Labour law 2 - VIVA QUESTIONS

Chapter 1 :

-Definitions - social security , social insurance, social assistance ,

-Constitutional provisions of SS.
1. Definition of Social security:
"Social security systems mean the systems to enable every citizen to lead a worthy life as a
member of cultured society. Social security systems provide countermeasures against the
causes for needy circumstances including illness, injury, childbirth, disablement, death, old age,
unemployment and having a lot of children by implementing economic security measures
through insurance or by direct public spending.
Social security systems ensure the minimum level of living to the needy by public
assistance, and they also promote public health and social welfare."
According to the definition, social security systems play the following three roles.
First, the systems deal with the factors that may cause needy circumstances such as illness,
injury, childbirth, old age, disablement, and unemployment by providing economic security
through insurance (social insurance) or by direct public spending (social assistance). Second, the
systems ensure the minimum level of living to the needy by implementing public assistance
programs. Third, in line with the aforementioned measures, the systems promote public health
and social welfare.

2. Social assistance:
Social assistance refers to the assistance rendered by the Government to the needy persons
without asking them to make contributions to be entitled to get such assistance. In other
words, social assistance includes those benefits which are provided by the Government without
any contribution from workers and employers. Workmen’s compensation, maternity benefits,
old age pensions, etc. are the examples of social assistance.

3._ Social Insurance_:

Social insurance refers to a scheme of maintaining fund from the contributions made by the
employees and employer, with or without a subsidy from the Government. In other words,
social insurance can be defined as a device to provide benefits as of right for persons of small
earnings; in amounts which combine the contributive efforts of the insured with subsidies from
the employer and the Government Examples of social insurance are provident fund and group
insurance.

4. CONSTITUTIONAL PROVISIONS OF SOCIAL SECURITY

∆ Article 21(Right to life, work, sleep etc)

∆ Article 41( Right to work)
∆ Article 42 (to provide just and humane condition and maternity relief)
∆ Schedule 7 list 3 ( Social security, maternity benefits etc)
Chapter 2 :

Under Employees compensation act:

- Definition of employee, partial disablement, Total disablement,Dependent , formula for

calculating compensation, Arising out of and in the course of employment, Notional
extension, Who can appoint commissioner.

https://www.legalserviceindia.com/legal/article-5297-basics-of-employee-s-compensation-act-
1923.html

The term workman includes any person (except those whose employment is of casual nature or
a person who is employed for the sake of employer�s business or trade) who is:

1. One who is not permanently employed in administrative, district or sub-divisional office

of a railway but is a railway servant as defined in section 3 of the Indian Railway Act,
1890.
2. Employed as per specified in schedule II.

The Act is applicable to all such people who are employed as cook in hotel, liquified petroleum
gas, restaurants using power etc.

Chapter 3:

Employees state insurance act:

- Section 46(All the benefits) , ESI COURT( who can be appointed ), ESI fund, medical benefit
council.

https://blog.ipleaders.in/employees-state-insurance-act-1948/#Introduction

Section 46 of the ESI Act grants benefits to employees as social security in case of injury, which
can be availed during the course of employment. There are 6 types of benefits that can be
availed:

Medical benefit.
Sickness benefit.
Maternity benefit.
Dependants’ benefits.
Disablement benefits.
Other benefits.

…………..Via a notification in the Official Gazette, an Employees’ Insurance Court will be

constituted by the State Government, with a set amount of judges as per the decision of the
State Government. The same court may be appointed for two or more local areas, or two
courts or more courts may be appointed for the same local area. 74 3) Any person who is or
has been a judicial officer or is a legal practitioner of five years' standing shall be qualified
to be a Judge of the Employees' Insurance Court.

………………The Employees’ State Insurance Fund is the primary monetary source for the ESIC to
perform its functions. All contributions paid under this Act and all other money received on
behalf of the Corporation shall be paid into this fund to be held and administered by the
Corporation. These could be in the form of grants, donations or gifts by the government.

……………….The Medical Benefit Council is an advisory body on matters related to the

administration of medical benefits under the ESI scheme. It consists of:

The Director-General of ESIC as Chairman.

The Director-General of Health Services as co-Chairman.
The Medical Commissioner of ESIC.
One member for each state appointed by State Government.
Three members representing employers.
Three members representing employees.
Three members including one woman representing the medical profession.

