Law IR Compendium 2022

COMPENDIUM ON LAW AND IR
Table of Contents
TOPIC PAGE NO.

Industrial Relations – Terms 3
Trade Unions Act, 1926 6
Apprentices Act, 1961 11
Contract Labour (Regulation and Abolition) Act, 1970 14
Industrial Disputes Act, 1947 19
Factories Act, 1948 22
Code on Wages, 2019 29
Industrial Relations Code, 2020 32
Code on Social Security, 2020 37
Occupational Safety, Health and Working Conditions Code, 2020 41
Protection of Women from Sexual Harassment Act, 2013 46
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Industrial Relations – Terms
Three Approaches to Industrial Relations

Approach Concept
System’s Model / Dunlop’s Consists of a set of actors bound by a network of rules that governs
Approach the workplace and work community.
Pluralist Approach Organization is multi-structured and competitive, perpetually in a

state of dynamic tension arising from inherent conflict of interest.
Structural Contradictions/ Assumes that the organization exists within a capitalist society with
Radical/ Marxist Perspective downward enforcement of control.
Employee Relations and Industrial Relations

Industrial Relations Employee Relations
Industrial relations examines the relationship Employee relations refer to the relationship
between labour (employees) and management shared among the employees in an
(the employer), as well as the governments, organization that contribute to satisfactory
institutions, and organizations that directly or productivity, motivation, and morale.
indirectly regulate the industrial relations Essentially, Employee Relations is concerned
system. with preventing and resolving problems
involving individuals which arise out of or
affect work situations.
Unions—Classification
Craft Union
An organization of workers bound by a common occupation, skill, or trade or a group of closely

related skilled tasks. Organization may be purely local or national in scope. For example, Pilots Union
of Indian Airlines; Guards Union of S.E. Railway etc. It is an organization of workers employed in a
particular craft or trade or in a single, two, or three related trades / crafts / occupations.
The members are generally craft-conscious rather than class-conscious. They derive their strength
from the strategic position of their workers. Such unions are horizontal in character, for they enroll
workers engaged in one or a single group of processes, such as spinning, weaving, warping, watch and
ward; or carpenters, joiners, frame-makers.
Industrial Union
Workers in an industrial union are organized on the basis of the product for example, workers in
rubber, steel, automobile, mining, etc. In this, generally all the workers in a plant or industry, unskilled,
semiskilled, and skilled are included in the industrial union. This type of structure is also referred to as
vertical unionism. It is organized in an industry-wise rather than a craft-wise basis.
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The Textile Labour Association of Ahmedabad, the Rashtriya Mill Mazdoor Sangh, Bombay, the
Engineering Mazdoor Sabha, Bombay, the Labour Mines Mazdoor Sangh, Udaipur, are important
examples.
General Union
A term generally applied which accepts into membership all those desirous of joining. It embraces all
workers, from the unskilled to the skilled. It is an organization that covers various industries and
laborers having different types of skills. The objectives of these unions are all-embracing in character.
They have numerical superiority, for they are open to all classes of workers; and this is the source of
their strength.
Closed Shop
A union-security arrangement where the employer is required to hire only employees who are
member of the Union. This practice was outlawed in USA as per the Taft-Hartley Act 1946. In UK, closed
shop is still prevalent though certain restrictions have been put according to Employment Act of 1982.
This is not prevalent in India.
Closed Union
A union that seeks to protect the job opportunities of its members by limiting those who may enter
the trade and become members. Membership is restricted through unusually high initiation fees and
dues, and by laying down certain restrictive terms and conditions.
Union Shop
A form of Union-security which lets the employer hire whomever he pleases but requires all new
employees to become members of the union within a specified time, usually 30 to 90 days. Under
which all the employees in the bargaining unit must be or become members of the union after a
specified date. A union shop is desirable for the contribution it can make to stabilize industrial
relations. A union whose security is beyond question can afford to be more reasonable on other
matters such as promotions, lay-offs and other points on which discrimination is possible against union
members.
Registration v/s Recognition
Registration Recognition
 Under the Trade Unions Act of 1926  Acceptance of the existence of a Union by
 Signifies acceptance by the Government. the management
Results in a legal entity which can negotiate,  For the purposes of negotiation and
hold property, enter into contracts, etc. collective bargaining
 Does not automatically result in recognition  The management may recognise a
nonregistered union
 There is no central law governing
recognition—only certain state laws
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Common Factory Problems & Legal Ramifications
1) Wearing of black badges during working hours

This is a fundamental right of the workers under Article 19(1)(a) of the Indian Constitution. No legal
action can be taken unless there is an effect on productivity.
2) One day hunger strike

A non-violent hunger strike without cessation of work cannot be considered as act of misconduct. It is
a cognizable offence under Section 309 of IPC in case person refuses to take nourishment, when death
due to hunger is certain. In case it is accompanied by cessation of work then it would come within the
definition of strike. This would need to duly notified, failing which the strike would be illegal and
punishable under Section 25U of the ID Act.
3) Slogan shouting during lunch recesses and after the end of shift work
This is a fundamental right of the workers under Article 19(1)(a) and 19(1)(c) of the Indian Constitution.
No legal action can be taken unless there is an effect on productivity.
4) Complaint to Labour Commissioner

The union might complain to Labour Commissioner that the management is engaging in unfair labour
practices by refraining from participating in collective bargaining in good faith (as per Schedule V, I (1)
of ID Act, 1947). The management can counter it by conveying to the Labour Commissioner that it is
open to collective bargaining and request the Labour Commissioner to initiate conciliation proceedings
and see that a settlement is reached.
5) Work to rule (strictly 8 hours, refusal to do overtime)

As per the provisions of Section 64 2(d),(g),(h) of Factories Act, 1948, the state government has the
power to make exempting rules which override the Sections 51,52,54,55,56 of Factories Act. The
management should request Chief Inspector of Factories and other concerned authorities to invoke
the powers granted to them under the above Act and see that at least essential services are available
uninterrupted.
6) Go Slow
As per the ratio of SU Motors Ltd. v Their Workmen, go-slow is a serious misconduct and a more
damaging breach of contract of employment. Hence, once it is proved, those guilty of it may face
disciplinary action, including a deduction from wages and even dismissal from service.
7) Gherao
As per the ratio of Jay Engineering Vs State of West Bengal, gherao is an offence under the Indian Penal
Code. All persons guilty of wrongfully confining any person of management during a gherao are liable
to prosecution under Section 339 or 340 of IPC and the immunity granted under sections 17 and 18
would not be available to a case of gherao. In case the situation of gherao is anticipated, the
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management should inform the same to local police authorities.
8) Mass Walkout
Mass walkouts refer to a situation in which a group of persons collectively form an organization and
stop working in a manner of protest. All strikes are not mass walkouts, but all mass walkouts are a
form of strike.
Misconduct and Domestic Inquiry
Misconduct means any act of the employee that is detrimental to the property and reputation of the
employer as well as the business concern. Misconduct can be any act that comes into fold in model
standing orders or the standing orders of the business concern. An organization may terminate an
employee on grounds of misconduct, but only if it is proven through a formal process of domestic
inquiry. The domestic enquiry is subject to the principles of natural justice. The basic steps for a DI
are outlined below.
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Classification of workmen
Per the Industrial Employment (Standing Orders) Central Rules, 1946, the following types of
workmen may be differentiated. This classification may be different for different states
1. Permanent workman is a workman who has been engaged on a permanent basis and includes any
person who has satisfactorily completed a probationary period of three months in the same or
another occupation in the industrial establishment, including breaks due to sickness, accident,
leave, lock-out, strike (not being an illegal strike) or involuntary closure of the establishment.
2. Probationer is a workman who is provisionally employed to fill a permanent vacancy in a post and
has not completed three months’ service therein. If a permanent employee is employed as a
probationer in a new post he may, at any time during the probationary period of three months, be
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reverted to his old permanent post.
3. Badli is a workman who is appointed in the post of a permanent workman or probationer who is
temporarily absent.
4. Temporary workman is a workman who has been engaged for work which is of an essentially
temporary nature likely to be finished within a limited period.
5. Casual workman is a workman whose employment is of a casual nature.
6. Apprentice is a learner who is paid an allowance during the period of his training.
Statutory obligations of the employer in compensation
Act Applicability Employer obligation

Minimum Wages Applicable on every Wages paid to workers have to be above
Act, 1948 employment that employs more the minimum wages prescribed by the state
than 1000 personnel in a State
Payment of Bonus Establishment with 20 or more Profit-linked bonus between 8.33% and
Act, 1965 workmen; wage <= 21000 p.m. 20% of wages to be paid based on allocable
surplus of establishment. Under 31(A), can
be paid as productivity bonus if settlement
signed with workers
ESI Act, 1948 Applicable to non-seasonal The employer’s and employee’s
factories employing 10 or more contribution rate (w.e.f. 01st July 2019) is
persons and to employees with 3.25% and 0.75% of the wages payable to
wage <=21000 p.m. an employee, respectively.
EPF (MP) Act, 1952 Any factory (or establishment) Employer contribution = 13% of PF wage
employing 20 or more persons (3.67% - EPS, 8.33% - EPF, 0.5% - EDLI, 0.5%
- administration charges) upto 13% of 1500;
employee contribution = 12% of wage
[basic + DA]
Payment of Factories employing 10 or more The Act provides for payment of gratuity at
Gratuity Act, 1972 workmen the rate of 15 days wage s for each
completed year of service subject to a
maximum of Rs. 10 lakh. Monthly gratuity
provision = 4.81% of monthly wage
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Trade Unions Act, 1926

Applicability of the Act
To the whole of India
Appropriate Government
• Where the objects are confined to one state – the state government
• Else, the central government
Definitions
Trade Union
• Combination of people
• Temporary or permanent
• Includes federations
• Purpose: To regulate relations between workmen and workmen, employers and workmen,
employers and employers; to impose restrictions on any business
Trade Dispute
• Any dispute between workmen and workmen, workmen and employers, employers and
employers
• Connected to employment, non-employment, conditions of labour
Workman
Any person employed in a trade or industry – wide scope – includes contract labour, badli workers
Right to form unions
Fundamental Right – Article 19(1)(c) of the Constitution
All citizens shall have the right to form associations or unions.
The state may impose reasonable restrictions on this right for the purposes of protecting the
nation’s sovereignty, integrity and public order.
Exception: Persons performing sovereign functions  defence personnel, police, and judges.
Provisions of the Act
1) How many people are required to form a TU?

