ASSIGNMENT

OF
INDUSTRIAL RELATION
(MBA 52121)

Submitted for partial fulfillment of the degree

Of
MASTER OF BUSINESS ADMINISTRATION

Submitted To: Submitted By:

Prof. AJOY BHAR SHIBAYANI BISWAS
MBA-III Semester
Roll No.- PG/01/MBA/2018/008
Unit-1: Industrial Relations in India, Industrial Disputes
Act, 1947

11. “Poor industrial Relations bring Industrial unrest” Comment.

Ans. The main cause of poor industrial relations resulting in
inefficiency and industrial unrest is mental laziness on the part of both
management and labour. Management is not sufficiently concerned to
ascertain the causes of inefficiency and unrest following the fair
policy, until it is faced with strikes and more serious unrest. Even
with regard to methods of work, management does not bother to
devise the best method but leaves it mainly to the subordinates to
work it out for themselves. Contempt on the part of the employers
towards the workers is another major cause. However, the following
are briefly the causes of poor industrial relations:
 Mental inertia on the part of management and labour.
 An intolerant attitude of contempt of contempt towards the
workers on the part of management.
 Inadequate fixation of wage or wage structure.
 Unhealthy working conditions;
 Indiscipline
 Lack of human relations skill on the part of supervisors and
other managers.
 Desire on the part of the workers for higher bonus or DA and
the corresponding desire of the employers to give as little as
possible.
 Inappropriate introduction of automation without providing the
right climate.
 Unduly heavy workloads.
 Inadequate welfare facilities.
 Dispute on sharing the gains of productivity.
 Unfair labour practices, like victimization and undue dismissal.
  Retrenchment, dismissals and lock-outs on the part of
management and strikes on the part of the workers
 Inter-union rivalries
 General economic and political environment, such as rising
prices, strikes by others, and general indiscipline having their
effect on the employees attitudes.
12. Define award and settlement. When and under what a
condition does an award made under the ID Act 1947, commence
to be enforceable?
Ans. Award- According to Section 2(b) of the Industrial Disputes
Act, 1947 Award means an interim or a final determination of any
Industrial Dispute or of any question relating thereto by any Labour
Court, Industrial Tribunal or National Industrial Tribunal and includes
an arbitration award made under section 10A.
Settlement-According to Section 2 (p) of the Industrial Dispute Act,
1947 Settlement means a settlement arrived at the course of
conciliation proceeding and includes a written agreement between the
employer and workmen arrived at otherwise than in the course of
conciliation proceeding where such agreement has been signed by the
parties in such a manner as prescribed and a copy of it has been sent
to an officer authorised in this behalf by the appropriate Government
and the conciliation officer.
By the following conditions an award is commenced to be
enforceable-
 The award of a Labour Court or Tribunal or National Tribunal
shall be in writing and shall be signed by its presiding officer.
[Sec 16(2)].
 Every arbitration award and every award of a Labour Court,
Tribunal or National Tribunal shall, within a period of 30 days
from the date of its receipt by the appropriate Government, be
published in such manner as the appropriate Government thinks
fit. [Sec 17(1)].
  The award published shall be final and shall not be called in
question by any Court in any manner whatsoever. [Sec 17 (2)].
 An award (including an arbitration award) shall become
enforceable on the expiry of thirty days from the date of its
publication [Sec 17A (1)].
 Where the award has been given by a National Tribunal, that it
will be inexpedient (not advisable or not practicable) on public
grounds affecting national economy or social justice to give
effect to the whole or any part of the award, the appropriate
Government, or as the case may be, the Central Government
may, by notification in the Official Gazette, declare that the
award shall not become enforceable on the expiry of the said
period of thirty days. [Sec 17A (1) (b)].
 The appropriate Government or the Central Government may,
within 90 days from the date of publication of the award under
section 17, make an order rejecting or modifying the award, to
legislature of sate or parliament [Sec 17A (2) ]. And if no
pursuance has made, the order become enforceable after the
expiry of 90 days. [Sec 17A (3)].
 Any award as rejected or modified laid before legislature of
state or parliament, shall become enforceable on the expiry of
15 days from the date on which is so laid. [Sec 17A (3)].
 Award declared becomes enforceable on the specified date if
mentioned, if no date mentioned award becomes enforceable
according to above rules.
