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ESI Act 1948

(The employees state insurance act)

Intrdn - it is one type of health insurance for industrial workers

Obj- to provide cash benefits to workers in case of sickness, maternity, employment injury, medical facilities in kind

Applicability- 20 or more workers working on wages

Eligibility- below 16001(gross) salary


Contribution- employer-: 4.75 % Employee -: 1.75%

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1/8th share of expe (Employee whose contrbn. In this case only employer has to contribute) In case of delay in payment of contribution of employer 6% intrest on total amt. of contrbn. Is taken as fine by the govt.

~ ~efore 21 Sl of every month contrbn.should be paid to the state bank of India by the -employ~~'

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1 care. ayment of his

1 st April to 30 sept

1 st july to 31 st dec.

Contrbn. Period

15t oct to 31 st march

Administration of act- done by ESI corporation. It is central level

Members - representatives of state and central govt. employer employees etc. Union labor minister is chairman of this corporation


1. sickness - for sick employees eligibility 78 days contrbn. Maximum 91 days benefit during whole year.

Cash benefit-~~o wages of the payment. . \cAd',o~' '»)

a. extended sickness benefit C. \ V'('!>W 'i / '\ v

128 days/ 2yrs- 70% wages from the payment per month will be given. But he should be working for last 2yrs and 78 days contrbn. Required

b. enhanced sickness benefit

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Functions- policy making, decision making and implementation.

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given for family planning operation male -7 days. F emale-14 days full wages are given

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2. medical benefit

Eligibility - no condition i.e. starts from 151 day of joining Period - till the complition of treatment

maximum-2 yrs. For severe diseases

3. maternity benefit-

cash benefit to women employees min. 70 days contrbn. Required 100% wages are given

6 weeks before and 6 weeks after pregnancy

If the woman dies for the child then benefit will be continued till the complition of the 18 yrs of child.

4. Rhabilitation benefit - no condition

introdn. Rehabtn means fixing of bones and limbs artificially in person full wages are given till the complition of the treatment

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5. Dsablement benefit - given for employment injury or occupational disease


Temp disablement No conditition Till the incapacity 70% of wages
benefit lasts
Perman disablement No conditition For life Depends on loss of
benefit earning capacity dependent benefit ( given for dependts when the death occurs due to employment ~

injury or occupational disease)

no conditition i.e. no contribution is required starts from 1 st day

I Widow Son Daughter
I Life time Up to 18 yrs Up to marriage 7. funeral benefit - no conditition required Given for expenses of funeral

Not more than 2500


ESI forms I - Joining

5- Return of contribution (two times in a year i.e. April to sept, oct to march) 16 - Accident

53 - Cash challans 54 - Check challans

Challans 4 copies are there monthly (one to bank one to ESI office 2 for company i.e. one company keeps and other is submitted during submission of yearly returns)


It is a social security act.

ObjUo provide security and monetary assistance to workers and familie;When they are in stress unable to meet family need and to protect them from old age disa61ement or in case of death. And to have a habit of saving among workers.

Applicability- min twenty or more workers

Once started cant be stop if no of workers falls below 20 Starts from 15t day of joining

Contrbn- employer - 12% 8.33- pension 3.67 -P.F.

Employee- 12% (p.F.)

Total 15.67 % goes in P.F. account of workers

Upper limit - 6500 (it means according to 12% up to 6500 amount will be considered)


VI. at the time of retirement

\/-2. retirement on account of permot disability v3. migration from India

y/.:l. termn of service due to retrenchment

90 % amt can be withdrawn at credit after attaining at 54 yrs of age or before 1 yr from retirement

Provides non- refundable loans

House, edn of sons, daughter marriage, illness etc.

