Labour Law

INTRODUCTION: Initially Labour law in India as labour legislation in order to protect the interests of
British employers, then came the Factories Act. It is well known that Indian textile goods offered stiff
competition to British textiles in the export market and hence in order to make Indian labour costlier the
Factories Act was first introduced in 1883 because of the pressure brought on the British parliament by
the textile magnates of Manchester and Lancashire. Thus we received the first stipulation of eight hours
of work and other. To date, India has ratified 39 International Labour Organization (ILO) conventions of
which 37 are in force. Of the ILO’s eight fundamental conventions, India has ratified four – Forced
Labour 1930, Abolition of Forced Labour 1957, Equal Remuneration 1951, and Discrimination
(employment and occupation) 1958.

The Ministry of Labour has the responsibility to protect and safeguard the interests of workers in general
and those constituting the deprived and the marginal classes of society in particular with regard to the
creation of a healthy work environment for higher production and productivity.

Trade Unionism: There are almost ten major central union organisations of workers based on different
political ideologies. Almost every union is affiliated to one of these. These central organizations have
state branches, committees, and councils from where its organisation works down to the local level. The
first central trade union organisation in India was the All India Trade Union Congress (AITUC) in 1920.

ILO Conventions
Specific features of Conventions
Conventions are instruments designed to create international obligations for the states which ratify them.
In addition to its Conventions, the ILO has adopted a number of Recommendations, which are different
from the point of view of their legal character. Recommendations do not create obligations, but rather
provide guidelines for action. Conventions have a number of specific features, which can be grouped
under four main ideas:
1. Conventions are adopted within an institutional framework. Thus, the adoption of Conventions does
not follow the type of diplomatic negotiation which is usual in the case of treaties. They are rather
prepared in discussions in an assembly that has many points in common with parliamentary assemblies.
This also partly explains the fact that unanimity is not necessary for the adoption of Conventions. For the
same reason, only the International Court of Justice can interpret the Conventions. The revision of
Conventions is made only by the General Conference, which is the legislative body of the Organization.
2. The International Labour Conference, which adopts Conventions, is constituted by representatives of
governments, employers and workers, each delegate being entitled to vote individually.
3. A two-thirds majority is sufficient for the adoption of a Convention, and governments should submit
the Convention to their competent authorities for ratification, i.e. as a rule to their parliaments. Also, the
governments have the obligation, when requested, to supply reports on various issues related to
Conventions. (See overview of supervisory system)
4. Some Conventions include flexibility clauses, because they are generally directed towards countries
with very different economic, social and political conditions, as well as different constitutional and legal
systems. The flexibility clauses comprise options regarding the following:
A. Obligations: possibility of choosing, at the time of ratification, by means of formal declaration, the
extent of the obligations undertaken. (for .e.g. Social Security Convention, No. 102)
B. Scope: Governments may decide for themselves, subject to certain consultations, what the scope of the
Convention shall be (for. e.g. Conventions of minimum wage fixing machinery, Nos. 26 and 29), or they
may be permitted to exclude certain categories of persons or undertakings (for e.g. Conventions on night
work, Nos.41 and 89), or the definitions of persons covered may be based on a specified percentage of the
wage earners or population of the country concerned (for e.g. many social security Conventions), or
exceptions are allowed for a certain part of the country (Various types of Conventions, for e.g. Nos. 24,
25, 62, 63, 77, 78, 81, 88, 94, 95, 96 etc.), or governments may themselves define a certain branch,
industry or sector (for e.g. Weekly rest Convention, No. 106)
C. Methods: State which ratifies a Convention shall take such action as may be necessary to make
effective the provisions of such Convention, custom, administrative measures or, in certain
circumstances, collective agreements.
Core Conventions
While ILO Conventions are not ranked in terms of their order of importance, there is an underlying
hierarchy, which can be discerned. In the first category are Conventions dealing with freedom of
association and collective bargaining (Conventions Nos. 87 and 89), forced labour (Conventions Nos. 29
and 105), non-discrimination in employment (Conventions Nos. 100 and 111) and child labour
(Convention 138). These core Conventions were identified and given prominence in the Conclusion of the
World Summit for Social Development in 1995. In the second category are technical standards, which
establish norms to improve working conditions.
Freedom of Association and Protection of the Right to Organize Convention, 1948)
Establishes the right of all workers and employers to form and join organizations of their own choosing
without prior authorization, and lays down a series of guarantees for the free functioning of organizations
without interference by the public authorities. In December 1997, 121 countries had ratified this
convention. Right to Organize and Collective Bargaining Convention, 1949
Provides for protection against anti-union discrimination, for protection of workers’ and employers’
organizations against acts of interference by each other, and for measures to promote collective
bargaining. In December 1997, 137 countries had ratified this convention.
Forced Labour Convention, 1930
Requires the suppression of forced or compulsory labour in all its forms. Certain exceptions are
permitted, such as military service, convict labour properly supervised, emergencies such as wars, fires,
earthquakes, etc. In December 1997, 145 countries had ratified this convention.
Abolition of Forced Labour Convention, 1957
Prohibits the use of any form of forced or compulsory labour as a means of political coercion or
education, punishment for the expression of political or ideological views, workforce mobilization, labour
discipline, punishment for participation in strikes, or discrimination. In December 1997, 130 countries
had ratified this convention.
Discrimination (Employment and Occupation) Convention, 1958
Calls for a national policy to eliminate discrimination in access to employment, training and working
conditions, on grounds of race, color, sex, religion, political opinion, national extraction or social origin
and to promote equality of opportunity and treatment. In December 1997, 129 countries had ratified this
convention.
Equal Remuneration Convention, 1951
Calls for equal pay for men and women for work of equal value. In December 1997, 135 countries had
ratified this convention.
Minimum Age Convention, 1973
Aims at the abolition of child labour, stipulating that the minimum age for admission to employment shall
not be less than the age of completion of compulsory schooling, and in any case not less than 15 years (14
for developing countries). In December 1997, 59 countries had ratified this convention.
FACTORY ACT, 1948:

Definitions:
Adult: means a person who has completed his eighteen year of age [Section 2(a)];
Adolescent: means a person who has completed his fifteenth year of age but has not completed his
eighteenth year[Section 2(b)].
Child: means a person who has not completed his fifteenth year of age[Section 2(c)].
Competent person: in relation to any provision of this Act, means a person or an institution recognized
as such by the Chief Inspector for the purpose of carrying out tests, examinations and inspections required
to be done in a factory under the provisions of this act having regard to –
I. The qualifications and experience of the person and facilities available at his disposal; or
II. The qualifications and experience of the persons employed in such institution and facilities
available therein.
With regard to the conduct of such tests, examinations and inspections and more than one person or
institution can be recognized as a competent person in relation to a factory [Section 2(ca)].
Hazardous process: means any process or activity in relation to an industry specified in the first
schedule where, unless special care is taken, raw materials used therein or the intermediate or finished
products, bye products, wastes or effluents thereof would-
I. Cause material impairment to the health of the persons engaged in or connected therewith, or
II. Result in the pollution of the general environment:
Provided that the State Government may, by notification in the official Gazette amend the first Schedule
by way of addition, omission or variation of any industry specified in the said
Schedule [Section 2 (cb)].
Young person: means a person who is either a child or an adolescent [Section 2 (d)];
Day: mans under Section 2 (e), a period of twenty four hours beginning at midnight [Section 2 (e)];
Week: means a period of seven days beginning at mid-night on Saturday night or such other night as may
be approved in writing for a particular area by the chief inspector of Factories
Power: means electrical energy or any other form of energy which is mechanically transmitted and is not
generated by human or animal agency.
Prime mover: means any engine, motor or other appliance which generates or otherwise provides power.
Transmission machinery: means any shaft, wheel, drum, pulley, system of pulleys, coupling, clutch,
driving belt or other appliance or device by which the motion of a prime-mover is transmitted to or
received by any machinery or appliance.

Factory: [Section 2 (m)];

Factory includes any premises including the precincts thereof-

I. Whereon ten on more workers are working, or wee working 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
II. 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 does not include a mine subject to the operation of the Mines Act, 1952 or a mobile unit belonging to
the armed forces of the union or a railway running shed, or a hotel, restaurant or eating place

Explanation I: For computing the number of workers for the purposes of this clause, all the workers in
different groups and relays in a day shall be taken into account.
Explanation II: For the purposes of this clause the mere fact that an Electronic Data Processing Unit or a
computer unit is installed in any premises or part thereof, shall not be constructed to make it a factory if
no manufacturing process is being carried on in such premises or part thereof.
Essentials elements of a factory: There must be premises. There must be a manufacturing process which
is being carried on or is so ordinarily carried on in any part of such premises. There must be ten or more
workers who are/were working in such premises on any day of the last 12 months where the said
manufacturing process is carried on with the aid of power. But where the manufacturing process is carried
on without the aid of power, the required number of workers working should be twenty or more.
The following are not covered by the definition of ‘factory’:
i. Railway running sheds,
ii. Mines,
iii. Mobile units of armed forces,
iv. Hotels, eating places or restaurants.

Manufacturing process : [Section 2(k)] : Making, altering, repairing, ornamenting, finishing , packing,
oiling, washing, cleaning, breaking up, demolishing, or otherwise, treating or adapting any article or
substance with a view to its use, sale, transport, delivery or disposal; or Pumping oil , water or sewage or
any other substance; or Generating, transforming, transmitting power; or Composing types for printing,
printing by letter press, lithography, photography or other similar process, or book binding; or
Constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels; or Preserving
or storing any article in cold storage

Statutory Agencies and their Powers far Enforcement of the Act: The state government assumes the
main responsibility for administration of the act and its various provisions by utilizing the powers vested
in them. Section 3 empowers the state government to make rules for references to time of day where
Indian standard time, being 5-1/2 hours ahead of Greenwich Mean Time is not ordinarily observed. These
rules may specify the area, define the local mean time ordinarily observed therein, and permit such time
to be observed in all or any of the factories situated in the area. The state government assumes power
under section 4 of the act to declare different departments to be separate factories or two or more factories
to be single factory for the purposes of this Act. This power will be utilised by the state government either
its own or an application made to it by the occupier. But no order could be made on its own motion unless
& occupier is heard in this regard.
In case of public emergency, section 5 further empowers the state government to exempt by notification
any factory or class or description of factories from all or any of the provisions of this Act except section
67 for such period and subject to such conditions as it may think fit: provided no such notification shall be
made exceeding a period of three months at a time.
Explanation to section 5 defines public emergency as a situation whereby the, security of India or of any
part of the territory thereof is threatened ‘.7" whether by war or external aggression or internal
disturbance. The state government carries out the administration of the Act through:
i. Inspecting staff
ii. Certifying surgeons
iii. Welfare officers: Where in 500 or more workers
iv. Safety officers: Where more than 1,000 workers

Approval, Licensing and Registration of Factories: Section 6 empowers the state government to
make rules with regard to licensing and registration of Factories under the Act on following matters:
1. Submission of plans of any class or description of factories to the chief inspector or the state
government
2. Obtaining previous permission of the state government of the chief or Inspector, for the site on which
factory is to be situated and for construction or extension of any factory or class or description of
factories. However, replacement or addition of any plant or machinery within prescribed limits, shall not
amount to extension of the factory, if it does not reduce the minimum safe working space or adversely
affect the environmental conditions which is injurious to health;
3. Considering applications for permission for the submission of plans and specifications:
4. Nature of plans and specifications and the authority certifying them;
5. Registration and licensing of factories;
6. Fees payable for registration and licensing and for the renewal of licenses;
7. License not to be granted or renewed unless notice specified under section has been given.
Automatic Approval: If an application is made for the approval of site for construction or extension of
the factory and required plans and specifications have been submitted by registered post to the state
government or the chief inspector and if no reply is received within three months from the date on which
it is sent the application stands automatically approved [section 6(2)] where the rules require the licensing
authority to issue a license on satisfaction of all legal requirements/record seasons for refusal. License
could not be refused only on a direction from government. S. Kunju v. kerala (1985 2LLI 106.)
Appeal Against Refusal to Grant Permission: If the state government or chief inspector do not grant
permission to the site, construction or extension of a factory, or to the registration and licensing of a
factory, the applicant may within 30 days of the date of such refusal appeal to:
i. The central government against the order of the state government
ii. The state government against the order of any other authority.
Notice by Occupier: This section imposes an obligation on the occupier of a factory to send a written
notice, containing prescribed particulars, to the chief inspector at least 15 days before an occupier begins
to occupy or use a premises as a factory and at least 30 days before the date of resumption of work in case
of seasonal factories, i.e. factories working for less than 180 days in a year.
Contents of Notice
A notice must contain following particulars:
1. The name and situation of the factory.
2. The name and address of the occupier.
3. The name and address of the owner of the premises or building (including the precincts, etc., thereof)
referred to in section 93.
4. The address at which communication relating to the factory should be sent.
5. The nature of manufacturing process to be carried on in the factory during next 12 months.
6. The total rated horse power installed or to be installed in the factory which shall not include the rated
horse power of any separate standby plant.
7. The name of the manager of the factory for the purpose of this Act.
8. The number of workers likely to be employed in the factory.
9. Such other particulars as may be prescribed.

Notice Where New Manager is Appointed: Whenever a new manager is appointed, the occupier shall
send to the inspector a written notice and to the chief inspector a copy thereof, within seven days from the
date on which such person takes over charge.

