages ? . have been specifically excluded from the benefit of the EPF scheme. as per para 26 of EPF scheme 1952. 6500/.
Qs’ If any… 182 .
THE EMPLOYEE’S STATE INSURANCE ACT 1948 183 .
in contingencies. Maternity and Death or Disablement due to an employment injury or Occupational hazard 184 . in the organised sector.ESI Scheme … • ESI Scheme for India is an integrated social security scheme tailored to provide Social Production to workers and their dependents. such as Sickness.
power using factories and establishments employing twenty(20) or more persons • Employees of the Factories and Establishments in receipt of wages not exceeding Rs.COVERAGE … The ESI Act 1948 applies to • Non – seasonal Factories using power in and Employing ten (10) or More persons • Non – seasonal and non. 185 .7500 /.Per month are covered under this Act.
express or implied. lock out. b). Any traveling allowance or the value of any traveling concession. Any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment . 186 . strike which is not illegal or layoff and other additional remuneration. or under this act. paid at intervals not exceeding two months. if the terms of the contract of employment. were fulfilled and includes any payment to an employee in respect of any period of authorised leave. or d). but does not include :a). if any. Any gratuity payable on discharge.WAGES Defined … • Wages means all remuneration paid or payable in cash to an employee. c). Any contribution paid by the employer to any pension fund or Provident fund.
WAGES Defined … The above definition has three parts 1. 2. 187 . Any additional remuneration even if not flowing from any agreement or settlement but paid at intervals not exceeding two months. The periodicity of payment is not relevant in this case. Any remuneration paid or payable under para 1 and 2 is wages and chargeable to contribution whereas any amount paid towards items mentioned in clause (a) to (d) are not wages and therefore no contribution is chargeable on the amount. 3. The exceptions as provided in Clause (a) to (d) above. All remuneration paid or payable in cash to an employee following from the term of employment (including agreement) express or implied.
00) but are entitled to all social security benefits under 188 the Scheme.Finances … • The Scheme is primarily funded by contribution raised from Insured Employees and their employers • Payable such as 1.5 % of the Wages Employees in receipt of an average daily wage of Rs. Employers’ Contribution – 4.40/.or Less.75% of the Wages 2.6.f 8. are exempted from Payment of their share of contribution (w.75% of the Wages TOTAL .4. Employees’ Contribution – 1. .e.
Contribution Period Benefit Period 1st April to 30th September 1st January to 30th June of the following year 1st October to 31st March 1st July to 31st Dec. are required to pay contribution towards the scheme on a monthly basis. 189 . The benefit period starts three months after the closure of a contribution period.Contribution & Benefit Period … • Employees covered under the ESI Act. • Cash benefits under the scheme are generally liked with contributions paid. A contribution period means a six month time span from 1st April to 30th September and 1st October to 31st March. The two type of periods are elucidated below.
lump sum grant or opting for any other medical insurance policy of limited scope unless it is a contractual obligation of the employer 190 . Employers are absolved of their liabilities of providing medical facilities to employees and their dependents in kind or in the form of fixed cash allowance. reimbursement of actual expenses.ADVANTAGES OF EMPLOYERS … • 1.
well secured workforce. Maternity Benefit Act (b). Workmen's’ Compensation Act in respect of employee covered under the ESI Scheme 3). Employers are exempted from the applicability of the : (a). an essential ingredient for better productivity 191 . Employers have their disposal. a productivity .ADVANTAGES OF EMPLOYERS … 2).
employment injury or Physical disablement resulting in loss of wages. as the responsibility of Paying cash benefits shits to the corporation in respect of insured employees 5). Employers are absolved of any responsibility in times of Physical distress of workers such as sickness.ADVANTAGES OF EMPLOYERS … 4). Any sum paid by way of contribution under the ESI Act is deducted in computing ‘income’ under the Income Tax Act 192 .
Medical Benefit – for self & Family 2. Permanent Disablement Benefit – for self 5. Maternity Benefit .Benefits to Employees … • ESI Scheme Major Social Security Benefits in Cash and Kind include … 1. Temporary Disablement Benefit – for self b). Disablement Benefit a). Sickness Benefit – for self 3.for self 4. Dependents’ Benefit – for dependents in case of death due to employment injury 193 .
Rehabilitation allowances – for self iii). Funeral Expenses – to a person who performs the last rites of IP ii). Medical Bonus – for insured women and IP’s wife 194 .Benefits to Employees … • In addition.for self iv). the Scheme also provides some other need based benefits to insured workers. Old age Medicare – for self and spouse v). These are: i). Vocational Rehabilitation .
• Out-door medical care is provided at the state Insurance Dispensaries or Mobile Dispensaries manned by full-time doctors (service’ system) or at the private clinics of Insurance Medical Practitioners (Panel System) 195 . in-patient treatment.Medical Benefit … • Medical Benefit means Medical care of IPs and their families. ante-natal and post natal care. all necessary drugs and dressing. wherever covered for medical benefit. emergency treatment etc. • The Standard medical care consists of out-door treatment.. pathological and radiological specialist consultation and care.
• A worker who is covered under the scheme for first time is eligible for medical care for the period of three months.Medical Benefit … • Insured worker and members of his family are eligible for medical care from the very first day of the worker coming under ESI Scheme. 196 . This is admissible after the worker has been under ESI these conditions are satisfied medical benefit is admissible for a maximum period of 730 days for the IP and his/ her family. If he/she contributes at least for 78 days in a contribution period the eligibility is there up to the end of the corresponding benefit period. • A worker is also eligible for extended sickness benefit when he/she is suffering from any one of the long term 34 diseases listed in the Act.
Financial support extended by the corporation is such a contingency is called sickness Benefit • Sickness Benefit represents periodical payments made to an Insured Person for the period of certified sickness after completing 9 Months in insurable employment. 197 .Sickness Benefit … • Sickness signifies a state of health necessitating Medical treatment and attendance and abstention from work on Medical grounds.
contributions should have been payable for atleast 78 days in the relevant contribution period.Benefits to Employees … • To qualify for this benefit. • The Maximum duration for availing sickness Benefit is 91 days in two consecutive benefit periods • Standard benefit rate – this rate corresponds to the average daily wage of an Insured person during the corresponding contribution period and is roughly half of the daily wage rate. 198 .
Extended Sickness Benefit … • Extended Sickness Benefit is a Cash Benefit paid for prolonged illness (Tuberculosis / Leprosy. Mental and Malignant diseases) due to any of the 34 Specified diseases • The IP should have been in continuous employment for a period of 2 years and should have contributed for atleast 156 days in 4 preceding contribution periods 199 .
Extended Sickness Benefit … • The daily rate of Extended Sickness Benefit is 40% more than the standard Sickness Benefit rate admissible • After exhausting sickness Benefit Payable for 91 days the Extended Sickness Benefit is payable upto further period of 124 / 309 days that can be extended upto 2 years in special circumstances 200 .
Say.Enhanced Sickness Benefit … • Is Cash Benefit for IP undergoing sterilisation operation of vasectomy / tuberctomy for family planning. Say. • The contributory conditions are the dame as for claiming sickness benefits • The daily rate of this benefit is double the standard benefit rate. not less than the daily wage. 201 . • The benefit is available upto 7 days for vasectomy and upto 14 days for tubectomy operations. • The benefit rate of this benefit is double the standard benefit rate. not less than the daily wage.
202 . • “Miscarriage” means expulsion of the contents of a pregnant uterus at any period prior to or during 26th week of pregnancy.Maternity Benefit… • Maternity Benefit is cash payable to an Insured women for the specified period of abstention from work for confinement or mis-carriage or for sickness arising out of pregnancy. “confinement” “premature birth of child or miscarriage” “confinement” connotes labour after 26 weeks of pregnancy whether the result issue is alive or dead.
