MERRL

FACTORIES ACT 1948

The Factories Act, 1948 (Act No. 63 of 1948), as amended by the Factories (Amendment) Act, 1987
(Act 20 of 1987), serves to assist in formulating national policies in India with respect to occupational
safety and health in factories and docks in India. It deals with various problems concerning safety, health,
efficiency and well-being of the persons at work places.
The Act is administered by the Ministry of Labour and Employment in India through its Directorate
General Factory Advice Service & Labour Institutes (DGFASLI) and by the State Governments through
their factory inspectorates. DGFASLI advises the Central and State Governments on administration of the
Factories Act and coordinating the factory inspection services in the States. [1]
The Act is applicable to any factory using power & employing 10 or more workers and if not using
power, employing 20 or more workers on any day of the preceding twelve 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, or
whereon twenty or more workers are working, or were working on any day of the preceding twelve
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 this does not include a mine, or a mobile unit belonging to the armed
forces of the union, a railway running shed or a hotel, restaurant or.
Health Measures Provisions as per Factories Act, 1948

Section 11: Cleanliness in Every Factory

 Accumulation of dirt and refuse should be removed daily by any effective method from the floors
of workrooms and from staircases and passages and disposed of in a suitable and efficient manner.

 In case the floor is subject to become wet during the working time, then they should take proper
drainage process or steps.

 Clean the worker’s floor every week with proper disinfectant or any other effective method of
cleaning.

 Paint or repaint walls, ceilings, and staircases of the factory once in every 5 years.

 Repaint the walls once in every 3 years in case of washable water paints.

 Paint and varnish all doors and window-frames and other wooden or metallic framework and
shutters at least once in a period of 5 years.

Section 12: Disposal of Effluents and Wastes

(a) It is necessary for the factories to arrange proper and effective waste treatment and its disposal.
(b) The State Government may make rules prescribing the arrangements for the disposal and treatment of
waste and effluents.
Section 13: Ventilation and Temperature

 Effective and suitable provisions should be made in every factory for securing and maintaining in
every workroom proper ventilation by circulation of fresh air. It also involves providing an adequate
temperature at the workplace. For this, they should select the material of the walls accordingly.

 The State Government may prescribe a standard of adequate ventilation and reasonable
temperature for any factory or class or description of factories.

 Lastly, if it appears to the Chief Inspector that excessively high temperature in any factory can be
reduced by the adoption of suitable measures, he can order them to use such a method.

Section 14: Dust and Fume

 If dust and fume release in the manufacturing process of a factory then they should take effective
measures to prevent its inhalation and accumulation in the workplace. For this, they should use proper
exhaust appliances in the workplace.

 In any factory, no stationary internal combustion engine shall be operated unless the exhaust is
conducted into the open air.

Section 15: Artificial Humidification

 Firstly, prescribing standards of humidification;

 Secondly, regulating the methods used for artificially increasing the humidity of the air;

 directing tests for determining the humidity of the air for correct carrying out and recording.

 Lastly, prescribing methods for securing adequate ventilation and cooling of the air in the
workrooms.

Section 16: Overcrowding

 Firstly, no room in any factory shall be overcrowded to an extent injurious to the health of the
workers employed therein.

 Secondly, a factory built after the commencement of this Act at least 14.2 cubic meters of space
for every worker employed therein, and for the purposes of this subsection, no account shall be taken
of any space which is more than 4.2 meters above the level of the floor of the room.

 If the Chief Inspector by order in writing, may or may not post a notice specifying the maximum
number of workers who may be employed in the room.

Section 17: Lighting

 glare, either directly from a source of light or by reflection from a smooth or polished surface;
  the formation of shadows to such an extent as to cause eye-strain or the risk of accident to any
worker.

Section 18: Drinking Water

This section states that in every factory, there should be proper arrangements for a sufficient supply of
wholesome drinking water and shall be legibly marked as “drinking water”.

Section 19: Latrines and Urinals

This section states that every factory should make arrangements of latrine and urinals for the employees and
the rules are laid down by the State Government in this behalf.

Section 20: Spittoons

There should be a sufficient number of spittoons in the factories for the employees and they should be in
clean and hygienic condition according to this law

Working Hours Provisions, Under the Factories Act, 1948

Section 51: Weekly Hours

This section lays down the maximum limit on working time for a worker in a factory on a weekly basis. It
states that no factory would ask the workers or make them work for more than 48 hours a week.

Section 52: Weekly Holidays

This section states that no adult worker shall be required or allowed to work in a factory on the first day of the
week. But this provision applies subject to certain conditions:

(a) Firstly, he has or will have a holiday for the whole day on one of three days immediately before or after
the relevant day.
(b) Secondly, the manager of the factory has, before the said day or the substituted day under the clause.

Section 53: Compensatory Holidays

This section states that if in any case, the factory in under any provision cuts-off a holiday of the worker, then
the factory is under due pressure to give the same number of holidays to the workers within the time period of
two months.

Section 54: Daily Hours

This section is nothing but the extension of Section 51. Keeping in view the weekly working hours limit
prescribed by Section 51, this section states the limit on a daily basis. It states that a factory should allow a
worker to work for more than 9 hours per day.

Section 55: Rest Intervals

This section states that the maximum time for which a worker will work before the interval time period is 5
hours. The interval needs to be of a minimum half an hour, In certain cases, the State Government may
exempt some factories from this limitation. In reality, the limitation is not removed but extended to 6 hours
only.

Section 56: Spread Over

Looking at the human limitations in working, this section states that the periods of work of an adult worker in
a factory including the intervals for rest should not spread over more than 10.5 hours in any day.

Section 57: Night Shifts

This section provides certain clarifications for the questions related to the night shifts. It states that if any
worker works after midnight, then the provisions of holidays of Section 52 and Section 53 will be applicable
for 24 hours after his shift ends. Moreover, the extra hours after midnight will form part of the previous day
only.

Section 59: Overtime and Extra Wages

This section rewards those workers who are trying to work for more than the maximum time. It states that
those workers who work for more than 9 hours a day or 48 hours weekly, he/she is entitled to be paid at
double wage rate than the ordinary wage rate for the extra time.

The ‘ordinary wage rate’ includes only the basic salary and the allowances. It does not include the bonus and
other perks. Moreover, the factories need to maintain proper registers for the datils of the extra time of the
workers and the payment made to them.

Section 60: Double Employment

This section states that no worker is allowed or required to work for more than one factory in a day. In other
words, if a worker is working in a factory on a day then, he cannot work for another factory on the same day.

Section 61: Notice of Periods of Work for Adults

This section states that the factory manager should paste a notice on the wall of the factory about the time
period of the work for the workers.

Moreover, the manager has to comply with the time limiting sections like Section 52. In case the workers
don’t have to work at the same time then, the manager should specify the time of their work and the timing of
their work.
Section 62: Register of Workers

This section states that the manager of the factory to maintain a register about the details of the workers of the
factory.

It includes names of the workers, work nature, specific formal groups of the workers, etc. Moreover, no
worker can work in the factory unless his/her name is given in the register.

Provisions related to Welfare of workers(Under Factories Act, 1948)

Section 42: Washing facilities

(a) Firstly, provide and maintain adequate and suitable facilities for washing for all the workers in the factory
(b) Secondly, provide separate and adequately screened facilities separately for men and women.
(c) Thirdly, make accessible all the facilities to all the workers

Section 43: Facilities for storing and drying clothes

This section contests some powers with the State Government. It states that the State Government has the
powers to direct the factories regarding the place of storing the clothes of the workers.

Moreover, they can also direct them regarding the manner of drying the clothes of the workers. It applies to
the situation when workers are not wearing their working clothes.

Section 44: Facilities for sitting

There are various kinds of jobs in a factory. Some of them require the workers to stand for a longer period of
time. There is no doubt that human power to stand has limits. Looking at such case, this section states:

(a) Firstly, the factory should provide suitable arrangements for sitting for the workers. This is important
because whenever the worker gets some free time, he/she may be able to take some rest by sitting. This will
also enhance their efficiency.
(b) Secondly, if the Chief Inspector finds that any worker can do his work more efficiently while sitting, then
he can direct the factory officials to arrange sitting arrangements for him.

Section 45: First-aid-appliance

Injuries are somehow an inescapable part of life for the workers especially working in the factories. Looking
at the safety and welfare of the workers this section provides that:

(a) The factory should provide and maintain proper first-aid boxes at every workroom. Under this Act, the
number of boxes should not be less than one for every 100 or 50 workers. Moreover, the first-aid boxes
should have all the relevant contents according to the Act.
(b) There should be nothing except the prescribed contents in a first-aid box.
(c) Each box should be under control of a first-aid in-charge who will handle all its requirements and its
utilization. The in-charge should be an expert in First-aid field.
(d) In case the number of workers exceeds 500, then the factory should arrange an ‘Ambulance Room’ with
the availability of all necessary equipment.

Section 46: Canteens

(a) Every factory where the number of workers exceeds 250, then the State Government may direct the
factory owners to provide and maintain a canteen for the workers.
(b) Moreover, the government may lay down certain conditions in the construction of canteen, like:

1.  the standard in respect of construction, accommodation, furniture and other equipment of the canteen
2. the foodstuffs to be served therein
3. the date by which such canteen shall be provided
4. the constitution of a managing committee for the canteen
5. the delegation to Chief Inspector subject to such conditions as may be prescribed

Section 47: Shelters, rest-rooms, and lunch-rooms

(a) If the number of workers in a factory crosses 150, then the factory owners should construct and maintain
shelters, rest-rooms and lunch rooms for the workers. It allows the workers to eat the food which they bring
along with them.

(b) The shelters, rest-rooms and lunch rooms should be properly ventilated and lighted.
(c) The State Government may prescribe the standards, in respect of construction accommodation, furniture,
and other equipment.

Section 48: Creches

Due to workforce diversity nowadays, women’s participation is increasing in all the sectors especially the
industrial sector.

One of the factors that stop women to work in factories or any other sector is lack of care for their children
during their working hours. In order to solve this problem and increase the engagement of women in
factories, section 48 states:

(a) Where numbers of women workers exceed 30, then the factory should arrange a special room for the
worker’s kids who are below the age of 6 years.
(b) The room should be properly lighted and ventilated

PAYMENT OF WAGES ACT 1936

Purpose of the Act

The main objective of the Act is to avoid unnecessary delay in the payment of wages and to prevent
unauthorized deductions from the wages. Every person employed in any factory, upon any railway or
through sub-contractor in a railway and a person employed in an industrial or other establishment.The
State Government may by notification extend the provisions to any class of persons employed in any
establishment or class of establishment. The benefit of the Act prescribes for the regular and timely
payment of wages (on or before 7th day or 10th day of after wage period is greater than 1000 workers)
and Preventing unauthorized deductions being made from wages and arbitrary fines.
Salary statics
Wages are averaging less than Rs. 6500.00 per month only are covered or protected by the Act by the
amendment in 2005 by {Section 1(6)}.Wages means contractual wages and not overtime wages. They are
not to be taken into account for deciding the applicability of the Act in the context of section 1(6) of the
Act. Wages must be paid in current coin or currency notes or in both and not in kind. It is, however,
permissible for an employer to pay wages by cheque of by crediting them in the bank account if so
authorized in writing by an employed person.
Summary of the provisions of the Act
The provisions of the Act regarding the imposition of fines on the employed person are as follows such
as, The employer must exhibit on his premises a list of acts or omissions for which fines can be imposed,
Before imposing a fine on an employed person he must be given an opportunity of showing cause against
the fine, The amount of fine must not exceed 3 percent of the wages, A fine cannot be imposed on an
employed person who is under the age of 15 years, A fine cannot be recovered by installments or after 90
days from the day of the act or omission for which it is imposed, The moneys realized from fines must be
applied to purposes beneficial to employed persons.
Subsection 8(3), 10(1-A) & Rule 15} deals with Any person desiring to impose a fine on an employed
person or to make a deduction for damage or loss shall explain personally or in writing to the said person
the act or omission, or damage or loss in respect of which the fine or deduction is proposed to be
imposed, and the amount of fine or deduction, which it is proposed to impose, and shall hear his
explanation in the presence of at least one other person, or obtain it in writing.
The procedure and Competent authority which deals with employment matters
The procedure to employ a person has to follow for claiming deducted or delayed wages.If contrary to the
provisions of the Act any deduction has been made from the wages of an employed person or any
payment of wages has been delayed, he has to make an application for claiming the same to the Authority
appointed under the Act.Such application can be made by the employed person himself or a legal
practitioner or an official of a registered trade union.Such application has to be made within a period of
12 months from the date on which the date on which the deduction from the wages was made or from the
date on which the payment of the wages was due to be made.
There is a competent Authority to entertain and decide an application for payment of subsistence
allowance. The subsistence allowance payable to an employee placed under suspension pending
Departmental Enquiry is covered within the definition of wages given under Section 2(6) of the Act and,
therefore, the Authority is competent to entertain and decide an application for payment of subsistence
allowance.
The Authority under the Payment of Wages Act is a Court of summary jurisdiction having powers to deal
with the simple matter of delay in payment of wages or deduction from wages. It is not within the
competence of the Authority to decide the question of the status of an employed person. The matter is a
complicated question of law as also of fact. There is an agreement between an employer and his
employees authorizing the deduction of union subscription from the salaries of the employer null and void
under Section 23 of the Act, Such agreement being beneficial and advantageous to the employees is not
null and void under Section 23 of the Act.
 Employer's duty
Employer's required to display the abstracts of the Act in his factory or establishment. Every employer
must display in his factory or establishment a notice containing the abstracts of the Act and the rules
made thereunder in English and also in the language understood by the majority or the persons.
Conclusion
The Payment wages act is a regulation drawn up to protect the employee’s rights from being infringed by
the employer. The employee should be paid on time and should not be harassed against anything during
the employment. It has however given a lot of protections to employees and will continue to do so in the
future as well.
Full text of "Payment Wages Act 1936" available here

Please note that the information provided on this page:

 Does not provide a complete or authoritative statement of the law;

 Does not constitute legal advice by Net Lawman;
 Does not create a contractual relationship;
 Does not form part of any other advice, whether paid or free.