Transfer - P.F. can be transferred before 10 yrs of service i.e. in case of joining other company

Claims - within 30 days P.F. claims can be settled otherwise fine is there P.F. forms


2- Nomination form

5- Joining form

10- Leaving form lOC- P.F. withdrawal 10D- pension

3A - yearly retm

~~ (4 copy same as ESI process)

In P. F. challans above accounts are there

1- contrbn ( 12+3.67 = 15.67 i.e. P.F. account) 2- 1.10 (administration charges)

10- 8.33 pension

21- 0.5 EDLI

22- 0.0 1 (administration charges ofEDLI) EDLI scheme

Employees deposit link insurance scheme

pplies to all industries where P.F. IS applicable "

Employees does not contribute in this scheme

Employers pay the contrbn at the rate of 0.5% pays of the employees where are P. F. subscribers

Employers also pay the administration charges @ 0.01 % of the pay drawn by employees

i.e. Rs. 2 per month ~ ~ ~ . .. _- -

Central govt. pays admnstm charges @ o. 005%pay drawn by employees i.e. Rs. 1 per m~ "-------

Employers also pay the inspection charges @ of 0.02 %

Benefit - under this schemeem~family will get benefit in case of death while in service of worker

i.e. additional amt equal to avg. balance in P. F. account during recent 12 months

for e.g. - if worker is having 35000 balance in current 12 months in his P. F. account then his family will get 35000 + 25% amt in excess of Rs. 35000 ( in case of death only)


Intrdn -

Compulsory to all persons who have become members of P. F. (date of intrdn of scheme) P.F. members who were not members of~ _ _§9heme have an option to join pension scheme

Vrs member also have an option to join this pension scheme

Eligibility- min 10 yrs service

Benefit - monthly pension after retirement, total perrnn disablement, death during service, children pension, orphan pension, death after disablement, retirement on account of disablement

Formula for calculation of monthly pension

Members pension =pensionable salary x (pensionable service + 2)


For e.g. - if member has completed 33 yrs service and pensionable salary is 5000 then

Members pension =pensionable salary x (pensionable service + 2)

5000 (33+2)


= 2,500 P.M.

(Last one yrs pensionable salary will be considered for calculation)

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General information

Canteen - above 250 workers First aid box - 150 workers Creche- 30 women (breast feeding) Welfare officer- 500 workers

, /Safety officer - 1000 workers

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Working hrs of adult (workers) - weekly 48 hrs Daily - not more than 9 hrs

Interval for rest - after 5hrs of work halfhr for rest Spread over - not more than 10.5 hrs in a day

Working hrs of women - 6 am to 7pm no working at night OT -after 9 hrs of work OT is given.limit 4 hrs .


Annual leave / priviledeg leave / earned leave

--------------- ~ ~

Through factory act it comes

240 days - 12 leaves i.e. 20 days- 1 leave

Max 120 days PL can be stored above that they are cancelled Those have completed 50 yrs of age can store PL up to 240 days

For taking PL before 15 days intimation should be given to personal dept through application

In a yr for 3 times PL is given

Mim 4 days leave is compulsory for PL

PL can not be taken with SL and CL jointly

Causal leave

For 3 days CL is given

Can not be balanced for next yr For continuous 3 days it is given CL can't be taken with PL and SL CL comes through settlement

Sick leave

10 days S L per yr is there

Can be balanced for 60 days but can't be selled to others For more than 3 days medical certificate is required Can't be taken at a time with PL and CL

Annual leave with wages i.e. PL , EL Adult -20 days 1 leave

Child - 15 days 1 leave

Leaves can be balanced

i.e. 30 days for adult and 40 days for child

PL can't be taken with attaching holiday in such case holiday will be calculated in PL For e.g. Tuesday is the holiday on Monday Wednesday leave is not granted it can be taken from thr, frd, sat, sun.



Obj - to ensure health safety and welfare measures to the workers and also to provide proper working hrs, leave and other benefits.


Factory -

a. any premises in which 10 or more workers are employed and manufacturing process is carried on with the aid of power.

b. any premises in which 20 or more workers are employed and manufacturing process is carried on without the aid of power.

Manufacturing process - the term manufacturing process refers to any process for making altering, repairing, ornamenting, finishing, packing, oiling, washing. Cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use sale transport, delivery or disposal.

Worker - means a person employed (directly or by or through any agency including contractor) with or without the knowledge of principle employer whether for working in the industry.

Occupier - a person who has ultimate control over the affairs of the factory.

Adult - a person who has completed his 18 yrs of age is called as adult.