• The contribution condition is the same as for Sickness Benefit. Benefits is paid for Sundays also. • The daily benefit rate is double the sickness Benefit rate and is thus roughly equivalent to the full wages. however. 203 .Maternity Benefit… • Criminal abortion or miscarriage does not. entitle to benefit.
leaving behind the living child. if the insured women dies during confinement or with in 6 weeks thereafter. For Confinement For a total period 12 Weeks beginning not more than 6 weeks before the expected date of child birth.Maternity Benefit… • The Benefit is paid as follows (Duration) a). But the child also die during that period. 204 . the benefit will be paid upto and including the day of the death of the child. the benefit continues to be payable for the whole of the period.
There is no waiting period. 205 . For sickness arising out of pregnancy.Maternity Benefit… b). In all the cases. the benefit is paid only if the insured women does not work for remuneration during the period for which benefit is claimed. confinement. Premature birth of child or miscarriage : For an additional period or upto four weeks. For Miscarriage For the period of 6 weeks following the date of miscarriage c).
1000/. This bonus of Rs.Maternity Benefit… • Medical Bonus Medical Bonus is lump sum payment made to an Insured woman or the wife of an insures person in case she does not avail medical facility from an ESI hospital at the time of delivery of a child. 250/.has been increased to Rs.from 1st April 2003 206 .
. not payable if the incapacity lasts for less than 3 days excluding the date of accident. • Disablement benefit is admissible to insured person for the entire period so certified by an Insurance Medical officer / Practitioner for which IP does not work for wages. 207 . • However.Disablement Benefit … a). • The benefit is not subject to any contributory condition and is payable at a rate which is not less than 70% of daily average wages. Temporary disablement benefit : • In case of temporary disability arising out of an employment injury or occupational disease.
partial or total loss of earning capacity. 1991. periodical increases are granted. • In order to product erosion in real value of the periodical payments of Permanent Disablement benefits. • Periodical payments are made to the IP for life at a rate depending on the actual loss of earning capacity as may be determined and certified by a duly-constituted Medical Board. against rise in the cost of living index. based on actuarial calculation 208 .Permanent disablement benefit … • In case an employment injury or occupational disease results in permanent. • The rates of Disablement Benefits are determined in accordance with the provisions of Rule 57 of ESI (Central) Rules.
50. 1.30000/-). per day. 209 .10000/. • Commutation of Permanent Disablement Benefit into lump sum payment is also allowed in case the total commuted value does not exceed Rs.Permanent disablement benefit … • Commutation of periodical payments into lump sum (one time payment) is permissible where the permanent disablement stands assessed as final and daily rate of benefit does not exceed Rs.(The ceiling is now being raised to Rs.
whichever is earlier. 210 . till infirmity lasts and she continues to be unmarried. In the absence of any widow or legitimate child. Legitimate or adopted son until age 18 or if legitimate son is infirm. c). or if infirm. till infirmity lasts. Widow / widows during life or until remarriage b).Dependants’ Benefit … • Dependents Benefit is a monthly pension payable to the eligible dependents of an insured person who dies as a result of an Employment Injury or occupational disease • Beneficiaries and Duration of benefit a). Legitimate or adopted unmarried daughter until age 18 or until marriage. to any other male dependent until age 18 or to an unmarried or widowed female dependent until age 18. the benefit is payable to a parent or grandparent for life.
there is a proportionate reduction in the respective shares of the beneficiaries. • The amount of pension paid to the dependents of a deceased insured person is reviewed vis-à-vis the cost of living index and increases are granted from time to time to compensate for erosion in its real value.Dependants’ Benefit … • How much … • The total divisible benefit is equivalent to the temporary disablement benefit rate (roughly 70% of the wage rate). The widow / widows share 3/5th of the benefit and the legitimate or adopted son and daughter 2/5th each of the benefit. If the total benefit so divided exceeds the full rate. 211 .
Other Benefit … (i). to the person who actually incurs the expenditure on the funeral. in his absence. 212 . The amount is paid either to the eldest surviving member of the family or. Funeral Expenses Funeral Expenses are in the nature of lump sum payment up to a maximum of Rs.2500/made to defray the expenditure on the funeral of deceased IP.
resolved to grant rehabilitation Allowance to the IPs. vide its Resolution dated 22. On the rates. on which they remain admitted in an Artificial limb centre. for each day. which generally confirm to double the Standard Sickness Benefit rate.1979.12.1. The above benefit was introduced with effect from 1.1980 213 .Other Benefit … Rehabilitation Allowance The corporation.
85(B) (i) of the ESI Act. read with Regulation 31(A) of the ESI (General) Regulations 1950. 2 months and above but less than 4 months 10% iii). 1950. In addition.Levy of Interest & Damages … • Under Section 39(5)(a) of the ESI act. 6 months and above 25% Interest and damages can also recovered as arrears of land revenue Section 45(c) to Section 45(I) by the Recovery Officer of ESI Corporation. read with sec. Up to less than 2 months 5% ii). the Corporation is empowered to recover damage as under: Period of delay in Rate of Damages payment of Contribution on the amount due i). 214 . under the Provision of Regulation 31-C of ESI (General) Regulations.4 months and above but less than 6 months 15% iv). the employer is liable to pay simple interest at the rate of 15 percent per annum in respect of each day of default or delay in payment contributions.
Obtain Employer’s code No. In respect of newly appointed employees. 2). Submit Form 01 to the Regional office for this purpose. Fill up Declaration Forms in respect of all coverable employees and submit the same to the Regional Office/ Local Office of the corporation well before the ‘Appointed Day’ and obtain insurance Numbers from the concerned Local Office/ Regional Office.Obligation of the Employers … 1). for use in all ESIC Forms / documents and correspondence with the offices of the ESI Corporation. Get your Factory / establishment registered with in 15 days after the Act becomes applicable. 215 . fill up the declaration form soon after appointment of such employees and submit the same to the Local Office Concerned.
216 . Pay ESI contribution (Employee's Share @4.Obligation of the Employers … 3).75% and the Employer’s share @ 1. in which the wages fall due. Pending receipt of identity cards/ identity certificates you may issue “certificate of employment” in Form 86 to the covered employee(s) enabling them to avail cash/medical Benefits 4).75% of the wages) with in 21 days of the month following.
Grant leave to insured employees on the basis of sickness certificates issued by any authorised ESI doctor.Obligation of the Employers … 5). 6). Minor accidents which do not cause absence from work need not be reported 7).Submit an Accident Report to the Local Office / ESI Dispensary concerned immediately in respect of accidents that could result in death or disablement and within 24 hours of its occurrence otherwise.Maintain an Accident Book as prescribed under the Factory Act / ESI Act. 217 .
Copies of Challans 10. Accident Book 7. Wage register 3. Returns of Contribution 8.Obligation of the Employers … Maintain the following records/ registers properly for the purpose of inspection 1. Return of Declaration Forms 9. Employees’ Register 6. Attendance Registers / Muster Rolls (in respect of all employees including those employed through contractors) 2. Balance Sheet. Inspection Book 218 . 5. Account Books including Ledgers and Vouchers. Cash Book / Bank Book 4.
ownership of the concern or its management. 12. Promptly report change in business activity. Ascertain the liability towards ESI dues. Submit return of contribution within 42 days of the expiry of contribution period. Intimate the date of closure of shifting (Temporary or Permanent) of the Factory / Establishment to the Regional office / Local Office within seven days of its closure or shifting 11. while taking over the ownership of any factory/establishment by purchase.Obligation of the Employers … 9. lease or license or in any other manner whatsoever as new owner is liable to discharge the past liabilities if any 219 . gift. 10.
Qs’ If any… 220 .
PAYMENT OF BONUS ACT – 1965 221 .
In certain cases of industrial disputes demand for payment of bonus was also included. the Full Bench of the Labour Appellate evolved a formula for determination of bonus. 222 .Bonus . In 1950.History • The practice of paying bonus in India appears to have originated during First World War when certain textile mills granted 10% of wages as war bonus to their workers in 1917.