7 or more persons employed in the trade/industry to which the TU is connected
2) Can managerial and supervisory staff form a TU?

Yes
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3) Does TU membership automatically cease if employment is terminated?

No
4) What protection does a registered TU have?

Protection from “criminal conspiracy” clause under Section 120B of the Indian Penal Code
[Unless it can be proved that, the members made an express agreement to commit an
offence.]
5) Proportion of office bearers that are outsiders

Not more than 1/3 of total membership or 5 (whichever is less).
Retired / retrenched employee is not considered an outsider.
6) Difference between Registered and Recognized TU

o Registration – under the Act, as prescribed
o Recognition – given by the employer for the purpose of negotiation
o One has nothing to do with the other – a registered union need not be recognized,
and a recognized TU need not be a registered one
o Different states have different laws w.r.t. recognition
7) Methods of recognition
• Verification
• Check-off
• Secret ballot
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Apprentices Act, 1961

Any area / industry in any area, to which the Central Government extends the provisions of
this Act by notification, in the whole of India.
Who is an apprentice?
Section 2(aa):
A person undergoing apprenticeship training under a contract of apprenticeship.

Also known as a statutory apprentice.
The Central Government would specify the number of Apprentices under the Act.
An organization may engage apprentices under its own training scheme - these are not statutory
apprentices under the Act.
Status of an apprentice under various legislations
• If Apprentice under the Apprentices Act:

Factories Act Industrial Disputes Act Apprentice Act
‘Worker’ under S. 2(l) for Not ‘ workman’ under S. 2(s) Not ‘worker’ under S. 2(r)  Statutory
health, safety and welfare  Refer Section 18 of apprentices not to be as workers for
provisions (Chapter III, IV and Apprentices Act counting number of workers employed
V of the Factories Act) employer as in Section 9 of Apprentices Act
Exception: Apprentices engaged over and above the number prescribed by Central Government
would become ‘workman’ under ID Act and ‘worker’ under Apprentice Act.
• All other types of apprentices

Factories Act Industrial Disputes Act Apprentice Act
‘Worker’ under S. 2(l)l Workman under S. 2(s) ‘Worker’ under S. 2(r)
Does non-registration of contract make Apprentice an employee?
No. Only penal provisions are attracted.
Can an apprentice be made to work overtime under the Factories Act?
No. Only with approval from the Apprenticeship Advisor.
After the completion of Apprenticeship, does the Apprentice become an employee?

Not unless expressly specified in the Contract of Apprenticeship.
How are disputes settled?
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Any dispute is referred to the Apprenticeship Advisor for decision.

Objective of the Act be different for different  To learn his subject field in
 Provide practical training categories of apprentices engineering or technology
to technically qualified Contract of Apprenticeship or vocational course
persons in various trades (Sec. 4) conscientiously and
 Promotion of new skilled  To contain such terms and diligently at his place of
manpower conditions as may be training [For Graduate or
Industry (Sec. 2(k)) agreed to by the parties to Technical Apprentice]
 Industry means any the contract  To attend practical and
industry or business in Termination of instructional classes
which any trade, Apprenticeship (Sec. 7) regularly.
occupation or subject field  On the expiry of the period  To carry out all lawful
in engineering or non- of apprenticeship training. orders of his employer
engineering or technology  On the application made and supervisors
or any vocational course by either parties to the  To carry out his
may be specified as a contract of apprenticeship contractual obligations
designated trade or to the Apprenticeship Health Safety & Welfare
optional trade or both Advisor (Sec. 14)
Apprentice (Sec. 2(aa)) Payment to Apprentices (Sec.  As if they were workers as
 Apprentice means a 13) per Factories Act, 1948 or
person who is undergoing  The employer to pay such as if they were persons
apprenticeship training in stipend at a rate of not less employed in a mine as per
pursuance of a contract of than the prescribed Mines Act, 1952, as the
apprenticeship minimum rate as may be case may be
Graduate or Technician specified in contract of Hours of work (Rule 12(1),
Apprentice (Sec. 2(j)) apprenticeship Apprenticeship Rules, 1992) -
 Graduate or Technician Payment of Stipend (Rule Trade Apprentice
Apprentice means an 11(3), Apprenticeship  42h/week during basic
apprentice who holds, or (Amendment) Rules, 2015 training; 42h to 45h/week
is undergoing training in  The stipend for a particular during second year
order that he may hold a month shall be paid by the  Third year onwards: Same
degree or diploma in tenth day of the following as the workers in the trade
engineering or non- month and the stipend in which apprentice is
engineering or technology shall be paid through the undergoing training
or equivalent bank account of  Not to be engaged in
qualification granted by apprentices from a date training between 10 pm
any institution recognized notified by the Central and 6 am [Exception: Prior
by the Government and Government approval of
undergoes apprenticeship Obligations of Apprentice Apprenticeship Advisor]
training in any designated (Sec. 11) Hours of work (Rule 12(2),
trade  To learn his trade Apprenticeship Rules, 1992) –
Apprenticeship Training (Sec. conscientiously and Graduate, Technician and
2(aaa)) diligently Technician (Vocational)
 Apprenticeship training  Endeavour to qualify  According to the normal
means a course of himself as a skilled hours of work of the
training in any industry or craftsman before the department in the
establishment undergone expiry of the period of establishment to which
in pursuance of a contract training [For Trade they are attached for
of apprenticeship and Apprentice] training
under prescribed terms Leave and Holidays (Sec. 15)
and conditions which may
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 An apprentice shall be Applicability of the Act (Sec. period of apprentice

entitled to such leave and 1) training
holidays as are observed  Provisions of the Act are  The approval of the
in the establishment in in applicable when the Apprentice ship Advisor is
which he is undergoing Central Government by to be obtained
training notification in the Official  Agreement must be
Gazette specifies the area registered with the
or industry as an area or Apprenticeship Advisor
industry to which the
provisions shall apply with
effect from such date as
may be mentioned in the
notification
Qualification for Being
Engaged as an Apprentice
(Sec. 3)
 Not less than 14 years of
age
 Designated trades in
hazardous industries: Not
less than 18 years of age
 Satisfies such prescribed
standards of education
and physical fitness
 Different standards may
be prescribed w. r. t.
training in different
designated trades and
different categories of
apprentices
Conditions for Novation of
Contract of Apprenticeship
(Sec. 5)
 When there exists an
apprenticeship contract
between and apprentice
and an employer, and the
employer is unable to
fulfil his obligationsunder
the contract, under the
agreement between the
employer,
apprentice/guardian and
any other employer, an
apprenticeship contract
may be registered
between any “other
employer” and
apprentice/guardian for
the unexpired portion of
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Contract Labour Regulation and Abolition Act, 1970
PRELIMINARY
• To establishments where 20 or more workmen are employed (or were employed in the
preceding year)
• To contractors who employ (or employed in the preceding year) 20 or more workmen
• To an establishment or contractor employing <20 workmen to whom the Appropriate
Government may extend the provisions of this Act after giving a notice of two months.
Exception: Establishments where work of only a casual or intermittent nature is carried on.
Work of an establishment is not intermittent in nature if
 if is performed for >120 days in the preceding year

 for seasonal work, if it is performed for >60 days in the preceding year
The number of days is not the only test. The AG would also take into account other characteristics of
the work being performed.
Appropriate Government (AG)
If under the ID Act, the AG is the Central Govt.  AG under CLRA is also Central Govt. For
all other establishments  AG under CLRA is State Govt.
The AG is determined with respect to the establishment and not the contractor.
Powers of the Appropriate Government
Registration of establishments
Licensing of contractors
Extending the provisions of the Act to establishments/contractors with < 20 workmen
Abolition of CL under S. 10
Principal Employer
Employs contract labour through a contractor.
Who is the principal employer?
 For government office / dept.  HOD

 For factory  Occupier / Owner / Manager (as mentioned under Factories Act)
 For mine  Owner / Manager
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 Any other establishment  person responsible for supervision and control The PE makes
application for registration under the Act.
Contractor
 Undertakes to produce a given result
 for the establishment
 by providing contract labour
 includes any and all subcontractors
NB: Someone who simply provides goods/articles of manufacture is NOT a contractor under this Act.
Workman
Any person doing any skilled, semi-skilled or unskilled, manual, supervisory, technical or clerical work,
in an establishment, for hire or reward. Includes contract labour.
Terms of employment may be express or implied.
Does NOT include:
 Anyone whose primary job is managerial and/or administrative