13. Write a note on: Lay-off, Retrenchment, Lock-out, Strikes.
Ans. Lay-off: Lay-off is to temporarily or permanently terminate or
get rid of the staff /employee. This is usually done by a company /
firm on account of a business slowdown as a result of which there is
insufficient work to be allotted to an employee who is registered with
the establishment and who has not yet been retrenched. It is the
suspension or termination of employment (with or without notice) by
an employer or management. A company layoff involves the
cessation of employee benefits such as salary or wages. The laid-off
employees are paid laid-off compensation. All of the laid off
employees should be taken back in their usual posts, as soon as the
layoff is lifted out. It maybe due to any of reasons like shortage of
materials, economic recession, breakdown of machinery,
accumulation of stocks etc.
Retrenchment: Retrenchment is to reduce the amount of corporate
expenses. When a company/firm implements retrenchment, it cuts off
or minimizes all the unnecessary expenditures, usually to cut the
diversity of products or services it offers and often reducing the size
of the company by closing down some of its offices that don’t
necessarily mean a reduction in a company’s workforce. It simply
means termination of employees services because of replacement of
the worker by machines or closure of the unit due to the lack of
product’s demand, produced by the unit.
Lock-out: Lock-out means temporary shutdown of the factory by the
employer, but not winding up of the factory. Lockout of the
factory maybe due to the failure in the management affected by
internal disturbances or by external disturbances. Internal
disturbances maybe caused when the factory management goes in to
financial crisis or financial debts, disputes between workers and
workers, disputes between workers and management or may be
caused by ill-treatment of workers by the management. Sometimes
factory lockouts may be caused by external influences, such as
unnecessary political parties involvement in management of workers
union may be provoked for unjustified demands that may be
unaffordable by the management, which may ultimately lead to
lockout of the factory. Factory lockout is procedural aspects governed
by the labour legislation of that country. It is declared by the
management out of the consequences of clashes between management
and the workers, due to unjustified demands by the workers.
Strikes: A strike is a powerful weapon used by Trade Unions or other
associations or workers to put across their demands or grievances by
employers or management of industries. Section 2 (q) of the Industrial
Disputes Act 1947 defined Strike as a concerted refusal of any
number of persons who are or have been employed in any industry to
continue to work or to accept employment. During strikes, workers
put pressure on the employers by refusal to work till fulfilment of
their demands. It is a collective commitment on the part of the
employees as a group.
15. Discuss the provisions of ID Act relating to voluntarily
reference of disputes to arbitration.
Ans. The section 10 of the ID Act provides by voluntary reference of
dispute to arbitrators for the settlement of industrial disputes.
Following provisions are made under the ID Act to achieve this
purpose:
 Where any industrial dispute exists or is apprehended and the
same has not yet been referred for adjudication to a Labour
Court, Tribunal or National Tribunal, the employer and the
workmen may refer the dispute. By a written agreement, to
arbitration specifying the arbitrator or arbitrators. The presiding
officer of a Labour Court or Tribunal or National Tribunal can
also be named by the parties as arbitrator.
 Provides for a reference of the dispute where an arbitration
agreement to an even number of arbitrators. The agreement shall
provide for the appointment of another person. If the arbitrators
are equally divided in their opinion, as an umpire who shall
enter upon the reference, and the award of the umpire. Also
shall prevail and shall deem to be the arbitration award for the
purposes of this Act.
 Referred to in sub-section 1, an arbitration agreement shall be in
such form. Also as may be prescribed shall be signed by the
parties in such manner.
 To appropriate Government, a copy of the arbitration agreement
shall be forwarded. Therefore, within one month from the date
of the receipt of such copy the Conciliation Officer and the
appropriate Government shall publish the same in the Official
Gazette.
  According to Section 10 A of the ID Act, where an industrial
dispute has been referred to arbitration and the person making
the reference represent the majority of each party satisfies the
appropriate Government. Thus, the appropriate Government
may, within the time referred above; issue a notification in such
manner as may be prescribed.