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. 223 .
extent and application • • It extends to the whole of India Every other establishment in which twenty or more persons are employed on any day during an accounting year. 224 .Short title.
& (b) Every other establishment in which 20 or more persons (less than 20 but 10 or more if appropriate Govt.Bonus . in Factories Act). 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.Applicability (a) Every factory (as def. 225 .
whether situated in the same place or in different places. undertakings and branches • Where an establishment consists of different departments or undertakings or has branches. all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus : 226 Cont-2 .• Establishments to include departments.
provided he has worked in the establishment for not less than thirty working days in that year. bonus. in accordance with the provisions of this Act.Eligibility Every employee shall be entitled to be paid by his employer in an accounting year. 227 .Bonus .
or • (b) riotous or violent behaviour while on the premises of the establishment. misappropriation or sabotage of any property of the establishment 228 .Disqualification for bonus An employee shall be disqualified from receiving bonus under this Act :• (a) fraud. or • (c) theft.
during the accounting year 229 . • (c) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment. or under the Industrial Disputes Act. 1946. 1947. or under any other law applicable to the establishment.Computation of 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. • (b) he has been on leave with salary or wages. and • (d) the employee has been on maternity leave with salary or wages.• (a) he has been laid off under an agreement or as permitted by standing orders under the Industrial Employment (Standing Orders) Act.
of such salary or wage. 230 . the allocable surplus exceeds the amount of maximum bonus payable to the employees.Payment of minimum & Maximum bonus • A minimum bonus which shall be 8. be bound to pay to every employee in respect of that accounting. • Where in respect of any accounting year referred to in section 10. 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.33 per cent of the salary or wage earned by the employee during the accounting year.
CALCULATION OF BONUS The method for calculation of annual bonus is as follows: • Calculate the Available Surplus. • Development allowance 231 . • Available Surplus = • Gross Profit – ( deduct) the following : • Depreciation admissible u/s 32 of the Income tax Act.
• Allocable Surplus = 60% of Available Surplus. For calculating the amount of bonus in respect of an accounting year. 7) in respect of gross profits for the immediately preceding accounting year.7) – Sums specified in the Third Schedule. allocable surplus is computed after considering the amount of set on and set off from the previous years 232 . • Make adjustment for ‘Set-on’ and ‘Set-off’. • Direct Taxes (calculated as per Sec.Available Surplus (Deductions) • Direct taxes payable for the accounting year (calculated as per Sec. 67% in case of foreign companies.
then. the amount of set on or set off carried forward from the earliest accounting year shall first be taken into account.Set On & Set Off • Where in any accounting year any amount has been carried forward and set on or set off under this section. • The allocable surplus so computed is distributed amongst the employees in proportion to salary or wages received by them during the relevant accounting year. 233 . in calculating bonus for the succeeding accounting year.
Time-limit for payment of bonus • where there is a dispute regarding payment of bonus pending before any authority under section 22. within a period of eight months from the close of the accounting year: 234 . within a month from the date on which the award becomes enforceable or the settlement comes into operation. • (b) in any other case. in respect of such dispute.
235 . his assignee or heirs may.Recovery of bonus due from an employer(Sec-22) Where any money is due to an employee by way of bonus from his employer under a settlement or an award or agreement. or in the case of the death of the employee. the employee himself or any other person authorized by him in writing in this behalf. without prejudice to any other mode of recovery. make an application to the appropriate Government or such authority as the appropriate Government may specify in this behalf is satisfied that any money is so due. it shall issue a certificate for that amount to the Collector who shall proceed to recover the same in particular employee.
within one year of its becoming due. • Right to seek clarification and obtain information. to whom the Payment of Bonus Act does not apply. • Right to refer any dispute to the Labour Court/Tribunal. cannot raise a dispute regarding bonus under the Industrial Disputes Act. on any item in the accounts of the establishment 236 .RIGHTS OF EMPLOYEES • Right to claim bonus payable under the Act and to make an application to the Government. • Employees. for the recovery of bonus due and unpaid.
237 .Reference of disputes under the Bonus Act • Where any dispute arises between an employer and his employees with respect to the bonus payable under this Act or with respect to the application of this Act to an establishment in public sector. then. or of any corresponding law relating to investigation and settlement of industrial disputes in force in a State and the provisions of that Act. such dispute shall be deemed to be an industries dispute within the meaning of the Industrial Disputes Act. 1947 (14 of 1947).
238 . by notification on the Official Gazette. records & Inspectors • Every employer shall prepare and maintain such registers. records and other documents in such form and in such manner as may prescribed. • The appropriate Government may.Maintenance of register. appoint such person as it think fit to be Inspectors for the purposes of this Act and may define the limits within which they shall exercise jurisdiction.
Inspectors Duties : • An Inspector appointed under sub-section (1) may. as he thinks fit enter any establishment or any premises connected therewith and require any one found in charge thereof to produce before him for examination any accounts. • at any reasonable time and with such assistance. 239 . books. registers and other documents relating to the employment of persons or the payment of salary or wage or bonus in the establishment. for the purpose of ascertaining whether any of the provisions of this Act has been complied with -• (a) Require an employer to furnish such information as he may consider necessary. if any.
firms. or fine up to Rs. or both.1000. shall be deemed to be guilty of that offence. its director.1000. unless the person concerned proves that the offence was committed without his knowledge or that he exercised all due diligence 240 . • For failure to comply with the directions or requisitions made the penalty is imprisonment upto 6 months. or both. • In case of offences by companies. or fine up to Rs. body corporate or association of individuals. partner or a principal officer responsible for the conduct of its business.OFFENCES AND PENALTIES • For contravention of the provisions of the Act or rules the penalty is imprisonment upto 6 months.
Qs’ If any… 241 .
THE APPRENTICES ACT. • From time to time.THE APPRENTICES ACT.1961 242 1 . 1961 • The Act extends to the whole of India. the Central Govt. has specified the designated trades. • Applies to those apprentices who are undergoing apprenticeship training in designated trades.
• (3) Every contract of apprenticeship may contain such terms and conditions as may be agreed to by the parties to the contract : of Apprenticeship THE APPRENTICES ACT.Contract • (1) No person shall be engaged as an apprentice to undergo apprenticeship training in a designated trade unless such person or. if he is a minor.1961 243 2 . his guardian has entered into a contract of apprenticeship with the employer. • (2) The apprenticeship training shall be deemed to have commenced on the date on which the contract of apprenticeship has been entered into under sub-section (1).
THE APPRENTICES ACT. namely : • (a) to learn his subject field in engineering or technology or vocational course conscientiously and diligently at his place of training.1961 244 3 .OBLIGATIONS OF APPRENTICES • Every graduate or technician apprentice. technician (vocational) apprentice undergoing apprenticeship training shall have the following obligations.
1961 245 4 . THE APPRENTICES ACT. • (c) to carry out all lawful orders of his employer and superiors in the establishment. • (d) to carry out his obligations under the contract of apprenticeship which shall include the maintenance of such records of his work as may be prescribed.Conti. • (b) to attend the practical and instructional classes regularly.
and the rules made there under.OBLIGATIONS OF EMPLOYERS • (a) To provide the apprentice with the training in his trade in accordance with the provisions of this Act. to ensure that a person who possesses the prescribed qualifications is placed in charge of the training of the apprentice. • (b) If the employer is not himself qualified in the trade. THE APPRENTICES ACT.1961 246 5 .
Cont. for imparting practical and theoretical training and facilities for trade test of apprentices. THE APPRENTICES ACT. • (bb) to provide adequate instructional staff.1961 247 6 . possessing such qualifications as may be prescribed. and • (c) to carry out his obligations under the contract of apprenticeship.
have passed the trade tests or examinations conducted by that Council or by an institution recognized by that Council. the period of apprenticeship training shall be such as may be determined by that Council or by an institution recognized by that Council.PERIOD OF APPRENTICESHIP TRAINING • The period of apprenticeship training. which shall be specified in the contract of apprenticeship. THE APPRENTICES ACT. shall be as follows : • (a) in the case of trade apprentices who.1961 248 7 . having undergone institutional training in a school or other institution recognized by the National Council.
