Directorate of Distance Education M.A. [PM & IR] Il - Semester 308 22 LABOUR LEGISLATIONS - II‘Authors Prot S.C. Srivastava, Secretary Generalafthe Nations! Labour Law Assocation Units 1-4, 8-10, 2-14) M.C. Kuchhal, Ex-Reader SCC, University ofl Unis (6-7) ‘Vikas* Publishing House: Unit (11) ‘Argh roare. Naso ofa publeaon whine mati oecied ay scape noe ‘apna fea se nay fo aby ayes fort crn i a hasbeen gb by RAG" Plating Howe Pv Ul nha ron aes yt Ars om nts levee ease aa aac ha bee et [nowksge wove me nner Univeral ns tur sat earn ale at i cee de wg tea rn a spc Sa my he relied trademark ot Vics \VIKAS® PUBLISHNGHOUSE PVT.LTD. 28, Selon, Nowa -20730% (UP) Phone 20a7aa00 «Fax o720-4078900 Rege, Ofte: 735, Ravindra Mansion Rary Nagar. New Daly 110055 ‘ Wbsie ww kaspubising com » Ena Malpine@saspublshing.com ubtshing House Pr. i. Work Order No, AUDDEIDE’-264/Preparation and Printing of Course Materials2018 Dated 18.11.2018 Copies - 500SYLLABI-BOOK MAPPING TABLE Labour Legislations I Sytlabl Mapping In Book BLOCK I: BASICS OF LABOUR LEGISLATIONS- I UNITI Payment of Bonus Act: Computation of available surplus caleulaton of direst ax payable surplus calculation of diet {ax payable by the employer UNIT? Eligibility for bonus and payment of bonus ~ deduction from bonus payable — adjustment of customary of interim bonus payable UNIT3 Adjustment of customary or interim bonus linked with production or productivity ~ set on and set off allocable surplus UNIT Set on and sot off allocable surplus set on and set off allocable surplus presumption about accuracy of balance sheet and profit and loss account. Unit 1: Payment of Bonus Act: Computation of Surplus (Pages 1-20) Unit2: Payment of Bons ‘Act Eligibility and Payment (Pages 21-26) Unit: Payment of Bonus ‘Act: Adjustment (Pages 27-32) Unit 4: Payment of Bons "Act: Seton and Set Of (Pages 33-38) BLOCK: PAYMENT OF GRATUITY AND WAGESACT. UNITS. Payment of Gratuity Act, 1972: Payment of Gratuity — ‘exemption — nomination ~ determination and recovery of the amount of gratuity UNIT. Payment of Wages Act, 1936: Objects, provisions relating to responsibility for payment of wages UNIT? Fixation of wage periods, time of payment, deduction and fines UNIT8 Maintenance of records and registers, inspectors appointment of authorities and adjudication of claims. ‘Unit: Payment of Gratuity ages 39-50) Unit 6: Peyment of Wages ‘(Pages 51-56) 7: Fixation of Wage Periods Pages $7-64) Unit 8; Maintenance of Records and Appointment of Authorities (Pages 65-71) v BLOCK Ik: MINIMUM WAGEACTAND FEATURES UNITS Minimum Wages Act, 1948; Objects, fixing of minimum rate ‘or wages~procedute for fixing andreceiving minimum wages UNITIO Appoiatment of advisory boatd ~ paynent of minimum ‘wages, maintenance of registers and records contacting UNITIT An Act to prove for fixing minimum rates of wages in Certain employments. Powers of appropriate government offences and penalties, Unit; Minimum Wages ‘Act Fixation of Rate (Pages 72-80) Unit 10: Minimum Wages ‘Act: Board, Payment and Registers (Pages 81-88) Unit 11: Minimum Wages Act: Powers, Offences and Penalties (Pages 89-96) BLOCK: STANDINGORDERSAND LEVEL OUTS UNITI2 Industrial Employment(Standing Orders) Act, 1946: Provisions regarding certification and operating of standing orders UNIT 13 Duration and modification of standing orders ~ power of| cemitying officer — interpretation of sanding orders UNIT Trade Union ey, 1926: Registration of Trade Unions, rights, and liabilities trade unions ~ procedure ~ penalties Unit 12: Industrial Employment (Standing Orders) Aet Concept, Certitiation and Operation (Pages 97-114) Unit 13: Industrial Employment (Standing Orders) ‘Act: Moditieation and Inverpretation (Pages 115-144) Unit 14: Trade Union Act, [926 (Pages 148-168)CONTENTS INTRODUCTION BLOCK I: BASICS OF LABOUR LEGISLATION-IL UNIT 1 PAYMENT OF BONUS AC 1.0 Introduction LI Objectives 1.2 Approach to Labour Laws 1.3 Payment of Bonus Act: Computation and Obligations. TRL Objects and Seope 132. Computation of Available Surplus and Calevlaton of Direct Tax Payable by the Employer 133 Obligations and Rights of Employers and Employees 134 Offences and Penalties 14 Answers to Check Your Progress Questions 15 Summary 146 Key Words 1.7 Self Assessment Questions and Exercises, 1.8 Further Readings COMPUTATION OF SURPLUS UNIT2 PAYMENT OF BONUS AC’ 2.0 Introduction 2.1. Objectives 2.2 Bligiblity of Bonus and Payment of Bonus 221 Peyment of Bonus 222 Deduction fom Bonus Payable 23. Answers to Check Your Progress Questions 24 Summary 25 Key Words 26 Self Assessment Questions and Exercises 2.7 Further Readings ‘LIGIBILITY AND PAYMENT UNIT3 PAYMENT OF BONUS ACT: ADJUSTMENT 30 Introduction 3.1 Objectives 3.2 Adjustment of Customary or Interim Bonus Linked with Production or Productivity 3.3 Answers to Check Your Progress Questions 3.4 Summary 35 Key