Unit- 2: Workers Participation in Management

6. Explain various forms of WPM.
Ans. The form of WPM depends, to a great extent, on the levels of
participation. The reason being the forms of participation attempt to
achieve the objectives of WPM set by an organisation. Some of the
most important forms of worker’s participation in management
(WPM) are as follows:
 Suggestion Scheme: Under this scheme, a suggestion
committee is constituted consisting of equal number of members
from management and workers. A suggestion box is installed at
an appropriate place in the organisation. Workers are invited and
encouraged to put their suggestions for improving working of
the organisation into the suggestion box. The suggestion
committee periodically scrutinizes the suggestions given by the
workers. Good suggestions are accepted and implemented and
also rewarded. This encourages workers to make more and
better suggestions.
 Works Committee: Under section 3 of the Industrial Disputes
Act, I947, and the appropriate Government may require an
enterprise employing 100 or more workers, to constitute a works
committee with equal number of representatives from the
employees and the management. The main purpose behind
Constituting works committees is to evolve ways and means for
maintaining cordial and harmonious relations between the
employees and the management.
 Joint Management Councils (JMCs): JMCs were introduced
first in 1958. These councils are formed at plant level with equal
number of representatives from employers and employees.
These are mainly consultative and advisory ones. Hence, neither
the workers nor the employers take them seriously. The
responsibility of the JMCs is relating to matters such as working
conditions indiscipline, absenteeism, training, safety, accident
prevention, preparation of holiday schemes, etc. However, it
was alleged that JMCs and work committees appeared similar in
their scopes and functions. Further, multiplicity of bipartite
consultative bodies did not serve any purpose.