THE APPRENTICES ACT. the period of apprenticeship training shall be such as may be prescribed. by notification in the Official Gazette specify in this behalf.Cont. having undergone institutional training in a school or other institution affiliated to or recognized by a Board or State Council of Technical Education or any other authority which the Central Government may. • In the case of trade apprentices who.1961 249 8 . have passed the trade tests or examinations conducted by that Board or State Council or authority.
NUMBER OF APPRENTICES • The Central Government shall. after consulting the Central Apprenticeship Council.1961 250 9 . THE APPRENTICES ACT. determine for each designated trade the ratio of trade apprentices to workers other than unskilled workers in that trade. by order notified in the Official Gazette.
1961 251 10 . the basic training shall be imparted in separate part of the workshop building or in a separate building set up by the employer.Duties of the Employer • Every employer shall make suitable arrangements in his workshop for imparting a course of practical training to every apprentice engaged by him in accordance with the program approved by the Apprenticeship Adviser. THE APPRENTICES ACT. • Where an employer employs 500 or more workers.
THE APPRENTICES ACT.1961 25211 .EMPLOYERS to ensure • Placement of Training Officer with suitable qualification • Payment of stipend at a rate not less than the prescribed minimum rate • Not to pay on the basis of piece work • Not to require to take part in any output bonus or other incentive scheme.
1961 253 12 .1923. SAFETY AND WELFARE OF APPRENTICES. • In case of employment injury pay compensation in accordance with the provisions of the Workmen's Compensation Act. • HEALTH. THE APPRENTICES ACT.Employer to Ensure Contd.
OVERTIME. LEAVE AND HOLIDAYS.HOURS OF WORK.1961 254 13 . • (2) No apprentice shall be required or allowed to work overtime except with the approval of the Apprenticeship Adviser who shall not grant such approval unless he is satisfied that such overtime is in the interest of the training of the apprentice or in the public interest. • (1) The weekly and daily hours of work of an apprentice while undergoing practical training in a workshop shall be such as may be prescribed. THE APPRENTICES ACT.
THE APPRENTICES ACT.Con t. • (3) An apprentice shall be entitled to such leave as may be prescribed and to such holidays as are observed in the establishment in which he is undergoing training.1961 255 14 .
• In continuation with the same. • As per the latest notification. applicable Leaves are as follows. 15 Medical Leave. 08 Casual Leave Leave Entitlement. THE APPRENTICES ACT. the apprentice should be entitled the leaves as prescribed.1961 25615 .
• In all matters of conduct and discipline.1961 257 16 . THE APPRENTICES ACT. the apprentice shall be governed by the rules and regulations applicable to employees of the corresponding category in the establishment in which the apprentice is undergoing training.CONDUCT AND DISCIPLINE.
• (a) Every apprentice undergoing apprenticeship training in a designated trade in an establishment shall be a trainee and not a worker. and • (b) The provisions of any law with respect to Labour shall not apply to or in relation to such apprentice. THE APPRENTICES ACT.APPRENTICES ARE TRAINEES AND NOT WORKERS.1961 258 .
m. 1500/. will be entitled for Stipend and not the Salary/Wages.1961 259 18 . THE APPRENTICES ACT. notification the rate of Stipend is Rs.Rate of Stipend • As the Apprentice is a “Trainee” & not the worker . • As per the Govt.p.
RECORDS AND RETURNS • Every employer shall maintain records of the progress of training of each apprentice undergoing apprenticeship training in his establishment in such form as may be prescribed.1961 . • Forms & Returns Apprentice Act.xls (Click here to view the details) 260 19 THE APPRENTICES ACT.1961.
THE APPRENTICES ACT. • If any employer . or • (c) contravenes the provisions of this Act relating to the number of apprentices which he is required to engage under those provisions.OFFENCES AND PENALTIES.1961 261 20 . he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both. or • (b) fails to carry out the terms and conditions of a contract of apprenticeship.(a) engages as an apprentice a person who is not qualified for being so engaged.
or • (ii) furnishes or causes to be furnished any information or return which is false and which he either knows or believes to be false or does not believe to be true.1961 262 21 . or THE APPRENTICES ACT. • If any employer or any other person (a) required to furnish any information or return • (i) refuses or neglects to furnish such information or return. or • (iii) refuses to answer. or gives a false answer to any question necessary for obtaining any information required to be furnished by him.Cont.
Cont. as may be authorized by the Central or the State Apprenticeship Adviser in writing in this behalf any reasonable facility for making any entry.1961 263 22 . examination or inquiry authorized by or under this Act. inspection. or • (c) requires an apprentice to work overtime without the approval of the Apprenticeship Adviser. not below the rank of an Assistant Apprenticeship Adviser. • (b) refuses or willfully neglects to afford the Central or the State Apprenticeship Adviser or such other person. or THE APPRENTICES ACT.
• (d) employs an apprentice on any work which is not connected with his training. or • (e) makes payment to an apprentice on the basis of piecework.1961 264 23 .Cont. or • (f) requires an apprentice to take part in any output bonus or incentive scheme. THE APPRENTICES ACT. he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both.
• (2) Every trade apprentice who passes the test referred to in sub-section (1) shall be granted a certificate of proficiency in the trade by the National Council. THE APPRENTICES ACT.TEST AND GRANT OF CERTIFICATE & CONCLUSION OF TRAINING • (1) Every trade apprentice who has completed the period of training shall appear for a test to be conducted by the National Council to determine his proficiency in the designated trade in which he has undergone his apprenticeship training.1961 265 24 .
shall be granted a certificate of proficiency by that Board. technician (vocational) apprentice shall be assessed by the employer from time to time. who completes his apprenticeship training to the satisfaction of the concerned Regional Board.Cont • (3) The progress in apprenticeship training of every graduate or technician apprentice.1961 266 25 . • (4) Every graduate or technician apprentice or technician (vocational) apprentice. THE APPRENTICES ACT.
• Premature termination by employer the employer shall pay to the apprentice such compensation as may be prescribed.Termination of Training • On the expiry of the period of apprenticeship training specified in the contract.1961 267 26 . • Premature termination by the apprentice apprentice or his guardian shall refund to the employer as cost of training such amount as may be determined by the Apprenticeship Adviser. THE APPRENTICES ACT.
1961 268 27 .Disputes • Any dispute between an employer and an apprentice arising out of the contract of apprenticeship shall be referred to the Apprenticeship Adviser for decision. THE APPRENTICES ACT.
nor shall it be obligatory on the part of the apprentice to accept an employment under the employer. 269 28 THE APPRENTICES ACT.OFFER AND ACCEPTANCE OF EMPLOYMENT • (1) It shall not be obligatory on the part of the employer to offer any employment to any apprentice who has completed the period of his apprenticeship training in his establishment.1961 .
after the successful completion of the apprenticeship training.Cont. where there is a condition in a contract of apprenticeship shall. the employer shall.1961 270 29 . and the apprentice shall be bound to serve the employer in that capacity for such period and on such remuneration as may be specified in the contract. serve the employer. be bound to offer suitable employment to the apprentice. THE APPRENTICES ACT. on such completion. • (2) Notwithstanding anything in sub-section (1).
in the opinion of the Apprenticeship Adviser. • Provided that where such period or remuneration is not. he may revise such period or remuneration so as to make it reasonable. and the period or remuneration so revised shall be deemed to be the period or remuneration agreed to between the apprentice and the employer.1961 271 30 . THE APPRENTICES ACT. reasonable.Cont.
Qs’ If any… 272 .
273 .THE INTERSTATE MIGRANT WORKMEN (REGULATION OF EMPLOYMENT AND CONDITIONS OF SERVICE) ACT 1979 • Act to regulate the employment of interstate migrant workers and to provide for their conditions of service.