Authorized deductions from wages under the payment of wages act, 1939
1. 1. AUTHORISED DEDUCTIONS FROM WAGES UNDER THE PAYMENT OF WAGES
ACT, 1936 PRESENTED BY: ANAND SARAN 142005
2. 2. OBJECT OF THE ACT • To avoid unnecessary delay in the payment of wages. • To prevent
unauthorized deductions from wages.
3. 3. WAGES [SECTION 2(6)] Wages means all remuneration (whether by way of salary,
allowances or otherwise) expressed in terms of money or capable of being so expressed which
would if the terms of employment express or implied were fulfilled, be payable to a person
employed in respect of his employment or of work done in such employment .
4. 4. WAGES Wage includes any remuneration:- •Payable under any award or settlement between
the parties or order of a Court; •Over-time work or holiday or any leave period; •Any additional
remuneration under the terms of employment. Wage does not include any bonus, pension fund or
provident fund, travelling allowance and any gratuity.
5. 5. DEDUCTIONS FROM WAGES (SECTION 7 TO 13) • The wages of an employed person
shall be paid to him without deductions of any kind except those authorised by or under this Act.
• Deductions from the wages of an employed person shall be made only in accordance with the
provisions of this Act.
6. 6. DEDUCTIONS FROM WAGES • Deductions for fines • Deductions for absence from duty •
Deductions for damage or loss • Deductions for services • Deductions for recovery of advances •
Deductions for recovery of loans • Deductions for payments to co-operative societies and
insurance schemes • Other deductions
7. 7. DEDUCTIONS FOR FINES (SECTION 8) • No fine shall be imposed on any employed
person in respect of such acts and omissions on his part as the employer may have specified by
notice. • A notice specifying such acts and omissions shall be exhibited in the prescribed manner
on the premises in which the employment is carried out. • No fine shall be imposed on any
employed person until he has been given an opportunity of showing cause against the fine.
8. 8. Contd. • The total amount of fine which may be imposed in any one wage-period on any
employed person shall not exceed an amount equal to three per cent of the wages payable to him
 in respect of that wage-period. • Every fine shall be deemed to have been imposed on the day of
the act or omission in respect of which it was imposed. • All fines and all realisations thereof shall
be recorded in a register to be kept by the person responsible for the payment of wages.
9. 9. DEDUCTION FOR ABSENCE FROM DUTIES FOR UNAUTHORISED ABSENCE
(SECTION 9) • Deductions may be made under clause (b) of sub section (2) of section 7 only on
account of the absence of an employed person from the place or places where by the terms of his
employment, he is required to work • The ratio between the amount of deduction and the wages
payable shall not exceed the ratio between the period of absence and the total period within such
wage period
10. 10. DEDUCTION FOR DAMAGE OR LOSS [SECTION 7(2)] • Deductions for damage to or
loss of goods expressly entrusted to the employed person for custody or for loss of money for
which he is required to account (C) • Acceptance by the employed person of counterfeit or base
coins or mutilated or forged currency notes(M) • Failure of the employed person to invoice to bill
to collect or to account for the appropriate charges due to that administration (N) • Any rebates or
refunds incorrectly granted by the employed person (O)
11. 11. DEDUCTIONS FOR DAMAGE OR LOSS (SECTION 10) • The deduction shall not exceed
the amount of the damage or loss caused to the employer. • A deduction shall not be made until
the employed person has been given an opportunity of showing cause against the deduction. • All
such deductions and all realisations thereof shall be recorded in a register to be kept by the person
responsible for the payment of wages.
12. 12. DEDUCTION FOR SERVICES [SECTION 7(2)] • Deductions for house-accommodation
supplied by the employer. • Deductions for such amenities services supplied by the employer. •
Deductions shall not be made from the wages, unless such services have been accepted by the
employed person under the terms of employment or otherwise (Section 11)
13. 13. DEDUCTION FOR RECOVERY OF ADVANCE [SECTION 7(2)(F)] Deductions for
recovery of advances of whatever nature (including advances for travelling allowance or
conveyance allowance) and the interest due in respect thereof or for adjustment of over-payments
of wages.
14. 14. DEDUCTIONS FOR RECOVERY OF LOANS • Deductions for recovery of loans granted
for house-building or other purposes approved by the State Government and the interest due in
respect thereof. [Section 7(2)(fff)] • Deductions shall be subject to any rules made by the State
Government regulating the extent to which such loans may be granted and the rate of interest
payable thereon.(Section 12-A)
15. 15. DEDUCTIONS FOR PAYMENTS TO CO-OPERATIVE SOCIETIES AND INSURANCE
SCHEMES • Deductions for payments to co-operative societies approved by the State
Government or to a scheme of insurance maintained by the Indian Post Office [Section 7(2)(j)] •
Deductions made with the written authorisation of the person employed for payment of any
premium on his life insurance policy to the Life Insurance Corporation Act of India or for the
purchase of securities of the Government of India or for being deposited in any Post Office
Saving Bank. [Section 7(2)(k)]
16. 16. OTHER DEDUCTIONS [SECTION 7(2)] • Deductions of income-tax payable by the
employed person. (g) • Deductions required to be made by order of a court or other authority .(h)
• Deductions for subscriptions to and for repayment of advances from any provident fund to
which the Provident Funds Act 1952 applies or any recognised provident funds or any provident
fund approved by the State Government .(i)
17. 17. Contd. • Deductions for payment of insurance premium on Fidelity Guarantee Bonds.(l) •
Deductions made with the written authorisation of the employed person for contribution to the
Prime Minister's National Relief Fund.(p) • Deductions for contributions to any insurance scheme
framed by the Central Government .(q)
 18. 18. LIMIT ON DEDUCTIONS [SECTION 7(3)] • In cases where such deductions are wholly or
partly made for payments to co-operative societies under clause (j) of sub-section (2) seventy-five
per cent of such wages. • In any other case fifty per cent of such wages. The excess may be
recovered in such manner as may be prescribed.

EPF ACT 1952

Employees Provident Fund is established in 1952 and hence the act is named as Employees Provident
Fund & Miscellaneous Provisions Act, 1952, which extend to the whole of India except Jammu &
Kashmir.
Employee Provident Fund (EPF)
Provident fund is a welfare scheme for the benefits of the employees. Under this scheme both the
employee & employer contribute their part but whole of the amount is deposited by the employer.
Employer deducted the employee share from the salary of the employee. The interest earned on this
investment is also credited in pf account of the employees. At the time of retirement, the accumulated
amount is given to the employees, if certain conditions are satisfied.
Applicability of the Act
It is applicable:
a) Every factory engaged in any industry specified in Schedule 1 in which 20 or more persons are
employed;
b) Every other establishment employing 20 or more persons or class of such establishments which the
Central Govt. may notify;
c) Any other establishment so notified by the Central Government even if employing less than 20 persons.
Every employee, including the one employed through a contractor (but excluding an apprentice engaged
under the Apprentices Act or under the standing orders of the establishment and casual laborers), who is
in receipt of wages up to Rs.6,500 p.m., shall be eligible for becoming a member of the funds. The
condition of three months’ continuous service or 60 days of actual work, for membership of the scheme.
Taxability of PF
Deduction of PF can be claimed under section 80C while calculating Income Tax & when the employee
withdraw the amount of PF & Interest after the retirement then, PF amount & Interest amount is not
taxable.
Pf can be accumulated withdrawn by the employee if he is unemployed for more than 2 month. 75% PF
can be withdrawn after the employment of 1 month &   rest 25% PF can be withdrawn after the
unemployment of 2 month. It is on the choice of the employee after withdrawn of 75% amount that they
should continue with the PF account or want to withdrawal the whole amount.
Income Tax Liability on PF withdrawal

Serial Scenario Taxability

No

1 Amount withdrawn is < Rs 50,000 No TDS.

 before completion of 5 continuous
years of service
But while filling return amount of pf shall be
shown.

2 Amount withdrawn is > Rs 50,000 TDS @ 10% if PAN is furnished;

before completion of 5 years of
continuous service No TDS in case Form 15G/15H is furnished No
TDS.

3 Withdrawal of EPF after 5 years of No need to mention in return as the amount is

continuous service not taxable No TDS.

4 Transfer of PF from one account to No need to mention in return as the amount is

another upon a change of job not taxable.

5 Before completion of 5 continuous No TDS.

years of service\ if
Further, the individual need not offer the same
employment is terminated due to in the return of income as such withdrawal is
employee’s ill health exempt from tax
The business of the employer is
discontinued
or the reasons for withdrawal are
beyond the employee’s control

 Important Provisions of the Epf

1. 1. THE EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT,
1952 “basic wages” means all emoluments which are earned by an employee while on duty or on
leave or on holidays with wages in either case in accordance with the terms of the contract of
employment and which are paid or payable in cash to him, but does not include- (i) the cash value
of any food concession; (ii) any dearness allowance that is to say, all cash payments by whatever
name called paid to an employee on account of a rise in the cost of living, house-rent allowance,
overtime allowance, bonus, commission or any other similar allowance payable to the employee
in respect of his employment or of work done in such employment; (iii) any presents made by the
employer; BASIC WAGES- THE MOST IMPORTANT DEFINITION
2. 2. Definition of an employee • f) “employee” means any person who is employed for wages in
any kind of work, manual or otherwise, in or in connection with the work of an establishment and
who gets his wages directly or indirectly from the employer, and includes any person,- (i)
employed by or through a contractor in or in connection with the work of the establishment; (ii)
engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52
of 1961) or under the standing orders of the establishment; • HR NOTE: All employees
irrespective of their nature of job contract are covered under the epf act. Only apprentices having
a proper contract of apprenticeship are not covered under the act.
3. 3. CONTRIBUTIONS Employees’ Provident Funds Scheme, 1952 12% Employee contribution +
3.67% employer contribution + 0.85% admin charges Employees’ Deposit-Linked Insurance
 Scheme, 1976 (EDLI) and 0.5% employer contribution + 0.01% admin charges Employees’
Pension Scheme, 1995 (EPS) (Earlier the Employees’ Family Pension Scheme, 1971 8.33%
employer contribution. No admin charges
4. 4. According to the EPF withdrawal rules, you can get back your EPF money only under three
situations—after the retirement age (which has been extended from 55 to 58), unemployed for
more than two months, or death before retirement. EPF also offers the nomination facility, that is,
an employee can nominate his mother, father, spouse or children to receive the money in the
event of the death of the employee. However, an employee cannot nominate his brother or sister
to take their EPF money. The EPF withdrawal amount is tax free only if you get it after
retirement or have been working continuously for five year. However, you will be taxed if you
withdraw your EPF money before completing five years of continuous service and if the amount
is above Rs 30,000. There are special provisions for women who have subscribed under EPF.
Women who quit their job for getting married, or during pregnancy or childbirth will not have to
wait for two months to withdraw and can do so immediately. EPF WITHDRAWL NORMS

REGISTRATION OF TRADE UNION ACT 1926

Trade Unions in India are registered and file annual returns under the Trade Union Act (1926). Its
statistics are collected annually by the Labour Bureau of the Ministry of Labour, Government of India.
Chapter II of the Trade Unions Act, 1926 deals with the provisions of the registration of trade unions.

The procedure of registration of a trade union as following –

Appointment of Registrar:
Section 3 of the Trade Union Act, 1926 empowers the appropriate Government to appoint a person to be
registrar of Trade Unions. The appropriate Government be it State or Central, as the case may be is also
empowered to appoint additional and Deputy Registrars as it thinks fit for the purpose of exercising and
discharging the powers and duties of the Registrar. However, such person will work under the
superintendence and direction of the Registrar. He may exercise such powers and functions of Registrar
with a local limit as may be specified for this purpose.

Mode of Registration:
Any seven or more persons who want to form a trade union, can apply for its registration to the
Registration of Trade Unions under Section 4 (1) of the Trade Unions Act, 1926. These applicants must
be members of a trade union.

In order to check the multiplicity of trade unions, one school of thought has proposed the number of
persons forming a trade union for the purposes of registration be reasonably increased to 10 percent of
employees of the unit, subject to a minimum of seven persons employed therein This is expected to
strengthen the trade union movement. The application for registration must be sent to the Registrar of
Trade Unions in Form “A” as required by the Trade Union Act, 1926 under Section 5.

Application for registration

According to section 5 of the Act, every application for the registration of the trade union shall be made
to the Registrar and shall be accompanied by a copy of the rules of the Trade Union and a statement of the
following particulars namely-
 1. The names, occupations and addresses of the members making the application;
2. The name of the trade union and the address of its head office, and
3. The titles, names, ages, addresses and occupations of the office- bearers of the trade union.
Where a trade union has been in existence for more than a year, then a copy of the assets and liabilities
shall also be submitted along with the application for registration.

Provisions to be contained in the rules of a Trade Union

According to section 6 of the Act, a Trade Union shall not be entitled to registration under the Act unless
the executive committee has been established in accordance with the provisions of the Act and the rules
provide for the following-

1. The name of the trade union;

2. The whole of the objects for which the trade union has been established;
3. The whole of the purposes for which the general funds of the trade union shall be applicable;
4. The maintenance of a list of the members of the trade union;
5. The admission of ordinary members who shall be persons actually engaged or employed in an
industry with which the trade union is connected;
6. The conditions under which any member shall be entitled to any benefit assured by the rules and
under which any fine or forfeiture may be imposed on the members;
7. The manner in which the rules shall be amended, varied or rescinded;
8. The manner in which the members of the executive and the other office bearers of the Trade
Union shall be elected and removed;
9. The safe custody of the funds of the trade union, an annual audit, in such manner, as may be
prescribed, of the accounts thereof, and adequate facilities for the inspection of the account books
by the office bearers and members of the trade union, and;
10. The manner in which the trade union may be dissolved.

Section 7 provides power to call for further particulars and to require alteration of name. —

(1) The Registrar may call for further information for the purpose of satisfying himself that any
application complies with the provisions of section 5, or that the Trade Union is entitled to registration
under section 6, and may refuse to register the Trade Union until such information is supplied.

(2) If the name under which the Trade Union is proposed to be registered is identical with that by which
any other existing Trade Union has been registered or, in the opinion of the Registrar, so nearly resembles
such name as to be likely to deceive the public or the members of either Trade Union, the Registrar shall
require the persons applying for registration to alter the name of the Trade Union stated in the application,
and shall refuse to register the Union until such alteration has been made.

Registration
According to section 8 of the Act, if the registrar thinks that the trade union has complied with all the
provisions of the Act, it shall register the Trade Union by entering in a register all the particulars in
accordance with the provisions of the Act.

Certificate of registration
According to section 9 of the Act, the registrar shall issue a certificate of registration to the trade union
after registration under section 8 which shall be conclusive proof that a trade union has been duly
registered.

OR
Procedures for the Registration of Trade Unions

1. Appointment of Registrar:

Section 3 of the Trade Union Act, 1926 empowers the appropriate Government to appoint a person to be

registrar of Trade Unions. The appropriate Government be it State or Central, as the case may be is also

empowered to appoint additional and Deputy Registrars as it thinks fit for the purpose of exercising and

discharging the powers and duties of the Registrar. However, such person will work under the

superintendence and direction of the Registrar. He may exercise such powers and functions of Registrar

with local limit as may be specified for this purpose.

2. Mode of Registration:

Any seven or more persons who want to form trade union, can apply for its registration to the Registration

of Trade Unions under Section 4 (1) of the Trade Unions Act, 1926. These applicants must be members

of a trade union.

In order to check the multiplicity of trade unions, one school of thought has proposed the number of

persons farming a trade union for the purposes of registration be reasonably increased to 10 per cent of

employees of the unit, subject to minimum of seven persons employed therein This is expected to

strengthen the trade union movement. The application for registration must be sent to the Registrar of

Trade Unions in Form “A” as required by the Trade Union Act, 1926 under Section 5.

Every application must be accompanied with the following particulars:

1. The names, occupations and addresses of the members making application.

2. The name of the trade union and the address of its head office.

3. The titles, names, ages, addresses and occupations of the office bearers of the trade union.
4 If a trade union has been in existence for more than one year prior to application of its registration, a

financial statement showing its assets and liabilities prepared in the prescribed form has also to be

submitted to the Registrar along with the application for registration.

5. Besides, every application must be accompanied with a copy of Rules of Trade union complying with

the items as specified under Section 6 of the Trade Unions Act, 1926.

Rules of a Trade Union:

A trade union can be registered only when its constitution fulfils the following rules:

1. Name of the trade union;

2. The whole of the objects for which the trade union has been established;

3. The whole of the purposes for which the general funds of a trade union shall be applicable.

4. The maintenance of a list of the members of the trade union and adequate facilities for the inspection

thereof by the office-bearers and members of trade union;

5. The payment of a subscription by members of the trade union which shall be not less than 25 naya

paise per month per member;

6. The manner in which rules will be amended varied and/or rescinded;

7. The manner in which the members of the executive and the other office-bearers of the trade union shall

be appointed and removed;

8. The manner in which the funds of the trade union shall be kept and audited and inspection of the books

of accounts by the office bearers and members of the trade union be made;
9. The conditions under which any member shall be entitled to have benefits under the rules and under

which fine or forfeiture shall be imposed on the members; and The manner in which the trade union shall

be dissolved.

