Labour Law 2 Study Material 1

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Labour LAW-2 Study Material 1
Ballb (Karnataka State Law University)
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Labour law – 2 Questions with answers
The fundamental rights and directive principles of state policy are the
backbone of the industrial jurisprudence in india elucidate.
Labour Laws and Constitution of India
The Constitution of India is the touchstone for any Act passed in our country. The Constitution of India is the
largest written constitution of the world. Each and every act which was in force before the enactment of our
constitution were either amended or nullified after its enforcement. Our constitution plays an important part in
the changes and growth in labour laws in India. The Fundamental Rights and Directive Principles of State
Policy enshrined in Part III and Part IV mentions working class related benchmark laws.
Labour laws in Fundamental Rights
Part III of the Constitution of India is the benchmark for labor laws in India. Also, Part III (Article 12 to 35) of
the Constitution covers the fundamental rights of its citizens which includes Equality before the law, Religion,
Sex, caste, place of birth, the abolition of untouchability, freedom of speech and expression and prohibition of
employment of children in factories.
Article 14
Equality before the law which is interpreted in labor laws as “Equal pay for Equal work”. It does not mean that
article 14 is absolute. There are a few exceptions in it regarding labor laws such as physical ability, unskilled
and skilled labors shall receive payment according to their merit.
In the case of Randhir Singh vs Union of India, the Supreme Court said that Even though the principle of Equal
pay for Equal work is not defined in the Constitution of India, it is a goal which is to be achieved through
Article 14,16 and 39 (c) of the Constitution of India.
Article 19 (1) (C)
Constitution guarantees citizens to form a union or association. The Trade Union Act, 1926 works through this
Article of the Constitution. It allows workers to form trade unions.
Trade Unions provide the power to raise voice against atrocities done to the workers. Unionization brings
power to the laborers. Trade Unions discuss various labor-related problems with the employers, they conduct
strikes, etc.
Article 23
Constitution prohibits forced labor. When the Britishers ruled over India, forced labor was prevalent all over
India. They were made to work against their will and weren’t paid according to their work. The Government at
that time were infamous for forced labor and the landlords were also involved in forced labor.
In current times, forced or bonded labor is an offense which is punishable under the law. The Bonded Labor
(Abolition) Act, 1976 prohibits all kinds of bonded labor and is declared illegal.
Article 24

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Constitution prohibits all forms of child labor. Nobody can employ a child under the age of 14 to work. Child
labor was a massive problem of our country in the earlier times and it still is happening but at a lower scale.
The penalization of article 24 is severe.
Relevancy of Part IV (Article 36 – 51) on Labor Laws

Part IV of the Constitution of India, which is also known as the “Directive Principles of State Policy” aims to
work toward the welfare of its citizens. DPSP cannot be enforced in the court of law, but it provides a guideline
to the legislature for making labor laws in India.
Article 39 (a)
> The State shall, in particular, direct its policy towards securing; That the citizens, men and women equally,
have the right to an adequate means of livelihood. It means that every citizen of the country has the right to earn
a livelihood without getting discriminated on the basis of their sex.
Article 39(d)
Constitution says that The State shall, in particular, direct its policy towards securing; that there is equal pay for
equal work for both men and women. Wages will not be determined on the basis of sex rather it will be
according to the amount of work done by the worker.
Article 41
Constitution provides “ Right to Work” which means that every citizen of the country has the right to work and
the state with the best of its abilities will secure the right to work and education.
Article 42
Provides for the upliftment of the working conditions for workers. It talks about creating a suitable and Humane
workplace. This article also talks about maternity relief, i.e leave provided to women when they are pregnant.
Article 43
Talks about the “living wage” for its citizens. Living wage not only includes the “bare necessities of life” but
also the social and cultural upliftment of the person. It also includes education and insurances for a person.
The State shall constantly try to create opportunities in the fields of Agriculture and Industries with special
reference to cottage industries.
Conclusion
Constitution of India is the base for all laws in our country. The labor laws are also made according to the
constitution and any violation of constitutional laws result in the abolition of that particular law. The Directive
Principles of the State policy play a major role in the making of new labor laws in India.
Constitutional provisions of labour law.

Labor Laws with reference to Directive Principles of State
Policy
The Directive Principle of the State Policy is enshrined in Part IV of the Constitution. The aim of Part IV of the
Constitution is to direct the legislative and executive organs of the government while framing the policies. The

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state shall take all endeavors to build a nation with facilities of the old home, employment, schools to educate,
fair wages to all, good and standard life and act. The directive Principle is not enforceable in any court of law as
they are enshrined as the ‘to-do list’ by the Constitution makers.
Industrialization is the modern trend in almost all developing nations. The proper conditions between employer
and employee are needed or can say it’s on priority for the planned, progressive and purposeful development so
the society. No economy can reach its peak if its labor force is not happy. Post- Independence has witnessed the
evolution of new India with many small scales and large scale industries and factories. Along with the industrial
revolution, the period also witnessed the mass awakening and responsible being towards their rights and duties.
As a result of which during the 20th-century a new branch of Industrial Jurisprudence has developed in our
country. Industrial Jurisprudence paved a way for many labor and industrial legislation not only this many
knocked the doors of High Court and Supreme Court which lead to many landmark judgments. The principles
on which the labor or industrial legislation laid down should be social justice, social equality, international
uniformity, and national economy.
Constitutional Provisions Regarding labor Laws

The Labor laws of independent India derive their strength, origin from the Constitution of India and
International Convention and recommendations. The Part III of the Constitution which is the Fundamental
Right guaranteed the labor force their dignity of work, equal treatment, and savior from exploitation under
Article 16,19,23& 24 whereas, the Directive Principle of State Policy under Article 39,41,42,43,43A which
direct the government to frame the policies to uplift the condition of workers.
India is also a signatory to many UN conventions and human rights which to aims to protect the interest of the
labor class in the world. These include the right to work of one’s choice, right against discrimination, the
prohibition of child labor, just and humane conditions of work, social security, protection of wages, redress of
grievances, right to organize trade unions, collective bargaining, and participation in management
Article 39 of the Constitution
The state shall take the necessary steps in securing:-

• All the citizens, equally, have the right to an adequate means of livelihood.
• The distribution of material resources should be in a way to serve the best common good
• The operation of the economic system does not result in the concentration of wealth.
• Equal pay for equal work
• No exploitation of workers includes men, women, and children. Abuse in terms of strength, economic
necessity and their age.
• Protection of children from any exploitation and abuse, children must be given opportunities and facilities to
develop in a healthy manner.
Dhirendra Chamoli v. State of U.P (AIR 1986 SC 172)
Facts:
The writ petition has been file by two employees of the Nehru Yuvak Kendra, Dehradun name:-Dhirendra
Chamoli and Mohan Singh.

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The complaint made in the writ was Nehru Yuvak Kendra engages number of workers as casual workers on a
daily wage basis and the work done by the daily wage workers is the same work as is performed by the Class
IV employee. The daily wage workers and Class IV workers do the same work but both are given different
salaries and allowances.
Judgment:-
“the writ petitions and make the rule absolute and direct the Central Government to accord to these persons who
are employed by the Nehru Yuvak Kendra’s and who are concededly performing the same duties as Class IV
employees, the same salary and conditions of service as are being received by Class IV employees”.
Article 41
The state shall take endeavor for securing the right to work, to education and to public assistance in cases of
unemployment, old age, sickness and disablement and in other cases of undeserved want.
Article 42
There is a separate legislation Maternity Benefit Act 1961, with an object to do social justice to women
workers. The legislation includes different kinds of wages to the women workers and special allowances,
benefits to the female wage earners before and after the childbirth.
The Act provides that the women will be paid maternity benefit at the rate of her average daily wage in the
three months preceding her maternity leave. This legislation has changed the scenario of women workers and
has brought an end to the exploitation of women and newborns to a greater extend.
Ram Bahadur Thakur vs Chief Inspector of Plantations
In this case, the woman worker who was employed in the Pambanar Tea Estate was denied maternity benefit on
the ground that she had worked for only 157 days instead of 160 days. The court held the women worker claim
and held that all the wage less holiday have to be taken into consideration and the maternity benefit act must be
interpreted to advance the purpose of the Act.
Article 43 and 43 A
Article 42 aims at providing to all workers, agricultural, industrial or other a wage for securing a standard life
and enjoyment of cultural and social opportunities.
1. The state should also take measures, or make legislation, for the participation of workers in the management
of the industrial establishment.
Article 43-A was included in part of the Constitution by the 42nd amendment of the constitution. It is also
known as the Magna Carta of the Industrial Jurisprudence.
explain the salient features of the bonded labour system (abolition)

act 1976 with the help of decided cases.
Laws related to bonded labour in India
Various forms of slavery existed in the Indian society before its independence. It was first legislatively
abolished by the British Empire in 1843, through Act No.V of 1843 also known as the Indian Slavery Act,
1843. However, this practice has not been completely eradicated from the Indian society till date. One of the
most common forms of slavery which is still prevalent in the Indian society is bonded Labour. Even after the
independence, there have been several legislations passed in India which abolishes bonded labour. This article

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would be dealing with the constitutional safeguards available and the laws that abolish this practice. Further,
this article would also discuss the possible causes of the continuance of this practice in India. But before
dealing with any of that, we must understand what exactly is bonded labour.
What is bonded labour?
Bonded labour has been defined as well as addressed as a prohibited practice in several international
conventions as well as a many Indian legislations. It is a system of forced (or partly forced) labour in which a
debtor enters (or presumed to have entered) into an agreement with the creditor. Owing to this agreement,
following are the end results:
Render services to the creditor (by himself or through a family member) for a specified (or unspecified) period
of time with no wages (or nominal wages).
Forfeit the right to move freely.
Forfeit the right to appropriate or sell the product or property at the market value from his (or his family
members’) labour or service.
This definition has been provided in the Bonded Labour System (Abolition) Act 1976.
The said agreement of bonded labour results into an undeniable loss of freedom on part of the debtor. However,
the scope of ‘loss of freedom’, as used above has not been defined so what would be the yardstick of this ‘loss
of freedom’? The National Human Rights Commission has elucidated on the scope in the following manner:
Loss of freedom of employment or alternative avenues of employment to sustain a decent livelihood.
Loss of freedom to earn the minimum wage as notified by the Government of India.
Loss of freedom to move from one part of the country to another.
So speaking in simple words, the system of bonded labour refers to a system wherein a creditor and a debtor
enter into an agreement of rendering services of the debtor as a mode of repayment of the said amount. This
agreement may lapse with time or may continue for an uncertain period of time.
This is also referred as a debt bondage or for the lack of a better word, debt slavery. It is important to
understand that not all the forms of bonded labour are forced but all the forms of bonded labour involve a
certain bondage. It is due to this bondage, the very Constitution of India abolishes the practice of bonded
labour.
As per Article 23 of the Indian Constitution, traffic in human beings and other forms of forced labour are
prohibited. Based on this constitutional provision, the Government of India passed The Bonded Labour System
(Abolition) Act, 1976. In this context, the Supreme Court of India deliberated in the following words – “We
are, therefore, of the view that when a person provides labour of service to another for remuneration which is
less than the minimum wage, the labour or service provided by him clearly falls within the scope and ambit of
the words “forced labour” under Article 23.”
As we can observe, the Supreme Court has well interpreted this constitutional provision and expanded the
scope of Article 23 in this case.
The Bonded Labour System (Abolition) Act, 1976- Salient Features and Criticisms

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Salient Features of the Act

The Act provides several safeguards against the system, to protect the bonded labour from exploitation. Some
of these safeguards are as follows:
 The bonded labour stand discharged from every obligation to provide any form of bonded labour.
 The Act yielded every agreement/ custom void wherein bonded labour existed.
 The Act freed every property which was mortgaged vis- -vis recovery for bonded debt from its
commencement.
 The Act also freed any person who was detained in civil prison in pursuance of a bonded debt.
 As per the Act, once a bonded labour is freed, he cannot be evicted from the homestead.
 The Act has made the offence of practising Bonded Labour punishable, with imprisonment of up to 3 years and
a fine up to two thousand rupees for any person compelling another individual to engage in bonded labour.
 Offences under this Act are cognizable as well as bailable.
Constitutional Safeguards
Now that we are aware of what exactly is a system of bonded labour, let us delve further into the constitutional
safeguards. In the Constitution of India, there are a few safeguards which address the system at hand.
Article 21 of the Indian Constitution – This is the most important and foremost safeguard against any
exploitation of human lives and their liberty. It is part of the Basic Structure of the Constitution and cannot be
amended. It secures the right to life and right to live with human dignity to every person in India. So, any
practice of bonded labour would be in contravention of this Constitutional provision since bonded labour
deprives a person of numerous liberties.
Article 23 of the Indian Constitution – As discussed above, the Constitution of India expressly provides for the
abolition of forced labour and prohibits this form of forced labour in the territory of India. This not only
prohibits bonded labour but also covers the practice of Begar and other forms of human trafficking in India.
Article 39 of the Constitution – This is covered in Part IV of the Indian Constitution which deals with the
Directive Principles of State Policy is albeit not enforceable but are considered irrefutable for the purpose of
governance. This constitutional provision directs the State to secure the right to an adequate livelihood. It also
directs the state to formulate its policies with an object that no citizen is forced out of economic necessity to
enter into avocations which are not suited to them.
Article 42 of the Constitution – This is also a Directive Principle of State Policy which states “The State shall
make provision for securing just and humane conditions of work…” This means that the state must ensure that
every person has a working condition which are just and humane for them. However, since it is part of Part IV,
it cannot be enforced.
Article 43 of the Constitution – This directive directs the State to secure i.a. – conditions for work ensuring a
decent standard of life.
What are the laws in India?
Apart from the above mentioned constitutional provisions and safeguards, there are also a few legislations
which deal with the subject at hand. However, the major law governing the practice of bonded labour is The
Bonded Labour System (Abolition) Act 1976. In addition to this, there are a few more legislations in
consonance with this major law in India such as Contract Labour (Regulation and Abolition) Act 1970,
Minimum Wages Act 1948 and the Inter-State Migrant Workmen (Regulation of Employment and Conditions
of Service) Act, 1979 and even the Indian Penal Code 1860.
The Indian Penal Code recognizes the offence of unlawful compulsory labour and imposes a punishment of
imprisonment for a term extendable to 1 year or with a fine or both.