 Board Representation: Under this scheme, one or two

representatives of workers are nominated or elected on the
Board of Directors. The basic idea behind incorporating
workers’ representation on the Board of Directors is to
safeguard the workers’ interest, for industrial harmony and good
relations between the workers and management. This is the
highest form of workers’ participation in management. The
Government itself, as an employer, introduced this scheme in
several public sector enterprises such as Hindustan Organic
Chemicals Ltd., National Coal Mines Development Corporation,
Bharat Heavy Engineering Ltd., National Textile Mills, etc. This
scheme required the verification of trade union membership,
identification of the representative union and selection of a
worker director who is selected out of a penal of three persons
furnished to the government by the representative union within a
prescribed period. Subsequent to the nationalization of banks in
1970, the Government, under the Nationalized Banks Scheme
1970, introduced the nomination of workers’ representatives as
directors to the Boards – one representing employees arid the
other representing officers for a tenure of 3 years.
 Co-partnership: Co-partnership means employees participation
in the share capital of their own company. Under this scheme,
 workers are induced to buy equity shares of the company.
Workers may be allowed to make payments in installments,
advanced loans or even give financial assistance to enable
workers to buy equity shares. For Example, workers hold sixty
one percent of the shares of Otto India, Calcutta and forty-one
percent of the shares of Sehgal Sanitary Fittings, Jalandhar. As
shareholders, workers take part in the management by way of
electing their representatives to the Board of Directors.
However, the workers’ participation under this method is
limited. Hence, trade unions in India do not favour this scheme.
Nonetheless, workers’ participation in management through co-
partnership scheme was approved logical in India by the
Supreme Court.
 Workers Complete Ownership: Under this scheme, workers
acquire complete control of management of their enterprise
through an elected board or Workers Council. This system of
participation is also called “self management”. In this system,
two different sets of persons perform two distinct types of
functions, namely, managerial and operative. This system of
participation is characterised by virtues like workers’
identification with their organisations, loyalty and responsibility
to organisations, etc. This maintains industrial harmony and
peace for the organisation. Expectedly, trade unions favour this
form of workers’ participation in management.
7. Discuss WPM in the context of Indian organizations.
 Ans. The workers participation in management came into
existence during the second decade of this century. The history
of workers’ participation goes back to the year 1917 when UK
Whitley Committee recommended it as an instrument to have
cooperation between workers and employers.
 After World War I many European countries have made laws
for establishing Works Councils. After World War II in UK
joint bodies of workers and representatives of employers were
set up but their status was advisory.
  The countries like Belgium, Sweden, Germany and France
followed suit. Progress was slow but gradually it gained
momentum.
 Workers participation in Management in India was given
importance only after Independence. Industrial Disputes Act,
1947 was the first step in this direction, which recommended for
the setting up of works committees.
 The Industrial Policy Resolution, 1948 advocated WPM by
suggesting that labour should be in all matters concerning
industrial production. The joint management councils were
established in 1950 which increased the labour participation in
management.
 Since July 1975 the two-tier participation called shop councils
at shop level and Joint councils were introduced.
 Workers participation in Management Bill, 1990 was introduced
in Parliament which provided scope for upliftment of workers.
 It provided Formulation of scheme specifying criteria regarding
nomination of representatives from workers, rules for
monitoring the scheme, Deletion of Section 3 of the Industrial
Dispute Act, 1947, rules for appointment of Inspector and
Imprisonment up to 2 years or a fine up to Rs. 20,000 or both for
contravention of the provisions.

Unit-3: Collective Bargaining

1. Discuss the role of collective bargaining in HRM?
Ans. The role of collective bargaining in HRM may be evaluated from
the following points of view:
 From the Management Point of View:
 The main objectives of every management are:-
i. To earn higher profits at lower cost and
ii. To have maximum utilisation of workers.
 To achieve these objectives cooperation is required from the
side of the employees and collective bargaining is a device to
get and promote cooperation. Collective bargaining is the best
measure for maintaining the cordial relations. Strikes, go-slow
tactics are avoided which result in increasing the production. It
promotes industrial democracy.
 From the Workers’ Point of View:
 The management has a tendency to exploit the labour class
as they have very poor bargaining power. Individually a
worker has no existence. But when they join hands they
become a power to protect their interests against the
exploitation by the employers.
 The collective bargaining imposes certain restrictions upon
the employers. Employers are not free to make and enforce
decisions at their own will. All important decisions are to
be taken through negotiations with the labour unions.
 From the Trade Union Point of View:
Collective bargaining strengthens the trade union movement
because trade unions are the bargaining agents of the workers.
The main function of the trade unions is to protect the interests
of the workers through constructive programmes and collective
bargaining is one of the devices to attain that objective through
negotiations with the employers.
 From Government Point of View:
 Government is also affected by the process of collective
bargaining. Government passes and implements several
labour legislations and desires it to be implemented in its
true sense.
 Collective bargaining helps the Government in the
enforcement of these laws, as an amicable agreement can
be reached between the employers and employees for
implementing legislative provisions.
  Moreover, as labour problems are minimised through
collective bargaining, industrial peace will be promoted in
the country without any force.
7. Discuss the importance of collective bargaining to employer
and employees.
Ans. The importance of collective bargaining is mostly felt when
serious problems have to be solved at the level of an undertaking of
an industry. For this purpose, managements and workers of
organisations have to get together. In this context, “collective
agreements” provide a climate for smooth progress. The agreement
spells out the working relationship between employers and employees
of organisations in which a synthesis between the demands from one
side and concessions from the other can be given a practical shape.
 The Employers Point of View:
 The Employers collective bargaining goals are the control
of the enterprise, maintaining its ability to manage with a
high degree of flexibility and efficiency of operation. The
factors determining employers approach to collective
bargaining are its views on the economic outlook,
conditioned by the size of inventory on hand, precedents
set by recent agreements, cost structure of the firm and
competitive conditions in the industry.
 The bargaining techniques of Employers consist of its
control of hiring, promotion, discharge, lay-off and
personnel techniques consisting of incentive wage
systems, special benefits provided voluntarily by the
employer and a human relation approach to the employees.
 The Employees Point of View:
 From the employees point of view, collective bargaining
agreements ensure that employers do not take any
unilateral action. This is achieved by seeing to it that an
employer signs a contract which specifies the conditions of
employment during a particular period of time, and which
 establishes the procedure for the handling of issues and
disputes which arise during that period.
 In other words, collective bargaining is an employer
regulating device, a method of guaranteeing the rights and
immunities of the employees by limiting the employer’s
freedom of action. With the application of collective
bargaining agreements, the status of individual employees
is improved, not only in terms of their wage, but also in
such non-monetary aspects of their employment as better
working conditions and greater job security.
 A collective bargaining agreement develops a sense of
responsibility and of self- respect among the workers, and
is a guarantee against wage cuts. Through collective
bargaining, unions attempt to secure a wide variety of
economic and non-economic goals.
 The economic goals include wages, and fringe benefits.
The non-economic goals centre around hours of work, the
working conditions, employees satisfaction with his job
and the protection of the union as a growing institution.
 Within the union, there are many actual and potential areas
of conflict between different interest groups. The choice of
giving priority to the objectives is a difficult task. The
important factors in determining which goals to be given
priority are- economic conditions affecting the industry,
the precedents set by recent agreements, etc. The major
bargaining tactics are strikes, boycotts and picketing.
 To sum up, collective bargaining enables both the parties to:-
i. Increase their economic strength for mutual benefit.
ii. Establish uniform conditions of employment with a view
to avoid industrial disputes and maintaining stable peace in
the industry.
iii. Secure a prompt and fair redressal of grievances.
iv. Avoid interruptions in work which follow strikes, go-slow
tactics and similar coercive activities.
 v. Lay down fair rates of wages and norms of working
conditions.
vi. Achieve an efficient operation of the plant.
vii. Promote the stability and prosperity of the industry.
 In fact collective bargaining agreement brings both employers
and employees together to determine the conditions of
employment which, till then, had been decided exclusively by
an outside agency like Industrial Tribunal and paves the way for
the closing of the psychological and emotional gap
which divides employers and employees.