General Duties of the Occupier:

1. Every occupier shall ensure, so far as is reasonably practicable, the health, safety and welfare of all
workers while they are at work in the factory.
2. Without prejudice to the generality of the provisions of sub-section (1) the matters to which such duty
extend shall include:
a. The provisions and maintenance of plant and systems of work in the factory that are safe and
without risks to health;
b. The arrangement in the factory for ensuring safety and absence of risks to health in connection with
the use, handling, storage and transport of articles and substances;
c. The provisions of such information, instruction, training and supervisions as are necessary to ensure
the health and safety of all workers at work;
 d. The maintenance of all places of work in the factory in a condition that is safe and without risks to
health and the provision and maintenance of such means of access to, and agrees from, such places
as are safe and without such risks;
e. The provisions, maintenance or monitoring of such working environment in the factory for the
workers that is safe, without risks to health and adequate as regards facilities and arrangements for
their welfare at work.
3. Except in such cases as may be prescribed, every occupier shall prepare, and as often as may be
appropriate revise, a written statement of his general policy with respect to the health and safety of the
workers at work and the organisation and arrangements for the time being in force for carrying out that
policy, and to bring the statement and any revisions thereof to the notice of all the workers in such
manner as may be prescribed.

General Duties of Manufacturers etc:

a. Ensure, so far as is reasonably practicable, that the article is so designed and constructed as to be safe
and without risks to the health of the workers when properly used;
b. Carry out or arrange for the carrying out of such tests and examination as may be considered necessary
for the effective implementation of the provisions of clause (a);
c. Take such steps as may be necessary to ensure that adequate information will be available.
i. In connection with the use of the article in any factory;
ii. About the use for which it is designed and tested; and
iii. About any condition necessary to ensure that the article, when put to such use, will be safe, and
without risks to the health of the workers.

Section further provides that where on article is designed or manufactured outside India, it shall be
obligatory on the part of the importer to see:
a. That the article (including plant and machinery) conforms to the same standards if such article is
manufactured in India, or
b. If the standards adopted in the country outside for the manufacture of such article is above the
standards adopted in India that the article conforms to such standards.
For the above purposes, the concerned person may carry out or arrange for the carrying out of necessary
research with a view to the discovery and so far as is reasonably practicable, the elimination or
minimisation of any risk to the health or safety of workers to which design or article (including plant and
machinery) may give rise. The section further provides that if research, testing, etc. has already been
exercised or carried out, then no such research is required again. The above duties relate only to things
done in the course of the business carried out by him, and to matters within his control. However I the
person may get relief from the exercise of above duties If he gets an undertaking In writing by the user of
such article to take necessary steps that the article will be safe and without risk to the health of the
workers. Measures to be taken by Factories for health, safety and welfare of workers

Safety:
1. Fencing of machinery
a. every moving parts of a prime-mover and flywheel connected to a prime-mover or flywheel is in
the engine house or not;
b. head-race and tail-race of water wheel and water turbine;
c. any part of a stock-bar which projects beyond the head stock of a lathe;
d. every part of an electric generator, a motor or rotary convertor or transmission machinery unless
they are in the safe position;
e. every dangerous part of any other machinery unless they are in safe position.
2. Safety Measures in case of work on or near machinery in motion Restriction on Woman or Young
Person to Work an Such Machines.
3. Employment of Young Persons on Dangerous Machines, Striking Gear and Devices for Cutting Off
Power, Self-acting machines
4. Prohibition of employment of women and children near Cotton Openers Lifting machines, ropes,
chains and Lifting Tackles Pressure plant Excessive weights
5. Precautions in case of fire

Welfare: There should be Washing Facilities, Facilities far Sitting, First-aid Appliances, Canteens,
Shelters, Rest Rooms and Lunch Rooms, Crèches, Emergency Standards, Permissible Limits of Chemical
and Toxic Substance, Workers Participation in Safety Management, and it is a right of Workers to Warn
about Imminent Danger.
THE INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1946

This act not apply where Chapter VII of the Bombay Industrial Relations Act, 1946, (Bom. Act II of 1947)
apply; or Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961 (M.P. Act 26 of 1961)
apply.

Application of Model Standing Orders to Every Industrial Establishment:

Where this Act applies to an industrial establishment, the model standing order for every matter set out in
the Schedule (see*) applicable to such establishment shall apply to such establishment from such date [ as
the State Government may by notification in the Official Gazette appoint in this behalf:
Provided that nothing in this section shall be deemed to affect any Standing Orders which are finally
certified under this Act and have come into operation under this Act in respect of any industrial
establishment before the date of the coming into force of the Industrial Employment (Standing Orders)
(Bombay Amendment) Act, 1957]
[2. Notwithstanding anything contained in the proviso to subsection (1) model standing orders made in
respect of additional matters included in the Schedule after the coming into force of the Act referred to in
that proviso (being additional matters relating to probationers or badlis or temporary or casual workmen)
shall, unless such model standing orders are in the opinion of Certifying Officer less advantageous to
them than the corresponding standing orders applicable to them under the said proviso, also apply in
relation to such workmen in the establishments referred to in the said proviso from such date as the State
Government may, by notification in the Official Gazette, appoint in this behalf.]
Submission of Amendment:
[Within six months £tom the date on which the model standing orders apply to any industrial
establishment under Section 2A, the employer or any workman employed therein may submit to the
Certifying Officer five copies of the draft amendments for adoption in such industrial establishment:
Provided that no amendment which provides for the deletion or omission of any rule in the model
standing orders relating to any matter set out in the Schedule shall be submitted under this section.]
The [draft amendments] submitted under this section shall be accompanied by a statement giving
prescribed particulars of the workmen employed in the industrial establishment including the name of the
trade union, if any, to which they belong.
Subject to such conditions as may be prescribed, a group of employers in similar industrial establishments
may submit a joint [draft of amendments] under this section.
Certification of Amendments:
1. On receipt of the draft under Section 3, the Certifying Officer shall forward a copy thereof to the trade
union, if any, of the workmen, or where there is no such trade union, to the workmen in such manner as
may be prescribed [or the employer, as the case may be,] together with a notice in the prescribed form
requiring objections, if any, which the workmen, [or employer] may desire to make to the [draft
amendments] to be submitted to him within fifteen days from the receipt of the notice.
2. After giving the employer, [the workmen submitting the amendment and the trade union or such other
representatives of the workmen as may be prescribed an opportunity of being heard, the Certifying
Officer shall decide whether or not any modification of [the draft submitted under sub-section (1) of
Section 3 is necessary,] and shall make an order in writing accordingly.
3. The Certifying Officer shall thereupon IO [certify the draft amendments] after making any
modifications therein which his order under sub-section (2) may require, and shall within seven days
thereafter send copies of the 11 [model standing orders together with copies of the certified amendments
thereof,] authenticated in the prescribed manner and of his order under sub-section (2) to the employer
and to the trade union or other prescribed representatives of the workmen.
The submission that the Standing Orders are sacrosanct and engroceable regardless of the developments
in the parallel proceedings unless and until necessary change has been certified by the authority under the
Act would be too technical an interpretation and would therefore not is acceptable.
Date of Operation of Standing Orders: Standing Orders [or amendments] shall, unless an appeal is
preferred under section 6, come into operation on the expiry of thirty days from the date on which
authenticated copies thereof are sent under sub-section (3) of section 5, or where an appeal as aforesaid is
preferred, on the expiry of seven days from the date on which copies of the order of the appellate
authority are sent under sub-section (2) of section 6.
Register of Standing Orders [and Model Standing Orders together with All Certified
Amendments]: A copy of all standing orders ‘[or model standing orders together with all the
amendments] as finally certified under this Act shall be filed by the Certifying Officer in a register in the
prescribed form maintained. for the purpose, and the Certifying Officer shall furnish a copy thereof to any
person applying therefor on payment of the prescribed fee.
Posting of Standing Orders l[and Model Standing Orders together with All Certified
Amendments]: The text of the standing orders ([or model standing orders together with all the
amendments] as finally certified under this Act shall be prominently posted by the employer in English
and in the language understood by the majority of his workmen on special board to be maintained for the
purpose at or near the entrance through which the majority of workmen enter the industrial establishment
and in all departments thereof where the workmen are employed.
Duration and Modification of Standing Orders [or the Amendments]: Standing Orders [or the
amendments] finally certified under this Act shall not, except on agreement between the employer and the
workmen [ or a trade union or other representative body of the workmen] be liable to modification until
the expiry of six months from the date on which the standing orders [ or the amendments] or the last
modifications thereof came into operation [and where model standing orders have not been amended as
aforesaid, the model standing orders shall not be liable to such modification until the expiry of one year
from the date on which they were applied under section 2-A]. [2. Subject to the provisions of sub-section
(1), an employer, or workman [ or a trade union or other representative body of the workmen] or any
prescribed representatives of workmen desiring to modify the standing orders or the model standing
orders together with the amendments, as finally certified under this Act, or the model standing orders
applied under section 2A, as the case may be, shall make an application to the Certifying Officer in that
behalf, and such application shall be accompanied by five copies of the standing orders, or the model
standing orders, together with all amendments thereto as certified under this Act or model standing orders
in which shall be indicated the modifications proposed to be made and where such modifications are
proposed to be made by agreement between the employer and workmen [or a trade union or other
representative body of the workmen] a certified copy of the agreement shall be filed along with the
application]. The word ‘modification’ in Sec. 1.0(2) should not be given a restricted meaning, as i”,
implying only minor changes, hence, even an application for deletion of a clause can be “I deemed as an
application for modification of the Standing Orders. 3. The foregoing provisions of this Act shall apply in
respect of an application under sub-section (2) as they apply to the certification of the first [amendments].
[4. Nothing contained in sub-section (2) shall apply to an industrial establishment in respect of which the
appropriate Government is the Government of the State of Gujarat]

*Matters to be provided in Standing Orders 2 [Model Standing Orders and Amendments]

under this Act:
1. Classification of workmen, e.g., whether permanent, temporary, apprentices, probationers or badlis,
[1-A. Workmen’s tickets and registers]
2. Manner of intimating to workmen periods and hours of work, holidays, pay-days and I. wage rates.
3. Shift working.
4. Attendance and late coming.
5. Conditions of, procedure in applying for, and the authority which may grant leave and holidays.
6. Requirements to enter premises by certain gates, and liability to search.
7. Closing and re-opening of sections of the industrial establishment and temporary stoppages of
work and the rights and liabilities of the employer and workmen arising there from]
 [7-A. Closing and re-opening of the entire industrial establishment or departments thereof and the
rights and liabilities of the employer and workmen arising there from]
8. Termination of employment and the notice thereof to be given by employer and workmen.
9. Suspension or dismissal for misconduct, and acts or omissions which constitute misconduct.
10. Means of redress for workmen against unfair treatment or wrongful exaction by the employer or
his agents or servants.
[10-A.Age for retirement or superannuation]
[10-B. Medical examination (including provision for bearing expenses therefor)]
[10-C. Employment or re-employment for probationers or badlis or1emporary or casual workmen,
and their conditions of service]
11. Any other matter which may be prescribed.
Additional matters to be provided in Standing Orders relating to all industrial establishments in coal
mines by Central rule
1. Medical and in case of accident;
2. Railway travel facilities;
3. Method of filling vacancies;
4. Transfers;
5. Liability of Manager of the establishment or mine;
6. Service certificate;
7. Exhibition and supply of Standing Orders.”
Additional matters to be provided in the Standing Orders relating to all industrial establishments by
Central rule
1. Service record-matters relating to service card, token tickets, certification of service, change of
residential addresses of workers and record of age;
2. Confirmation;
3. Age of retirement;
4. Transfer;
5. Medical aid, in case of accidents;
6. Medical examination;
7. Secrecy;
8. Exclusive Service.

Violation of any of Act attract fine which may extend to five thousand rupees or continuing offence with
a further fine which may extend to two hundred rupees every day and Standing order attract Fine which
may extend to one hundred rupees and 25 rupees every day
TRADE UNION ACT, 1926:

Trade Union is a workers organization which represents its members and which aims to improve things
such as their working condition and pay. Any seven or more members of a trade union may apply for
registration by subscribing their names to the rules of trade union and complying with other
requirements in relation to registration under the act. Every application for registration shall be made to
the registrar along with the fee as prescribed under regulation 8 (Rupees five at present) and shall be
accompanied by a copy of the rules of the trade union and a statement of all particulars as prescribed. Any
person who has attained the age of fifteen years may be a member of a registered Trade union subject to
any rules of the Trade union to the contrary, and may, subject as aforesaid, enjoy all the rights of a
member and executive all instruments and give all a quittances necessary to be executed or given under
the rules.

Definition:
Appropriate government: In this act, the term ‘appropriate government means in relation to trade unions
whose objects are not confined to one state, the central government, and in relation to other trade unions,
the state government.
Executive: section 2(a) Executive means the body, by whatever name called, to which the management
of the affairs of a trade union is entrusted.
Office bearer: section 2(b) Office bearer in the case of a trade union includes any member of the
executive thereof, but does not include an auditor.
Registered office and registered trade union: section 2(d) and 2(e) registered office means that office
of a trade union which is registered under this act as the head office thereof and a registered trade union
means a trade union registered under this act.
Registrar: a) a registrar of trade union appointed by the appropriate government under section 3 and
includes any additional or deputy registrar of trade union; and b) in relation to any trade union, the
registrar appointed for the state in which the head or registered office, as the case may be, of the trade
union is situated.
Trade Union: section 2(h) Trade union means any combination, whether temporary or permanent formed
primarily for the purpose of a) regulating the relation: (1) between workmen and employers or (2)
between workmen and workmen, or (3) between employers and employers; OR b) for imposing
restrictive conditions on the conduct of any trade or business, and includes any federation of two or more
trade unions.