• Applies to every establishment wherein five or more interstate migrant workmen (whether or not in addition to other workmen) are employed and every contractor who employs (whether or not in addition to other workmen) 5 or more interstate migrant worker. 274 .Extends to the whole of India.
275 .Interstate migrant worker • An interstate migrant worker means any person who is recruited by or through a contractor in the state under an agreement or arrangement for employment in an establishment in another state. whether with or without the knowledge of the principal employer.
appointment of licensing officers.Provides for • Registration of establishments employing interstate migrant workmen. prohibition of employment of migrant workmen without registration and duties and obligations of contractors provided under the Act. 276 . licensing of contractors.
medical facilities.Employer to ensure • Regular payment. • The contractor to maintain register of migrant employees. protective clothing etc shall be ensured to such workmen. send report of accidents. half yearly returns (From 23) and annual returns (Form 24) • Employer contravening the provisions liable for punishment of imprisonment or fine or both 277 . equal pay for equal work irrespective of sex. suitable conditions of work.
Qs’ If any… 278 .
• In order to make the wages equal. prevailing wages shall not be reduced but the higher rate shall be maintained.THE EQUAL REMUNERATION ACT. 279 . 1976 • Act provides for the payment of equal remuneration to men and women • Extends to the whole of India • Act makes it obligatory on the part of employer to pay equal remuneration to men and women workers for same work or work of a similar nature.
No discrimination • No discrimination while making recruitment for the same work or work of a similar nature. • No discrimination in any condition of service subsequent to recruitment such as promotions. 280 . except where the employment of women in such work is prohibited or restricted by or under any law for the time being in force. training or transfer.
Qs’ If any… 281 .
THE APPRENTICES ACT. has specified the designated trades. the Central Govt. • Applies to those apprentices who are undergoing apprenticeship training in designated trades. 282 . 1961 • The Act extends to the whole of India. • From time to time.
guardian of the apprentice.Contract of apprenticeship • A contract of apprenticeship training is entered in to between the employer and the apprentice or. 283 . if he is a minor. • The contract of apprenticeship training is to be sent to the Apprenticeship Adviser of the respective area.
Termination of training • on the expiry of the period of apprenticeship training specified in the contract. • Premature termination by employer the employer shall pay to the apprentice such compensation as may be prescribed • Premature termination by the apprentice apprentice or his guardian shall refund to the employer as cost of training such amount as may be determined by the Apprenticeship Adviser 284 .
285 .NUMBER OF APPRENTICES • Depends on the ratio of trade apprentices to workers other than unskilled workers and the facilities available and that may be made available by the employer for training the apprentices.
Duties of the employer
• Make suitable arrangements for imparting practical training • Provide for basic training. • Where an employer employs 500 or more workers, the basic training shall be imparted in separate part of the workshop building or in a separate building set up by the employer. • * the employer may get easy loan from the Govt. for construction of building for conducting training classes
• if the number of apprentices to be trained is less than twelve, then the employer may depute such apprentices to any Basic Training Center or Industrial Training Institute run by the Government for basic training in any designated trade. • Where an employer deputes any apprentice as above, such employer shall pay to the Government the expenses incurred by the Government on such training, at such rate as may be specified by the Central Government.
• Apprentice to be given Related Instruction course.
• Time spent by a trade apprentice in attending classes on RIC shall be treated as part of his paid period of work.
EMPLOYERS to ensure
• Placement of Training Officer with suitable qualification • Payment of stipend at a rate not less than the prescribed minimum rate • Not to pay on the basis of piece work • Not to require to take part in any output bonus or other incentive scheme
Employer to ensure (contd.)
• HEALTH, SAFETY AND WELFARE OF APPRENTICES • Not to require or allow overtime except with the approval of the Apprenticeship Adviser. • In case of employment injury pay compensation in accordance with the provisions of the Workmen's Compensation Act, 1923
• Any disagreement or dispute between an employer and an apprentice arising out of the contract of apprenticeship shall be referred to the Apprenticeship Adviser for decision.
Obligation for employment
• It shall not be obligatory on the part of the employer to offer any employment to any apprentice who has completed the period of his apprenticeship training in his establishment, • nor shall it be obligatory on the part of the apprentice to accept an employment under the employer.
Qs’ If any… 293 .
THE WORKMEN’S COMPENSATION ACT. 294 . 1923 • The Act provides for payment of compensation to the worker injured during the course of employment or contracted by any occupational disease peculiar to that employment • Act extends to the whole of India.
whichever is more • * for permanent total disablement.The amount of compensation • for accidents resulting in death. or an amount of eighty thousand rupees. whichever is more. or an amount of ninety thousand rupees. an amount equal to sixty per cent of the monthly wages of the injured workman multiplied by the relevant factor. an amount equal to fifty per cent of the monthly wages of the deceased workman multiplied by the relevant factor. 295 .
C.57. 2000 per month upto a period of 5 years 296 .5.496 • Permanent Partial Disablement .According to incapacity caused • Temporary Disablement .4.080 • Permanent Total Disablement .Rs. Amendment Act 2000 • Fatal Injury .The maximum compensation as per W.Rs.48.Rs.
ESI Corporation and Workmen compensation • The liability of payment of compensation shifted from the employer to the Employees State Insurance Corporation 297 .
Qs’ If any… 298 .
safety and welfare of the workers employed. 1948 • Act which makes it obligatory on the part of the employer to provide for the health.THE FACTORIES ACT. 299 .
if run without power. if run with power and 20 or more workers are or were employed. • Application to factories with fewer workers u/s 85 300 . • Applies to every factory wherein 10 or more workers are or were employed.Act extends to the whole of India.
301 . • Weekly Holiday: No work for more than 10 days without a day of rest. • Relaxation: Where an adult worker is engaged in urgent repairs. • ** Provision relating to hours of work not applicable to supervisory staff. • Prohibition of employment of Women: No woman shall be employed in any factory for more than 9 hours in any day or between 7 pm and 6 am. • Intervals of rest: half an hour for 5 hours of work • No child (who has not attained the age of 15 years) be permitted to work.PROVIDES for • Hours of work (adult) not to exceed 48 hours in a week or 9 hours in a day. • Payment of Overtime wages for overstay at workplace @ twice the ordinary rate of wages.
302 .Factories Act now allows women to work night shifts PROVIDED • adequate safeguards in the factory as regards occupational safety and health. adequate protection of their dignity. equal opportunity for women workers. honor and safety and their transportation from the factory premises to the nearest point of their residence" are made.
303 . paid holidays or leave days considered • Encashment of unavailed leave: Encashable at the present rate of wages. • Days of lay off.Leave with Wages • @ 1day for every 20 days provided ----240 days of work during preceding year.
thick bound sheet.in FORM 16 (with similar entries as in Form 15) • Provide each worker an Attendance Card in form 28 showing the particulars of employment * shall be substituted by Electronic cards 304 .in FORM 15 • Provide each employee a Leave Book.The occupier (Employer) to maintain a register – LEAVE WITH WAGES REGISTER.
Ensure provision of sufficient number of Latrines and urinals – separate for gents and ladies Ensure spittoons are provided at adequate places. of workers is more than 250. Ensure proper lighting. Ensure supply of uninterrupted supply of Drinking Water.artificial or natural or both. provision for cold water in every lunch room. 305 . Where the no. Ensure workplace has adequate ventilation Avoid overcrowding – ensure 500 cubic feet of space for every worker without reference to any space which is more than 14 feet above the level of the floor of the room.• • • • • • • • • • • EMPLOYER TO KEEP THE FACTORY PREMISES CLEAN white washing at least once in every 14 months repainting or revarnishing every 5 years ensure proper disposal of wastes and effluents Record the dates on which white washing. painting or varnishing done in a register in FORM 7. rest room and canteen shall be ensured.
unaided by another person. belts etc • Protection of eyes using screens or goggles from excessive light or infra-red or ultra violet radiations • Precaution in case of Fire.EMPLOYER TO ENSURE SAFETY OF WORKERS • Fencing of Machines and Moving parts of machines – spindles. gears. lift. • * Adult male 75 Kgs • * Adult female 30 Kgs • * Adolescent male 30 Kgs • * Adolescent female 20 Kgs • Safety Officer: Appoint a Safety Officer wherein 1000 or more workers are employed. 306 . carry or move by hand or head any material or tool exceeding the maximum limit prescribed. • No woman or young person shall. pulleys.