Unit-4: Trade Union

2. Is Registration of a Trade Union compulsory?
Ans. Registration of a Trade union is not compulsory but is desirable
since a registered Trade union enjoys certain rights and privileges
under the Act. Minimum seven workers of an establishment (or seven
employers) can form a trade union and apply to the Registrar for its
registration.
 The application for registration should be in the prescribed form
and accompanied by the prescribed fee, a copy of the rules of
the union signed by at least 7 members, and a statement
containing-
 the names, addresses and occupations of the members
making the application.
 the name of the trade union and the addresses of its head
office.
 the titles, names, ages, addresses and occupations of its
office bearers.
 If the union has been in existence for more than a year, then a
statement of its assets and liabilities in the prescribed form
should be submitted along with the application.
  The registrar may call for further information for satisfying
himself that the application is complete and is in accordance
with the provisions, and that the proposed name does not
resemble.
 On being satisfied with all the requirements, the registrar shall
register the trade union and issue a certificate of registration,
which shall be conclusive evidence of its registration.
8. Define the term Trade Union, Trade Dispute and Registered
Trade Union.
Ans. Trade Union: Trade union is a voluntary organisation of
workers formed to protect and promote their interests through
collective action. It may be formed on plant basis, industry basis, firm
basis, regional basis or national basis. According to The Trade Union
Act 1926, it is any combination, whether temporary or permanent,
formed primarily for the purpose of regulating the relations between
workmen and employers, or between workmen and workmen, or
between employers and employers, and for imposing restrictive
conditions on the conduct of any trade or business and includes any
federation of two or more trade unions.
Trade Dispute: The Trade Unions Act, 1926 has christened the
“industrial dispute” as “trade dispute” and defines it as any dispute
between employers and workmen or between workmen and workmen
or between employers and employers which is connected with
employment or non-employment or the terms of employment.
 Registered Trade Union: A registered trade union enjoys
certain rights and privileges under the Act. Minimum seven
workers of an establishment (or seven employers) can form a
trade union and apply to the Registrar for its registration. It is a
body corporate with perpetual succession and a common seal. It
can acquire, hold sell or transfer any movable or immovable
property and can be a party to contracts. It can sue and be sued
in its own name. No civil suit or other legal proceeding can be
initiated against a registered trade union in respect of any act
 done in furtherance of a trade dispute under certain conditions.
No agreement between the members of a registered trade union
shall be void or voidable merely on the ground that any of its
objects is in restraint of trade.
13. What are the rules regarding the change of a name of trade
union?
Ans. The rules regarding the change of name of Trade Union are as
follows:
 Under Section 23(3)(a) of the Trade Unions Ordinance, the
proposed union name cannot be identical with that under which
any other trade union, whether existing or not, is or has been
registered on so nearly resembles such name as to be likely to
deceive the public or the members of such trade union or of any
other trade union.
 Under Section 23(1) of the Trade Unions Ordinance, a
registered trade union may agree to change its name by secret
ballot of a majority of its voting members or a majority of
members’ representatives (where the union rules allow) present
at a general meeting.
 The general meeting should be held in accordance with the
stipulations laid down in the rules of the trade union, e.g.
sufficient notice of meeting, sufficient quorum, the motion in
respect of change of name is conducted in the manner specified
by the Trade Unions Ordinance and the rules of the trade union,
etc.
 Under Section 23(2) of the Trade Unions Ordinance, application
for registration of the change of name shall be sent to the
Registrar within 14 days of the change. No change of name of a
registered trade union shall take effect until the same has been
registered under the Trade Unions Ordinance.
 The Chairman and one other officer must sign the Form 8
“Application for Registration of Change of Name of a
 Registered Trade Union” personally before sending it to the
Registry with all requisite documents.
15. When can the registration of Trade union be cancelled or
withdrawn?
Ans. According to Section 10 in Trade Unions Act, 1926 A certificate
of registration of a Trade Union may be withdrawn or cancelled by
the Registrar:
 on the application of the Trade Union to be verified in such
manner as may be prescribed.
 if the Registrar is satisfied that the certificate has been obtained
by fraud or mistake, or that the Trade Union has ceased to exist
or has wilfully and after notice from the Registrar contravened
any provision of this Act or allowed any rule to continue in
force which is inconsistent with any such provision, or has
rescinded any rule providing for any matter provision for which
is required by section 6.
 if the Registrar is satisfied that a registered Trade Union of
workmen ceases to have the requisite number of members
provided that not less than two months previous notice in
writing specifying the ground on which it is proposed to
withdraw or cancel the certificate shall be given by the Registrar
to the Trade Union before the certificate is withdrawn or
cancelled otherwise than on the application of the Trade Union.