Appointment of registrars:
a) The appropriate government shall appoint a person to be the registrar to trade unions for each state.
b) The appropriate government is also empowered to appoint if it thinks fir, additional and deputy
registrar. Such persons will function under the superintendence and direction of the registrar who may
define the local limits within which each one will operate.
c) Where an additional or deputy registrar exercises and discharges the powers and functions of a registrar
in an area within which the registered office of a trade union is situated, the additional or deputy registrar
shall be deemed to be the registrar in relation to the trade union for the purposes of this act.

Registration of trade unions:

As is evident from the preamble it that the act is enacted of provide for registration of trade unions, the act
lays done in a comprehensive manner the procedure for registering a trade union. However, it should be
noted that registration of trade union is not mandatory under the act. In view of a number of immunities
granted to a registered trade union from civil and criminal proceedings, registration of trade unions is
desired.
The procedure for registration enumerated in the following Para graphics carved out form the provisions
of the trade unions act and the central trade union regulations, 1938, which are in relation to a trade union
whose objects are not confined to one state. The procedure for registration in relation to other trade
unions can be ascertained from the provision of the trade unions act, 1926 and the regulations made by
the appropriate governments.

Rules of trade union:

According to section 6 of the trade unions act, no trade union shall be entitled to registration unless the
executive thereof is constituted and the rules thereof provide for the matters stipulated in section 6. A
trade union cannot be registered unless its executive has been constituted according to the law and the
rules thereof provide for the following matters:
a) The name of the trade union:
b) The whole of the objects for which the trade union has been established;
c) The whole of the purposes for which the general funds of the trade union shall be applicable, all of
which purposes shall be purposes to which such funds are lawfully applicable under this act.
d) 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;
e) The admission of ordinary members who shall be persons actually engaged or employed in an industry
in an industry with which the trade union is connected, and also the admission of the number of honorary
or temporary members as office bearers required under section 22 to form the executive of the trade
union;
e) The payment of a subscription by members of the trade union which shall not be less than twenty five
paisa per month per member.
f) 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;
g) The manner in which the members of the executive and the other office bearers of the trade union shall
be appointed and removed;
h) The manner in which the members of the executive and other office bearers of the trade union shall be
appointed and removed.
i) The safe custody of the funds of the trade union, and 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
j) The manner in which the trade union may be dissolved. In the case of Trilok Nath Tripathi v. Allahabad
Division bench, A.I.R. 1957 all 234, it was observed that section 6 requires that no registration can be
allowed unless certain conditions given in this section are fulfilled. Rules framed under the constitution of
any trade union do not get any statutory force. It is correct that existence of such rules framed to comply
with requirements of union. It is only in the nature of contract binding on the members of union. Any
breach of such rules cannot be enforced by a writ of mandamus under Article 226 of the constitution. The
remedy of the aggrieved party is by way o suit.

Certain membership rights:

i) Rights of minors to membership of trade unions: section 21 Any person who has attained the age of
fifteen years may be a member of a registered Trade union subject to any rules of the Trade union to the
contrary, and may, subject as aforesaid, enjoy all the rights of a member and executive all instruments and
give all a quittances necessary to be executed or given under the rules.
ii) Rights to inspect books of Trade union : section 20 The account books of a registered Trade union and
the list of members there of shall be open to inspection by an Office bearer or member of the Trade union
at such times as may be provided for in the rules of the Trade union.

Dissolution of Trade union:

In case a registered Trade union is dissolved, a notice signed by members and the secretary of the union
shall be given to the registrar with 14 days of such dissolution. If the dissolution has been effected in
accordance with the rules he shall register the same and it will have effect from the date of such
registration. On dissolution where the rules do not provide for distribution of the funds of the Trade
union, the registrar shall distribute the fund amongst member in such manner as may be prescribed under
the Trade union regulations, the registrar shall divide the funds in proportion to the amounts contributed
by the members by way of subscription during their membership (regulation 11)

Offences and Penalties:

1. If default is made of the part of any registered Trade union in given any notice or sending any
statement or other documents are required by or under any provision of this Act, every office bearer or
other person bound by the rules opt the trade union to give or send the same, or if there is no such office
bearer or person, every member of executive of the trade union, shall be with the fine which may extend it
five rupees and in the case of continuing default, with aqn additional fine which may extend to five rupees
for each week after the first during which the default continues. however the aggregate fine should not
exceed fifty rupees.
2. A person who willfully makes, or causes to be made, any false entry in, or any commission from, the
general statement required by section 28 or in or from any copy of rules or of alterations of rules sent to
the registrar under the section, shall be punishable with fine which may extend to five hundred rupees

Amalgamation of trade unions: Any two or more registered Trade unions may become amalgamated
together as one Trade union with or without dissolution or division of the funds of such trade unions or
either or any of them
INDUSTRIAL DISPUTES AND INDUSTRIAL DISPUTE ACT: The “Industrial Disputes” are disputes
relating to an industry which could leads to settlement arrived at in the course of conciliation proceedings

Any dispute or differences between Employer and Employer, Employer and Workmen and Workmen and
workmen connected with Employment or Non - employment or condition of Labour of any person is
termed as “ Industrial Dispute” under the Act. In fact, the term “Industrial Dispute” plays very important
and vital or key role in the entire industrial jurisprudence. It is therefore, very necessary that the term is
understood in its fullest sense and concept. The term “Industrial Dispute” has remained unchanged from
the time it was defined in the Act. The Term can be understood in its various facets and for this reason, it
can be said that the term has its four facets, viz
a. Factum of Dispute
b. Parties to Dispute
c. Subject matter of dispute and
d. Dispute must be relating to an Industry.

ii. Factum of dispute: It is undoubtedly needless to observe that unless there is a dispute or difference of
any sort, no legal machinery need to take a start! Therefore, dispute/ difference is the first and pre -
condition stipulated in the definition under the Act For dispute or differences to arise, it is not necessary
that the parties should come to blows but at the same time a mere personal quarrel or a grumbling will not
amount to dispute or differences within the four corner of the definition (C.J. Sambhunath Goyal v/s Bank
of Baroda, 1978 I LLJ 484). It must be clearly understood that not all sorts of dispute or difference are
included in the definition in the Act. ‘The only differences or disputes which are within the fold of the
definition given in Section 2(k) of the Act are only those disputes, or differences which bear upon the (1)
relationship of Employers and Employers or
Employers and Workmen or workmen and workmen and (2) condition of Labour. Thus the inter-se
seniority dispute between two workmen is purely an individual dispute and it cannot be treated as
industrial dispute if other employees are not concerned
iii. Parties to dispute .”The Act provides that any dispute or differences (a) between Employers and
Employers (b) Between Employers and Workmen or (c) between workmen and workmen can be taken up
for conciliation or adjudication, as the case may be, if necessary. However, in common parlence, the term
“industrial disputes” is always taken to mean the dispute between Employers and Workmen and dispute
between no other parties, namely between Employers and Employers or between workmen and workmen.
There are, therefore, few case laws on disputes between workmen and workmen or between Employers
and Employers.

iv. Subject matter: The expression “dispute or difference” means controversy connected with (a) the
Employment or non-employment or (b) with the terms of employment or (c) the conditions of labour of
any person. Further, it must also be a grievance felt by workmen which the Employer is in a position to
remedy or set right the definition further shows that certain types of disputes can never fail within its
ambit. For example, who is to be elected as the President of the Union, cannot be held to come under the
definition of the expressions “Industrial
Dispute” because, it is not at all connected with the employment or no employment or with the terms of
employment or with the condition of labour. Similarly the dispute with regard to demotion cannot be
raised even under Section 2A of the Act to constitute an industrial dispute. So also when there is a dispute
with regard to seniority inter-se it cannot be treated as “Industrial Dispute”, if a settlement has arrived at
between the parties, there cannot arise any “Industrial Dispute” which can form a subject matter of a
reference before the Tribunal. When the dispute of individual workmen are taken up by any union of
which he or they are members and when the demand is made by union on their behalf, it becomes
“Industrial Dispute”. When employees made demand that employees working in higher promotion be
confirmed, it was contended that it was not in “Industrial dispute1*. The supreme court held that although
promotion is entirely at the sole discretion of the employer but the employees were not demanding
promotion, what they were demanding was that those employees who have already been promoted they
should be categorised as permanent or confirmed. As such, it was clearly an industrial dispute. [Workmen
of Hindustan Lever u/s HL Ltd, 1984 1 LLN 460 (SC)]A

v. When does Industrial dispute arise : For existence of an industrial dispute, there should be a demand by
workmen and refusal to grant it by the management. How the demand should be raised cannot be a legal
notion of fixity and rigidity. The grievance of the workmen and the demand for its redressal must be
communicated to the management. The means and mechanism of communication adopted are not matters
of much significance so long as the demand is that of workmen and it reaches the management
{RarnkrishnaMills (Coimbatore) Ltd., v/s Government of Tamilnadu, 1984 II LLJ 259 (Madras)] In
National Engineering Industries Ltd. v/s State of Rajasthan,2000 I CLR 389, there were Trade Unions, i.e.
Labour Union, Workers Union and the Staff Union. The Labour Union has majority of the Workers on its
roll- It was the recognised Union. However, all the three unions, raised a Charters of Demands, which
were identical in almost all respect. Conciliation Proceedings under the Act were initiated during which
time, settlement was reached with the Labour Union and the staff Union. Since no settlement was arrived
at in respect of the Charter of Demands raised by the Workers Union, the Conciliation Officer submitted
its Failure Report; however, the appropriate Government took no decision on it. The Workers Union
thereupon moved the High Court, which directed the Government to make the reference. However, before
the Order of the High Court, the appropriate Government took the decision and made a reference on the
industrial dispute touching the Charter of Demands of the Workers Union. This Order of Reference made
by the appropriate Government was challenged in the High Court before the Single Judge and in appeal
before the Division Bench but without success. The apex Court held that in view of the settlement of the
‘industrial dispute’ touching the Charter of Demands, there was no ‘industrial dispute’ under the Act and
therefore, the Appropriate
Government had no jurisdiction to make the reference.

vi. Written Demand not necessary : A Demand need not be in writing to constitute an industrial dispute.
The Act nowhere contemplates that the industrial dispute would come into existence in any particular
specific or prescribed manner. For coming into existence of an industrial dispute, a written cause is not a
“Sine qua non” unless of course in the case of public utility service, because Section 22 of the Act forbids
going on strike without giving a (strike) Notice. [Shambkunath Goyal vis Bank of Baroda, 1978 I LLJ
484, Ramkrishna Mills (Coimbatore) Mills Ltd v/s Govt. of Tamilnadu, 1984 II LLJ 259]

vii. Does it mean “Collective Dispute”; The term “Industrial Dispute” conveys the meaning that dispute
must be such as would “affect large groups of (1) workmen and the (2) employers, ranged on opposite
side” [D.N. Benarji v/s P.R. Mukharjee, 1953 I LLJ 195, The obiter was cited with approval in News
Papers Ltd. v/s I.T. 1957 II LLJ 6 (by SC}]. A collective dispute, however does not mean that ail
workmen or a majority of them should sponsor and sport the dispute. In fact, there is nothing in the Act to
require the dispute to be raised by all the workmen of the industry or by every one of them or even by a
majority of them. It is enough if the controversy is between Employer on one side and the workmen on
the other. So also, there is nothing in the Act to require that workmen raising the controversy should form
a majority of the employees or the controversy affects, or will affect the interest of workmen as a class.
The law envisages that in the interest of peace, the industrial dispute should be examined and decided in
the manner laid down in the Act {Indian Oxygen Ltd. vis Us workmen 1979 LIC 585 (SC)], it is not
necessary that the dispute should have been espoused only by a recognised union. It can be espoused by
unrecognised union also [State of Bihar v/s Kripa Shankar Jaiswal, AIR 1961, SC 304]. In the case of
DA.C.C. v/s workmen, AIR 1960 SC 777. Pradip’Lamp Works vis Workmen 1970 ILLJ 491, Tata
Chemicals v/s Workmen 1978I LLJ 22(SC)], it was held that even a minority union canraise the dispute.
However, when the agenda of the meeting in which the cause of individual workmen was not produced,
there was no other record to show that the cause of the workmen was taken up save and except the
oralevidence of the Secretary. It was held that the cause of individual workman was not espoused to treat
it as an industrial dispute. It was held that, at least, the Resolution espousing the cause of workmen was
necessary [BombayUnion Journalists v/s The Hindu, AIR 1963 SC 318]. However, in the case of
Workmen v/s Rohtak General Transport Company1962 I LLJ 634 & 1975 LIC 838] it was held that
relevant documents showing espousal of dispute by union need notbe examined too technically. The
Tairvi” by the union, in conciliation is sufficient proof to show espousal of the cause[WIMCO o/s its
workmen, AIR 1970 SC 1205].It is not necessary that the same union should remain in charge of that
dispute till adjudication because it is not necessary thatthe dispute must be espoused or conducted only by
a registered trade union. Therefore, it is necessary to bear in mind the distinction between “espousal” and
“representation”. The emphasis is on espousal and not on representation. Thus it is not necessary that the
dispute must be espoused or conducted only by a registered trade union. Even if a union ceases to be a
registered trade union that would not affect maintainability of the order of reference [Management of
Gammon (India) Ltd. v/s State of Orissa 1974 II LLJ 34]. The new Union can takeover and conduct the
matter further [Ramlal Guramal TextileMills v/s State of Punjab, 1958 II LLJ 245].In Mukund Ltd. v/s
M.Staff & Officers Association, 2000 I
CLR 707, the question before the Court was whether employees falling in the category of “Workman”
under the ID Act can espouse the cause of the non-workmen working in the same establishment. The
Court held that they can because they have substantial interest in the subject matter of the dispute and that
there is a community of interest. As such, the reference was validity made.