EMPLOYER TO LOOK AFTER THE WELFARE OF EMPLOYEES • • • • • • • • • • • Washing facility separately for women and men Separate rooms for men and women for drying of clothes Separate rest rooms for men and women First Aid boxes equipped with prescribed medicines Ambulance room where 500 or more are employed Canteen for use of workers where 250 or more are employed (150 under Plantation Labour Act) Lunch room where 150 or more are employed Crèches where 30 or more women are employed Appoint WELFARE OFFICER (S) where 500 or more are employed (300 under PLA) The duties. qualification and conditions of service of such welfare officers shall be in accordance with the rules of the respective State Govt. NOTICE OF DANGEROUS OPERATIONS 307 .
painting etc in form 7 Register of Compensatory Holidays in form 9 Overtime Muster roll for Exempted workers in form 10 Register of Leave with Wages in form 15 Health Register in form 17 (in respect of persons employed in occupations declared to be dangerous operations u/s 87) Register of Accidents and Dangerous Occurrences in form 26 Particulars of Rooms in the factory in form 35.REGISTERS TO BE MAINTAINED • • • • • • • • • Attendance Register/ Muster roll in form 25 Register of Adult Workers in form 12 Record of Lime washing. 308 .
RETURNS TO BE SENT TO APPROPRIATE AUTHORITIES • • • • • • • • • Notice of accidents and dangerous occurrences resulting in death or bodily injury in form 18 (similar to the one to be sent ESI Local Office under the ESI Act) Half yearly returns in form 22 Annual returns in form 21 Notice of change of Manager in form 23 Details of closure in form 32 Report of examination of Pressure Vessel or Plant in form 8 Report of examination of Water sealed Gas holder in form 38 Report of Examination of Hoist or Lift in form 41 Certificate of Fitness for Dangerous Operations in form 39 309 .
THE INDUSTRIAL EMPLOYMENT (STANDING ORDER) ACT. • Applies to every industrial establishment wherein 100 (in some States 50)or more workers are employed • The Act extends to the whole of India 310 . 1946 • Defines the terms and conditions of service between the employer and his employees.
Therefore. it is always desirable to get standing orders drafted and certified as it regulates the relationship between the employer and the employee. 311 .SIGNIFICANCE • Terms of appointment order issued to an employee cannot circumvent the provisions of certified standing order.
Qs’ If any… 312 .
Casual and Trainees 313 . Probationer. Badlis.Standing Order drafted shall provide for • • • Date on which the standing orders shall come in to force and shall remain in force Definitions Classification of workmen as Permanent.
drawing or documents of the process of manufacture of the company not to carry any lethal weapon.contd • • • • • • • • Obligations – not to carryon any other business for gain or to take admission in educational institution without permission to observe strict secrecy of company matters not to take photographs. explosive or article dangerous to life or property to follow safety rules in force to inform any change in the address etc 314 .
contd • • • • • • • • • Medical examination and aid in case of accident Identification of workmen and issue of Identity cards Working time for different categories of workmen Record of age. qualification and experience Entry. exit and liability for security checking Shift working and weekly off Attendance and late coming Methods of applying for different kinds of leave and extension of leave Action for unauthorised absence 315 .
closing or lay off of establishment and strike Resignation – notice or payment in lieu of notice to be given Termination of employment and notice or payment in lieu of notice required to be served or made 316 contd .• • • • • • • • • National and festival holidays Transfer Apprehension of danger to the safety and security of factory and its personnels Date of payment of wages/ salary Overtime wages Increment and promotion Stoppage.
contd • Deduction from wages for fine imposed or absence from duty or loss caused to the property and recovery of employees contribution to schemes like EPF. ESI and Labour Welfare fund Age of superannuation Grievance procedure Disciplinary action for misconduct Punishment for misconduct and procedure for imposition of punishment 317 • • • • .
contd • • • • Service of notice Issue of service certificate Amendment of Standing order Exhibition of Notices – as whether if put in the Notice Board or not 318 .
Qs’ If any… 319 .
shop or establishment • Woman entitled to maternity benefit not withstanding the application of the Employees State Insurance Act.THE MATERNITY BENEFIT ACT. 1948 320 . 1961 • The Act extends to the whole of India • Applies to every factory.
Employer to ensure…… • No woman works during the six weeks immediately following the day of her delivery or her miscarriage • No woman does any arduous work during the period of ten weeks from the expected date of delivery • Not to discharge or dismiss a woman during her pregnancy 321 .
• Leave days & lay offs taken as worked. 322 .Eligibility • Work of 80 days in the 12 months immediately preceding the date of delivery.
6 weeks leave with pay at the same rate as applicable to maternity benefit.Benefit • 12 weeks leave of which not more than 6 weeks shall precede the date of her expected delivery • The benefit to be paid @ average rate of wages for the three months preceding her maternity leave • In case of miscarriage. 323 .
Qs’ If any… 324 .
The Industrial Disputes Act. 1947 • • • • • • • • • Important Definitions Authorities under the Industrial Disputes Act Award & Settlement Strikes Lock-outs Lay Offs Retrenchments Closure Case Law Studies 325 .
service. employment.2(j)]: means any business. ii. In relation to an industry carried on by or under the authority of any department of the Central Government or a State Government – the authority prescribed in this behalf. In relation to an industry carried on by or on behalf of a local authority – the Chief Executive Officer of that authority. 326 .Important Definitions Industry [S. manufacture or calling of employers and includes any calling. or industrial occupation or avocation of workmen. undertaking. handicraft. trade. Employer [S.2(g)]: meansi.
Important Definitions • Industrial Dispute [S. or ii. or iii.2(k)]: means any dispute or difference betweeni. which is connected withi. Employers and Employers. of any person related directly or indirectly to the industry. Employers and Workmen. The conditions of labour. The employment or non-employment. 327 . Workmen and Workmen. The terms of employment. or ii. or iii.
iv. vi. or as a consequence of. discharged or retrenched in connection with. discharge or retrenchment has led 328 . ii. v. that dispute or whose dismissal.Important Definitions Workman [S. includes any such person who has been dismissed. iii. vii.2(s)]: means any person (including an apprentice) employed in any industry to do anyi. and in relation to an Industrial Dispute. whether the terms of employment be expressed or implied. Manual Skilled Unskilled Technical Operational Clerical Supervisory work for hire or reward.
Employed mainly in a managerial or administrative capacity.): to that dispute. Employed in the police service or as an officer or other employee of a prison. 1950. Employed in a supervisory capacity. Workman does not include any such person. or iii. and draws wages exceeding Rs. by the duties attached to the office or by the reason of power vested in him. who is:i. 1957. Subject to the Air Force Act. or iv.Important Definitions Workman (contd. 329 . or ii. or the Navy Act. 1950. or v.1600 per mensem. Exercises functions mainly of managerial nature. the Army Act.
vi. Any postal. on the working of which the safety of the establishment or the workmen employed therein depends. Any industry specified in the first schedule. Any service in. ii. Any system of public conservancy or sanitation. light or water to the public. telegraph or telephone service. Any railway service or any transport service for the carriage of passengers or goods by air. Any section of an industrial establishment. Any industry which supplies power. or in connection with the working of. v. vii. 330 . iv. iii.2(n)]: meansi.Important Definitions Public Utility Service [S. any major port or dock.
These authorities are meant for dealing with the Industrial Disputes. The Authorities are: i. it does not mean each and every authority has power to make a binding decision.Board Of Conciliation (Section 11 & 13) iv.11 &14) v.Court Of Inquiry (Section 6. Works Committee (Section 3) ii. Conciliation Officer (Section 4.National Tribunal (Section 7b.11 & 15) vii.10.Authorities under the Act The Act has set up machinery to deal with the Industrial Disputes.Industrial Tribunal (Section 7A. Even though the name authority is used.11 & 15) 331 .11 & 12) iii.11 &15) vi. Labour Court (Section 7.
Industrial or National Tribunal and includes arbitration award made under section 10A. 332 . Settlement (Section 18-21): means a settlement arrived at in the course of conciliation proceedings and includes a written agreement between the employer and workman arrived at.Award & Settlement Award: means an interim or final determination of any Industrial Dispute to any question relating thereto. otherwise than in the course of conciliation proceedings where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an officer authorized in this behalf by the Appropriate Government and the Conciliation Officer. by any Labour Court.
333 . of any number of persons who are or have been so employed to continue to work or accept employment. Acting in combination. A refusal under a common understanding. or b. Collectively bargaining is a process of reaching agreement and strikes are an integral and frequently necessary part of that process.Strikes Strike: means cessation of work by a body of persons in any Industry:a. in the process of collective bargaining. The economic pressure of the strike is the catalyst which makes the agreement possible. Strike tests the economic bargaining power of each side and forces each of them to face the need it has for others contribution. or c. A concerted refusal. Strike is a weapon in the hands of the workmen.
Before the expiry of the date of strike specified in any such notice. Within 14 days of giving such notice. or d. no person employed in it shall g o on strike in breach of contracta. Without giving to the employer notice of a strike. or c. b.Strikes: in Public Utility Services • Section 22 says “In case an industry is a public utility service. provided within 6 weeks before striking. During the pendency of any conciliation proceedings before a conciliation offices and 7 days after the completion of these proceedings” 334 .
The copy of this notice is to be submitted to the conciliation officer. The employer. shall report within 5 days toa. The date on which the workman proposed to go on strike should be specified in the notice.which states the number of notices received on that day. or such authority as may be prescribed by the Appropriate Government. 335 . Appropriate Government b. on receipt of notice of strike from employees. Authority prescribed by the Appropriate Government. A fresh notice is necessary when the date of strike specified in the original notice expires.Strikes: in Public Utility Services Notice of strike should be in prescribed form.
when the conciliation proceedings fail. 336 . the parties can respond to each other. if possible. • During the period of notice. which have started after the notice. • The object of giving the notice is to allow the other party to come to terms. or to approach the authorities to intervene and stop the strike.Strikes: in Public Utility Services • A new notice is necessary. • Illegality attaches only to that period which remains to expire before the commencement of action.
Industrial Tribunal or National Tribunal. b. During the pendency of conciliation proceedings before a Board and 7 days after the completion of these proceedings. 337 . and 2 months after the completion of these proceedings. During the pendency of arbitration proceedings before an arbitrator and 2 months after the completion of these proceedings. c. where notification has been issued under S 10A(3A) d. No workman who is employed in any Industrial Establishment shall go on strike in the following circumstances: a.Strikes: General Prohibition Section 23 states the general prohibition of strike. During any period in which a settlement or award is in operation in respect of any of the matters covered by the settlement or award. During the pendency of proceedings before a Labour Court.
As strike is a weapon in the hands of workmen for enforcing their demand. or The refusal by an employer to continue to employ any number of persons employed by him. he shall report the number of notices given to the Appropriate Government. The temporary closing down of a place of employment. lock-out is a weapon in the hands of the employer to persuade the workers to agree to his point of view and accept his demands in the struggle between capital and labour. c. On event of employer giving notice of lock-out on any day to any person employed by him. within 5 days of giving such a notice. The notice of lock-0ut shall be given in prescribed manner. b. 338 .Lock-outs Lock-out [Section 2(I)] meansa. The suspension of work.
However. the employer shall send intimation of lockout to the authority specified by the Appropriate Government. The notice of lock-out is not necessary when a lockout is already existent in case of a public utility service. same as the provisions of Strikes. The provisions for general prohibition of lock-outs are dictated under Section 23.Prohibition of Lock-outs The conditions of lock-outs in public utility services are dictated under Section 22 and are same as the conditions of Strikes. 339 . on the day of declaration of lockout itself.
but legal. also decide the payment or nonpayment of wages to the workmen. the workmen are entitled to receive wages for the period of the strike. If a strike is not justified. For a legal lock-out. A lock-out in violation of the statutory requirements is illegal and unjustified and workers are entitled to wages for the lock-out period. or if a strike is illegal. the factor of justification of reasons leading to the Act of going on strike. but duly justified. However. 340 . no wages are payable to the workmen.Strikes & Lockouts: Wages & Justification Wages are generally not provided during the period of strikes when it is proven illegal under the Act.
26): Any workman who commences.27): Any person who instigates or incites other to take part in a strike or lock-out which is illegal shall be punishable with imprisonment up to 6 months or with fine up to Rs.25) Penalty for illegal strike (S. continues or acts in furtherance of an illegal strike shall be punishable with imprisonment up to 1 month. Penalty for giving financial aid to illegal strikes and lockouts (S. Penalty for instigation (S. or fine up to Rs.Strikes & Lock-outs: Penalties Prohibition of financial aid to illegal strikes or lock-outs (S.1000 or both.28): Punishable with imprisonment up to 6 months or fine up to Rs.1000 or both.50 or both. 341 .
f. Power or raw materials. Inability of an employer on account of shortage of: a. Coal. or Natural calamity. to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched. c. or For any other connected reason to give employment.Lay-Offs Lay-Off means: i. 342 . b. or iii. The failure ii. or The break-down of machinery. or The accumulation of stocks. d. e. Refusal.
343 . it would be considered as having laid-off that whole day. The employer – workman relationship does not come to an end. The workman should not have been retrenched. The workman’s name should be essentially present on the muster rolls of the industry for claiming relief. The duration of a Lay-Off should not be longer than that of the current emergency. but is suspended during the period of emergency. If work is given by the employer on a different shift.Lay-Offs Lay-Off means putting aside workmen temporarily. it would be considered as a half-day lay-off. If employment is not given within two hours.
Where the number of workmen is less than 50 ii.e.Lay-Offs: Rules and Provisions The payment of compensation for a lay-off is dependent upona. Number of workmen in the Industrial Establishment Industrial Establishments are classified into three groups depending on the number of workers employed in that establishment: i. Where the number of workmen is more than 100. casual. i.e. Status of a workman. Type of service. 344 . or permanent b. continuous or seasonal c. i... badli. Where the number of workmen is 50 – 100 iii.
Nil compensation for IEs with less than 50 workmen. ii. iii. 345 . Compensation at the rate of 50% of the total basic pay and dearness allowance to a time limit of 45 days for IEs with 50 – 100 workmen. Workmen are not entitled to any compensation if alternate employment is provided by the employer in a radius of 5 miles.Lay-Offs: Compensation Compensation is provided to the workmen in an Industrial Establishment on the basis of the category they fall in from the above mentioned three groups: i. or if the lay-off is a result of a strike. Compensation at the rate of 50% of the total basic pay and dearness allowance to a time limit of 45 days for IEs with more than 100 workmen.
by a notification by the official Gazette.Lay Offs: Penalties The employer of the Industrial Establishment is required to prepare a muster register that shows the name and other requisite details of all workmen in the prescribed format. or fine up to Rs. 346 . Section 25M states that an employer of an Industrial Establishment employing 100 or more workmen on average per day in the preceding 12 months is required to obtain previous permission of specified authority appointed for the purpose by the Appropriate Government.1000 or both. Section 25Q says any employer who contravenes the provision of Section 25M shall be punishable with imprisonment up to one month.