Unit-5: The Factories Act, 1948

7. What are the rights of the workers?
Ans. Every worker shall have the right to –
 Obtain from the occupier, information relating to worker’s
health and safety at work.
  Get trained within the factory wherever possible, or, to get
himself sponsored by the occupier for getting trained at a
training centre or institute, duly approved by the Chief
Inspector, where training is imparted for worker’s health and
safety at work.
 Represent to the Inspector directly or through his representative
in the matter of inadequate provision for protection of his health
and safety in the factory.
10. Define the term factory, occupier, adult, adolescent, young
person, Worker and Manufacturing process as used in the
Factories Act, 1948.
Ans. Factory: Section 2(m) of the Factories Act, 1948 defines the
term ‘Factory’ as any premises or precincts thereof –
 whereon 10 or more workers are working, or were working, on
any day of the preceding 12 months, and in any part of which a
manufacturing process is being carried on with the aid of
power, or is ordinarily so carried on.
 whereon twenty or more workers are working, or working on
any day of the preceding 12 months and in any part of which a
manufacturing process is being carried on without the aid of
power ,or is ordinarily so carried on, but does not include
(i) a mine subject to the operation of the Mines Act 1952
(ii) a mobile unit belonging to the armed forces of the Union of
India.
(iii) a railway running shed
(iv) a hotel
(v) a restaurant
(vi) eating place
(vii) poly house
(viii) Green house engaged in the activity of floriculture or
pomology or high value crops.
Occupier: According to section 2(n) "occupier" of a factory means
the person, who has ultimate control over the affairs of the factory.
Provided that-
 in the case of a firm or other association of individuals, any one
of the individual partners or members thereof shall be deemed to
be the occupier.
 in the case of a company, any one of the directors, shall be
deemed to be the occupier.
 in the case of a factory owned or controlled by the Central
Government or any State Government, or any local authority,
the person or persons appointed to manage the affairs of the
factory by the Central Government, the State Government or the
local authority, as the case may be, shall be deemed to be the
occupier.
Adult: “Adult” means a person who has completed his eighteenth
year of age.
Adolescent: According to Sec. 2(b) an “Adolescent” means a person,
who completes his fifteenth year of age but not his eighteenth year.
Hence, he is someone who crosses the age of a child but is not an
adult yet.
Young Person: “Young person” means a person who is either a child
or an adolescent.
Worker: According to Sec. 2(l), Worker means a person employed,
directly or by or through any agency (including a contractor) with or
without the knowledge of the principal employer, whether for
remuneration or not, in any the manufacturing process, or in cleaning
any part of the machinery or premises used for a manufacturing
process, or in any other kind of work incidental to, or connected with,
the manufacturing process, or the subject of the manufacturing
process but does not include any member of the armed forces of the
union.
Manufacturing Process: Manufacturing process” means 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, Pumping oil, water,
sewage or any other substance.
 Generating, transforming or transmitting power.
 Composing types for printing, printing by letterpress,
lithography,
photogravure, other similar process or bookbinding.
 Constructing, reconstructing, repairing, refitting, finishing or
breaking up ships or vessels.
 Preserving or storing any article in cold storage
11. Who are certifying surgeons? What are their duties?
 Ans. The State Government may appoint qualified medical
practitioners to be certifying surgeons for the purposes of this
Act within such local limits or for such factory or class or
description of factories as it may assign to them respectively.
 A certifying surgeon may, with the approval of the State
Government, authorise any qualified medical practitioner to
exercise any of his powers under this Act for such period as the
certifying surgeon may specify and subject to such conditions as
the State Government may think fit to impose, and references
to any qualified medical practitioner when so authorised.
 No person shall be appointed to be, or authorised to exercise the
powers of a certifying surgeon, or having been so appointed or
authorised, continue to exercise such powers, who is or becomes
the occupier of a factory or is or becomes directly or indirectly
interested in or in any process or business carried on there or in
any patent or machinery connected therewith or is otherwise in
the employ of the factory [Provided that the State Government
 may, by order in writing and subject to such conditions as may
be specified in the order exempt any person or class of
persons from the provisions of this sub-section in respect of any
factory or class or description of factories].
The certifying surgeon shall carry out duties as may be prescribed
in connection with-
I. the examination and certification of young persons under this
Act.
II. the examination of persons engaged in factories in such
dangerous occupations or processes as may be prescribed.
III. the exercising of such medical supervisions as may be
prescribed for any factory or class or description of factories
where –
 cases of illness have occurred, which it is reasonable to
believe are due to the nature of the manufacturing process
carried on, or other conditions of work prevailing there by
reason of any change in the manufacturing carried on or in
the substances used therein or by reason of the adoption of
any new manufacturing process, or of any new substance
for use in a manufacturing process, there is likelihood of
injury to the health of workers employed in that
manufacturing process.
 young persons are, or are about to be, employed in any
work which is likely to cause injury to their health.
13. State the restrictions imposed on the employment and work of
women under the Act?
Ans. The restrictions imposed on the employment and work of
women under the Act are as follows-
 Under the section 54, no exemption shall be made on the female
workers, relating to the daily working hours.
 There is a strict restriction on the women workers’ employment
except between the hours of 6:00 am to 7:00 pm as no women
 are allowed to be employed between the hours of 10:00 pm to
5:00 am.
 No changes in the shifts allow the factory act, except the after
the weekly holiday or any other holiday.
 The section 66 doesn’t allow any female worker to work during
late night hours.
 The act, prohibits the women employed in any part which is
below the ground level.
 The factory act also bounds the employer to provide the female
workers 30 or more in number with crèches for their children,
aged from 6 years to below.
 There should be a fixed rest period called rest interval for the
women workers.
 Also, women workers shall be provided with the bathing and
cleaning facilities to maintain health and hygiene at work.
 There must be proper restrooms for female working staff in a
factory.
 It allows women too, to take off when in need and also get the
fixed maternity leave along with the weekly and festival
holidays.
 The maternity leaves are made paid also other leaves are paid
for women working in the factories.

Unit-6: E.S.I.C Act, 1948

9. How a factory gets registered under this act?
Ans. Registration of a factory or establishment with the Employees
State Insurance Corporation is a statutory responsibility of the
employer under Section 2-A of the Act with Regulation 10-B. The
employer, in respect of a factory or establishment to which the Act
applies for the first time, is liable to furnish Declaration of
Registration in Form 01 (Employers’ Registration Form) to the
concerned Regional or Sub Regional Office within 15 days after the
Act becomes applicable. This is obligatory on the part of the
Employer. In addition to this, the employer will have to indicate, in a
seperate sheet, the name and address of the factory or establishment,
number of employees, nature of duty and name, designation and
address of the Manager, controlling such persons in respect of any
other office or offices situated outside the premises of the Factory or
Establishment.
10. What are the powers and duties of the ESIC, the standing
committee, and the medical council?
Ans. The powers and duties of the following are mentioned as under-
ESIC (Employees State Insurance Corporation):
Powers:-
 Section 17 allows the Corporation to appoint staff members and
officers for carrying out its business effectively. It may bestow
provident fund, gratuity and other similar benefits on its staff.
 The Corporation has powers to purchase and sell movable as
well as immovable properties. It can even raise loans and invest
its money with the Central Government’s sanction.
 In order to ensure compliance with provisions of the Act, the
Corporation can appoint Social Security Officers. These officers
function in their local limits and exercise jurisdiction over
factories and establishments therein.
 All employers to whom this Act applies have to pay
some contribution for the benefit of employees. The Corporation
has powers to determine how much this contribution should be
derived.
 The Director-General of the Corporation has to sign on every
decision it takes. He may appoint some other officer on his
behalf to carry out this task.
Duties:-
Most of these duties are in the nature of compliances relating
to its functioning and decisions. For example, every year the
Corporation has to make a budget of its probable income and
expenditure. It has to submit this report to the Central Government for
its approval.
 Furthermore, it has to maintain accounts of its incomes and
expenses in the format that the Central Government prescribes.
None other than the Comptroller & Auditor General (CAG) of
India audits these accounts every year.
 Other compliances of the Corporation include submission of
annual reports of its activities to the Central Government. Apart
from these, it has to appoint a valuer to value its assets and
liabilities every three years.
The Standing Committee:
Powers:-
 Committee has the power to issue a formal summons for
documents or witnesses.
 Subject to the general superintendence and control of the ESI
Corporation, the Standing Committee shall administer the affairs
of the ESI Corporation and may exercise any of the powers and
perform any of the functions of the Corporation.
 It shall submit for the consideration and decision of the
Corporation, all such cases and matters as maybe specified in
the regulations made in this behalf.
 It may, at its discretion, submit any other case or matter for the
decision of the Corporation.
Duties:-
 The Chair of the Committee is responsible for proposing
meeting arrangements. This is done as soon as the Committee
receives Bills, Annual Reports, Petitions, Treaties and Audit
Reports.
  The frequency and timing of meetings depends on a
Committee’s workload. Business may only be transacted at a
Committee meeting when there is a quorum.
 During the course of an inquiry, a Committee will compile a list
of relevant Government departments, local agencies, non-
government organisations and other stakeholders to be contacted
and invited to make submissions or attend a public hearing or
site visit on the subject matter. Public hearing is advertised in
the Media.
 Committees hold public hearings to obtain evidence from key
witnesses which may include key stakeholders and experts on an
inquiry’s subject matter.
 Committee meetings are a matter of National Security, Third
party confidential information, personnel or human resources or
deliberations and discussions conducted in the development and
finalisation of Committee recommendations and reports.
 A Committee may take evidence by electronic means, such as
audio or video links which provides evidence for what is needed
in the inquiry.
 A Committee must report back to Parliament on a Bill referred
to the Committee not later than 30 days after the referral unless
Parliament resolved otherwise or extends.
 A Committee may report back to Parliament on other matters as
soon as it has completed its considerations and deliberations.
The Medical Council:
Powers and Duties:-
 To advise the Corporation in regard to the constitution, setting
up duties and powers of the regional and local Medical Benefit
Councils.
 To make recommendations to the Corporation in regard to-
i. the scale and nature of medical benefit provided at
hospitals, dispensaries, clinics and other institutions and
the nature and the extent of the medicines, staff and
 equipment which shall be maintained at such institutions
and the extent to which these fall short of the desired
standard.
ii. the medical formulary for use in connection with the
medical benefit provided under the Act.
iii. medical certification, including the procedure and the
forms for such certification, statistical returns, registers
and other medical records.
iv. measures undertaken for the improvement of the health
and welfare of insured persons, and the rehabilitation and
re-employment of insured persons, disabled or injured.
 To advise the Corporation on any matter relating to the
professional conduct of any medical practitioner employed for
the purpose of providing medical benefit under the Act.
15. What is ESI Fund? What are the purposes for which the fund
may be expended?
Ans. The Employees State Insurance (ESI) scheme under the ESI Act,
1948, provides social security coverage to workers employed in
various factories and establishments, and covers contingencies such as
sickness, maternity leave, and physical disablement or death due to
employment injury resulting in loss of wages or earning capacity.
The ESI Act stipulates the rules and regulations that govern the
functioning of the Employees State Insurance Corporation (ESIC),
which in turn manages the ESI fund.
Subject to the provisions of this Act and of any rules made by
the Central Government in that behalf, the Employees State Insurance
Fund shall be expended only for the following purposes:
 Payment of benefits and provision of medical treatment and
attendance to insured persons and, where the medical benefit is
extended to their families, the provision of such medical benefit
to their families, in accordance with the provisions of this Act
and defraying the charges and costs in connection with them.
 Payment of fees and allowances to members of the Corporation,
the Standing Committee and the Medical Benefit Council, the
Regional Boards, Local Committees and Regional and Local
Medical Benefit Councils.
 Payment of salaries, leave and joining time allowances,
travelling and compensatory allowances, gratuities and
compassionate allowances, pensions, contributions to provident
or other benefit fund of officers and servants of the Corporation
and meeting the expenditure in respect of offices and other
services set up for the purpose of giving effect to the provisions
of this Act.
 Establishment and maintenance of hospitals, dispensaries and
other institutions and the provisions of medical and other
ancillary services for the benefit of insured persons and where
the medical benefit is extended to their families, their families.
 Payment of contributions to any State Government, local
authority or any private body or individual, towards the cost of
medical treatment and attendance provided to insured persons
and, where the medical benefit is extended to their families,
their families, including the cost of any building and equipment,
in accordance with any agreement entered into by the
Corporation.
 Defraying the cost (including all expenses of auditing the
accounts of the Corporation and of the valuation of its assets and
liabilities.
 Defraying the cost (including all expenses) of the Employees’
Insurance Courts set up under this Act.
 Payment of any sums under any contract entered into for the
purposes of this Act by the Corporation or the Standing
Committee or by any officer duly authorised by the Corporation
or the Standing Committee in that behalf.
 Payment of sums under any decree, order or award of any Court
or Tribunal against the Corporation or any of its officers or
servants for any act done in the execution of his duty or under a
 compromise or settlement of any suit or other legal proceeding
or claim instituted or made against the Corporation.
 Defraying the cost and other charges of instituting or defending
any civil or criminal proceedings arising out of any action taken
under this Act.
 Defraying expenditure, within the limits prescribed, on
measures for the improvement of the health and welfare of
insured persons and for the rehabilitation and re-employment of
insured persons who have been disabled or injured.
 Some other purposes as may be authorised by the Corporation
with the previous approval of the Central Government.