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The Minimum Wages Act 1948 sets the minimum wage for certain enumerated occupations and requires that
overtime be paid to whoever working beyond the ‘normal working day.’
Similarly, the Bonded Labour System (Abolition) Act 1976 prescribes imprisonment for a term upto 3 years as
well as a fine upto Rs. 2000/-. This punishment is for whoever compelling a person to render their service under
bonded labour and whoever advancing the bonded debt. Every offence under the Act is cognizable and bailable.
What is the consequence of abolition after 1976 under the Act of 1976?
 All the bonded labourers are freed and discharged from all the obligations to render their bonded labour.
 All of the customs, traditions, contracts, agreements or any instruments by virtue of which a person (or any
member of the family) is required to render bonded labour to someone will now be deemed as void.
 Every obligation of a bonded labourer to repay any bonded debt shall be deemed to be extinguished.
 All the decrees for recovery of bonded labour debt which was not fully satisfied shall be deemed as fully
satisfied after the commencement of the Act.
 Every property of a bonded labourer which was removed from his possession or forcible taken from him, shall
be restored to him.
 Every bonded labourer who has been detained in Civil Prison shall be released.
 Freed bonded labourers shall not be evicted from their homestead.
Supreme Court Cases

From the above stated constitutional provisions, it would not be incorrect to say that the State is vested with the
responsibility of securing every citizen with a decent standard of living and ensuring that the prohibited
practices like bonded labour are not practised in India.
Despite these constitutional provisions, can we say that bonded labour does not exist in India? There have been
cases in India even after the enactment of the Act which the Apex Court has dealt very deftly.
In the case of Neerja Chaudhury v. State of Madhya Pradesh, the Supreme Court ruled – “It is the plainest
requirement of Articles 21 and 23 of the Constitution that bonded labourers must be identified and released and
on release, they must be suitably rehabilitated… Any failure of action on the part of the State Government[s] in
implementing the provisions of [the Bonded Labour System (Abolition) Act] would be the clearest violation of
Article 21 and Article 23 of the Constitution.”
As mentioned above, there are a few constitutional provisions that safeguard the system of bonded labour from
being practised. In this case, the Apex Court did very well by relating the issue of bonded labour system with
the person’s fundamental right enshrined in Article 21 of the Constitution and gave a clear thrust to the State to
implement Article 21 and Article 23 of the Constitution.
Also, in the case of People’s Union for Democratic Rights v. Union of India, the Supreme Court of India
delivered the judgement stating – “Where a person provides labour or service to another for remuneration
which is less than minimum wage, the labour or service provided by him clearly falls within the scope and
ambit of the word `forced labour’…”
As seen, the Court has tried to expand the scope of forced labour and protect the rights of citizens time and
again.
Conclusion

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There are several factors which are causing the continuance of this system of forced labour. Often, the usurious
rate of interest is one of the leading factors which contribute to its continuance. Apart from that, faulty system
of adjustment of wages with the amount lent, prevalent ignorance, illiteracy, being socially backward, lack of
debtor’s organisation etc. are all factors contributing to the continuance of bonded labour.
The system of bonded labour is an agreement between two parties; an agreement which in today’s date, stands
void in the eyes of law and is also a punishable offence under numerous legislations of India. Due to the gravity
of this offence, it has also been addressed in numerous international conventions.
Bonded labour is probably the least known form of slavery in today’s date and yet, ironically, it is most widely
performed form of slavery. There have been several initiatives by the National Human Rights Commission to
curb this practice. Apart from that, even the Supreme Court has condemned this practice in India and has given
it an expansive meaning so that it is not practised in any form whatsoever.
But is this enough? No, we must take steps against any system of forced labour and should voice out if a person
is being oppressed due to his status. This is a system which degrades a human to a commodity or an asset. It
should not only be prohibited by law but also be seriously punished. Thus, forced labour, whatever form it may
be, should not be condemned by anyone.
Define the term minimum wage and explain the procedure for
fixation of minimum rates of wages laid down under minimum wages
act 1948
Indian Labour laws- Minimum Wages Act, 1948
Introduction
Labour laws in India include Industrial Dispute Act, 1947; Workmen Compensation Act, 1923; Payment of
Bonus Act, 1965; the Payment of Wages Act,1936; Minimum Wages Act, 1948; Equal Remuneration Act,
1976 etc. The labour laws are subject under Concurrent List in the Constitution of India. Both Central And state
government have the power to make laws upon this subject but some matters are confined to the central
government only. These laws have been made to generate employment opportunities and also to protect and
benefit the workers, including the poor, deprived and underprivileged section of society to establish a healthy
work environment for higher output and productivity. The focus of Government is on promoting welfare
activities and providing social security to the labourers in both organized and unorganized sectors. So, these
purposes can be achieved by enacting labour laws which governs the rules and regulations of service, wages,
compensation, employment of workers. Both Central And State Government have their separate Labour
Ministry which are governed by Central and State labour laws which ensures the working of their subordinate
bodies.
Minimum Wages Act, 1948

History
The concept of minimum wage initially developed in terms of worker’s remuneration in industries, where the
level of wages was much lower as compared to the wages of similar types of labour in other industries. Prior to
the state intervention in the matter of wages, the decision related to the wages was taken by free bargaining
between workmen and employers. But when the enquiry held upon these matters it was revealed that there is
exploitation of women and children in small scale industries. So, to avoid these kinds of malpractices, various

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legislation was introduced. In 1943, Standing Labour Committee and Indian Labour conference constituted a
labour inquiry committee to inquire in matters relating to working conditions and minimum wages of
workers. Ghosh and Nandan, the report which was Submitted by the Standing Labour Committee, became the
basis for Implementing India’s minimum wage policy.
The Minimum Wages Act of 1948 was the first law of India related to the working rights of labourers. The Act
contains detailed procedures which have been set for setting and listing minimum wages in various
industries. Wages were fixed by Appropriate Governments at the central and state levels for various scheduled
employment based on skilled and unskilled labour, agricultural and non-agricultural employment and minimum
wages in different states for a specific time period in India under its domain. Hence, the objective of the
Minimum Wages Act was to provide more rights to the worker class.
The Tripartite Committee on Fair Wages appointed in 1948 defined three different types of wages: a Living
wage, fair wage and minimum wage. Living wage was defined as allowing a person to live a decent life for
himself and his family and the other factor is equal to fair wages should be based on productivity. The
committee accepted that the general wage level was low and stated that there should be a balance built between
employee subsistence and normal productivity. Finally, the minimum wage was not only on the basis of
subsistence but also on the basis of labour efficiency. The purpose of the Act was to protect workers from
labour exploitation which was held in the case of Chandra Bhavan Boarding and Lodging Bangalore v. State of
Mysore and another. Protection from exploitation was to be achieved by providing representation and speedy
compensation to the workers. There was a provision of an Advisory Committee and Advisory Board to give
workers and employers equal representation to reduce unequal bargaining. Thus, the Act provided early
resolution to labour disputes through a summary process that would ensure penalties and then civil prosecution
of the offending party.
Objective
The Minimum Wages Act has been passed for the benefits of workers. It came into existence to secure and for
the welfare of workers in competitive market by providing minimum wages in certain employment. It
empowers the Central And State Government to fix the minimum wage in certain employments to prevent the
exploitation of labourers or unprivileged class of labours. The objectives of are:
To allot Fixed of minimum wages in schedule employment.
Empowers the Government to take steps regarding fixation of wages and to revise them in every five years.
To prevent exploitation of workers.
To provide appointment of Advisory Committee and boards having equal number of representatives of both
employers and workers.
To apply this law to the majority in organized sector.
Application of the Act

The Act applies to the whole India except Jammu and Kashmir. It applies in those sectors which employs 1000
employees in respective sector. It does not apply on the employees who are governed under Central government
or the federal railways, except with the consent of the Central Government.
Salient features of the Act

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The Act provides the fixation of:

 Minimum time rate of wages.
 Minimum piece rate.
 Overtime rate for different occupations or class of work for adults, adolcensents, children and apprentices
 The minimum wages under the Act may contain:
 Basic rate of wages and living allowance.
 Basic rate of wages with or without living allowance cost.
 The Act requires to pay the wages in cash , but it also empowers the Government to sanction the payment of
minimum wages, in kind in particular cases either wholly or partially.
 This also gives authority to Appropriate Government to fix the number of working hours per day, to provide a
weekly holiday and the payment of overtime with regard to any scheduled employment in respect of which the
fixation of minimum rate of wages is done under the Act.
 It also provide appointment of Inspectors and competent authorities to hear and decide the issues arising out of
payment of wages at less than the minimum rate of wages or remuneration of days of rest or of work done on
such days of overtime. It also provides dealing with the complaints made for the violation of the provision of
the Act and also improving the penalties for the offences committed under this Act.
Fixing of minimum rates of wages

Section 3 of Minimum wages Act, 1948 lays down that the Appropriate Government shall be empowered to fix
the minimum rate of wages in a manner which is prescribed in the Act. It shall fix the wages which has to be
paid to the employees employed in employment under Part I and Part II of the schedule.
The appropriate Government shall have the authority to review the minimum rates of wages to fix and revise
the minimum rate if required, at such intervals as may be deemed fit. The intervals must not exceed 5
year. Subsection (1-a) describes that Appropriate Government may abstain from fixing minimum rates of wages
in respect of any scheduled employment in which there are less than one thousand employees are involved in
such employment.
Minimum rates of wages
Section 4 states that any minimum rates of wages fixed or revised by the appropriateGovernment in respect of
scheduled employment in Section 3 may include:
 The basic rate of wages and a special allowance shall be adjusted in such intervals which may be directed by
the Appropriate Government which varies with the cost of living index.
 The basic rate of wages with or without cost of living allowance based on the cost of living index number.
 All inclusive rates is allowing for the basic rate of wages with the cost of living allowance and cash value of
concessional supply of materials.
Procedure of fixing and revising minimum wages

Section 5 deals with the procedure of fixing and revising minimum rates of wages in respect of any scheduled
employment under this Act or revising minimum rates of wages so fixed , the Appropriate Government shall
either:
 Appoint as many committees and Subcommittees as it considered necessary to hold enquiry and advise it in
respect of such fixation and revision, or

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 By notification in the official Gazette, publish its proposal for the information of the person likely to be affected
thereby and specify the date which must not be less than two months from the date of notification of which the
proposals will be taken into consideration.
Advisory board
The Appropriate Government Shall according to Section 7 appoint an Advisory Board for the purpose of :
Coordinating the work of committees and sub-committees, appointed under Section 5; and
Advising the Appropriate Government in the matter of fixation and revision of minimum rates of wages.
Besides the Advisory Board may frame the procedure to be adopted for discharging its functions under Section
5 of the Act
Central Advisory board
Section 8 makes it obligatory upon the Central Government to appoint a Central Advisory Board for the
following purposes:
a) Advising the Central And State Government in the matters of the fixation and revision of minimum rates of
wages and other matters under the Act, and
b) For co-coordinating the work of the Advisory Boards.
Section 8(2) provides that the Central Advisory Board shall consist of :
a) Persons to be nominated by the Central Government representing employers and employees in the scheduled
employment, who shall be equal in number; and
b) Independent persons not exceeding one-third of its total number of members.
The Chairman of the Central Board shall be one of the independent persons and shall be appointed by the
Central Government.
Composition of committees
Section 9 provides that such committees, sub committees and the Advisory Board shall consist of persons to be
nominated by the Appropriate Government. Persons who can be appointed to these committees shall be
representatives of employers and employees in scheduled employments and shall be equal in number. The
person who are independent must not exceed one-third of the total number of members in such bodies shall also
be appointed. The Appropriate Government shall appoint one of such independent persons to be the Chairman.
The expression independent person in this section means a person other than those who are employers and
employees in relation to the scheduled employment in respect of which minimum wages are sought to be fixed.
The fact that the person nominated to function as an independent member of the committee is a Government
official, there is no-bar to such nomination. It does not mean that persons in the employment of Government
were to be excluded. The presence of high Government officials who may have actual working knowledge
about the problems of employers and employees can afford a good deal of guidance and assistance in
formulating the advice which is to be tendered under Section 9 to the appropriate Government. The
appointment of a Labour Commissioner, as a Chairman, who is conversant with the employment conditions and
representing independent interest is valid.

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Payment of minimum rates of wages

Section 12 lays down that in respect of any scheduled employment for which a notification under Section 5 is in
force, the employer shall pay to every employee engaged in a scheduled employment under him, wages at a rate
not less than the minimum rate of wages fixed by such notification for that class of employees in that
employment without any deductions except as may be authorized within such time and subject to such
conditions as may be prescribed. Provisions of Section 12 of this Act should not affect the provisions of
the Payment of Wages Act, 1936.
Fixing hours of normal working day, etc

Section 13(1) provided that, in regard to any scheduled employment minimum rates of wages in respect of
which have been fixed under this Act, the Appropriate Government may:
 Fix the number of hours of work which shall constitute a normal working day, inclusive of one or more
specified intervals.
 Provide for day of rest in every period of seven day which shall be allowed to all the employees or any
specified class of employees and for the payment of remuneration in respect of such a day of rest.
 Provide the payment of work on a rest day must not be less than the overtime rest.
According to Section 13(2), the provisions of sub-section (1) shall, in relation. to the following classes of
employees apply only to such extent and subject as may be prescribed in respective Act:
 Employees engaged on urgent work, or in any. emergency which could not have been foreseen or prevented.
 Employees. engaged in work in the nature of preparatory or complementary work which must necessarily be
carried on outside the limits laid down for the general working in the employment concerned.
 Employees whose employment Is essentially intermittent.
 Employees engaged in a work which could not be carried on except at the time dependant on irregular action of
natural forces.
 Employees involved in any work which for technical reasons has to be completed before the duty.
Maintenance of Register and Records

Every employer has to maintain register regarding these:
 Every employer shall maintain such registers and record containing such particular of employees employed by
employer.
 Update the work performed by employees.
 Wages paid to the employees.
 Maintain the receipts given by the employers.
 Every employer should hold the notices exhibited in such a factory, workshop or place as used for giving work
to employees.
 The appropriate Government can provide for the issue of wage books or wage slips to employees employed in
any scheduled employment as per the rules made under the Act.
Claims
Section 20(1) empowers the Appropriate Government to appoint, by notification in the official Gazette, in
authority to hear and decide for any specified area the following claims:
 Any claims arising out of payment of. less than the minimum rates of wages.

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 Claim in respect of payment of remuneration for days of rest.

 Any. claim in respect of payment of remuneration of work done on such days under clause (b) or (c) or Section
13(1).
 Any claims of wages under overtime rate under Section 14 or employees employes or paid in that area.
Who can be appointed as authority?
The following persons may be appointed an authority to decide any claims aforesaid:
 Any Commissioner tor, Workmen’s Compensation.
 Any officer of Central ‘Government exercising as a Labour Commissioner for any region.
 Any officer of the StateGovernment not below the rank of a Labour Commissioner.
 Any other officer with experience as a Judge of a Civil Court.
Penalties
Section 22 deals with Fines or penalties which cannot be imposed on any employed person in relation to the
omission of such acts by the employer with the authority specified as the previous Government approval or
notice under sub-section (2).
Notices specifying such acts and omissions may be displayed in the prescribed manner in the premises in that
case or place of a person employed like a railway (in a factory) at the appointed place or places. Penalties
cannot be imposed on a person employed unless he is the reason for the fine or following such procedure as
may be prescribed for the imposition of a fine.
The total amount of penalty on any employed person in any pay period should not exceed an amount equal to
3% of the wages payable to him in relation to that pay period. The fine cannot be imposed on any employed
person who is under fifteen years of age.
Conflict of MGNREGA wages rate or minimum wages rate
Mahatma Gandhi National Rural Employment Guarantee Act is a scheme which guarantees employment for
100 days at a rate of wage of INR 120 per day (determined in 2009). These benefits can be secured by any
family, whether they are below the national poverty line or above. The Central Government removed the
MNREGA wage rates from the state’s lowest minimum wage rates in January 2009 when states such as Uttar
Pradesh, Rajasthan and Maharashtra revised and increased their minimum wage rates. This had implications for
the MNREGA scheme directly in the Central Government budget. The move to stop the MGNREGA scheme
created distress in various parts and sections of India as the move was considered to dissolve the Minimum
Wages Act, 1948. MNREGA wage rates were lower than the minimum wage rates of the respective states and
they were in five states below the national level of minimum wage.
Protests erupted across India with disputes regarding corruption, workers’ payments, poor quality of
infrastructure, unclear sources of funds and unintended negative impact on poverty. The recommendations
made by the National Advisory Council headed by Jean Dreze and the Central Employment Guarantee Council
that MGNREGA wage rates should be coordinated with the Minimum Wages Act were rejected by the Central
Government. The Central Government stuck on its decision to freeze MGNREGA wages even after a Supreme
Court order. Eventually, the Prime Minister agreed to accept the recommendations and converted MNREGA
wages into minimum wage rates until an expert committee headed by Pranab Mukherjee produced a
satisfactory index. However, he maintained a clear distinction between MGNREGA wage rates and minimum
wage rates to avoid an increase in the budget on the revision of state-wise minimum rates.
Constitutional validity of the Act

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The Act is not unreasonable.