Settlement - Binding - not Binding: If a copy of the settlement is not forwarded to authorities prescribed
by rule 58 (4) of the Central Rules that will not have any effect on the validity of the settlement.

1. “Settlements” arrived at in the course of conciliation and

2. Settlements” arrived at privately or otherwise than in the course of conciliation.

STRIKES: Strike is concerted refusal to work on the part of workmen who are in a particular vocational
area. The workers in a democratic state have a right to strike to withhold their labour in order to express
their grievance or to make certain demands. Thus a strike is a necessary safety valve in industrial
relations. Forms of Strikes are Go-slow, Legal and Illegal Strike, Justified & Unjustified Strike.
Prohibition of Strikes in Public Utility Service

Strike Notice: Sub-section (1) requires a 14 days Strike Notice in public utility services. It says that:
i. no person employed in public utility service shall go on a strike in breach of contract:
ii. without giving strike notice.
iii. within 6 weeks of such notice.
iv. within 14 days of giving such notice.
v. before the expiry of the date of strike specified in notice; or
vi. during the pendency of any conciliation proceedings and 7 days after conclusion of such proceedings.

LOCK-OUT: Strike is cessation of work by employees, the Lock-out is cessation of work by the
Employer. Just as Employees have a right not to sale their Labour, the same way the Employer has a right
not to buy it, as a measure of setting the industrial dispute. When the Employer closes temporarily his
place of Employment in order to force his employees to accept a compromise favourable to him on an
industrial dispute raised by his employees, it is a ‘Lock-out’.

Lock-out, When Legal: The Act treats strikes and lock-out on the same basis; it treats one as the counter
part of the other. (Mohammed Sumsuddin, 1956 I LLJ 575), the circumstances under which the
legislature has banned strike, it has also at the Same time banned the lock-out. Thus what holds good-bad;
legal-illegal, justified unjustified for strikes, holds the same for the lock-out. As such, the provisions of
the Act which prohibit the strike also prohibits the lock-out.
The object and reasons for which the Lock-out are banned or prohibited are the same for which strikes are
banned or prohibited. It is because the Employer and the Employees are not discriminated in their
respective rights in the field of industrial relationship between the two. As such, lock-out if not in conflict
with Section 22 and 23 may be said to be legal or not legal. Sections 24(1) (iii), 10(3) and 10A (4A)
similarly controls the lock-out. A lock-out in consequence of illegal strike is not deemed to be illegal. But
if lock-out is illegal, Section
26(2), 27 and 28 will come in operation to deal with the situation. The Act does not lay down any
guidelines to settle
the claims arising out of illegal lock-out. The courts, therefore, have adopted the technique of
apportioning the blame between the Employer and employees. This once again brings to the fore the
concept of justifiability of lock-out.
If strike is unjustified followed by a justified lock-out, the workmen will get no wages at all conversely if
strike is legal and lock-out is unjustified, the workmen will get the full wages for the period of strike-
lock-out. However, where strike is illegal followed by an illegal lock-out, the question of apportionment
will arise (India Marine Services (P) Ltd. vis Their Workmen, AIR 1963 SC 528). Relying upon this, the
apex court granted half wages. In this case, in which the Industrial Tribunal had held chat strike was
unjustified, so the lock-out was justified on the following day but its continuance was not justified. In
Statesman Ltd. v/s Their Workmen, AIR 1976 SC 758, the apex court refused to interfere in the Award of
Industrial Tribunal in which the Tribunal had awarded 50% wages for the lock-out period. The Tribunal
has held both the parties equally responsible. The apex court observed that in between lies a grey of
twilight Law. Strictly speaking the whole field is left to the — judicious discretion of the Tribunal, Where
the strike is illegal and sequel of lock-out legal, we have to view the whole course of— development and
not stop with examining the initial legitimacy. If one side or the other behaves unreasonably or over-all
interest of good industrial relations warrant the
Tribunal making such direction regarding strike period wages will meet with justice, fair play and
pragmatic wisdom; there is no error in doing so. This power of Tribunal is flexible. In Engineering
Mazdoor Sabha vis S. Taki Bilgrami, 1971 I LLJ 71, the Bombay High Court held that it is permissible
for the Employer to prove misdemeanor and misconduct of employees sufficient to absolve him from the
lock-out liability to pay wages for the period of illegal lock-out. Thus according to Bombay High Court,
merely because a lock-out is illegal will not ipse-dixit result in payment of wages to the workmen but the
Employer can take the opportunity to prove disentitlement of workmen in a case of reference made to
industrial tribunal for adjudication on a demand for wages for the period of lock-out.

Penalties for strike and Lock-out: Section 26 prescribes - penalty for, both, strike as well as lockout.
However, before any - punishment is imposed under this Act or rather under this Section, it must be
proved beyond all reasonable doubt that:
1. A workman has in fact commenced or continued or has otherwise acted in furtherance of a strike OR in
case of a lock-out an Employer has commenced or continued or has acted in furtherance of- a lock-out;
and
2. the strike or lock-out is illegal. The illegality must be proved strictly with reference to the provisions of
the Act and the mens-rea on the part of a workman or an employer is wholly irrelevant and immaterial.
These two ingredients must co-exist and only if these two ingredients are present then Workman shall be
punishable with imprisonment for a term upto one month or with fine which may extend upto Fifty
Rupees or with both.
a. Employer shall be punishable with imprisonment for a term which may extend to Rupees one month or
with fine which may extend to Rupees one thousand or both.

LAY-OFF: When the employer decides to discontinue his business forever it is called as Closure. But
when he decides to discontinue his business, not forever but for a short while, in order to tide over his
difficulties, it cannot be called as closure. Nevertheless, during this period also the employer discontinues
to employ his labour force. Such a discharge of labour-force, (for a temporary period when the employer
has suspended his business activities) is called as lay-off.

Refusal to Give Work: The Employer’s refusal to give work must be for:

· shortage of coal
· shortage of power (Electricity)
· shortage of raw material
· accumulation of stocks
· break down of machinery
· natural calamity - Force-Major and any other connected reason.

Contract of Employment: In lay-off, the contract of employment goes under suspended animation
or the relationship is kept in cold storage. The workman continues to be on the muster roll but the
employer suspends the contract for the time being. The relationship (of master and servant) is resumed as
soon as the work is resumed by the employer. Thus, the lay-off is a temporary suspension of work and it
is resumed as soon as the circumstances permit the employer to do so. It means that the Employer cannot
keep away the workman for an indefinite period in the garb of lay-off or cannot breach the contract of
employment. But period can have treated as temporary and what period can be treated as long or
indefinite will depend upon the facts of each case and the Act is completely silent on this issue.

RETRENCHMENT: Retrenchment means the termination by the Employer of the services of a

workman for any reason whatsoever.

Retrenchment Compensation: Section 25 F:

1. One Month’s Notice to the workman who is to be retrenched must be given.
2. Notice of Retrenchment must be in writing.
3. Reasons for retrenchment must be given in the Notice of Retrenchment to the workman.
4. Notice period of one month must have expired unless one month’s wages must have been paid
in lieu of Notice of one month to the workman.
5. (Payment to workman must have been effected at the time of retrenchment and not after the
retrenchment.
6. Notice in prescribed manner must have been served upon the appropriate Government or such
other authority as may have been specified by the appropriate government.

Clause (b) Lays down that a workman shall be:

i. paid compensation
ii. at the time of retrenchment (and not after the retrenchment)
in. calculated at the rate of 15 days (average pay)
iv. for every completed year of “continuous service” or
v. any part in excess of six months
The average pay has been defined in Section 2 (aaa). It means if in one month, a workman’s pay was
Rs.1000/- in second month, it was Rs.1400/- and in the third month, it is only Rs 900/-The Employer has
to take the average pay and not the last drawn wages. As such in given illustration, the average pay will
work out to be [1000 + 1400 + 900 = 3300 - 3] Rs. 1100/- p.m. Undoubtedly, it may work out against the
workman also, if in first month, wages are Rs.900/- in the second month, it is Rs.1000/- and in the third
month it is Rs. 1400/- but the workman will be paid at the rate of Rs. 1100/- (it being his average wages).

CLOSURES: In the case of closure, the Employer closes down his business permanently, finally and
irrevocably. There is no intention on his part to restart the work. The right of closing down is as much a
fundamental right as to “carry on business”. The Notice of termination has to be given individually or
collectively but a notice is a must. Closer can be “Partial Closure” and “Closure by Stages”. It is a
fundamental right, for payment of money to those employees who are thrown out of employment on
account of closure. For computing quantum of money, on closure, has adopted the same methodology as
adopted for the retrenchment. Provision to exception is there for the Unavoidable circumstances beyond
the control of the employer and if mine, If minerals get exhausted and employer ensure alternative
employment on same terms and condition and remuneration is given to workman, Services remain un-
interrupted and in subsequent closure, employer undertakes to pay closure compensation for the
throughout period - on the basis of continuous service. Employer shall give Notice at least 60 days before
intended closure failing attracts penalty of imprisonment for a term upto 6 months or fine upto Rs. 5000/-
or both.

Special Provisions for Mines: Sub-section 1-A provides that in case of Mines, workmen will not be given
closure compensations if minerals get exhausted and as a result, the mining operations have to be
discontinued.
This benefit is available only on conditions :
1. If minerals get exhausted and
2. Employer fulfills three conditions
a. alternative employment on same terms and condition and remuneration is given to workman
b. Services remain un-interrupted and
3. in subsequent closure, employer undertakes to pay closure compensation for the throughout period - on
the basis of continuous service.

Special Provisions for Building Industry: The second exception to the general rule of closure
compensation is laid down in sub-section 1-A. It is applicable to undertakings set up for construction of
1. Buildings
2. Bridges
3. Roads
4. Canals
5. Dams or
6. Construction work which is over on completion of job.
The benefit of this exception is available only when the undertaking is closed down within two years from
the data of its set up. However, if no closure within two years then workmen will be entitled to the closure
compensation at the same rate as prescribed under sub-section (1), if an undertaking takes up construction
work wherever available, and if it deploys local persons for local work then it has freedom of
discontinuing the local staff and the test of Unity of ownership, unity of management or unity of control
on all different local units is not available. As such, the workmen of local units, if retrenched, do not have
any right to demand the benefits flowing from this Section [Hindustan - Steel Works, Construction Ltd.
v/s HSWC Employees Union, 1995 LIC 1594, (SC)].

Protected Workmen: Member of the executive (Managing) committee or other office, bearer of a
Registered Trade Union and their number are 5% of total workmen with Minimum 5 and Maximum 100.
THE CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970

Applied to every establishment in which twenty or more workmen are employed or were employed on
any day of the preceding twelve months as contract labour, to every contractor who employs or who
employed on any day of the preceding twelve months twenty or more workmen. Registration of
Establishments should be done who are employing contract labour and contractor licensing done through
the prescribed process. Welfare and Health measure of Contract Labour should be maintained as
prescribed. Contractor is responsible for payment of wages then representative duly authorized and finally
principal employer liable.

The Advisory Boards:

Central Advisory Board
1. The Central Government shall, as soon as may be, constitute a board to be called the Central Advisory
Contract Labour Board (hereinafter referred to as the Central Board) to advise the Central Government on
such matters arising out of the administration of this Act as may be referred to it and to carry out other
functions assigned to it under this Act.
2. The Central Board shall consist of a. a Chairman to be appointed by the Central Government; b. the
Chief Labour Commissioner (Central), ex-officio; c. such number of members, not exceeding seventeen
but not less than eleven, as the Central Government may nominate to represent that Government, the
Railways, the coal industry, the mining industry, the contractors, the workmen and any other interests
which, in the opinion of the Central Government, bought to be represented on the Central Board.
3. The number of persons to be appointed as members from each of the categories specified in sub-section
(2), the term of office and other conditions of service of, the procedure to be followed in the discharge of
their functions, by, and the manner of filling vacancies among, the members of the Central Board shall be
such as may be prescribed: Provided that the number of members nominated to represent the workmen
shall not be less than the number of members nominated to represent the principal employers and the
contractors
State Advisory Board
1. The State Government may constitute a board to be called the State Advisory Contract Labour Board
(hereinafter referred to as the State Board) to. advise the State Government on such matters arising out of
the administration of this Act as may be referred to it and to carry out other functions assigned to it under
this Act.
2. The State Board shall consist of - a. a Chairman to be appointed by the State Government; b. the
Labour Commissioner, ex~officio, or in his absence any other officer nominated by the State Government
in that behalf; c. such number of members, not exceeding eleven, but not less than nine, as the State
Government may nominate to represent that Government, the industry, the contractors, the workmen and
any other interests which, in the opinion of the State Government, ought to be represented on the State
Board.
3. The number of persons to be appointed as members from each of the categories specified in sub-section
(2), the term of office and other conditions of service of, the procedure to be followed in the discharge of
their functions by, and the manner of filling vacancies among, the members of the State Board shall be
such as may be prescribed:
Provided that the number of members nominated to represent the workmen shall not be less than the
number of members nominated to represent the principal employers and the contractors.