 A supervisor drawing a salary of over Rs. 500/month
 An outworker
Who is an outworker?
A worker who is given materials/articles to be processed for the PE’s business – but the processing is
done OUTSIDE the PE’s establishment.
E.g. welding, polishing
Contract Labour
 Hired by or through a contractor
 With or without the knowledge of the PE
 In connection with the work of an establishment.
REGISTRATION AND LICENSING

Registration (of the establishment)
 PE must apply for registration within prescribed time (as the AG may notify)
 If registration has not been done or has been revoked, the PE shall not employ CL.
Licensing (of the contractor)

 Application must be made for every establishment which the contractor undertakes
work for
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WELFARE PROVISIONS
Canteen (S. 16)
If the Appropriate Government so prescribes—canteens should be provided for CL where
(i) Where CL’s work is expected to continue for 6 months* or more, AND
(ii) Where 100 or more CL are employed
The contractor would ordinarily provide for the canteen.
Other amenities (S. 17, 18, 19)

1) Rest rooms – if CL are expected to stay overnight in the establishment
2) Drinking water, urinals, washing facilities
3) First aid
Liability of the PE
1) For welfare amenities
• If the contractor does not provide the amenities in S. 16—19, it is the responsibility of
the PE to provide the same
• The expenses for the above must be recovered from the contractor.
2) For wages
• If the contractor does not pay wages due to CL in time / pays less wages – it is the PE’s
responsibility to pay the wages in full/partial, as the case may be. This is also known
as vicarious liability of the PE.
• This amount must be recovered from the contractor.
MISCELLANEOUS
Registers and records
 Every PE and every contractor must maintain records detailing—Particulars of CL, rates of
wages, nature of work, etc.
 Wherever CL is employed, PE and contractor must visibly display notices detailing hours of
work, nature of duty, and other relevant information.
Wages
 Under the Act, ‘wages’ are defined as defined under the Payment of Wages Act, 1936.
 For scheduled employment, wages cannot be below Minimum Wage, as may be prescribed.
 Wage period cannot exceed one month. *
 If CL employed <1000, wages must be paid on or before 7th day of wage period. In other cases,
wages must be paid on or before 10th day of wage period.*
*as mentioned in CLRA Central Rules
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Same or Similar Work

If CL performs same or similar work as workmen directly employed by PE—the wage rates, holidays, hours
of work and other conditions of service shall be the same for both. [Rule 25 of CLRA Rules]
Industrial Disputes by CL
Can CL raise industrial disputes? — Generally, no.
However, if there is an issue, which is common for both CL and directly employed workmen — CL may
be involved in the ID so raised.
Abolition of Contract Labour under S. 10

 Only the AG can abolish the use of CL in an establishment
 The AG must consult with the Central/State Board before doing so
 The AG must consider all relevant factors before making its decision
  The AG must notify its decision in the Official Gazette
The AG’s notification to prohibit CL may be challenged in the High Court under Article 226 of the
Constitution through Writ petition.
 Writ of Mandamus – if AG has not followed proper procedure as detailed above

 Writ of Certiorari – if proper procedure has been followed but the judgement is to be
challenged
IMPORTANT JUDGEMENTS (CASE-LAWS)

Deena Nath v. National Fertilisers Ltd (1992)
 If CL employed without registration/license, penal provisions will be attracted.
 The CL so employed will NOT automatically become regular employees of PE.
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Gujarat State Electricity Board (1995)

If the contract between PE and contractor is found by a court to be sham, nominal and merely a
camouflage  CL would be the direct employees of PE.
Tests to determine the actual employer:
i) Who pays the salary?

ii) Who has the power to remove/dismiss, or initiate disciplinary action?
iii) Who has direction and control over the employee?
Air India Case (1997)

Prohibition of CL under S. 10  automatic absorption of CL as regular employees of PE.
SAIL I (2001) – overruling the Air India judgement

Prohibition of CL will NOT lead to automatic absorption of CL.
SAIL II case (2006)

Labour Court or Writ Court cannot prohibit employment of CL – power rests only with AG under
Section 10
NTPC (2003), Mishra Dhatu (2003)

If canteen is statutory obligation under S-46 of the Factories Act and CL is employed therein 
canteen is incidental to the work of the establishment  CL will be held to be the direct employees
of PE.
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Industrial Disputes Act, 1947

To the whole of India
Important definitions (Section 2)
(j) Industry
 Any business, trade, undertaking, manufacture or calling of employers
 Includes calling, service, employment, handicraft, industrial occupation/vocation of workmen
  Wide scope – includes factories, IT firms.
TRIPLE TEST (Bangalore Water Supply case)

o Systematic activity
o Organized by cooperation between employer and employee
o For the production of goods and services to satisfy human wants and wishes
(k) Industrial Dispute
 Dispute or difference
 Can be between workmen and workmen, employers and workmen, employers and employers 
Connected with: employment, non-employment, terms of employment, conditions of labour
Note: An individual workman cannot raise an industrial dispute. The dispute must involve a significant number
of workmen. Exception: An individual workman can raise an ID if the dispute pertains to the termination of his
employment.
(kkk) Lay-off
 Should not be confused with ‘retrenchment’
 Failure / refusal / inability of employer to provide employment, due to:
 Several reasons: natural calamity (e.g. floods), shortage of raw materials, breakdown of machinery, etc.
(l) Lock out

 Temporary closing of place of employment, OR
 Suspension of work, OR
 Refusal by employer to continue to employ any number of workmen
 Analogous to strike by management
(n) Public Utility Service

 Any industry in the First Schedule – the government may declare as a PUS by notification
 Other industries mentioned in S. 2(n)  automatically PUS  e.g. Railway service; postal, telegraph,
telephone service; industries supplying power, light, water; major port/dock; system of public conservancy,
sanitation, etc.
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(oo) Retrenchment
 Does not include:
o Voluntary retirement
o Superannuation
o Non-renewal of fixed term contract
o Termination due to continued ill-health
o Termination by way of punishment/disciplinary action
 Includes:
o Termination by the employer due to any other reason whatsoever.
 Generally due to a situation of ’surplus labour’
(q) Strike
 Cessation of work
 By a body of persons employed
 Acting in combination / concerted refusal / refusal under a common understanding
(ra) Unfair Labour Practice

 Practices specified in the Fifth Schedule
 May be committed by both management and workmen/unions.
(s) Workman
Does not include:
 Any person employed in Air Force, Navy, Army, police, prison system
 Anyone employed mainly in a managerial / administrative capacity
 Supervisors drawing wages excess of Rs. 10,000 per month OR performs functions mainly of a
managerial nature
Includes:
 All other employed persons, doing skilled, unskilled, technical, operational, clerical,
supervisory work
 Any person dismissed, discharged, retrenched in connection to employment under this Act
 There must be the existence of an employer-employee relationship
Questions
1. Can CL raise industrial disputes?

Generally, no.
However, if there is an issue, which is common for both CL and directly employed workmen — CL may be
involved in the ID so raised.
2. If a workman with diabetes is fired—does this amount to retrenchment?

While terminating employment due to continued ill health, the employer must consider: Does the illness
affect the workman’s performance at work?
If not, then it would be retrenchment.
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3. Can only a majority of workmen raise an industrial dispute?

A majority is not required for an industrial dispute—as long as there is a community of interest among a
substantial number of workmen.
4. Can only unions raise Industrial Disputes?

No. Any group of workmen may raise an ID.
5. What is the difference between Discharge, Dismissal and Retrenchment?

Discharge – Termination as per terms of the contract – No stigma attached
Dismissal – Termination by way of punishment for misconduct – Stigma attached
Retrenchment – Termination in case of a ‘surplus labour’ situation
6. What is the difference between superannuation and retirement?

Superannuation is retirement from service on attainment of a certain age. The competent authority sets
the age limit beforehand. Retirement on the other hand is not related to age and it can happen anytime.
VRS is an example of retirement.
7. What is the difference between adjudication, arbitration and conciliation?
Process Presiding Body Outcome

Conciliation Officer
Conciliation Board of Conciliation Agreement or Settlement
Arbitration Arbitrator chosen by both parties Award
Labour Court
Adjudication Industrial Tribunal Award
National Tribunal
Page | 18
Factories Act, 1948
An act to consolidate and amend the law regulating labour in factories primarily with the object of
protecting workers against industrial and occupational hazards by imposing obligation on the owner.
OBJECTIVES
1) To ensure adequate safety measures and to promote the health and welfare of the workers
employed in factories
2) To prevent haphazard growth of factories through the provisions related to the approval of plans
before the creation of a factory
APPLICABILITY OF THE ACT

1. To the whole of India including Jammu & Kashmir.
2. To any premises, wherein any manufacturing process is being carried,
– using power and employing 10 or more workers
– If not using power, employing 20 or more workers
On any day of the preceding 12 months.
DEFINITIONS (SECTION 2)
1. Calendar Year: Begins January 1st