Chapter 4 :

Employees provident fund act :

- 3 Schemes

EPF is a welfare scheme brought into force to secure a better future for employees. It is a
statutory benefit available to the employees post retirement or when they leave the
services. In case of deceased employees, their dependents will be entitled for the benefits.
Under the Employees’ Provident Fund Scheme (EPF Scheme) both employers and
employees have to make their contributions towards the Fund. Interest earned on the
amount is credited to the member’s Provident Fund Account (PF account) and is available
to the employee at the time of retirement or exit from employment as the case may be,
provided certain conditions are fulfilled.
1. Employees’ Provident Fund Scheme, 1952: Employees’ Provident Fund Scheme was set up under
the Act for the purpose of providing a post retirement benefit for the employees or a class of
employees or their legal heirs in case of death, employed under an establishment to which this Act
applies.

2. Employees’ Pension Scheme, 1995: Employees’ Pension Scheme was framed under the Act for the
purpose of providing the superannuation pension, retiring pension or permanent total disablement
pension to the employees of any establishment or class of establishments to whom this Act applies;
 and widow or widower’s pension, children pension or orphan pension payable to the beneficiaries of
such employees.

3. Employees’ Deposit-linked Insurance Scheme, 1976: Employees’ Deposit-linked Insurance

Scheme (EDLI Scheme) was framed under the Act for the purpose of providing insurance benefits to
the employees of an establishment or a class of establishments to whom this Act applies in case of
death while in service.

https://www.simpliance.in/provident-fund#:~:text=%20Types%20of%20schemes%20under
%20the%20Act%20,Insurance%20Scheme%20%28EDLI%20Scheme%29%20was%20framed...
%20More%20

Payment of gratuity act:

Definition of gratuity, eligibility, Maximum eligibility (20 Lakh), Formula for calculating
gratuity
1. Definition of Gratuity: A gift which is rendered by the employer to the employee for the good
service rendered by him for a particular period.

2. Eligibility of Gratuity: (SEC 2A)

2.1 Minimum 5 years of continuous service.

3. When a Gratuity is paid?

¶ On reaching the age of Superannuation
¶ Retirement
¶ On the death or disablement due to accident.

4. Maximum eligibility to be claimed under gratuity : Rs.20 Lakhs but take away is Rs.15 Lakhs

Gratuity Formula-------
Below are the gratuity calculation formula [Section 4]:-

Monthly Salaried Employee-

Gratuity = Last drawn wages × 15/26 × Completed years of Service (including a part of year in
excess of six months)

Note:
Wages = Last Drawn
Month = Period of 26 Days
15 days wages = Last drawn wages × 15/26

Piece Rated Employee-

Gratuity = Last drawn wages × 15/26 × Completed years of Service (including a part of year in
excess of six months)

Note:
Last drawn Wages = Total wages received during three months immediately preceding
termination /Days actually worked
Last drawn wages shall not include overtime wages.

Employee of a Seasonal Establishment-

Employee of seasonal establishment shall be paid gratuity at the rate of 7 days wages for each
season.

Maternity benefit act :

- Maternity leave ( 26 weeks(8 weeks before delivery and 18 weeks after delivery) upto 2
child and for 3rd child- 12 weeks)
1. Maternity leave: 26 weeks granted. First 8 weeks before delivery and 18 weeks after delivery
can be claimed.
This 26 Weeks can be claimed for first two child. For the third child only 12 weeks is granted.👼🏻

Payment of bonus:

Definition of Bonus, Minimum bonus, Maximum bonus, kinds of bonus, Available and
allocable surplus

-------- Bonus payments are additional pay given to employees apart from their salary. It is given
by the employers as a remuneration for their dedication towards the company and work, which
in turn helped the company achieve its business goals. The underlying purpose of offering a
bonus is to distribute the benefit received by the company to the employees.

---------- S 10. According to the Bonus Payment Act, a minimum bonus of 8.33% of wage or
salary earned by the employee for an accounting year or Rs 100, whichever is higher shall be
paid to the employee. The employer shall also pay a higher bonus to employees if, in a year, the
allocable surplus exceeds the amount of minimum bonus payable to the employees.

Note: S 31 A A ceiling limit of 20% of the wage or salary earned by the employee during an
accounting year is fixed.