Registration of Establishments Employing Contract Labour:

Appointment of registering officers: The appropriate Government may, by an order notified in the
Official Gazette,-
a. appoint such persons, being Gazetted Officers of Government, as it thinks fit to be registering officers
for the purposes of this Chapter; and
b. Define the limits, within which a registering officer shall exercise the powers conferred on him by or
under this Act.
Registration of Certain Establishments
1. Every principal employer of an establishment to which this Act applies shall, within such period as the
appropriate Government may, by notification in the Official Gazette, fix in this behalf with respect to
establishments generally or with respect to any class of them, make an application to the registering
officer in the prescribed manner for registration of the establishment:
Provided that the registering officer may entertain any such application for registration after expiry of the
period fixed in this behalf, if the registering officer is satisfied that the applicant was prevented by
sufficient cause from making the application in time.
2. If the application for registration is complete in all respects, the registering officer shall register the
establishment and issue to the principal employer of the establishment a certificate of registration
containing such particulars as may be prescribed.
Revocation of registration in certain cases
If the registering officer is satisfied, either on a reference made to him in this behalf or otherwise, that the
registration of any establishment has been obtained by misrepresentation or suppression of any material
fact, or that for any other reason the registration has become useless or ineffective and therefore requires
to be revoked, the registering officer may, after giving an opportunity to the principal employer of the
establishment to be heard and with the previous approval of the appropriate Government revoke the
registration.
Effect of Non-registration
No principal employer of an establishment, to which this Act applies, shalla. in the case of an
establishment required to be registered under section 7, but which has not been registered within the time
fixed for the purpose under that section,
b. in the case of an establishment the registration in respect of which has been revoked under section 8,
employ contract labour in the establishment after the expiry of the period referred to in clause (a) or after
the revocation of registration referred to in clause (b) as the case may be. Contract labour cannot become
employees of principal employer merely because contractor or employer has not obtain license or
registration respectively. Dinanath v. National Fertilizers Ltd. 1992 I LLJ 289 (S.C.): 1992 (64) FLR 39:
1992 I CLR 1: 19921 LLN53
Prohibition of Employment of Contract Labour
1. Notwithstanding anything contained in this Act, the appropriate Government may, after consultation
with the
Central Board or, as the case may be, a State Board, prohibit, by notification in the official Gazette,
employment of contract labour in any process, operation or other work in any establishment.
2. Before issuing any notification under sub-section (1) in relation to an establishment, the appropriate
Government shall have regard to the conditions of work and benefits provided for the contract labour in
that establishment and other relevant factors, such as a. whether the process, operation or other work is
incidental to, or necessary for the industry, trade, business, manufacture or occupation that is carried on in
the establishment; b. whether it is of perennial nature, that is to say, it is of sufficient duration, having
regard, to the nature of industry, trade, business, manufacture or occupation carried on in that
establishment; c. whether it is done ordinarily through regular workmen in that establishment or an
establishment similar thereto; d. whether it is sufficient to employ considerable number of whole-time
workmen.

Licensing of Contractors:
Appointment of Licensing Officers
The appropriate Government may, by an order notified in the Official Gazette,-
a. appoint such persons, being Gazetted Officers of Government, as it thinks fit to be licensing officers for
the purposes of this Chapter; and b. define the limits, within which a licensing officer shall exercise the
powers conferred on licensing officers by or under this Act.
Licensing of Contractors: 1. With effect from such date as the appropriate Government may, by
notification in the Official Gazette, appoint, no contractor to whom this Act applies, shall undertake or
execute any work through contract labour except under and in accordance with a license issued in that
behalf by the licensing officer.
2. Subject to the provisions of this Act, a license under subsection (I) may contain such conditions
including, in particular, conditions as to hours of work, fixation of wages and other essential amenities in
respect of contract labour as the appropriate Government may deem fit to impose in accordance with the
rules, if any, made under section 35 and shall be issued on payment of such fees and on the deposit of
such sum if any, as security for the due performance of the conditions as may be prescribed. Contractor
cannot be registered as a Contractor as well as principal employer Gammon India Ltd. Bombay v.
Assistant Labour Commissioner, 1976 I LLN 410 (Born. DB): 1976 LlC 745.
13. Grant of Licenses
1. Every application for the grant of a license under sub-section (I) of section 12 shall be made in the
prescribed form and shall contain the particulars regarding the location of the establishment, the nature of
process, operation or work for which contract labour is to be employed and such other particulars as may
be prescribed.
2. The licensing officer may make such investigation in respect of the application received under sub-
section (1) and in making any such investigation the licensing officer shall follow such procedure as may
be prescribed.
3. A licence granted under this Chapter shall be valid for the period specified therein and may be renewed
from time to time for such period and on payment of such fees and on such conditions as may be
prescribed.
14. Revocation, Suspension and Amendment of Licenses
1. If the licensing officer is satisfied, either on a reference made to him in this behalf or otherwise, that a.
a license granted under section 12 has been obtained by misrepresentation or suppression of any material
fact, or b. the holder of a license has, without reasonable cause, failed to comply with the conditions
subject to which the license has been granted or has contravened any of the provisions of this Act or the
rules made there under, then, without prejudice to any other penalty to which the holder of the license
may be liable under this Act, the licensing officer may, after giving the holder of the license an
opportunity of showing cause, revoke or suspend the license or forfeit the sum, if any, or any portion
thereof deposited as security for the due performance of the conditions subject to which the license has
been granted.
2. Subject to any rules that may be made in this behalf, the licensing officer may vary or amend a license
granted under section 12.
CHILD LABOUR (PROHIBITION AND REGULATION) ACT, 1986

Define the Child a person who has not completed his Fourteenth year of age. There is prohibition of
employment of children in certain occupations and processes prescribed in part A and part B of the
schedule. If no age certificate, then decision to be given by the prescribed medical authority.
Contravention of the provisions of Section 3 attract imprisonment from 3 months to 1 year and fine from
Rs.10000 to Rs.20000 or both. Second or subsequent offence, attract imprisonment from 6 months to 2
year and fine from Rs.10000 to Rs.20000 or both. If fails to give notice, Section 9, 11, 12 attract
Imprisonment upto to 1 month and fine upto Rs.10000 or both.

Prohibition of Employment of Children in Certain Occupations and Processes :

No child shall be employed or permitted to work in any of the occupations set forth in Part A of the
Schedule or in any workshop wherein any of the processes set forth in Part B of the Schedule is carried
on; Provided that nothing in this section shall apply to any workshop wherein any process is carried on by
the occupier with the aid of his family or to any school establishment by, or receiving assistance or
recognition from, Government.
Power to amend the Schedule.
The Central Government, after giving by notification in the Official Gazette, not less than three months
notice of its intention so to do, may, by like notification, add any occupation or process to the Schedule
and thereupon the Schedule shall be deemed to have been amended accordingly.
Child Labour Technical Advisory Committee
1. The Central Government may, by notification in the Official Gazette, constitute an advisory committee
to be called the Child Labour Technical Advisory Committee (hereafter in this section referred to as the
Committee) to advise the Central Government for the purpose of addition of occupation and processes to
the Schedule.
2. The Committee shall consist of a Chairman and such other members not exceeding ten, as may be
appointed by the Central Government.
3. The Committee shall meet as often as it may consider necessary and shall have power to regulate its
own procedure.
4. The Committee may, if it deems it necessary so to do, constitute one or more sub-committees and may
appoint to any such sub- committee, whether generally or for the consideration of any particular matter,
any person who is not a member of the Committee.
5. The term of office of, the manner of filling casual vacancies in the office of, and the allowances, if any,
payable to, the Chairman and other members of the Committee, and the conditions and restrictions subject
to which the Committee may appoint any person who is not a member of the Committee as a member of
any of its sub-committees shall be such as may be prescribed.
Part III
Regulation of Conditions of Work of Children
Application of Part
The provisions of this Part shall apply to an establishment or a class of establishments in which none of
the occupations or processes referred to in Section 3 is carried on.
Hours and Period of Work
1. No child shall be required or permitted to work in any establishment in excess of such number of hours
as may be prescribed for such establishment or class of establishments.
2. The period of work on each day shall be so fixed that no period shall exceed three hours and that no
child shall work for more than three hours before he has had an interval for rest for at least one hour.
3. The period of work of a child shall be so arranged that inclusive of his interval for rest, under sub-
section (2), it shall not be spread over more than six hours, including the time spent in waiting for work
on any day.
4. No child shall be permitted or required to work between 7 p.m. and 8 a.m.
5. No child shall be required or permitted to work overtime.
6. No child shall be required or permitted to work in any establishment on any day on which he has
already been working in another establishment.
Weekly Holidays
Every child employed in an establishment shall be allowed in each week, a holiday of one whole day,
which day shall be specified by the occupier in a notice permanently exhibited in a conspicuous place in
the establishment and the day so specified shall not be altered by the occupier more than once in three
months.
Notice to Inspector
1. Every occupier in relation to an establishment in which a child was employed or permitted to work
immediately before the date of commencement of this Act in relation to such establishment shall, within a
period of thirty days from such commencement, send to the Inspector within whose local limits the
establishment is situated, a written notice containing the following particulars, namely: -
a. the name and situation of the establishment;
b. the name of the person in actual management of the establishment;
c. the address to which communications relating to the establishment should be sent; and
d. the nature of the occupation or process carried on in the establishment.
2. Every occupier, in relation to an establishment, who employs, or permits to work, any child after the
date of commencement of this Act in relation to such establishment, shall, within a period of thirty days
from the date of such employment, send to the Inspector within whose local limits the establishment is
situated, a written notice containing the particulars as are mentioned in subsection (1)
3. Nothing in Sections 7,8 and 9 shall apply to any establishment wherein any process is carried on by the
occupier with the aid of his family or to any school established by, or receiving assistance or recognition
from, Government.
Disputes as to Age
If any question arises between an Inspector and an occupier as to the age of any child who is employed or
is permitted to work by him in an establishment, the question shall, in the absence of a certificate as to the
age of such child granted by the prescribed medical authority, be referred by the Inspector for decision to
the prescribed medical authority.
Maintenance of Register
There shall be maintained by every occupier in respect of children employed or permitted to work in any
establishment, a register to be available for inspection by an Inspector at all times during working hours
or when work is being carried on in any such establishment, showing
a. the name and date of birth of every child and so employed or permitted to work
b. hours and periods of work of any such child and the intervals of rest to which he is entitled
c. the nature of work of any such child; and
d. such other particulars as may be prescribed.
Display of Notice Containing Abstract of Section 3 and 14
Every railway administration, every port authority and every such occupier shall cause to be displayed in
a conspicuous and accessible place at every station on its railway or within the limits of a portor at the
place of work, as the case may be, a notice in the local language and in the English language containing
an abstract of Sections 3 and 14.
THE EQUAL REMUNERATION ACT 1976:

This Act has Overriding Effect to all other acts which says “PAYMENT OF REMUNERATION NOT
AT EQUAL RATES TO MEN AND WOMEN WORKERS AND OTHER MATTERS”. It is a Duty of
employer to pay equal remuneration to men and women workers for same work or work of a similar
nature and No Discrimination to be Made While Recruiting Men and Women Workers. Act not to Apply
in Certain Special Cases affecting the terms and conditions of a woman’s employment in complying with
the requirements of any law giving special treatment to women, or to any special treatment accorded to
women in connection With the birth or expected birth of a child, or the terms and conditions relating to
retirement, marriage or death or to any provision made in connection with the retirement, marriage or
death.

“same work or work of a similar nature” means work in respect of which the skill, effort and
responsibility required are the same, when performed under similar working conditions, by a man or a
woman and the differences, if any, between the skill, effort and responsibility required of a man and those
required of woman are not of practical importance in relation to the terms and conditions of employment;
i. “worker” means a worker in any establishment or employment in respect of which this Act has come
into force;
ii. Words and expressions used in this Act and not defined but defined in the Industrial Disputes Act,
1947 (14 of 1947), shall have the meanings respectively assigned to them in that Act.

Act to have Overriding Effect:

The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in
any other law or in the terms of any award, agreement or contract of service, whether made before or after
the commencement of this Act, or in any instrument having effect under any law for the time being in
force.
PAYMENT OF REMUNERATION AT EQUAL RATES TO MEN AND WOMEN WORKERS AND
OTHER MATTERS

Duty of employer to pay equal remuneration to men and women workers for same work or work of
a similar nature:
1. No employer shall pay to any worker, employed by him in an establishment or employment,
remuneration, whether payable in cash or in kind, at rates less favourable than those at which
remuneration is paid by him to the workers of the opposite sex in such establishment or employment for
performing the same work or work of a similar nature.
2. No employer shall, for the purpose of complying with the provisions of sub-section (1), reduce the rate
of remuneration of any worker.
3. Where, in an establishment or employment, the rates of remuneration payable before the
commencement of this Act for men and women workers for the same work or work of a similar nature are
different only on the ground of sex, then the higher (in cases where there are only two rates), or, as the
case may be, the highest (in cases where there are more than two rates), of such rates shall be the rate at
which remuneration shall be payable, on and from such commencement, to such men and women
workers:
Provided, that nothing in this sub-section shall be deemed to entitle a worker to the revision of the rate of
remuneration payable to him or her with reference to the service rendered by him or her before the
commencement of this Act.

No Discrimination to be Made While Recruiting Men and Women Workers:

On and from the commencement of this Act, no employer shall, while making recruitment for the same
work or work of a similar nature, 1[or in any condition of service subsequent to recruitment such as
promotions, training or transfer,] make any discrimination against women except where the employment
of women in such work is prohibited or restricted by or under any law for the time being in force:
PROVIDED, that the provisions of this section shall not affect any priority or reservation for scheduled
castes or scheduled tribes, ex-servicemen, retrenched employees or any other class or category of persons
in the matter of recruitment to the posts in an establishment or employment.

Advisory Committee:
1. For the purpose of providing increasing employment opportunities for women, the appropriate
government shall constitute one or more advisory committees to advise it with regard to the extent to
which women may be employed in such establishments or employments as the Central Government may,
by notification, specify in this behalf,
2. Every advisory committee shall consist of not less than ten persons, to be nominated by the appropriate
government, of which one-half shall be Women.
3. In tendering its advice, the advisory committee shall have regard to the number of women employed in
the concerned establishment or employment, the nature of work, hours of work, suitability of women for
employment, as the case may be, the need for providing increasing employment opportunities for women,
including part-time employment and such other relevant factors as the committee may think fit.
4. The advisory committee shall regulate its own procedure.
5. The appropriate government may, after considering the advice tendered to it by the advisory committee
and after giving to the persons concerned in the establishment or employment an opportunity to make
representations, issue such directions in respect of employment of women workers, as the appropriate
government may think fit.