2. Adult: >=18 years
3. Adolescent: >=15 years but <18 years
4. Child: <15 years
5. Hazardous Processes:
– Applies to industries specified in the 1st schedule
– Where the in-process materials can cause health problems or environmental pollution 6.
Power: Any form of energy not generated by human agency
7. Manufacturing process:
“Manufacturing process” means any process for—
1. 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;
2. Pumping oil, water, sewage or any other substance;
3. Generating, transforming or transmitting power;
4. Composing types for printing, printing by letter press, lithography, photogravure or other similar
process or book binding;
5. Constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels;
6. Preserving or storing any article in cold storage;
Page | 19
8. Worker:
– Employed directly or indirectly
– With or without the knowledge of a principal employer
– With or without wages
– To carry out manual process or jobs related to it
9. Factory: Premises where manufacturing process is carried on:
– >=10 workmen (With power)
– >= 20 workmen (without power)
– Number clause to be met for least one day in the preceding 12 months
Exception
Does not include
• A mine (covered under Mines Act, 1952)
• A hotel, restaurant or an eating place
10. Occupier: Person having ultimate control over the affairs of the factory
– Firm: Any one partner
– Company: One of the directors
– Factory owned or controlled by the Central Govt.: Relevant person appointed as the in-charge
The occupier needs to send a notice at least 15 days prior to occupying premises as a factory to the
Chief Inspector informing him about the names of the owner and occupier, nature of the manufacturing
process, average number of workmen employed etc.
Duties of Occupier:
1. Ensuring the health, safety and welfare of all the workers while they are at work in the factory
2. Maintenance of plant and systems in the factory
HIGHLIGHTS
- All factories are industries, but all industries are not factories.
- All workman inside a factory are a worker, but all workers inside a factory are not
workman. Workers includes the supervisory and managerial staff as well.
- The state government can declare different branches of a factory to be one single factory
or it can also declare two departments to be different factories.
- An inspector shall be appointed under this act to make examination of the premises -
This act takes precedence over CLRA in case of any inconsistencies
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CHAPTER V - WELFARE
Section 42 Washing Facilities -

Facilities for storing & drying
Section 43 clothing -
Section 44 Facilities for Sitting -
Section 45 First Aid Appliances
Minimum 1 first aid box for every
Clause 1 150 workers
For more than 500 workers -->
Clause 4 Ambulance room
Section 46 Canteen 251 or more workers
Section 47 Shelters, Rest Rooms & Lunch Rooms 151 or more workers
Section 48 Crèches 31 or more women
Section 49 Welfare Officers 500 or more workers
Power to make rules to supplement
Section 50 -
Chapter V of Factories Act
CHAPTER III – HEALTH

Section 11 Cleanliness
1(b) Floor Cleaning Once every week
1)Non-Washable Paint - Repainted once every 5 years
2)Washable Paint - Repainted once every 3 years and
1(d) Painting washed once in six months
3)Smooth impervious surface - Cleaned once every 14
months
1 Doors &
(dd) Windows Painted every 5 years
Disposal of
Section 12 Waste As prescribed by State Government
Ventilation &
Section 13 Temperature As prescribed by State Government
Section 14 Dust & Fume
Artificial
Section 15 Humidification As prescribed by State Government
Before Factories Act: 9.9 Cubic Metre space per worker
2 Overcrowding
Section 16 After Factories Act : 14.2 Cubic Metre space per worker
Section 17 Lighting
Should not be within 6 metres of Washing
Section 18 2 Drinking Water place/Urinal/Spittoon etc.
251 or more --> For cooling drinking water during hot
3 weather
1 Latrines &
Section 19 (b) Urinals Separate provision for male & female
251 or more --> 90 cm height of glazed, polished,
2 impervious surface
Section 20 Spittoons
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WORKING HOURS
Category Hours
Weekly Hours 48 hrs
Weekly Holidays On the first day of the week
Compensatory Off Within 2 months
Daily Hours 9 hrs a day
After a max of 5 hrs, a rest of at least ½ hrs (State Government or Chief
Intervals of Rest Inspector can increase this to 6 hrs by specifying reasons in writing)
Spread Over 10.5 hrs (Chief Inspector may change this to max. 12 hrs by specifying
reasons in writing)
- Working hours for women:
 9 hours a day, 48 hours a week
 No night shift (Working hours outside 6 am to 7 pm)
 By notification of state government; authorization for working
between 10 pm to 5 am
– Working hours for children:

o No child who has not completed his 14th year shall be required or
allowed to work in any factory
o Not more than 4.5 hours any day
o No night shifts (period of at least 12 consecutive hours including
interval 10 pm and 6 am)
o Female child not allowed to work in any factory except between 8 am and 7 pm
- Annual Leave with Wages

 To be entitled for annual leave with wages a worker must have worked for at least
240 days in the preceding year. If he has joined late, say in April, he must have
worked for 2/3rd of the remaining days. Having completed these requirements, a
worker is entitled to annual leave with wages in the following year, based on his
work in the previous calendar year.
 In a PUS, leave application has to be made 30 days beforehand, while in a non-PUS it
can be made 15 days before actual leave. However, for illness, no such timeframe is
required. A factory can be exempted these rules under state government approval
due to provision of better terms.
 Wages during leave period: For an earned leave with wages, the worker must be
paid as if he worked on that day, excluding any overtime wage and bonus. Wage
here is equivalent to full time earning of worker in the month immediately
preceding the month in which leave is taken. The wage should also include cash
equivalent of any benefit such as food grains etc.
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Category Leave Days

Adult 1 for every 20 days worked
Child 1 for every 15 days worked
Days deemed to be worked (only Layoff

used for calculation of 240 days, Maternity leave < = 12 weeks
no leave for these) Earned leave from previous year enjoyed in the year
Carried forward leave (max) Adult: 30 days

Child: 40 days
IMPORTANT CASE LAWS
1. IOCL v. Chief Inspector of factories
Who is deemed to be the occupier of a factory (of a Govt. company incorporated under Indian
companies Act with respect to the given case)?
Litmus Test: Whoever has the ultimate control over affairs of the factory
2. Dharangadhara Chemical Works Ltd. V. State of Saurashtra:
Essential condition for person to be a workman (taken from ID Act) and the same test can be
invoked for a worker:
 Existence of master servant relationship
 The right of the master to supervise and control in what work the servant will do and the
manner of work
 The prima facie test is existence of right to supervise and control the work done in terms
of what and how he does the work
3. State of Gujarat v. Jethalal Ghelabhai Patel
Safety Obligation with respect to workers
• Concept of vicarious liability
• Occupier not abrogated from his liability by the mere fact that he didn’t know that the
fencing cover of the machine had been removed
Page | 23
Q&A
1) Whether a contract labour is a worker under Factories Act? Whether a contractor is a worker
under Factories Act?
Answer
Contract Labour is considered a worker under Factories Act.
A contractor is not a worker as per factories Act because:
– A contractor works independently
– Absence of control and supervision Contract Labour is considered a worker under
Factories Act
Case Law
Dharangadhara Chemical Works Ltd. V. State of Saurashtra
2) Would a person maintaining records of stock, and dealing with bill come under the ambit of a
worker, especially so when he works from factory premises or precincts?
Answer
The person in question is a worker under Factories Act
Case Law: Supreme Court judgment in Rohtas Industries Ltd case
– As the worker was ‘subject of the manufacturing process’ namely the raw materials
3) Would piece rate workers come under the Section 2(l) of the Factories Act?
Answer Yes,
Refer to S. 59(3)
4) What is the minimum age required for working in any factory? Answer
14 years
– S. 67: No child who has not completed his fourteenth year shall be required or allowed to work
in any factory
5) Ram, a boy of 16 years of age, with a valid certificate of fitness, is working in a factory from
10:00 a.m. to 7:45 p.m. Is it legal?
Answer NO; Refer Section on Working Hours above
6) Ram has exceeded his share of carry forward quota of leaves, applies to management for
encashment, and is refused. In this situation, what would happen with his carry forward leaves?
Answer Section 79(5) Proviso: A worker, who has applied for leave with wages but has not been
given such leave, shall be entitled to carry forward the leave refused without any limit.
7) A worker working in Jusco, applied to factory manager for availing all the leaves available to
him, from 16th day of application. Should he go ahead with his vacation plans?
Answer Section
79(6) Proviso
– A worker may at any time apply in writing to the manager of a factory not less than fifteen days
before the date on which he wishes his leave to begin,
Page | 24
– Provided that the application shall be made not less than thirty days, if he is employed in a public
utility service as defined in Section 2(n) of the ID Act
8) What are the disclosures required to be given by a factory occupier if the factory belongs to the
Asian Paints chemical division?
Answer
Section 41B
– Information regarding dangers, including health hazards and the measures to overcome such
hazards
– Include accurate information as to the quantity, specifications and other characteristics of wastes
and the manner of their disposal.
– A detailed policy regarding the health and safety of the workers
– An on- site emergency plan and detailed disaster control measures
– Measures for the handling, usage, transportation and storage of hazardous substances inside the
factory premises
Page | 25
Code on Wages, 2019
Introduction
 India initiates codification of its labour laws on equal remuneration (anti-discrimination), wages,
minimum wage rates and bonus payments to employees.
 This is the first in the series of four labour codes that have been proposed by the government and
is expected to pave way for the other labour codes including the code on employee health and
safety and social security.
Once the effective date of the Code on Wages is notified, it shall subsume and repeal the following
important labour laws:
a. The Payment of Wages Act, 1936 (POWA)

b. The Minimum Wages Act, 1948 (MWA)
c. The Payment of Bonus Act, 1965 (POBA)
d. The Equal Remuneration Act, 1976 (ERA)
Highlights of the Act
 Shall regulate wage and bonus payments in all employments

