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UNIT III

INDUSTRIAL LAW

An overview of Factories Act, Payment of Wages Act, Payment of Bonus Act, Industrial Disputes Act. THE FACTORIES ACT, 1948 The Factories Act, 1948 came into force on the 1st day of april 1949, its object is to regulate the conditions of work in manufacturing establishment which come within the definition of the term factory as used in the act. What is a Factory? A factory is a premises where on 10 or more persons are engaged if power is used or 20 or more persons are engaged if power is not used, in a manufacturing process. Provisions relating to Health, safety and welfare Health (sec.11 to 20) 1. Cleanliness (sec.11) 2. Disposal of wastes and effluents (sec.12) 3. Ventilation and temperature (sec.13) 4. Dust and fume (sec.14) 5. Artificial Humidification (sec.15) 6. Overcrowding (sec.16) 7. Lighting (sec.17) 8. Drinking water (sec.18) 9. Latrines and urinals (sec.19) 10. Spittoons (sec.20) Safety (sec.21 to 41) 1. Fencing of machinery (sec.21) 2. Work on near machinery in motion (sec.22) 3. Employment of young persons on dangerous machines (sec.23) 4. Striking gear and devices for cutting off power (sec.24) 5. Self acting machines (sec.25) 6. Casing of new machinery (sec.26) 7. Prohibition of employment of women and children near cotton openers (sec.27) 8. Hoists and lifts (sec.28) 9. Lifting machines, chains, ropes and lifting tackles (sec.29) 10. Revolving machinery (sec.30) 11. Pressure Plant (sec.31) 12. Floors, stairs and means of access 9sec.32)

13. Pits, sumps, openings in floors, etc (sec.33) 14. Excessive weights (sec.34) 15. Protection of eyes (sec.35) 16. Precautions against dangerous fumes (sec.36) 17. Precautions against explosive or inflammable dust, gas etc. (sec.37) 18. Precautions incase of fire (sec.38) 19. Safety of building and machinery (sec.40) 20. Maintenance of building (sec.40A) 21. Safety officers (sec.40.B) Welfare (sec.42 to 50) 1. Washing facilities (sec.42) 2. Facilities for storing and drying clothing (sec.43) 3. Facilities for sitting (sec.44) 4. First aid appliances (sec.45) 5. Canteens (sec.46) 6. Shelters, rest rooms and lunch rooms (sec.47) 7. Crches (sec.48) 8. Welfare officers (sec.49) Working Hours of Adults The rules as to the regulation of hours of work of adult workers in a factory and holidays are as follows. Working hours 1. Working hours (sec.51) Not allowed to work more than 48 hours in any week. 2. Daily hours (sec.54) Not more than 9 hours in any day. 3. Intervals for rest (sec.55) No worker shall work for more than 5 hours before he has an interval for rest of at least half an hour. Spread over Including his intervals for rest they shall not spread over more than Ten and Half hours in any day. Rules regarding Employment of adults Night shifts Works on a shift which extends beyond midnight his weekly and compensatory holiday means a period of holiday for 24 consecutive hours beginning when his shift ends. Double Employment No adult worker shall be required or allowed to work in any factory on any day on which he has already been working in any other factory.

Notice of periods of work There must be displayed in every factory notice showing periods of work of adults, classifications of works in groups according to nature of their work, shifts and relays etc. Holidays Weekly holidays Every adult worker in a factory shall be allowed a holiday during a week. No adult worker shall be required or allowed to work in a factory on the first day of the week which is Sunday. But mana ger can substitute for Sunday any of the 3days preceding or following it. Compensatory holidays Where a worker is deprived of any of the weekly holidays under sec.52 he shall be allowed compensatory holidays of equal number to the holidays so left. Employment of young persons 1. Prohibition of employment of young children (sec.67) not completed his 14th year 2. Non adult workers to carry tokens (sec.68) A child completed his 14 year may allowed to work in a factory if. A certificate of fitness Such child or adolescent carries a token giving a reference to such certificate. 3. Working hours and notice of periods of work for children. No child shall be employed or permitted to work in any factory a) For more than four and half hours a day b) During the night shift (10.00 pm 6.00 am) 4. Period of work of children limited to 2 shifts. 5. Child workers entitled to weekly holidays. 6. Prohibition if the child worker has already been working in another factory. 7. Female child to work only between 8.00 am to 7.00 pm 8. Display of notice of work of child workers 9. Register of child workers. Employment of women 1. Prohibition of work on or near machinery in motion 2. Prohibition of employment near cotton openers 3. Crches 4. Working hours 5. Restriction on employment of women on dangerous operations.