Child - a person who is below 15 yrs is called as child / minor

Adolescent - a person who has completed 15 yrs but not completed 18 yrs of age is called as adolescent i.e. 15 to 18

Day - period of 24 hrs starting at mid night is called as day

Week - a period of 6 days usually starting at Saturday midnight is called as week

Calendar yr - a period of 12 months beginning on the month of 1 st jan of any yr

Power - the electrical or any form of energy which can be mechanically transmitted but not generated from human / animals prime mover - any engine / motor / appliances which generates or provide power is called as prime mover

Machinery - which supplies or transfer energy / power

Prescribed - it means rules set by govt

Relay - a set of 3 shifts is called as relay

Competent authority - a person recognized by chief inspector of factory to conduct test / exam who have prescribed qualification

Factory inspector - he is appointed under the act has power to enter any place which is 4 1ise'd~to make an examination of the premises, plant and machinery, to require the production of any register and any other document relating to the factory and to take statements of any person for the purpose of carrying out the purposes of the act

The inspectors are required

a. to carry out duties as laid down under section

b. to ensure that statutory provision and rules framed are carried out properly and

c. to launch prosecutions against factory owners under the provision of chapter

Certifying surgeons - state govt appoints qualified medical practitioner to be certifying surgeons for the purpose of this act

The certifying surgeon shall carry out such duties as may be prescribed in connection with

a. The examination and certification of young persons under this act.

b. The examination of persons engaged in factories in such dangerous occupations or processes as may be prescribed

c. Exercising the medical supervision for any factory in respect of

1. illness that has occurred due to the nature of manufacturing process

11. injury that is likely to be caused to the health of workers by reason of the adoption of an new manufacturing process

111. Injury that is likely to occur to the health of young persons.

Chapter 3 - health Chapter 4 - safety Chapter 5- welfare

Chapter 6- hrs of work for adult Chapter 7- employment of young person

Chapter 3 - health (11 to 20)

Se~rion 11 - cJ~fullinrss

Sectiop 12 -disposa] Rf waste and effluents ~eotipn l3-v~ijtilati91l and tem,P

Section 14-dust and fumes ."

Section IS-artificial humidification Section 16-overcrowding

Section 17 -lightning

Section 18 -drinking water

Section 19-1atrines, urinals

Section 20-spittons

Chapter 4 - safety (21 to 40)

Section 21 -fencing of machinery Section 22 -work on or near machinery

Section 23 -emplynt of young person on dangerous machine Section 24 -striking gear and devices for cutting of power Section 25 -self acting machine

Section 26- casting of new machinery

Section 27 -prohibition of emplynt of women children near cotton openers Section 28 -hoists and lifts

Section 29 -Iifting machine chain ropes Section 30 -revolving machinery Section 31 -pressure plant

Section 32 -floors stairs and means of access Section 33 -pits sumps opening in floor Section 34 - excessive wts

Section 35 -protection of eyes

Section 36 -precaution regarding use of portable electrical light Section 37 -inflammable or explosive gas

Section 38 -precaution in fire

Section 39 - power to require specification of defective parts Section 40 -safety of building and machinery

Section 40A- maintenance of building

Section 40B-safety officers

Chapter 5- welfare (42 to 50)

Section 42 - washing facilities

Section 43 -facilities for storing drying clothing Section 44 -facilities for sitting

Section 45 -first aid appliances

Section 46 -canteen

Section 47 -shelter rest room and lunch room Section 48 -creche

Section 49 -welfare officer

Section 50 -state govt can make rules

Chapter 6- hrs of work for adult (S1to 66)

Section 51 -working hrs of adult Section 52 -weekly holiday

Section 53 -compensatory of holiday Section 54 -daily hrs of working Section 55 -interval for rest

Section 56 -spread over

Section 57 -riight shift

Section 58 - prohibition of overlapping of shifts

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Section 59 =extra wages for OT

Section 60 -prescription of double employment Section 61 -notice period of work for adults Section 62 -register of adult workers

Section 63 -hrs of work to correspond with notice Section 64 -power to make exempting rules Section 65 - power to make exempting orders Section 66 -restriction on employment of women

Chapter 7- employment of young person (67 to 71)

Section 67 - prohibition of employment of young children Section 68 -non adult workers to carry token

Section 69 -certificate of fitness

Section 70 -effect of certificate of fitness granted to adolescence Section 71 -working hrs for children


Defn - process of managing people of an organization with human approach is called as HRM


1. In HRM we have to view people of an orgn as an important assest

2. Utilize the man power not only for the benefit of the orgn but also for the growth, development and self / job satisfaction of the concerned people