 Aims at providing equal remuneration to employees performing work of a similar nature in every
industry, trade, business, or manufacture
 Aims to transform old and obsolete labour laws, some of which were enacted in the pre-
Independence era and meant primarily for factories and industrial establishments, into a more
accountable and transparent law
 Shall come into force on such date as maybe specified by the Central Government by way of a
notification in the Official Gazette
 Codification shall remove the multiplicity of definitions and authorities, without compromising
on the basic concepts of employee welfare and benefits
 Would be make it easier for employers to understand and thereby comply, and for the labour
authorities to enforce the laws.
Coverage and Applicability
 Will apply to employees in the organized and unorganized sector

 Central Government will continue making wage-related decisions for employments such as
railways, mines, oil fields, central public sector undertaking etc. [Central Government as AG]
 State Governments shall make such decisions for all other employments including for private
sector establishments [State Government as AG]
 Unlike the POWA which applied to only those employees who drew monthly wages of up to INR
24,000 and the MWA that applied only to scheduled employments, the provisions of the Code
Page | 26
on Wages relating to payment of wages shall extend to all employees irrespective of their wage
ceiling and type of employment
Key Features
1. Definition of ‘Wages’
 To include salary, allowances and other components expressed in monetary terms
 Definition Lists down the specific items including certain allowances such as conveyance and
house rent allowance which are excluded from the ambit of ‘Wages’
 Excluded components cannot exceed one half or such other percent as notified by the
Central Government of all the remuneration payable to the employee  If it does, the
amount exceeding the one half or such percent as specified by the Central
 Government shall be considered as ‘Wages’
2. Distinction between ‘Employee’ and ‘Worker’
 ‘Employee’ is any person (other than an apprentice engaged under the Apprentices Act,
1961), employed on wages by an establishment to do any skilled, semi-skilled or unskilled,
manual, operational, supervisory, managerial, administrative, technical or clerical work for
hire or reward, whether the terms of employment be express or implied
 Worker’ refers to any person (except an apprentice as defined under clause (aa) of section 2
of the Apprentices Act, 1961) employed in any industry to do any manual, unskilled, skilled,
technical, operational, clerical or supervisory work for hire or reward, whether the terms of
employment be express or implied; however excludes inter alia (i) someone who is
employed mainly in a managerial or administrative capacity; or (ii) someone who is
employed in a supervisory capacity drawing a monthly wage exceeding INR 18,000 or such
amount as may be notified by the Central Government from time to time
 Only certain limited provisions under the Code on Wages that relate to fixation and payment
of minimum wages uses the term ‘Worker’
3. Prohibition of Gender Discrimination
 Prohibits discrimination amongst employees on the ground of gender in matters relating to
payment of wages by the same employer, in respect of the ‘same work or work of a similar
nature done by any employee’
 Same work or work of a similar nature’  Work in respect of which the skill, effort,
experience and responsibility required are the same, when performed under similar working
conditions by employees and the difference if any, between the skill, effort, experience and
responsibility required for employees of any gender, are not of practical importance in
relation to the terms and conditions of employment
4. Floor Wage
 Central Government to fix a ‘Floor Wage’ after taking into account the minimum living
standards of workers and depending on the geographical areas
 Based on the Floor Wages, AG to fix minimum rate of wages payable to employees that
cannot be less than the floor wage
 Minimum wages cannot be reduced in events where existing minimum wages are higher
than floor wages
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5. Working Hours and Overtime

 AG may fix the number of hours that constitute a normal working day
 Hours in excess of normal working hours or work on a rest day are to be compensated with
overtime wages at a rate at least twice the normal rate of wages
6. Payment of Wages
 Provides for payment of all wages in current coin/currency notes/cheque/digital or
electronic mode
 Specifies time limit for payment of wages
 In the event that an employee is removed, dismissed, retrenched, resigns or becomes
unemployed due to closure, wages are to paid within two working days
7. Permissible Deductions
 Wages may be deducted on certain limited grounds including fines, absence from duty,
accommodation given by employer or recovery of advances given to the employee
8. Bonus Payments
 Shall apply to only those establishments employing atleast 20 employees or if atleast 20
employees have been employed on any day in that accounting year
 All employees whose wages do not exceed a specific monthly amount, notified by the
Central or State government, will be entitled to an annual bonus
 Bonus shall be at least 8.33% of his wages or Rs 100, whichever is higher
 Maximum bonus  20% of employee’s annual wages
 Employer will distribute a part of the gross profits amongst the employees in proportion to
the annual wages of the employees
9. Disqualification for Bonus
 Code on Wages lists criteria for disqualification for wages that are consistent with POBA
 Additional Ground: Dismissal from service on the grounds of conviction for sexual
harassment
10. Death of Employee
 Undisbursed dues, in case of the employee’s death, to be paid to employee’s nominee or
duly deposited with the authority as specified in the rules
11. Records, Returns and Notices
 Provision for issuance of a wage slip
 Mandates employer to maintain a register containing the details of the persons employed,
muster roll, wages and such other details in the manner to be specified in the rules by AG
12. Inspector cum Facilitator
 To carry out inspections and provide information to employers and employees for better
compliance
13. Right to be Heard
 The Inspector-cum-Facilitator shall not initiate any action unless the employer has been
given an opportunity to rectify the non-compliance within a specified time period
 In case of repetition of the same contravention within five years from the date on which
such first violation was committed such an opportunity shall not be provided
Page | 28
Industrial Relations Code, 2020
Introduction
The IR Code consolidates three important laws relating to industrial relations (employer-employee
relationship):
a. The Industrial Disputes Act, 1946 (ID Act)

b. The Industrial Employment (Standing Orders) Act, 1946 (IESO Act)
c. The Trade Unions Act, 1926 (TU Act)
 The definition of ‘industry’ now stands corrected and is more comprehensive than the one
mentioned in ID Act.
 It has introduced the concept of ‘Fixed term’ employment which is expected to make hiring
and firing easier for establishments
 Notice period for Strike: Workers employed in all establishments covered under the IR Code
will have to give a 14-day notice before going on strike, which workers only in PUS were
required to under ID Act.
 Every industrial establishment employing 20 or more workers will have one or more Grievance
Redressal Committees for resolution of disputes arising out of employees’ grievances.
 The code also proposes setting up of a reskilling fund to help skill retrenched workers.
 The Code offers industries
o flexibility in doing business,
o hiring and firing,
o make industrial strikes difficult while promoting fixed-term employment,
o reducing influence of trade unions
 The Code shall apply to the whole of India

 The appropriate government has the power to exempt any new industrial establishment or
class of establishments from the provision of the Code in public interest if it deems fit.
 The definition of industry and worker has been expanded (Please refer to point no. 1 and 2
under Key Feature)
Key Features
1. Definition of ‘Industry’ [s.2(p)]

 The definition of Industry now reads as propounded in Triple Test by the Supreme Court in
Bangalore Water Supply and Sewage Board v. A Rajappa
Page | 29
 Industry means:
o Any systematic activity
o Carried on by cooperation between employer and worker (including any worker
employed through an agency or a contractor)
o For the production, supply, or distribution of goods or services to satisfy human wants
and wishes
Under the IR Code the definition of " industry" specifically excludes the following:
 Institutions engaged in any charitable, social or philanthropic service; or
 any activity of the appropriate Government relatable to the sovereign functions
 any domestic service; or
 any other activity as may be notified by the Central Government.
Note: Under the ID Act, several establishments such as hospitals, educational, scientific institutions
etc. which were earlier excluded, have now been withdrawn from the list of exceptions under the
definition.
2. Definition of ‘worker’ [s.2(zr)]

 Includes all persons employed in a skilled or unskilled, manual, technical, operational, clerical
capacity, or supervisory work drawing wages up to ₹18,000 per month (earlier was 10,000).
 Includes working journalists and sales promotion employees.
3. Definition of "Employer"
Definition of employer has been expanded to include:
 In a factory: the occupier of the factory, where a person has been named as a manager of the
factory, the person so named.
 Any other establishment: Person/Authority who has ultimate control over the affairs of the
establishment
 Contractor
 Legal representative of a deceased employer
4. Definition of “wages”
The IR Code has re-defined the term ‘wages' to mean :
 all remuneration whether by way of salary, allowances or otherwise
 payable to a person employed in respect of his/her employment,
 Includes basic pay, dearness allowance and retaining allowance
 Excludes any bonus, which doesn't form part of the remuneration, value of any house
accommodation, or the supply of light, water, medical attendance, any conveyance allowance,
overtime allowance etc.
If the excluded components under the definition, exceed 50 percent of the entire remuneration paid,
then the amount in excess of this 50 percent, shall be construed within the ‘wages'.
Page | 30
5. Definition for "Fixed Term Employment"

Introduces a new provision for "fixed term employment", which means engagement of a worker on
the basis of a written contract of employment for a fixed period, provided that:
 hours of work, wages, allowances and other benefits shall not be less than that of a
permanent worker doing the same work or work of similar nature;
 shall be eligible for all statutory benefits available to a permanent worker proportionately
according to the period of service
 shall be eligible for gratuity if service rendered for a period of one year.
6. Appropriate Government (AG)