Penalties:
1. If after the commencement of this Act, any employer, being required by or under the Act, so to do—
a. omits or fails to maintain any register or other document in relation to workers employed by him,
or
b. omits or fails to produce any register, muster-roll or other document relating to the employment of
workers, or
c. omits or refuses to give any evidence or prevents his agent, servant, or any other person in charge
of the establishment, or any worker, from giving evidence, or
d. omits or refuses to give any information, he shall be punishable l[with simple imprisonment for a
term which may extend to one month or with fine which may extend to ten thousand rupees or with
both].
2. If, after the commencement of this Act, any employer
a. makes any recruitment in contravention of the provisions of this Act, or
b. makes any payment of remuneration at unequal rates to men and women workers, for the same
work or work of a similar nature, or
c. makes any discrimination between men and women workers in contravention of the provisions of
this Act, or
d. omits or fails to carry out any direction made by the appropriate government under sub-section (5)
of section
6, he shall be punishable l[with fine which shall not be less than ten thousand rupees but which may
extend to twenty thousand rupees or with imprisonment for a term which shall be not less than three
months but which may extend to one year or with both for; the first offence, and with imprisonment
which may extend to two years for the second and subsequent offences].
3. If any person being required so to do, omits or refuses to produce to an inspector any register or other
document or to give any information, he shall be punishable with fine, which may extend to five hundred
rupees.
Act not to Apply in Certain Special Cases:
Nothing in this Act shall apply
a. to cases affecting the terms and conditions of a woman’s employment in complying with the
requirements of any law giving special treatment to women, or
b. to any special treatment accorded to women in connection with
i. the birth or expected birth of a child, or
ii. the terms and conditions relating to retirement, marriage or death or to any provision made in
connection with the retirement, marriage or death.
MINIMUM WAGES ACT, 1948 :

The appropriate government shall, in the manner hereinafter provided fix the minimum rates of wages
payable to employees employed in an employment specified in Part I or Part II of the Schedule. And fix
the minimum rates of wages payable to employees employed in an employment added to either Part by
notification under section 27 or review at such intervals as it may think fit, such intervals not exceeding
five years or employment having 1000 number of employees or more. The appropriate government may
fix minimum wages as a minimum time rate, a minimum piece rate, a guaranteed time rate or overtime
rate. Different minimum rates of wages may be fixed for, different scheduled employments, different
classes of work in the same scheduled employment, adults, adolescents, children and apprentices, and
different localities.

Fixing of Minimum Rates of Wages:

[(1) The appropriate government shall, in the manner hereinafter provided,-

[a. fix the minimum rates of wages payable to employees employed in an employment specified in Part I
or Part II of the Schedule and in an employment added to either Part by notification under section 27:
PROVIDED that the appropriate Government may, in respect of employees employed in an employment
specified in Part II of the Schedule, instead of fixing minimum rates of wages under this clause for the
whole State, fix such rates for a part of the State or for any specified class or classes of such employment
in the whole State or part thereof;]
b. review at such intervals as it may think fit, such intervals not exceeding five years, the minimum rates
of wages so fixed and revise the minimum rates, if necessary:
[PROVIDED that where for any reason the appropriate government has not reviewed the minimum rates
of wages fixed by it in respect of any scheduled employment within any interval of five years, nothing
contained in this clause shall be deemed to prevent it from reviewing the minimum rates after the expiry
of the said period of five years and revising them, if necessary, and until they are so revised the minimum
rates in force immediately before the expiry of the said period of five years shall continue in force.]
(1A) Notwithstanding anything contained in sub-section (1), the appropriate government may refrain
from fixing minimum rates of wages in respect of any scheduled employment in which there are in the
whole State less than one thousand employees engaged in such employment, but if at any time, the
appropriate government comes to a finding after such inquiry as it may make or cause to be made in this
behalf that the number of employees in any scheduled employment in respect of which it has refrained
from fixing minimum rates of wages has risen to one thousand or more, it shall fix minimum rates of
wages payable to employees in such employment [as soon as may be after such finding.]
2. The appropriate government may fix
a. a minimum rate of wages for time work (hereinafter referred to as “a minimum time rate”);
b. a minimum rate of wages for piece work (hereinafter referred to as “a minimum piece rate”);
I a minimum rate of remuneration to apply in the case of employees employed on piece work for the
purpose of securing to such employees a minimum rate of wages on a time work basis (hereinafter
referred to as “a guaranteed time rate”);
d. a minimum rate (whether a time rate or a piece rate) to apply in substitution for the minimum rate
which would otherwise be applicable, in respect of overtime work done by employees (hereinafter
referred to as “overtime rate”).
[(2A) Where in respect of an industrial dispute relating to the rates of wages payable to any of the
employees employed in a scheduled employment, any proceeding is pending before a
Tribunal or National Tribunal under the Industrial Disputes Act, 1947 (14 of 1947) or before any like
authority under any other law for the time being in force, or an award made by any Tribunal, National
Tribunal or such authority is in operation, and a notification fixing or revising the minimum rates of
wages in respect of the scheduled employment is issued during the pendency of such proceeding or the
operation of the award, then, notwithstanding anything contained in this Act, the minimum rates of wages
so fixed or so revised shall not apply to those employees during the period in which the proceeding is
pending and the award made therein is in operation or, as the case may be, where the notification is issued
during the period of operation of an award, during that period; and where such proceeding or award
relates to the rates of wages payable to all the employees in the scheduled employment, no minimum
rates of wages shall be fixed or revised in respect of that employment during the said period.]
3. In fixing or revising minimum rates of wages under this section,-
1. different minimum rates of wages may be fixed fori. different scheduled employments;
ii. different classes of work in the same scheduled employment;
iii. adults, adolescents, children and apprentices;
iv. different localities;
[b. minimum rates of wages may be fixed by any one or more of the following wage periods, namely:
i. by the hour,
ii. by the day,
iii. by the month, or
iv. by such other larger wage-period as may be prescribed;
and where such rates are fixed by the day or by the month, the manner of calculating wages for a month
or for a day, as the case may be, may be indicated:]
PROVIDED that where any wage-periods have been fixed under section 4 of the Payment of Wages Act,
1936 (4 of 1936), minimum wages shall be fixed in accordance therewith.

Minimum Rate of Wages:

1. Any minimum rate of wages fixed or revised by the appropriate government in respect of scheduled
employments under section 3 may consist of
i. a basic rate of wages and a special allowance at a rate to be adjusted, at such intervals and in such
manner as the appropriate government may direct, to accord as nearly as practicable with the variation
in the cost of living index number applicable to such workers (hereinafter referred to as the “cost of
living allowance”); or
ii. a basic rate of wages with or without the cost of living allowance, and the cash value of the
concessions in respect of supplies of essential commodities at concessional rates, where so authorised;
or
iii. an all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the
concessions, if any.
2. The cost of living allowance and the cash value of the concessions in respect of supplies of essential
commodities at concessional rate shall be computed by the competent authority at such intervals and in
accordance with such directions as may be specified or given by the appropriate government.

Procedure for Fixing and Revising Minimum Wages

1. In fixing minimum rates of wages in respect of any scheduled employment for the first time under this
Act or in revising minimum rates of wages so fixed, the appropriate government shall either
a. appoint as many committees and sub-committees as it considers necessary to hold enquiries and advise
it in respect of such fixation or revision, as the case may be, or
b. by notification in the Official Gazette, publish its proposals for the information of persons likely to be
affected thereby and specify a date, not less than two months from the date of the notification, on which
the proposals will be taken into consideration.
2. After considering the advice of the committee or committees appointed under clause (a) of sub-section
(1), or as the case may be, all representations received by it before the date specified in the notification
under clause (b) of that subsection, the appropriate government shall, by notification in the Official
Gazette fix, or, as the case may be, revise the minimum rates of wages in respect of each scheduled
employment, and unless such notification otherwise provides, it shall come into force on the expiry of
three months from the date of its issue:
Provided that where the appropriate government proposes to revise the minimum rates of wages by the
mode specified in clause (b) of sub-section (1), the appropriate government shall consult the Advisory
Board also.]
Advisory Board
For the purpose of co-ordinating work of 15[committees and sub-committees appointed under section 5]
and advising the appropriate government generally in the matter of fixing and revising minimum rates of
wages, the appropriate government shall appoint an Advisory Board.
Central Advisory Board
1. For the purpose of advising the Central and State Governments in the matters of the fixation and
revision of minimum rates of wages and other matters under this Act and for co-ordinating the work of
the Advisory Boards, the Central Government shall appoint a Central Advisory Board.
2. The Central Advisory Board shall consist of persons to be nominated by the Central Government
representing employers and employees in the scheduled employments, who shall be equal in number, and
independent persons not exceeding one-third of its total number of members; one of such independent
persons shall be appointed the Chairman of the Board by the Central Government.
Composition of Committees, etc.
Each of the committees, sub-committees and the Advisory Board shall consist of persons to be nominated
by the appropriate government representing employers and employees in the scheduled employments,
who shall be equal in number, and independent persons not exceeding one-third of its total number of
members; one of such independent persons shall be appointed the Chairman by the appropriate
government.
Correction of Errors
1. The appropriate government may, at any time, by notification in the Official Gazette, correct clerical or
arithmetical mistakes in any order fixing or revising minimum rates of wages under this Act, or errors
arising therein from any accidental slip or omission.
2. Every such notification shall, as soon as may be after it is issued, be placed before the Advisory Board
for information,]
Wages in Kind
1. Minimum wages payable under this Act shall be paid in cash.
2. Where it has been the custom to pay wages wholly or partly in kind, the appropriate government being
of the opinion that it is necessary in the circumstances of the case may, by notification in the Official
Gazette, authorise the payment of minimum wages either wholly or partly in kind.
3. If appropriate government is of the opinion that provision should be made for the supply of essential
commodities at concessional rates, the appropriate government may, by notification in the Official
Gazette, authorise the provision of such supplies at concessional rates.
4. The cash value of wages in kind and of concessions in respect of supplies of essential commodities at
concessional rates authorised under sub-sections (2) and (3) shall be estimated in the prescribed manner.
Payment of Minimum Rates of Wages
1. Where in respect of any scheduled employment a notification under section 5 17[***] is in force, the
employer shall pay to every employee engaged in a scheduled employment under him wages at a rate not
less than the minimum rate of wages fixed by such notification for that class of employees in that
employment without any deductions except as may be authorised within such time and subject to such
conditions as may be prescribed.
2. Nothing contained in this section shall affect the provisions of the Payment of Wages Act, 1936 (4 of
1936).
Fixing Hours for a Normal Working Day, etc.
[(1) In regard to any scheduled employment minimum rates of wages in respect of which have been fixed
under this Act, the appropriate government may-
1. fix the number of hours of work which shall constitute a normal working day, inclusive of one or more
specified intervals;
b. provide for a day of rest in every period of seven days which shall be allowed to all employees or to
any specified class of employees and for the payment of remuneration in respect of such days of rest;
I provide for payment for work on a day of rest at a rate not less than the overtime rate.]
[(2) The provisions of sub-section (1) shall, in relation to the following classes of employees, apply only
to such extent and subject to such conditions as may be prescribed:-
1. employees engaged on urgent work, or in any emergency which could not have been foreseen or
prevented;
b. employees engaged in work in the nature of preparatory or complementary work which must
necessarily be carried on outside the limits laid down for the general working in the employment
concerned;
I employees whose employment is essentially intermittent;
d. employees engaged in any work which for technical reasons has to be completed before the duty is
over;
e. employees engaged in a work which could not be carried on except at times dependent on the irregular
action of natural forces.
(3) For the purposes of clause I of sub-section (2), employment of an employee is essentially intermittent
when it is declared to be so by the appropriate government on the ground that the daily hours of duty of
the employee, or if there be no daily hours of duty as such for the employee, the hours of duty, normally
include periods of inaction during which the employee may be on duty but is not called upon to display
either physical activity or sustained attention.]
Overtime
1. Where an employee, whose minimum rate of wages is fixed under this Act by the hour, by the day or
by such a longer wage-period as may be prescribed, works on any day in excess of the number of hours
constituting a normal working day, the employer shall pay him for every hour or for part of an hour so
worked in excess at the overtime rate fixed under this Act or under any law of the appropriate government
for the time being in force, whichever is higher.
2. Nothing in this Act shall prejudice the operation of the provisions of [section 59 of the Factories Act,
1948 (63 of 1948)] in any case where those provisions are applicable.
Wages of Worker who Works for Less than Normal Working Day
If an employee whose minimum rate of wages has been fixed under this Act by the day works on any day
on which he was employed for a period less than the requisite number of hours constituting a normal
working day, he shall, save as otherwise hereinafter provided, be entitled to receive wages in respect of
work done by him on that day as if he had worked for a full normal working day:
PROVIDED, however, that he shall not be entitled to receive wages for a full normal working day
i. in any case where his failure to work is caused by his unwillingness to work and not by the
omission of the employer to provide him with work, and
ii. ii. in such other cases and circumstances as may be prescribed.
Wages for Two or More Classes of Work
Where an employee does two or more classes of work to each of which a different minimum rate of
wages is applicable, the employer shall pay to such employee in respect of the time respectively occupied
in each such class of work, wages at not less than the minimum rate in force in respect of each such class.
Minimum Time Rate Wages for Piece Work
Where an employee is employed on piece work for which minimum time rate and not a minimum piece
rate has been fixed under this Act, the employer shall pay to such employee wages at not less than the
minimum time rate.
Maintenance of Registers and Records
1. Every employer shall maintain such registers and records giving such particulars of employees
employed by him, the work performed by them, the wages paid to them, the receipts given by them and
such other particulars and in such form as may be prescribed.
2. Every employer shall keep exhibited, in such manner as may be prescribed, in the factory, workshop or
place where the employees in the scheduled employment may be employed, or in the case of out-workers,
in such factory, workshop or place as may be used for giving out work to them, notices in the prescribed
form containing prescribed particulars.
3. The appropriate government may, by rules made under this Act, provide for the issue of wage books or
wage slips to employees employed in any scheduled employment in respect of which minimum rates of
wages have been fixed and prescribed in the manner in which entries shall be made and authenticated in
such wage books or wage slips by the employer or his agent.
Inspectors
1. The appropriate government may, by notification in the Official Gazette, appoint such persons as it
thinks fit to be Inspectors for the purposes of this Act and define the local limits within which they shall
exercise their functions.
2. Subject to any rules made in this behalf, an Inspector may, within the local limits for which he is
appointed-
1. enter, at all reasonable hours, with such assistants (if any), being persons in the service of the
government or any local or other public authority, as he thinks fit, any premises or place where employees
are employed or work is given out to out-workers in any scheduled employment in respect of which
minimum rates of wages have been fixed under this Act for the purpose of examining any register, record
of wages or notices required to be kept or exhibited by or under this Act or rules made there under, and
require the production thereof for inspection;
b. examine any person whom he finds in any such premises or place and who, he has reasonable cause to
believe, is an employee employed therein or an employee to whom work is given out therein;
I require any person giving out-work and any outworkers, to give any information, which is in his power
to give, with respect to the names and addresses of the persons to, for and from whom the work is given
out or received, and with respect to the payments to be made for the work;
[d. seize or take copies of such register, record or wages or notices or portions thereof as he may consider
relevant in respect of an offence under this Act which he has reason to believe has been committed by an
employer]; and
e. exercise such other powers as may be prescribed.
3. Every Inspector shall be deemed to be a public servant within the meaning of the Indian Penal Code
(45 of 1860).
[4. Any person required to produce any document or thing or to give any information by an Inspector
under sub-section (2) shall be deemed to be legally bound to do so within the meaning of section 175 and
section 176 of the Indian Penal Code (45 of 1860).]