3. Thus HRM focuses human resource development on one hand & effective mgmt of people on other hand

4. Thus the major function of HRM is to utilize the human resources as per the need of orgn i.e. to use skills, abilities, qualities, potentialities, talents,

GOLDEN RULE OF HRM • Give love and get love

JI{ .. __....-- Scope of HRM

• Identifying right kind of people

• Socializing them

• Training and developing them

• Use new technology

• Improve orgnsnal efficiency, work culture

• Job satisfaction and cordial industrial relation

Functions of HRM

1. creating and promoting HR philosophy and getting approval from top mgmt

2. determining HR needs of an orgn

3. educating executives and managers

4. assisting and educating top managers regarding HR policies strategies and approaches

5. conducting researches and using data for policy formulation and HR planning

6. to establish orgnsnal culture and climate that would help to build up team work"

mutual respect sense of belonging and commitments

7. procurement, maintenance and development of human resource

8. HRD

9. developing and maintaining effective communication system

10. establishing and maintaining cordial industrial relations

11. employee welfare

12. evaluation and performance appraisal

13. occupational health and safety

14. infliciting punishment for any personal offence

Major function

• Procuring skilled employees

• Developing them

• Motivating them for higher performance

• Ensure their commitment to the orgn

Why there is need for HRM approach

Reasons - industrial unrest, growing trade union influence, strained worker - mgmt relnship

Increase gulf between management and workers Advanced technology, globalization, political influence

HR approach increases orgnsal efficiency, work culture, better productivity, co-ordial industrial relations, mutual understanding, job satisfaction etc.

Difference between the HRM and PM

Viewed as staff function i.e. procure Viewed as line function i.e. career planning
develop and maintain adequate man power counseling, research, feedback
Independent function - record keeping and Policy making, HR planning
rule enforcing What is HR Planning -

it is nothing but predetermination of future course of action chosen from no of alternatives course of action for procurement, development, compensation, integration, maintenance ,motivation, career planning, succession planning and separating the human elements of enterprise

Need for HR planning -

to fulfill orgnsal as well as individual needs i.e. career growth, job satisfaction, family as well as individual security.

Important aspects of HR planning

1. identification of skills, abilities,

2. HRD

3. compensation plans i.e. VRS


1. deciding goal / obj

2. estimating future orgnsal structure and man power requirement

3. auditing human resources

4. planning job requirement and job description

5. developing a human resource plan


It is to identify the training need of individual and give training to him i.e. HRD seek to know what the individual seeks to have and then try to match it with orgnsal needs in this feedback is essential. it is an developmental activity. it uses care development as a focus on assuring an alignment of individual career, planning and orgnsal career mgmt .

It a process to achieve an optimal match of individual and orgnsal needs

Elements of HRD

1. development of leadership and orgnsal commitments

2. career planning and development

3. performance appraisal

4. reward system

5. potential appraisal

6. human resource information system

7. mgmt development

8. supervision development

9. feedback

10. employee welfare

11. grievance procedure

12. succession planning


defn- it is an organized procedure for increasing knowledge and skills of people for definite purpose

obj - to achieve change in the behavior

need of training - to increase productivity, to improve quality, to gain individual development, to improve health and safety,

importance - peaceful industrial relations, better results, to increase motivation in workers, feeling of oneness and sense of belonging ness towards the company, to adopt and adjust with new and changed techniques, develop the individual and rise / promotion with in orgn

Types of training

1. on job-

• job coaching - it is nothing but giving instruction on the job by experience person

• job rotation - moving from one machine to other

• special assignments -solving problems / tasks 2. off the job -

• vestibule training - i.e. ITI institute

• simulation -artificial condition are created and future dangers are find out and on that how to face these dangers training is given

• demonstration and examples

• Class room methods i.e. lectures, conferences, guest lectures, role playing, casestudyetc.