3. Rights and Duties of Registrar:

Section 7 of the Act empowers the Registrar of Trade Union to make, if required so, further enquiries on

receipt of an application for registration to fully satisfy himself that the application complies with the

provisions of section 5. However, such enquiries can be made only from the application and not from any

other source.

The duties of the Registrar of Trade Unions in matters of registration of trade union are laid down under

Section 8 of the Act. On having being satisfied with the requirements for the registration of the union, the

Registrar shall register the trade union by entering in a register. The letter to this effect will be issued to

the Trade Union. In case of non-satisfaction of registrar with the compliance of requirements, the refusal

for registration will be issued to the trade union.

No time limit for the grant or refusal of registration has been prescribed in the Trade Union Act, 1926.

However, there are legal directives issued by the Court to the Registrar of Trade Unions to perform me

statutory duty imposed upon mm under sections 7 and 8 to deal with the application of the Trade Union

according to law at an early date

The National Commission on Labour has suggested 30 days excluding the time which the Union takes in

answering queries from the Registrar for the grant or refusal of registration by the Registrar. The Trade

Unions (Amendment) Bill, 1982 has provided for insertion of the words “within a period of 60 days from

the date of such compliance” after the words “Register the Trade Unions” in Section 8 of the Trade

Unions Act, 1926. Where, however, Registrar refuses to grant registration to a trade union, he is under an

obligation to state reasons for refusing to grant registration.

The Societies of Registration Act, 1860, Co-operative Societies Act, 1912 and the Companies Act, 1956

do not apply to trade unions and registration thereof under any of these Acts is void ab initio.

4. Legal Status of Registered Trade Union:

Upon the registration, a trade union assumes to a corporate body by the name under which it is registered.

A registered trade union shall have perpetual succession and its common seal. A registered trade union is

an entity distinct from the members of which, the trade union is composed of It enjoys power to contract

and to hold property both moveable and immoveable and to sue and be sued by the name in which it is

registered.

INDUSTRIAL DISPUTE ACT 1947

The Industrial Disputes Act, 1947 extends to the whole of India and regulates Indian labour law so far
as that concerns trade unions as well as Individual workman employed in any Industry within the territory
of Indian mainland. Enacted on 11th March 1947 and It came into force 1 April 1947.

Objectives
An act to make provision for the investigation and settlement of industrial disputes, and for certain other
purposes. The objective of the Industrial Disputes Act is to secure industrial peace and harmony by
providing mechanism and procedure for the investigation and settlement of industrial disputes by
conciliation, arbitration and adjudication which is provided under the statute. The main and ultimate
objective of this act is "Maintenance of Peaceful work culture in the Industry in India" which is clearly
provided under the Statement of Objects & Reasons of the statute.
The laws apply only to the organised sector. Chapter V talks about the most important and often in news
topic of 'Strikes and Lockouts'. It talks about the Regulation of strikes and lockouts and the proper
procedure which is to be followed to make it a Legal instrument of 'Economic Coercion' either by the
Employer or by the Workmen. Chapter V-B, introduced by an amendment in 1976, requires firms
employing 300 or more workers to obtain government permission for layoffs, retrenchments and closures.
A further amendment in 1982 (which took effect in 1984) expanded its ambit by reducing the threshold to
100 workers.
The Act also lays down:

1. The provision for payment of compensation to the workman on account of closure or lay off
or retrenchment.
2. The procedure for prior permission of appropriate Government for laying off or retrenching the
workers or closing down industrial establishments
3. Unfair labour practices on part of an employer or a trade union or workers.
Applicability
The Industrial Disputes Act extends to whole of India and applies to every Industry and its various
industrial establishment carrying on any business, trade, manufacture or distribution of goods and services
irrespective of the number of workmen employed there in.
Every person employed in an establishment for hire or reward including contract labour, apprentices and
part-time employees to do any manual, clerical, skilled, unskilled, technical, operational or supervisory
work, is covered by the Act.
This Act though does not apply to persons mainly in managerial or administrative capacity, persons
engaged in a supervisory capacity and drawing > 10,000 p.m or executing managerial functions and
persons subject to Army Act, Air Force and Navy Act or those in police service or officer or employee of
a prison.

Machinery for Prevention and Settlement of Industrial Disputes

If industrial peace is the backbone of a nation, strikes and lockouts are cancer for the same as they effect

production and peace in the factories. In the socioeconomic development of any country cordial and

harmonious industrial relations have a very important and significant role to play. Industry belongs to the

society and therefore good industrial relations are important form society’s point of view.

Now-a-days, industrial relations are not bipartite affair between the management and the work force or

employees. Government is playing an active role in promoting industrial relations. The concept of

industrial relations has therefore, become a tripartite affair between the employees, employers and the

government concerned.

It is possible to settle the industrial disputes if timely steps are taken by the management. Such disputes

can be prevented and settled amicably if there is equitable arrangement and adjustment between the

management and the workers.

The following is the machinery for prevention and settlement of industrial disputes:
1. Works committees:

This committee represents workers and employers. Under the Industrial Disputes Act 1947, works

committees exist in industrial establishments in which one hundred or more workmen are employed

during the previous year.

It is the duty of the works Committee to promote measures for securing and preserving amity and good

relations between the employers and workers. It also deals with certain matters viz. Condition of work,

amenities, safety and accident prevention, educational and recreational facilities.

2. Conciliation officers:

Conciliation Officers are appointed by the government under the Industrial Disputes Act, 1947.

The duties of conciliation officer are given below:

(i) He has to evolve a fair and amicable settlement of the dispute. In case of public utility service, he must

hold conciliation proceedings in the prescribed manner.

(ii) He shall send a report to the government if a dispute is settled in the course of conciliation

proceedings along with the charter of the settlement signed by the parties.

(iii) Where no settlement is reached, conciliation officer sends a report to the government indicating the

steps taken by him for ascertaining the facts, circumstances relating to dispute and the reasons on account

of which settlement within 14 days of the commencement of the conciliation proceedings.

3. Boards of conciliation:

The government can also appoint a Board of Conciliation for promoting settlement of Industrial Disputes.

The chairman of the board is an independent person and other members (may be two or four) are to be

equally represented by the parties to the disputes.

The duties of the board include:

(a) To investigate the dispute and all matters affecting the merits and do everything fit for the purpose of

inducing the parties to reach a fair and amicable settlement.

(b) A report has to be sent to the government by the board if a dispute has been settled or not within two

months of the date on which the disputes were referred to it.

4. Court of enquiry:

The government may appoint a Court of enquiry for enquiring into any industrial dispute. A court may

consist of one person or more that one person and in that case one of the persons will be the chairman.

The Court shall be required to enquire into the matter and submit its report to the government within a

period of six months.

5. Labour courts:

As per the second schedule of the Industrial Dispute Act 1947.

The government sets up Labour Courts to deal with matters such as:

(i) The propriety or legality of an order passed by an employer under the standing orders.

(ii) The application and interpretation of standing orders passed.

(iii Discharge or dismissal of workmen including reinstatement, grant of relief to workers who are

wrongfully dismissed.

(iv) Withdrawal of any customary concession of privilege

(v) Illegality or otherwise of a strike or lockout, and all other matters not specified in the third schedule.

6. Industrial Tribunals:

A Tribunal is appointed by the government for the adjudication of Industrial disputes.

7. National Tribunal:

A National tribunals is constituted by the Central government for Industrial Disputes involving question

of national importance.

8. Arbitration:

The employer and employees may agree to settle the dispute by appointing an independent and impartial

person called Arbitrator. Arbitration provides justice at minimum cost

FORMS/MODES OF WORKERS PARTICIPATION

Form # 1. Works Committee:

Enterprises with a workforce of 100 or more workers constitute a works committee with equal number of
representatives from employees and the management. This committee has to evolve ways and means for
maintaining cordial and harmonious relations between employees and the management.

Form # 2. Joint Management Council (JMC):

JMCs were introduced in 1958. These councils are formed at plant level with equal number of employee
and employer representatives. These are mainly consultative and advisory ones. The scope of JMCs
encompasses to matters like working conditions, indiscipline, absenteeism, accident prevention,
preparation of holiday schemes etc. It is generally alleged that both works committee and JMC are similar
in scope and function. Hence multiplicity of bipartite consultative bodies did not serve the purpose.

Form # 3. Board of Representation:

Under this scheme, one or two representatives of workers are nominated or elected to the Board of
Directors. The basic idea is to safeguard worker’s interest, and usher in industrial harmony and good
relations between workers and management. This is the highest form of participation. Government of
India introduced this schemes in public sector enterprises like Hindustan Antibiotics Ltd, BHEL, NTC,
National Coal Mines Development Corporation, Hindustan Organic Chemicals, etc.
Public Sector Banks have introduced the scheme from 1970 onwards. The representative unions have to
give a panel containing names out of which one will be selected by the Government. The success of the
worker director depends in his role in the board and his prior consultation communication with the other
workers. He should articulate the worker’s concern very effectively and cogently with facts and figures
and enlighten the management of the implications of various proposals at the board.

Form # 4. Participation through Ownership:

Workers by becoming shareholders take part in management. Management sell shares at reduced price to
its committed and loyal workforce. Such workers are allowed to pay the price in installments or allowed
financial accommodation to buy the shares. But participation is distinct from management. But its effect
on participation is observed to be limited. In some cases, sick companies are allowed to be taken over by
workers. For example, Kamani Tubes, New Central Jute mills, etc., are some of the companies taken over
by worker’s cooperatives.
Form # 5. Participation through Complete Control:
It is called self-management. Yugoslavia is the country practicing this model. This gives a complete
control to the workers to directly manage all aspects of industries through their representatives. This
method ensures complete identification of workers with their organization. The scope for industrial
conflict becomes lesser under the self-management method. But the success of the method depends on the
intensity of interest shown by workers in the management.

Form # 6. Collective Bargaining:

This mechanism gives the management and the employees to lay down rules relating to working
conditions and contract of employment. This type of participation is in practice.
Form # 7. Job Enlargement and Job Enrichment:
Job enlargement means addition of task elements horizontally. Job enrichment means adding motivators
to the existing job. Both are mechanisms to relieve the job holders of the monotony of work. They serve
as participative mechanisms as they offer freedom and scope to use their wisdom.

Form # 8. Suggestion Scheme:

Suggestions are invited from workers on the various aspects of work. Management reviews the
suggestions made and put the constructive suggestions into action. Some companies share financial
benefits accruing through good suggestions with the workers who contribute the suggestion. This
mechanism kindles the creative or innovative urge in the workers. This is a win-win mechanism. The
rewards awarded should be commensurate with the benefits derived from the suggestion.

Form # 9. Quality Circle (QC):

A Quality Circle (QC) consists of 7 to 10 people drawn from the same work area, who meet regularly to
define, analyse and solve quality and related problems in their area. Membership is voluntary and
meetings are held once a week for an hour. During the meetings, members are trained in problem-solving.
This concept originated from Japan. In India, the experience of quality circle is a mixed one.

Form # 10. Empowered Team and Autonomous Teams:

Empowerment means transferring authority and responsibility to employees. When power is transferred
to employees, they experience a sense of ownership and control over their job. At the same time, it
engenders in them a sense of accountability.
i. Empowered team sets its own target.
ii. Decides the method of work.
iii. Decides the style of leadership and function.
iv. Creates its own work schedules and reviews its performance.
v. Prepares its own budget and coordinates its work with other departments.
vi. Chooses the source of supply of materials.
vii. Hires own replacement.
viii. Assumes responsibility for the discipline of its members.
ix. Takes responsibility for the quality of the products and services.
Indian companies practising empowered team concept includes TITAN, ABB, TATA Information
System, Philips, Wipro Infotech, etc.
Form # 11. Total Quality Management (TQM):
TQM denotes deep commitment of an organization to quality. The quality of product/service is the sole
focus of an organization. It intends to infuse quality in each and every process of production and delivery
of service to the end consumer.
Conventional belief that quality is the preserve of quality control department, quality can be improved
through inspection, quality costs high and defects cannot be eliminated totally, have been thrown
overboard.
The new TQM philosophy includes the following:
i. Meeting customer’s requirement on time.
ii. Ensuring error-free work.
iii. Managing by pro-action ‘not by correction’.
iv. Measuring the cost of quality.
TQM is viewed as one of the participative methods as every employee is involved and assumes
responsibility for quality improvement.

Form # 12. Financial Participation:

This type of participation has potential to involve the worker in the decision-making process or
consultation process intensively. It enhances employees’ commitment to the organization by linking the
performance of the firm to that of the employee. Many schemes of financial participation include profit
sharing plan, ESOP, management buyout, profit-linked pay, worker’s co-operatives, pension fund
participation and wage earner fund

COLLECTIVE BARGAINING
Collective bargaining, the ongoing process of negotiation between representatives of workers and
employers to establish the conditions of employment. The collectively determined agreement may cover
not only wages but hiring practices, layoffs, promotions, job functions, working conditions and hours,
worker discipline and termination, and benefit programs.

Collective bargaining is the process of negotiating the terms of employment between an employer and a

group of workers. The terms of employment are likely to include items such as conditions of
employment, working conditions, and other workplace rules, as well as base pay, overtime pay, work
hours, shift length, work holidays, sick leave, vacation time, retirement benefits, and health care benefits.

KEY TAKEAWAYS

 Collective bargaining is the process of negotiating the terms of employment between an employer
and a group of workers, such as pay and working conditions. 
 The process takes place between company management and a labor union. 
 Roughly 10.3% of U.S. workers are union members, where 33.6% of public sector workers are
unionized, versus 6.2% for the private sector. 
 The median weekly pay for union workers is higher than nonunion workers as of 2019, coming in
at $1,095 versus $892, respectively. 

Procedure for initiating collective bargaining

1. A charter of demands
The trade union will notify the employer for initiating collective bargaining negotiations. The
representatives of the trade union draft a charter of demands which contains issues related to terms of
employment and the working conditions namely wages and allowances, bonuses, working hours, benefits,
holidays. In some cases, an employer may also notify the trade union and initiate collective bargaining
negotiations.

2. Negotiations
Negotiation is the next step after the submission of the charter of demands by the trade union. Both the
employer and the employee seek opportunities to suggest compromise solutions in their favour until an
agreement is reached. If it impossible to reach out to an agreement, a third party (mediator / arbitrator)
may be brought in from outside. If, even with the assistance of the third party, no viable solution can be
found to resolve the parties’ differences, the trade union may decide to engage in strikes.

3. Collective bargaining agreement

Pursuant to the negotiations between the parties, a collective bargaining agreement will be executed
between the employer and workmen represented by trade unions, setting out the terms of employment and
the working conditions of labour.

4. Strikes
If both parties fail to reach an agreement because of mutual consensus, the union may go on a strike,
which shall be in accordance with the provisions of the Industrial Disputes Act 1947 (“ID Act”).