Words 36 Self Assessment Questions and Exercises 3.7. Further Readings UNIT4 PAYMENT OF BONUS ACT: 4.0 Introduction 4.1 Objectives 120 21-26 27-82 33-3842 Introduction to Set On and Set OF Allocable Surplus 421 Bonus in Cese of New Establishment (Upto Seven Yess) 43 Recovery and Settlement of Dispute 431. Presumptions about Accuracy of Balance Sheet and Profit and Loss Account 44 Answers to Check Your Progress Questions 43 Summary 46 Key Words 4.7 Self Assessment Questions and Exercises 48 Further Readings BLOCK II: PAYMENT OF GRATUITY AND WAGES ACT UNITS PAYMENT OF GRATUITY 39-50 5.0 Introduction 5.1 Objectives 5.2. The Payment of Gratuity Act, 1972 53. Answers to Check Your Progress Questions 5.4 Summary 55 Key Words 5.6 Self Assessment Questions and Exercises 5.7 Further Readings UNIT 6 PAYMENT OF WAGES 51-56 6.0 Introduction 6.1 Objectives 62 Payment of Wages Act, 1936 6.3 Answers to Check Your Progress Questions 64 Summary 65 Key Words 66 Self Assessment Questions and Exercises 6.7 Further Readings UNIT 7 FIXATION OF WAGE PERIODS. 57-64 70 Introduction 7.1 Objectives 712 Wage Period and Time of Payment 721 Deductions and Fines 73 Answers to Check Your Progress Questions 74 Summary 75 Key Words 76 Self Assessment Questions and Exercises 7.7 Further Readings UNIT 8 MAINTENANCE OF RECORDS AND APPOINTMENT OF AUTHORITIES 65-71 80 Introduction 8.1 Objectives 8.2 Maintenance of Records83 8a 85 86 87 88 Authorities and Adjudication of Claims under the Payment of Wages Act Angwers to Check Your Progress Questions Summary Key Words Self Assessment Questions and Exercises Further Readings BLOCK III: MINIMUM WAGE ACT AND FEATURES UNIT 9 MINIMUM WAGES ACT: FIXATION OF RATE 90 9 92 93 94 98 96 97 98 Introduction Objectives Objects and Applicability Procedure for Fixing Rate of Wage Angwers to Check Your Progress Questions Summary Key Words Self Assessment Questions and Exercises Further Readings UNIT 10 MINIMUM WAGES ACT: BOARD, PAYMENT AND REGISTERS UD 109 10.1 102 103 104 wos 106 107 108 109 110 nd n2 u3 4 us 16 7 ns Introduction Objectives Appointment of Advisory Board Payment of Minimum Wages 103.1 Maintenance of Records and Display of Notices Claims and Procedure OAL Contracting Ou 1042. Exemption ofmployer from Liability in Certain Cases Angwers to Check Your Progress Questions Summary Key Words Self Assessment Questions and Exercises ther Readings IT LL MINIMUM WAGES ACT: POWERS, OFFENCES AND PENALTIES Introduction Objectives Power of Appropriate Government 1121 Powers of Tae State and Central Government to Make Rules Penalties and Offences ‘Answers to Check Your Progress Questions Summary Key Words cif Assessment Questions and Exercises Further Readings 72-80 81-88 89.96BLOCK I’ : STANDING ORDERS AND LEVELS OUTS UNIT 12. INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT: CONCEPT, CERTIFICATION AND OPERATION 97-114 120 Introduction 12.1 Objectives 122 Provisions Regarding Certification and Operation of Standing Orders 123 Coverage of the Act 124 Concept and Nature of Standing Orders 125. Answers to Check Your Progress Questions 126 Summary 127 Key Words 128 Self Assessment Questions and Exercises 129 Further Readings 13 INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT: MODIFICATION AND INTERPRETATION 115-144 130 Introduction 13.1 Objectives 13.2 Power of Certifying Officer 133. Duration and Modification of Standing Order 134 Interpretation of Standing Orders 135 Role of Government under the IESOA 1346 Answers to Check Your Progress Questions 13.7 Summary 138 Key Words 13.9 Self Assessment Questions and Exercises 13.10 Further Readings UNIT 14. TRADE UNION ACT, 1926 145-164 140 Introduction 14.1. Objectives 142. Overview of the Act 143. Registration of Trade Unions 144. Rights, Liabilities Procedure and Penalties 145. Angwets to Check Your Progress Questions 146 Summary 147 Key Words 148 Self Assessment Questions and Exercises 149 Further ReadingsNOTES INTRODUCTION Labour legislation comprises ofa number of egal clauses, administrative verdicts and standards. These govemn the legal rights of and implementrestrictions on the ‘working of employees and employers. This legislation works as amediator for the liaisons between trade unions, workers and owners. Labour legislations in the Indian history have been initially blended with the history of British colonialists ‘who established their colonies in India. As expected, they upheld the interests of the British political economy. In other words, early labour legislations were more inclined to favour British colonialism, However now, the system has undergone changes along with the changes in Indian conditions Inpostindependent india, Labour legislation secks to regulate the relations between an employer ora class of employers and their workmen, However, ‘major flaw of labour legislations is that most labour legislations are not applicable to unorganized labour, which constitutes about 92 percent ofthe entire labour force. Thisbook, Labour Legislations~ If will discuss important labour legislations suchas the Payment of Bonus Act, 1965, the Payment of Gratuity Act, 1972, the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, andthe Industrial Employment (Standing Orders) Act, 1946, The book has been writen in Keeping wit te sel-instructional mode or ‘the SIM format wherein each Unit begins with an Introduction tothe topic, followed byan outline ofthe Objectives. The detailed contents then presented ina simple and organized manner, interspersed with Check Your Progress questions to test the student's understanding of the topics covered. A Summary along witha list of Key Words se of Self Assessment Questions and Exercises and Further Readings, is provided atthe end of each Unit for effective recapitulation.BLOCK -I BASICS OF LABOUR LEGISLATION-IL UNIT 1 PAYMENT OF BONUS ACT: COMPUTATION OF SURPLUS Structure 1.0 Introduction LI Objectives 1.2 Approach to Labour Laws 1.3 Payment of Bonus Act: Computation and Obligations. TRL Objects and Scope 132. Computation of Available Surplus and Calevlation of Direct Tax Payable by the Employer 133. Obligations and Rights of Employers and Employees 134 Offences and Penalties 14. Answers to Check Your Progress Questions 15 Summary 1.6 Key Words 1.7 Self Assessment Questions and Exercises 18 Further Readings 1.0 RODUCTION Over the years, labour laws have undergone change with regard to their object and scope. Early labour legislations were enacted to safeguard the interest of employers. They were governed by the doctrine of laissez faire. Modern labour legislation, on the other hand, aims to protect workers against exploitation by employers. The advent of doctrine of welfare state is based on the notion of| progressive social philosophy which has rendered te old doctrine of laissez aire obsolete, The theory of hire and fire’ as wellas the theory of supply and demand? which found free scope under the old doctrine of laissez faire no longer hold good. In this unit, you will the fundamentals of the Payment of Bonus Act. Payment of Bonus Actas the name suggests prescribes the provisions that are to be adhered to when dealing with the payments of bonuses to the employees in different companies. It was brought out in 1965 and provides rules related to applicability, definitions, calculations, offenses, dispute settlements, ete. There are 40 Sections and 4 schedules. The major amendments tothe Act has been brought ‘out previously in 2007 and 2015 andthe rules have been amended thrice in 1975, 2014 and 2016. Payment of Bors Ace Campion of Supe NOTESAct Computation of NOTES 1.1 OBJECTIVES After going through this nit, you willbe ableto: * Listthe objects ofthe Payment of Bonus Act + Explain the computation ofax and surplus + Discuss the obligations and rights of employers and employees + Recall the offences and penalties 1.2. APPROACH TO LABOUR LAWS Labour law seeks to regulate the relations between an employer ora class of employers and their employees. The reach of this law is so wide that ittouches the lives of far more people. Indeed, itcovers millions of working men and womenas compared to any other branch oflaw. Iti this aspect which makesitmost fascinating ofall branches of law and, therefore, the study of this subject is of enormous dimension and of ever-changing facets. ‘There has been a remarkable change in the approach to labour law and industrial relations since World War II. Philadelphia Charter adopted in 1944 provided that ‘labour isnot a commodity’ and tha ‘poverty anywhere isa danger to prosperity everywhere’. W Friedmann and others who have tried to analyse the essential characteristics of legal development inthis branch of law consideritto bea ‘social duty’ onthe part of employeras the main bedrock on which this law is built. This is exemplified bythe very approach of law makers to the construction ofa wage packet of the working men and women, wage fixation and condition of service. ‘The Indian Constitution lays down broad guidelines tobe followed by the state, The Supreme Court in D.N Banerji. P R Mukherjee, stated that the law as developed after the Second World Wer, particularly ina welfare state, has, reversed the theories of Sir Henry Maine and now society progresses form contract to status and has witnessed considerable legislation laying down conditions of service and also ensuring payment of minimum wages by laws. Basis of Labour Laws Otto Kahn-Freund in his book Labour and the Law makes the following propositions: (The system of collective bargaining rests on a balance ofthe collective forces of management and organized labour. The contribution which the courts have made tothe orderly development of collective labour relations hasbeen infinitesimal