One of the directive principles of state policy, incorporated in Article 43 of the Constitution of India, speaks of
giving workers living wages, which not only ensures material subsistence, but health and decency are important
to the public interest. While it is true that individual employers may find it difficult to do business on the basis
of the minimum wage prescribed under the Act, it should not be the entire basis and reason for declaring the
law unreasonable.
In the case, Gulmuhommad Tarasaheb a bidi factory by its proprietors Shamrao vs State Of Bombay it was
decided by the court that “The restrictions, though they interfere to some extent with the freedom of trade or
business guaranteed under Article 19(1)(g) of the Constitution, are reasonable and being imposed on the general
interest of the general public, are protected by the terms of clause (6) of the Article 19.”
The determination of the minimum wage is for the preservation of public order, and if there is no minimum
wage set, it will cause employers to be arbitrary and this will undoubtedly lead to a confrontation between the
employer and labour which will create “friction in society”
The case of Uchinoy vs. State of Kerala the judgement includes, “ As regards to the procedure for fixing of the
minimum wages, the ‘Appropriate Government’ has undoubtedly been given very large powers , but it has to
take into consideration, before fixing wages, the advice of the committee if one is appointed on the
representations on proposals made by persons who are likely to be affected thereby. The various provisions
constitute an adequate safeguard against any hasty or capricious decision by the ‘Appropriate Government’. In
suitable cases, the ‘Appropriate Government’ has also been given the power of granting exemptions from the
operations of the Provisions of the Act. There is no provision undoubtedly, for a further review of the decision
of the Appropriate Government, but that itself would not make the provisions of the Act unreasonable”.
Doesn’t violate Article 14 of the Constitution
On a careful examination of the various of the Act and the machinery setup by this Act, Section 3(3)(iv) neither
contravene Article 19(1) of the Constitution nor does it infringe the equal protection clause of the Constitution.
The Courts have also held that the Constitution of the committees and the Advisory Board did not contravene
the statutory provisions in that behalf prescribed by the legislature, this was decided in the case of Bhikusa
Yamasa Kshatriya vs Sangammar Akola Bidi Kamgar Union.
As it was held in the case of “C.B. Boarding & Lodging it added to the mentioned case that ,”nor the reason
that two different procedures are provided for collecting information”.
Notification of fixing different rates of minimum wages for different areas is not discriminatory.
It was stated that where the determination of wage rates and their revision was detected by detailed survey and
investigation and the rates were implemented after considering the representation made by a section of the
employer, it would be difficult To place that notification on the basis of fixed rates of minimum wages for
various sectors, it was based on rational deliberation with the purpose of the Act, and thus violated Article 14.
As the matter came into light by one of the India’s Union Labour and Employment Minister Shri Mallikarjuna .
The variation of minimum wages between the states is due to differences in socio-economic and agro-climatic
conditions, the prices of essential commodities, paying capacity, productivity and local conditions influencing
the wage rate. The regional disparity in minimum wages is also attributed to the fact that both the Central and
the State Governments are the Appropriate Governments to fix, revise and enforce minimum wages in
Scheduled employments in their respective jurisdictions under the Act.
Despite saying nothing in the above statements, it was decided in the case of N.M.Wadia Charitable Hospital
vs. State of Maharashtra that “fixing of Different minimum wages are allowed for different localities under the
Constitution and Indian labour laws, hence the question whether any provision of the Minimum Wages Act is
wrong against the provision of the Constitution.”

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The Constitution of India accepts the responsibility of the state to create an economic system, in which every
citizen gets employment and receives “fair pay”. This made it necessary to set clear criteria for identifying fair
pay. Therefore, in its first session of November 1948, a Central Advisory Council appointed a Tripartite
Committee on fair pay. The Committee consisted of employers, employees and Government representatives.
Their job was to inquire and report on the subject of fair wages of labour.
Sanctity of the Act
It is a clear decision of the Supreme Court in their three rulings held that non-payment of minimum wages leads
to “forced labour” which is prohibited under Article 23 of The Indian Constitution. ‘Forced labour’ can arise in
many ways like hunger and poverty, want and destruction.
In the case of Sanjit Roy Vs. State of Rajasthan, the Supreme Court has decided that ‘The Exemption Act in so
far as it excluded the applicability of the Minimum Wages Act, 1948 to the workmen employed in famine relief
work is “clearly violative” of Article 23. Thus, even public works ostensibly initiated by the Government for
the sole purpose of providing employment are subject to the Minimum Wage Act.
After considering the decision of the Supreme Court, the Andhra High Court set aside the notification
ofGovernment of India which makes the payment of minimum wages mandatory in prevailing states. This is
outlined in a legal opinion provided by Ms. Indira Jaisingh, Additional Solicitor General to the Working Group
of wages of the Central Employment Guarantee Council (CEGC), where she made it clear that Section 6(1) to
allow payment less than minimum wages in MNREGA works will lead to forced labour. Eminent jurists and
lawyers from India have also asked the Government of India to immediately cancel its unConstitutional
notification and ensure that all workers in India are paid the minimum wage.
The Act and the decision are in favour of equality provided under Article 14 of the Constitution and a decision
in the case namely “Engineering Workers Union Vs.Union of India (1994), “The provision under Section
3(2)(a), that the fixed rate of wages fixed or revised in the prescribed employment shall not apply to the
employees during the period, has violated the equality clause of Article 14 and hence this section is void. “.
In view of the Directive Principles of State Policy contained in Article 43 of the Constitution of India, it is
beyond doubt that the labourers receive a living wage which not only ensures physical subsistence, but
maintains health and decency.
Conclusion
India consists of 487 million workers, the second largest after China. India has numerous labour laws for
prohibiting discrimination and child labour. The Act aims to guarantee fair and human conditions of work,
provide social security, minimum wages, right to organize, form trade union and enforce collective bargaining.
It protects the exploitation of those who are poor in majority, who are socially and economically disadvantaged
people. Therefore, it seems necessary for such law not only appears on paper but serve some assurance from
exploitation to gain the trust of people. Governments are bound to comply with the socio-economic laws,
failure of which will be a violation of Article 21 of the Constitution of India. India is considered to be the
highly regulated and most rigid labour laws countries in the world . They need to be flexible for their proper
implementation and should be reviewed from time to time according to the need of labour and economy’s
dynamics.
Explain the salient features of payment of gratuity act 1972

Or
Determination of payment of gratuity.

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Payment of Gratuity Act, 1972

Introduction
The Payment of Gratuity Act is a genre of various statutes like the Minimum Wages Act, Employment and
Social Policy, etc. which is an extension of labour laws and it lays down the minimum benefits to be provided
to the employees. It is a social security enactment providing for the welfare benefits of the employees working
in industries, companies and organisations.
Scope and Objective

The Payment of Gratuity Act,1972 was enacted with sole objective of providing gratuity i.e., a monetary award
given for services rendered to the employees working in the factories, oilfields, mines, plantations, railway
companies, shops or other establishments upon their superannuation (e.g.,old age retirement amount,etc.),
retirement, resignation, death or disablement.
Payment of Gratututy Act, 1972
Continuous Service
According to this Act, the continuous service means an uninterrupted service during the employment period.
This includes the leave due to sickness, accident, lay off, strike, etc. If the interruption is of six months or one
year, then the employee is not entitled to gratuity benefits. He/She should have worked for at least 190 days in
mine or coalfield like establishment(where duration of work is only for 6 months) and 240 days in other areas.
Recently, a question arose before the Supreme Court of India that whether the services provided by the
employees were regularised or not and whether they are entitled to gratuity amount or not in the case of Netram
Sahu v. State of Chhattisgarh. The appellant employee had in all rendered 25 years and 3 months of service (22
years and 1 month as daily wager and 3 years and 2 months as regular work charge employees). However, the
Appellant was not paid the gratuity amount by the State after his retirement because out of the total period of 25
years of his service, he worked 22 years as daily wager and only 3 years as a regular employee, the Supreme
Court of India held that the state should release the gratuity amount of the employee because the Appellant had
actually rendered the service for a period of 25 years. Because the services were regularised, the appellant was
entitled to claim its benefit for a period of 25 years regardless of the post and the capacity on which he worked
for 22 years. This shows that whether the services were regularized or not, is of no significance to the
continuous service to the said Act.
Controlling Authority
The controlling authority shall be appointed by the appropriate government for the proper administration of this
Act. The government may appoint different controlling authority for different areas also.
Payment of Gratuity
An employee is entitled for the payment of gratuity if he/she has rendered five years of continuous service on
his superannuation, retirement, resignation, death, disablement. However, the five years of continuous service is
not mandatory in the case where the termination is due to death or disablement. A retired person is also entitled
to gratuity amount along with his pension. This was held in the case of Allahabad Bank and others v. All India
Allahabad Bank Retired Employees Association, where the honorable court held that pensionary benefits may
include both pension amount and gratuity amount but gratuity amount is a must to be paid to the employees.
In the case of death or disablement by accident or disease, the employer is under obligation to pay the gratuity
amount to the employee’s nominee or the legal heir, as the case may be, irrespective of the number of years
continuous services has been rendered.

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The Act also has a provision for the minors as a legal heir in which the controlling authority has to invest the
amount in such banks or other financial institutions for the benefit of the minor until he/she becomes a major.
Further, the Act provides for the services rendered for at least 6 months where the gratuity amount will be
calculated at the rate of fifteen days wages based on the rate of wages last drawn by the employee concerned,
provided that the amount paid for the overtime work will not be considered.
The amount of gratuity shall not exceed Rs. 10 Lakhs.
An employee holds a right to receive a gratuity for services rendered, however, this right of an employee can be
curtailed in two conditions:
If the termination is due to willful omission or negligence causing loss, or damage, or destruction of property
belonging to the employer.
If the termination is due to riotous or disorderly conduct or constitutes of an offence which is immoral in nature.
Compulsory Insurance
Section 4A of the Act provides for the compulsory insurance to every employer other than those belonging to
the Central Government or State Government through Life Insurance Corporation. However, those employers
are exempted from this provision who have an established and registered gratuity fund in their company. The
government may also make rules for the enforcement of this section as and when necessary. Violation of this
provision by anyone may lead to penalty.
Power to Exempt
The Act provides the power to exempt to the appropriate government by notification to declare any
establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted from gratuity if the
government is of the opinion that the establishment has favourable benefits not less than what this Act has been
providing. The same law applies to any employee or class of employees.
Nomination
According to this Act, it is necessary for the employee to prescribe for the name/names of the nominee soon
after completing one year of service. In case of a family, the nominee should be one among the family members
of the employee and other nominees shall be void. Any alteration or fresh nomination must be conveyed by the
employee to the employer who shall keep the same in his safe custody.
Determination of the Amount of Gratuity

The person entitled to receive the gratuity amount shall send an application in writing to the employer. The
employer shall calculate the gratuity amount and provide notice in writing to the concerned employee and the
controlling authority. The payment should be made within 30 days from the date payable to the employee.
Failure of payment within the prescribed limit will result in payment of simple interests. However, if the
delayed payment is because of the employee then the employer is not entitled to pay the simple interests.
In a landmark case of Y.K. Singla v. Punjab National Bank, the highest court of India, the Supreme Court had
to decide whether an employee whose gratuity has been withheld under Regulation 46 of the Punjab National
Bank (Employees) Pension Regulations is entitled to get interests because of the delay after the completion of
the proceeding? The court held that even though the provisions of the 1995 Regulations, are silent on the issue
of payment of interest, the appellant would be entitled to interest, on account of delayed payment under the
Payment of Gratuity Act for the benefit of the employee.

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The disputes arising between the employee and employer shall be referred to the controlling authority and
proceeding for the resolution presided by the controlling authority shall be considered to be judicial proceeding.
The controlling authority has the authority to enforce the presence of any person and examine his oath,
production of relevant documents and issuing commissions for the examination of witnesses if required. After
due inquiry and giving the parties a reasonable opportunity of being heard, the controlling authority may
determine the matters and pass appropriate orders. The aggrieved party can apply for appeals to the
government.
Inspectors Appointed for the Purpose of this Act and their Powers
The government may appoint an inspector or inspectors who are deemed to be a public servant under Section
21 of Indian Penal Code for the purpose of ascertaining whether any of the provisions of this Act are being
violated or not complied with and take necessary measures to ensure the fulfilment of all the provisions of this
Act.
Recovery of Gratuity
If the employer delays in the payment of gratuity amount under the prescribed time limit, then the controlling
authority shall issue the certificate to the collector on behalf of the aggrieved party and recover the amount
including the compound interest decided by the central government and pay the same to the person. However,
these provisions are under two conditions:
The controlling authority should give the employer a reasonable opportunity to show the cause of such an Act.
The amount of interest to be paid should not exceed the amount of gratuity under this Act.
Penalties
Violation of the provisions of the Act shall entail certain penalties. They are:
For avoiding any payment, if someone makes a false representation or false statement shall be punishable with
imprisonment for 6 months or fine up to Rs. 10,000 or both.
Failure to comply with the provisions of this Act shall be punishable for a minimum of 3 months which may
extend upto 1 year or a fine of Rs. 10,000 which may extend upto 20,000.
Non-payment of gratuity under the Act will lead to offence and the employer shall be punishable with
imprisonment for at least 6 months and which may extend upto 2 years unless the court provides for the
sufficient reason for less payment.
Exemption of Employer from Liability
An employer if charged with any offence punishable under this Act, shall be exempted from any liability, if he
provides sufficient reasons for his conduct of the act or some other person doing that act without his
knowledge. The other person if found guilty will be charged with the same punishment as an employer shall be
charged.
Cognizance of Offences
The court cannot take cognizance of the offences punishable under this Act unless the amount of gratuity to be
paid has not been paid or recovered within 6 months from the expiry of the prescribed time. In such cases, the
government shall authorise the controlling authority to make a complaint where the authority has to make a
complaint to the metropolitan magistrate or judicial magistrate of first class within 15 days of the authorisation.
Protection of action taken in good faith

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The controlling authority shall not be under any legal proceeding if the acts done by him is in good faith or
under any rule or any order.
Protection of Gratuity
No exempted gratuity which is payable under this Act to the employee by the employer shall be liable to the
attachment of any order or decree by any court.
Act to override other enactments
Since the Payment of Gratuity Act is complete in itself, therefore, this Act has an overriding effect on all
provisions, regulations and statutes relating to gratuity. The landmark case for this provision is University Of
Delhi vs Ram Prakash And Ors. which states that any provision which is more beneficial for the employees
should be considered to be having overriding effect.
Power to make rules
The power to make rules in the Payment of Gratuity Act, 1927, shall rest with the appropriate government and
declare by notification.
Validation of amendments made in this Act
The rules made has to be presented before both the houses of the parliament when in session. If both the houses
are in conformity for the annulments or the modifications, then it shall be applicable immediately otherwise
such modifications will have no effect.
Conclusion
The Payment of Gratuity Act, 1927, is a welfare statute provided for the welfare of the employees who are the
backbone of any organisation, company or startups. The gratuity amount encourages the employee to work
efficiently and improve productivity. Recently, by the Payment of Gratuity (Amendment) Act, 2018, the central
government has tried to promote social welfare by providing leverage to the female employees who are on
maternity leave from ‘twelve weeks’ to ‘twenty six weeks’.
However, the scope of this Act is limited to large scale companies or organisations and is not applicable to
organisations where the number of employees is less than 10. Yet, the Act in its entirety is complete and
therefore it overrides other Acts and statues in relation to gratuity. The only need of the hour is to change or
modify the implementation of the Act as this Act is still not followed by many companies or corporations.
Explain the concept of bonus. How is it calucalted.