 Central government continue to be the AG for a central PSU even if the holding of the central
government is that PSU goes below 50% post the commencement of the Bills.
 Central government will also be the appropriate government for any “Controlled Industry”
(that the government may specify).
 A Controlled Industry has been defined (in Occupational Safety and Industrial Relations Code,
2020) as an industry on which the control of the Union has been declared by any Central Act
in public interest.
7. Applicability of Standing Orders
 Any establishment with 300 workers or more must prepare standing orders on the matters
listed in a Schedule to the Code.
 These matters relate to: (i) classification of workers, (ii) manner of informing workers about
work hours, holidays, paydays, and wage rates, (iii) termination of employment, (iv)
suspension for misconduct, and (v) grievance redressal mechanisms for workers
8. Closure, Lay-off, and Retrenchment

 Prior permission of the AG will be required before closure, lay-off, or retrenchment if the
non-seasonal industrial establishment has at least 300 workers on an average per working
day in the preceding twelve months. (Presently it is for 100 workers)
 It is not necessary to obtain prior permission if lay-off is due to shortage of power, natural
calamity
 If no communication (accepting/refusing permission) from government within 60 days,
permission shall be deemed to have been granted.
 The AG can increase the threshold on the number of workers through notification.
 Employers of non-seasonal industrial establishments such as mines, factories, and
plantations with 50 to 300 workers must (i) pay 50% of basic wages and dearness allowance
to a worker who has been laid off, and (ii) give one month’s notice or wages for the notice
period to the retrenched worker.
9. Trade Union
a) Recognition of a sole negotiating union:
 If only 1 registered trade union: recognise such a trade union as the negotiating union
 If more than one 1 registered trade union: trade union having 51 per cent or more workers
on the muster roll will be recognized.
Page | 31
 If aforesaid criteria not fulfilled: constitute a negotiating council comprising of the

representative trade unions which have the support of not less than twenty 20 per cent of
the total workers on the muster rolls
 Recognition of a negotiating union/negotiating council will be valid for a period of three 3
years, but will not exceed a period of five 5 years.
b) Membership of Minors in TU’s:

The IR Code has lowered the age criteria for membership of minors in trade unions from 15
years to14 years.
c) Central and State Recognition of Trade Unions:

The IR Code empowers the Central Government and State Governments to recognise a trade
union or a federation of trade unions as a central trade union or state trade union,
respectively.
d) Adjudication of Disputes:
Under the IR Code, in case a dispute arises between (a) two trade unions; or (b) worker(s)
of a trade union and the concerned trade union, regarding registration, administration or
management or election of office bearers of the trade union; or (c) workers who are refused
admission as members of a trade union and the concerned trade union; or where a dispute
is in respect of a trade union which is a federation of trade unions and office-bearer
authorised in this behalf by the concerned trade union, an application for adjudication can
be made before the Industrial Tribunal constituted under the IR Code having jurisdiction
over the registered office of such trade union(s).
e) Appeal:
Appeals against an order of the Registrar of Trade Unions, refusing registration of trade
union or cancellation of certificate of registration, shall lie before the Industrial Tribunal
required to be constituted under the IR Code. Under the TU Act, an appeal could be made
before the High Court or the concerned Labour Court or Industrial Tribunal, depending upon
the location of the head office of a trade union.
10. Strikes
 Definition of strike expanded to include concerted casual leave on a given day by 50% or
more workers employed in an industry.
 No person employed in an industrial establishment shall go on strike without a 60-day
notice and during the pendency of proceedings before a Tribunal or a National Industrial
Tribunal and 60 days after the conclusion of such proceedings.
 This elongates the legally permissible time frame before the workers can go on a legal
strike, making a legal strike well-nigh impossible.
 At present, a person employed in a PUS cannot go on strike unless he gives notice for a
strike within six weeks before going on strike or within fourteen days of giving such notice,
which the IR Code now proposes to apply for all the industrial establishments.
11. Notice of Change in Conditions of Service:

 Advance notice will not be required if ‘such change is effected in accordance with the
orders of the appropriate government.
Page | 32
 This clause may be particularly useful to employers in a situation akin to a government-

mandated lockdown or imposition of any other such embargo on conducting of business
12. Unfair Labour Practices

 The Code prohibits employers, workers, and trade unions from committing any unfair labour
practices listed in a Schedule to the Code. These include:
o restricting workers from forming trade unions,
o establishing employer sponsored trade union of workers,
o coercing workers to join trade unions,
o damage to employer’s property, and
o preventing any worker from attending work.
13. Industrial Tribunal

 It sets up an Industrial Tribunal consisting of a Judicial Member and an Administrative
Member, in place of only Judicial Member who presently presides the Tribunal.
 For certain specified cases, the matters will be decided by the two-member Tribunal and the
remaining shall be decided by a single-member Tribunal as may be provided for in the rules
 It sets up Industrial Tribunals in the place of existing multiple adjudicating bodies like the
Court of Inquiry, Board of Conciliation and Labour Courts
 It removes the reference system for adjudication of Industrial Disputes, except the
reference to the National Industrial Tribunal for adjudication
14. Worker Re-skilling Fund
IR Code prescribes for the creation of a worker re-skilling fund by the appropriate Government
which shall consist of :
(a) amount contributed by the employer of an industrial establishment equal to 15 days wages
last drawn by the worker immediately before the retrenchment, or such other number of days
as may be notified by the Central Government, for every retrenched worker in case of
retrenchment only; and
(b) contribution from such other sources as may be prescribed by the appropriate
Government.
Page | 33
Code on Social Security, 2020
Introduction
The Social Security Code was legislated to consolidate laws relating to social security and to extend
social security to all worker in both organized and unorganized sectors.
It subsumes nine laws on social security under it namely:

1. The Employee’s Compensation Act, 1923;
2. The Employees’ State Insurance Act, 1948;
3. The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952;
4. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959;
5. The Maternity Benefit Act, 1961;
6. The Payment of Gratuity Act, 1972;
7. The Cine-Workers Welfare Fund Act, 1981;
8. The Building and Other Construction Workers’ Welfare Cess Act, 1996;
9. The Unorganised Workers Social Security Act, 2008.
 For the first time, a law on social security will also extend to agricultural workers
 It reduces the time limit for receiving gratuity payment from the continuous service of 5 years to
1 year for all kinds of employees, including fixed-term employees, contract labour, daily and
monthly wage workers.
 The Code proposes a National Social Security Board which shall recommend to the central
government for formulating suitable schemes for different sections of unorganised workers, gig
workers and platform workers.
 Aggregators employing gig workers will have to contribute 1-2 per cent of their annual turnover
for social security, with the total contribution not exceeding 5 per cent of the amount payable by
the aggregator to gig and platform workers.
 It provides for maternity benefits such as prohibition from work during certain periods, provision
of nursing breaks, crèche facility, claim for maternity benefits, etc
 It provides for establishment and maintenance of separate accounts under social security fund,
for the welfare of unorganised workers, gig workers and platform workers; and a separate account
for the amount received from the composition of offences under the Bill or under any other central
labour laws.
 The Code covers under it both organized and unorganized workers including migrant workers, gig
workers, and platform workers.
 For the first time, a law on social security will also extend to agricultural workers
Page | 34
Key Features
1. Definitions
a) Wages: The SS Code has sought to align the definition of the term 'wages' in line with the
definition under the Code on Wages, 2019. Wages will mean:
 all remuneration whether by way of salary, allowances or otherwise
 payable to a person employed in respect of his/her employment,
 Includes basic pay, dearness allowance and retaining allowance
 Excludes any bonus, which doesn't form part of the remuneration, value of any house
accommodation, or the supply of light, water, medical attendance, any conveyance allowance,
overtime allowance etc.
If the excluded components under the definition, exceed 50 percent of the entire remuneration paid,
then the amount in excess of this 50 percent, shall be construed within the ‘wages'.
b) “aggregator” means a digital intermediary or a marketplace for a buyer or user of a service

to connect with the seller or the service provider
c) “career center” means any office (including employment exchange, place or portal)
established and maintained in the manner prescribed by the Central Government for
providing such career services (including collection and furnishing of information, either by
the keeping of registers or otherwise, manually, digitally, virtually or through any other mode)
as may be prescribed by the Central Government, which may, inter alia, relate generally or
specifically to— (i) persons who seek to employ employees; (ii) persons who seek
employment; (iii) occurrence of vacancies; and (iv) persons who seek vocational guidance and
career counseling or guidance to start self-employment
d) “gig worker” means a person who performs work or participates in a work arrangement and
earns from such activities outside of traditional employer-employee relationship
e) "home-based worker" means a person engaged in the production of goods or services for an
employer in his home or other premises of his choice other than the workplace of the
employer, for remuneration, irrespective of whether or not the employer provides the
equipment , materials or other inputs
f) "platform work" means a form of employment in which organisations or individuals use an
online platform to access other organisations or individuals to solve specific problems or to
provide specific services in exchange for payment
g) “platform worker” means a person engaged in or undertaking platform work.
2. Social Security Schemes