5. Conciliation
Once the conciliation officer receives a notice of strike or lockout, the conciliation proceedings shall
commence. The State Government may appoint a conciliation officer or a Board of Conciliation to
investigate disputes, mediate and promote a settlement. Workers are prohibited from going on strike
during the pendency of such conciliation proceedings. Conciliation proceeding may have one of the three
outcomes, namely (i) a settlement; or (ii) no settlement; or (iv) reference being made to the appropriate
labour court or any other industrial tribunal.

6. Compulsory arbitration or adjudication

When conciliation and mediation fail, parties may either resort to compulsory or voluntary arbitration.
Arbitration and the recommendations of the arbitrator may be binding to the parties. Section 7A of the ID
Act provides for a labour court or industrial tribunal within a state to adjudicate protracted industrial
disputes such as strikes and lockouts. Section 7B of the ID Act provides for constitution of national
tribunals to resolve disputes involving questions of national interest or issues concerning more than two
states. In the event, a labour dispute is not resolved by conciliation and mediation, the employer, and the
workers may refer the case by a written agreement to a labour court, industrial tribunal or national
tribunal for adjudication or compulsory arbitration.

The following types of collective bargaining agreements are prevalent in India:

1. Bipartite agreements
These agreements are a result of voluntary negotiations between employer and trade union and are
binding, as per the provisions of the ID Act.

2. Settlements
It is tripartite in nature as it involves the employer, trade union and the conciliation officer. Settlements
arise out of specific disputes which is resolved by a reconciliation officer. If, during the conciliation
proceedings, the conciliation officer believes at any point of time that there is a possibility of reaching a
settlement, then the officer may withdraw himself from the negotiations. The parties are free to finalise
the terms of the agreement and must inform the conciliation officer within a specified timeframe if such
an agreement is reached after his withdrawal.

3. Consent awards
These are agreements reached while a dispute is pending before an adjudicatory authority. Such
agreement is incorporated in the authority’s award and although the agreement is reached voluntarily
between parties, it becomes binding under the award passed by the authority.

Recent Trends in Collective Bargaining

1.      Decentralised and Individualized Bargaining

The collective bargaining in India remained largely decentralized, i.e. company or unit level bargaining
rather than Industry level bargaining. But in some sectors (mostly public sector industries) the industry
level bargaining was dominant. However, privatization of public sector transformed the industry level
bargaining to company level bargaining. On the other hand, due to drastic infomalisation of workforce
and downsizing in the industries, the strength and power of the trade unions is heavily reduced. The trade
unions mainly represented the interests of formal workers. Increasing number of informal workers in the
companies soon transformed the structure of the workforce in such a way that the formal workers became
a minority. Moreover, in some sectors like garment, there is almost complete informalisation of the work
force with only a tiny section of formal workers. It happened in almost all sectors. Due to various reasons
informal workers are not able to form their own trade unions, and on the other hand they are not
represented by the trade unions of the formal workers. These situations resulted in spurt of individualized
bargaining.

High level of informalisation of workforce combined with the individualized bargaining actually changed
the character of the trade unions also. In relevant sectors and industrial regions, it converted many trade
unions (particularly in sector dominated by informal workers) in to legal consultants (pursuing individual
cases and charging fees for their services) rather than collective bargaining agents. 

2.      Declining Wage Share

Declining strength of collective bargaining is also reflected in sharply increasing share of profit and
drastically declining the wage share (since 2001-02), resulting in depressing purchasing power.
Approximately 73 million out of 173 million wage earners throughout India do not receive minimum
wages[5]. About 30–40 per cent of these low-paid wage earners belong to poor families.[6] 

3.      New Wave of Labour Movement for Unionisation

A new wave of workers struggle for unionization is emerging from below by and large independent from
the central trade unions. This is mainly emerging in the formal sector. The workers are realizing by their
own experiences that they can not change their fate without organizing themselves in a trade union. In
many cases the workers do not get even the legal benefits like minimum wages, premium rate of overtime
and holidays and casual leaves. Once the union is formed, at least the minimum benefits guaranteed by
law are easily available to all workers. Actually large numbers of informal workers are illegally put in the
category of informal, and they can convert their status in to formal workers only by organizing
themselves in a trade union. It is in this background that even when the workers are facing unimaginable
repression for their attempts to form a union, they are fighting for it and more and more workers in new
factories are also choosing the same.

In 2009-10, most of the well known workers struggles were on the issue of formation or for recognition of
the trade union for collective bargaining, e.g. Hyundai Workers Struggle for Recognition of the Union,
Nokia Workers Struggle for Wage Hike and Against Victimization, MRF Workers Struggle for
Recognition of Union, Pricol Workers Struggle for Recognition of Union, Graziano Workers struggle for
Unionization, The Case of Trade Union Repression in Nestle, Vivva Global Workers Struggle for
Minimum Wages and Unionization, Rico Auto Workers Struggle for Unionization and Sunbeam Workers
Struggle for Democratisation of the union.[8]
It is also interesting to note that in almost all the above cases both formal and informal workers came
together in these struggles. It explains that the conditions have already entered in a new phase when the
numbers of informal workers in factories are either equal to or more than formal workers and generally
with same competence levels. Therefore the enmity of formal workers with informal workers has gone.
Now rather than trying to oust informal workers, the formals are uniting with informals and demanding
regularization of their jobs so that they get the same status and benefits as formal workers. Unionizing all
the formal and informal workers under the same union is actually one major step in this direction. 

On the other hand, the industrialists are not ready to accept trade unions in their factories at any cost.
They are unleashing unimaginable repression on workers and trade union leaders when there are efforts to
form trade unions in their factories. Even after the trade unions are formed, managements are not ready to
recognize them and therefore deny them space for collective bargaining.

According the data of Government of India on strikes and lockouts (Indian Labour Statistics 2010), causal
factor of 34.8 percent cases of industrial disputes is recorded as indiscipline. 22 percent cases of industrial
disputes are around demands for wages and allowances (in many cases demanding only minimum wages
fixed by the government). Actually these two categories of industrial disputes largely reflect on the
sufferings of informal workers and repression unleashed by factory managements on unionization efforts
of the workers. Moreover, after the liberalization, man days lost in the lockouts are far more than the
strikes by the workers. This is a consistent trend.[9]

In the meantime, the central trade unions are also increasingly realizing the importance of unity among
trade unions. This is reflected in formation of a Coordination Committee of eight Central Trade Unions
on the other. First joint action of this coordination committee was the one day All India General Strike on
7th Nov 2010, which is said to be the biggest strike in India since independence with participation of
about 100 million workers from all over the country.

There are also new initiatives to organize informal sector workers particularly the agriculture workers.
After the implementation of National Rural Employment Guarantee Act, the new possibilities emerged to
unionize the rural workers around the NREGA. Many local level unions of rural workers and also
regional platforms of rural workers have started emerging. However, the system of collective bargaining
in this sector is very different; it is mostly on general issues like proper implementation of the act itself,
ensuring minimum wages, employment guarantee and workplace facilities. Since the wages (minimum
wages) and facilities are fixed by law, the struggle is actually for implementation of the NREGA. There
are also initiatives to organize other informal sector workers also like forest workers, fish workers and
other self employed categories. But the movement is still very weak and informal sector workers are by
and large not able to realize the right of collective bargaining.

INDUSTRIAL RELATIONS
Industrial relations or employment relations is the multidisciplinary academic field that studies the
employment relationship;[1] that is, the complex interrelations
between employers and employees, labor/trade unions, employer organizations and the state.
The newer name, "employment relations" is increasingly taking precedence because "industrial relations"
is often seen to have relatively narrow connotations. [2] Nevertheless, industrial relations has frequently
been concerned with employment relationships in the broadest sense, including "non-industrial"
employment relationships. This is sometimes seen as paralleling a trend in the separate but related
discipline of human resource management.[3]
While some scholars regard or treat industrial/employment relations as synonymous with employee
relations and labour relations, this is controversial, because of the narrower focus of employee/labour
relations, i.e. on employees or labour, from the perspective of employers, managers and/or officials. In
addition, employee relations is often perceived as dealing only with non-unionized workers, whereas
labour relations is seen as dealing with organized labour, i.e unionized workers. Some academics,
universities and other institutions regard human resource management as synonymous with one or more
of the above disciplines,[5] although this too is controversial

Approaches to Industrial Relations

Approach # 1. Unitary:

The unitary approach is based on the strong argument that there is only one source of authority i.e., the
management, which owns and controls the dynamics of decision making in issues relating to negotiation
and bargaining. Under unitary approach, industrial relations are grounded in mutual co-operation,
individual treatment, team-work, and shared goals.
Work place conflict is seen as a temporary aberration, resulting from poor management, from employees
who do not mix well with the organizational culture. Unions co-operate with the management and the
management’s right to manage is accepted because there is no ‘we-they’ feeling.
The underlying assumption is that everyone benefits when the focus is on common interest and promotion
of harmony. Conflict in the form of strikes is not only regarded as necessary but destructive.
Advocates of the unitary approach emphasize on a reactive industrial relations strategy. They seek direct
negotiations with employees. Participation of government, tribunals and unions is not sought or is seen as
being necessary for achieving harmonious employee relations.
The unitary approach is being criticized as a tool for seducing employees away from unionism and
socialism. It is also criticized as manipulative and exploitative.
Approach # 2. Pluralistic:
The pluralistic approach totally departs from the unitary approach and assumes that the organization is
composed of individuals who form distinct groups with their own set of aims, objectives, leadership
styles, and value propositions.
The organization is multi structured and there will be continued tension due to conflicts within and
between the various sectional groups. In contrast to the unitary approach, the pluralistic approach
considers conflict between management and employees as rational and inevitable.
The pluralistic approach perceives:
i. Organizations as coalitions of competing interests, where the role of the management is to mediate
amongst the different interest groups.
ii. Trade unions as legitimate representatives of employee interests.
iii. Stability in industrial relations as the product of concessions and compromises between management
and unions.
Legitimacy of the management’s authority is not automatically accepted. Conflict between the
management and workers is understood as inevitable and, in fact, is viewed as conducive for innovation
and growth. Employees join unions to protect their interests and influence decision-making by the
management.
Unions, thus, balance the power between the management and employees. In the pluralistic approach,
therefore, a strong union is not only desirable but necessary. Similarly, society’s interests are protected by
state intervention through legislation and industrial tribunals which provide orderly process for regulation
and resolution of conflict.

The theories on pluralism were evolved in the mid-sixties and early seventies when England witnessed a
resurgence of industrial conflicts. However, the recent theories of pluralism emanate from British
scholars, and in particular, from Flanders and Fox.
According to pluralists, industrial conflict is inevitable and it needs to be contained within the social
mechanism of collective bargaining, conciliation, and arbitration.

Approach # 3. Marxist:

Also known as the ‘Radical Perspective’, the Marxist approach is based on the proposition that the
economic activities of production, manufacturing, and distribution are majorly governed by the objective
of profit. Marxists, like the pluralists, regard conflict between employers and employees as inevitable.
However, pluralists believe that the conflict is inevitable in all organizations. Marxists see it as a product
of the capitalist society. Adversarial relations in the workplace are simple one aspect of class conflict. The
Marxist approach, thus, focuses on the type of society in which an organization functions.

Conflict arises not only because of competing interests within the organization, but because of the
division within society between those who won or manage the means of production and those who have
only their labour to offer. Industrial conflict is, thus, seen as being synonymous with political and social
unrest.
The Marxist approach argues that for social change to take place, class conflict is required. Social change
initiates strong reactions from the worker class and bridges the gap between the economically settled
owners of factors of production and the economically dependent worker class. This approach views
pluralism as unreal and considers industrial disputes and class conflicts as inevitable for the circular
functioning of an industry.
Trade unions are seen both as labour reaction to exploitation by capital, as well as a weapon to bring
about a revolutionary social change. Concerns with wage-related disputes are secondary. Trade unions
focus on improving the position of workers within the capitalist system and not to overthrow. For the
Marxists, all strikes are political.
Besides, Marxists regard state intervention via legislation and the creation of industrial tribunals as
supporting management’s interest rather than ensuring a balance between the competing groups. This
view is in contrast to the belief of the pluralists who argue that state intervention is necessary to protect
the overall interest of society.

To Marxists, the pluralist approach is supportive of capitalism, the unitary approach anathema.
Consequently, enterprise bargaining, employee participation, cooperative work culture, and the like which
help usher in cordial industrial relations are not acceptable to Marxists.
Such initiatives are regarded as nothing more than sophisticated management techniques designed to
reinforce management control and the continuation of the capitalist system

Scope

Industrial relations are relation between employee and employer in their day-to-day work. Hence, it is
continuous relationship.
The scope of industrial relations includes:
(a) Relationship among employees, between employees and their superiors or managers.
(b) Collective relations between trade unions and management. It is called union-management relations.
(c) Collective relations among trade unions, employers’ associations and government.

The industrial relations has to attain the maximum individual development, desirable working
relationships between management and employees and effective moulding of human resources. They
have also asserted that either industrial relations or personnel administration is primarily concerned with
all functions relating man effectively to his environment.
Thus, the scope of industrial relations seems to be very wide. It includes the establishment and
maintenance of good personnel relations in the industry, ensuring manpower development, establishing a
closer contact between persons connected with the industry and that between the management and the
workers, creating a sense of belonging in the minds of management, creating a mutual affection,
responsibility and regard for each other, stimulating production as well as industrial and economic
development, establishing a good industrial climate and peace and ultimately maximising social welfare
What Is the Importance of Industrial Relations

Every company needs to have good industrial relations. When the relationship between the employees
and the managers is positive, then a lot of things see an instant improvement, such as the productivity of
the employee, their motivation, engagement, and morale, among others.

Employees who have amicable relationships with their managers actually enjoy and look forward to
going to work every morning. Their counterparts, who have negative relationships with their managers,
will typically feel anxious about work and won’t be looking forward to it in the morning. Employees who
have better relations with their managers will have a positive work experience, where they will work
better, harder, happier, and in a more devoted fashion. They will be happy and the customers of the
company will also be happy as a result. Ultimately, the bottom line of the company will benefit from
better employee relationships.

The Functions of Industrial Relations

There are four main functions which industrial relations play and which can be used by managers to
ensure that relationships with employees are positive.
The Function of Open Communication

Communication is important to any relationship, including a business relationship. Employees will

typically spend a very large chunk of their days at work and so it is important that they feel perfectly
comfortable with their manager and satisfied with the kind of work that they do.

The ABC rule really helps here. ABS stands for Always Be Communication and it is an important rule of
thumb to remember when relating with employees. A manager should inform their team that the work of
the manager is to make work a little easier for the employee and help them with whatever they need. They
should also seek to be clear about what they need from employees.

One way that you can stay on top of things with your team is to conduct surveys on a weekly basis where
your employees can give you feedback with the benefit of anonymity. It helps to maintain the flow of
communication and it engages your employees in an environment that is both safe and anonymous for
them.
The Function of Recognition

Sometimes something as simple as saying some kind words to your employees can go a long way. In fact,
most employees feel starved of recognition at their places of work. When you show them gratitude and
appreciation it will mean a lot to them. It also a kind of reinforcement strategy, where you reinforce the
good work that they do by recognizing them for it. That inspires them to want to do more of it.

But don’t just give the praise in private. Give it in public as well for a much grander effect. When you
praise your employees in public, the rest of the team also gets inspired. When you reward your team for
work well done then a culture of reward and appreciation begins to develop between you and your
employees, which motivates them to work even harder at their tasks.

The Function of Constant Feedback

You should offer feedback as frequently as you can to your employees. You can tell them about the great
work they’re doing as well as offer some constructive criticism on what they need to improve. That is
another essential part of a strong relationship between an employee and a manager.

Believe it or not, your employees actually want and value your feedback. They want to learn more and
grow in their capabilities and sills and feel like they are moving ahead, not just at their place of work, but
in life as well. When you give them guidance and little tips on what they need to do to get where they
want, they will appreciate you. Hold as many feedback sessions as you need to do this and make sure you
employees constantly feel like there is growth and development in their work and themselves.

The Function of Investment

You should always show your employees that you care. You shouldn’t care about them as your
employees, but also as people. They need to know that you take their fulfillment seriously, both
personally and professionally. When you want your employees to succeed, they will respect you more and
will be more engaged in their work and in the company generally.

When an employee is happy and feels fulfilled in his personal life, his productivity at work is likely to
improve. So, if you want to see your employees do better, make a grand gesture of investing in their
personal lives and you will see massive improvements.
There are many ways in which you can invest in the personal lives of your employees, in meaningful
ways. For example, you can offer gym memberships that encourage your employees to take care of their
bodies and to be happier in the process. You can encourage them to pursue their hobbies, and to do things
that they find interesting outside of work. You could even offer time off from their job, so that they can
do some volunteer work.

LABOUR LEGISLATION
The term "labour legislation" or "labour laws" is used to denote that body of laws which deal with
employment and non-employment wages, working conditions, industrial relations, social security and
labour welfare of industrially employed persons. Any enlightened state would intervene in the conduct of
industry and impose statutory obligations mostly on the employers and also, to a lesser degree, on the
workers in order to maintain industrial peace and good relations between management and workers and to
secure to the better working conditions a minimum wage, compensation in case of accidents medical
facilities provision for future etc.
The origin and growth of labour legislation may be ascribed mostly to the development of organised
industry where a large number of workers including women and children are employed under conditions
which tend to be detrimental to their health, safety and welfare and against which they arc often unable to
protect themselves.
Need for Labour Legislation

To sum up, Labour Legislation is necessary for the following reasons:

1. The individual workers are economically weak. They cannot bargain with the employers for the
protection of their rights and even for subsistence wages. As such legislation for protection of labour
against long hours of work, unhygienic conditions of work, low wages and exploitation is needed.
2. The workers are exposed to certain risks in factories, mines and other establishments. As such in order
to make provision for their health, safety and welfare, legislation is needed.
3. In order to increase the bargaining power of labour, legislation is necessary to encourage the formation
of trade unions.
4. In order to avoid industrial disputes which lead to strikes and lock-outs, labour legislation is needed.
5. To protect children and women from taking to work under hazardous conditions and at odd hours, laws
are necessary.

6. Laws for providing compensation to workmen who die or are injured during and in the course of
employment are also needed. ,
7. Labour Legislation advances the interests of the working people and thus helps set up the development
of the national economy on a sound and self-reliant basis.

PRINCIPLES OF LABOUR LEGISLATION

1. Social Justice-In an industrial set-up, social justice means an equitable distribution of profits and
benefits accruing from industry between industrialists and workers and affording protection to the
workers against harmful effect to their health, safety and morality. Mere compliance with and
enforcement of legal rights may be unfair and cause hardship to the workers as workers-employer
contracts are generally one-sided and directed by the employers. The Workmen's Compensation Act,
1923 and the Minimum Wages Act, 1948, for example, are attempts at securing social justice to the
workers. The provisions of the Factories Act, 1948, fixing hours of work, overtime, leave privileges,
welfare facilities and safe working conditions are also directed towards the same end.

2. Social equity—Anotherr principle on which Labour Legislation is based is social equity. Legislation

based on social justice fixes a definite standard for adoption for the future, taking into consideration the

events and circumstances of the past and the present. But with the change of circumstances arid ideas

there maybe a need for change in the law. This power of changing the law is taken by the Government by

making provisions for True-making powers in the Acts in regard to certain specified matters. The rules

may be modified or amended by the Government to suit the changed situation. Such legislation is based

on the principle of social equity.

3. International uniformity—International uniformity is another principle on which labour laws are based.

The important role played by the International Labour Organisation (in short, I.L.O.) in this connection is

praiseworthy. I.L.O. is an international agency which was founded in 1919 soon after the First World

War.

The main aims of the I.L.O.

(i) to remove injustice, hardship and deprivation of large masses of toiling people all over the world; and

(ii) to improve their living and working conditions and thus establish universal and lasting peace based

upon social justice.

I.L.O. is a tripartite organisation consisting of representative of Government, employers and workers of

the member countries. There is parity of representation as between Government and non-Government

welding together employers and workers in different countries into independent organisations. By its

tripartite character of association of representatives of Government, employers and workers, it has

produced a large number of international Conventions and Recommendations covering unemployment,

general conditions of employment, wages, hours of work, weekly rest periods, holidays, employment, of

children, young persons and women, industrial health, safety, social security, industrial relations and

many other allied subjects.

4. National economy—In enacting labour legislation, the general economic situation of the country has to

be born in mind lest the very objective of the legislation be defeated. The state of national economy is an

important factor in influencing labour legislation in the country.

Evolution of Labour legislation in India:

Labour legislation in India has a history of over 125 years. Beginning with the Apprentice Act, passed in

1850, to enable children brought up in orphanages to nd employment when they come of age, several

labour laws covering all aspects of industrial employment have been passed. The labour laws regulate not

only the conditions of work of industrial establishments, but also industrial relations, payment of wages,

registration of trade unions, certication of standing orders, etc. In addition, they provide social security

measures for workers. They dene legal rights and obligations of employees and employers and also

provide guidelines for their relationship. In India, all laws emanate from the Constitution of India. Under

the Constitution, labour is a concurrent subject, i.e., both the Central and State governments can enact

labour legislation, with the clause that the State legislature cannot enact a law which is repugnant to the

Central law. A rough estimate places the total number of enactments in India to be around 160.

The Apprentice Act of 1850 was followed by the Factories Act of 1881 and the rst State act was the

Bombay Trade Disputes (and Conciliation) Act, 1934, followed by the Bombay Industrial Disputes Act,

1938, which was amended during the war years. This was replaced by the BIR Act, 1946. The Central

Government at this time introduced the Industrial Employment (Standing Orders) Act, 1946. In 1947, the

government replaced the Trade Disputes Act with the Industrial Disputes Act, which was later modied.
This law is the main instrument for government intervention in industrial disputes. After Independence,

many laws concerning social security and regulation of labour employment were enacted, such as the ESI

Act, 1948, EPF and Miscellaneous Provisions Act, 1952, Payment of Gratuity Act, 1972, Equal

Remuneration Act, 1976. Etc.

Types of Labour Legislation in India:

1) Protective and employment legislation

2) Social security legislation

3) Regulatory legislation.

QUALITY CIRCLES
Conceptually Quality Circles can be described as a small group of employees of the same work area,
doing similar work that meets voluntarily and regularly to identify, analyse and resolve work related
problems.

This small group with every member of the circle participating to the full carries on the activities,
utilising problem solving techniques to achieve control or improvement in the work area and also help
self and mutual development in the process.

The concept of the Quality Circle is based on “respect for the human individual” as against the traditional
assumption based on suspicion and mistrust between management and its employees.

Quality circles built mutual trust and create greater understanding between the management and the
workers. Cooperation and not confrontation is the key element in its operation. Quality Circles aims at
building people, developing them, arousing genuine interest and dedication to their work to improve
quality, productivity, cost reduction etc.

Thus we can say that a quality circle is a group of 5 to 8 employees performing similar work, who
volunteer themselves to meet regularly, to identify the cause of their on-the-job problems, employ
advanced problem-solving techniques to reach solutions and implement them.
The concept is based on the premise that the people who do a job everyday know more about it than
anyone else and hence their voluntary involvement is the best way to solve their work related problems.

The Quality Circle concept provides an opportunity to the circle members to use their wisdom, creativity
and experience in bringing about improvements in the work they are engaged in by converting the
challenging problems into opportunities and it contributes to the development of the employees and in
turn benefits the organisation as well. The concept encourages the sense of belongingness in circle
members and they feel that they have an important role to play in the organisation.

Characteristics of Effective Quality Circles:

1. The atmosphere should be informal, comfortable and relaxed. The members should feel involved and
interested.

2. Everyone should participate.

3. The objectives should be clear to the members.

4. The members should listen to each other.

5. The group should feel comfortable even when there are disagreements.

6. The decisions should generally be taken by a kind of consensus and voting should be minimum.

7. When an action is required to be taken, clear assignments should be made and accepted by all the
members.

8. The leader should not dominate the group. The main idea should not be as to who controls but how to
get the job done.

9. Until a final solution is found and results are attained feedback is necessary.

Objectives of Quality Circles:

Some of the broad objectives of the Quality Circle are:
(i) To improve quality, productivity, safety and cost reduction.

(ii) To give chance to the employees to use their wisdom and creativity.

(iii) To encourage team spirit, cohesive culture among different levels and sections of the employees.
(iv) To promote self and mutual development including leadership quality,

(v) To fulfill the self-esteem and motivational needs of employees.

Techniques

Technique # 1. Brainstorming Processes:

Under these techniques a complete and free environment is created where employees can voice all their
worthy and stupid ideas. All these ideas are recorded seriously. This technique is useful to generate as
many ideas as possible. Later, the plus and the minus points of each idea are discussed before taking final
decision.

Technique # 2. Cause and Effect:

Members are asked to find out the causes for the identified problem. In this process they identify one
important effect of this cause on the problem. Then they identify other causes and their effects. Charting
out of those causes and effects resembles a fish bone diagram.

Technique # 3. Sampling and Charting Methods:

The quality circles observe the events and their consequences in the form of positive or negative results.
They chart out all their observations either in sequence or in some other relationship, which gives a clear
idea of the problem. These techniques will work effectively in attaining objectives only when the
organization structure of the quality circle is sound and systematic. The following chart explains the
various stages/steps in the process of quality circle and techniques used by the business organization in
the present competitive and global word.
Problems of Quality Circles and Their Solutions:

Though QC concept has many positive points, it has failed miserably in many organisations due to certain

problems and pitfalls. Following are some important problems of QC implementation in India and

remedies to overcome or solve them.

1. Negative Attitude:

Both employees and managers having negative attitude toward QC often resist its implementation.

Managers feel that QC dilutes their authority and importance in the organisation. This negative attitude
can be dispelled by imparting appropriate training to employees as well managers about the real concept

and contribution of QC.

2. Lack of Ability:

The Indian workers are characterized by their low level of educations and also lack of leadership

qualities. This problem can be overcome by initiating workers’ education programme.

3. Lack of Management Commitment:

Lack of management commitment toward QC is demonstrated by not permitting the members to hold QC

meetings during the working hours. Therefore, the top management should permit the members to hold

QC meetings periodically during working hours preferably at the end of the day. Management should also

extend all required and timely assistance for the smooth

4. Non-implementation of Suggestions:

The members of the QC feel disheartened in case their suggestions are not accepted and implemented by

the management without giving convincing reasons for not doing so. Instead, the suggestions rendered by

QC should be given due consideration and weightage and should be implemented honestly.

This will, as a result, further enthuse, the members of QC to improve quality of their goods and services.

In this way, QC may benefit both workers and organisation. In other worlds, QC is symbiotic for workers

and organisation, if used honestly.

SET ON AND SET OFF

Set on: For an accounting year, when the allocable surplus exceeds the amount of maximum bonus
payable to the employees in the establishment under Section 11 then the excess shall, subject to a limit of
20% of the total salary or wage of the employees employed in the establishment in that accounting year,
be carried forward for being set on in the succeeding accounting year and so on up to and inclusive of the
fourth accounting year to be utilized for the purpose of payment of bonus.
Set off: For an accounting year, when there is no available surplus or the allocable surplus in respect of
that year falls short of the amount of minimum bonus payable to the employees in the establishment under
Section 10 and there is no amount of sufficient amount carried forward and set on under Sub-section (1)
that could be utilized for the purpose of payment of the minimum bonus then such minimum amount or
the deficiency, as the case may be, shall be carried forward for being set off in the succeeding accounting
year and so on up to and inclusive of the fourth accounting year.

FUNDAMENTAL RIGHTS AND LABOUR LEGISLATION

. They can be grouped together under as

(1). The Right to Equality (Article 14 to 18)

(2). The Right to Freedom (Article 19 to 22)

(3). The Right against Exploitation (Article 23 to 24)

(4). The Right to Freedom of Religion (Article 25 to 30)

(5). Cultural and Educational Rights (Articles 29-30)

(6). The Right to Constitutional Remedies (Articles 32 to 35)

Since the Fundamental Rights have been guaranteed to protect the public from repressive state actions,

judicial decisions tend to expand the scope of word 'State' as defined by Article 12 of the Constitution. A

liberal interpretation is made of the words "other authorities" so as to include any instrumentality or

agency of the Government whether an individual or a corporation like Life Insurance Corporation (Som

Prakash Rakhi vs. Union of India-SC 1981) or society like the Indian Statistical Institute registered under

the Societies Registration Act, 1960,or a company like Steel Authority of India. All have to fulfil the tests

laid down by the court in their dealings with their employees (Ajay Hasia vs.Kahlid Mujid-SC 1981)

Fundamental Rights are subject to reasonable restrictions. Therefore, Article 14, dealing with the right to

equality and equal protection of law is subject to reasonable classification as absolute equality is

impossibility.Classification can be on the basis of age, sex ,nature of trade profession or occupation

framing rules for recruitment or promotions of public servants to secure efficiency, fixing of different

minimum wages for different. To be valid, the classification must be operational and not arbitrary. Itwas
held that Classification of employees of P&T deptt. into regular employees and casual employees for the

purpose of paying the latter less than minimum payable to regular employees is not tenable and violative

of Article 14 and 16 of Constitution. It also amounts to exploitation of labour and is opposed to clause (2)

of Article 38 which provides that the State in particular strive, to"minimise inequality in income".

Article 16 (1) and (2) of the Constitution guarantees equality of opportunity to all the citizens in matter of

appointment to any office or any other employment under the State. Clauses (3), (4) &(5) lay down, by

way exceptions, reasonable classification and provisions for backwards and for religious institutions.

Introduction to Labour Legislation Article 19 in its various sub clauses provides, inter alia, freedom of

association; freedom to carry on trade or business and freedom of speech, which are relevant to labour

legislation.

Article 21 proclaims that "no person shall be deprived of his life or personal liberty except according to

procedures established by law". With passage of time, and compelling social needs, however, the courts

have given a very liberal and wide interpretation of the terms "life" or "Personal Liberty". In Bandhua

Mukti Morcha vs. union of India-SC 1984, it was held that Article 21 assures a citizen the right to live

with human dignity free from exploitation. The Govt. is bound to ensure observance of social welfare and

labour laws enacted to secure for workmen a life compatible with human dignity. Again in Ogla Tellis12-

Dec-06 vs. Bombay Municipal Corporations - S.C. 1985, this was affirmed

Article 23 and 24 guarantee the right against exploitation. Clause(1) of Article 23, prohibits traffic in

human beings; and any form of forced labour and makes them punishable offence. In People's Union for

Democratic Rights vs. Union of India Sc. 1983, it was held that labour or services for a remuneration less

than a minimum wages amounts to "forced labour". In this case, a letter written to Justice Bhagwati

regarding the working conditions of construction workers engaged in building structures connected with

Asian Games was entertained as Writ Petition, setting aside the technicalities of locus - standi and other

procedures. The court held that when judicial redressal is sought for legal injury suffered by a person or

persons who by reason of poverty, disability or socially or economically disadvantaged position are
unable to approach the court and the attention of the court is drawn to such legal injury by a member of

public, even by a letter, the same will be entertained by the court as a writ petition to bring justice within

the reach of the poor masses.

In Bandhua Mukti Morcha vs. Union of India (SC 1984) S.C. held that Government was bound to ensure

observance of social welfare and labour laws enacted to secure to workmen a life of basic human dignity.

So also, Neerja Choudhary vs. State of MP SC - 1984, held that wherever it is found that any workman is

forced to provide labour for no remuneration or nominal remuneration, the presumption would be that he

is a bonded labour, unless the employer or the state government proves otherwise. Similarly, the Court

said that the plainest requirement of Article 21 and 23 is that bonded labour not only be identified and

redressed but also suitably rehabilitated.

Article 24 of the Constituion prohibits the employment of children below the age of 14 years in factories,

mines or any other hazardous work. The idea is to protect the health and well being of children. However,

the article does not prohibit the employment of children in easy and less strenuous work.

Articles 32 to 35 guarantee the right to constitutional remedies, as right without a remedy is a

meaningless formality. It is the remedy which makes the right real. In view of this, the S.C. has evolved

the innovative strategy by encouraging Public Interest Litigation aimed at providing easy access to justice

to the poor and weaker sections of Indian Society (generally labourers) and giving a powerful tool to

public sprited individuals and social action groups to combat exploitation and injustice. In the cases like

People's Union for Democratic Rights, Bandhua Mukti Morcha etc., the S.C. departed from traditional

principles of locus standi to entertain even the letter by a member of public as writ petition to give relief

to poor and illiterate workmen.

PAYMENT OF BONUS ACT 1965

The payment of Bonus Act provides for payment of bonus to persons employed in certain establishments
of the basis of profits or on the basis of production or productivity and for matters connected therewith.
 It extends to the whole of India and is applicable to every factory and to every other establishment where
20 or more workmen are employed on any day during an accounting year

Eligibility For Bonus

Every employee receiving salary or wages upto RS. 3,500 p.m. and engaged in any kind of work whether
skilled, unskilled, managerial, supervisory etc. is entitled to bonus for every accounting year if he has
worked for at least 30 working days in that year.

However employees of L.I.C., Universities and Educational institutions, Hospitals, Chamber of

Commerce, R.B.I., IFCI, U.T.I. Social Welfare institutions are not entitled to bonus under this Act.

DISQUALIFICATION FOR BONUS 

Notwithstanding anything contained in the act, an employee shall be disqualified from receiving bonus, if
he is dismissed from service for fraud or riotous or violent behaviour while in the premises of the
establishment or theft, misappropriation or sabotage of any property of the establishment.

Minimum/Maximum Bonus Payable

MINIMUM BONUS

1. The minimum bonus which an employer is required to pay even if he suffers losses during the
accounting year or there is no allocable surplus is 8.33 % of the salary or wages during the accounting
year, or
2. Rs. 100 in case of employees above 15 years and Rs 60 in case of employees below 15 years, at
the beginning of the accounting year,

whichever is higher

MAXIMUM BONUS 

If in an accounting year, the allocable surplus, calculated after taking into account the amount ‘set on’ or
the amount ‘set of’ exceeds the minimum bonus, the employer should pay bonus in proportion to the
salary or wages earned by the employee in that accounting year subject to a maximum of 20% of such
salary or wages. 

TIME LIMIT FOR PAYMENT

The bonus should be paid in cash within 8 months from the close of the accounting year or within one
month from the date of enforcement of the award or coming into operation of a settlement following an
industrial dispute regarding payment of bonus. 

However if there is sufficient cause extension may be applied for.

Calculation of Bonus
The method for calculation of annual bouns is as follow:
 1. Calculate the gross profit profit in the manner specified in-
i. First Schedule, in case of a banking company, or
ii. Second Schedule, in any other case.
2. Calculate the Available Surplus.

Available Surplus = A+B, where A = Gross Profit – Depreciation admissible u/s 32 of the Income tax Act
- Development allowance - Direct taxes payable for the accounting year (calculated as per Sec.7) – Sums
specified in the Third Schedule.
 

B = Direct Taxes (calculated as per Sec. 7) in respect of gross profits for the immediately preceding
accounting year – Direct Taxes in respect of such gross profits as reduced by the amount of bonus, for the
immediately preceding accounting year.

3. Calculate Allocable Surplus

Allocable Surplus = 60% of Available Surplus, 67% in case of foreign companies.

4. Make adjustment for ‘Set-on’ and ‘Set-off’. For calculating the amount of bonus in respect of an
accounting year, allocable surplus is computed after considering the amount of set on and set offf from
the previous years, as illustrated in Fourth Schedule.
5. The allocable surplus so computed is distributed amongst the employees in proportion to salary or
wages received by them during the relevant accounting year.

In case of an employee receiving salary or wages above Rs. 2,500 the bonus payable is to be calculated as
if the salary or wages were Rs. 2,500 p.m. only.

Duties/Rights of Employer
DUTIES

1. To calculate and pay the annual bonus as required under the Act
2. To submit an annul return of bonus paid to employees during the year, in Form D, to the
Inspector, within 30 days of the expiry of the time limit specified for payment of bonus.
3. To co-operate with the Inspector, produce before him the registers/records maintained, and such
other information as may be required by them.
4. To get his account audited as per the directions of a Labour Court/Tribunal or of any such other
authority.

RIGHTS
 
An employer has the following rights:
1. Right to forfeit bonus of an employee, who has been dismissed from service for fraud, riotous or
violent behaviour, or theft, misappropriation or sabotage of any property of the establishment.
2. Right to make permissible deductions from the bonus payable to an employee, such as,
festival/interim bonus paid and financial loss caused by misconduct of the employee.
3. Right to refer any disputes relating to application or interpretation of any provision of the Act, to
the Labour Court or Labour Tribunal.

Rights of Employees

1. Right to claim bonus payable under the Act and to make an application to the Government, for
the recovery of bonus due and unpaid, within one year of its becoming due.
2. Right to refer any dispute to the Labour Court/Tribunal Employees, to whom the Payment of
Bonus Act does not apply, cannot raise a dispute regarding bonus under the Industrial Disputes Act.
3. Right to seek clarification and obtain information, on any item in the accounts of the
establishment.

Recovery of Bonus Due

1. Where any bonus is due to an employee by way of bonus, employee or any other person
authorised by him can make an application to the appropriate government for recovery of the money due.
2. If the government is satisfied that money is due to an employee by way of bonus, it shall issue a
certificate for that amount to the collector who then recovers the money.
3. Such application shall be made within one year from the date on which the money became due to
the employee.
4. However the application may be entertained after a year if the applicant shows that there was
sufficient cause for not making the application within time.

Offences and Penalties

For contravention of the provisions of the Act or rules the penalty is imprisonment upto 6 months, or fine
up to Rs.1000, or both. 

For failure to comply with the directions or requisitions made the penalty is imprisonment upto 6 months,
or fine up to Rs.1000, or both.

In case of offences by companies, firms, body corporate or association of individuals, its director, partner
or a principal officer responsible for the conduct of its business, as the case may be, shall be deemed to be
guilty of that offence and punished accordingly, unless the person concerned proves that the offence was
committed without his knowledge or that he exercised all due diligence

Available and allocable surplus

Allocable Surplus [Section 2 (4)]: “Allocable surplus” means:

 In relation to an employer, being a company (other than a banking company) which has not made
the arrangements prescribed under the Income Tax Act for the declaration and payment within India of
the dividends payable out of its profits in accordance with the provisions of Section 194 of that Act,
67% of the available surplus in an accounting year.
 In any other case, 60% of such available surplus. [Section 2(4)].
 
Available Surplus [Section 2(6)]: “Available surplus” means the available surplus computed as per
Section 5. According to Section 5, the available surplus in respect of any accounting year is the gross
profit for that year after deducting therefrom the sum referred to in Section 6 and adding certain amounts.

As per Section 6 of the Payment of Bonus Act, 1965, the following deductions are to be made from
the ‘gross profit’ :
 Amount of depreciation admissible.
 Amount of the development rebate or the development allowance or the investment allowance
admissible as deductions from the income.
 Direct Tax payable as per Section 7.
 Sums which have been specified in the Third Schedule of the Act.

Besides making the above deductions from the gross profit, the difference between the following
amounts has to be added to the gross profit :
 Direct Tax computed according to Section 7 in respect of the gross profit for the immediately
preceding accounting year and
 Direct Tax computed according to Section 7 in respect of gross profit which is reduced by the
amount of bonus, for the immediately preceding accounting year.
Thus, Available surplus = Gross Profit — Certain Deductions Amounts + Certain

Distinction between Allocable Surplus and Available Surplus : The term ‘allocable’ surplus is defined
in Section 2 (4) of the payment of Bonus Act, 1965. It is the workers share in the available surplus.
Available surplus means the available surplus computed under Section 5 of the Act.
According to Section 5, the available surplus in respect of any accounting year shall be the gross profit for
that year after deducting from it certain prior changes as mentioned in Section 6.

Calculation of Bonus as per Bonus Act)

If the gross earning of your employees is below Rs.21000 you are eligible to pay bonus. Calculation of
bonus will be as follows:

 If Basic+DA is below Rs.7000 then bonus will be calculated on the actual amount.
 If Basic+DA is above Rs.7000 then the bonus will be calculated on Rs.7000.
 Examples of calculation of bonus

 If the Basic salary of the employee is less than or equal to Rs 7,000

Rahul is working as an engineer in a Company in Bangalore. His basic salary is Rs. 6,500 per month.

Formula: Basic Salary*8.33% = Bonus per month

6500*8.33% = 541.45 (6497.4 per annum)

 If the Basic salary of the employee is higher than Rs 7,000

Siddharth is working as a Sales officer in one of the shops in Delhi. His basic salary is Rs. 18,000 per
month.

Formula: Basic Salary*20% = Bonus per month

7,000*20% = 1400 per month

 If the Basic salary of the employee is higher than Rs 21,000

There is no bonus applicable to employees having a basic salary of more than Rs 21,000.

POWER OF INSPECTOR UNDER FACTORIES ACT

Powers of Inspectors

(a) enter, with such assistants, being persons in the service of the government, or any local or other
public authority, 4[or with an expert] as he thinks fit, any place which is used, or which he has reason to
believe is used, as a factory;

(b) make examination of the premises, plant, machinery, article or substance;

(c) inquire into any accident or dangerous occurrence, whether resulting in bodily injury, disability or not,
and take on the spot or otherwise statements of any person which he may consider necessary for such
inquiry;

(d) require the production of any prescribed register or any other document relating to the factory;

(e) seize, or take copies of, any register, record or other document or any portion thereof as he may
consider necessary in respect of any offence under this Act, which he has reason to believe, has been
committed;

(f) direct the occupier that any premises or any part thereof, or anything lying therein, shall be left
undisturbed (whether generally or in particular respects) for so long as is necessary for the purpose of any
examination under clause (b);

(g) take measurements and photographs and make such recordings as he considers necessary for the
purpose of any examination under clause (b), taking with him any necessary instrument or equipment;

(h) in case of any article or substance found in any premises, being an article or substance which appears
to him as having caused or is likely to cause danger to the health or safety of the workers, direct it to be
dismantled or subject it to any process or test (but not so as to damage or destroy it unless the same is, in
the circumstances necessary, for carrying out the purposes of this Act), and take possession of any such
article or substance or a part thereof, and detain it for so long as is necessary for such examination;

(i) exercise such other powers as may be prescribed

MATERNITY BENEFITS ACT

The Maternity (Amendment) Bill 2017, an amendment to the Maternity Benefit Act, 1961, was passed
in Rajya Sabha on August 11, 2016, in Lok Sabha on March 09, 2017, and received an assent from
President of India on March 27, 2017.[2] The Maternity Benefit Act, 1961 protects the employment of
women during the time of her maternity and entitles her of a ‘maternity benefit’ – i.e. full paid absence
from work – to take care for her child. The act is applicable to all establishments employing 10 or more
employees.
The provisions of The Maternity Benefit (Amendment) Act, 2017 are effective from April 1, 2017.
However, provision on crèche facility (Section 111 A) shall be effective from July 1, 2017.

Applicability[edit]
The Act is applicable to all establishments which include factories, mines, plantations, Government
establishments, shops and establishments under the relevant applicable legislation, or any other
establishment as may be notified by the Central Government.
Eligibility[edit]
As per the Act, to be eligible for maternity benefit, a woman must have been working as an employee in
an establishment for a period of at least 80 days within the past 12 months. Payment during the leave
period is based on the average daily wage for the period of actual absence. [3]

Key amendments[edit]

 Increased Paid Maternity Leave:

The Maternity Benefit Amendment Act has increased the duration of paid maternity leave available for
women employees from the existing 12 weeks to 26 weeks. Under the Maternity Benefit Amendment
Act, this benefit could be availed by women for a period extending up to a maximum of 8 weeks before
the expected delivery date and the remaining time can be availed after childbirth. For women who are
having 2 or more surviving children, the duration of paid maternity leave shall be 12 weeks (i.e. 6 weeks
before and 6 weeks after expected date of delivery).

 Maternity leave for adoptive and commissioning mothers:

Maternity leave of 12 weeks to be available to mothers adopting a child below the age of three months
from the date of adoption as well as to the “commissioning mothers”. The commissioning mother has
been defined as biological mother who uses her egg to create an embryo planted in any other woman. [4]

 Work from Home option:

The Maternity Benefit Amendment Act has also introduced an enabling provision relating to "work from
home" for women, which may be exercised after the expiry of the 26 weeks' leave period. Depending
upon the nature of work, women employees may be able to avail this benefit on terms that are mutually
agreed with the employer.

 Crèche facility:[5]
The Maternity Benefit Amendment Act makes crèche facility mandatory for every establishment
employing 50 or more employees.[6] Women employees would be permitted to visit the crèche 4 times
during the day (including rest intervals)
The Maternity Benefit Amendment Act makes it mandatory for employers to educate women about the
maternity benefits available to them at the time of their appointment.

Criticism[edit]

 Gender discrimination against women having childbearing age:

Policy design is important and making such leave an employer mandate, as in India, ensures employers
will discriminate against women of childbearing age. [7] Additional requirements like creche facilities
require more capital and operating expenditure. It won’t come as a surprise that some companies in India
might shy away from hiring young women. When they do, the women might face a reduction in
compensation as firms compensate for higher lifetime costs.

 Types of burden on the employer:

Employers have to bear the entire cost of providing leave to employees—in terms of both continued pay
while on leave, as well as the indirect cost of having to get the work done by employing other workers to
finish the work of the absent employee. Also, it increases the cost of temporary training provided to the
employee which is employed on behalf of the absent employee. [7]

 Women will lose their jobs:

Regarding how the bulk of employment is in the informal sector, Team-lease estimates, that 11-18 Lakh
jobs for women will be lost because of the implementation of the Act, over the first four years. [8]

 Financial burden only on employer:

In most countries, the cost of maternity leave is shared by the government, employer, insurance agency
and other social security programs. In Singapore, for example, the employer bears the cost for 8 weeks
and public funds for 8 weeks. In Australia and Canada, public funds bear the full cost. A social insurance
scheme bears the cost in France. In Brazil, it shared by the employer, employee and the government

WORKMEN COMPENSATION ACT

The Workmen Compensation Act, 1923 is an enactment that was issued by the tral Government and was
implemented by various State Governments which gives social security to workers. This security is
offered by the law for people who work.

The Act was formed after it was noted that laborers were getting more exposed to danger with the use of
advanced and sophisticated machinery. The common law had it that the employer would only take up the
compensation responsibility if it is found that the industrial accident was a result of his negligence. In
India, the issue of compensating workmen after fatal and major accidents hit the road in 1884. It was then
in 1885 that the factory and mining inspectors realized that the Fatal Accidents Act, 1885, was not enough
to attend to the intended purposes.

The State offered a hearing ear when members of the Legislative Assembly, employers’ representatives,
workers and experts in medicine and insurance formed a committee that gave a report that led to the
enacting of the Workmen’s Compensation Act in 1923.

The passing of the Act put a stop and offered a relief for workers who would have gone through court
processes that are often expensive, an effort to seek compensation whenever they acquired an injury
during employment.

Aspects of The Workmen Compensation Act

The Act has its basis on two aspects:
# Theory of least cost.
# The production cost shall have the cost of blood and workmen included.

For an industry to run, an employer uses capital, skills in business and the labor of workers who are paid
for the labor. The management has to put aside finances for the possibility of the expense needed to repair
the machines when they break down. If that care and attention can be given to machines, human beings
working in the same environment need also receive care and attention for the risks they undertake when
working in that industry.

Social security offers to ensure compensation is paid to a disabled or injured person only if the accident
rose in the middle of the employment. The compensation paid to a workman by an employer when an
accident occurs is a relief and social security measure provided by the Act. A workman is now able to get
compensation regardless of his negligence.

The Act also puts in place the amount that is to be paid according to the intensity of the injury. This
makes an employer aware of the amount of compensation he is liable to pay in case of an accident.

The Act is recognized all over India and applies to all workmen and casual workers in factories,
plantations, mines, transport establishments, railways, ships, circuses, construction work and any other
potentially dangerous occupations made mention in Schedule II of this Act. The Act is not applicable to
people in the Armed Forces.

Objective of The Workmen Compensation Act

The Workmen’s Compensation Act of 1923 was formed majorly to give compensations to workmen in
the event of an accident.

The Act has it that employers should have duties and obligations that include the welfare of workers after
an injury resulting from employment in the same way they have reserved the right to make profits. The
Act aims to see workmen have a sustainable life after an employment-related accident.

The Royal Commission on Labour made note of the following:

The Act also goes further to ensure the prevention of accidents by giving workmen a relief from anxiety
and renders the industry more friendly and desirable.

It has become a necessity for workmen to be protected due to the increasing complexity of the industry
through the increased use of sophisticated machinery that poses a potential danger to workers and also the
possibility of poverty after injury.

The Act tried as much as possible to curb the chances of disputes which has led to events which are
arbitrary. However, the general outcome is satisfactory since the merits are more than the demerits when
it comes to the welfare of workmen.

Scope of the Act:

The Act is applicable only to those workmen working in industries as specified in the Act. The Act
affords protection to a workman from losses or injury caused by accident arising out of and in the course
of employment subject to certain exceptions as laid down in the Act.
Employer’s Liability for Compensation:
To make the employer pay compensation, the death or injury suffered by the workman must be
consequence of an ‘accident arising out of and in the course of his employment’ is dependent upon the
following four conditions:
(1) The casual connection between the injury and the accident (i.e., personal injury is caused to workman
while on work);
(2) The injury and accident caused during the course of employment;
(3) The probability tenable to reason that the work contributed to the causing of personal injury; and
(4) The applicant proves that it was the work and the resulting strain which contributed to or aggravated
the injury.

1. Applicability of the Act:

The Act is applicable throughout India except the State of Jammu & Kashmir. The Act does not apply to
those areas which are covered by the Employees’ State Insurance Act, 1948.

2. The salient features of the Act are as follows:

I. Extent and Application:
The Act extends to whole of India. It is also applicable to the workman recruited by
companies/establishments registered in India and sent for work abroad.

It applies to:
(a) All railway servants not permanently employed in any administrative, district or sub-divisional office
of a railway and not employed in any capacity as is specified in Schedule II to the Act;

(b) Persons employed in any such capacity as is specified in Schedule II to the Act. Schedule II includes
persons employed in factories, mines, plantations, mechanically propelled vehicles, construction works
and certain other hazardous occupations. In all, there are 48 employments listed in the Schedule; and

(c) Persons employed in employments added to Schedule II by the State Government in exercise of the
powers conferred on them under section 2(3) of the Act. In this connection, a statement indicating the
additions made so far by different State Governments is enclosed (Annex-I).

There is no wage limit for coverage under the Act. All the employees employed in Scheduled
employment including the railway servants men tioned at (a) above, are therefore, covered under the Act.

II. Contingencies in which Compensation is Payable:

Compensation is payable in case of temporary/permanent disablement or death as a result of an
employment injury. The contracting of any disease listed in Schedule III to the Act is deemed to be an
injury by accident.
III. Occupational Diseases:
If a workman employed in the employment specified in Schedule III of the Act contracts any
occupational disease peculiar to that employment he becomes eligible for payment of compensation under
the Act.
The occupational diseases should be contracted while in the service of an employer in the specified
employment. The Schedule III divides the occupational diseases in three parts, namely Part-A, Part-B and
Part-C.

For diseases specified in Part-A, there is no qualifying period of employment. In case of diseases
specified in Part-B, a person should have been employed in the specified employment for a continuous
period of not less than six months before the disease is contracted.

For the diseases specified in Part-C, the qualifying period is specified by the Central Government.
The qualifying period speci fied for the diseases figuring in Part-C of the Schedule is as given
below:
(a) Pneumoconioses 7 years
(b) Pagassosis 3 years
(c) Byssionesis 7 years
No qualifying period is required to be specified.

Note:
(1) Where the monthly wages of a workman exceed two thou sand rupees, his monthly wages for the
purposes of (a) and (b) above shall be deemed to be two thousand rupees only.
(2) The minimum rates of compensation for permanent disablement and death specified in the Act is
rupees Sixty thousand and fifty thousand respectively. The maximum amount of compensation works out
to about Rs. 2,74,248.00 for permanent disablement and Rs. 2,28,540.00 for death.

V. Administration:
The Act does not provide for appointment of Inspectors. However, under Section 32 of the Act, the State
Governments/Union Territory Admin istrations have to frame rules to carry out the purposes of the Act.
The rule making power under the Act was originally vested in the Central Govern ment and in exercise of
these powers, the Workmen’s Compensation Rules, 1924 were framed. Some of the State Governments
have subsequently farmed their own rules under the Act.

In this connection, a statement showing the names of the States/UTs, which have so far framed necessary
rules under the Act, is attached (Annex-II). The remaining States/UTs are being reminded to expedite the
framing of rules under the Act.

VI. Settlement of Claims under the Act:

The claims for compensation broadly fall in three categories, namely (i) uncontested cases of
disablement; (ii) disputed cases of disablement and (iii) fatal cases. The procedures for settlement of the
three types of cases are as given below:
(i) Uncontested Cases:
(a) After a workman has given notice of the accident, the employer is expected to arrange for medical
examination of the workman. It must be free of charge. The medical Examination will indicate the nature
of the disablement.
(b) If the disablement is of temporary nature the employer will pay compensation as half monthly
payments, direct to the workmen.
(c) If the disablement is of permanent nature compensation will be paid in lump sum by the employer to
the workman if he is a male over 18 years of age. In the case of woman and minors, the employer will
deposit the amount of compensation with the Com missioner, for disbursement.
(d) Where a workman has agreed to accept and has taken a smaller sum than the amount fixed by the Act
his right to bring proceed ings for the balance are protected.
(e) Any agreement with the workman for a lump sum payment must be registered with the Commissioner
by the employer.

(ii) Disputed Cases:

(a) If the employer refuses to pay compensation or does not pay the full amount due, the workman has to
make an application to the Commissioner for Workman’s Compensation appointed by the State
Government or Union Territory.
The application has to be made in Form ‘F* prescribed under the Workman’s Compensation Rules. An
illiterate person can have the application prepared under the direction of the Commissioner.
(b) A claim for compensation must be preferred before the Commis sioner within 2 years of the
occurrence of the accident or in the case of death within 2 years of the date of death.
In the case of contracting of a disease the accident is deemed to have occurred on the first of the day
during which the workman was continuously absent in consequence of the disablement caused by the
disease.

(iii) Fatal Cases:

(a) The amount of compensation due has to be deposited by the employer with the Commissioner for
Workmen’s Compensation. The Act specifically provided that no payment made directly by the employer
shall be deemed to be a payment of compensation.
(b) The Commissioner shall distribute the lump sum amount of com pensation to the dependants in such
proportion as he may decide.
(c) If the employer does not deposit the compensation the dependant or dependants have to make an
application to the Commissioner in Form ‘G’ prescribed under the Workmen’s Compensation Rules for
the issue of an order to deposit compensation.

VII. Extension of the provisions of the Workmen’s Compensation Act to Hazardous Employments
in Agriculture:
The Workmen’s Compensation Act, 1923 already applies to workers employed in farming by tractors or
other contrivances driven by steam or other mechanical power or electricity etc.

The State Governments of Andhra Pradesh etc. were advised in March, 1976 to consider addition of the
following employments to Schedule-II to the Act in accordance with the provision of sub-Section (3)
of Section 2 of the Act:
(i) Employed in clearing of jungles or reclaiming land or ponds in which on any one day of the
proceeding twelve months more than twenty-five persons have been employed ;
(ii) Employed in cultivation of land or rearing and maintenance of live stock or forest operations or
fishing in which on any one day of the proceeding twelve months more than twenty-five persons have
been employed ;
(iii) Employed, otherwise than in cleric. I capacity, in installation, main tenance, repair of pumping
equipment used for lifting of water from wells, tube-wells, ponds, lakes, stream etc.;
(iv) Employed, otherwise than in clerical capacity, in the construction, boring or deepening of an open
well/dug well through mechanical contrivances;
(v) Employed, otherwise than in clerical capacity in the construction, working, repair or maintenance of a
bore well, bore-cum-dug well, fitter point etc.;
(vi) Employed in spraying and dusting of insecticides or persticides in agricultural operation/or
plantations;
(vii) Employed in working or repair of maintenance of bulldozers, tractors, power tillers etc.

As per available information, the State Governments of Andhra Pradesh, Arunachal Pradesh, Assam,
Bihar, Haryana, Karnataka, Kerala, Maharashtra, Meghalaya, Orissa, Punjab, Tamil Nadu and Tripura
and U.T.
Administrations of Chandigarh, Dadra and Nagar Haveli and Pondicherry have already made the
proposed additions with effect from 15.9.95.

The Central Govern ment has included all the above mentioned employments in Schedule II of the Act by
amending the Schedule. The matter is not, therefore, being pursued further with the remaining
States/UTs.

VIII. Last Amendment of the Act in 1995

(a) The provisions of the Workmen’s Compensation Act, 1923, were reviewed by the Law Commission
of India (1974) and (1989). The Commission had made a number of recommendations for amend ment of
the Act.
Based on their recommendations and suggestions received from the Ministries/State Governments. The
Act has been amended for carrying out certain amendments.

The amendments made by the Workmen’s Compensation (Amendment) Act, 1995 provides inter-alia for
enhancement in the rate of compensation from 40% to 50% and from 50% to 60% of the monthly wage in
the case of death and permanent total disablement respectively;

(b) The minimum rate of compensation for permanent total disable ment and death have been fixed at Rs.
60,000/- and Rs. 50,000/- respectively, as against the previous rates of Rs. 24,000/- and Rs. 20,000/-
respectively;

(c) The monthly wage ceiling specified in Explanation II under Sec tion 4(1) for working out the
maximum amount of compensation has been enhanced from Rs. 1000/- to Rs. 2000/-. The rate of
compensation is linked to the age of the workman at the time of his disablement or death.

The workers getting disabled/dying at an early age are, therefore entitled to compensation at a
comparatively higher rate.
(d) A provision for payment of Rs. 1000/- towards funeral expenses has been made in addition to
compensation;
(e) The Act has been made applicable to workmen recruited by Companies registered and based in India
and sent for work abroad;

(f) Sixteen new employments have been added to Schedule-II. In addition to State Governments, the
Central Government has also been empowered to add hazardous employment in Schedule-II.

(g) Three new occupational diseases added to Schedule-Ill. Power to add occupational diseases in
Schedule-Ill conferred also on the Central Govt.

(h) The claimant of compensation may have the claim/petition filed/ transferred also before the
Commissioner for the area in which the workman ordinarily resides.

Except this all other provisions of the Workmen’s Compensation (Amendment) Act, 1995 have been
brought into force with effect from 15.9.1995

 Distribution of compensation

(1) No payment of compensation in respect of a workman whose injury has resulted in death and no
payment of a lump sum as compensation to a woman or a person under a legal disability shall be made
otherwise than by deposit with the Commissioner and no such payment directly by an employer shall be
deemed to be a payment of compensation :

Provided that in the case of a deceased workman an employer may make to any dependant advances on
account of compensation of an amount equal to three months' wages of such workman and so much of
such amount as does not exceed the compensation payable to that dependant shall be deducted by the
Commissioner from such compensation and repaid to the employer.

Any other sum amounting to not less than ten rupees which is payable as compensation may be deposited
with the Commissioner on behalf of the person entitled thereto. The receipt of the Commissioner shall be
a sufficient discharge in respect of any compensation deposited with him. On the deposit of any money
under sub-section (1) as compensation in respect of a deceased workman the Commissioner shall if he
thinks necessary cause notice to be published or to be served on each dependant in such manner as he
thinks fit calling upon the dependants to appear before him on such dates as he may fix for determining
the distribution of the compensation. If the Commissioner is satisfied after any inquiry which he may
deem necessary that no dependant exists he shall repay the balance of the money to the employer by
whom it was paid. The Commissioner shall on application by the employer furnish a statement showing
in detail all disbursements made. Compensation deposited in respect of a deceased workman shall subject
to any deduction made under sub-section (4) be apportioned among the dependants of the deceased
workman or any of them in such proportion as the Commissioner thinks fit or may in the desecration of
the Commissioner be allotted to any one dependant. Where any compensation deposited with the
Commissioner is payable to any person the Commissioner shall if the person to whom the compensation
is payable is not a woman or a person under a legal disability and may in other cases pay the money to the
person entitled thereto. Where any lump sum deposited with the Commissioner is payable to a woman or
a person under a legal disability such sum may be invested applied or otherwise dealt with for the benefit
of the woman or of such person during his disability in such manner as the Commissioner may direct; and
where a half-monthly payment is payable to any person under a legal disability the Commissioner may of
his own motion or on an application made to him in this behalf order that the payment be made during the
disability to any dependant of the workman or to any other person whom the Commissioner thinks best
fitted to provide for the welfare of the workman. Where on application made to him in this behalf or
otherwise the Commissioner is satisfied that on account of neglect of children on the part of a parent or on
account of the variation of the circumstances of any dependant of for any other sufficient cause an order
of the Commissioner as to the distribution of any sum paid as compensation or as to the manner in which
any sum payable to any such dependant is to be invested applied or otherwise dealt with ought to be
varied the Commissioner may make such order for the variation of the former order as he thinks just in
the circumstances of the case :

Provided that no such order prejudicial to any person shall be made unless such person has been given an
opportunity of showing cause why the order should not be made or shall be made in and case in which it
would involve the repayment by a dependant of any sum already paid to him.