Introduction
Payment of Bonus Act, 1965 is a statutory liability on the part of the employers of the establishment to pay to
the labour, in accordance with the capital available for the peaceful functioning of the establishment. The
purpose of the Act was to enable the employees to have a say in the profits of the company and to earn a little
more than the minimum wage according to their performance in the organisation.
This Act is applicable throughout India on the factory workers and the persons employed in railways or is in
contract with railways. It also includes skilled or unskilled workers, whether under the express or implied terms
of the contract.
Establishment to include department, undertakings, and branches

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The term “establishment” in this Act is of great importance. It could be divided into Public and Private
establishments. However, if these establishments function as different departments or branches then those
departments and branches would be treated as a single establishment, but in case, different accounts are
prepared for these branches and departments, then they would be treated as different departments or branches
for the sake of computation of profit for that particular accounting year.
Computation of Gross profit

Gross profit is calculated for an accounting year
(i) Banking Company– in accordance with the first schedule.
(ii) In other cases– according to the manner prescribed in the second schedule.
Computation of available surplus
The available surplus is calculated taking into account the gross profit after making adjustments of depreciation,
development allowance, direct taxes of the current accounting year and all the sums specified under Schedule
3 of the Act. This gross profit has to be added to the direct taxes in respect of the gross profit for the preceding
year, deducting from it the direct taxes which has been adjusted to the gross profits that are reduced to the
amount of bonus, for the immediately preceding year.
Sum deductible from gross profits
The following sums need to be deducted from the gross profit:

 Any amount by way of development rebate, investment allowance or the development allowance, which is
deductible from the income according to the income tax.
 Any direct tax which the employer has to pay with respect to his income, profits, and gains during that year.
 Any other sums which are specified by the employer.
 Any amount of depreciation according to the Income Tax Act, 1961 or Agricultural Income Tax law.
 Calculation of direct tax payable by the employer
 The direct taxes are calculated as per the present year’s income of the employer. In case the employer is an
individual or part of the Hindu Undivided Family, then the income which will be considered for the taxes will
be treated as the only income of the employer.
Moreover, if the employer is a religious institute or charitable trust, not barred by Section 32 of the Act and if
its income is partially or fully non-taxable then the income which is non-taxable would be treated as the income
from an institution in which the public is substantially interested.
However the income would not include any loss of the previous year which is carried forward to this year under
any existing law or the depreciation that need to be accounted to the depreciation allowance or any exemption
under Section 84 of the Income Tax Act or any deduction under Section 101(1) of the Income Tax Act, 1961.
Eligibility for bonus
Under the present enactment, every employee is entitled to get a bonus only if he has worked for a minimum
period of 30 days.
The minimum bonus which the employee would get in an accounting year would be 8.33% of the salary or
wages of the employee or ₹ 100 whichever is more. In cases where the age of the employee is less than 15 years

lOMoARcPSD|19820570
at the beginning of the accounting year, this provision would have the same effect except in the place of ₹ 100 it
would be ₹ 60.
The maximum bonus which an employee could get in an accounting year is equal to 20% of the salary or wages
of the employee in the given accounting year. The employer is bound to pay the maximum bonus when the
allocable bonus has exceeded the minimum bonus of that accounting year.
The employee would be disqualified for a bonus if he has been terminated from employment on account of
fraud or theft, misappropriation or sabotage of the establishment’s property or has displayed violent or unruly
behaviour in the premises of the establishment.
Calculation of bonus with respect to certain employees
Where the salary of the employee exceed ₹ 7000 per mensem or minimum wages applicable for such
employment as fixed by the government, whichever is higher, such employee would be entitled for bonus
under Section 10 or Section 11 of the Act as if the salary or wages is ₹ 7000 per mensem or minimum wages
applicable for such employment as fixed by the government whichever is higher.
Proportionate reduction in bonus
If an employee has not worked for any day in the accounting year, his minimum bonus which is ₹ 100 (or ₹60)
or his salary or wages subject to 8.33%, whichever is higher would be reduced proportionately.
Computation of the number of working days
The computation of the working day is an important criterion for the calculation of the bonus. The employee
would be considered working even on the days when he is on leave but is paid salary or wages or he is on a
maternity leave with salary or wages, or he met with an accident while in undertaking the employment or he has
been laid off under an agreement or as permitted under the Industrial Employment Act, 1946 or Industrial
Disputes Act, 1947 or any legal provision which is applicable on the establishment at the given time.
Set on and set off of allocable surplus
The allocable income which is left even after paying the maximum bonus at the rate of 20% on the salary or
wages, would be carried forward to the next year to compensate in case there is any shortage in that year. This
is called set on.
However, the set off is the complete opposite of set on in which the profit falls short to pay even the minimum
bonus at the rate of 8.33%. Then, in this case, the set on of the previous year would be used to pay the bonuses
of the given accounting year.
In calculating the bonus, the amount of set on and set off from the previous accounting year shall be first taken
into consideration. This allocable income would be distributed to the employees in proportion to their salary or
wages in a given accounting year.
Special provisions with respect to certain establishments
In the first five accounting years, after the establishment has started selling and manufacturing goods or
rendering services, it has to pay bonuses only in case of profits.
However, in the sixth, seventh and eighth accounting year, after the establishment has started selling and
manufacturing goods or rendering services, the bonus shall be paid, taking into account the set on or set off.
In the case of the sixth year, the allocable surplus of the fifth and the sixth year would be taking into account
and in the case of the seventh year, the allocable surplus of the sixth and the seventh year is taken into
consideration.

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Adjustments of customary or interim bonus against bonus payable under the Act
If the employer has paid any puja bonus or any other customary bonus or has paid the bonus before the date on
which the bonus becomes payable, then, in that case, the employer has the right to deduct the amount of bonus
from the actual bonus payable, and the employee shall get the remaining amount.
Deduction of certain amounts from bonus payable under the Act
If the employee is found to be guilty of misconduct due to which the establishment has to bear losses then such
an establishment has the right to deduct the amount of loss from the bonus that has to be paid to the employee
in that accounting year and shall be paid the balance if any.
The time limit for payment of bonus
Under the provisions of this Act, the employees must be awarded the bonus within 8 months from the closure of
the accounting year. However, in cases of disputes (under the purview of the Industrial Dispute Act), the bonus
has to be paid within 1 month from the time when the settlement becomes effective.
Application of Act to establishments in the public sector
If any public establishment manufactures or sells any product or renders any services and the income from them
is less than 20% of the gross income of such public establishment then the provisions of this Act shall apply to
it in the same manner as if it is a private establishment. However, except for the above case, the provisions of
this Act would not be applicable to the employees working in the public establishment.
Recovery of bonus due to an employer
In case of any amount of the bonus which is due from an employer, the employee can or any of his assignees or
in case of his death his heirs, have the right to make an application to the government and if it is satisfied with
the veracity of the application then it shall issue a certificate to the collector who shall proceed to recover the
amount in the like manner as if it were an arrear of land revenue.
However, such an application must be within one year after the payment has become due, if the application is
made after the expiry one year and the government is satisfied with the reasons for doing so, then that
application could be entertained.
Reference of disputes under the Act
In case of any dispute between the employee and the employer, that shall be treated as an industrial dispute
within the meaning of Industrial Dispute Act or any other Act which is dedicated to the investigation and
settlement of the disputes of like nature. Such law shall be applied as expressed.
Presumption about the accuracy of balance sheet and profit and loss account of corporations and companies
The disputes falling under the purview of the Industrial Dispute Act or any other law dedicated to the
investigation and settlement of the disputes of like nature would be referred to an arbitrator or a tribunal in
accordance with the above-mentioned laws. If the balance sheet or the profit and loss account of the
corporations or the companies are audited by the Auditor General of India or any other auditor who is
empowered to do so under the Companies Act, then there is no need to file an affidavit to prove its accuracy.
However, if the tribunal or the arbitrator is certain about the inaccuracy of the balance sheet or the profit and
loss account then it can take any steps that it deems necessary to find out the accuracy of the balance sheet and
the profit and loss accounts.

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The trade unions or the employees, being a party to the dispute, can file an application to the authority for any
clarification in the balance sheet or the profit and loss statement. The authority, after satisfying itself about the
need for such clarifications, would further direct the company and corporation to tender the required
clarification to the other party.
Audited accounts of banking companies not to be questioned

In case of the dispute (as per Section 22 of the Act), where one of the party is a banking company and it has
rendered its account, to the authority which is duly audited, the trade union or the employee which is the other
party has no authority to question the accuracy of the accounts. However, it can ask for information to verify
the amount of bonus.
The trade union or the employee cannot ask for any information which the banking company is not obliged to
give as per the banking regulations Act.
Audit of accounts of employers, not being corporations or companies
In case of a dispute between an employee and the other party not being a corporation or company and if it has
tendered an account which is duly audited by an auditor empowered to do so under the Companies Act, 2013
then Section 23 of the Act would be applicable.
If however the accounts are not audited and the said authority thinks that it is necessary to have an audited
account for making a decision, then it can direct the employer to get the accounts audited by the specified time.
If the employer fails to get the accounts audited then, in that case, the authority itself can get the accounts
audited by the auditor and the authority is also entitled to levy punishments in accordance with Section 28 of
this Act. The expenses incurred by the authority, in this case, shall be recoverable from the employer and if the
employer does not pay the expenses then it would be recovered as per Section 21 of the Act.
Maintenance of registers, records, etc
Every employer is responsible to maintain records and register in the manner as it is prescribed in the
provisions of this Act.
Inspectors
The government by way of notification in the official gazette may appoint a person to be an inspector under the
provision of this Act.
The inspector can enter any premises at a reasonable time and ask for an examination of the accounts. The
employer is legally bound to furnish the information asked by the inspector.
Penalty
If any person contravenes a provision of this Act or fails to comply with any of the directions made under this
Act, it would be punishable for imprisonment which shall extend up to 6 months or fine up to ₹ 1000 or both.
Offences by companies
If any offence is committed under the provisions of this Act and the offence is committed by the company, then
everyone who is in charge of the company or responsible for the affairs of this company would be liable and
could be proceeded against. However, if the offence has been committed while taking all due diligence or the
offence so committed was beyond the knowledge of the person, then such person shall not be punishable under
this Act.

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However, if the offence so committed was in the knowledge of the director, manager, secretary or officer of the
company then such person shall be liable and can be punished accordingly.
Cognizance of offences
No court shall take cognisance of the offence committed under this Act except there is a complaint by or under
the authority of the government or by an officer of the government not below the rank of the regional labour
commissioner or labour commissioner in the central and the state government respectively. Moreover, the court
under which such complaints would be filed shall not below the court of presidency magistrate or magistrate of
the first class.
Protection of action taken under the Act

The government and the government officers are protected from any suit or any other legal proceedings against
them for their actions done in good faith in pursuance of the provision of the given Act.
Special provisions with respect to payment of bonus linked with production or productivity
Under the given Act, the procedure for the computation of the bonus has been delineated, however, in certain
circumstances, the payment of the bonus is linked with the productivity and production of the given employee.
Such an arrangement will take place when there is any settlement or agreement between the employer and the
employee in this regard.
Act not to apply to certain classes of employees
Life Insurance Corporation,
The Indian Red Cross Society or any other institution of a like nature,
Universities and other educational institutions,
Institutions (including hospitals, chambers of commerce and social welfare institutions) established not for
purposes of profit,
Employees employed through contractors on building operations,
Employees employed by the Reserve Bank of India,
The Industrial Finance Corporation of India,
Financial Corporations,
the National Bank for Agriculture and Rural Development,
the Unit Trust of India,
the Industrial Development Bank of India,
Employees of inland water transport establishment passing through another country.
Employees and employers not to be precluded from entering into agreements for grant of bonus under a
different formula
It is provided that the employee and the employers can indulge in any agreement or settlement, for the purpose
of bonus, with a different formula. If any law or rule which renders such agreement or settlement to be null and
void, that law or rule would be inconsistent to that effect.
Effect of laws and agreement inconsistent with the Act

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With regards to the Section 31A of the Act, the provisions of this Act shall apply even if there is an
inconsistency with any other law in force at that time or with respect to any agreement or settlement.
Saving
The provisions of this Act would not be applicable to the Coal Mines, Provident Fund and Bonus Schemes Act,
1948.
Power of exemption
If the central government finds it necessary in the public interest to prevent the application of a certain
provision of this Act in certain establishment or class of establishment then it may, through the notification in
the official gazette, specify the time for which the application of those provisions would be ceased for that
particular establishment or class of establishment
Power to make rules

The central government has the power to make rules with regard to the provisions of this Act. The government
can make rules with respect to the accounting year, maintenance of records and registers, working of the
inspectors under this actor any other matter which may be prescribed. The new rule shall be presented before
each house of the parliament while it is in the session and if both the house have agreed that the rule shall be
applicable or shall be applied will have the same effect accordingly. However, any modification or annulment
made shall not be contrary to the rule previously made
Application of certain laws not barred
Certain enactments like the Industrial Dispute Act, 1947 or any other statutory provision dedicated to the
investigation and settlement of the dispute in the distribution of the be applicable in such cases. The
applicability of the given legislation does not in any way bar the relevancy of other statutes.
Conclusion
The Payment of Bonus Act, 1965 seeks to legally regularise the practice of paying bonus by different
establishment. It offers an objective way to calculate the bonus based on profit and productivity. It enables the
employees to earn over and above their minimum wages or salary. This Act provides different procedures for
different establishments like banking companies, public organisations and also for the establishments which are
not a company or a corporation. Apart from the procedure, this Act also defines a robust redressal mechanism.
Write a short note on object and scope of the maternity benefit act
1961
Or
Write a note on maternity leave under the maternity benefit act 1961
Introduction
In India, the percentage of women engaged in employment is a mere 26.97%. This, in turn, means that 3 out of
every 4 women are not employed, or are not actively seeking any employment activities. In order to fuel female