3. Apprentenship training

4. Other training methods - film shows, audio-video traits, OHP


Grievance means complaints and these complaints are solved at above stages in the company so that there will be justice, proper functioning, no labour unrest, good relations, good work culture in orgn



Works crmmittee

Manatement Court

Domestic inquiry

c011laint Warning

Collect lVidences


Show cause notice


Charge sheet

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Report 0 mquiry

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Filla s lOW cause notice



Function of time office - attendance from top to bottom, in case of late attendance issue action, maintenance of various files

i.e. time register, memo register, leave register, gate pass, punch cards, leave administration, wage and salary administration

Role of HR / PM in industry

Mediator Counselor Teacher


Promoter Resource utilizer

encourager motivator supporter evaluator facilitator



researcher awareness builder enabler

Professional tax - compulsory to every worker. Should be paid before is" of every month to P.F. office

J>T slabs

2000 to 2S00 30 Rs
2S00 to 3S00 60 Rs
3500 to SOOO 120 Rs
5000 to 10,000 175 Rs
A v . 1 0 'J()n ~ I Above .O,O~O

I kVV R...,

(in feb R~ ~OO)

Income tax

Above 1,00,000- 10 %

For ladies - above 1,25,000- 10%

Net salary -it means total income with deduction

Gross salary - it means total income without deduction

Authorized deduction - PF, ESI


Object- To share the profit to workers earned by owner so that there will be peace & harmony Salary:- It means basic allowance plus DA not any other allowance.

Eligibility for Bonus:- Worker should work for continuous 30 Days in an accounting year. Non Eligibiliy for Bonus:-

Employer can not give bonus to employee in above reasons.

1) In case of fraud.

2) Violent behavior in the premises of company.

3) Theft or any loss to property of company.

Amount of Bonus:

Minimum 8.33% of the salary earned by an employee during an accounting year. Maximum 20% is given.

Time limit for Payment of Bonus:-

The Bonus shall be paid within a period of 8 months from the close of an accounting


If there is dispute it shall be paid within one month from the date on which award becomes enforceable.

The Salary Limit for Bonus:- 3,500/Month.

Payment of Gratuity act 1972:-

Object:- The act provides for scheme of compulsory payment of gratuity to employees engaged in factories, mines, railway companies etc.

Eligibility for Gratuity:-

Continuous 5 years of service is required., but in case of death or disablement termination of employment occurs then there is not requirement of 5 years of service. In case of death of employee the gratuity is payable to his nominee or guardian of such nominee.

Amount of Gratuity:- Limit: -3.5 Lacs.

Formula for gratuity:- 15 X Basic + DA 126 X No. of years of service. (In this 15 means no. of days in years)

Basic + DA :- Last current Basic + DA at the time of termination is considered. 26 :- No of Days in a month.

Gratuity can be cancelled by an employer in certain conditions:-

If the service of the employee have been terminated for any act of willful negligence causing any damage or loss or destruction of property belonging to the employer in this gratuity can be cancelled.

Every employer after completing one year of service has to nominate his family who may receive gratuity in case death.

The Payment of wages act 1936:

Object:- To regulate the payment of wages to workers working in industry in a particular form & at regular intervals & to prevent unauthorized deductions from the wages.

Employees whose wages average less than Rs. 1,600 IMonth are covered under this act. Wage Payment:- For less than 1,000 workers- before ih of every month

For above 1,000 workers before 10th every month.

Deductions from wages:-

The standing order Act 1946

Object- a) To bring uniformity in terms & conditions of employment.

b) to minimise industrial conflicts.

c) to foster harmonious relations between employer & employee.

Applicability- 100 or above workmen.

The schedule to the act provides for above matters.

1) shift working

2) Attendance & late coming

3) Manner of intimating to workmen period & hrs of work, holidays, pay days, wage rates.

4) Conditions & procedures in applying for & the authority which may grant leave & holidays.

5) Suspension & dismissal for misconduct

Model standing orders

When this act becomes applicable to an industrial establishment for the first time, till the standing orders as finally certified under this act come in to operation under section 7 in that establishment ,the prescribed model s.o shall deemed to have been adopted in that establishment.

i.e- model s.o is duplicate copy of s.o & it stands untill s.o does not gets approved.

Acts of misconduct

1) going on illegal strikes

2) willful slowing down in performance

3) taking or giving bribes.

4) Taking drinks, smoking in premises

5) Habitual neglect to work

6) Willful damage to work

7) Theft in premises

8) Sleeping on work

9) holding meetings inside premises without permission of mgmt

10) disclosing information to unauthorized person

11) misbehaviour with colleagues, seniors.

12) Refusal to accept a chargesheet.