(9) Where the Commissioner varies any order under sub-section (8) by reason of the fact that payment of
compensation to any person has been obtained by fraud impersonation or other improper means any
amount so paid to or on behalf of such person may be recovered in the manner hereinafter provided in
section 31.

EMPLOYEES STATE INSURANCE ACT 1948

The promulgation of Employees' State Insurance Act, 1948 (ESI Act), by the Parliament was the first
major legislation on social Security for workers in independent India.

The ESI Act 1948, encompasses certain health related eventualities that the workers are generally
exposed to; such as sickness, maternity, temporary or permanent disablement, Occupational disease or
death due to employment injury, resulting in loss of wages or earning capacity-total or partial. Social
security provision made in the Act to counterbalance or negate the resulting physical or financial distress
in such contingencies, are thus, aimed at upholding human dignity in times of crises through protection
from deprivation, destitution and social degradation while enabling the society the retention and
continuity of a socially useful and productive manpower.

Coverage

Applicability

Under Section 2(12) the Act is applicable to non-seasonal factories employing 10 or more persons.
Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas
including preview theatres, road-motor transport undertakings and newspaper establishments employing
10* or more persons.
Further under section 1(5) of the Act, the Scheme has been extended to Private Medical and Educational
institutions employing 10* or more persons in certain States/UTs.

Areas covered
The ESI Scheme is now notified in 526 Districts in 34 States and Union Territories, which include 346
complete District, 95 District Headquarters and in 85 Districts. The scheme is implemented in centers.
The scheme is yet to be implemented in Arunachal Pradesh and Lakshadweep.
Finance

ESI Scheme, like most of the Social Security Schemes the world over, is a self financing health insurance
scheme. Contributions are raised from covered employees and their employers as a fixed percentage of
wages. The State Governments, as per provisions of the Act, contribute 1/8th of the expenditure of
medical benefit within a per capita ceiling of Rs. 1500/- per Insured Person per annum. Any additional
expenditure incurred by the State Governments, over and above the ceiling and not falling within the
shareable pool, is borne by the State Governments concerned.

Contribution

E.S.I. Scheme being contributory in nature, all the employees in the factories or establishments to which
the Act applies shall be insured in a manner provided by the Act. The contribution payable to the
Corporation in respect of an employee shall comprise of employer's contribution and employee's
contribution at a specified rate. The rates are revised from time to time.

Currently, the employee's contribution rate (w.e.f. 1.1.97) is 1.75% of the wages and that of employer's is
4.75% of the wages paid/payable in respect of the employees in every wage period. For newly
implemented areas, the contribution rate is 1% of wages of Employee and 3% payable by Employers for
first 24 months (w.e.f. 06.10.2016) Employees in receipt of a daily average wage upto Rs.137/- are
exempted from payment of contribution. Employers will however contribute their own share in respect of
these employees.

Collection of Contribution

An employer is liable to pay his contribution in respect of every employee and deduct employees
contribution from wages bill and shall pay these contributions at the above specified rates to the
Corporation within 15 days of the last day of the Calendar month in which the contributions fall due. The
Corporation has authorized designated branches of the State Bank of India and some other banks to
receive the payments on its behalf.

Contribution Period and Benefit Period

There are two contribution periods each of six months duration and two corresponding benefit periods
also of six months duration as under.

Contribution period Corresponding Cash Benefit period

Contribution Period Cash Benefit Period

1st April to 30th Sept. 1st Jan of the following year to 30th June

1st Oct to 31st March of the year following. 1st July to 31st December.

Benefits

The section 46 of the Act envisages following six social security benefits :-
 1. Medical Benefit : Full medical care is provided to an Insured person and his family members
from the day he enters insurable employment. There is no ceiling on expenditure on the treatment
of an Insured Person or his family member. Medical care is also provided to retired and
permanently disabled insured persons and their spouses on payment of a token annual premium
of Rs.120/- .
2. Sickness Benefit (SB) : Sickness Benefit in the form of cash compensation at the rate of 70 per
cent of wages is payable to insured workers during the periods of certified sickness for a
maximum of 91 days in a year. In order to qualify for sickness benefit the insured worker is
required to contribute for 78 days in a contribution period of 6 months.
o Extended Sickness Benefit (ESB): SB extendable upto two years in the case of 34
malignant and long-term diseases at an enhanced rate of 80 per cent of wages.
o Enhanced Sickness Benefit : Enhanced Sickness Benefit equal to full wage is payable to
insured persons undergoing sterilization for 7 days/14 days for male and female workers
respectively.
3. Maternity Benefit (MB) : Maternity Benefit for confinement/pregnancy is payable for Twenty
Six (26) weeks, which is extendable by further one month on medical advice at the rate of full
wage subject to contribution for 70 days in the preceding Two Contribution Periods.
4. Disablement Benefit
o Temporary disablement benefit (TDB) : From day one of entering insurable
employment & irrespective of having paid any contribution in case of employment
injury. Temporary Disablement Benefit at the rate of 90% of wage is payable so long as
disability continues.
o Permanent disablement benefit (PDB): The benefit is paid at the rate of 90% of wage
in the form of monthly payment depending upon the extent of loss of earning capacity as
certified by a Medical Board
5. Dependants Benefit (DB) : DB paid at the rate of 90% of wage in the form of monthly payment
to the dependants of a deceased Insured person in cases where death occurs due to employment
injury or occupational hazards.
6. Other Benefits :
o Funeral Expenses : An amount of Rs.15,000/- is payable to the dependents or to the
person who performs last rites from day one of entering insurable employment.
o Confinement Expenses : An Insured Women or an I.P. in respect of his wife in case
confinement occurs at a place where necessary medical facilities under ESI Scheme are
not available.

In addition, the scheme also provides some other need based benefits to insured workers.

 Vocational Rehabilitation :To permanently disabled Insured Person for undergoing VR

Training at VRS.
 Physical Rehabilitation : In case of physical disablement due to employment injury.
 Old Age Medical Care : For Insured Person retiring on attaining the age of superannuation or
under VRS/ERS and person having to leave service due to permanent disability insured person &
spouse on payment of Rs. 120/- per annum.
 Rajiv Gandhi Shramik Kalyan Yojana : This scheme of Unemployment allowance was
introduced w.e.f. 01-04-2005. An Insured Person who become unemployed after being insured
three or more years, due to closure of factory/establishment, retrenchment or permanent invalidity
are entitled to :-
o Unemployment Allowance equal to 50% of wage for a maximum period of upto Two
Years.
 o Medical care for self and family from ESI Hospitals/Dispensaries during the period IP
receives unemployment allowance.
o Vocational Training provided for upgrading skills - Expenditure on fee/travelling
allowance borne by ESIC.
 Incentive to employers in the Private Sector for providing regular employment to the
persons with disability :
o Minimum wage limit for Physically Disabled Persons for availing ESIC Benefits is Rs
25,000/-.
o Employerss' contribution is paid by the Central Government for 3 years.

INTERNATIONAL LABOUR ORGANIZATION(ILO)

The International Labour Organization (ILO) is a United Nations agency whose mandate is to
advance social justice and promote decent work by setting international labour standards.[1] It was the first
specialised agency of the UN. The ILO has 187 member states: 186 of the 193 UN member states plus
the Cook Islands are members of the ILO. The tripartite structure is unique to the ILO where
representatives from the government, employers and employees openly debate and create labour
standards.
The International Labour Office is the permanent secretariat of the International Labour Organization. It
is the focal point for International Labour Organization's overall activities, which it prepares under the
scrutiny of the Governing Body and under the leadership of the Director-General.
The ILO employs some 2,700 officials from over 150 nations at its headquarters in Geneva, and in around
40 field offices around the world. Among these officials, 900 work in technical cooperation programmes
and projects.
In 1969, the ILO received the Nobel Peace Prize for improving fraternity and peace among nations,
pursuing decent work and justice for workers, and providing technical assistance to other developing
nations.[2] Fifty years later to mark the organization's centenary, it convened a Global Commission on the
Future of Work, whose report, published in January 2019, made ten recommendations for governments to
meet the unprecedented challenges of a changing world of work. Those included a universal labour
guarantee, social protection from birth to old age and an entitlement to lifelong learning. [3][4]
The International Labour Organization has developed a system of international labour standards aimed at
promoting opportunities for women and men to obtain decent and productive work, in conditions of
freedom, equity, security and dignity

Objectives

The aims and objectives of the ILO were set forth in the preamble to its constitution, drawn up in 1919.
The preamble declares that "universal and lasting peace can be established only if it is based upon social
justice." Hence, the basic objective of the organization is to help improve social conditions throughout the
world. The following examples of concrete measures "urgently required" are specifically mentioned in the
preamble: regulation of the hours of work, including the establishment of a maximum working day and
week; regulation of the labor supply; prevention of unemployment; provision of an adequate living wage;
protection of the worker against sickness, disease, and injury arising out of his or her employment;
protection of children, young persons, and women; provision for old age and injury; protection of the
interests of workers when employed in countries other than their own; recognition of the principle of
equal remuneration for work of equal value; and recognition of the principle of freedom of association.
 full employment and the raising of standards of living;

 employment of workers in the occupations for which they are best suited and where they can make
their greatest contribution to the common well-being;

 facilities for training and the transfer of labor, including migration for employment and settlement;

 policies in regard to wages and earnings, hours, and other conditions of work calculated to ensure a
just share of the fruits of progress to all and a minimum living wage to all employed and in need of such
protection;

 effective recognition of the right of collective bargaining, the cooperation of management and labor in
the continuous improvement of productive efficiency, and the collaboration of workers and employers in
the preparation and application of social and economic measures;

 extension of social security measures to provide a basic income to all in need of such protection and
comprehensive medical care;

 adequate protection for the life and health of workers in all occupations;

 child welfare and maternity protection;

 adequate nutrition, housing, and facilities for recreation and culture; and

 assurance of equality of educational and vocational opportunity.

Structure of International Labor Organisation (ILO)

Some of the most important organisational structure of ILO are as follows: 1. International Labour

Conference (ILC) 2. Governing Body 3. International Labour Office (ILO).

1. International Labour Conference (ILC):

This is the Apex body of ILO which makes labour policies for international labour. The ILC holds its

sessions at a frequency not less than once in a year. The delegates from three group’s viz. the government,

the employers’ and the workers attend ILC sessions in the ratio of 2:1:1 respectively. Each representative

has a vote. The representatives from the Government are mostly ministers, diplomats or officials.

The conference is empowered to appoint committees to deal with different matters relating to labour

during each session. Examples of such committees are the selection committee, The Credential
Committee, The Resolution Committee, The Drafting Committee, The Finance Committee, etc. All

committees except Finance Committee are tripartite in nature.

The functions performed by the ILC are to:

1. Formulate international labour standards.

2. Fix the amount of contribution to be paid by the member states.

3. Decide budget and submit the same to the Governing Body.

4. Study the labour problems submitted by the Director General and assist in their solutions.

5. Appoint committees to deal with different problems during its sessions.

6. Elect the president.

7. Select members of the Governing Body.

8. Develop policies and procedures.

9. Seek advisory opinion from International Committee of Justice.

10. Confirm the powers, functions and procedure of Regional Conference.

2. Governing Body:

It is also a tripartite body. It implements decisions of the ILC with the help of the International Labour

Organisation. It consists of 56 members in the same ratio of 2:1:1, i.e. 28 representatives of the

Government, 14 of the employers and 14 of the workers. Of the 28 representatives of the Government, 10

are appointed by the members of the States of Chief Industrial Importance and remaining 18 are delegates

of the other governments.

Industrial population is the criteria for chief Industrial Importance. India is one of the ten states of chief

Industrial Importance. The tenure of the office of this body is 3 years. It meets frequently in a year to take

decisions on the programmes of the ILO.

The functions of the Governing Body are to:

1. Co-ordinate work between the ILC and ILO.

2. Prepare agenda for each session of the ILC.

3. Appoint the Director General of the office.

4. Scrutinize the budget.

5. Follow up with member states in regard to implementation of the conventions and recommendations

adopted by the ILC.

6. Fix the date, duration, schedule and agenda for the Regional Conferences

7. Seek as and when required, advisory opinion from the International Court of Justice with the consent of

the ILC.

3. International Labour Office:

This is the secretariat of the ILO in Geneva and is the third major organ of the ILO. The Director General

(DG) of the ILO is the Chief Executive Officer of the Secretariat appointed by the Governing Body. He

also serves as the Secretary General of the ILC. His tenure is for 10 years and extendable by the

Governing Body.

The Director General is assisted by two Deputy Director Generals, six Assistant Director Generals, one

Director of the International Institute of Labour Studies, and one Director of the International Centre for

Advanced Technical and Vocational Training, Advisors, Chief of Divisions from 100 nations.
Following are the main functions of this office:

1. Prepare briefs and documents for agenda of ILC.

2. Assist the Governments of the States to form labour legislation based on recommendations of the ILC.

3. Bring out publications relating to industrial labour problems of international nature and interest.

4. Carry out functions related to the observance of the conventions.

5. Collect and distribute information on international labour and social problems.

Strike
Definition: In business terms, a strike can be understood as a curtailment of work, due to the collective
refusal of workers to work, which occurs as a response to employee grievances. It involves, dropping out
of work by any number of workers, employed in a particular industry, with an aim of creating pressure on
the employers, to accept their demands relating to pay scale, working conditions, trade practices and so
forth.

A strike is a situation in which the workers act in concert for stopping or denying to resume work. The
relationship between the employer and employee continue to exist though in a state of hostile suspension.

Causes of Strike

 Dispute relating to minimum wages.

 Salary and incentive issues.
 Increment is not up to the performance.
 Dissatisfaction with the policies of the company.
 Hours of work and interval timings.
 Holidays and leaves with pay.
 Bonus, Provident Fund, and gratuity.
 Withdrawal of any facility or allowance.
 Wrongful dismissal of workmen.
The most obvious reason of strike is the non-payment of wages or salaries to the workers of the factory by
the employers.
 Types of Strike

1. Hunger Strike: Strike in which the employees go on fasting, near the workplace or at the
residence of the employer, to force him/her redress their grievances is called hunger strike.
2. Economic Strike: Economic Strike is the cessation of work by the labors with an aim of
imposing their economic demands like wages and bonus.

In such strike, the workers raise their voices to increase their pay, improve working conditions, facilitate
them with allowances, perquisites, and add-on benefits.

3. Stay-in Strike: A type of strike, in which the employees come to the office, as usual, take their
seats but do not work and also deny to leave the office premises, when asked to do so.

When such an act is performed in combination, it amounts to stay-in strike. Alternately called as sit-
down, pen-down or tool-down strike.

4. Go-slow Strike: Otherwise called as a slow-down strike, is one in which the workers do not stop
working, but slow down the entire process by deliberately delaying the production, which results in the
reduction of output.

This amounts to a serious case of misconduct, whereby the workmen pretend to be engaged in the work
and entitled to full wages. It is more harmful than the complete cessation of work by employees, as the
resources get wasted, due to delayed working of employees.

5. Sympathetic Strike: A type of strike in which the workers of one department, unit, division, or
industry, go on strike, in support of the workers of another department, unit, division, or industry, who are
already on strike.

This may be an unjustified seizure of rights of the employer, who is not even involved in the conflict.

Strike is one of the powerful tool of collective bargaining, used by trade unions and labor associations
to compel the employer to grant several concessions. It can also be used to protest certain terms of former
or proposed agreement amidst the labor and management.

A prolonged strike may result in lock-out, which is a strategy used by employers to make trade unions
settle down with their terms