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participation and engage more women in the workforce, the Centre implemented the Maternity Benefit Act,
1961, in order to ignite the representation of women in the employment sector.
The maternity benefits for women
The Maternity Benefit Act, 1961 [‘Act’] which entails various benefits given to pregnant women employees
and workers, was passed as a way to provide relief to women struggling to balance their work and
household/family duties. In a bird’s-eye view of the total number of women employed in a broad spectrum of
occupational sectors, an increase in the number of employed women mandated the passing of a law that protects
and safeguards the rights of women in terms of their maternity health and childcare. In the era preceding
Independence, an array of women were made to work in mines, do strenuous activities, and work night shifts
while being pregnant, which affected their health and caused prenatal complications. The Act was passed
relieving women of such apprehensions and, in turn, establishing concepts such as maternity leaves with wages,
payment of maternity benefits as defined under Section 3(h) of the Act, nursing breaks, rights against the
deduction of wages, etc., thus implementing a drastic improvement to their conditions. The Act was amended in
2017 on the recommendations of the Indian Labour Commission, thereby, giving additional rights to women
regarding maternity health, which surpassed standards of care given by countries in Europe and Asia regarding
maternity health and benefits.
Rights of the women under the Maternity Act
The Act incorporates the rights and benefits that women are entitled to receive while employed, whether
directly or through any agency, for wages in any establishment.
Employee’s rights
Any woman as an employee of the establishment that she is part of, can exercise her rights under the Act, if she
becomes eligible to do so. Section 4 and 5 delve into the rights that women have as solely being an employee of
an organization.
No work during certain periods: Subpart (1) and (2) of Section 4 inter alia provide that the employer cannot
employ any woman, or engage her in any work if already an employee in such organization, within the duration
of 6 [six] weeks immediately after her delivery date/ miscarriage/ medical termination of the pregnancy.
Exemption from strenuous work: If a woman requests to do so, the employer must, for a certain period of
time, exempt her from engaging in any strenuous, arduous, tiring, or lengthy activity that may affect her
wellbeing and maternity health [Section 4(3)]. Such periods include:
the period of one month immediately before the date of her expected delivery;
any period during the said period of six weeks for which the pregnant woman does not avail of leave of absence
under Section 6 of the Act.
Dismissal during absence: No employer can dismiss, discharge, or fire a woman during the period of absence
as taken in accordance with the provisions of the Act. If she is discharged and dismissed at the time wherein she
would have been applicable for the maternity benefit, such benefit would still be applicable to her. If in case
such an employer does deprive women of the maternity benefit, such women have a remedy, by appealing to a
prescribed authority, whose say in the matter is final. [Section 12]
Overriding Power of Contract: If, in an event that any woman, has signed an agreement/contract or received
an arbitral award, etc., and the provisions for maternity benefit in such agreement/contract/award are more
favourable to her than those which she is entitled to receive in accordance with the Act, then she shall be
entitled to the more favourable benefits under the agreement/contract/award. [Section 27]

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Maternity Benefit: Sections 5, 6, and 7 provide for the right that women have to receive maternity benefit
from their employers. In accordance with Section 5(2), a woman can only claim maternity benefit from an
employer after completing a minimum period of 80 [eighty] days in the employment of the establishment from
whom such benefit is being claimed, in the twelve months immediately preceding the date of her expected
delivery. Such benefit is available to any woman working in the employment of the establishment, irrespective
of the contract she has with the establishment.
This was laid down in Municipal Corporation of Delhi vs. Female Workers (Muster Roll) & Anr. In this case,
the Municipal Corporation of Delhi granted maternity benefits only to the regular female workers, and denied it
to female workers on the muster roll, and not regularised. The Court held that in accordance with Articles
14 and 15 of the Constitution “labour to whichever sector it may belong in a particular region and in a particular
industry will be treated on an equal basis.” (Hindustan Antibiotics Ltd. v. Workmen (1967). Thus, it was held
that all women shall be entitled to receive maternity benefits from the establishment.
Payment of Maternity Benefit: Every woman has the right to be paid maternity benefits from her employer at
the rate of her average daily wage, for the entirety of the period wherein she has remained absent from
employment, by taking leave in accordance to the provisions of the Act.
Time Period for Maternity Benefit: The maximum period for which any woman would be eligible to receive
such maternity benefit shall be 26 [twenty-six] weeks, of which only a maximum of 8 [eight] weeks can be
counted before the date of expected delivery. If a woman has 2 or more surviving children, then the benefit
extends to only a period of 12 [twelve] weeks of which a maximum of 6 [six] weeks can be counted preceding
her delivery date. In calculating the number of days viable to receive maternity benefit, the Act also includes
the holidays as being included in such calculation.
The question of the time period of maternity benefit was brought up in B. Shah vs. Presiding Officer Labour
Court, Coimbatore, and Ors. The issue that arose in court was whether Sundays, being wageless holidays,
should be included in the calculation of the maternity benefit period.
It was held by the Supreme Court that the benefit that was conferred by the Maternity Benefit Act, read
with Article 42 of the Indian Constitution, was directed to help women to not only safeguard her maternity
rights but also preserve her effectiveness as an employee and keep her efficiency level stable. She, therefore,
requires any amount that may become payable to her, in lieu of the medical expenses and wellbeing of the
child. The law makes maternity benefit compulsory so as to help women balance their employment and
reproductive roles efficiently. Thus, the court, in accordance with the rule of beneficial construction, stated that
Sundays would be included in the said period.
In case of death: If a woman dies in the duration of the period of maternity leave as mentioned hereinabove,
the maternity benefit applicable to her shall only be calculated till the date of her death. If the woman dies after
giving birth to the child, and thus resulting in the survival of the child, then the entirety of the maternity benefit
would be payable. If the child dies during the period when maternity benefit is applicable to the mother, then
the employer is expected to pay such maternity benefit applicable up to the date of the child’s death. Such
payments after the death of the woman shall be made to the person nominated by the woman in the notice given
under Section 6 (1) of the Act, and, in case there is no such nominee, to her legal representative.
Method to claim maternity benefit: In order to be applicable to claim such maternity benefit as provided for
under this Act, any woman looking to access this right has to submit a notice to her employer in accordance
with the form prescribed by the establishment she is employed with. Such notice should consist of the
following:
The maternity benefit and any other amount she might be entitled to under this Act;
The name of the person to whom such amounts should be paid;

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A confirmation that she will not work in the establishment in the duration of receiving such maternity benefits;
The date of commencement of her absence from employment.
The employer is to pay such maternity benefit to the woman in advance, after the production of evidence from
the woman stating she is pregnant.
Failure to provide notice: The Act gives another right to women that condones the failure to provide such
aforesaid notice. Such failure does not exempt a woman from receiving the benefit but provides that the order
by an inspector after reviewing an application for the payment of the benefit can make the woman eligible for
the payment of maternity benefit.
Wages
As stated in Section 5 of the Act, the women claiming maternity benefits are to be paid their ‘average daily
wages’ in the duration of their absence. Such ‘wages’ constitute varied amounts that are further detailed
under Section 3(n) of the Act. Such wages include the cash allowances/income a woman is entitled to, at the
prevailing time, dearness allowances, house-rent allowances, incentives/bonuses, the concession of food and
other articles provided by the employer.
Right against the deduction of wages: An employer cannot deduct the wage of a woman employee entitled to
maternity benefit by reason of the nature of work assigned to her, breaks taken to nurse her child, or any other
reason attributed to her maternal and post-delivery health/status.
Leaves
The provisions regarding the right to maternity leaves are entailed under Sections 9, 9A, and 10. These
provisions, in turn, provide for the following conditions circling the right to maternity leaves.
Right to leave in case of miscarriage/abortion: A woman who has suffered a miscarriage or underwent the
medical termination of her pregnancy has a right to ask for a paid leave at the rate of maternity benefit, on the
production of evidence of such happening for a period of 6 [six] weeks immediately after the day of such
happening.
Right to Leave in case of a Tubectomy: A woman who has undergone a tubectomy operation has a right to ask
for a paid leave at the rate of maternity benefit, on the production of evidence of such happening, for a period of
2 [two] weeks immediately after the day of such operation.
Right to Leave for illness arising out of pregnancy: A woman suffering from any illness arising out of
pregnancy, delivery, premature birth of a child, miscarriage, medical termination of pregnancy or a tubectomy
shall have the right to ask for a paid leave at the rate of maternity benefit, in addition to the period of authorized
absence already provided under Section 5 and 6, in accordance with the provisions of this Act, on the
production of proof of such illness.
Other benefits
In addition to the benefits and rights as mentioned above, the Act also provides for some miscellaneous benefits
to women, to further help in the safeguarding and well being of her maternity health and status.
Maternity Benefit and Adopted Children: If a woman legally adopts a child below the age of 3 [three] months,
or is a commissioning mother [added as Section 3 (b)(a) by the Maternity Benefit (Amendment) Act, 2017], she
is entitled to maternity benefit for a period of 12 [twelve] weeks from the date the child is handed over to her.
[Section 5(4)]

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Work From Home: The women entitled to maternity benefit under this Act have the provision of undertaking
the work of the establishment at their own homes if the nature of work allows them to do so and the employer
consents to the same. [Section 5(5)]
Nursing Breaks: After the period of maternity benefit has concluded when the woman commences her
employment again, in addition to the break timings given to her, she has a right to receive two breaks in the
course of the day that are prescribed for the nursing of her child, for a set period of time until her child reaches
the age of 15 [fifteen] months. [Section 11]
Crèche facility: In furtherance of the rights provided, the women also have access to the provision of a crèche
facility four times a day including the break timings given to her, if the employment establishment falls within
the category that mandates the provision of a crèche facility. [Section 11 A]
Medical Bonus: A woman entitled to maternity benefit from an employer, is also entitled to a medical bonus
from such an employer consisting of Rs. 1000/- [Rupees One Thousand Only] in an event that no prenatal or
postnatal care is provided by such an employer for free. [Section 8]
Applicability of the Act
The applicability of the Act can be understood in a two-part sense, i.e. the applicability to an establishment, and
the applicability to a woman claiming such benefit under the Act. The establishments which are bound to abide
by the guidelines of the Act are:
 Mines;
 Factories;
 Plantations;
 Establishments displaying acrobatic and other performances;
 Shops and/or establishments as defined under the Shops and Establishments Act of the state;
 Any such establishments having 10 [ten] or more people who are, or were employed within it in the preceding
12 [twelve] months;
 Any other establishment, as may be notified by the Central/State Government to be included under the ambit,
vide an official gazette.
All such establishments are required to follow its duties as laid down under the Act. These establishments thus
fall under the ambit of ‘applicability’ vis-a-vis the provisions of the Act. It, however, does not apply to any
other factory, wherein other maternity benefit laws apply, such as the Employees State Insurance Act, 1948.
Another feature that corresponds with the applicability of the Act, is the category of women who can claim
such benefits under the Act. In accordance with Section 5(2) of the Act, any woman who has been employed
for a continuous period of 80 [eighty] days in the 12 [twelve] months immediately preceding her date of
delivery with the establishment from which she is seeking such benefit, is entitled to receive the benefit. Any
and all women falling under this category are provisioned to claim maternity benefit from their employer as
under this Act, irrespective of the type of contract she may have with such establishment.
Additionally, Sections 5A and 5B of the Act also lay down certain inclusive provisions for women seeking this
benefit. Section 5A provides for the continuance of maternity benefit to a woman irrespective of the application
of the Employees State Insurance Act, 1948 until she becomes qualified to be entitled to maternity benefit as
stipulated under Section 50 of the 1948 Act.
Section 5B states that a woman is applicable to receive benefits under the act if employed with a factory to
which the 1948 Act applies, whose wages per month exceed the provisions under Section 2(9)b of the 1948
Act, and who fulfils any other condition mentioned in that Act.
The obligation of the States

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The foundations of duties and responsibilities of the government are enshrined in the Constitution of India. It
holds paramount importance and is regarded as the backbone of any other legislation prevailing in our country
today.
Article 42 of the constitution provides for the just and humane conditions of work and maternity relief. It states
that the State shall make provisions for securing just and humane conditions of work and for maternity relief.
Thus, the responsibility of ensuring maternity rights to the citizens lies in the hands of the State. As a general
practice, the Centre issues central legislation with powers given to the States to amend and constitute rules for
the same in the respective territories, and such is the practice for the Maternity Benefit Act, 1961 as well.
Therefore, the Government of India, as well as the State Governments, becomes liable and responsible to
protect maternity rights of women in the country. In order to affect the employment of women in myriad sectors
of employment in periods before and after childbirth, the Parliament passed the Maternity Benefit Act, 1961.
This was done with an objective to reduce gender inequality, discrimination, unfair practices, and other
maladies that existed due to gender disparity in the country. It is the State’s obligation to manoeuvre the laws in
a manner so as to improve the conditions of the citizens and protect their health and well being. In pursuance of
this duty, the State passed the Act, to regulate the participation of women in the working sector.
Before the Act, the Bombay Government passed the Maternity Benefit Act of 1929 in a response to the Trade
Union movement, which compelled them to make security laws for women labourers to improve their working
conditions during pregnancy.
The increasing understanding of the obligation of the State in assuring maternity benefits was established in the
case of . Mrs. Bharti Gupta vs. Rail India Technical and Economical Services Ltd. [RITES] and others In this
case, the Court held that the nature and provisions of benefits for women during and after childbirth had been
laid down in the Act. The Act is a social and benevolent law and because of its objective, it had to include the
establishments of RITES as falling within its purview. RITES is an instrument of the State, as laid down
by Article 12 of the Constitution and is thus, under the ambit of Part 3 of the Constitution. Thus, RITES had to
follow the provisions of the Act and did not have any leverage to be exempted from such duties.
The concepts of maternity rights and gender equality, as we see today, have stemmed from various international
human rights legislation and treaties such as the International Covenant on Economic, Social and Cultural
Rights of 1996. The International Labour Organization on many occasions has highlighted the importance of
extending maternity protection and promoting a balance in the work and personal life of the women. In
response to the 1975 seating and the 2004 seating of the ILO, the Indian Parliament amended the preexisting
Maternity Benefit Act in 2017, to make it more inclusive and at par with international standards.
Compliance requirements for employers
In light of the provisions laid down in the Act, the employer has certain duties and compliances to accord to,
regarding the maintenance of the wellbeing of the establishment as well as of the women workers employed
therein. The employer must follow the prescribed conditions in order to do so. These include:
Challenges for employers
In contrast to situations in other nations, India is considered to be disadvantageous on the part of the employers’
obligations. This is because the prevailing legislation on maternity benefits, that is the Maternity Benefit Act,
1961, puts the burden of payment of wages, to the women claiming maternity benefit, completely on the
employers. In most other countries, such financial burden is shared by the employer and the state, however,
this, unfortunately, is not the method India decided to adopt. This indirectly leads to the reduced employment of
women in many establishments. This transverse reaction stems from the fact that since companies and
establishments have to pay for maternity benefit themselves without any state aid, the profit to loss ratio would
indicate that hiring male counterparts would ineffectually be more feasible, than making extra payments for

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women under such Act. Thus, this challenge to employers is a challenge for women seeking employment as
well.
In an attempt to improve such conditions, the government, as stated here below, has drafted a scheme called
the Maternity Leave Incentive Scheme, 2018, in order to assist the employers in providing maternity benefit to
the women workers.
Additionally, many SMEs (Small and Medium Enterprises) cannot practically afford a six to nine-week leave
that they are obligated to grant their employees, as this would adversely affect the growth of the company; and
hiring cheap temporary workers to fill in the vacancy caused due to availing maternity benefits also becomes
unaffordable.
The employers could also face the challenge of women misusing the provisions of the Act for their own benefit,
by availing the maternity benefits and leaving the said employment immediately after the period for maternity
benefit has passed, thus, causing a great waste of resources for the employer.
Further, many difficulties in establishing creches for women and their children also arise due to matching
standards of quality of the creche, as well as establishing one in a convenient location.
These, along with myriad other moral and legal challenges faced by the employer, make it difficult to comply
with and be legally correct in carrying out the provisions of this Act.
Alternative laws that provide maternity benefits in India
In addition to the provisions of the Maternity Benefits Act, 1861, there are many legislations that contain
provisions regarding maternity benefit and health. These legislations, though not centrally focused on
prescribing rights to women during and after pregnancy, contain particular sections that give an insight into the
same in the context of the legislation.
The Employees State Insurance Act, 1948, is one such legislation that acts in correspondence with the
Maternity Benefits Act and helps in safeguarding the health of women. This Act, in Section 46 (1) (b) provides
for periodical payments given to a woman employee insured under this Act in an event of miscarriage, sickness,
operations, etc. arising out of pregnancy/premature birth/miscarriage, etc. Section 56(3) of this Act provides for
medical benefits to a woman who is qualified to claim maternity benefit from the employer. It also provides for
the establishment of organizations by the State and Central Government that provide certain benefits to
employees in case of sickness or maternity. Similar to the Maternity Benefit Act, this Act also provides for the
right against dismissal, punishment, and discharge of an employee by the employer during the period of her
absence from employment due to illness arising from pregnancy, thus, rendering the employee unfit to work.
The Maternity Benefit (Mines And Circus) Rules, 1961 is another prevailing legislation that is an offshoot of
the Maternity Benefit Act and prescribes various procedures and compliances to be followed by employers of
such establishments while dealing with maternity health. It provides for the establishment of creches, maternity
leave, muster rolls, breaks for nursing a child, payment of maternity benefit, etc. It is mainly directed, as its
namesake, to the women working in mines or circuses.
Another legislation that consists of a maternity safeguarding clause is the Central Civil Services Rules of 1972.
These rules, which are applicable to government servants working in the Civil Service, consist of a structured
and detailed clause on Maternity Leave. It provides for maternity leave of 135 days to the female government
servants, in the duration of which, she is paid the leave salary which is equal to the pay while working in the
service. It also provides for a maternity leave not exceeding 45 days in an event of a miscarriage.
The Mines Act, 1952 provides for a maternity leave clause for any number of days not exceeding twelve weeks,
for women who take part in the management, control, supervision or direction of a mine or of any part thereof.