Through inquiry committee Action, suspension, dismissal

Subsistance allowance- Given during s~pension period pending inquiry 1 st 90 days- 50 % wages

Above- 75% wages

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Authorized deductions or permissible deductions.

Deductions for fines, absence from duty, damage or loss, house accommodation advances, loans labor welfare fund, income tax, PT tax, PF, ESI, insurance.

Deductions for fines:- 3% from the wages are deducted and these 3% are used for the labor welfare.

Authorized the deduction should not be more than 75% of the wage period.


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Labour welfare fund - collected twice in a year for conducting labour welfare activities i.e. jan and june

LTA (leave traveling allowance) - once in a yr it is given to worker and staff

Recruitment process

a. identification of vacancies

b. advertisement

c. sorting of forms

d. sending calls for interview e. arrangement of interviews

i.e. second and final interview

Sources - 1. Internal sources - promotion I demotion I transfer I references

2. External sources - out side the orgn

3. Direct sources - advertisement in news papers

4. Indirect sources - campus interviews

5. Third party - placement cell, training institute, employment exchange office

Performance appraisal

Defn- it is nothing but an evaluation of work done

Obj -ofPA

1. for the promotions

2. for the analysis of work

Here first obj are given to an individual. Specific time is allotted to him. Then the obj are completed in time or not are seen. Only to complete the obj is not required but that obj should be completed in a proper way. In this process questionnaire is used and through this questionnaire marks are given and accordingly to the marks performance

. is judged ad promotion is done.

Process of P A

1. establish performance standards

2. communicate performance standards to workers

3. measure actual performance

4. compare actual performance with established standards

5. discuss appraisal with workers

6. if necessary, initiate corrective action

Years of the act

1. Workman compensation -1923

2. Trade union act -1926

3. Payment of wages 1936

4. Standing order act - 1946

5. LD. act - 1947

6. Bombay industrial relation act -1948

7. Factory act, ESI act, min wages act -1948

8. P.F. act- 1952

9. Apprentices act -1961

10. Bonus act -1965

11. Contract labour act (regulation and abolition) - 1970

12. Gratuity act - 1972

13. Employee pension act -1995

14. MHRPT - maharashtra recognition of trade union and prevention of unfair labour practices act

Function of PM


planning, directing, coordinating, controlling, organizing


Procurement, development, compensative, integration, maintenance


motivation, training and development, labour relations, wage and salary administration,

personnel procedure and practices - i.e. recruitment, selection placement, induction, transfer, promotion, demotion, layoff, retrenchment, retirement and VRS scheme performance appraisal, fringe benefits, allowances, handling of ESI PF gratuity etc. employee records, man power planning,

1. planning - it means to prepare plans, policies, strategies programmes to achieve desire goals

2. organizing -it means to organize the people to give tasks among groups and motivate people for completion of desired obj i.e. max profit with min effort

4 M's-

• man

~ Machine

• Money

• Material

(These are the organized resources)

3. Directing - motivating or commanding. directing the subordinates it is getting persons together and asking them either through command or motivation to work willingly and effectively for the achievement of goals

4. controlling - whether to check the work is going according to plan or not

5. coordinating - it refers to balancing timing and integrating activities in orgn to achieve goal i.e. top to bottom

6. Procurement - it means to obtain proper and right kind of people the goals. it i nothing but searching appropriate talents for the growth of orgn

7. development - it means increasing employees skills through training

8. compensative - it means rewarding or giving remuneration

9. integration - it means process of combining two or more things it means productive and creative results with less absenteeism and with no unproper behavior

10. maintenance - it means to maintain physical condition of employee (health and safety

Dismissal - through disciplinary action dismissal of an individual is done i.e. due to misbehavior, absenteeism,

Discharge - it is given in a good form i.e. retirement. It can be temp or perment

collective bargaining - it done during settlement between trade union and mgmt it is for 3 yrs the settlement is linked with efficiency norms it means company will give certain things if the workers will produce according to management. it is done through mutual understanding

Private LTD. It means only one owner i.e. family having 100 % shares in company

Public LTD. it means company opens shares to out side people i.e. 51 % - company and 49 % - people / govt

pay sheet - all workers history is there i.e. basic, DA , allowances, HRA ,PF and ESI cutting

Ex -gratia- max 20% bonus is given if company gives more than 20% it called as Exgratia

CNC- computerized numerical control

How to get factory license- to fill the form, authority - factory inspector, fees paid every yr for renewal of license form 27 , 28 - annual return of factory-act

Works committee-

More than I 00 workers are required Under ID act it comes

Equal representatives of management and workers are present Tenure is of2 yr

Through election this body is selected Total strength not more than 20 members


1. discussion on condition of work like lighting, ventilation, temperature, sanitation, welfare facilities

2. to develop relation between mgmt and workers

Joint mgmt council- more than 500 workers. Both representatives are present. T.U is required

Workers participation in mgmt - at shop level, at dept level, at board level

Scope - harmonious industrial relation, no unrest and strike, good work culture, good production, high turn over

Forms of participation - works committee, joint magmt council, joint council, unit council, plant council, shop council, workers representive on the board of mgmt, workers participation in share capital, participation through quality circle

Promotion- it means promoting individual to upper posts according to their performance.

Demotion- it means stopping the promotion of an individual due to poor performance ~ it means separating an individual indirectly from the company i.e. VRS, retirement, retrenchment.

Transfer - according to requirement in the company transfer of an individual is done Personnel records these records are the individual records i.e. joining dates, educational documents, promotion, memos etc.

Industrial relations

Defn - relations in industry can be called as industrial relations

~oncept - it is relatipr between mgmt and workers, mgmt and trade union, or trade union and workers. From this relation there will be no unrest in the orgn there will be industrial peace and hormony in the orgn.

Scope - progress of company as well as workers, industrial peace, industrial stability, industrial harmony, cordial industrial relation, motivation to workers sense of belonging, feeling of oneness, sense of proud feeling among workers, positive results, effective working, high production and turn over, high economic growth, industrial development, quality and quantity will improve, increase in the reputation of the company in the market, high industrial growth, job satisfaction among workers

Industrial relation machinery in India

Conciliation, arbitration, adjudication, labour court, industrial tribunal and national tribunal

Code of conduct - two types of code

1. dispute of right - it is related to existing contract or agreement of employment

2. dispute of intrest - it is claims of employees or proposals by mgmt about terms and condition of employment

Code of discipline - in this workers and employers should consider the rights and responsibilities of each other and should willingly and properly discharge thei r obligations with each other. Both employees and management have to settle disputes at an appropriate level.

Labour Welfare

Functions - labor welfare, labour administration, labour relations.

1. Labour Welfare - Advice and assistance in implementing legislation provision relating to

A] Health and safety. B] Working Condition

C] Sanitation and cleanliness 0] Recreation

E] Workers' education F] Housing

G] Formation of welfare committee

2. Labour administration

A] Organizational Discipline

B] Medical and safety administration C] Wage and salary administration

3. Labour relationg _

A] Administration of standing order B] Settlement of grievances

C] T.V. and mgmt. relations


Supervision of

Health safety and welfare programmes, housing, sanitation, recreation Looking after the working of joint committee

Grant of leave with wages

Redressal of workers' grievances

Counseling to workers on

Personal and family problems Adjusting to work environment Understanding rights

Advising the management on matters of

1. formulating welfare policies

2. Apperentship training program

3. Devloping fringe benefits

4. Workers' education

Establishing liaison with workers to

Communicate company policies

Convince Workers to come to a settlement in the event of dispute

Establishing liaison between mgmt to

1. interfere on the behalf of workers in matters related with consideration

2. Appreciate the workers

3. Maintain good relations in the plant

Working with management and workers

1. Arrange a prompt redressal of grievances and speedy settlement

2. Improve the productivity and efficiency of the enterprise


Obj- to make provision for the i~i_Qp. and ~!!lem __ of industrial disputes

On the various judgments given by the Supreme Court the principle object of the act is

1. to ensure social justice to both employer and employees and advance the progress of industries by bringing about harmony and co-ordial relationships

2. to settle disputes by peaceful methods and through the machinery of conciliation,


3. to prevent illegal strikes and lockouts

4. to provide compensation to workmen in cases of layoff, retrenchment and closure

5. to promote collective bargaining

A W ARD- It means final decision of industrial dispute given by labour court, industrial tribunal, and national tribunal.