Unit-7: Payment of Gratuity Act, 1972

10. What are the rules relating to nomination by an employee
under the payment of Gratuity Act 1972?
Ans. The rules related to Nomination by an employee under the
payment of Gratuity Act 1972 are given as under-
 Each employee, who has completed one year of service, shall
make, within such time, in such form and in such manner, as
may be prescribed, nomination for the purpose of the second
proviso to sub-section (1) of Section 4.
 An employee may, in his nomination, distribute the amount of
gratuity payable to him under this Act amongst more than one
nominee.
 If an employee has a family at the time of making a nomination,
the nomination shall be made in favour of one or more
members of his family, and any nomination made by such
employee in favour of a person who is not a member of his
family, shall be void.
 If at the time of making a nomination the employee has no
family, the nomination may be made in favour of any person or
persons but if the employee subsequently acquires a family,
 such nomination shall forthwith become invalid and the
employee shall make, within such time as may be prescribed, a
fresh nomination in favour of one or more members of his
family.
 A nomination may, subject to the provisions of sub-sections (3)
and (4), be modified by an employee at any time, after giving to
his employer a written notice in such form and in such manner
as may be prescribed, of his intention to do so.
 If a nominee pre-deceases the employee, the interest of the
nominee shall revert to the employee who shall make a fresh
nomination in the prescribed form, in respect of such interest.
 Every nomination, fresh nomination or alteration of
nomination, as the case may be, shall be sent by the employee
to his employer, who shall keep the same in his safe custody.
11. What are the rules as to recovery and determination of
amount under the act?
Ans. The rules for the recovery and determination of amount under
the Act is given as follows-
 If the amount of gratuity payable under this Act is not paid by
the employer, within the prescribed time, to the person entitled
there to, the controlling authority shall, on an application made
to it in this behalf by the aggrieved person, issue a certificate
for that amount to the Collector, who shall recover the same,
together with compound interest there on [at such rate as the
Central Government by notification, specify,] from the date of
expiry of the prescribed time, as arrears of land revenue and
pay the same to the person entitled there to :
 Provided that the controlling authority shall, before
issuing a certificate under this section, give the employer
a reasonable opportunity of showing cause against the
issue of such certificate.
  Provided further that the amount of interest payable under
this section shall, in no case exceed the amount of gratuity
payable under this Act.]
13. Write a note on compulsory insurance of employer for
payment of gratuity.
Ans. According to Payment of Gratuity Act, 1972 Section 4A defined
Compulsory Insurance as-
 With effect from such date as may be notified by the
appropriate Government in this behalf, every employer, other
than an employer or an establishment belonging to, or under the
control of, the Central Government or a State Government,
shall, subject to the provisions of sub-section (2), obtain an
insurance in the manner prescribed, for his liability for payment
towards the gratuity under this Act, from the Life Insurance
Corporation of India established under the Life Insurance
Corporation of India Act, 1956 or any other prescribed insurer:
Provided that different dates may be appointed for different
establishments or class of establishments or for different areas.
 The appropriate Government may, subject to such conditions as
may be prescribed, exempt every employer who had already
established an approved gratuity fund in respect of his
employees and who desires to continue such arrangement and
every employer employing five hundred or more persons who
establishes an approved gratuity fund in the manner prescribed
from the provisions of sub-section (1).
 For the purpose of effectively implementing the provisions of
this section, every employer within such time as prescribed get
his establishment registered with the controlling authority in the
prescribed manner and no employer shall be registered under
the provisions of this section unless he has taken an insurance
referred to in sub-section (1) or has established an approved
gratuity fund referred to in sub-section (2).
  The appropriate Government may, by notification, make rules
to give effect to the provisions of this section and such rules
may provide for the composition of the Board of Trustees of the
approved gratuity fund and for the recovery by the controlling
authority of the amount of the gratuity payable to an employee
from the Life Insurance Corporation of India or any other
insurer with whom an insurance has been taken under sub-
section (1), or may be by the Board of Trustees of the approved
gratuity fund.
 Where an employer fails to make any payment by way of
premium to the insurance referred to in sub-section (1) or by
way of contribution to all approved gratuity fund referred to in
sub-section (2), he shall be liable to pay the amount of gratuity
due under this Act (including interest, if any, for delayed
payments) forthwith to the controlling authority.
 Whoever contravenes the provisions of sub-section (5) shall be
punishable with fine which may extend to ten thousand rupees
and in the case of a continuing offence with a further fine which
may extend to one thousand rupees for each day during which
the offence continues.

Unit-8: Contract Labour Act, 1970

1. Discuss Contract Labour Act, 1970 along with its applicability
and Scope.
Ans. The Contract Labour (Regulation and Abolition) Act, has been
enacted by the Indian Legislature from the year 1970. It aims at
regulating employment of contract employees hired by the employers
and extending certain benefits to such employees as prescribed under
the Labour Laws. The Contract Labour Act attempts to provide basic
cover to the employees and ensure they do enjoy certain rights which
are at par with the benefits extended to directly employed individuals.
Respective Government is empowered to prohibit deployment of
Contract Labour in any process and in any establishment, if it is of the
opinion that conditions laid out under the Act is not being followed by
the respective employers.
The applicability and scope of Contract Labour Act, 1970 are as
follows:
 It applies to any establishment in which twenty or more
workmen are employed on any day of the of the accounting year
as contract labour.
 It applies to any contractor who employs or who employed
twenty or more workers on any day of the accounting year.
6. What are the conditions in which a license can be revoked or
suspended?
Ans. The conditions in which a license can be revoked or suspended
are as follows-
 If the licensing officer is satisfied, either on a reference made to
him in this behalf or otherwise, that—
 a licence granted under section 12 has been obtained by
misrepresentation or suppression of any material fact.
 the holder of a licence has, without reasonable cause,
failed to comply with the conditions subject to which the
licence has been granted or has contravened any of the
provisions of this Act or the rules made there under, then,
without prejudice to any other penalty to which the holder
of the licence may be liable under this Act, the licensing
officer may, after giving the holder of the license an
opportunity of showing cause, revoke or suspend the
license or forfeit the sum, if any, or any portion of
deposited as security for the due performance of the
conditions subject to which the licence has been granted.
 Subject to any rules that may be made in this behalf, the
licensing officer may vary or amend a licence granted under
section 12.
9. What type of record is required to be maintained under the act
by a Principal employer or Contractor?
Ans. It is explained as follows-
 Under section 29 of the Act, it states that there shall be the
maintenance of records & registers by every principal employer
and every contractor in a prescribed form. The rules are framed
under the Act by the Central Government and the State
Government. The registers and record’s maintenance, the
display of notices and the principal employer to the registering
officers and licensing office.
 Also, the principal employers and the contractors are too
required to keep exhibited in a prescribed manner in premises of
the establishment or the factory. Notices in the prescribed form
containing particulars about the hours of work, where the
contract labour is employed. Therefore, including the nature of
duty and such other information are in a prescribed form.
 As per this Act “small establishments” (establishments
employing not less than 10 persons and not more than 19
persons) are required. To furnish a core Return in Form A and
maintain Registers Form B, Form C, and Form D and “very
small establishments” (establishments employing not more than
9 persons) are required to furnish the return in Form A and
maintain Register in Form E prescribed under this Act.
 Therefore this requirement is in lieu of furnishing of such
returns and maintaining of such registers. As prescribed under
various labour laws mentioned in Schedule I of this Act.