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The Factories Act, 1948 has a similar provision regarding maternity leave, which provides for maternity leave
for any number of days not exceeding twelve weeks, for women who work in a factory. Further, the Act also
contains a provision that makes it compulsory for the Factories that employ more than 30 [thirty] women, to
maintain a suitable room for the use by the children of such women, who are under the age of 6 [six] years.
Further, the Plantations Labour Act, 1951 also provides for the facilities of maternity benefits and creches for
women who work on plantation fields. It states that any plantation having employed more than 50 [fifty]
women, is mandated to provide a facility for the children of such women to use until the age of 6 [six] years.
The act entails that every woman is entitled to obtain a maternity allowance by the employer at the prescribed
rate.
Additionally, in an attempt to tackle the above-mentioned problem, the Government, in 2018, proposed a
Scheme called the Maternity Leave Incentive Scheme, 2018 which provided for the reimbursement of 7 [seven]
week’s wages to the employers who employ women workers and provide maternity benefit to them for 26
weeks of paid leave. However, this scheme is still currently in the draft stage and requires due consultation and
approval to become a full-fledged plan to increase the percentage of women workers and employees in India.
Conclusion
The Maternity Benefit Act, 1961 as well as the Amendment of 2017, have proved to be a boon, as well as a
bane to the country and its economy. However, the Government has played its part in matching international
standards of maternity rights via these legislations so that the gender neutrality and efficiency of work is
maintained in the country. It properly safeguards the rights of women and maternity and provides for the basic
foundations of health and safety.
Scope and Nature of Maternity Benefit Laws

Maternity as the name suggests is the benefit that every women is entitled to get as a payment which is payable
to her by the employer in her actual absence during the course of employment.
Women all across the world have lots of responsibilities and have to go through certain things like pregnancy,
childhood, menstruation etc. It may happen that she has to quit her job to take care of other things. Maternity
Benefit Laws are thus made to help such women so that they can continue to work and reap the benefits which
in turn will create a harmonious environment in the organisation.
The first maternity benefit legislation was made by the State of Bombay in the year 1929. After this several
other states made similar laws and soon a need was felt to make a central legislation for women and then
‘Maternity Benefit Act 1961’ came into existence so that divergence between the different Acts can be reduced.
Maternity Benefit Act 2017
The main objective of the Act is regulating the employment of women employees in different establishments
for a fixed period and provide maternity and different other benefits. The Act is an initiative taken by the
government for the security of the women and in a way encouraging the women to work and to help her in
taking care of her child. In 2016 a bill was passed in Rajya Sabha and the bill was passed and the ‘Maternity
Benefit Act 2017 came into effect from 1st April 2017 which further proved to be a boon for the mothers.
Applicability of the Act:
The Act is applicable to all the organisations like –factories, mines, and any private or governmental
organisation.
Salient Features of the Act:

lOMoARcPSD|19820570
 -The Act applies to all the women who are employed either directly or indirectly (i.e- by a contractor or an
agent), or is working in full term employment or in contractual basis.
 -Section 12 of the Act makes it unlawful if any employer dismisses any women employer during her pregnancy.
In the case of any grave misconduct by the employee he can take the mandatory steps as per the guidelines and
policies of the company.
 -In the previous Act the period of maternity leave was for 12 weeks but after the amendment the period of the
maternity leave is increased from12 weeks to 26 weeks for 2 children however for women having more than 2
children the leave is for 12 weeks only.
 -For those women who adopts a child below the age of 3 months the maternity leave is for 12 weeks the date of
which shall be counted from the day the child is handed to the women.
 -Women may or may not choose to work from home (in private organisations) depending upon the consent of
the employer and the nature of the work after the expiry of 26 weeks.
– It is mandatory as per the act for the establishments having more than 50 employees to have crèches within a
defined distance. The amended act allows a women- employee to visit the crèches 4 times a day that includes
the regular rest intervals.
 -Under the Act it is obligatory for the employer to inform the employees the maternity benefit rules and laws in
writing at the time of their appointment.
Objectives and need for Maternity Benefit Laws in India
The most foundational purpose of the maternity benefit laws is protecting the dignity of motherhood and
Mothers, safeguard her and her child’s health. Motherhood is the most beautiful time in any women’s life and
it’s her right to enjoy it and give proper care to her child having no worries related to security of her job.
Further the ratio of working women in the urban sector has increased remarkably and there is a need to make a
gender friendly labour market providing a propitious and an encouraging environment and thus it was natural to
protect the women in her maternity seeing a large number of female employees.
Maternity Benefit Laws under Indian Constitution

There are several laws under the constitution of India that safeguard and protect the rights of women. Under
Article 14 –equality of the sex is stipulated, whereas Article 15 provides for equality in employment, Article
39(a) mandates equal pay for equal work Article 42 stipulates- right to just and humane conditions of work and
maternity relief which is a DPSP and under the same under Article 46 it is stated that state should make rules
for improvement in employment opportunities and conditions of the working women.
Article 15(3) gives the government the power to make special laws for the women and under which it passed
the ‘Maternity benefit Act’.
Apart from this ‘Indian Labour Organisation’ have made certain standards on maternity benefits where the
fundamental concern is to provide social and economical security to the women employees and ensure that no
risk is posed to her and her child in any way.
The stance of the Indian Judiciary related to the maternity Laws in India
Municipal Corporation of Delhi v. Female Workers[1]: It was held by the court that it is unlawful to impel a
women employee to do heavy work during her advanced pregnancy as it can be deleterious for both the foetus
and the mother.

lOMoARcPSD|19820570
Air India v. Nergesh Meerza[2] : Under the termination and retirement policy of Air India Corporation (AIC)
one of the mandatory conditions was that – on the first pregnancy the women employee will be terminated
which was held to be violative of Article 14,15 and 16 of the Constitution Of India.
Shah vs. Presiding Officer, Labour Court, Coimbatore and others[3]: The question before the court was that
whether Sundays are to be included in calculating the maternity benefits of the women. The court held that- In
order to enable the woman worker to subsist during this period and to preserve her health, the law makes a
provision for maternity benefit so that the woman can play her productive and reproductive roles efficiently.
Conclusion
Indian Government along with Indian Judiciary has always worked for the furtherance of the women and proper
analysis of the Maternity Benefit Act and judicial sensitivity toward this notion, it is quite clear that the Act is
an appendage for the women. The Act has increased the reliance of the women both towards the organisation
they are working for and the government. The act has provided a social and economical palisade for women
employees and has created a stable environment for the women so that they can contribute their best for the
organisation.
The Unorganized Workers Social Security Act, 2008

and
Social Security Coverage Scheme for Workers in Unorganised Sector
The unorganised worker's social security Act was enacted by the parliament of India in 2008 by president's
assent. It is implemented by the Ministry of Labour and Employment. worker's sector. Recently, the honorary
Supreme Court dismissed the PIL filed by Shri R Subramanian which was seeking directions to compensate the
financial loss of the workers employed in the unorganised sector.
The persistence of Covid-19 pandemic has expedited the misery of India's working population. It came to light
that more than 90% of the Indian population is employed in the unorganised sector and they neither have access
to social security nor minimum wages despite them contributing an approximate of 60% to the Indian GDP.
Salient Features:
The Act mentions about constitution of a National Social Security board and State Social Security Board which
will give recommendation for formulation of suitable schemes which later shall be monitored and reviewed.
In Rajan Kudumbathil v. Union of India on 12 November 2009, the Kerala government was directed to
immediately constitute the State Social Security Board as it was not established post the enactment of the act.
The UWSS Act has laid down provisions wherein it registers and issues a smart identity card with a unique
number to the unorganised sector worker.
The Record Keeping function will be performed by the District Administration.
The Workers Facilitation Centres will disseminate the available data on the social security schemes, facilitate
the filing-processing and forwarding of the registration application with the assistance of the district
administrator.
The act in its Schedule I has laid down a list of the Social Security Schemes to ensure that the workers of the
unorganised sector meet their basic needs and that they have a decent standard of living.
Objective And Purpose

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The UWSS Act 2008 was implemented with the objective to ensure social security, good wellbeing and to
protect the unorganised sector workers from several contingencies.
The importance of the act came to light in 2012 in National Domestic Workers Welf. v. State of Jharkhand &
Ors. wherein it was highlighted that the current labour laws in force such as the Industrial Disputes Act, the
Minimum Wages Act, Maternity Benefit Act, the Workmen's Compensation Act, Factories Act, etc. are
applicable to a restricted number of workers.
In India, the social security laws have derived their basis from Part IV of the Directive Principles of State
Policy (DPSP). The Social security and Labour Laws form a part of the concurrent list therefore both, the
Central and the State Governments are approved to make laws for the same. It is the obligation of the state to
lay down provisions which grant social security to organised as well as unorganised sector workers.
Another purpose of the act is to ensure that the needs of the workers employed in the unorganised sector are
addressed as it contributes to the sustainable economic growth in the country. Apart from Social security the
needs include availability of credit, upskilling, use of modern technology, infrastructure and the requirement of
a contractual obligation between the employer and employee.
Progress Made Under IT
The Social Security Schemes and Acts mentioned in the Schedule I and II of the UWSS, 2008 are run by
several different ministries. For instance, the Medical care is been taken care by the Ministry of Health, Food
Security by Ministry for Agriculture etc. The budget allocation for the same is done by different ministries
creating a problem of multipliciy of benefits availed and suggests a formation of a ministry of social security.
The National Social Assistance Programme which comprises of Indira Gandhi National Old Age Pension
Scheme under the UWSS has 4,02,56,984 people as beneficiaries as of 14th June 2020. As an extension to the
act, a National Social Security Fund (NSSF) was constituted for unorganised workers in 2010 with an initial
funding of INR 1,000 crore.
Several schemes under the Act depend on State-level nodal agencies for functioning of its Schemes and in
times like the national health crisis these labour laws and policies not only provide social security for the
workers but help the economy from deteriorating. Recently, the state of Uttar Pradesh promulgated Uttar
Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020 which shall suspend a majority of
the acts and schemes under UWSS for a period of three years.
The Covid-19 pandemic has highlighted the need for additional legal safeguards and welfare measures for the
unorganised workers especially the migrant workers and domestic workers as they are in dire need of social
security more than ever.
Critical Analysis
The UWSS Act is a significant initiative taken by the government to address and provide remedy to the plight
of the workers engaged in unorganised sector for the first time, the act has also enlisted several welfare schemes
which can be availed by the workers.
There are certain inadequacies in the act which complicates the implementation process at the same time
infringes rights of the unorganised workers. The scope of the definition of unorganised workers is narrow
and excludes forest and fish workers, domestic workers, cross-border provisional workers, and aanganwadi
workers etc.
It is important to note that, the act has not defined the term social security and hence it is not justiciable. The
act has laid down several social security schemes but has not included them within the body of the act.

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The Social Security (Minimum Standards) Convention, 1952 established a globally accepted minimum standard
social security benefit which covers the nine branches of social security namely medical care, sickness,
unemployment, old-age, employment injury, family, maternity, invalidity and survivor's benefit. Yet, the
UWSS fails to provide for any minimum social security to its unorganised workers.
The act places the unorganised workers in an odd position as, if they fail to make the deposits in time, they are
disentitled from the benefits without considering the contingencies that come along which renders the process
of contribution complicated.
Recommendations:
The term social Security should be explicitly defined to make it enforceable in court of law.
Currently, the act is only applicable to unorganised workers who are below poverty line and hence, should be
made inclusive of all the unorganised workers which will fulfil the purpose of the act.
A chapter on dispute resolution needs should be appended to the Act to make sure workers can file complaints
about violations and seek remedy.
An amendment should be made to add minimum social security benefits for the unorganised workers based
on ILO standards.
Create a comprehensive database of unorganised workers working in sectors not covered by the act to provide
them visibility.
Conclusion
Social security is an important part of the development at all the levels of the existent society and leads it
towards a better social and economic growth. To enable these workers to gain maximum benefit from the
schemes an effort must be to make them aware of their rights.
The lack of proper implementation and standard checks have made the schemes to remain on the papers as
evidently, In the light of the current pandemic and suspension of labour laws in few states poses a grave
question, whether India acknowledges the importance of the unorganised workers in the country?
Social Security Coverage Scheme for Workers in Unorganised Sector

In order to provide social security benefits to the workers in the unorganised sector, the Government has
enacted the Unorganised Workers Social Security Act, 2008. The 2008 Act stipulates formulation of suitable
welfare schemes for unorganised workers on matters relating to: (i) life and disability cover, (ii) health and
maternity benefits, (iii) old age protection and (iv) any other benefit as may be determined by the Central
Government through the National Social Security Board. Various Schemes, formulated by the Government to
provide social security cover to the unorganized worker, listed in the Schedule I of the above Act are as under:
i. Indira Gandhi National Old Age Pension Scheme. (Ministry of Rural Development.
ii. National Family Benefit Scheme. (Ministry of Rural Development)
iii. Janani Suraksha Yojana. (Ministry of Health and Family Welfare)
iv. Handloom Weavers Comprehensive Welfare Scheme. (Ministry of Textiles)
v. Handicraft Artisans Comprehensive Welfare Scheme. (Ministry of Textiles)
vi. Pension to Master Craft Persons. (Ministry of Textiles)

lOMoARcPSD|19820570
vii. National Scheme for Welfare of Fishermen and Training and Extension. (Department of Animal
Husbandry, Dairying & Fisheries)
viii. Aam Admi Bima Yojana. (Department of Financial Services)
ix. Rashtriya Swasthya Bima Yojana. (Ministry of Health and Family Welfare)
Central Government has also launched following three schemes for all citizen targeting unorganised workers to
provide them comprehensive social security.
(i) Atal Pension Yojna (APY): Under the APY, subscribers would receive a fixed minimum pension at the age
of 60 years, depending on their contributions, which itself would vary on the age of joining the APY. The
Central Government would also co-contribute 50 percent of the total contribution or Rs. 1000 per annum,
whichever is lower, to each eligible subscriber account, for a period of 5 years, who are not members of any
statutory social security scheme and who are not Income Tax payers. The pension would also be available to
the spouse on the death of the subscriber and thereafter, the pension corpus would be returned to the nominee.
The minimum age of joining APY is 18 years and maximum age is 40 years. The benefit of fixed minimum
pension would be guaranteed by the Government.
(ii) Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY): Under PMJJBY, life insurance of Rs. 2 lakh would
be available on the payment of premium of Rs. 330 per annum by the subscribers. The PMJJBY will be made
available to people in the age group of 18 to 50 years having a bank account from where the premium would be
collected through the facility of "auto-debit".
(iii) Pradhan Mantri Suraksha Bima Yojana (PMSBY): Under PMSBY, the risk coverage will be Rs. 2 lakh for
accidental death and full disability and Rs. 1 lakh for partial disability on the payment of premium of Rs. 12 per
annum. The Scheme will be available to people in the age group 18 to 70 years with a bank account, from
where the premium would be collected through the facility of "auto-debit".
explain the registration procedure and authorities under the

karnataka shops and commercial establishments act 1961
Karnataka Shop and Establishment Act

In July 2020, the Karnataka Government announced that they are thinking about the removal of surprise
inspections under 12 Acts, including the Shops & Establishment Act of 1965. This is said to improve the ‘ease
of doing business’ rankings for the State.
The Karnataka Shops And Commercial Establishments Act, 1961 is one of the state labour laws enforced by the
Department of Labour. This act is valid all over the state of Karnataka from the date notified by the state
government. This act provides regulations and other guidelines for work and employment in Shops and
Commercial establishments inside the state of Karnataka.
According to this act, the “Commercial Establishment” means
Commercial
Trading
Banking
Insurance Company

lOMoARcPSD|19820570
An Establishment or Administrative services.