 The SS Code empowers the Central Government to notify various social security schemes for
the benefit of the workers, including:
i. Employees' Provident Fund (EPF) Scheme: for which provident funds shall be established for
employees or any class of employees and specify the establishments or class of establishments to
which the scheme shall apply;
ii. Employees' Pension Scheme (EPS): for the purpose of providing for superannuation pension,
retiring pension or permanent total disablement to the employees, widow or widower's pension,
childrens' pension or orphan pension, payable to beneficiaries and nominee pension; and
Page | 35
iii. Employees' Deposit Linked Insurance (EPDLI) Scheme: for providing life insurance benefits to the
employees of any establishment or class of establishments.
 The Central Government may also frame any other scheme or schemes for the purpose of providing
social security benefits to self-employed workers or any other class of persons.
 In addition to the above, the Central Government may also frame schemes for unorganised workers,
gig workers and platform workers and the members of their families for providing benefits admissible
under the SS Code.
 The Central Government, under the SS Code, may also notify:
(i) an Employees' State Insurance (ESI) Scheme to provide medical benefits to the
insured persons and members of his family;
(ii) gratuity to workers on completing five years of employment or less than 5 years in
certain cases such as for journalists and fixed term workers;
(iii) maternity benefit to women employees;
(iv) cess for welfare of building and construction workers; and
(v) compensation to employees and their dependants in the case of occupational injury
or disease.
3. Gratuity
 The SS Code has fixed different thresholds with respect to eligibility for gratuity of permanent and
fixed term employees.
 Gratuity shall be payable to eligible employees by every shop or establishment in which 10 or
more employees are employed, or were employed, on any day of the preceding 12months.
 Gratuity shall be payable to an employee on the termination of his employment after he has
rendered continuous service for not less than 5 years, on his superannuation; on his retirement
or resignation; on his death or disablement due to accident or disease; on termination of his
contract period under fixed term employment.
 However, a continuous service of 5 years shall not be necessary where the termination of the
employment of any employee is due to death or disablement or expiration of fixed term
employment.
 For every completed year of service or part thereof in excess of 6 months, the employer shall pay
gratuity to an employee at the rate of fifteen 15 days' wages. The amount of gratuity payable to
an employee shall not exceed such amount as may be notified by the Central Government.
 Gratuity under the SS Code is payable to employees hired directly or through a contractor.
4. Constitution of various administrative bodies

Various social security organisations for the administration of the Bill, namely,
a. the Central Board of Trustees of the Employees’ Provident Fund (Central Board),
b. the Employees’ State Insurance Corporation (Corporation),
c. the National Social Security Board for Unorganised Workers (National Social Security
Board),
d. the State Unorganised Workers’ Social Security Board and
e. the State Building Workers Welfare Boards
5. Employees State Insurance

 The SS Code allows for voluntary registration under the Employee State Insurance if the
employer and majority of the employees agree.
 Further, the Government has the power to extend the Employee State Insurance Scheme to
any hazardous occupation irrespective of the number of employees employed.
Page | 36
 The SS Code also provides for coverage of Gig Workers and Unorganised Sectors under the
Employee State Insurance Scheme.
 The employer shall pay in respect of every employee, whether employed by him directly or
through a contractor, both the employer's contribution and the employee's contribution.
Neither the employer nor the contractor shall be entitled to deduct the employer's
contribution from any wages payable to an employee or otherwise to recover it from him.
6. Maternity Benefit
 Maternity benefits shall be applicable to every shop or establishment in which 10 or more employees
are employed, or were employed, on any day of the preceding 12 months; and such other shops or
establishments notified by the appropriate Government.
 No employer/ nor woman can knowingly employ a woman in any establishment during the 6 weeks
immediately following the day of her delivery, miscarriage or medical termination of pregnancy.
 A woman shall be entitled to maternity benefit if she has worked in the establishment, for a period of
not less than 80 days in the 12 months immediately preceding the date of her expected delivery.
 The maximum period of maternity benefit shall be 26 weeks of which not more than 8 weeks shall
precede the expected date of her delivery. However, the maximum period entitled to maternity
benefit by a woman having two or more surviving children shall be 12 weeks of which not more than
6 weeks shall precede the date of her expected delivery.
 If any person is in contravention of the provisions of maternity benefits or dismisses, discharges,
reduces in rank or otherwise penalizes a woman employee or fails to provide any maternity benefit to
which a woman is entitled to, he shall be punishable with imprisonment for a term which may extend
to 6 months or with fine which may extend to Rs. 50,000/-, or with both.
Page | 37
Occupational Safety, Health and Working

Conditions Code, 2020
Introduction
It subsumes and replaces 13 labour laws relating to safety, health and working conditions. They are:
1. The Factories Act, 1948;
2. The Plantations Labour Act, 1951;
3. The Mines Act, 1952;
4. The Working Journalists and other Newspaper Employees (Conditions of Service and
Miscellaneous Provisions) Act, 1955;
5. The Working Journalists (Fixation of Rates of Wages) Act, 1958;
6. The Motor Transport Workers Act, 1961;
7. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966;
8. The Contract Labour (Regulation and Abolition) Act, 1970;
9. The Sales Promotion Employees (Condition of Service) Act, 1976;
10. The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act,
1979;
11. The Cine Workers and Cinema Theatre Workers Act, 1981;
12. The Dock Workers (Safety, Health and Welfare) Act, 1986;
13. The Building and Other Construction Workers (Regulation of Employment and Conditions of
Service) Act, 1996.
 Single Registration: The Code proposes single registration for an establishment instead of multiple
registrations. Therefore, establishments covered by the Code will be required to register within a
period of 60 days from the date of commencement of this Code. This will design a centralized
database and develop an ease of doing business.
 Appointment letter made Statutory: It is for the very first time wherein the government has made
statutory compliance to provide appointment letter to all the employees engaged in their
establishment. This will stem from formalization of employment and the exploitation of
employees.
 Working Hours for Women: A special provision has been laid down wherein, female
workers/women can work during night shifts but with their consent. Also, the time slot for such
night shift shall be from 7 p.m. and before 6 a.m., which shall also be approved by the central or
state government.
Page | 38
 The Code applies to establishments or organisations with 10 or more workers, and in all mines and
docks
 Certain provisions of this Code will cover both employees and workers. Employees include
individuals in managerial, administrative or supervisory roles (with monthly wage of at least ₹
18,000).
 The Code does not apply to apprentices, or to offices of the central or state governments
Key Features
1. Definitions
 Contract labour means a worker who shall be deemed to be employed in or in connection
with the work of an establishment when he is hired in or in connection with such work by or
through a contractor, with or without the knowledge of the principal employer and includes
inter-State migrant worker but does not include a worker (other than part time employee)
who is regularly employed by the contractor for any activity of his establishment and his
employment is governed by mutually accepted standards of the conditions of employment
(including engagement on a permanent basis), and gets periodical increment in the pay, social
security coverage and other welfare benefits in accordance with the law for the time being in
force in such employment.
 Establishment is (i) any place with ten (10) or more workers where any industry, trade,
business, manufacturing or occupation is carried on; or (ii) a motor transport undertaking,
newspaper establishment, audio-video production, building and other construction work or
plantation with ten (10) or more workers; or (iii) factory in which ten (10) or more workers are
employed; or (iv) a mine or port or vicinity of port where dock work is carried out.
 Hazardous Process is any process or activity in relation to specific industries where, unless special care
is taken, raw/intermediate/finished/bye-products, etc., as the case may be, would cause material
impairment to the health of the persons engaged in or connected herewith; or result in pollution of
working environment.
 Principal Employer is any person i) responsible for the supervision and control of the establishment
where contract employer is employed or engaged. ii) owner or occupier of the factory iii) the person
named as manager of the factory.
 Wages comprises all remuneration such as salaries, allowances or otherwise, expressed in terms of
money or capable of being so expressed which would be payable to a person in respect of his
employment, whether express or implied, or of work done in such employment and includes basic pay,
dearness allowance and retaining allowance, if any.
 The OSH Code clarifies that wages do not include (a) bonus; (b) value of accommodation or light, water,
medical attendance; (c) employer contribution towards any pension or provident fund; (d) conveyance
allowance; (e) sum paid to employed person to defray special expenses; (f) house rent allowance; (g)
overtime allowance and (h) gratuity, etc.
Page | 39
 Workers: The definition of “workers” excludes from its ambit any person who is employed in a
supervisory capacity drawing a wage exceeding Rs. 18,000/- (Rupees Eighteen Thousand only) per
month or such other amount as may be notified by the Central Government.
2. Work hours and leave

 Work hours: Work hours for different classes of establishment and employees will be notified
by the central or state government. For overtime work, the worker must be paid twice the
rate of daily wages. Prior consent of workers is required for overtime work. Female workers
may work past 7 pm and before 6 am with their consent, and if approved by the government.
Journalists cannot work more than 144 hours in four weeks.
 Leave: Workers cannot be required to work for more than six days a week. Further, they must
receive one day of leave for every 20 days of work per year.
3. Relevant Authorities
 Inspector-cum-facilitators: The duties of Inspector-cum-Facilitators include inquiring into
accidents, and conducting inspections. They have additional powers in the case of factories,
mines, docks and building and construction workers which include; (i) reducing the number of
employees working in sections of the establishment, and (ii) prohibiting work in dangerous
situations.
 Advisory Bodies: The central and state governments will set up Occupational Safety and
Health Advisory Boards at the national and state level, respectively. These Boards will advise
the central and state governments on the standards, rules, and regulations to be framed under
the Code.
 Safety Committees: The appropriate government may require constitution of safety
committees in certain establishments, and for a certain class of workers. The committees will
be composed of representatives of the employer and the workers. The number of employer
representatives cannot exceed the employee representatives. These committees will function
as a liaison between employers and employees.
4. Working conditions and welfare facilities