Penalties for Certain Offences

Any employer who
1. pays to any employee less than the minimum rates of wages fixed for that employee’s class of work, or
less than the amount due to him under the provisions of this Act, or
2. Contravenes any rule or order made under section 13; shall be punishable with imprisonment for a term
which may extend to six months, or with fine which may extend to five hundred rupees, or with both:
PROVIDED, that in imposing any fine for an offence under this section, the court shall take into
consideration the amount of any compensation already awarded against the accused in any proceedings
taken under section 20.
22A. General Provision for Punishment of Other Offences
Any employer who contravenes any provision of this Act or of any rule or order made thereunder shall, if
no other penalty is provided for such contravention by this Act be punishable with fine which may extend
to five hundred rupees.
22B. Cognizance of Offences
1. No court shall take cognizance of a complaint against any person for an offence-
a. under clause (a) of section 22 unless an application in respect of the facts constituting such offence has
been presented under section 20 and has been granted wholly or in part, and the appropriate government
or an officer
authorised by it in this behalf has sanctioned the making of the complaint;
b. under clause (b) of section 22 or under section 22A, except on a complaint made by, or with the section
of, an Inspector.
2. No court shall take cognizance of an offence-
a. under clause (a) or clause (b) of section 22, unless complaint thereof is made within one month of the
grant of sanction under this section;
b. under section 22A, unless complaint thereof is made within six months of the date on which the
offence is alleged to have been committed.
22C. Offences by Companies
1. If the person committing any offence under this Act is a company, every person who at the time the
offence was committed, was in charge of, and was responsible to, the company for the conduct of the
business of the company as well as the company shall be deemed to be guilty of the offence and shall be
liable to be proceeded against and punished accordingly:
PROVIDED that nothing contained in this sub-section shall render any such person liable to any
punishment provided in this Act if he proves that the offence was committed without his knowledge or
that he exercised all due diligence to prevent the commission of such offence.
2. Notwithstanding anything contained in sub-section (1), where any offence under this Act has been
committed by a company and it is proved that the offence has been committed with the consent or
connivance of, or is attributable to any neglect on the part of, any director, manager, secretary, or other
officer of the company, such director, manager, secretary or other officer of the company shall also be
deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation: For the purposes of this section-
1. “Company” means anybody corporate and includes a firm or other association of individuals, and
b. “director” in relation to a firm means a partner in the firm.
22D. Payment of Undisbursed Amounts Due to Employees
All amounts payable by an employer to an employee as the amount of minimum wages of the employee
under this Act or otherwise due to the employee under this Act or any rule or order made thereunder shall,
if such amounts could not or cannot be paid to the employee on account of his death before payment or on
account of his whereabouts not being known, be deposited with the prescribed authority who shall deal
with the money so deposited in such manner as may be prescribed.
22e. Protection Against Attachment of Assets of Employer with Government
Any amount deposited with the appropriate government by an employer to secure the due performance of
a contract with that government and any other amount due to such employer from that government in
respect of such contract shall not be liable to attachment under any decree or order of any court in respect
of any debt or liability incurred by the employer other than any debt or liability incurred by the employer
towards any employee employed in connection with the contract aforesaid.
22F. Application of Payment of Wages Act, 1936 to Scheduled Employments
1. Notwithstanding anything contained in the Payment of Wages Act, 1936 (4 of 1936), the appropriate
government may, by notification in the Official Gazette, direct that, subject to the provisions of sub-
section (2), all or any of the provisions of the said Act shall, with such modifications, if any, as may be
specified in the notification, apply to wages payable to employees in such scheduled employments as may
be specified in the notification.
2. Where all or any of the provisions of the said Act are applied to wages payable to employees in any
scheduled employment under sub-section (1), the Inspector appointed under this Act shall be deemed to
be the Inspector for the purpose of enforcement of the provisions so applied within the local limits of his
jurisdiction.]
EMPLOYEES STATE INSURANCE ACT 1948:

The Act provided for certain benefits to employees’ in case of sickness, maternity and employment injury
and also makes provision for certain other matters. The coverage under the act is at present restricted to
employees drawing wages not exceeding Rs. 3000 per month. The administrative and regulatory
authorities in ESI act are Corporation, Standing Committee and Medical Benefit Council. Subject to the
general superintendence and control of the Corporation, the Standing Committee shall administer the
affairs of the Corporation and may exercise any of the powers and perform any of the functions of the
Corporation. The Standing Committee shall submit for the consideration and decision of the Corporation
all such cases and matters as may be specified in the regulations made in this behalf. Government may, by
notification in the Official Gazette, supersede Corporation or Standing Committee. Duties of Medical
Benefit Council Advise the Corporation and the Standing Committee, powers and duties of investigation
as may be prescribed in relation to complaints against medical practitioners.

Corporation, Standing Committee and Medical Benefit Council:

Establishment of Employees’ State Insurance Corporation

1. With effect from such dateas the Central Government may, by notification in the Official Gazette,
appoint in this behalf, there shall be established for the administration of the scheme of employees’ state
insurance in accordance with the provisions of this Act a Corporation to be known as the Employees’
State Insurance Corporation.
2. The Corporation shall be a body corporate by the name of Employees’ State Insurance Corporation
having perpetual succession and a common seal and shall by the said name sue and be sued.
4. Constitution of Corporation
The Corporation shall consist of the following members, namely:-
[a. a Chairman to be [appointed] by the Central Government;
b. a Vice-Chairman to be [appointed] by the Central Government;]
c. not more than five persons to be [appointed] by the Central Government,
d. one person each representing each of the [[States] in which this Act is in force] to be [appointed] by the
State Government concerned;
e. one person to be [appointed] by the Central Government to represent the [Union Territories];
f. [ten] persons representing employers to be [appointed] by the Central Government in consultation with
such organisations of employers as may be recognised for the purpose by the Central Government;
g. [ten] persons representing employees to be [appointed] by the Central Government in consultation with
such organisations of employees as may be reorganised for the purpose by the Central Government;
h. two persons representing the medical profession to be [appointed] by the Central Government in
consultation with such organisation of medical practitioners as may be recognised for the purpose by the
Central Government
i. three members of Parliament of whom two shall be members of the House of the People (Lok Sabha)
and one shall be a member of the Council of States (Rajya Sabha) elected respectively by the members of
the House of the People and the members of the Council of States; and
j. the Director-General of the Corporation ex-officio.]
5. Term of Office of Members of the Corporation
1. Save as otherwise expressly provided in this Act, the term of office of members of the Corporation
other than [the members referred to in clauses (a), (b), (c), (d) and (e) of section 4 and the ex officio
member,] shall be four years, commencing from the date on which their [appointment] or election is
notified:
PROVIDED that a member of the Corporation shall, notwithstanding the expiry of the said period of four
years, continue to hold office until the [appointment] or election of his successor is notified.
2. The members of the Corporation referred to in clauses [(a),(b),(c) and (e)]of section 4 shall hold office
during the pleasure of the government [appointing] them.
6. Eligibility for Re-nomination or Re-election
An outgoing member of the Corporation, the Standing Committee, or the Medical Benefit Council shall
be eligible for [re-appointment] or re-election as the case may be.
7. Authentication of Orders, Decisions etc.
All orders and decisions of the Corporation shall be authenticated by the signature of the Director General
of the Corporation and all other instruments issued by the Corporation shall be authenticated by the
signature of the Director General or such other officer of the Corporation as may be authorised by him.]
8. Constitution of Standing Committee
A Standing Committee of the Corporation shall be constituted from among its members, consisting of
a. A Chairman, [appointed] by the Central Government;
b. three members of the Corporation [appointed] by the Central Government];
[bb. three members of the Corporation representing such three State Governments thereon as the Central
Government may, by notification Gazette, specify from time to time;]
c. [eight] members elected by the Corporation as follows
ii. [three] members from among the members of the Corporation representing employers;
iii. [three] members from among the members of the Corporation representing employees;
iv. one member from among the members of the Corporation representing the medical profession; and
v. one member from among the members of the Corporation elected by [Parliament];
[d. the Director General of the Corporation, ex officio.]
9. Term of Office of Members of Standing Committee
1. Save as otherwise expressly provided in this Act, the term of office of a member of the Standing
Committee, other than a member referred to in clause (a) or [clause (b) or clause (bb)] of section 8, shall
be two years from the date on which his election is notified:
PROVIDED that a member of the Standing Committee shall, notwithstanding the expiry of the said
period of two years, continue to hold office until the election of his successor is notified:
PROVIDED FURTHER that a member of the Standing Committee shall cease to hold office when he
ceases to be a member of the Corporation.
2. A member of the Standing Committee referred to in clause (a) or [clause (b) or clause (bb)] of section 8
shall hold office during the pleasure of the Central Government.
10. Medical Benefit Council
1. The Central Government shall constitute a Medical Benefit Council consisting of
a. The Director General, Health Services, ex officio, as Chairman;
b. A Deputy Director General, Health Services, to be [appointed] by the Central Government;
c. The medical commissioner of the Corporation, ex officio;
d. One member each representing each of the [[States (other than Union Territories) in Which this Act is
in force] to be [appointed] by the State Government concerned;
e. Three members representing employers to be [appointed] by the Central Government in consultation
with such organisations of employers as may be recognised for the purpose by the Central Government;
f. three members representing employees to be [appointed] by the Central Government in consultation
with such organisations of employees as may be recognised for the purpose by the Central Government;
and
g. three members, of whom not less than one shall be a woman, representing the medical profession, to be
[appointed] by the Central Government in consultation with such organisations of medical practitioners as
may be recognised for the purpose by the Central Government.
2. Save as otherwise expressly provided in this Act, the term of office of a member of the Medical Benefit
Council, other than a member referred to in any of the clauses (a) to (d) of sub-sec. (1), shall be four years
from the date on which his [appointment] is notified:
[PROVIDED that a member of the Medical Benefit Council shall notwithstanding the expiry of the said
period of four years continue to hold office until the [appointment] of his successor is notified.]
3. A member of the Medical Benefit Council referred to in clauses (b) and (d) of sub-section (1) shall
hold office during the pleasure of the government [appointing] him.
11. Resignation of Membership
A member of the Corporation, the Standing Committee or the Medical Benefit Council may resign his
office by notice in writing to the Central Government and his seat shall fall vacant on the acceptance of
the resignation by that government.
12. Cessation of Membership
[1. A member of the Corporation, the Standing Committee or the Medical Benefit Council shall cease to
be a member of that body if he fails to attend three consecutive meetings thereof :
PROVIDED that the Corporation, the Standing Committee or the Medical Benefit Council, as the case
may be, may, subject to rules made by the Central Government in this behalf, restore him to membership.
[2. Where in the opinion of the Central Government any person [appointed] or elected to represent
employers, employees or the medical profession on the Corporation, the Standing Committee or the
Medical Benefit Council, as the case may be, has ceased to represent such employers, employees, or the
medical profession, the Central Government may, by notification in the Official Gazette, declare that with
effect from such date as may be specified therein such person shall cease to be a member of the
Corporation, the Standing Committee or the Medical Benefit Council, as the case may be.]
[3. A person referred to in clause (i) of section 4 shall cease to be a member of the Corporation when he
ceases to be a Member of Parliament.]
13. Disqualification
A person shall be disqualified for being chosen as or for being a member of the Corporation, the Standing
Committee or the Medical Benefit Council
a. if he is declared to be of unsound mind by a competent court; or
b. if he is an undischarged insolvent; or
c. if he has directly or indirectly by himself or by his partner any interest in a subsisting contract with, or
any work being done for, the Corporation except as a medical practitioner or as a shareholder (not being a
director) of a company; or
d. if before or after the commencement of this Act, he has been convicted of an offence involving moral
turpitude.
14. Filling of Vacancies
1. Vacancies in the office of [appointed] or elected members of the Corporation, the Standing Committee
and the Medical Benefit Council shall be filled by [appointment] or election, as the case may be.
2. A member of the Corporation, the Standing Committee or the Medical Benefit Council [appointed] or
elected to fill a casual vacancy shall hold office only so long as the member in whose place he is
[appointed] or elected would have been entitled to hold office, if the vacancy had not occurred.
15. Fees and Allowances
Members of the Corporation, the Standing Committee and the Medical Benefit Council shall receive such
fees and allowances as may from time to time be prescribed by the Central Government.
16. Principal Officers
[1. The Central Government may, in consultation with the Corporation, appoint a director general and a
financial commissioner.]
2. The director general shall be the chief executive officer of the Corporation.
3. [The director general and the financial commissioner] shall be whole-time officers of the Corporation
and shall not undertake any work unconnected with their office without the sanction of the Central
Government [and of the Corporation.]
4. [The director general or the financial commissioner] shall hold office for such period, not exceeding
five years, as may be specified in the order appointing him. An outgoing [director general or financial
commissioner] shall be eligible for re-appointment if he is otherwise qualified.
5. [The director general or the financial commissioner] shall receive such salary and allowances as may
be prescribed by the Central Government.
6. A person shall be disqualified from being [appointed] as or for being [The Director General or the
Financial Commissioner] if he is subject to any of the disqualifications specified in section 13.
7. The Central Government may at any time remove [the director general or the financial commissioner]
from office and shall do so if such removal is recommended by a resolution of the Corporation passed at a
special meeting called for the purpose and supported by the votes of not less than two-thirds of the total
strength of the Corporation.
17. Staff
1. The Corporation may employ such other staff of officers and servants as may be necessary for the
efficient transaction of its business provided that the sanction of the Central Government shall be obtained
for the creation of any post [the maximum monthly salary of which [exceeds such salary as may be
prescribed by the Central Government.]
[2. a. The method of recruitment, salary and allowances, discipline and other conditions of service of the
members of the staff of the Corporation shall be such as may be specified in the regulations made by the
Corporation in accordance with the rules and orders applicable to the officers and employees of the
Central Government drawing corresponding scales of pay:
PROVIDED that where the Corporation is of the opinion that it is necessary to make a departure from the
said rules or orders in respect of any of the matters aforesaid, it shall obtain the prior approval of the
Central Government.
b. In determining the corresponding scales of pay of the members of the staff under clause (a), the
Corporation shall have regard to the educational qualifications, method of recruitment, duties and
responsibilities of such officers and employees under the Central Government and in case of any doubt,
the Corporation shall refer the matter to the Central Government whose decision thereon shall be final.]
3. Every appointment to [posts [(other than medical posts)] posts under Central Government], shall be
made in consultation with the [Union] Public Service Commission:
PROVIDED that this sub-section shall not apply to an officiating or temporary [appointment] for [a
period] not exceeding one year:
[PROVIDED FURTHER, that any such officiating or temporary appointment shall not confer any claim
for regular appointment and the services rendered in that capacity shall not count towards seniority or
minimum qualifying service specified in the regulations for promotion to next higher grade.]
[4. If any question arises whether a post corresponds to a [Group A and Group B] post under the Central
Government, the question shall be referred to that government whose decision thereon shall be final.]
18. Powers of the Standing Committee
1. Subject to the general superintendence and control of the Corporation, the Standing Committee shall
administer the affairs of the Corporation and may exercise any of the powers and perform any of the
functions of the Corporation.
2. The Standing Committee shall submit for the consideration and decision of the Corporation all such
cases and matters as may be specified in the regulations made in this behalf.
3. The Standing Committee may, in its discretion, submit any other case or matter for the decision of the
Corporation.
19. Corporation’s Power to Promote Measures for Health, etc. of Insured Persons
The Corporation may, in addition to the scheme of benefits specified in this Act, promote measures for
the improvement of the health and welfare of insured persons and for the rehabilitation and re-
employment of insured persons who have been disabled or injured and may incur in respect of such
measures expenditure from the funds of the Corporation within such limits as may be prescribed by the
Central Government.
20. Meetings of Corporation, Standing Committee and Medical Benefit Council
Subject to any rules made under this Act, the Corporation, the Standing Committee and the Medical
Benefit Council shall meet at such times and places and shall observe such rules or procedure in regard to
transaction of business at their meetings as may be specified in the regulations made in this behalf.
21. Supersession of the Corporation and Standing Committee
1. If in the opinion of the Central Government, the Corporation or the Standing Committee persistently
makes default in performing the duties imposed on it by or under this Act or abuses its powers, that
government may, by notification in the Official Gazette, supersede the Corporation, or in the case of the
Standing Committee, supersede, in consultation with the Corporation, the Standing Committee:
PROVIDED that before issuing a notification under this sub-section the Central Government shall give a
reasonable opportunity to the Corporation or the Standing Committee, as the case may be, to show cause
why it should not be superseded and shall consider the explanations and objections, if any, of the
Corporation or the Standing Committee, as the case may be.
2. Upon the publication of a notification under sub-section (1) superseding the Corporation or the
Standing Committee, all the members of the Corporation or the Standing Committee, as the case may be,
shall, as from the date of such publication, be deemed to have vacated their offices.
3. When the Standing Committee has been superseded, a new standing Committee shall be immediately
constituted in accordance with section 8.
4. When the Corporation has been superseded, the Central Government may
a. immediately [appoint] or cause to be [appointed] or elected new members to the Corporation in
accordance with section 4 and may constitute a new Standing Committee under section 8;
b. in its discretion, appoint such agency, for such period as it may think fit, to exercise the powers and
perform the functions of the Corporation and such agency shall be competent to exercise all the powers
and perform all the functions of the Corporation.
5. The Central Government shall cause a full report of any action taken under this section and the
circumstances leading to such action to be laid before [Parliament] at the earliest opportunity and in any
case not later than three months from the date of the notification superseding the Corporation or the
Standing Committee as the case may be.
22. Duties of Medical Benefit Council
The Medical Benefit Council shall
a. advise [the Corporation and the Standing Committee] on matters relating to the administration of
medical benefit, the certification for purposes of the grant of benefits and other connected matters;
b. have such powers and duties of investigation as may be prescribed in relation to complaints against
medical practitioners in connection with medical treatment and attendance; and
c. perform such other duties in connection with medical treatment and attendance as may be specified in
the regulations.
23. Duties of [Director General and the Financial Commissioner]
The [director general and the financial commissioner] shall exercise such powers and discharge such
duties as may be prescribed. They shall also perform such other functions as may be specified in the
regulations.
24. Acts of Corporation, etc. not Invalid by Reason of Defect in Constitution, etc.
No act of the Corporation, the Standing Committee or the Medical Benefit Council shall be deemed to be
invalid by reason of any defect in the constitution of the Corporation, the Standing Committee or the
Medical Benefit Council, on the ground that any member thereof was not entitled to hold or continue in
office by reason of any disqualification or of any irregularity in his [appointment] or election, or by
reason of such act having been done during the period of any vacancy in the office of any member of the
Corporation, the Standing Committee or the Medical Benefit Council.
25. Regional Boards, Local Committees, Regional and Local Medical Benefit Councils
The Corporation may appoint regional boards, local committees and regional and local Medical Benefit
Councils in such areas and in such manner, and delegate to them such powers and functions, as may be
provided by the regulations.

Employees’ State Insurance Fund:

1. All contributions paid under this Act and all other moneys received on behalf of the Corporation shall
be paid into a fund called the Employees’ State Insurance Fund which shall be held and administered by
the Corporation for the purposes of this Act.
2. The Corporation may accept grants, donations and gifts from the Central or any [State Government,]
local authority, or any individual or body whether incorporated or not, for all or any of the purposes of
this Act.
[3. Subject to the other provisions contained in this Act and to any rules or regulations made in this
behalf, all moneys accruing or payable to the said Fund shall be paid into the Reserve Bank of India or
such other bank as may be approved by the Central Government to the credit on an account styled the
account of the Employees’ State Insurance Fund.]
4. Such account shall be operated on by such officers as may be authorised by the Standing Committee
with the approval of the Corporation.
28. Purposes for which the Fund may be Expended
Subject to the provisions of this Act and of any rules made by the Central Government in that behalf, the
Employees’ State Insurance Fund shall be expended only for the following purposes, namely:-
i. payment of benefits and provision of medical treatment and attendance to insured persons and, where
the medical benefit is extended to their families, the provision of such medical benefit to their families, in
accordance with the provisions of this Act and defraying the charges and costs in connection therewith;
ii. payment of fees and allowances to members of the Corporation, the Standing Committee and the
Medical Benefit Council, the regional boards, local committees and regional and local Medical Benefit
Councils;
iii. payment of salaries, leave and joining time allowances, travelling and compensatory allowances,
gratuities and compassionate allowances, pensions, contributions to provident or other benefit fund of
officers and servants of the Corporation and meeting the expenditure in respect of offices and other
services set up for the purpose of giving effect to the provisions of this Act;
iv. establishment and maintenance of hospitals, dispensaries and other institutions and the provisions of
medical and other ancillary services for the benefit of insured persons and, where the medical benefit is
extended to their families, their families;
v. payment of contributions to any [State Government,] local authority or any private body or individual,
towards the cost of medical treatment and attendance provided to insured persons and, where the medical
benefit is extended to their families, their families including the cost of any building and equipment in
accordance with any agreement entered into by the Corporation;
vi. defraying the cost (including all expenses) of auditing the accounts of the Corporation and of the
valuation of its assets and liabilities;
vii. defraying the cost (including all expenses) of the Employees’ State Insurance Courts set up under this
Act;
viii. payment of any sums under any contract entered into for the purposes of this Act by the Corporation
or the Standing Committee or by any officer duly authorised by the Corporation or the Standing
Committee in that behalf;
ix. payment of sums under any decree, order or award of any Court or Tribunal against the Corporation or
any of its officers or servants for any act done in the execution of his duty or under a compromise or
settlement of any suit or other legal proceeding or claim instituted or made against the Corporation;
x. defraying the cost and other charges of instituting or defending any civil or criminal proceedings
arising out of any action taken under this Act;
xi. defraying expenditure, within the limits prescribed, on measures for the improvement of the health and
welfare of insured persons and for the rehabilitation and reemployment of insured persons who have been
disabled or injured; and
xii. such other purposes as may be authorised by the Corporation with the previous approval of the
Central Government.
Contributions

38. All Employees to be Insured

Subject to the provisions of this Act, all employees in factories or establishments to which this Act
applies shall be insured in the manner provided by this Act.
39. Contributions
1. The contribution payable under this Act in respect of an employee shall comprise contribution payable
by the employer (hereinafter referred to as the employer’s contribution) and contribution payable by the
employee
(hereinafter referred to as the employee’s contribution) and shall be paid to the Corporation.
[2. The contributions shall be paid at such rates as may be prescribed by the Central Government:
PROVIDED that the rates so prescribed shall not be more than the rates which were in force immediately
before the commencement of the Employees’ State Insurance (Amendment) Act, 1989.]
[3. The wage period in relation to an employee shall be the unit in respect of which all contributions shall
be payable under this Act.]
4. The contributions payable in respect of each [wage period] shall ordinarily fall due on the last day of
the [wage period], and where an employee is employed for part of the [wage period], or is employed
under two or more employers during the same 69[wage period], the contributions shall fall due on such
days as may be specified in the regulations.
5. a. If any contribution payable under this Act is not paid by the principal employer on the date on which
such contribution has become due, he shall be liable to pay simple interest at the rate of twelve per cent
per annum or at such higher rate as may be specified in the regulations till the date of its actual payment:
PROVIDED that higher interest specified in the regulations shall not exceed the lending rate of interest
charged by any scheduled bank.
b. Any interest recoverable under clause (a) may be recovered as an arrear of land revenue or under
sections 45C to 45-1.
Explanation: In this sub-section, “scheduled bank” means a bank for the time being included in the
Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934).]

Principal Employer to Pay Contributions in the First Instance

1. The principal employer shall pay in respect of every employee, whether directly employed by him or
by or through an immediate employer, both the employer’s contribution and the employee’s contribution.
2. Notwithstanding anything contained in any other enactment but subject to the provisions of this Act
and the regulations, if any, made there under, the principal employer shall, in the case of an employee
directly employed by him (not being an exempted employee), be entitled to recover from the employee
the employee’s contribution by deduction from his wages and not otherwise:
PROVIDED that no such deduction shall be made from any wages other than such as relate to the period
or part of the period in respect of which the contribution is payable, or in excess of the sum representing
the employee’s contribution for the period.
3. Notwithstanding any contract to the contrary, neither the principal employer nor the immediate
employer shall be entitled to deduct the employer’s contribution from any wages payable to an employee
or otherwise to recover it from him.
4. Any sum deducted by the principal employer from wages under this Act shall be deemed to have been
entrusted to him by the employee for the purpose of paying the contribution in respect of which it was
deducted.
5. The principal employer shall bear the expenses of remitting the contributions to the Corporation.