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A person where he/she is employed mainly in office work, a hotel, a restaurant, boarding, a café or other
refreshment places
A theatre or any other public amusement or entertainment.
6. The State government can also declare a specific space as a commercial establishment for this Act.
Shops mean any premises or location where the business or trade is carried on where service is provided to the
consumers. It includes offices, storerooms, godowns, warehouses, etc. It can be on the same premises or
otherwise. But, this explanation does not include a commercial or shop attached to the factory where the
employee comes under the scope of the Factories Act, 1948.
What are all the business exempt from the shop & establishment Act?
As per the act, the “exemption” means the businesses which have nothing to do with this act.
Offices of Central and State Government or local authorities.
Postal, railway, Telephone, water transport services
Offices of a banking Company
Railway Dining Cars
A place to treatment or care for the sick or people who is mentally unfit.
Establishment of Food Corporation of India (FCI)
Offices of a banking
Offices of legal and medical operations where only three persons are employed
A shop mainly in medicines, surgical requisites or appliances.
A person directly engaged in a clerk job responsible for the despatch of goods.
What are the features of the Karnataka Shop and Commercial Establishment Act?
Issuing Registration Certificate
Renewal of Registration Certificate
Facilitating changes in Registration Certificate
Issuing Duplicate Registration Certificate
Annual Returns Filing

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Exemption or relief weekly holidays

Exemption for Women working in Night Shifts
Appeal submission
Duties of the owner:
 Registration of the organisation
 Weekly Holiday for the Establishment
 Fixing Working Hours
 Employment and Regulation
 Records Management
How to register an establishment under this act?
For registration and renewal of establishment under the Karnataka Shop and Commercial Establishment Act,
1961 entrepreneurs can avail the e-Karmika online facility.
In case of a new registration, you should register the organisation within 30 days from the date of
commencement of business.
In case of an existing organisation, you should register the organisation from the date on which this Act comes
into force.
The registration certificate is valid for five years and it should be renewed before the expiry date by paying fees
and in the manner prescribed.
The business owner should display the registration certificate in a place where everyone can see inside the
office premises.
If you plan to change any information, such change should be notified in the prescribed format to the
registration authority.
After closing the business establishment, the owner should submit the registration certificate to the authority.
What are the documents to be uploaded?
Address proof on the owner (Aadhaar Card/ Voter ID/ Driving License)
Incorporation Certificate/MoA (In case of Private Limited Company)
Self-attested letter from the Owner/Authorisation letter from the Authority.
Payment Receipt or Challan
Registration form signed by the owner
What is the fee for new registration?

No. of Employees
Fee (Rupees)
Nil Employee300One to Nine600Ten to Nineteen4000Twenty to Forty-nine10000Fifty to Ninety-
nine20000Hundred to Two hundred and fifty40000Two hundred and Fifty-one to Five hundred50000Five
hundred and one to One thousand70000Above a thousand75000

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Weekly Holiday for the Establishment

An establishment must remain closed for one day of the week. The owner of the establishment has to fix such a
day at the beginning of the year and the same should be informed to the registration authority.
However, certain establishments are exempted from weekly holidays. Here are some of the establishments.
Clubs, Hotels, School and College Hostels, Residential schools.
Hair Cutting Saloon
Copper, Container, Manufacturing Firms.
Selling Petrol and Diesel
Daily Newspaper & Weekly Magazines
Cinema halls, theatres and other recreational centres.
Medicine and Medical Equipment sellers
Organisations performing research/study on infectious diseases.
Working hours:
Any Business or establishment within the prescribed working hours. In other words, any establishment shall not
before and after the following hours.
Bangalore City – Before 6 am and Night after 9 pm.
Other location: Before 8 am and after 8 pm.
Prohibition and Exemption:

Children under 14 years of age are prohibited to work in any establishment. No women shall be required or
allowed to work in any establishment after 8 PM.
However, Information Technology/ Business Technology organisation can get permission to work after 8 PM
(Form R).
Employment and Regulation:

Any employee who has completed 180 days or 6 months of service cannot be dismissed without prior notice.
Working time-period of any employee should not exceed 48 hours and 58 hours including extra working hours.
Employee attendance should be maintained in Form T.
Salary should be credited to every employee before the 7th of next month.
Forms & Records:

Form A:
Registration, Renewal and Report Change of information of establishment.

lOMoARcPSD|19820570
Form P:
Fixing different days for weekly holidays.
Form F & Form H:
Maintaining employee leave a record (Form F) and share a copy to the employee (Form H)
Form T:
Employee daily attendance.
Form R:
Permission to allow women to work after 8 PM.
Form U:
Annual Report for the year ending with 31st December shall be submitted before 31st January of next year.
The act will be implemented under the supervision of labour commissioner – Chief Inspector.
Inspector and Senior Inspector – Inspector and department level authorities are called as Additional Inspector.
The government PDF of Shop and Establishment is available below. You can check this out.
When can the taxpayer claim refund from electronic cash ledger?
If the taxpayer has paid excess amount by mistake, they can request for refund from the electronic cash
ledger.Understand the procedure for GST registration and GST returns here.
How do banks assess the working capital requirements of borrowers?
Methods such as cash flow mismatch are used by banks to assess the capital requirements that the borrowers
seek from banks.More on Income Tax Return Filing.
What does the Aadhaar number have to do with filing of tax returns?
Aadhar card is mandatory for tax payers in India. Non-resident Indians, people aged more than 80 years are
exempt from providing Aadhar card when applying for PAN card. Learn more about Aadhar Certification.
What is the purpose of ISO standards?

ISO international standards checks whether the services and products remain reliable, good quality and safe.
There are certain tools that helps in increasing productivity. More info on ISO Registration in india.
What is the benefit of ngo?
An NGO has a major role in resolving the issues of the underprivileged by using financial assistance received
from the Government or foreign bodies.More about NGO Registration.
Write a note on objectives of special economic zones act 2005.
The special economic zones act 2005 has been enacted with the major objective of

lOMoARcPSD|19820570
 generation of additional economic activity

 Promotion of exports of Good's and services
 Promotion of investment from domestic
 and foreign sources.
 Creation of employment opportunities
 Development of infrastructure facilities
Recently, Kakinada Special Economic Zone (KSEZ) was in the news when GMR Infrastructure, India's largest
and amongst the world's top 5 private airport developers who own and operate Delhi and Hyderabad
International Airports sold its entire stake of 51% in KSEZ to Aurobindo Realty and Infrastructure for INR
2,719 crore. But what exactly a Special Economic Zone is? How is it different from the rest of the economic
areas? By whom is it developed and how? Let's answer all these questions in this article.
What is a Special Economic Zone?
Special Economic Zones (SEZs) can be defined as a special jurisdiction within a country made to facilitate
foreign trade. As per Section 53(1) of the Special Economic Zones Act, 2005 (SEZ Act), SEZs are deemed as
foreign jurisdictions for the purpose of trade operations and taxes. Within SEZs, businesses are provided heavy
tax exemptions, advanced infrastructure, minimal regulations and lucrative fiscal packages to boost the
country's economy through foreign trade. Many countries including Russia, the Philippines, Jordan, Poland,
North Korea, China have SEZs.
The concept of SEZs in India was officially introduced on 1st April 2000 as a part of the Export-Import Policy
and was cemented by the commencement of the Special Economic Zones Act, 2005. Before this Act, the SEZ
policy was implemented via amendments in various statutes and executive orders, which was causing an
alarming hindrance in the path of Foreign Direct Investment (FDI) to India. Presently, SEZs are governed by
the SEZ Authority under the Department of Commerce, Ministry of Trade and Commerce.
Why are SEZs developed?

The core objectives of the Special Economic Zones Act, 2005 (primary statute concerning the formation and
governance of SEZs) are as follow:
 Driving more economic activities;
 To further the export of commodities;
 To draw investments from foreign and domestic investors;
 To generate employment in the country;
For infrastructural development.

SEZs provide a conducive environment to local enterprises for business growth and expansion in order to make
them compete on an international scale. Further, SEZs can be set up even by the private sector and foreign
investors, making them drivers of public-private partnership to bolster infrastructure in the country.
SEZs can do wonders for an economy. For example: According to the World Bank, in recent years in China,
SEZs have made a total 22% contribution to the GDP, 45% of total national FDI and 60% of exports. These
Chinese SEZs have generated approximately 30M+ jobs, catapulted participating farmers' income by 30% and
bolstered industrialization, urbanization, modernization and even agriculture in China.

lOMoARcPSD|19820570
Who all can develop SEZs?

According to Section 3 of the SEZ Act private entities/individuals, State Governments and Central Government
can establish SEZs either jointly or separately for manufacturing, providing services or for establishing Free
Trade and Warehousing Zone (FTWZs) that are defined in Section 2(n) of the SEZ Act.
What are the incentives and facilities offered in SEZs?
Businesses are provided multiple incentives and facilities under SEZs to attract domestic as well as foreign
investments there.
These incentives/facilities are as follow:
Benefits to SEZs' Developers
 Under Section 80-IAB of the Income Tax Act, 1961(ITA), there is a complete exemption from Income Tax on
the income generated via the business by the developers of the SEZs (for a span of 10 years out of the first 15
years from the date of notification of that SEZ by the Central Government
 Under Section 115JB of ITA no Minimum Alternate Tax (MAT);
 Imports and domestic procurement of goods for the purpose SEZ businesses are zero-rated under Integrated
Good and Services Tax Act, 2017;
 A Single Window Clearance system for all the required permissions from the Central and the State government;
 No custom tax(s) and excise duties for SEZs' development for particular operations to be approved by the
Board of Approval (BOA) of Special Economic Zones;
 Under Section 115-O of ITA, SEZ businesses are exempted from the Dividend Distribution Tax.
 Direct coordination with customs officer to ease and expedite the trade processes;
Benefits to businesses situated in SEZ

Under Section 10AA of the Income Tax Act, 1961 for the first five years there is zero Income Tax on export
income for SEZ businesses. Thereafter, merely 50% for the subsequent five years and 50% of the ploughed
back export profit for subsequent five years.
Under the aforementioned Section, losses that are related to business and are mentioned under the heading of
Profits and Gains from Businesses/Profession and Income from Capital Gains can be carried forward to
subsequent years.
Exempted from the Securities Transaction Tax applicable on taxable securities that are entered into by a non-
resident via IFSC.
Under Section 54GA of the ITA Capital gains tax on the transfer of assets is exempted for the shifting of
industrial units from an urban area to SEZ on the satisfaction of certain conditions.
Under Section 10(15)(viii) of the ITA, interest income is exempted from tax for non-residents/not ordinarily
residents if the deposit is made in an Off-Shore Banking Units(OBUs) situated in SEZs.
Legal Procedure for Setting-up of SEZs in India

Legal Criteria for the Approval of SEZ
The objectives for the establishment of SEZs as aforementioned under the heading of Why SEZs are
established? are pretty much the criteria for the approval of a SEZs project. In addition, the SEZ project shall in
no manner subvert the sovereignty, integrity and security of India.

lOMoARcPSD|19820570
Under Section 9(2) of the SEZ Act, BOA has the complete authority to reject, approve or modify the proposal
for SEZs' establishment. Further, it also has the power to revoke the approval after the applicant has been heard
on the same.
The legal procedure to establish SEZs in India by private entities including individuals, co-operative societies,
companies, partnerships, etc is as follow:
Step 1: Submission of proposal
If an organisation has identified the location where it wishes to set up an SEZ, it has to make a proposal either
to the State's government or directly to the BOA using From-A prescribed under the Special Economic Zones
Rules, 2006 (SEZs Rules).
Step 2: Approval from State and BOA
If the proposal is first made to the State government, then it is forwarded to BOA along with its
recommendation within 45 days from the date of proposal. But if the proposal is directly made to the BOA,
then the developer needs to get the concurrence of the State Government within six months from BOA's
approval date.
Step 3: Obtaining the Letter of Approval
Thereafter, the proposal is forwarded to the Central Government, which after its satisfaction grants the Letter of
Approval to the concerned person. This letter has a validity period of three years within which the developer
has to implement the proposal and kick off the operations. Though, BOA has the power to grant a two years
sanction depending upon the merit of the developer.
Step 4: Submission of land documents
After obtaining the LOA, the developer is required to submit the documentation of land acquired for the
purpose of the establishment of SEZ. SEZs & FTWZs other than those for IT/ITES, Biotech or Health (except
hospitals) services, must have a contiguous land area of 50ha or more. But in the case of Meghalaya, Nagaland,
Manipur, Assam Tripura, Himachal Pradesh, Arunachal Pradesh, Uttarakhand, Sikkim, Goa, Mizoram or in a
UT, the limit is 25ha or more.
For SEZs in Biotech, Health (except hospitals) and IT/ITES services, there is no minimum land area threshold
but the minimum built-up processing-area thresholds are as per the provisions laid down in SEZ (3rd
Amendment) Rules, 2019 notified vide 17th December 2019 notification.
After the concerned Development Commissioner has inspected the area and submitted his report on the
contiguity and vacancy of land certifying the same, the area is notified as SEZ by the Central Government.
Step 5: Complete Project's Details Submission
Once the green signal is received for the land, the developer has to provide complete details about the project in
order to commence the authorized operations, apply for the exemptions, concessions and drawbacks.
Step 6: Demarcation of Land
Afterwards, the SEZ land is divided into processing and non-processing areas. The processing areas are then
allotted to individual businesses who wish to conduct business under that SEZ by the developer. The developer
is not allowed to sell the non-processing areas but can utilise such areas by allotting them for business or
societal causes.
Note: The developer or co-developer needs to have a minimum of 26% of the equity in the entity proposing to
create the business, residential or recreational facilities within SEZ.

lOMoARcPSD|19820570
Compliances for the establishment of SEZs

The developer has to sign a bond-cum-legal undertaking with respect to the proper utilisation of goods. Further,
he also has to sign an undertaking saying that he will be compliant with the Area Planning laws, Pollution
Control laws, Industrial & Labour laws and Sewerage Disposal laws.
SEZ Authority is also obligated to undertake the development, operations and management of SEZ including
but not limited to infrastructural advancement and promotion of exports and other supervisory work.
Resolution of Dispute in SEZs
As per Section 42 of the SEZ Act, any dispute between developers, entrepreneurs or developer-entrepreneur
dispute shall be referred to arbitration.
But such disputes can only be referred for arbitration unless before the date when a court has been designated to
resolve them. These courts are designated under Section 23(1) of the SEZ Act and have the power to try civil
suits and suits of the notified offences. An appeal under Section 24 of the SEZ Act can be filed against the
Order(s) of the designated court(s) before the High Court within 60 days from the date of the verdict.
Conclusion
There are 262 operational SEZs in India. Since 2006 (when SEZs rules were official) 426 SEZs have been
formally approved out of which 358 have been notified. A total of 20L jobs have been generated by these SEZs
since 2006. In 2015-16, these SEZs made exports worth INR 4,67,337 (USD 71.38B), while in 2016-2017, it
increased by 12.05% to 5,23,637
(USD 78.07B).
Define contribution examine the law relating to contribution by the

employer and employees under the employees provident fund act
1952
The Employee Provident Funds, 1952
Introduction
The Employee Provident Funds, 1952 is a beneficial legislation enacted for the betterment of the future of
industrial worker:
On his retirement.
For his dependents in case of death of employment.
This Act is enacted as a social security measure which falls under the ground of “retirement benefit”, the object
of this Act is to inculcate, non withdrawable financial benefit, the sum is payable normally on retirement or on
the death of the employee. Administration of the scheme given under this act is done by the central board, state
board, and regional committee, a chief executive committee appointed and constituted by the central
government.
Central board _ Section 5A

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Executive committee – Section 5AA

State board – Section 5B
Regional committee
Boards under the Act
Constitution and position
Central board: Section 5
Central board – Central board is created by official gazette notification given by the Central government.
Functions
Section 6 and Section 6C discussions how the central board should use their fund vested on them.
Duty of the central board is to send an annual report to the Central government, of its work and activities.
The central government will submit a report to the comptroller and Auditor General of India. Comments of
Central board is laid down before parliament.
Constitution of the following a person as a member:

Chairman and a vice-chairman appointed by the central government
The central Provident fund commissioner, ex-official
Among Central government officials (not more than five-person)
A representative of states (not more than 50)
Representing the employer of the establishment (10 people)
Representing the employee of the establishment (10 people)
Executive committee: Section 5AA

State Board: section 5 B
The central government, after consulting with any of the states constitute the state board in the following state,
as provided for in the scheme. Constitution of the state board is done by the notification in the official gazette.
Central government from time to time prescribes the duties to be performed by the state board and the powers
exercised by the state government. The following scheme will provide the terms condition subject to which a
member of state board is appointed, time place and procedure for conducting meetings etc. Every board of
trustee constituted under this section is a Body Corporate, being a body corporate, it has perpetual succession, a
common seal and right to sue or get sued in its name.
Regional committee
Until state board is constituted, the Central Government may set up Regional Committee, which is under the
control of Central Government, it works under the advice of the following person:
Central board, when matters referred to it from time to time.

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All the matter regarding “administration of the Scheme”, such as the progress of recovery of PF, contribution
and other charges, speedy disposal of prosecution, settlement of claims and sanctions of advances.
Appointment of central fund commissioner

The central government shall appoint Central provident fund commissioner, deputy provident commissioner
and regional provident fund commissioner by discharging his duty they will assist central provident fund
commissioner.
Chief executive officer is appointed by the central provident fund commissioner.
Central Board will appoint other officers, employees for the efficient administration of various schemes.
EPF Features
The employer is under a statutory obligation to deduct a specified percentage of the contribution from the
employee’s salary for provident fund. The employer should also contribute such percentage for provident fund.
An employee who gets more than 15,000 is eligible for getting the provident fund.
This Act contains nearly 20 sections and four schedules. Section 7E, F, G, H, M, N is omitted, section 20 is
repealed.
Applicability of the Act – section 1 of this Act deals with the application of the Act. This is applicable to
“every factory engaged in any industry specified in schedule I”.
Every establishment in which 20 or more are employed.
Any establishment notified by the central government.
Any class of such establishment employing 20 or more. This Act is applicable to home workers held in the case
Mangalore Gandhi Beedi workers V. U.O.I and P.M.Patel V. U.O.I.
This Act is applied when the establishment satisfies the two tests, namely:
Whether there is an establishment is a ‘factory’?
Whether 20 or more person is employed which is held in the case Andhra University V. Regional Provident
Fund Commissioner.
Some workers will not come under this Act. They are Casual, or temporary workers can’t be considered as
employee held in the case Bikar cold storage co. Ltd. V. Regional PF Commissioner.
Non-applicability of the Act
The Act does not apply to the following things. Any establishment registered under the co-operative society
Act, 1912. Any state-related co-operative society employed less than 50 people and working without the aid of
power. From the date on which the establishment is set up, where the establishment as:
Only 50 or more persons, after the expiry of 3 years.
Only 20 or more, but less than 50 people before the expiry of 5 years, which is held in the case V.K. Bhatt V.
A.C.B & T. Mfg. Co.
Central Government also has the power to exempt any class of establishment, on such condition mentioned in
the notification:
 On the ground of financial position.

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 Other circumstances of the case which is held in the case Mohammed Ali V. U.O.I.
 Eligibility For getting EPF- Any person is eligible, who is employed:
 For work of the establishment.
 Through contractor.
 Connection with work of establishment is eligible for the benefit of the Act.
This Act was constitutionally challenged on the ground that it is:
Discriminative in nature.
Article 14 is violated because it is applied only to a particular class of industry, but the Supreme Court said that
it doesn’t violate article 14, it is certain, classification of a certain class of industry falls in reasonable
classification which is valid.
Schemes under EPF

Employees provident fund scheme 1952
Section 5 gives wholly unrestricted unguided direction to the central government to frame a scheme, and it
appears on the other hand that the Act is full of carefully laid down principles to guide the central government
which is held in the case R.P.F. Commr. V. L.R.F Works, A.I.R 1962 Punj. 507
When they say that this scheme has retrospective effect, the employer cannot be asked to pay the employees
contribution for the period antecedent to the notification applying the scheme because he has no right to deduct
the same for the future wages payable to the employee. The payment of employee contribution by the employer
with the corresponding right to deduct the same from the wages of the employees could be only for the current
period during which the employer also has to pay his contribution, which is held in the case District exhibitors
Assn.,Muzaffarnagar & others V. Union of India (1991) II LLJ 115 (SC).
They were re-employment by the petitioner on a temporary basis. It was held that the employer cannot be asked
to pay a contribution in respect of re-employed employees on a temporary basis which is held in the case
Bombay printers LTD. & Others V. Union of India and others (1992)I LLJ 816 (BOM).
The fund shall be administered by the central board constituted under section 5A of the Act. The scheme shall
take effect either prospectively or retrospectively.
Employees deposit linked insurance scheme, 1976

The scheme Established the purpose of providing life insurance benefits to the employees. The benefit under
the scheme is to provide the incentive to the members to save more in the Provident fund account. The benefit
under this scheme is linked to the amount of accumulation in the Provident fund account of the member. All the
members of the employee’s Provident Fund Scheme are covered as members of the employee’s deposit linked
insurance scheme also.
Employee’s family pension scheme, 1995

For the benefit of providing family pension and life insurance benefit. Following benefit package is:
Pension for life to the member, on retirement and invalidation
To the member of the family upon the death of the members.

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Facility for capital return ( corpus accretion) on an option formula basis

Commutation if pension up to 1/3 Rd of pension amount.
Retention of membership of the scheme till attaining the age of 68
Retirement pension under the new scheme will be payable on fulfilling minimum 10 years eligible service and
on attaining the age of 58 years.
EPF Form
Form 20 EPF settlements in case of employee’s death.
This form is submitted by the beneficiary if the employee is departed, to the benefit of EPF, EPS and EDLI.
The amount is paid directly to the beneficiary account, or they will send through money order.
Form 31 Withdrawal of EPF

This form is submitted for partial withdrawals, used for purposes of house renovation, availing loans, for
education, medical treatment etc. eligible criteria will vary depending on the purpose of withdrawal.
Form 10C EPS withdrawal

This form is used to claim the withdrawal benefit:
Before completing 10 years of service.
Has attained the age of 58 years but not completed 10 years of service.
This form is also used by the family member of the employee in the following circumstances like:
Employee departed (after attaining the age of 58 years but has not completed 10 years of service).
An employee who is above 50 years old but less than 58 years, who don’t wish to opt for a reduced pension can
also use Form 10C.
Form 5 Registration form for new employees for EPS and EPF
This form is used by employers for enrolling new employees for this scheme. The new employee will give his
personal details. This form helps the EPFO to register individuals who are joining the first time for this scheme.
The form should be submitted by the employer before the 15th of every month, the official website of the EPFO
provides the form where we can download.
Form 5(IF) Employees’ Deposit Linked Insurance (EDLI) scheme claim form
An employee who is contributing to the EPF scheme is already eligible for the employee linked insurance
scheme. In case an employee is departed, this form helps the beneficiary to get the benefit. By submitting this
form, the beneficiary is eligible to get insurance benefit of rs.4.5 lakhs and bonus benefit of rs.1.5 lakh
(maximum benefit of Rs. 6 Lakh).
Form 10D to apply for a pension after retirement
This form is used for withdrawal of pension on a monthly basis after retirement.

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Form 11 Automatic transfer of EPF

The employee must fill this form while joining a new company. This is a self-declaration regarding the transfer
of EPF, details regarding last EPF account must be filled in this form.
Form 14 LIC Policy

This form is submitted to pay the premium amount for the LIC policy; this form should be submitted to EPF
Commissioner after getting an attestation from the employer.
Form 15 G to save Tax Deducted at Source (TDS) for any interest that is generated from EPF
This form is submitted to use to online withdrawal of EPF amount; this form is used to withdraw the EPF
amount (above 50,000) before completing 5 years of service. Senior citizens must submit 15H for this facility.
Form 19 Settlement of EPF

This form is submitted by the member who is not having UAN number after 2014.
Form 2 Nominations for the EPF and Employees’ Pension Scheme (EPS)
The employee who is under the scheme shall submit this Form 2 for nomination. The nominated person will get
the EPF fund amount if the employee (EPF member) is departed.
UAN- Universal Account Number
Universal account number (UAN) is number given to an employee by the Ministry of Employment and Labour
under the government of India, who is maintaining PF account. It used to know information or track
information done by his employer regarding his provided fund (PF). When an employee joined in the new
organisation, he was assigned with new PF account, after UAN came into existence, the member of the
assemble (employee) all his PF account associated with multiple Ids of difference organization at one place. So
through UAN, difficulties faced by the employee when he/she joins the new organization is overcome, with
UAN they can track the activities if there are any payment issues.
Uses of UAN
It is a unique number given to an employee, which is independent of employers.
UAN is used to link all the PF account when the employee is switching his company.
An employer can authenticate his employee by verifying this number and KYC documents.
EPF passbook can be verified by sending SMS EPFOHO UAN ENG TO 7738299899 from the mobile number
which is registered under employee provident fund organization.
An employee can check his deposit done by his employer through online using UAN number, and you can also
get a monthly update regarding your deposit done by the employer.
Transparency Through UAN

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Through UAN employee can check the employer is depositing his PF amount periodically, by registering on
EPF member Portal using his UAN.
The employee would be able to find out whether his employer is deducted or hold back his PF.
EPF Calculation and Example

Contribution for EPF is two parts, one is by the employee, and the other is by the employer.
Contribution by the employee is, including basic wage and dearness allowance is -12%.
Contribution on the part of the employer is-

8.33% (for Employees Pension Scheme Account of Employee)
3.67 % (for Employee Provident Fund Account of Employee)
0.50% ( for Employees Deposit Linked Insurance Account of Employee)
0.50% ( is Employer has to pay an additional charge for an administrative account- minimum 500 rupees and if
there is no contribution by the employer that month, an employer must pay rupees 75)
The interest rate for every month is 8.65%, which may differ every year (interest rate is calculated every month,
but it is deposited in the account at the end of the financial year)
Example
For example, the employee is getting a basic salary and dearness allowances at rupees 15, 000.
Employee’s contribution to EPF is 12% of 15,000 that is 1,800.
Employer’s contribution to EPF is 8.33 % of 15,000 that is 1,250.
Employers contribution for EPF is subtracted from employees contribution that is (1800-1250=550)
Total EPF contribution every month is 1800+550=2,350
Interest for every month is 8.65%/12= 0.7083% (4,700)
Online EPF Submission
Online claim process reduces the time from 20 days to 10 days, follow the below-given steps for EPF online
submission.
Activate UAN.
Make sure mobile no. used to activate the UAN, is in use.
By seeding your adhaar details, e-KYC take place through a onetime password- Aadhaar authority will send.
Enter your bank account details, where the claim amount will appear.
You should enter (PAN) permanent account number if you’re not an EPFO member for at least 5 years.
EPFO Claim status

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EPF claim status can be checked through online or offline,

The status of withdrawal/transfer claim submitted.
Online- Member can check the online claim status by visiting the UAN portal or through visiting the official
website of EPFO.
Offline- Any of the PF office by accessing the EPFO website can track the status of the claim made.
Conclusion
Employees Provident Fund Scheme,1952 came to India through Para 83 of the government of India notification
in 2008, October 1. Employee Pension Scheme.1995 was created by a special provision in respect of
international workers as mentioned in para 43-A. After 2014 it became easily accessible through EPFO website
portal. This Act is created mainly for the purpose of encouraging saving during the period of employment,
where they use it in their old age, sickness or for any emergency purposes.
This study material by

Rajendra Prasad K M
3rd year BA, LLB student
Government law college kolar 563102

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Labour law – 2 Questions with answers

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Relevancy of Part IV (Article 36 – 51) on Labor Laws

Constitutional provisions of labour law.

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Constitutional Provisions Regarding labor Laws

Article 39 of the Constitution

The state shall take the necessary steps in securing:-

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explain the salient features of the bonded labour system (abolition)

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What is bonded labour?

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Salient Features of the Act

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Supreme Court Cases

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Minimum Wages Act, 1948

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Application of the Act

Salient features of the Act

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The Act provides the fixation of:

Fixing of minimum rates of wages

Procedure of fixing and revising minimum wages

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Payment of minimum rates of wages

Fixing hours of normal working day, etc

Maintenance of Register and Records

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 Claim in respect of payment of remuneration for days of rest.

Constitutional validity of the Act

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The Act is not unreasonable.

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Explain the salient features of payment of gratuity act 1972

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Payment of Gratuity Act, 1972

Scope and Objective

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Determination of the Amount of Gratuity

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Explain the concept of bonus. How is it calucalted.

Establishment to include department, undertakings, and branches

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Computation of Gross profit

Sum deductible from gross profits

The following sums need to be deducted from the gross profit:

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Audited accounts of banking companies not to be questioned

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Protection of action taken under the Act

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Power to make rules

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