Authorities under act

1. works committee

Above 100 workmen. Both workers as well as employers representatives are present Obj - to settle disputes through mutual understanding

2. Conciliation officer - approp govt appoints C.O.

Working - mediate and to promote for settlement of l.D.

He may be appointed for specific area appointment may be permanent or temp

3. conciliation board - same func of CO Chairman-l

Members - 2/4


The appr~priate govt may constitute a court of inquiry consisting of one or more independent persons to enquire into any matter connected with or relevant to an industrial dispute. Where a court consists of two or more members, one of them shall be appointed as chairmen.

4. labour courts


The appropriate govt may constitute one or more labour courts to adjudicate industrial

disputes relating to any of the following matters

a. The propriety or legality of an order passed by an employer under the standing orders.

~. The application and interpretation of standing orders

~. Discharge or dismissal of workmen, including retirement of, or grant of relief to, workmen wrongfully dismissed;

d. Withdrawal; pf any customary concession or privilege;

e. Illegality or otherwise of a strike or lockout, ..J~

6. Industrial tribunals

The appropriate govt may, by a notification in the official Gazette, constitute one or more industrial tribunals to adjudicate industrial disputes relating to any matter, whether specified in the second schedule

• j_.

wages, including the period and mode of payment, compensation and other allowances

hours of work and rest intervals

leave with wages and holidays

bonus, profit -sharing, provident fund and gratuity

Shift working otherwise than in accordance with standing order Classification by grades

Rules of discipline


J. Retrenchment of workmen and closure of establishment and k. Any other matter that may be prescribed.

g. h.


6. national tribunals

The central govt may, by a notification in the official Gazette, constitute one or more national industrial tribunals for the adjudication of industrial disputes which, in the opinion of the central govt, involve questions of national importance

Notice of change-

When employer makes change in the condition of wages, contribution to PF, hrs of work, rest interval, compensatory off, allowances leave, with wages, holidays, intrdn to new rules of discipline employer should give prior 21 days notice to the workmen

Duties of conciliation officer

1. to hold conciliation proceeding where any ID arises

2. To investigate dispute and all matters affecting. Try to convince the parties to come to fair settlement

3. if there is settlement of dispute sent report to the govt with memorandum of settlement signed by two parties

4. if there is no settlement he must send govt full report in regard to steps taken by him to settle the dispute and the reasons why settlement could not occur

5. he must send report of settlement or non-settlement of the dispute within 14 days of the starting of the conciliation proceedings or within period set by govt

Duties of board of conciliation

Same as CO here for submission of report two months are given

Duties of court of inquiry

Duty of court to inquire the matter and submit the report to the govt within 6months

Duties of court, industrial tribunal and national tribunal

To hold proceeding, to submit A WARD to the approp govt on the conclusion of adjudication

Report of court and award of tribunal should be in writing and signed by all members. Minutes must be recorded. The award of labour! industrial! national must be signed by presiding officer. The report of award must be published by the govt within one month from date of receipt

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Lockouts: ,~sing the place of employment or refusal of employer to continue to

employ the worker is called as lockout - ~

Lay off:(fuilure or refusal-of an employer to give employment to workers on account of shortJgeof raw material or coal and power is called as lay0:!l

Closure: it means permanent closing down of a place of an employment

Retrenchment: the termination of services of workmen by employer due to reasons

Strikes and lockouts: no notice is required. If proceedings are pending before conciliation officer then there can be no strike lockout

Layoff: permanent worker gets

Layoff compensation - 50% (basic + D.A.) limit 45 days in a yr

Closure - employer should give prior notice of 60 days to the approp govt with reasons

Retrenchment: no workmen who has been employed for 1 yr can be retrenched until

1. he has been given 3 months notice in writing indication the reasons for retrenchment and the period of notice has expired or the workmen has been paid, in lieu of such notice, wages for the period of the notice

2. the workman has been paid compensation equivalent of fifteen days avg pay for every completed yr of service or any part thereof in excess of six months


Cause Imprisonment Fine
Illegal strike Max 1 month 50 Rs or both
Lock out 1 month 1000 Rs
Promoting strike and 6 month 1000 Rs
Giving financial aid to 6 month 1000 Rs
illegal strike or
Breach of settlement / 6 month Approp fine
Disclosing 6 month 1000 Rs
Closure without 6 month 5000 Rs