There are four kinds of bonus which are as follows -

(1) Production bonus - Production bonus depends upon the production in a particular year
(2) Profit bonus - Profit bonus depends upon the extent of Profit obtained in the relevant year
(3) Customary bonus - Customary bonus is a voluntary payment made by the employer to his
employees to meet special expenses of a festival. (For Example - Bonus of Diwali Festival )
(4) Bonus as an implied term of the contract - This type of Bonus may be claimed as a matter of
right. This right based on an implied agreement between the employer and the employees.
Meaning of "available surplus" and "allocable surplus"
Bonus payable under the Act is linked with profits. The employer has to calculate "gross profits"
of his establishment in the manner specified in section 4. Then, from "gross profits" so
calculated he has to deduct the sums referred to in section 6 as prior charges. The balance is
called "available surplus". A percentage of the available surplus calculated in accordance with
the provisions of sub-section (4) of section 2 is called "allocable surplus."

Where, in respect of any year the allocable surplus exceeds the amount of minimum bonus
payable to the employees' the employer must pay to every employee in respect of that year
bonus in proportion to the salary or wage earned by the employee during the year subject to a
maximum of twenty per cent of such salary or wage. 60 for india 67 for other

Set on …more…allocable surplus…20%…carried forward before..

Set off….less…carry forward…four years//

Chapter 5:

Factories act :

Definition - factory, Manufacturing process , Annual leave with wages, for Health- safety-
welfare( Have a glance) , working hours alone.

1. Manufacturing Process:
Section 2k-
∆ Manufacturing process means any process for Making, altering, washing, cleaning, packaging
or treating any article with a view to transport or dispose.
∆ Pumping⛽ water, oil, sewage
∆ Power⚡ generating, transforming, transmitting.
∆ Printing🖨️letters, lithography, book binding.
∆ Ship 🛳️construct, reconstruct, breaking.
∆ Cold storage❄️🥶 preserving.

2. Worker:
Sec 2L -
¶ A person who is directly or indirectly employed(through agencies)
¶ With or without the knowledge of principal employer.
¶ For remuneration or not.
¶ Any manufacturing process or cleaning the the machinary or the cleaning the premises.

Armed forces of union aren't in the ambit of definition of worker

FACTORY Section 2m -
¶ Factory means any premises including precincts (any land attached to the premises) where 10
or more persons are working.
¶ 20 members or more working.
¶ Mobile units of armed force of union, railway running shed, mines ,hotel , restaurant doesn't
come under the scope of the definition of Factory.

Case law : Ardeshir Vs Bombay State

Held that even Salt manufacturing plant comes under the purview of the factory.

4.Annual leave with wages:

Chapter 8 deals with this concept (Sec 78 to 84)

¶ Annual wages are entitled to workers who have worked for 240 days or more in the factory
during the calendar years.

{Adult 1 day leave for 20 days , Child (who is not completed the age of 15) 1 day leave for 15
days}

¶ Worker discharged or dismissed or quits or Superannuated or die the legal heirs are entitled
to get the benefits.

¶ Mode of recovery of unpaid wages comes under the payment of wages act (Section 82)

5. Health and safety:

¶ Chapter 3 and 4 Deals this concept.
¶ The place of should be sterile and neat.

Under the current Factories Act 1948, an adult — 18 and above — cannot work for more than
48 hours in a week and not more than nine hours in a day. Section 51 of the Act stipulates that
the spreadover time should not exceed 10 ½ hours.

Tamilnadu Shops and establishments act:

Definition - shops, establishment, commercial establishment, Recent changes in working

hours.

SHOP:
Sec 2(16)-Shop means any premises where trade or business is carried.
Where service is rendered to customer
Shops include office, storeroom, godown and warehouse.

Restaurant, commercial establishment and all doesn't come under the ambit of shop.
2 (3) ‘commercial establishment´ means an establishment which is not a shop but which carries on the
business of advertising, commission, forwarding or commercial agency, or which is a clerical department
of a factory or industrial undertaking or which is an insurance company, joint stock company, bank,
broker’s office or exchange and includes such other establishments as the State Government may by
notification declare to be a commercial establishment for the purposes of this Act.

2 (6) ‘establishment´ means a shop. commercial establishment, restaurant, eating-house, residential

hotel, theatre or any place of public amusement or entertainment and includes such establishment as
the 1[State] Government may by notification declare to be an establishment for the purposes of this Act;

TIMING FOR WORK HOURS:

Daily 8hrs weekly 48hrs
OT not more than 10hrs
OT Wages should be double the rate of ordinary wages.

Young person (14 to 17) can work between the time of 6 AM to 7 PM

Women working hour:

Morning 6 to evening 8