347 .Retrenchment Retrenchment [S.2(oo)]: means the termination by the employer of the service of a workman for any reason whatsoever. incapacity to work. etc. Retirement of the workman on reaching the age of superannuation. Voluntary retirement of workman. or c. but does not includea. The word ‘ill health’ means cataract. if his contract contains a stipulation in this behalf. leprosy. physical unfitness. or b. Termination of the service of a workman as a result of nonrenewal of the contract of employment. or d. infirmity due to old age. otherwise than as a punishment inflicted by way of disciplinary action. Termination of employment of a workman on the ground of continued ill health.
Where seasonal worker ceases to do work due to closure of season.Retrenchment Retrenchment means the discharge of surplus labour. that is to say. termination on this ground is illegal. 348 . Retrenchment connotes in its ordinary acceptation that the business itself is being continued but that a portion of the staff of labour force is discharged a surplusage. Where a worker suffers an accident during the course of employment making him unfit for the job. it is not retrenchment. it means termination of service for any reason whatsoever. It is not necessary that removal must be only when the establishment is in loss. The Supreme Court has interpreted the term retrenchment in stricter sense of it.
the workman is paid wages for the period of the notice. or In case one month’s notice is not given. b. Section 25F: No workman employed in any industry who is in continuous service for not less than one year under an employer shall be retrenched untila. in lieu of the notice period. The workman is given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired. Where number of workmen employed is more than 100.Retrenchment: Provisions & Rules Provisions are divided into two main categories which are as follows: i. ii. 349 . Where number of workmen employed is less than 100.
The workman is paid at the time of retrenchment. which states that the workman who is employed last will be retrenched first. only then he can do so. and d.Retrenchment: Provisions & Rules c. but the reasons have to be recorded. If an employer has sufficient reasons to depart from this rule. compensation which shall be equal to 15 days average pay for every completed year of continuous service or any part thereof in excess of six months. Notice in the prescribed manner is served on the Appropriate Government. 350 . • • Section 25G: The normal rule is to retrench first of all the junior most workman. The LIFO (Last In First Out) Principle is mentioned in the Section 25G.
In case the workman denies to accept compensation for the same. This provides for preferential reemployment of the retrenched workmen. the employer should have sufficient proof that retrenchment compensation was offered to the workman. the retrenched workman has a right of preference over the others. and clearly denied by him. If the employer wants to take the workmen in future.Retrenchment: Provisions & Rules • • • • • Section 25H gives a statutory right of reemployment to the retrenched workmen. 351 . The employer should take precaution that he pays the retrenchment compensation at the time of retrenchment.
b. 352 . This establishment should not be of a seasonal character or in which work is performed only intermittently. Section 25N specifies that no workman who is in continuous service for not less that one year under an employer shall be retrenched untila. wages for the period of notice. Notice in the prescribed manner has been given to the Appropriate Government and permission is granted.Retrenchment: Provisions & Rules Section 25K points out that the provisions of this chapter are applicable to Industrial Establishments employing 100 or more workmen on average per working day for the preceding 12 months. The workman has been given three months notice in writing indicating the reasons for retrenchment and the notice period has expired or the workman has been paid in lieu of such notice.
• Section 25Q specifies that any employer who contravenes the provisions of Section 25N shall be punishable with imprisonment up to one month or fine up to Rs. 353 . Penalties c. d. e. In case retrenchment is effected without making an application or where the permission for retrenchment is refused retrenchment shall be deemed to be illegal from the date on which it is effected and the workman shall be entitled to all the benefits that are available to him under the law. Inquiry is made by the Appropriate Government or specified authority and granting or refusing permission for the reasons to be recorded in writing. Workman has been paid compensation at the time of retrenchment which shall be equal to 15 days average pay for every completed year of continuous service or any part thereof in excess of six months.1000 or both.Retrenchment: Provisions.
of workmen 100 or more. • The closure of an undertaking is subject to the restrictions imposed by the statutory provisions. The provisions about closure are to be understood with reference toa. 354 . Type of service:. No.. of workmen less than 50 No. of workmen 50 – 100 No.i. iii. continuous service or not (same as layoff) b.e.Closure: Definition & Provisions Closure [Section 2(cc)]: means permanent closing down of a place of employment or part thereof. ii. Number of workmen employed.i.
Closure: Rules & Provisions Where number of workmen employed is less than 50 [Section 25 FFA & Section 25 FFF]. In case the construction work takes more that 2 years for completion after it is set up. or other construction work and it is closed down on account of completion of the work within 2 years from the date on which the undertaking is set up. 355 . bridges. if an undertaking is closed down for any reason whatsoever. the compensation payable to the workman shall not exceed his average pay for three months. roads. every workman who has been in continuous service for not less that one year in that undertaking immediately before such closure shall be entitled to notice and compensation as if the workman has been retrenched. If an undertaking is set up for the construction off buildings. dams. canals. If the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer. then no workman employed by the undertaking shall be entitled to any compensation. then the workman will be entitled to both notice and compensation as per the rules of retrenchment.
no notice is required. The reasons for the same have to be clearly stated. or An undertaking is set up for the construction of buildings. iii. canals. dams or for other such projects. ii. 356 .Closure: Rules & Provisions Where number of workmen employed is more than 50. The Appropriate Government is satisfied than. death of employer or similar reason. but less than 100 [Section 25 FFA]:a. No notice is required when:i. b. bridges. roads. The number of workmen employed is less than 50. The employer who intends to close down his undertaking shall have to serve at least sixty days notice in the prescribed manner on the Appropriate Government before the date on which the intended closure is to become effective. owing to exceptional circumstances like accident in the undertaking.
No such application to the Appropriate Government is required when the construction is the case of canals. etc. an employer who intends to close down his undertaking shall apply to the Appropriate Government for prior permission. buildings. • • • • Where the number of workmen is 100 or more [Section 25-O]. at the rate of 15 days wages for every completed year of continuous service. bridges. The compensation payable is the same as if applicable to an undertaking employing less than 50 workmen.Closure: Rules & Provisions c. d. 357 . The notice does not mean that any previous sanction of the Appropriate Government is required for the closure of an undertaking. Copy of this application should also be served on the representatives of the workmen in the prescribed manner. The notice to be given is only information to the Appropriate Government. Workmen shall be entitled to compensation in case of a legal closure. 90 days before the intended date of closure.
• Any employer who contravenes an order refusing to grant permission to close down an undertaking under Section 25-O(2) shall be punishable with imprisonment up to one year. or fine up to Rs.An employer who closes down any undertaking without complying with the provisions of Section 25FFA shall be punishable with imprisonment up to six months or fine up to Rs.5000 or both. • Where the contravention is continuing even then. 5000 or both. with a further fine up to Rs.Closure: Penalties • Penalty for closure [Section 25R]:.Any employer who closes down an undertaking without complying with the provisions of Section 25-) shall be punishable with imprisonment up to six months or fine up to Rs.2000 for every day during which the contravention after conviction continues can be imposed. 358 .5000 or both. • Penalty for closure without notice [Section 30A]:.
Case Law Studies 1) Syndicate Bank V/s Umesh Nayak HELD:.The Supreme Court has observed that strike or lock-out is to be resorted to. only in unavoidable circumstances and to compel the other party to see the justness of the demands and is not intended to cause nuisance or physical danger to their employers or others.Resorting to strikes or lock-outs without negotiations or conciliations is unjustified. 359 . 1) Hindustan Cables V/s Labour Court HELD:.
.Case Law Studies 3) Central India Spinning. Weaving & Manufacturing Co. 360 .The Bombay High Court said the key words “the failure. refusal. Sugar Mills V/s Ramakrishnan HELD:. or inability of an employer” in the definition of lay-off make it clear that the unemployment has to be on account of a cause which is independent of any action or inaction on part of the workmen themselves.Where seasonal worker ceases to do work due to closure of the season it is not retrenchment. 4) Morinda Co-op. V/s State Industrial Court HELD:. Ltd.
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