THE PAYMENT OF WAGES ACT, 1936 Before the payment of wages Act, 1936 was passed, evils of withholding wages, delays in paying wages and making unreasonable deductions out of wages were quite prevalent. The payment of wages act 1936 was passed to regulate the payment of wages to certain classes of persons employed in Industry. Rules for payment of wages (sec.3 to 6) 1. Responsibility for payment of wages (sec.3) Every employer shall be responsible for the payment to persons employed by him of all wages required to be paid under the payment of wages act (sec.3) 2. Fixation of wage periods (sec.4) Every person responsible for the payment of wage under sec.3 shall fix periods, known as wage periods. A wage period shall not exceed one month (sec.4(2)) 3. Time of payment of wages (sec.5) The rules relating to time of payment of wages are as follows. a) Wages to be paid before 7th or 10th day. Less than 1000 employees shall be paid before expiry of 7th day. More than 1000 employees shall be paid before expiry of 10th day. b) Wages in case of termination of employment. In case of termination the wages earned shall be paid before the expiry of the 2nd working day from the day of termination. c) Wages to be paid on a working day All payment of wages shall be made on a working day. 4. Medium of payment of wages (sec.6) All wages shall be paid in current coin or currency notes or both payment of wages in kind is not permitted. In order to avoid difficulties and save the worker from carrying cash on the pay day and misspending a provision has been added to sec.6 by the payment of wages (amendment) act 1976. The employer may after obtaining the written authorization of the employed person pay him the wages either by cheque or by crediting the wages in his bank account. Deductions from wages (sec.7 to 13) Deductions which may be made from wages (sec.7) Sec.7 provides that the wages of an employed person shall be paid to him without deductions of any kind except those authorized by or under the payment of wages act, 1936. Kinds of Deductions 1. Deductions for fines (sec.7(2) (a) and 8) 2. Deductions for absence from duty (sec.7(2) (b) and 9) 3. Deductions for damage or loss (sec.7 (2)(c), (m), (n), and (o) and 10) 4. Deductions for service (sec.7(2) (d), (e) and 11)

5. 6. 7. 8.

Deductions for recovery of advances (sec.7(2),(f) and 12) Deductions for recovery of loans (sec.7(2), (fff) and 12-A) Deductions for payment to co-operative societies and insurance schemes (sec.7 (2) (j) and (k) and 13) Other deductions The following deductions shall also be permitted under the Act. Deduction of income tax payable Deduction required to be made by order of a court or other competent authority Deductions for payment of insurance premia Deductions made with the written authorization of the employed person, for contribution to the prime ministers national relief fund.

Limit on deductions (sec.7(3)) Shall not exceed 75% of such wages in cases where such deductions are wholly or partly made for payments to co-operative societies. In other cases shall not exceed 50% of such wages. THE INDUSTRIAL DISPUTES ACT, 1947 What is an Industrial Dispute? Industrial dispute means any dispute or difference between 1) Employers and employers 2) Employers and workmen or 3) Workmen and workmen. Which is connected with a) The employment or non employment b) The terms of employment c) The conditions of labour of any person. Definitions 1) Lay off (sec.2 (kkk)) Lay off means the failure, refusal or inability of an employer to give employment to a workman due to Shortage of coal, power or raw material Accumulation of stocks The breakdown of machinery Natural calamity or for any other connected reasons. 2) Lock out (sec.2(1)) It means the temporary closing of a place of employment or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him.

3) Retrenchment (sec.2(oo)) It means to end conclude, or cease. The term as used in the industries dispute act means the termination by the employer of the service of a workman for any reason whatsoever, otherwisethan as punishment inflicted by way of disciplinary action. 4) Strike (sec.2(q)) It means 1) A cessation of work by a body of persons employed in any industry acting in combination. 2) A concerted refusal of any member of persons who are have been so employed to continue to work or to accept employment. 3) Refusal under a common understanding of any number of such person to continue to work or to accept employment. 5)Unfair Labour Practice (sec.2(ra)) It means any of the practices specified in the fifth schedule which declares certain labour practices as unfair on the part of employment and their trade unions and on the part of workmen and their trade unions. Procedure for settlement of Industrial disputes and Authorities under the Act. Conciliation Machinery The authorities that make use of conciliation as a method of settlement of industrial disputes are. 1. Works committees 2. Conciliation officers 3. Boards of conciliation 4. Courts of Inquiry Adjudication Machinery The foresaid authorities endeavour to compose any industrial difference of opinion or settle the industrial dispute before it may be adjudicated upon by 1. Labour courts 2. Industrial Tribunals 3. National Tribunals. THE PAYMENT OF BONUS ACT, 1965 Bonus defines as something given in addition to what is ordinarily received by or strictly due to a recipient. Calculation of amount payable as Bonus The Act has laid down a detailed procedure for calculating the amount of bonus payable to employees. 1. Computation of Gross profits (sec.4) Calculated as per First schedule (for Banking company) Calculated as per second schedule (for Non banking company) 2. Deductions from Gross profits (sec.6) Amount by way of depreciation

Any amount by way of development rebate, investment allowance, development allowance. Direct Tax which an employer is liable to pay for the accounting year. Sums specified in respect of the employer in the third schedule. 3. Computation of available surplus 4. Allocable surplus Out of available surplus 67% in case of company and 60% in case of Banking company shall be Allocable surplus. The amount available to payment of bonus to employees. Minimum Bonus 8.33% of salary or wage earned by the employee during the accounting year Maximum Bonus Allocable surplus exceeds the amount of Minimum Bonus Maximum bonus to be paid that is 20% of salary or wage of the accounting year. Set on and set off of Allocable surplus 1. Any accounting year the allocable surplus exceeds the amount of maximum bonus payable to the employees the excess shall carry forward for being seton in the succeeding accounting year. 2. There is no available surplus or the allocable surplus in respect of that year falls short of the amount of minimum bonus payable shall be carried forward for being set off. Eligibility for bonus Every employer shall be entitled to be paid by his employer in an accounting year bonus. If he worked in the establishment for not less than thirty working days in the accounting year. Disqualification for bonus a) Fraud b) Violent behavior while on the premises of the establishment. c) Theft, misappropriation of any property of the establishment.