 Working conditions: Working conditions will be notified by the central government.
Conditions may include hygienic work environment, clean drinking water, and toilets.
 Welfare facilities: Welfare facilities such as canteens, first aid boxes, and crèches, may be
provided as per standards notified by the central government. Additional facilities may be
specified for factories, mines, docks, and building and construction work such as welfare
officers, and temporary housing.
 The Code includes three schedules containing lists of:
(i) 29 diseases that the employer is required to notify the authorities of, in case a worker
contract them
(ii) 78 safety matters that the government may regulate, and
(iii) 29 industries involving hazardous processes. The lists may be amended by the central
government.
 The employer is required to provide and maintain welfare activities for employees as may be
prescribed by the Central Government including
(i) adequate and suitable facilities for washing to male and female employees separately;
(ii) bathing places and locker rooms for male, female and transgender employees separately;
Page | 40
(iii) sitting arrangements for all employees obliged to work in a standing position;
(iv) adequate first-aid boxes or cupboards with contents readily accessible during all working
hours; and
(v) any other welfare measures which the Central Government considers, under the set of
circumstances, as required for decent standard of life of the employees.
 the Central Government is entitled to prescribe for provision of, inter alia
(i) cleanliness and hygiene
(ii) ventilation, temperature and humidity
(iii) adequate standard of humidification
(iv) potable drinking water
(v) adequate lighting
(vi) adequate standards to prevent overcrowding,
5. Duties of an Employer Under the OSH Code, every employer is required to undertake the
following:
 ensure that the workplace is free from hazards which cause or are likely to cause injury or occupational
disease to the employees and comply with the OSH Code and the Government's directions on the same.
 provide free annual health examination or test, free of costs to certain classes of employees.
 provide and maintain, as far as is reasonably practicable, a working environment that is safe and
without risk to the health of the employees;
 issue letters of appointments to employees; and
 ensure that no charge is levied on any employee for maintenance of safety and health at workplace
including conduct of medical examination and investigation for the purpose of detecting occupational
diseases
6. Offences and Penalties

The Code specifies various offences. An offence that leads to the death of an employee will be
punishable with imprisonment of up to two years, or fine up to five lakh rupees, or both. Further,
courts may direct that at least 50% of such fine be given as compensation to the heirs of the victim.
For any other violation where the penalty is not specified, the employer will be punished with a
fine between two and three lakh rupees. If an employee violates provisions of the Code, he will
be subject to a fine of up to Rs 10,000. First-time offences which are not punishable with
imprisonment, can be settled for up to 50% of the maximum fine.
7. The Employment of Contract Labor and Inter-State Migrant Workers

 The OSH code has increased the minimum number of contract labour to 50 from 20 for the
applicability to hold. Welfare facilities under such establishments are to be provided by the
principal employer.
 OSH Code provides for a common license in respect of a factory, industrial premises for beedi
and cigar work and engaging contract labour.
 The OSH Code has also safeguarded the rights of the Inter-State Migrant Workers by ensuring
that the contractor extends all benefits as are available to a worker under the various labor
laws to inter-state migrant workers as well.
 The employer of every applicable establishment is required to pay to every inter-state migrant
worker, a lump sum fare for to and fro journey to his native place from the place of his
employment.
Page | 41
“Vishaka Guidelines” were stipulated by the Supreme Court of India, in Vishaka and others v
State of Rajasthan case in 1997, regarding sexual harassment at the workplace. The court stated
that these guidelines were to be implemented until legislation is passed to deal with the issue.
The guidelines issued by the Supreme Court widens the meaning and scope of sexual
harassment. It defines sexual harassment as an unwanted sexual determination which is directly
or impliedly intended to cause the following:
1. Physical contact or advances.
2. A demand or request for sexual favours.
3. Sexually coloured remarks.
4. Showing pornography.
5. Any other unwelcome conduct whether it is physical, verbal or non-verbal.
Page | 42
Protection of Women from Sexual
Harassment Act, 2013
The PoSH Act has been implemented to prevent and protect women from sexual harassment at
the workplace and thereby ensure a safe working environment for women. It requires every
company having more than ten employees to constitute an Internal Complaints Committee (ICC)
in the prescribed manner to receive and address the complaints of any sort of sexual harassment
from women in a time-bound and extremely confidential manner.
The person who can file a complaint has to be a woman, the POSH Act is not gender-neutral.
Features of the PoSH Act

 The Act defines sexual harassment at the workplace and creates a mechanism for redressal of
complaints and safeguards against false or malicious charges.
 Every employer is required to constitute an Internal Complaints Committee (ICC) at each office or
branch with 10 or more employees.
 The Complaints Committees have the powers of civil courts and are required to provide for
conciliation before initiating an inquiry if requested by the complainant.
 Penalties have been prescribed for employers for non-compliance with the provisions of the Act.
 The State Government will notify the District Officer in every district, who will constitute a Local
Complaints Committee (LCC) to enable women in the unorganized sector or small establishments
to work in an environment free of sexual harassment
Questions
Q. Explain PoSH Act 2013.

The Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act,
2013, also known as the "PoSH Act," is an Indian law that aims to make workplaces safer for
women by preventing, forbidding, and redressing acts of sexual harassment against them.
Q Explain what is a SHe-box?

This Sexual Harassment Electronic Box (SHe-Box) is an attempt by the Government of India to
provide a single window access to every woman, regardless of her work status, whether she is
employed in the organised or unorganised, private or public sector, to facilitate the filing of
sexual harassment complaints.
Q. What if the accused employee claims that the incident was "only a joke"?
It's uncommon for an employee accused of sexual harassment to argue that it wasn't meant that
way or that it was just a joke. If the person filing the complaint believes he or she is being
sexually harassed as defined by law, it is still considered sexual harassment at work.
Q. What happens if a female employee of one company accuses one of other company’s
employees of sexual harassment?
In this scenario, the inquiry and remedy will be handled by the company where the female
employee works. From time to time, the other company will need to assist with the investigation
process.
Page | 43
Q. What is the meaning of "quid pro quo" harassment?
When a person offers, or tries to exchange, job benefits for sexual favours, it is known as quid
pro quo harassment. As a result, it happens between an employee and someone in a position of
authority, such as a supervisor, who has the power to award or deny job perks.
Q. Is it possible for a guy to make a sexual harassment complaint against a woman?

Only sexual harassment against women is covered by the Sexual Harassment Act. Individual
organisations, on the other hand, may allow gender-neutral complaints under their own
procedures, though these would not be considered under the Act.
Q. Is it sexual harassment if someone makes a sexually charged remark about me to someone

else but not to me?
Unfortunately, no. To be considered sexual harassment, the remark must be made to the
complainant.
Q. Is it necessary for me to be a permanent employee of an organisation to file a sexual

harassment complaint?
No, any woman, whether an intern, trainee, ad-hoc or part-time employee, or even a guest, can
file a sexual harassment complaint. This means that you can file a sexual harassment complaint
with the respondent's employer's Internal Committee (IC or ICC) regardless of your relationship
to that organisation if the alleged sexual harassment occurs in the context of the respondent's
employment.
Page | 44

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COMPENDIUM ON LAW AND IR

TOPIC PAGE NO.

Industrial Relations – Terms

Three Approaches to Industrial Relations

Pluralist Approach Organization is multi-structured and competitive, perpetually in a

Employee Relations and Industrial Relations

An organization of workers bound by a common occupation, skill, or trade or a group of closely

Registration v/s Recognition

Common Factory Problems & Legal Ramifications

1) Wearing of black badges during working hours

2) One day hunger strike

4) Complaint to Labour Commissioner

5) Work to rule (strictly 8 hours, refusal to do overtime)

Misconduct and Domestic Inquiry

5. Casual workman is a workman whose employment is of a casual nature.

Statutory obligations of the employer in compensation

Act Applicability Employer obligation

Trade Unions Act, 1926

Right to form unions

Fundamental Right – Article 19(1)(c) of the Constitution

All citizens shall have the right to form associations or unions.

Provisions of the Act

1) How many people are required to form a TU?

2) Can managerial and supervisory staff form a TU?

3) Does TU membership automatically cease if employment is terminated?

4) What protection does a registered TU have?

5) Proportion of office bearers that are outsiders

6) Difference between Registered and Recognized TU

Apprentices Act, 1961

Applicability of the Act

A person undergoing apprenticeship training under a contract of apprenticeship.

Status of an apprentice under various legislations

• If Apprentice under the Apprentices Act:

• All other types of apprentices

Does non-registration of contract make Apprentice an employee?

No. Only penal provisions are attracted.

Can an apprentice be made to work overtime under the Factories Act?

No. Only with approval from the Apprenticeship Advisor.

After the completion of Apprenticeship, does the Apprentice become an employee?

Any dispute is referred to the Apprenticeship Advisor for decision.

 An apprentice shall be Applicability of the Act (Sec. period of apprentice

Contract Labour Regulation and Abolition Act, 1970

Work of an establishment is not intermittent in nature if

 if is performed for >120 days in the preceding year

Appropriate Government (AG)

Powers of the Appropriate Government

Who is the principal employer?

 For government office / dept.  HOD

Terms of employment may be express or implied.

Does NOT include:

 Anyone whose primary job is managerial and/or administrative

E.g. welding, polishing

REGISTRATION AND LICENSING

Licensing (of the contractor)

The contractor would ordinarily provide for the canteen.

Other amenities (S. 17, 18, 19)

*as mentioned in CLRA Central Rules

Same or Similar Work

Abolition of Contract Labour under S. 10

 Writ of Mandamus – if AG has not followed proper procedure as detailed above

IMPORTANT JUDGEMENTS (CASE-LAWS)

Gujarat State Electricity Board (1995)

Tests to determine the actual employer: