DHENKANAL LAW COLLEGE, DHENKANAL

STUDY MATERIAL
PAPER – I (LABOUR LAW-II)

UNIT – I: THE CODE ON SOCIAL SECURITY (I)

1.1 Definitions; Social Security Organisations

The Code on Social Security, 2020 is a comprehensive legislation that consolidates and
rationalizes various social security laws in India. It seeks to extend social security benefits to
all workers, including those in the unorganized and gig economy sectors, ensuring a broad-
based framework for worker welfare.

Definitions
The Code provides definitions for several key terms that structure its implementation:

1. Employee: Any person employed in an establishment to perform any skilled, semi-

skilled, or unskilled work for hire or reward.
2. Employer: A person or entity employing workers and responsible for their
remuneration, safety, and social security benefits.
3. Establishment: Any place where industry, trade, business, or occupation is carried
out and where workers are employed.
4. Gig Worker: A person engaged in work outside the traditional employer-employee
relationship, typically in on-demand services or platforms.
5. Platform Worker: A worker who provides services through a digital or online
platform.
6. Social Security: Measures ensuring access to healthcare, pensions, disability
insurance, maternity benefits, and other welfare provisions.
7. Unorganized Worker: A worker in the unorganized sector who is not covered under
formal employment benefits.

Social Security Organizations

The Code establishes several organizations and governing bodies to administer social security
schemes effectively:

1. Central Board of Trustees (CBT)

 Manages the Employees' Provident Fund (EPF) and pension schemes.

 Ensures financial sustainability and regulatory compliance.

2. Employees' State Insurance Corporation (ESIC)

 Administers health insurance and cash benefits for employees.

 Provides medical facilities, sickness, maternity, and disability benefits.

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3. National Social Security Board (NSSB) for Unorganized Workers

 Formulates policies for gig workers, platform workers, and unorganized sector
employees.
 Oversees implementation of welfare schemes.

4. State Unorganized Workers’ Social Security Boards

 Implements welfare schemes at the state level.

 Works with central agencies to ensure outreach and benefit distribution.

5. Other Key Authorities

 Inspector-cum-Facilitators: Enforce compliance and assist in grievance redressal.

 Grievance Redressal Mechanisms: Platforms for resolving disputes related to social
security benefits.

1.2 Employee’s Provident Fund; Employees State Insurance Corporation

The Employees' Provident Fund (EPF) and Employees' State Insurance Corporation
(ESIC) are two of India's most significant social security schemes aimed at ensuring financial
stability and healthcare benefits for employees. These schemes provide retirement benefits,
medical insurance, and social security support to workers in the organized sector.

The Employees' Provident Fund and Employees' State Insurance Corporation

play a crucial role in securing financial stability and healthcare for Indian workers. Through
mandatory contributions and extensive benefits, these schemes ensure comprehensive social
security, promoting economic well-being and workforce stability. Landmark cases have
reinforced their wide applicability, protecting the rights of employees across industries.

Employees' Provident Fund (EPF)

The Employees' Provident Fund and Miscellaneous Provisions Act, 1952, governs the
EPF scheme. It is managed by the Employees' Provident Fund Organization (EPFO)
under the Ministry of Labour and Employment.

Key Features of EPF

1. Mandatory Contribution: Both employer and employee contribute 12% of the

employee’s basic salary and dearness allowance.
2. Interest on EPF Balance: The EPFO declares interest annually on contributions,
providing a secure investment.
3. Withdrawal Provisions: Employees can withdraw the balance under specific
conditions such as retirement, medical emergencies, or unemployment.
4. Pension Scheme (EPS): A part of the employer’s contribution goes toward the
Employees’ Pension Scheme (EPS), ensuring lifelong financial security after
retirement.
5. Employees’ Deposit Linked Insurance (EDLI): Provides life insurance cover linked
to EPF accounts.

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Case Law: Regional Provident Fund Commissioner v. S.D. College,
Hoshiarpur (1997)

 The Supreme Court ruled that educational institutions employing 20 or more

employees are covered under the EPF Act, reinforcing the act’s broad applicability.

Employees' State Insurance Corporation (ESIC)

The Employees’ State Insurance Act, 1948, established the Employees’ State Insurance
Corporation (ESIC), which provides comprehensive healthcare and cash benefits to
employees and their families.

Key Features of ESIC

1. Medical Benefits: Provides medical care to employees and their dependents from the
first day of employment.
2. Sickness Benefits: Employees receive cash compensation during periods of certified
medical leave.
3. Maternity Benefits: Female employees receive paid maternity leave under ESIC
provisions.
4. Disability Benefits: Employees suffering from workplace injuries or disabilities
receive financial compensation.
5. Dependents' Benefits: Provides financial aid to dependents in case of an employee’s
death due to workplace hazards.

Case Law: ESIC v. Francis De Costa (1993)

 The Supreme Court held that employees injured during the course of employment,
even outside their workplace, are eligible for ESIC benefits, broadening the scheme’s
protective scope.

1.3 Gratuity; Maternity Benefit

Gratuity and maternity benefits are crucial aspects of employee welfare and social
security in India. These benefits ensure financial stability and support for employees during
significant life events such as retirement and childbirth. The Payment of Gratuity Act, 1972,
and the Maternity Benefit Act, 1961, provide the legal framework for these benefits.

Gratuity

The Payment of Gratuity Act, 1972, ensures a lump sum payment to employees as a token
of appreciation for their long-term service. It applies to employees in factories, mines,
plantations, ports, railway companies, shops, and establishments with ten or more employees.

Key Features of Gratuity

1. Eligibility: Employees must have completed at least five years of continuous service.
2. Calculation Formula: Gratuity = (Last drawn salary × 15 × number of years of
service) / 26.

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 3. Maximum Limit: The maximum gratuity payable is ₹20 lakhs as per the latest
amendments.
4. Premature Gratuity: In cases of death or disability, the five-year minimum service
rule does not apply.
5. Tax Exemption: Gratuity received by government employees is fully tax-exempt,
while for non-government employees, it is exempt up to ₹20 lakhs.

Case Law: Sundaram v. Madras Fertilizers Ltd. (2004)

 The Supreme Court ruled that delay in gratuity payment attracts interest, ensuring
timely disbursement of benefits.

Maternity Benefit
The Maternity Benefit Act, 1961, provides women employees with paid maternity leave and
safeguards their employment during pregnancy and childbirth.

Key Features of Maternity Benefit

1. Eligibility: Female employees working in establishments with ten or more employees

are entitled to maternity benefits.
2. Paid Leave Duration: Extended from 12 weeks to 26 weeks for women with less
than two surviving children.
3. Medical Bonus: Additional financial support provided for medical expenses related
to childbirth.
4. Work from Home Provision: Women may opt for work-from-home arrangements if
the nature of their work allows.
5. Crèche Facility: Establishments with 50 or more employees must provide crèche
facilities for childcare.

Case Law: Municipal Corporation of Delhi v. Female Workers (2000)

 The Supreme Court ruled that contractual female workers are also entitled to
maternity benefits, expanding the Act’s coverage.

Gratuity and maternity benefits are essential components of social security for employees in
India. Gratuity rewards employees for their long-term service, while maternity benefits
support women employees during pregnancy and childcare. Legislative provisions and
landmark judgments have strengthened these rights, ensuring financial stability and
promoting employee welfare in workplaces across the country.

1.3 Employee’s Compensation

Employee compensation is a critical aspect of labour laws aimed at protecting workers from
financial hardships arising from workplace injuries, disabilities, or death. The Employee’s
Compensation Act, 1923, formerly known as the Workmen’s Compensation Act, governs
the provisions related to compensation for employees and their dependents in case of
employment-related accidents.

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Key Features of the Employee’s Compensation Act, 1923

1. Applicability: The Act applies to employees working in factories, mines, plantations,

railways, and other hazardous occupations.
2. Employer’s Liability: Employers are legally bound to compensate employees for
injuries, disabilities, or fatalities occurring in the course of employment.
3. Types of Compensation:
o Death: Compensation payable to the dependents of the deceased employee.
o Permanent Total Disability: Lump sum compensation for employees unable
to work permanently.
o Permanent Partial Disability: Compensation based on the percentage of
disability.
o Temporary Disability: Wages are partially compensated during the recovery
period.
4. Calculation of Compensation:
o In case of death: 50% of the monthly wages × age factor (minimum
₹1,20,000, maximum ₹12,00,000).
o In case of permanent disability: 60% of the monthly wages × age factor
(minimum ₹1,40,000, maximum ₹14,00,000).
5. Employer’s Defences: Employers are not liable if the injury is due to an employee’s
negligence, wilful disobedience, or intoxication.
6. Compensation Claim Process: Employees or their dependents must file claims
before the Commissioner for Employee’s Compensation within two years of the
accident.
7. Medical Expenses and Rehabilitation: The Act mandates employers to cover
medical treatment and rehabilitation costs for injured workers.

Case Law: Pratap Narayan Singh Deo v. Srinivas Sabata (1976)

 Facts: The claimant, a carpenter, suffered an injury while working, resulting in

permanent disability.
 Ruling: The Supreme Court held that compensation is payable from the date of the
accident, and employers cannot delay payments under any pretext.
 Impact: Reinforced employer liability, ensuring timely compensation to affected
employees.

Significance of Employee’s Compensation

1. Financial Security: Provides financial relief to workers and their families during
unforeseen accidents.
2. Encourages Workplace Safety: Employers are incentivized to maintain safety
standards to reduce compensation liabilities.
3. Legal Protection: Prevents exploitation of workers and ensures their rights are
safeguarded.
4. Social Welfare: Contributes to overall labor welfare and economic stability by
securing workers against income loss.

The Employee’s Compensation Act, 1923, plays a pivotal role in ensuring financial stability
for workers affected by workplace injuries or fatalities. By establishing clear liability for
employers and defining structured compensation mechanisms, the law provides vital support
to the workforce. Judicial precedents such as Pratap Narayan Singh Deo v. Srinivas

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Sabata (1976) have reinforced the legal framework, ensuring prompt and fair compensation
for employees across industries.

Unit 2: The Code on Social Security (II)

2.1 Social Security and Cess in Respect of Building and Other Construction Workers

Social Security for Building and Other Construction Workers

The Code provides specific provisions for social security measures aimed at construction
workers, recognizing their vulnerability to occupational hazards.

Key Features

1. Applicability: Covers workers engaged in building and construction work, including

roads, highways, bridges, and other infrastructure projects.
2. Registration of Workers: Every construction worker is required to be registered
under the social security scheme to avail benefits.
3. Welfare Schemes: Includes provisions for health insurance, maternity benefits,
pension, educational assistance for children, and funeral expenses.
4. Safety and Working Conditions: Mandates the implementation of health and safety
measures at construction sites to minimize workplace accidents.
5. Grievance Redressal Mechanism: Establishes boards at state and central levels to
resolve worker grievances effectively.

Cess for the Welfare of Construction Workers

To fund welfare measures, the Building and Other Construction Workers’ Welfare Cess
Act, 1996, mandates the collection of a cess on construction projects.

Key Provisions of the Cess Act

1. Levy of Cess: A cess is imposed on the cost of construction incurred by an employer

at the rate of 1-2% of the total project cost.
2. Utilization of Funds: The collected cess is utilized exclusively for social security and
welfare measures for construction workers.
3. Responsibility of Employers: Employers are responsible for depositing the cess with
the respective Welfare Board to ensure proper utilization.
4. Monitoring and Compliance: Authorities conduct inspections and audits to prevent
mismanagement of funds.
5. Penalties for Non-Compliance: Failure to deposit the cess or misuse of funds attracts
penalties, ensuring strict adherence to the provisions.

Case Law: Lanco Anpara Power Ltd. v. State of Uttar Pradesh (2016)

 Facts: The company challenged the levy of cess on certain infrastructural projects,
arguing that they did not fall under the ambit of the Act.
 Ruling: The Supreme Court upheld the cess collection, reinforcing that the welfare of
construction workers must be prioritized.
 Impact: Established a precedent ensuring that all eligible construction projects
contribute to worker welfare funds.

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Significance of Social Security and Cess for Construction Workers

1. Ensures Financial Protection: Provides monetary support for health, education, and
livelihood security.
2. Improves Workplace Safety: Encourages better working conditions and safety
standards at construction sites.
3. Encourages Compliance Among Employers: Mandates financial contribution to
ensure the well-being of workers.
4. Strengthens Legal Framework: Reinforces the importance of dedicated funds for
labor welfare, ensuring sustainability of welfare initiatives.

The provisions under the Code on Social Security, 2020, and the Cess Act, 1996, highlight
the commitment to protecting the rights and welfare of building and construction workers. By
ensuring proper fund allocation and legal compliance, these laws aim to enhance social
security measures, fostering a safer and more sustainable work environment for millions of
labourers in India.

2.2 Social Security for Unorganised Workers, GIG Workers and Platform
Workers
The Code on Social Security, 2020, expands the coverage of social security to include
unorganized workers, gig workers, and platform workers, recognizing their role in the
evolving labor market. These workers often lack formal employment contracts and require
structured welfare mechanisms to ensure financial security and social protection.

Social Security for Unorganized Workers

Unorganized workers are those who are not covered under formal employment laws,
including agricultural laborers, domestic workers, street vendors, and small-scale self-
employed individuals.

Key Features

1. Definition: Workers engaged in unstructured, informal employment without fixed

wages or employer-provided benefits.
2. Registration and Welfare Schemes:
o Mandatory registration under social security boards to avail benefits.
o Access to health insurance, maternity benefits, disability aid, and old-age
pensions.
3. Government Initiatives:
o Pradhan Mantri Shram Yogi Maandhan Yojana (PMSYMY): Provides
pensions for unorganized workers.
o Ayushman Bharat Scheme: Offers health insurance coverage.
4. Challenges and Implementation Issues:
o Low awareness and enrollment rates.
o Difficulty in tracking employment and income patterns.

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Social Security for Gig Workers and Platform Workers

With the rise of digital platforms and the gig economy, the Code on Social Security
recognizes gig and platform workers, ensuring they receive necessary benefits despite non-
traditional work arrangements.

Definitions

1. Gig Workers: Individuals engaged in income-earning activities outside traditional

employer-employee relationships (e.g., freelancers, independent contractors).
2. Platform Workers: Workers who earn by providing services through digital
platforms such as food delivery and ride-hailing services.

Key Features of Social Security for Gig and Platform Workers

1. Mandatory Registration: Gig and platform workers must register under social
security schemes to receive benefits.
2. Welfare Benefits:
o Health insurance and accident coverage.
o Pension and old-age benefits.
o Skill development programs to enhance employability.
3. Contribution-Based Funding:
o Aggregator companies must contribute a portion of revenue towards social
security funds for platform workers.
o Government and workers may also contribute to the fund.
4. Implementation Challenges:
o Identifying and categorizing gig workers under legal frameworks.
o Ensuring compliance from digital platforms.

Case Law: Uber BV v. Aslam (2021)

 Facts: The UK Supreme Court ruled that Uber drivers qualify as workers and are
entitled to minimum wage and social benefits.
 Impact: Influenced global discussions on labor rights for gig workers, prompting
legal frameworks for social security benefits in India.

Significance of Social Security for Informal and Gig Workers

1. Bridges the Social Protection Gap: Ensures financial security for workers outside
traditional employment models.
2. Promotes Sustainable Livelihoods: Encourages labor force participation while
offering economic security.
3. Encourages Compliance Among Digital Platforms: Ensures fair treatment and
benefits for platform-based workers.
4. Strengthens Workforce Resilience: Provides a safety net against economic
fluctuations and work-related uncertainties.

The Code on Social Security, 2020, marks a significant step toward inclusive labor welfare
by integrating unorganized, gig, and platform workers into formal social security structures.
While challenges remain in implementation and enforcement, these provisions help secure
financial stability for millions of workers in the evolving labour market.

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2.3 Finance and Accounts; Authorities, Assessment, Compliance and
Recovery

The management of finance and accounts is a critical aspect of governance, ensuring

compliance with statutory obligations, accurate assessment, and effective recovery
mechanisms. The Code on Social Security, 2020, provides specific provisions for the
financial administration of social security schemes in India, laying down mechanisms for
assessment, compliance, and recovery.

Finance and Accounts in Social Security

The financial structure of social security schemes involves contributions from employers,
employees, and the government. Proper accounting ensures transparency and efficiency in the
utilization of funds.

Key Aspects

1. Contributions and Fund Management:

o Employers and employees contribute to provident funds, insurance schemes,
and other welfare programs.
o Government contributions support unorganized sector workers.
2. Auditing and Reporting:
o Regular audits ensure compliance with financial norms.
o Reports submitted to regulatory authorities for transparency.
3. Fund Disbursement:
o Payments to beneficiaries, including pensions, medical benefits, and maternity
assistance, are monitored for proper utilization.

Authorities in Finance and Compliance

The administration of finance and accounts in social security is overseen by regulatory

authorities to ensure adherence to laws.

Key Authorities

1. Central Board of Trustees (EPFO):

o Manages Employees' Provident Fund (EPF) and related schemes.
o Ensures collection and disbursement of funds.
2. Employees' State Insurance Corporation (ESIC):
o Oversees medical benefits and insurance for employees.
o Ensures financial sustainability of the scheme.
3. Social Security Boards:
o Set up at central and state levels to oversee social security schemes for
unorganized workers.
4. Adjudicating Officers and Tribunals:
o Handle disputes related to compliance and recovery.
o Assess penalties and resolve financial claims.

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Assessment, Compliance, and Recovery

The assessment of financial obligations, ensuring compliance, and recovering dues are
fundamental to maintaining the financial stability of social security schemes.

Assessment Mechanism

1. Self-Assessment by Employers:
o Employers must file regular financial returns indicating contributions.
2. Inspection and Verification:
o Authorities conduct inspections to ensure accurate assessment.
3. Penalties for Misreporting:
o Financial misreporting attracts penalties and legal action.

Compliance Requirements

1. Employer Responsibilities:
o Timely deposit of contributions.
o Maintenance of financial records.
2. Employee Contributions:
o Deduction from salaries and proper deposit in designated accounts.
3. Audit and Oversight:
o Periodic audits to ensure adherence to laws.

Recovery Mechanisms

1. Dues Collection:
o Authorities empowered to recover outstanding dues from employers.
2. Attachment of Property:
o In case of default, properties can be seized.
3. Legal Action:
o Cases filed against non-compliant entities to ensure dues are paid.

Case Law: Organo Chemical Industries v. Union of India (1979)

 Facts: The company delayed provident fund contributions, leading to legal

proceedings.
 Ruling: The Supreme Court held that timely contributions are mandatory, and non-
compliance would attract penalties.
 Impact: Reinforced employer obligations, ensuring better financial compliance in
social security schemes.

Significance of Financial Administration in Social Security

1. Ensures Stability of Social Security Funds: Proper management prevents financial

shortfalls.
2. Promotes Compliance: Encourages employers and employees to adhere to
contribution norms.
3. Facilitates Transparency and Accountability: Regular audits and assessments
improve governance.

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 4. Strengthens Enforcement Mechanisms: Legal provisions ensure recovery of dues
and penalize defaulters.

The financial administration of social security schemes plays a crucial role in ensuring
benefits reach eligible individuals. Effective assessment, compliance, and recovery
mechanisms, backed by legal provisions and case law, strengthen the framework for financial
governance in labor welfare. The Code on Social Security, 2020, continues to enhance these
mechanisms to ensure sustainability and accountability in social security finance.

2.4 Offences and Penalties; Employment Information and Monitoring

The Code on Social Security, 2020, outlines provisions related to offences and penalties to
ensure compliance with social security laws. Additionally, it emphasizes the importance of
employment information and monitoring to safeguard workers' rights and maintain
transparency in labor practices.

Offences and Penalties

To ensure compliance with social security obligations, the Code prescribes penalties for
violations committed by employers, employees, or other stakeholders.

Key Offences Under the Code

1. Non-Payment of Contributions:
o Employers failing to deposit employees' contributions face penalties.
2. False Statements or Misrepresentation:
o Providing false information to evade contributions or claim unauthorized
benefits is punishable.
3. Obstruction of Authorities:
o Preventing inspections, audits, or investigations is a punishable offence.
4. Non-Compliance with Notices and Orders:
o Failure to comply with directives issued by social security authorities results
in fines or prosecution.

Penalties for Violations

1. Fines and Imprisonment:

o Monetary penalties range from Rs. 50,000 to Rs. 3,00,000, depending on the
severity of the offence.
o Imprisonment for up to three years for repeated violations.
2. Compounding of Offences:
o Certain offences can be settled by paying prescribed fines instead of facing
legal proceedings.
3. Recovery of Dues:
o Authorities can recover unpaid contributions through attachment of property
or bank accounts.

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Case Law: RPFC v. S.D. College, Hoshiarpur (1997)

 Facts: The employer failed to deposit employees' provident fund contributions,

leading to legal proceedings.
 Ruling: The Supreme Court ruled that non-payment of contributions is a serious
offence, reinforcing the importance of strict compliance.
 Impact: Established a precedent for holding employers accountable for social security
obligations.

Employment Information and Monitoring

The collection and monitoring of employment data help in policy formulation, ensuring
social security coverage for workers in different sectors.

Key Aspects of Employment Monitoring

1. Registration and Record Maintenance:

o Employers must maintain records of employees covered under social security
schemes.
2. Periodic Reporting:
o Employers are required to submit employment data, including worker details
and contributions, to authorities.
3. Use of Technology:
o Digital platforms enable real-time tracking of employment trends and
compliance status.
4. Inspections and Audits:
o Labor authorities conduct periodic inspections to verify employment data and
ensure compliance.

Significance of Employment Information Systems

1. Improves Transparency: Accurate employment records help prevent fraud and

mismanagement.
2. Ensures Social Security Coverage: Monitoring employment data ensures workers
receive their entitled benefits.
3. Facilitates Government Policy: Data-driven decisions improve labor welfare
programs and social security schemes.
4. Enhances Employer Accountability: Mandating periodic reporting reduces
instances of non-compliance.

The provisions on offences and penalties ensure strict compliance with social security laws,
while employment information and monitoring facilitate transparency and effective
implementation of labor welfare schemes. Case law reinforces the accountability of
employers, making social security administration more robust and worker-friendly.

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Unit 3:The Occupational Safety Health and Working Conditions Code (I)

3.1 Definitions; Registration

The Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code)
consolidates and rationalizes provisions related to occupational safety, health, and working
conditions in various establishments. Some key definitions under the code are:

1. Establishment: Any place where industry, trade, business, manufacturing, or

occupation is carried out, including mines, docks, plantations, and motor transport
undertakings.
2. Employer: A person having ultimate control over the affairs of an establishment. This
includes the owner, occupier, manager, agent, contractor, or legal representative
responsible for the establishment.
3. Employee: Any person employed directly or through an agency, including a
contractor, to do any skilled, unskilled, manual, operational, supervisory, managerial,
administrative, technical, or clerical work for hire or reward.
4. Worker: A person employed in an establishment for wages, excluding those in
managerial or supervisory roles with wages exceeding the specified limit.
5. Principal Employer: In a factory, it refers to the owner, occupier, or a person
managing the factory, while in a mine, it is the owner or agent.
6. Contract Labour: A worker employed through a contractor without direct
supervision or control by the principal employer.
7. Hazardous Process: Any process or activity in an establishment involving dangerous
substances or activities posing health risks.
8. Inter-State Migrant Worker: A person recruited by an employer or contractor from
one state to another for employment.
9. Occupier: In the case of a factory, an occupier is the person who has ultimate control
over the affairs of the factory.
10. Appropriate Government: Depending on the type of establishment, it refers to either
the Central Government or the respective State Government responsible for
administration and enforcement.

Registration under OSH Code, 2020

The OSH Code mandates registration of establishments for regulatory compliance and
worker safety. The registration process is as follows:

1. Applicability:
o Every employer of an establishment covered under the OSH Code must
register with the appropriate government authority.
o Applicable to factories, mines, plantations, motor transport undertakings, and
other notified establishments.
2. Registration Process:
o The employer must submit an application electronically or in a prescribed
manner to the registration officer appointed under the OSH Code.
o The application must contain details such as the name of the establishment,
nature of work, number of workers, employer details, and other necessary
information.
o Upon verification, the registration officer will issue a Certificate of
Registration within the prescribed time frame.

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 o The certificate must be displayed prominently at the workplace.
3. Validity and Renewal:
o The registration certificate remains valid as prescribed under the rules framed
by the appropriate government.
o Renewal, if required, must be done before expiration to ensure uninterrupted
compliance.
4. Obligations of the Employer:
o Maintain records of workers, safety measures, and compliance reports.
o Ensure timely updates in case of changes in business nature, number of
employees, or closure of operations.
o Comply with periodic inspections and audits conducted by designated
authorities.
5. Penalties for Non-Compliance:
o Failure to register may result in penalties, including fines and legal
consequences under the OSH Code.
o Continuing violations may lead to higher fines or closure orders from
regulatory authorities.

3.2 Duties of Employer and Employees, Etc.

Duties of Employers

Under The Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code),
employers have several responsibilities to ensure a safe and healthy working environment for
employees. The key duties of employers are as follows:

1. Ensure Workplace Safety and Health:

o Provide a workplace free from hazards and ensure safe working conditions.
o Comply with all safety and health standards as prescribed by the appropriate
government.
2. Provide Welfare Facilities:
o Establish and maintain welfare provisions such as drinking water, restrooms,
canteens, first aid, and creches, where applicable.
o Arrange for separate sanitation facilities for male and female workers.
3. Risk Assessment and Safety Measures:
o Identify workplace hazards and implement necessary safety measures.
o Provide protective equipment and ensure workers are trained in their use.
4. Ensure Health and Hygiene Standards:
o Maintain cleanliness, ventilation, temperature control, and hygiene in the
workplace.
o Conduct periodic medical examinations for workers engaged in hazardous
processes.
5. Provide Training and Awareness:
o Conduct regular training programs on occupational safety and health.
o Inform workers about the risks associated with their jobs and preventive
measures.
6. Compliance with Working Hours and Leave:
o Ensure that workers are not engaged beyond the prescribed working hours.
o Provide mandatory leaves, rest breaks, and overtime benefits as per the Code.
7. Special Provisions for Certain Categories of Workers:

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 o Provide necessary accommodations and support for inter-state migrant
workers.
o Ensure safe working conditions for women, including night shifts with
adequate security.
8. Report and Maintain Records:
o Maintain accurate records of accidents, illnesses, and workplace injuries.
o Report any serious workplace accidents to the relevant authorities.
9. Contract Labour and Third-Party Responsibilities:
o Ensure compliance with safety regulations for contract labour.
o Principal employers must ensure that contractors adhere to the prescribed
safety norms.

Duties of Employees

Employees also have a responsibility to adhere to safety norms and cooperate with employers
to maintain a safe working environment. Their key duties include:

1. Follow Safety Protocols:

o Comply with all workplace safety and health regulations.
o Use safety equipment and protective gear provided by the employer.
2. Avoid Unsafe Practices:
o Refrain from tampering with safety devices or engaging in negligent behavior.
o Report unsafe conditions or hazards to the employer or safety officer.
3. Cooperate with Employer:
o Participate in training programs and safety drills.
o Assist in implementing workplace safety measures.
4. Maintain Cleanliness and Hygiene:
o Ensure personal hygiene and keep work areas clean.
o Dispose of waste materials properly to prevent hazards.
5. Report Workplace Incidents:
o Inform the employer about any workplace accident, injury, or safety violation.
o Cooperate in investigations related to workplace safety.

Duties of Manufacturers, Designers, and Suppliers

In addition to employers and employees, manufacturers, designers, and suppliers also have
obligations under the OSH Code:

1. Ensure Safe Machinery and Equipment:

o Design, manufacture, and supply machinery that meets safety standards.
o Provide proper instructions on the safe use of equipment.
2. Assess Risks:
o Conduct risk assessments before supplying machinery or hazardous
substances.
o Ensure necessary safety precautions are taken.
3. Compliance with Government Regulations:
o Adhere to the safety standards set by the government.
o Ensure that equipment and materials do not pose health risks to workers.

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Penalties for Non-Compliance

Failure to comply with the OSH Code can lead to legal action, including fines and
imprisonment. Employers, employees, and other stakeholders must adhere to the prescribed
guidelines to ensure workplace safety.

3.3 Occupational Safety and Health; Health, Safety and Working Conditions

The Occupational Safety, Health, and Working Conditions Code, 2020 (OSH Code) is a
comprehensive legal framework aimed at ensuring safe and healthy work environments
across various industries in India. It consolidates and rationalizes several labor laws
concerning occupational health, safety, and working conditions.

Occupational Safety and Health

Occupational safety and health (OSH) focus on preventing workplace injuries, illnesses, and
fatalities. Employers, employees, and the government share responsibilities to ensure a
hazard-free work environment.

Key Aspects of Occupational Safety and Health:

1. Hazard Identification and Risk Assessment:

o Employers must assess workplace risks and take preventive measures.
o Regular safety audits and risk management programs must be conducted.
2. Provision of Safety Equipment and Training:
o Employers must provide personal protective equipment (PPE) where
necessary.
o Workers should be trained on safe work practices and emergency procedures.
3. Workplace Accident Prevention:
o Implementation of safety protocols to reduce workplace accidents.
o Reporting and investigating accidents to prevent recurrence.
4. Emergency Preparedness:
o Employers must establish emergency response plans for fires, chemical spills,
and other hazards.
o Regular drills should be conducted to ensure preparedness.
5. Occupational Health Services:
o Regular health check-ups, especially for workers exposed to hazardous
environments.
o Monitoring of occupational diseases and necessary medical facilities.

Health, Safety, and Working Conditions

Ensuring health, safety, and optimal working conditions are fundamental to workers’ well-
being and productivity.

Key Provisions under OSH Code for Health and Safety:

1. Cleanliness and Hygiene:

o Establishments must maintain cleanliness, proper ventilation, and waste
disposal.
o Clean drinking water and proper sanitation facilities must be provided.

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 2. Working Hours and Rest Periods:
o The code sets standard working hours, mandatory rest breaks, and overtime
limits.
o Night shifts and extended hours should have additional safety measures.
3. Welfare Facilities:
o Adequate canteens, restrooms, and first aid provisions must be available.
o Special facilities for women and differently-abled workers.
4. Safety Committees and Worker Participation:
o Large establishments must constitute safety committees.
o Employees should have the right to participate in safety discussions and report
concerns.
5. Protection of Vulnerable Workers:
o Special provisions for women, contract laborers, inter-state migrant workers,
and differently-abled employees.
o Ensuring gender-sensitive workplace policies and protection against
harassment.

Employer Responsibilities

Employers are mandated to:

 Provide and maintain a safe working environment.

 Implement safety measures and training programs.
 Conduct regular risk assessments and inspections.
 Maintain records and report workplace accidents.

Employee Responsibilities

Employees must:

 Follow safety guidelines and use protective equipment.

 Report unsafe practices and workplace hazards.
 Participate in safety training and emergency drills.

Government’s Role

 Enforce regulations through inspections and audits.

 Prescribe safety standards and provide guidance.
 Establish labor welfare programs and occupational health monitoring.

3.4 Welfare Provisions; Hours of Work and Annual Leave with Wages

Welfare Provisions

The Occupational Safety, Health, and Working Conditions Code, 2020 (OSH Code)
includes several welfare provisions aimed at ensuring the well-being and dignity of workers
across various industries. These provisions are designed to enhance the quality of work-life,
provide basic necessities, and ensure a safe and comfortable working environment.

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1. Health and Hygiene

 Employers must maintain cleanliness, ventilation, and proper disposal of waste in

establishments.
 Adequate drinking water facilities must be provided at convenient locations.
 Separate, well-maintained washrooms and urinals should be available for male and
female workers.
 Workplaces should have appropriate lighting and temperature control to ensure
comfort and productivity.

2. Canteens

 Establishments with a specified number of workers (as determined by the

government) must provide canteen facilities.
 Canteens should maintain hygiene and provide nutritious food at reasonable rates.
 Proper seating arrangements should be available within the canteen.

3. First Aid and Medical Facilities

 Employers must provide first aid boxes equipped with necessary medical supplies.
 Large establishments must have in-house medical facilities or tie-ups with nearby
hospitals.
 Periodic health check-ups should be conducted, especially for workers engaged in
hazardous processes.

4. Creches

 Establishments with a specified number of female employees must provide a creche

facility for children.
 The creche should be well-ventilated, hygienic, and have trained staff to take care of
children.
 Mothers should be allowed to visit their children during working hours.

5. Rest Rooms and Welfare Rooms

 Factories, mines, and other large establishments should provide restrooms and lockers
for workers.
 These rooms should be properly maintained and accessible during working hours.

6. Social Security Benefits

 Employers must ensure compliance with Employees’ State Insurance (ESI) and
Employees’ Provident Fund (EPF) provisions.
 Gratuity and compensation for workplace accidents should be provided as per legal
requirements.

Hours of Work

The OSH Code lays down specific guidelines regarding working hours, overtime, and rest
periods to safeguard workers' rights and ensure a balanced work-life environment.

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1. Standard Working Hours

 A worker should not be required to work more than 8 hours per day and 48 hours
per week.
 The spread-over period, including rest breaks, should not exceed 12 hours.

2. Overtime Work

 Workers engaged beyond prescribed hours are entitled to overtime wages, which
should be at least twice the ordinary rate of wages.
 The maximum overtime limit should comply with government rules and industry-
specific requirements.

3. Work Shifts and Intervals

 Continuous work should not exceed 5-6 hours without a rest interval.
 Night shifts should be regulated, ensuring safety and additional welfare measures.

4. Weekly and Daily Rest

 Workers should get at least one day off per week, typically Sunday.
 In case a worker is required to work on a rest day, a compensatory leave must be
provided.

5. Special Provisions for Women and Young Workers

 Restrictions on night shifts for women unless adequate safety measures are in place.
 Young workers should not be engaged in hazardous occupations and should have
regulated working hours.

Annual Leave with Wages

Annual leave provisions ensure that workers get adequate time for rest and recuperation
while receiving their wages.

1. Eligibility for Annual Leave

 Workers who have completed 180 days of service in a year are eligible for annual
leave.
 The leave is calculated at one leave day for every 20 days worked.

2. Accumulation and Carry Forward of Leave

 Unused leave can be carried forward to the next year, subject to a maximum limit
specified by the government.
 Workers have the right to encash their leave under certain conditions.

3. Availing Leave

 Workers must apply for leave in advance, except in cases of emergencies.

 Employers should grant leave requests unless business exigencies prevent approval.

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  If a worker is denied leave, they should have the option to carry it forward or receive
leave encashment.

4. Wages During Leave Period

 Workers availing annual leave must be paid at their usual daily wage rate.
 Any compensatory holiday earned must be treated as paid leave.

5. Provisions for Sickness and Casual Leave

 Workers should be entitled to sick leave and casual leave in addition to annual leave.
 Medical certificates may be required for availing extended sick leave.

Unit 4: The Occupational Safety Health and Working Conditions Code (II)

4.1 Maintenance of Registers, Records and Returns

The Occupational Safety, Health, and Working Conditions Code, 2020 (OSH Code)
mandates the maintenance of registers, records, and returns by employers to ensure
compliance with labor laws and workplace safety norms. Proper documentation enhances
transparency, facilitates inspections, and ensures worker welfare.

Registers to be Maintained

Employers are required to maintain various registers to keep track of employee details,
working conditions, and statutory compliance.

1. Employee Register

 Must contain details of all employees, including name, age, gender, address, and
designation.
 Should include records of employment status, wages, and leaves.

2. Wage Register

 Employers must record salary payments, including basic pay, allowances, deductions,
and net wages paid.
 Details of overtime payments and bonus payments must be included.

3. Register of Hours of Work and Overtime

 Daily and weekly working hours of employees should be recorded.

 Overtime hours and wages paid for extra work must be documented.

4. Register of Leave and Attendance

 Details of annual leave, casual leave, sick leave, and other authorized leaves must be
maintained.
 Attendance records should be updated daily to track workdays and absences.

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5. Accident and Health Register

 Employers must record workplace accidents, injuries, and occupational diseases.

 Preventive measures taken and medical treatments provided should be documented.

6. Register of Welfare Facilities

 Record of welfare measures such as creches, first aid, canteens, and sanitation
facilities.
 Inspection reports on welfare provisions must be maintained.

Records to be Maintained

Employers must maintain records in prescribed formats to ensure legal compliance and
facilitate audits.

1. Medical Examination Records

 Records of periodic medical check-ups, especially for hazardous occupations.

 Reports of occupational diseases and treatments provided.

2. Safety and Health Reports

 Documentation of safety training, fire drills, and risk assessments.

 Records of safety equipment provided to employees.

3. Environmental and Hazardous Material Records

 Records of hazardous substances used, stored, and disposed of in the workplace.

 Compliance reports with environmental safety norms.

4. Employee Grievance Records

 Complaints received regarding working conditions, discrimination, or harassment.

 Actions taken by the employer to resolve grievances.

Returns to be Filed

Employers must submit periodic returns to the appropriate authorities to ensure regulatory
compliance.

1. Annual Returns

 Details of workforce strength, employment conditions, and compliance with labor

laws.
 Information on accidents, leaves, and wages paid during the year.

2. Half-Yearly and Quarterly Returns

 Reports on industrial safety measures, accident statistics, and welfare provisions.

 Returns related to hazardous material usage and disposal.

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3. Special Returns

 Reports on employment of women and differently-abled workers.

 Returns concerning contract labor and inter-state migrant workers.

Compliance and Penalties

Failure to maintain registers, records, and submit returns can result in penalties:

 Fines and legal action for non-compliance with record-keeping mandates.

 Increased scrutiny by labor inspectors and regulatory authorities.

4.2 Inspector-Cum-Facilitators and Other Authority

The Occupational Safety, Health, and Working Conditions Code, 2020 (OSH Code)
introduces the role of Inspector-cum-Facilitators and other regulatory authorities to ensure
compliance with labor laws and workplace safety norms. These officials are responsible for
monitoring working conditions, guiding employers on compliance, and enforcing necessary
legal provisions.

Inspector-Cum-Facilitators

The OSH Code replaces traditional labor inspectors with Inspector-cum-Facilitators,

emphasizing a proactive and advisory role alongside enforcement duties.

1. Appointment and Jurisdiction

 Inspector-cum-Facilitators are appointed by the appropriate government.

 They have jurisdiction over specific geographical areas or industries.

2. Powers and Responsibilities

 Conduct inspections to ensure compliance with safety, health, and working condition
norms.
 Examine workplace records, registers, and employment documents.
 Provide guidance to employers on compliance with labor laws.
 Investigate workplace accidents and take necessary legal action.
 Ensure fair treatment of workers and adherence to welfare provisions.
 Use electronic means for inspections and compliance verification.

3. Inspection and Compliance Mechanism

 The OSH Code promotes a risk-based inspection system.

 Inspections may be conducted based on predefined schedules or complaints received.
 Electronic and randomized inspection methods reduce bias and enhance efficiency.
 Employers are encouraged to conduct self-certifications to ensure compliance.

Other Authorities Under the OSH Code

Apart from Inspector-cum-Facilitators, other authorities play a crucial role in implementing

and enforcing workplace safety norms.

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1. National Occupational Safety and Health Advisory Board (NOSHAB)

 Formed at the central level to advise the government on OSH matters.

 Comprises representatives from employers, employees, and safety experts.
 Develops guidelines and standards for occupational safety and health.

2. State Occupational Safety and Health Advisory Board

 Operates at the state level to address local industry-specific concerns.

 Works in collaboration with NOSHAB to ensure uniform implementation of safety
norms.
 Advises state governments on necessary amendments and improvements.

3. Safety Committees

 Mandatory in establishments employing a prescribed number of workers.

 Comprise employer and worker representatives to discuss safety issues.
 Recommend workplace safety measures and monitor implementation.

4. Chief Inspector and Additional Chief Inspectors

 Oversee the overall implementation of OSH provisions in their respective areas.

 Have the authority to direct Inspector-cum-Facilitators and take enforcement actions.

5. Appellate Authority

 Handles disputes arising from inspections, penalties, and compliance orders.

 Provides a legal avenue for employers and workers to appeal decisions made by
inspectors.

Digital Compliance and Transparency

 The OSH Code encourages the use of digital platforms for compliance.
 Employers can submit records and registers electronically.
 Randomized inspections minimize corruption and ensure unbiased monitoring.

Penalties for Non-Compliance

 Failure to comply with inspector directives can lead to penalties and legal action.
 Repeated violations may result in higher fines and stricter enforcement measures.

4.3 Special Provision Relating to Employment of Women, Special Provisions

for Contract Labour and Inter-State Migrant Worker, Etc.

The Occupational Safety, Health, and Working Conditions Code, 2020 (OSH Code)
incorporates special provisions to safeguard the interests of women workers, contract
laborers, and inter-state migrant workers. These provisions aim to ensure fair working
conditions, promote workplace inclusivity, and protect vulnerable workers from exploitation.

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Special Provisions Relating to Employment of Women

The OSH Code promotes gender equality and ensures that women have equal opportunities in
the workforce while maintaining their safety and welfare.

1. Employment in All Establishments

 Women are permitted to work in all types of establishments, including mines,

factories, and hazardous workplaces, subject to adequate safety measures.
 No employer can discriminate against women in terms of recruitment, promotions, or
wages.

2. Night Shift Employment

 Women are allowed to work night shifts (between 7 PM and 6 AM) with their
consent.
 Employers must ensure proper security, transport facilities, and other safety measures.

3. Maternity Benefits and Childcare

 Provisions under the Maternity Benefit Act continue to apply, ensuring paid maternity
leave and post-maternity job security.
 Creche facilities are mandatory for establishments employing a prescribed number of
women workers.

4. Prevention of Harassment and Safety Measures

 Strict enforcement of workplace harassment laws and grievance redressal

mechanisms.
 Employers must ensure gender-sensitive workplace policies and adequate lighting,
sanitation, and security arrangements.

Special Provisions for Contract Labour

Contract laborers often face job insecurity and lack social security benefits. The OSH Code
provides specific protections for them.

1. Registration of Establishments Employing Contract Labour

 Principal employers must register establishments employing a prescribed number of

contract laborers.
 Contractors must obtain a license before deploying contract labor.

2. Equal Pay and Welfare Measures

 Contract laborers must be paid wages equal to directly employed workers performing
the same job.
 Contractors must provide health, safety, and welfare facilities such as drinking water,
sanitation, and first aid.

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3. Prohibition of Contract Labour in Core Activities

 Employment of contract labor is prohibited in core activities of an establishment

except under specified conditions.
 Exceptions include sudden increase in workload, specialized skills, and seasonal
work.

4. Rights of Contract Workers

 Right to timely wages, social security benefits, and safe working conditions.
 Employers and contractors are jointly responsible for compliance with labor laws.

Special Provisions for Inter-State Migrant Workers

Inter-state migrant workers are particularly vulnerable due to unfamiliar work environments
and lack of local support. The OSH Code ensures their protection.

1. Registration and Tracking of Migrant Workers

 Employers must register inter-state migrant workers and provide them with
identification.
 A centralized database is maintained to track their employment and welfare.

2. Travel and Displacement Allowance

 Migrant workers are entitled to displacement allowances to cover travel expenses.

 Employers must ensure cost-free return transportation in case of contract termination.

4.4 Social Security Fund, Offences and Penalties

The Occupational Safety, Health, and Working Conditions Code, 2020 (OSH Code)
emphasizes the protection of workers' rights by introducing provisions related to social
security, penalties for violations, and mechanisms for enforcement. The Social Security Fund
is a key feature aimed at enhancing workers’ welfare, while offences and penalties ensure
compliance with legal obligations.

Social Security Fund

The Social Security Fund is established to provide financial support to workers, especially
those in unorganized and vulnerable sectors.

1. Purpose of the Fund

 To provide financial aid to workers in cases of unemployment, medical emergencies,

and disability.
 To ensure old-age security and accident-related benefits.
 To promote welfare schemes for contract laborers, inter-state migrant workers, and
gig workers.

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2. Contributions to the Fund

 The fund is financed through employer contributions, government allocations, and

penalties collected from non-compliant employers.
 Specific industries employing a large number of contract laborers may have additional
mandatory contributions.
 Welfare Boards and other regulatory bodies may contribute to the fund for the benefit
of specific worker categories.

3. Administration and Utilization

 The government is responsible for managing and disbursing funds to eligible workers.
 Digital platforms are utilized for transparency and ease of access.
 Workers can apply for benefits through designated government portals and labor
welfare boards.

Offences Under the OSH Code

The OSH Code prescribes specific offences related to violations of workplace safety, health,
and labor laws. These offences are categorized based on their severity.

1. Non-Compliance with Workplace Safety Norms

 Failure to provide necessary safety equipment and protective gear to workers.

 Negligence in implementing workplace safety protocols leading to accidents.
 Lack of proper sanitation, drinking water, and welfare facilities for workers.

2. Violation of Employee Welfare Provisions

 Denying workers their rightful benefits such as wages, leave, and overtime
compensation.
 Discriminatory employment practices, including unequal pay and unlawful
termination.
 Failure to provide maternity benefits and crèche facilities to eligible women
employees.

3. Non-Registration and False Documentation

 Employers failing to register their establishments under the OSH Code.

 Submission of false records or tampering with employment documents to evade
compliance.

4. Exploitation of Contract and Migrant Workers

 Hiring contract laborers for core activities in violation of the OSH Code.
 Non-payment of wages, lack of social security coverage, and failure to provide
housing for migrant workers.

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Penalties for Non-Compliance

The OSH Code introduces stringent penalties for violations to ensure strict compliance and
accountability among employers.

1. Monetary Fines and Penalties

 General violations: Fine up to ₹2 lakh for failure to comply with safety and health
provisions.
 Serious offences leading to accidents: Fine up to ₹3 lakh per affected worker.
 Repeated violations: Additional penalties and enhanced fines for continued non-
compliance.

2. Imprisonment for Severe Violations

 Employers may face imprisonment of up to three years for gross negligence resulting
in fatalities or serious injuries.
 Repeated wilful violations can result in stricter penalties, including extended prison
terms.

3. Cancellation of Licenses and Business Permits

 Establishments failing to adhere to OSH Code provisions may have their licenses
revoked.
 Employers found guilty of continuous violations may face restrictions on future
business operations.

Enforcement and Compliance Mechanisms

 Regular inspections by Inspector-cum-Facilitators to ensure adherence to workplace

safety norms.
 Self-certification schemes for establishments to encourage voluntary compliance.
 Use of digital platforms for tracking compliance and imposing penalties in a
transparent manner.

Case Law: M.C. Mehta v. Union of India (1987)

In the landmark case of M.C. Mehta v. Union of India (1987), the Supreme Court of India
emphasized employer liability concerning workplace safety and environmental concerns.
This case reinforced the absolute liability principle, stating that industries engaged in
hazardous activities must ensure the safety of workers and the public. This ruling directly
relates to the OSH Code’s provisions on workplace safety and penalties, establishing that
employers cannot evade liability by merely following minimal safety regulations. The
judgment underscored the importance of strict enforcement of occupational health and safety
laws to prevent workplace hazards.

27
Q.1. Examine the scope and object of the Employees' Provident Funds as
per labour code

Ans. Scope. The provisions of this Act shall apply to every establishment-

(a) which is a factory engaged in any industry specified in Schedule I; and

(b) in which there are twenty or more persons [Section (1) (3) (a)]. However, section (1) (3)
(b) empowers the Central Government to apply the provisions of this Act, by notification in
the official Gazette, to any other establishment employing twenty or more persons or class of
such establishments as it may deem fit. Proviso to sub-section (3) provides that the Central
Government may after giving not less than two months' notice of its intention to do so, by
notification in the official Gazette, apply the provisions of this Act, to any establishment
employing such number of persons less than twenty as may be specified in the notification.

Sub-section 4 of section 1 empowers the Central Provident Fund Commissioner to apply the
provisions of employer and the majority of employees in relation to such establishment have
agreed that the provisions of this Act should be made applicable to such establishment.

For the application of this Act the minimum number of persons employed in the
establishment should be twenty. These persons should be employed in the regular course of
business of the establishment. Any person employed for a short period on account of some
pressing necessity or some temporary emergency would not be considered for counting the
requisite number of persons.1 If at any time, after the Act has become applicable to the
establishment, the number of persons employed therein, falls below twenty, the Act shall
continue to apply notwithstanding that the number of persons has fallen below the requisite
number. [Section 1 (5)].

The employment of twenty or more persons should be in a factory engaged in any industry
specified in Schedule I. The word 'factory' has been used in a comprehensive sense. It need
not be engaged in an exclusive activity specified in Schedule I. It also includes what is known
as 'composite factories', within its purview. In Associated Industrial (P) Ltd. v. R.P.F.
Commissioner, a company was running two separate and distinct industries-one engineering
work and the other a tile factory in the same premises. The engineering work was covered by
Schedule I of the Act but the tile work was not when a demand for contribution in respect of
both works was made, the employer, the factory owner refused to make contribution in
respect of both. When the matter was brought before the Supreme Court, it held that "The
word 'factory' used in section 1 (3) (a) has a comprehensive meaning and it includes premises
in which any manufacturing process is being carried on as described in the definition and so
the factory engaged in any industry specified in Schedule I does not necessarily mean a
factory exclusively engaged in the particular industry specified in the Schedule. Composite
factories come within the purview of section 1 (3) (a) and the fact that a factory is engaged in
industrial activities independent of each other some of which fall under the Schedule and
some do not, will not take the factory out of the purview of section 1 (3) (a)."

The Court also laid down the following propositions in this regard: -

(1) The test of numerical strength shall apply to the factory and not to the industry;

(2) If a factory comes in one industry which falls under Schedule I of the Act and the number
of persons employed therein are twenty or more, it will fall under section 1 (3) (a);

28
(3) If a factory carries on more than one industry all of which fall under Schedule I and the
number of persons employed therein either individually or collectively is twenty or more, it is
an establishment under section 1 (3) (a);

Hod

(4) If a factory runs more industries than one, and one of them is the main industry and others
are to support or to feed it, then the nature of main industry will determine the nature of
feeding or supporting industries;

(5) If a factory runs more than one industry and all of them are independent and constitute
separate and distinct industries, all of them will fall under section 1 (3) (a) even if one or
more datos but not all of the industries run by the factory fall under Schedule I.

In Union of India v. Ogale Glass Works,¹ a company engaged in manufacturing glass works,
stores, lanterns and enamel wares was held to be a composite factory and the Act was held to
apply to the whole of the company.

The Act does not apply to certain establish-ments. Section 16 of the Act lays down that the
Act does not apply to certain establishments. The position in this regard is as follows: -

(a) to any establishment registered under the Co-operative Societies Act, 1912 or under any
other law for the time being in force in any State relating to Co-operative Societies,
employing less than fifty persons and working without the aid of power; or

(b) to any other establishment belonging to or under the control of the Central Government or
a State Government and whose employees are entitled to the benefit of the contributory
provident fund or old age pension in accordance with any scheme or rule framed by the
Central Government or the State Government governing such benefits; or

(c) to any other establishment set up under any Central, Provincial or State Act and whose
employees are entitled to the benefits of contributory provident fund or old age pension in
accordance with any scheme or rule framed State Insurance Act, 1948 are not entitled for
compensation under the Employees' Compensation Act 1923 (Sec. 53, Employees' State
Insurance Act, 1948).

Q.2. What are the benefits provided to the insured persons under the Employees' State
Insurance Act, as per Labour Code.

Ans. Under the Employees' State Insurance Act, 1948, the following benefits are provided to
an insured person: -

1. Medical benefit.

The most important benefit available to an insured person under the Act is the medical
benefit in the form of medical attendance and treatment to the persons concerned, themselves
and their families whenever covered. (Section 56). The benefit is divided into three parts:-

(a) as an out-patient treatment and attendance in a hospital, dispensary, clinic or other

institution; or

(b) visit to home of the insured person; or

29
(c) as an in-patient treatment in a hospital or other institution.

An insured person is entitled to receive medical benefit during any period for which
contributions are payable in respect of him or in which he is qualified to receive sickness
benefit or maternity benefit or in respect of such disablement benefit as does not disentitle
him to medical benefit. But a person in respect of whom contribution ceases to be payable
may be allowed medical benefit for such period and of such nature as may be provided by the
regulation. Not only this, insured person who ceases to be in insurable employment may also
be provided this benefit. The benefit can also be allowed to a person and his spouse who has
attained the age of superannuation subject to payment of contribution and such other
conditions as may be prescribed.

The medical benefit shall be available only of such kind and on such scale as may be
prescribed by the State Government or by the Corporation. (Section 57).

2. Sickness benefit.

Sickness benefit is provided to an insured person on the basis of periodical payment if a duly
appointed medical practitioner certifies that the person concerned is ill. (Section 46 (9). The
sickness benefit shall be given on such rate and for such period as may be prescribed by the
Central Government. (Section 49). The sickness benefit is available at the daily standard
benefit rate for the period of sickness of the insured person. But he shall not be entitled for
the benefit for the first two days of sickness in the case of a spell of sickness following at an
interval of not more than fifteen days the spell of sickness for which the sickness benefit were
last paid. The sickness benefit shall not be paid to any person for more than 91 days in any
two consecutive periods. (Rule 55). The daily rate of sickness benefits in respect of a person
during any benefit period shall be "the standard benefit rate" corresponding to the average
daily wages of that person during the corresponding contribution period.

It was held in Management of Dioccsan Press v. Labour Court, Madras, that it was not
possible to accept the contention that since the employee has received sickness benefit under
the Act, he is not entitled to receive the wages for the period during which he was on sick
leave. But the employer is entitled to deduct the benefit received by the employee from the
leave salary payable to him.

3. Maternity benefit.

An insured woman in entitled to maternity benefit in case of confinement or miscarriage or

sickness arising out of pregnancy, confinement or childbirth or miscarriage if it is certified
that she is eligible for such payment. [Section 46 (b)]. The qualification of an insured woman
to claim maternity benefit, the conditions subject to which such benefit may be given, the rate
and period thereof shall be such as may be prescribed by the Central Government. (Section
50) Under this power the rules have been framed by the Central Government. [Rule 56
Employees' State Insurance (Central) Rules 1950].

An insured woman is qualified to claim maternity benefit for a confinement occurring or

expected to occur within a benefit period, if the contributions in respect of her were payable
for not less than eighty days in the immediately preceding two consecutive contribution
periods. The amount of benefit shall be payable at the daily rate for all days on which she
does not work for remuneration during a period of twelve weeks of which not more than six
weeks shall precede the expected date of confinement. But if she dies during her confinement
or during the period of six weeks immediately following her confinement for which she is

30
entitled to maternity benefits, leaving behind in either case the child, the maternity benefit
shall be paid for the whole of that period but if the child also dies during that period, then for
the days up to and including the day of the death of the child to the person nominated by the
insured woman and if there is no such nominee, to her legal representatives. The maternity
benefit is also payable in case of miscarriage or medical termination of pregnancy for all days
she does not work for remuneration during a period of six weeks immediately following the
date of her miscarriage or the medical termination of pregnancy. The maternity benefit is also
payable in respect of sickness arising out of pregnancy, confinement, premature birth of
child, miscarriage or medical termination of pregnancy for all days on which she does not
work for remuneration to maternity benefit at the prescribed rate.

Rate of maternity benefit. The daily rate of maternity benefit payable in respect of
confinement occurring or expected to occur during any benefit period shall be equal to twice
the 'Standard benefit rate' corresponding to the average daily wages in respect of the insured
woman during the corresponding contribution period.

4. Disablement benefit.

Where an employee suffers from a disablement as a result of an employment injury sustained

as an employee he shall be eligible for disablement benefit if so certified. [Section 46 (c)].

Where the employee sustains temporary disablement for not less than three days excluding
the day of accident he shall be entitled for periodical payment. [Section 55 (a)].

A person who sustains permanent disablement, whether total or partial, shall also be entitled
to periodical payment. [Section 55 (b)]. Rule 57 of the Employees' State Insurance (Central)
Rules, 1950 provides that a person is qualified to claim disablement benefit for temporary
disablement for not less than three days excluding the day of disablement. Similarly, for
permanent disablement, whether total or partial, benefit is payable and it shall be payable
either for limited period or life depending on the fact as to how it has been assessed. The
disablement benefit is payable only when the injury is duly certified by an Insurance Medical
Officer.

In Krishna Kutti Nair v. P.B.V. Regional Director E.S.I. Corporation and Another, the
appellant who was a covered employee under the E.S.I. scheme, met with an accident in the
course of his employment on 15th June, 1990. The claimant suffered injury after he had cased
to be an employee.

Dismissing the appeal it was held that section 46(c) provides specifically two cumulative
conditions for its applicability:

(i) first the claimant must be an insured person; and

(ii) second that such an injury must be sustained when he was an employee.

Hence when the injury had been sustained by the employee which he ceased to be an
employee he would not be entitled to the benefit of disablement though his contribution
period and his status as insured person continues.

Rate. The daily rate of disablement benefit shall be 40% more than the standard benefit rate
rounded to the next higher multiple of five paise corresponding to the average daily wages in
the contribution period corresponding to the benefit period in which the employment injury

31
occurs. For temporary and permanent total disablement, benefit shall be payable at full rate
but for permanent partial disablement at such percentage of full rate which would have been
payable in the case of permanent total disablement. For permanent partial disablement
resulting from an injury not specified in the Schedule II of the Act, at such percentage of full
rate payable in the case of permanent total disablement as is proportionate to the loss of
earning capacity permanently caused by the injury.

5. Dependents benefit: -

Where an insured employee dies as a result of an employment injury sustained as an

employee, such of his dependents shall be entitled to periodical payments of dependent's
benefit as are entitled to compensation under the Act. [Section 46 (d)]. In case, an insured
person dies without leaving behind him the dependents as aforesaid, the dependents' benefit
shall be paid to the other dependents of the deceased at such rates for such period and subject
to such conditions as may be prescribed by the Central Government. [Section 52 (2)]. The
dependents' benefit shall be paid in the following manner (Rule 58):-

(A) In the case of death of the insured person, the dependents benefit shall be payable to his
widow and children as follows:-

(a) to the widow during life, until remarriage, an amount equivalent to three fifths of the full
rate and if there are two or more widows, the amount payable to the widow shall be divided
equally between the widows;

(b) to each legitimate or adopted son an amount equivalent to two fifths of the full rate until
he attains the age of 18 years But if a son happens to be infirm and wholly dependent on the
earnings of the insured person at the time of his death, the benefits shall continue to be paid
till the infirmity lasts.

Q.3. Explain the defences available to an employer in regard to a claim for

compensation under Employees' Compensation Act, 1923 as per labour code.

Ans. Salient features of the Act. The Act originally passed aimed at covering only employees
whose occupations were hazardous and who were engaged in industries which were more or
less organised. Thus, the Act covered employees in all but the smallest factories in mines, on
the railways and trams, on certain types of building work and in certain less important
branches of employment. Commenting upon the object of the Act, the Royal Commission on
Labour in India has observed:

"Moreover, provisions for compensation is not the only benefit flowing from employees'
compensation legislation, it has important effects in furthering work on the prevention of
accidents in giving employees greater freedom from anxiety, and in rendering industry more
attractive. The growing complexity of industry, with the increasing use of machinery and
consequent danger to the employees along with comparative poverty of the employees
themselves renders it advisable that they should be protected, as far as possible from
hardships arising from accidents."

With that aim, the Act has the following salient features:-

32
1. It makes the payment of compensation obligatory in case the conditions prescribed therein
are fulfilled.

2. Compensation under the Act may be claimed by the employee himself or by his
dependents in case of his death.

3. The employee in order to be eligible for compensation under the Act must prove that the
accident 'arose out of and in the course of employment and resulted either in the death of the
employee or in his disablement exceeding three days.

4. The amount of compensation payable under the Act is assessed on the basis of the monthly
average wages of the employee.

5. The expression 'wages' under the Act has been given a wider definition.

6. Special provisions under the Act have been made regarding fatal accidents.

7. A sub-contractor is under an obligation to indemnify his contractor and the contractor to

the principal employer.

8. The Act is administered by the Commissioner for the employees' compensation appointed
by the State Government.

Employer's liability for compensation-Section 3 of the Employees' Compensation Act, 1923

provides for the employer's liability to pay compensation to an employee, if he is only
disabled or to his dependents, if he is dead. In order to hold the employer responsible for
payment of compensation, the following conditions must be proved:

1. Some personal injury must have been caused to an employee;

2. Such injury must have been caused by an accident;

3. The accident must have arisen out of and in the course of employment; and

4. The injury so caused must have resulted either in the death of the employee or in his total
or partial disablement exceeding three days.

An employee while engaged in carrying out his day-to-day duties in a department of his
employer's mill, was victim of assault which was initiated by one of the employees of the
mill, who was assisted by three outsiders. In the assault, his hands were fractured. It was held
that the injuries suffered by the employee were incidental to his employment and that the
accident must be taken to have arisen out of employment.1

Employer's liability in case of occupational diseases. If an employee: -

(a) employed in the employment specified in Part A of the Schedule III contracts any disease
specified therein as an occupational disease peculiar to that employment; or

(b) Whilst in the service of an employer in whose services he has been employed
continuously for a period not less than 6 months in any employment specified in Part B of the
Schedule III contracts any disease specified therein as an occupational disease employment;
or peculiar to that
33
(c) Whilst in the service of one or more employers in any employment specified in Part C of
Schedule III for such continuous period as the Central Government may specify in respect of
each employment, contracts any disease specified therein as an occupational disease peculiar
to that employment, the contracting of the disease shall be deemed to be an injury by an
accident arising out of and in the course of employment unless the contrary is proved
provided it is proved that:

(i) an employee whilst in the service of one or more employers in any employment specified
in Part C of Schedule III has contracted a disease specified therein, as an occupational disease
peculiar to that employment during a continuous period which is less than the period
specified under this provision for the employment; and

(ii) the disease has arisen out of and in the course of employment;

the contracting of such disease shall be deemed to be an injury by an accident:

Provided further that if it is proved that the employee who :-

(a) having served under any employer in any employment specified in Part B of Schedule III,
or

(b) having served under one or more employers in any employment specified in Part C of
Schedule III for a continuous period specified under this provision for that employment and

he has after the cessation of such service contracted any disease specified in the said Part B or
C, as the case may be, as an occupational disease peculiar to that employment and such
disease arose out of employment, the contracting of the disease shall be deemed to be an
injury by accident. [Section 3 (2)].

If an employee employed in any employment specified in Part C of Schedule III contracts

any occupational disease peculiar to that employment, the contracting thereof is deemed to be
an injury by accident and such employment was under more than one employer, all such
employers shall be liable for the payment of the compensation in such proportion as the
Commissioner may, in the circumstances deem just. [Section 3 (2A)].

The employer is not liable for any disablement during the period of suspension in case an
employee has given notice of an accident of the employee on being required to be so by the
employer or by the commission at any time refuses to submit himself for examination free of
charge by a qualified medical practitioner provided by his employer and his period of
suspension continues during the time of such refusal of the employee. Hence, the employer
cannot be held liable for compensation in respect of the aggravation of the injury under these
circumstances.

But where an injured employee has refused to be attended by a qualified medical practitioner
whose services have been offered to him by the employer free of charge for having accepted
such offer has deliberately disregarded the instruction of such medical practitioner, then if it
is proved:

(i) the employee has not thereafter been regularly attended by a qualified medical practitioner
or having been so attended has deliberately failed to follow his instructions; and

34
(ii) the refusal, disregard or failure was unreasonable, and Court. The petitioner state
challenged the above order. Allowing the petition the High Court held that Section 14 of the
Act provided for payment of overtime wages only to those employees who were getting
minimum rate of wages under the Minimum Wages Act, 1948. It did not apply to those who
were getting better wages under other statutory rules.

Where minimum rates of wages of an employee have been fixed by the day and he works on
any day less than the requisite number of hours constituting the normal working day, no
deduction shall be made from his pay on this account, i.e., he will receive wages in respect of
work done by him on that day as if he had worked for a full normal working day, unless-

(a) his failure to work has been caused by his own unwillingness to work and not by the
omission of the employer to provide him with work; or

(b) any rule made under the Act provides for such deduction in the particular case
circumstances. and

Where an employee does two or more classes of work to each of which a different minimum
rate of wages is applicable, the employer shall pay to the employee in respect of the time
respectively occupied in each such class of work, wages at not less than the minimum rate in
force in respect of each such class. (Section 6). Where an employee is employed on piece
work for which minimum time rate and not a minimum piece rate has been fixed, the
employer shall pay to the employee wages at not less than the minimum rate. (Section 1).

The study of the above provisions indicate that it has succeeded in achieving its objective
with respect to the industrial establishment it is applicable.

Q.4. What are the salient features of the Payment of Gratuity Act, 1972? When is an
employee entitled to get gratuity? When is he disqualified from receiving gratuity?

Ans. Salient Features. The Payment of Gratuity Act, 1972 has the following salient features.

Salient features d

1. It is a self contained and an exhaustive Act. It has an overriding effect on all other Acts or
instruments, or contracts so far as they are inconsistent with this Act.

2. It has wide coverage as it applies to all factories, mines, oilfields, plantations, parts and
railways irrespective of the number of persons employed by them. Shops and establishments
are also within its purview if they employ ten or more persons.

3. It confers statutory rights of gratuity in all employees who have rendered five years of
continuous service and whose services stand terminated after coming into force of the Act on
account of superannuation or retirement or resignation or death or disablement.

4. Both executive and quasi-judicial machinery for matters relating to nomination,

determination and recovery of gratuity have been created under the Act.

35
When employee is entitled to get gratuity

1. An employee is entitled for gratuity on the termination of his employment after rendering
not less than five years of continuous service-

(i) On his superannuation; or

(ii) On his retirement¹ or resignation; or

(iii) On his death or disablement due to accident or disease.

Provided that the completion of continuous service of five years shall not be necessary where
the termination of the employment of any employee is due to death or disablement:

Provided further that in the case of death of employee, gratuity payable to him shall be paid
to his nominee or if no nomination has been made to his heirs, and where any such nominees
or heirs is a minor. The share of such minor, shall be deposited with the controlling authority
who shall invest the same for the benefit of such minor in such bank or other financial
institution, as may be prescribed, until such minor attains the majority.

For the purposes of this section, disablement means such disablement as incapacitates an
employee for the work which he was capable of performing before the accident or disease
resulting in such disablement.

In Thapar Polytechnic Patiala v. State of Punjab & others, the controlling and appellate
authority under the Payment of Gratuity Act, 1972 had ordered the payment of gratuity to
respondent employee who was a peon with the petitioner institution. The petitioners
contended that they are not liable to pay gratuity as they are not of Punjab. It was held that
the management was liable to pay the gratuity to retired employee and there was no room for
argument that the management was being reimbursed by way of grant-in-aid by the
Government or not. Hence petition was dismissed.

In case of termination of employment by death or due to disablement, the completion of five

years' continuous service is not necessary where the termination of employment takes place
due to death.2

2. The employee must not be getting wages exceeding two thousand and five hundred rupees
per mensom or such higher amount as may be specified by the Central Government.

3. The employee must not be holding any post under the Central Government or a State
Government providing for payment of gratuity.

4. The employee must not be an exempted employee. Forfeiture of gratuity. The gratuity of
an:

(1) employee, whose services have been terminated for any act, wilful omission, or
negligence causing any damage or loss to or destruction of property, belonging to the
employer, shall be forfeited to the extent of the damage or loss so called.

(2) The gratuity of an employee shall wholly be forfeited :-

36
(a) if the services of such employee have been terminated for his riotous or disorderly
conduct or any other act of violence on his part;

(b) if the services of such employee have been terminated for any act which constitutes an
offence involving moral turpitude provided that such offence is committed by him in the
course of his establishment. [Section 4 (6)].

An employee whose wages, at the time of termination of his employment, exceeds the wage
limit contemplated under the Act but who otherwise satisfies the conditions of eligibility
would be entitled to gratuity for the period during which he satisfies the wage requirement. 1
Similarly, where an employee is appointed or continued in the employment after the date of
his superannuation, he is entitled to gratuity for the full period of service and not merely up to
the age of superannuation. 2

Where a workman is guilty of a serious misconduct such as acts of violence against the
management or other employees, or riotous or disorderly behaviour in or near the place of
employment, which though not causing damage directly is conducive to grave indiscipline, he
may lose his gratuity wholly.¹ Where an employee is guilty of theft, he will lose gratuity
wholly as theft amounts to an offence involving moral turpitude.2 However, the employee
would be deprived of the amount of gratuity only after having been given opportunity to
explain his conduct. 3

Where an employee continues to occupy an official premises after termination of his

establishment he does not thereby lose his right to get gratuity.4

Persons entitled for gratuity. Under the Act, the following persons are entitled for gratuity:

(1) Where the employment is terminated on superannuation or retirement or resignation or

disablement due to accident or disease, the employee himself;

(2) Where the employee dies, the person nominated by him, and, if no nomination has been
made, his heirs.

Where such nominee or heir happened to be minor, the amount of gratuity shall be deposited
with the controlling authority who shall invest the same for the benefit of such minor, until
such minor attains majority.

Q.5. What are the maternity benefits provided by the employer? As per labour Code.

Ans: Maternity Benefit: It is a benefit or privilege extended to a

female working woman by virtue of sex. It refers to sanction of special leave with wages for a
particular period preceding and subsequent to the day of delivery. It is an additional leave
available to a working woman in addition to other leaves viz., casual leave, sick leave,
earned/privileged leave available to all classes of employees irrespective of sex.

Maternity benefit is a payment to a woman at the rate of average daily wages for the period of
her actua: absence 6 weeks immediately preceding the day of her delivery and for the 6
weeks immediately following that day. Every woman who is working in an establishment for
which the Maternity Benefit Act applies is entitled for maternity benefit and the employer is

37
liable to pay the benefit. The rate of average daily wages means the average of the woman's
wages payable to her for the days she worked during the period of 3 calendar months
immediately preceding the date of her leave on account of maternity, or one rupee a day,
whichever is higher.

Payment of Maternity Benefit: A woman is entitled to claim

maternity benefit only if she has actually worked in an establishment of the employer from
whom she claims maternity benefit, for a period of not less than 160 days in the 12 months
immediately before the date of her expected delivery. For calculating 160 days the days of
lay-off during the said period shall be taken into account.

Sections 5, 5-A, 5-B, Sec. 6, Sec. 7, 8, 9 and 10 provide various provisions for the payment of
maternity benefit as detailed below -

Right to Payment of Maternity Benefit (Sec. 5): According to Section 5 of the Act, a working
woman is entitled to right for payment of the maternity benefit. It runs as follows -

(1) Subject to the provisions of this Act, every woman shall be entitled to, and her employer
shall be liable for, the payment of maternity benefit at the rate of the average daily wages for
the period of her actual absence, that is to say, the period immediately preceding the day of
her delivery, the actual day of her delivery and any period immediately following that day.

Explanation: For the purpose of this sub-Section, the average

daily wages means the average of the woman's wages payable to her for the days on which
she has worked during the period of three calendar months immediately preceding the date
from which she absents herself on account of maternity, the minimum rate of wage fixed or
revised under the Minimum Wages Act, 1948 (11 of 1948) or ten rupees, whichever is the
highest.

(2) No woman shall be entitled to Maternity benefit unless she has actually worked in an
establishment of the employer from whom she claims maternity benefit, for a period of not
less than eighty days in the twelve months immediately preceding the date of her expected
delivery:

Provided that the qualifying period of eighty days aforesaid shall not apply to a woman who
has immigrated into the State of Assam and was pregnant at the time of the immigration.

Explanation: For the purpose of calculating under the sub-

Section the days on which a woman has actually worked in the establishment (the days for
which she has been laid off or was on holidays declared under any law for the time being in
force to be holidays with wages) during the period of twelve months immediately preceding
the date of her expected delivery shall be taken into account.

(3) The maximum period for which an won in shall be entitled to maternity benefit shall be
twelve weeks of which not more than six weeks shall precede the date of her ex-delivery:

Provided that where a woman dies during this period, the maternity benefit shall be payable
only for the days up to and including the day of her death; Provided further that where a
woman, having been delivered of a child, dies during her delivery or during the period

38
immediately following the date of her delivery for which she is entitled for the maternity
benefit, leaving behind in either case the child, the employer shall be liable for the maternity
benefit for that-entire period but if the child also dies during the said period, then, for the
days up to and including the date of the death of the child.

Continuance of payment of maternity benefit in certain cases (Sec. 5-A): According to

Section 5-A (inserted by Act 21 of 1972) every woman entitled to the payment of maternity
benefit under this Act, shall, notwithstanding the application of the Employees' State
Insurance Act, 1948 (34 of 1948), to the factory or other establishment in which she is
employed, continue to be so entitled until she becomes qualified to claim maternity benefit
under Section 50 of that Act.

Payment of maternity benefit in certain cases (Sec. 5-B): According to Section 5-B (inserted
by Act 53 of 1976) every woman -

(a) who is employed in a factory or other establishment to which the provisions of the
Employees' State Insurance Act, 1948 apply:

(b) whose wages (excluding remuneration for over-time work) for a month exceed the
amount specified in sub-clause (b) of clause (9) of Section 2 of that Act; and

(c) who fulfils the conditions specified in sub Section (2) of Section 5, shall be entitled to the
payment of maternity benefit under this Act.

Notice of claim for maternity benefit and payment thereof (Sec. 6): Section 6 of the Act
requires that any working woman, who wants to claim the maternity benefit, shall give notice
in writing in a prescribed form to her employer.

Payment of maternity benefit in case of death of a woman (Sec. 7): Section 7 deals with the
right of the legal heir of a working woman to receive the maternity benefit in the event of
death of the working woman. Section 7 runs as follows - If a woman entitled to maternity
benefit or any other amount under this Act, dies before receiving such maternity benefit or
amount, or where the employer is liable for maternity benefit under the Second proviso to
sub-Section (3) of Section 5, the employer shall pay such benefit or amount to the person
nominated by the woman in the notice given under Section 6 and in case there is no such
nominee, to her legal representative.

Payment of medical bonus (Sec. 8): According to this Section, every woman entitled to
maternity benefit under this Act shall also be entitled to receive from her employer a medical
bonus of two hundred and fifty rupees, if no pre-natal confinement and post-natal care is
provided for by the employer free of charge.

Leave for miscarriage, etc. (Sec. 9): In case of miscarriage or medical termination of
pregnancy, a woman shall, on production of such proof as may be prescribed, be entitled to
leave with wages at the rate of maternity benefit for a period of two weeks immediately
following the day of her miscarriage or, as the case may be, her medical termination of
pregnancy.

Leave with wages for tubectomy operation (Sec. 9-A): As per this Section, in case of
tubectomy operation, a woman shall, on production of such proof as may be prescribed, be
entitled to leave with wages at the rate of maternity benefit for a period of two weeks
immediately following the day of her tubectomy operation.

39
Leave for illness arising out of pregnancy, delivery, premature birth of child, miscarriage,
medical termination of pregnancy or tubectomy operation (Sec. 10): According to Section 10
of the Act, a woman suffering from illness arising out of pregnancy, delivery, premature birth
of child, miscarriage, medical termination of pregnancy or tubectomy operation, shall on
production of such proof as may be prescribed, be entitled in addition to the period of
absence allowed to her under Section 6, or, as the case may be, under Section 9, to leave with
wages at the rate of maternity benefit for a maximum period of one month.

Q.6. Describe the salient features of the Employees' Compensation Act. As per Labour
Code.

Ans: Salient features of the Act. The Act originally passed aimed at covering only employees
whose occupations were hazardous and who were engaged in industries which were more or
less organised. Thus, the Act covered employees in all but the smallest factories in mines, on
the railways and trams, on certain types of building work and in certain less important
branches of employment. Commenting upon the object of the Act, the Royal Commission on
Labour in India has observed:

"Moreover, provisions for compensation is not the only benefit flowing from employees'
compensation legislation, it has important effects in furthering work on the prevention of
accidents in giving employees greater freedom from anxiety, and in rendering industry more
attractive. The growing complexity of industry, with the increasing use of machinery and
consequent danger to the employees along with comparative poverty of the employees
themselves renders it advisable that they should be protected, as far as possible from
hardships arising from accidents."

With that aim, the Act has the following salient features :-

1. It makes the payment of compensation obligatory in case the conditions prescribed (iii) the
injury has been aggravated thereby:

the injury and the resulting disablement are deemed to be of the same nature and duration as
they might reasonably have been expected to be if the employee han been regularly attended
to by the doctor whose instructions had followed and compensation, if any, in payable
accordingly.

Contracting of an occupational disease after discontinuance of service. - Where an employee

contracts an occupational disease after discontinuance of his service, the employer shall be
liable to pay compensation :-

(i) if it is proved that the employee has served under one or employers in more any
employment specified in Part C of Schedule III for such continuous period as the Central
Government may specify in respect of each such employment.

(ii) if after the cessation of service, he has contracted any disease specified in Part C of
Schedule III as an occupational disease peculiar to that employment; and

(iii) if it is proved that such disease arose out of the employment;

40
the contracting of the disease shall be deemed to be an injury by accident within the meaning
of this section.

Defences available to an employer. Where an action is brought against an employer for

payment of compensation under this Act on the ground that an employee has been disabled
by an accident arising out of and in the course of employment, the employer can raise any of
the following defences:- (1) The injury resulting from the accident does not result in the total
or partial disablement of the employee for a period exceeding three days.

(2) The injury to the employee, not resulting in his death, caused by an accident was directly
attributable to:-

(a) the employee having been at the time of accident under the influence of drink or drug; or

(b) the wilful disobedience of the employee to an order or rule expressly made for the
purpose of securing the safety of employee; or

(c) the wilful removal or disregard by the employee of any safety guard or other device which
he knew to have been provided for the purpose of securing the safety of employee.

(3) The accident which caused injury arose outside the scope of employment as it did not
arise out of and in the course of employment.

Arising out of and in the course of employment. In order to claim compensation under the
provisions of this Act, it is essential for the employee to establish that he has received
personal injury by an accident arising out of and in the course of employment.

The expression 'arising out of' and 'in the course of employment are co-extensive. These two
elements must be established together. The expression 'arising out of' suggests the cause of
accident and the expression 'in the course of employment' points out to the place and
circumstances under which the accident takes place and (iii) the injury has been aggravated
thereby:

the injury and the resulting disablement are deemed to be of the same nature and duration as
they might reasonably have been expected to be if the employee han been regularly attended
to by the doctor whose instructions had followed and compensation, if any, in payable
accordingly.

Contracting of an occupational disease after discontinuance of service. - Where an employee

contracts an occupational disease after discontinuance of his service, the employer shall be
liable to pay compensation :-

(i) if it is proved that the employee has served under one or employers in more any
employment specified in Part C of Schedule III for such continuous period as the Central
Government may specify in respect of each such employment.

(ii) if after the cessation of service, he has contracted any disease specified in Part C of
Schedule III as an occupational disease peculiar to that employment; and

(iii) if it is proved that such disease arose out of the employment;

41
the contracting of the disease shall be deemed to be an injury by accident within the meaning
of this section.

Defences available to an employer. Where an action is brought against an employer for

payment of compensation under this Act on the ground that an employee has been disabled
by an accident arising out of and in the course of employment, the employer can raise any of
the following defences:- (1) The injury resulting from the accident does not result in the total
or partial disablement of the employee for a period exceeding three days.

(2) The injury to the employee, not resulting in his death, caused by an accident was directly
attributable to:-

(a) the employee having been at the time of accident under the influence of drink or drug; or

(b) the wilful disobedience of the employee to an order or rule expressly made for the
purpose of securing the safety of employee; or

(c) the wilful removal or disregard by the employee of any safety guard or other device which
he knew to have been provided for the purpose of securing the safety of employee.

(3) The accident which caused injury arose outside the scope of employment as it did not
arise out of and in the course of employment.

Arising out of and in the course of employment. In order to claim compensation under the
provisions of this Act, it is essential for the employee to establish that he has received
personal injury by an accident arising out of and in the course of employment.

The expression 'arising out of' and 'in the course of employment are co-extensive. These two
elements must be established together. The expression 'arising out of' suggests the cause of
accident and the expression 'in the course of employment' points out to the place and
circumstances under which the accident takes place and the time when it occurred. A causal
connection between injury by accident and employment is necessary. The employment
should give rise to the circumstances of injury by accident, but direct relationship between
the two is not necessary. There must be a causal relationship between the two.

In Indian News Chronicle v. Mrs. Lazarus, 1 an employee in the discharge of his duties has to
make frequent visits to the heating and cooling room of the establishment due to which he
developed pneumonia which ultimately caused his death. It was held that the death is the
outcome of an accident arisen out of and in the course of employment and hence his widow is
entitled for compensation.

Similarly, in R.B. Moondra & Co. Ltd. v. Mst. Bhanwari, the driver of a petrol tanker
belonging to the appellant company died due to fire in the tanker as a result of negligence of
the driver himself. It was held that the accident arose out of and in the course of employment.

But in M. Mackenzie v. I.M. Issak,3 a seaman lost his life from a ship whose body could not
be traced, it was held that the accident did not arise out of and in the course of employment.

In State of Rajasthan v. Smt. Kanta, a driver in the Irrigation Survey Sub-Division died on
election duty. It was held that the death occurred in the course of employment.

42
In Bai Shakri v. New Mane Chowk, the following principles have been laid down in this
regard:

1. There must be causal connection between the injury and the accident and the work done in
the course of employment.

2. It is not necessary that the employee must actually be working at the time of accident or
had just ceased to work.

3. The applicant must show that it was the work and the resulting strain that contributed to or
aggravated the injury.

4. Where the evidence is balanced, if the evidence shows a greater probability which satisfies
a reasonable man that the work contributed to the causing of the personal injury, it would be
enough for the employee to succeed.

The Supreme Court in M. Mackenzie v. I.M. Issak,¹ has said that the words 'arising out of
employment' are understood to mean that during the course of the employment, injury has
resulted from some risk incidental to the duties of the service which unless engaged in the
duty owing to the master it is reasonable to believe the workman would not otherwise have
suffered. There must be a causal relationship between the accident and employment. If the
accident had occurred on account of a risk which is an incident of the employment the claim
for compensation must succeed unless of course the workman has exposed himself to do an
added peril by his own imprudence.

In Oriental Insurance Co. Ltd. v. Sorumai Gogoi,2 the Supreme Court observed that there
was nothing on record to show that death had occurred to the driver in an accident arising out
of employment. If some miscreanta had taken away the driver along with the vehicle or had
murdered him, it did not give rise to a presumption that death had occurred in accident arising
out of employment.

Notional extension of employer's premises. Ordinarily an employee is deemed to be in the

course of

employment when he has reached the place of his work and it comes to an end when he
leaves that place. The periods of going to and turning from employment are generally
excluded and are not within the course of employment. But there may be situations in which
these things may also become a part of the course of employment. Where an employee in
going to or coming from his work, he has to use an access which is part of the employer's
premises or which he is entitled to traverse, because he is going or coming from his work, he
is held to be on his master's business while he is using that access. 1

In St. Hellen's Colliery Co. Ltd. v. Hewitson, 2 a collier was injured while travelling in a
special colliers train running between the colliery and the place of residence of the employee.
It was held that the accident did not arise in the course of employment for the following
reasons:-

(1) There were no obligations on the employee to use the facility of train provided by the
employer. He was free to avail any other alternative facility.

43
(2) The physical feature of the land was not such that the facility of transit afforded by the
employer was the only means of transit to reach the place of employment and come back
from there.

(3) Where the employee is not under an obligation to use the facility of transit provided by
the employer, then the course of employment would not begin until he reaches the place of
work and hence the accident cannot be said to have arisen out of and in the course of
employment.

But in Weaner v. Tredeger Iron & Steel Co. Ltd.¹ on similar facts it was held that the accident
arose out of and in the course of employment. In this case a collier was injured while
boarding a train. The employees were using the facility of train under an arrangement with
the railway company for which fares were deducted from their wages; although the
employees were free to go by another means. This case was distinguished from St. Hellen's
case on the ground that in this case, the employment has not ceased as the employee has not
boarded the train and in the latter case the employment has not begun as he had not reached
the place of employment.

In S.S. Mfg. Co. v. Bai Velu Raja, an employee employed in a salt work was drowned while
crossing the creek in a public ferry due to bad weather. It was held that the accident cannot be
said to have arisen out of and in the course of employment.

The principle relating to notional extension of employer's premises are as follows:-

1. There must be an obligation on the employer to provide transport to and from the work
spot and reciprocal obligation on the employees to avail that transport.

2. The means of transport provided by the employer must be the only means to reach the
place of employment.

3. In case, the accident has taken place on a public road, the liability of the employer would
only arise when the employment required the employee at the place of accident. In such cases
the distance of the place of accident from the place of employment is immaterial.

Q.7. Discuss the various provisions relating to safety in the Factories Act, 1948.

Ans. The provisions relating to safety of the workers in the factories under the Factories Act,
1948 are as follows :-

(1) Fencing of machinery. In every factory every

moving part of a prime mover and every fly wheel connected to a prime mover, must be
securely fenced whether the prime mover or fly wheel is the engine house or not. The
headrace and tailrace of every water wheel and water turbine and any part of a stock-bat
projecting beyond the head stock of a lathe shall also be securely fenced. [Section 21 (1) (i) to
(iii)]. Similarly, every part of an electric generator, a motor or a rotary converter, every part
of the transmission machinery and every dangerous part of any other machinery shall be
securely fenced unless they are in such position or of such construction as to be safe to any
person employed in the factory as they would if they were securely fenced. [Section 21 (1)
(iv)].

44
The fencing and safeguards must be of substantial construction and shall be constantly kept
and maintained in position whilst the machinery is in motion or in the use excepting on any
occasion when it is necessary to examine machinery in motion or to carry out mounting or
shipping of belts, lubrication or other adjusting operations as a result thereof. [Section 21 (1)
and proviso].

In Walker v. Beltechley Hettans Ltd.,¹ it was held that a machine is dangerous if it is a

possible cause of injury to anybody acting in a way in which a human being may be
reasonably expected to act in circumstances which may be reasonably expected to occur. In
Mitchell v. North British Rubber Co. Ltd.,2 a machine was also held to be dangerous if in the
ordinary course of human affairs, danger may be reasonably anticipated from its use if
unfenced, not only to the prudent or alert but also to the careless or inattentive worker whose
inadvertent conduct may expose him to risk of injury from the unguarded part.

(2) Work on or near machinery in motion.-Where in any factory, it becomes necessary to

examine any part of machinery, while it is in motion or as a result of such examination to
carry out-

(a) lubrication or other adjusting operation [Section 22° (1) (9)], or

(b) by mounting or shipping of belts or lubrication or other adjusting operation, while the
machinery is in motion, such examination or operation shall be made or carried out only by a
specially trained adult male worker wearing tight fitting clothing whose name has been
recorded in the register prescribed in this behalf and who has been furnished with a certificate
of his appointment and while he is SO engaged :-

(2) such worker shall not handle a belt at a moving pulley unless:-

(i) the belt is not more than fifteen centimetre in width;

(ii) the pulley is normally for the purpose of drive and not merely a fly wheel or balance
wheel;

(iii) the belt joint is either laced or flush with the belt;

(iv) the belt, including the joint and the pulley rim are in good repair;

(v) there is a reasonable clearance between the pulley and any fixed plant or structure;

(vi) secure foot hold, and where necessary secure hand hold, are provided for the operator;
and

(vii) any ladder in the use for carrying out any examination or operation, is securely fixed or
lashed or is firmly held by a second person. [Section 22 (1) (b)].

Prohibition for women and young persons. No woman or young person shall be allowed to
clean lubricate or adjust-

(a) any part of prime mover or of transmission machinery while in motion; or

45
(b) any part of a machine if such work is likely to expose the woman or the young person to
risk of injury from any moving part of that machine or any adjacent machine. [Section 22
(2)).

Employment of young persons on dangerous machines. Where any machine is prescribed as

dangerous for young persons, no young person shall work unless-

(a) he has been fully instructed as to the dangers arising in connection with the machine and
the precautions to be observed; and

(b) he has received sufficient training in work at the machine or is under adequate supervision
by a person with thorough knowledge and experience of the machine. [Section 23 (1) & (2)].

Striking gear and devices for cutting off power. Suitable striking gear, or other efficient
mechanical appliances must be provided, maintained and used in every factory to move
driving belts to and from fast and loose pulleys in transmission machinery, so as to prevent
the belt from creeping back on to the fast pulleys. [Section 24 (1) (9)]. No driving belt when
not in use shall be allowed to rest or ride upon shafting in motion. [Section 24 (1) (b)].

Suitable device must be maintained in every workroom for cutting off power so that power
can be cut off in emergencies. [Section 24 (2)). In relation to factories in operation before the
commencement of the Act, this provision shall apply only to work room in which electricity
is used as power. [Section 24 (2) proviso].

When a device which can advertently shift from "off" to "on" position is provided in a factory
to cut off power, arrangements shall be provided for locking the device in safe position to
prevent accidental starting of the transmission machinery or other machines to which the
device is fitted. [Section 24 (3)].

(6) Self-acting machines. A traversing part of a self-acting machine in a factory and any
material carried thereon shall not be allowed to run on its outward travel within a distance of
18 inches from any fixed structure which is not part of the machine if the space over which it
runs is one on which a person is liable to pass (Sec. 25).

(7) Casing of a new machinery. In all machinery driven by power every set screw, bold or
key, on any revolving shaft, spindle, wheel, or pinion shall be so sunk, encased, guarded as to
prevent danger. [Section 26 (1) (a)]. Further, all spur worm and other toothed or friction
gearing not requiring frequent adjustments, while in motion shall be completely incased
unless it is safely situated. [Section 26 (1) (b)].

(8) Prohibition of employment of women and children near cotton openers. The employment
of any woman or child for pressing cotton in a factory in which a cotton opener is at work is
prohibited. (Sec 27). If the feed end of a cotton opener is in a room separated from the
delivery end by a partition extending to the roof or to a height specified by the Inspector,
women and children may, however, be employed on the side of the partition where the feed
end is situated. (Proviso to Section 27).

(9) Hoists and lifts. Hoists and lifts must be of good mechanical constructions, sound material
and adequate strength. [Section 28 (1) (a) (i)]. They must be properly maintained and
thoroughly examined at least once every six months. [Section 28 (1) (a) (ii)]. Particulars of
every such examination shall be recorded in a register in Form II. [Section 28 (1) (a)]. All
hoist ways and lift ways must be sufficiently protected by an enclosure fitted with gates

46
[Section 28 (1) (b)] and so constructed as to prevent any person or thing from being trapped
between any part of the hoist or lift or fixed structure or moving part. [Section 28 (1) (b)]. a
bulls so a

The maximum safe working load must be marked plainly on the hoists or lift and no load
greater than that shall be carried. (Section 28 (1)(c).

Where the hoists and lifts are used for carrying persons, interlocking or other device must be
fitted on the gate of each side of access to a landing so as to secure that the gate cannot be
opened except when the cage is at the landing and that the cage cannot be moved unless the
gate is closed. [Section 28 (i) (d) and (c)].

10. Lifting (machines other than hoists and lift) and chains and ropes and lifting tackles:-All
parts, including a lifting gear, whether fixed or movable of every lifting machine other than
hoists and lifts, and chain, rope and lifting tackle for the purpose of raising or lowering
persons, goods or materials must be of good construction, sound material, and adequate
strength and be properly maintained. [Section 29 (1) (9) (i) & (iii)]. They must be thoroughly
examined by a competent person at least once every 12 months or at intervals specified in
writing by the Chief Inspector. [Section 29 (1) (a) (iii)].

They must not be loaded beyond the safe working load which must be plainly marked thereon
together with an identification mark and duly entered in the prescribed register. Where this is
not practicable, a table showing the safe working loads of energy kind, and size of the
aforesaid machinery in use shall be displayed prominently on the premises. [Section 29 (1)
(b)].

It must be ensured that a travelling crane does not approach within 20 feet of a place where a
person working on or near its wheel track is liable to be struck by the crane. [Section 29(1)
(c)].

11. Revolving machinery. In all rooms where grinding is carried on, the maximum safe
working peripheral speed of a grind stone or abrasive wheel shaft or spindle upon which the
wheel is mounted, and the diameter of the pulley on such shaft or spindle must be indicated in
a notice, permanently affixed near the machine in use. [Section 30 (1)]. The speed indicated
should not be exceeded. [Section 30 (2)]. The safe working peripheral speed of energy
revolving vessel, cage, basket flywheel, pulley, dise or similar power driven appliance must
not be exceeded. [Section 30 (3)].

12. Pressure plant. If any part of the plant or machinery used in a manufacturing process is
operated at a pressure above atmospheric pressure, it must be ensured that the safe working
pressure of such part is not exceeded. [Section 31 (1)].

13. Floors, stairs and means of access. All floors, steps, stairs, passages and gang ways must
be well constructed, properly maintained and provided with substantial hand rails where
necessary. (Section 32). They should be kept free from obstructions and substances likely to
cause persons to slip. [Section 32 (1)]. However, no breach of statutory duty results if an
injury is occasioned by accumulation of rain water in a little depression in the concrete of the
passage.1

14. Pits, sumps, opening in floors etc. Energy fixed vessel, sumps, tank, pit or opening in the
ground or in a floor, which is dangerous by reason of its situation, construction, or content

47
shall be securely covered or fenced. [Section 33 (1)]. It is the duty of the owner to cover or
fence the pit.2

Q.8. Discuss the provisions relating to health and cleanliness under the Factories Act,
1948, as per labour code.

Ans. The provisions relating to health and cleanliness are contained in chapter 3 of the
Factories Act, 1948. These provisions are as follows-

(1) Cleanliness (Section 11): Every factory shall

be kept clean and free from effluvia arising from any drain, privy or other nuisance and in
particular:-

(a) Accumulation of dirt and refuse must be removed daily by sweeping or by any other
effective method from the floors and benches of work rooms and from staircases and
passages;

(b) The floor of every room must be cleaned at least once every week by washing, using
disinfectant or by some other effective method;

(c) Where the floor is liable to become wet in the course of any manufacturing process,
effective drainage shall be provided and maintained;

(d) All inside walls and partitions, all ceilings, or tops of rooms and walls, sides and tops of
passages and staircases should be-

(i) painted or varnished at least once in every five years;

(ii) where they have smooth and impervious

(a) adequate ventilation by circulation of fresh air; and

(b) such temperature as will secure to workers therein reasonable comfort and prevent injury
to their health.

The walls and roofs shall be of such materials and so designed that such temperature shall not
be exceeded but kept as low as practicable; and where the nature of work carried on in the
factory is likely to produce excessively high temperatures, practicable measures should be
taken to protect the workers by separating such process from the work room by insulating hot
parts or by other means. [Section 13 (1) (b)].

The State Government may prescribe-

(a) standard of adequate ventilation and reasonable temperature and direct a thermometer to
be maintained as specified;

(b) where excessively high temperatures can be reduced by whitewashing, spraying or

insulating and screening outside walls or roofs or windows or by raising the level of the roof

48
or by insulating the roof or such other methods as shall be adopted in the factory. (Section
13).

4. Dust and fumes. Where dust or fume or

impurity of such a nature is given off as a result of the manufacturing process which is likely
to be injurious or offensive, effective measures must be taken to prevent its inhalation and
accumulation in a work room and if an exhaust appliance is necessary for this purpose, it
shall be applied very near to the point of origin which must be enclosed.

An internal combustion engine which is stationary shall not be operated unless the exhaust is
conducted into the open air, no other internal combustion engine shall be operated in any
room unless effective measures have been taken to prevent accumulation of fumes therefrom
which are injurious. (Section 14).

5. Artificial humidification. In respect of all

factories in which the humidity of the air is artificially increased, the State Government may
make rules-

(a) prescribing standard of humidification;

(b) regulating the methods used for artificially increasing the humidity of the air;

(c) directing prescribed tests for determining the humidity of the air correctly carried out and
recorded.

(d) prescribing methods to be adopted for securing adequate ventilation and cooling of the air
and the work room.

Where the water for above purposes is obtained from a public supply or other sources of
drinking water, it shall be effectively purified before it is so used. (Section 15).

6. Overcrowding. No room in any factory shall be overcrowded to an extent injurious to the

health of the workers employed therein. For every worker employed therein at least 9.9 or 4.2
cubic metres of space, depending whether the factory was in operation before or after the
commencement of this Act shall be provided. No account shall be taken of any space which
is more than 4.2 metres above the level of the floor of the room. The Chief Inspector,
however, is empowered to exempt any work room from the provisions of this section if he
deems fit. (Section 16)

7. Lighting. In every part of a factory where workers are working or are passing sufficient
natural or artificial light or both shall be maintained. All glazed windows and skylights used
for lighting of work rooma must be kept clean and free from obstruction. Effective provision
must be made so far as practicable, for prevention of-

(a) glare from light directly or reflection from a smooth or polished surface, and

(b) formation of shadows causing eye strain or the risk of accident.

The State Government may prescribe standards of sufficient and suitable light. (Section 17)

49
8. Drinking water. In every factory effective arrangements shall be made to provide and
maintain at suitable points conveniently situated for all workers a sufficient supply of
wholesome drinking water. It shall be marked "drinking water" in the language understood by
a majority of workers. But no such point shall be situated within 6 metres of any washing
place, urinal, latrine, spittoon, open drain carrying sullage or effluent, unless a shorter
distance is approved in writing by the Chief Inspector. (Section 18). Wherein a factory more
than 250 workmen are ordinarily employed, provision shall be made for cooling drinking
water during hot weather by effective means and for distribution thereof. [Section 18 (3)].

9. Latrine and Urinals. In every factory, sufficient and separate latrine and urinals as
prescribed for males and females workers must be provided. The State Government may
prescribe their numbers in proportion to the employees employed therein. These latrine and
urinals must be adequately lighted and ventilated and as far as practicable, they shall not
communicate with any work room. Such rooms must be kept in a clean and sanitary condition
and sweepers must be employed for keeping latrine and urinals and washing places clean.

In a factory wherein more than 250 workers are ordinarily employed-

(i) all latrine and urinals accommodation shall be of prescribed sanitary type;

(ii) the floors and walls up to a height of 90 cms. of the latrine and urinals shall be in glazed
tiles or otherwise provided with a smooth polished impervious surface;

(iii) the floors, portions of the walls and blocks and sanitary parts of latrine and urinals shall
be thoroughly washed and cleaned at least once in every 7 days with suitable detergents and
disinfectant or with both.

The State Government may also provide for further matters of sanitation including the
obligation of workers in this regard. (Section 19).

10. Spittoons. In every factory there shall be provided a sufficient number of spittoons in
convenient places and they shall be maintained in a clean and hygienic condition. The State
Government may provide for the type and the numbers of spittoons, their location and
maintenance in a clean and hygienic condition. Lad

No person shall spit within the premises of a factory except in the spittoon provided for the
purpose and the penalty for its violation shall be prominently displayed at suitable places in
the premises.

The provisions relating to cleanliness and health are primarily the responsibility of the
employer as per direction given by the State Government.

Q.9. Discuss the various provisions governing working hours of adults under the
Factories Act, 1948, as per labour code.

Ans. The provisions relating to working hours of adults are discussed in Chapter 6 of the
Factories Act, 1948 which are as follows:-

50
(1) Weekly hours. No adult worker shall be required or allowed to work in a factory for more
than 48 hours in any week. [Section 90 (3) & (4)].

(2) Weekly holidays. An adult worker shall not be required or allowed to work on the first
day of the week unless-

(a) he has or will have a holiday for a whole day on one of the three days, immediately before
or after the said day; and

(b) the manager has before the said day or the substituted day, whichever is earlier-

(i) delivered a notice at the inspector's office of working on that day and the day to be
substituted and

(ii) displayed such notice in the factory. [Section 52 (1)].

(3) Compensatory holidays. Where as a result of the exemption of factory from the provision
relating to weekly holidays, a worker is deprived of any of the weekly holidays, he shall be
allowed within the month in which the holidays were due to him or within the two months
immediately following that month, compensatory holidays of equal number to the holidays so
lost. [Section 53 (1)).

(4) Daily hours. Subject to 48 weekly hours of work, no adult worker shall be required or
allowed to work for more than nine hours on any day. (Section 54). However, this maximum
daily may be exceeded to facilitate the change of shifts with the previous approval of the
chief inspector. (Proviso to Section 54).

(5) Intervals for rest. While fixing the periods of employment of adult workers, it must be
ensured that no period exceeds five hours and no worker works for more than five hours
without an interval or rest of at least half an hour. [Section 55 (1)]. The State Government,
may, however, exempt any factory from this provision. But in that case the total number of
hours worked by a worker would not exceed six hours. [Section 55 (2)].

(6) Spread over. The spread over of the period of work of an adult worker must not exceed 10
hours in any day including his intervals for rest. (Section 56). The Chief Inspector may,
however, increase it to 12 hours for reasons to be specified in writing. (Proviso to Section
56).

(7) Night Shift. Where a worker works in a shift extending beyond midnight for the purposes
of the provisions of weekly holidays and compensatory holidays, and holiday for whole day
shall mean a period of 24 consecutive hours, beginning when the shift ends. [Section 57 (a)].
The following day for such worker shall be deemed to be a period of 24 hours beginning
when the shift ends and the hours he has worked after midnight, shall be counted in the
previous day. (Section 5) (b)].

(8) Prohibition of overlapping shifts. No work shall be carried on by means of a system of

shifts in such a way that more than one relay of workers is engaged in work of the same mind
of the same time. [Section 58 (1)]. However, the State Government may make exceptions to
this rule. [Section 58 (2)]. In exercise of this power, printing presses attached to the
newspaper offices have been exempted subject to certain conditions. [Rule 84-A (1)].

51
(9) Extra wages for overtime. A worker working in excess of an hour in any day or 48 hours
in any week, shall be entitled to wages at the rate of twice his ordinary rate of wages for
overtime work. [Section 59 (1)].

(10) Restriction on double employment.-An adult worker shall not be required or allowed to
work on any day on which he had already been working in any other factory, except in the
prescribed circumstances. (Section 60).

(11) Notice of periods of work for adults.-A notice of periods of works for adults shall be
displayed and kept showing clearly for everyday, the periods during which adult workers are
required to work. [Section 61 (1)]. The period in the notice shall be fixed beforehand and
shall not contravene the provisions of weekly and daily hours, weekly holidays, intervals for
rest, spread over and prohibition of overlapping shifts. [Section 61 (2)].

(12) System of work. If on a particular single day there is a departure from the system of
work already notified, then that cannot be said to be a change in the system of work in the
factory because a change in the system of work would mean either a permanent change or a
change for a fairly long duration of time in the hour of work or any other condition.1

(13) Extension of time. The manager shall generally fix the period where all the adult
workers are required to work, during the same period [Section 61 (3)). Where all the adult
workers are not required to work during the same periods, the manager shall classify them
into groups in conformity with the nature of their work indicating the number of workers in
each group. [Section 61 (4)].

(14) Special restrictions on employment of women. Section 66(1) lays down that the
provisions of this chapter shall, in their application to women in factories, be supplemented
by the following further restrictions namely :-

(a) no exemption for the provisions of Section 54 may be granted in respect of any women;

(b) no women shall be required or allowed to work in any factory except between the hours
of 6 a.m. and 7 p.m.;

But the State Government may by notification in the Official Gazette, in respect of any
factory or group or class or description of factories vary the limit laid down in clause (b) in
such a manner that in no case any such variation shall authorise the employment of any
woman between the hours of 10 p.m. and 5 a.m.

(c) there shall be no change of shifts except after a weekly holiday or any other holiday.

Section 66(2) empowers the State Government to make rules providing for exemption for the
restrictions set out in sub- section (1) to such extent and subject to such conditions as it may
prescribe, of women working in fish-curing or fish-canning factories, where the employment
of women beyond the hours specified in the said restriction is necessary to prevent damage
to, or deterioration in, any raw material. Section 66(3) provides that the rules made under
sub-section (2) shall remain in force for not more than three years at a time.

The Royal Commission on Labour in its report has pointed out that "the main arguments in
favour of fixing the maximum for women's hours at lower level than those prescribed for men
are that women have domestic duties to perform and that they find long hours as a greater
strain."

52
In Omana Oomen and Others v. F.A.C.T. Ltd., 1 the women candidates were excluded for the
internal examination leading to absorption on a regular basis for the only reason that they
were women. Under Section 66(b) the State between 5 a.m. to 10 p.m. It was held that
women candidates could be accommodated to work in shift between 5 a.m. to 10 p.m. but the
company did not move the State Government to obtain such permission. Therefore, the
exclusion of women candidates on the ground of sex was violative of Articles 14 and 15 of
the Constitution. If other women trainees were regularly absorbed in employment which
involves working in shifts, there is no reason to eliminate the petitioners.

In Triveni K.S. and others v. Union of India and others, the constitutionality of section 66 (1)
(b) was challenged being discriminatory on the basis of sex. Section 66 (1) (b) provides that
no woman shall be required or allowed to work in any factory except between the hours of 6
a.m. and 7 p.m. The High Court held that the women should not be employed during night for
their own safety and welfare was a philosophy of a bygone age out of tune with modern
claims of equality, especially between sexes. It was further observed after referring to
Articles 2, 3 and 5 of the Convention 89 of the International Labour Organisation that it had
to be seen whether the State was following the Convention. Under section 66(2) of the
Factories Act, 1948, the State had been authorised to prescribe working hours for women
without any restrictions in fish-curing and fish-canning industries. This exception was not for
protecting women but for protecting the fish which would deteriorate. The High Court further
observed that it looked an absurd argument that women would be safe in fish curing or fish
canning industry but not safe in textile industry. Consequently, section 66(1) (b) of the
Factories Act, 1948 was struck down as unconstitutional by the High Court and declared that
the same safeguards as provided to women in fish industry should be given to women
workers in other industries during night time.

Rules from exemption from hours of work may be made for women working in fish curing,
fish canning factories to prevent damage to or deterioration in any raw material. [Section 66
(2)]. Such rules shall remain in force for not more than 3 years at a time. [Section 66 (3)].

Powers of State Government in regard to working hours of adults. Section 65(1) lays down
that where the State Government is satisfied that, owning to the nature of the work carried on
to other circumstances it is unreasonable to require that the period of work of any adult
workers in any factory or class or description of factories should be fixed before-hand, it may
by written order, relax or modify the provisions of Section 61 in respect of such workers
therein, to such extent and in such manner as it may think fit, and subject to such conditions
as it may deem expedient to ensure control over period of work.

According to Section 65(2), the State Government or subject to the control of the State
Government the Chief Inspector, may, by written order, exempt any or all of the adult
workers in any factory or group or class or description of factories from any or all of the
provisions of sections 51, 52, 54 and 56. The said exemption shall be subject to such
conditions as may be deemed expedient and shall be granted on the ground that it is required
to enable the factory or factories to deal with an exceptional pressure of work.

Any exemption granted under sub-section (2) this provision shall be subject to the following
conditions, namely:-

(i) the total number of hours of work in any day shall not exceed 12;

(ii) the spread-over, inclusive of intervals for rest shall not exceed 13 hours' in any day;

53
(iii) the total number of hours of work in any week including overtime shall not exceed sixty;

(iv) no worker shall be allowed to work overtime for more than seven days at a stretch and
the total number of hours, of overtime work in any quarter shall not exceed seventy five;

The mentioned provisions are very significant from the point of view of an adult employee.
(Section 65(3).

Q.10. What are the provisions relating to Inspecting staff and the authority responsible
to enforce the provisions on the occupational safety health and working condition, as
per the labour code?

Ans. This chapter containing Sections 8 to 10 of the Factories Act lays down the provisions
relating to Inspecting Staff or the authorities responsible to enforce the provisions of the
Factories Act. Section 8 empowers the State Government to appoint Inspectors.

Section 9 deals with powers of Inspectors.

Section 10 confers on the State Government power to appoint certifying surgeons.

(i) Inspectors (Sec. 8) The State Governments are empowered to appoint Chief Inspectors,
Additional Chief Inspectors, Joint Chief Inspectors and Deputy Chief Inspectors. The State
Governments are also empowered to appoint qualified medical practitioners as certifying
surgeons for the examination of persons engaged in the factories. They are deemed to be
public servants ensured with the power to enter any place which is used as factory, to
examine the premises, plant and machinery, to require the production of any register or
document relating to the factory.

Appointment of Inspectors and Chief Inspectors: The

State Government by notification in the Official Gazette may appoint Inspectors and Deputy
Chief Inspectors. Section 8(i) says that the appointment of Inspector must be by notification
in the Official Gazette and it does not mention that the assignment by local area must be by
notification (State of Mysore vs. R.D. Campwell, (1962) II LLI 264). The Inspectors
appointed should have the prescribed qualifications. The Chief Inspector, Additional Chief
Inspectors, Joint Chief Inspector, Deputy Chief Inspector appointed by the State Government
are to exercise powers of the Inspector throughout the State in addition to the powers
conferred on them under this Act. Every District Magistrate shall act as Inspector of his
district. A District Magistrate is competent to take cognizance of any offence on receiving a
complaint of facts which constitute an offence under the Act. Section 8 (4) does not prevent
the District Magistrate from exercising any of the powers vested in him under the Criminal
Procedure Code for dealing with an offence under the Factories Act.

Disqualification for appointment: Under Section 8.(3) no person shall be appointed as

Inspector, Chief Inspector or Additional Inspector or having been so appointed shall continue
to hold office, is or becomes directly or indirectly interested in a factory or any. process or
business carried therein or in any patent or machinery connected therewith.

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(ii) Powers of Inspectors (Sec. 9): According to Section 9 of the Act, an Inspector is vested
with the following powers which he may exercise within the local limits under his control.
The powers are to be exercised in accordance with the rules framed for this purpose :

(a) he may enter any premises which is used or which he has reason to believe is used, as a
factory. He may be accompanied by such assistants, who are in the service of the
Government or any local or public authority or with an expert as he thinks fit;

(b) make examination of the premises, plant, machinery, article or substance;

(c) inquire into an accident or dangerous occurrence, whether resulting in bodily injury,
disability or not, and take on the spot or otherwise Statements of any person which he may
consider necessary for such inquiry;

(d) require the production of any prescribed register or any other document relating to the
factory;

(e) seize, or take copies of any register, record or other document or any portion thereof as he
may consider necessary in respect of any offence under this Act, which he has reason to
believe, has been committed;

(f) direct the occupier that any premises or any part thereof or anything lying therein shall be
left undisturbed (whether generally or in particular aspects) for so long as is necessary for the
purpose of any examination under clause (b);

(g) take measurements and photographs and make such recordings as he considers necessary
for the purpose of any examination under clause (b), taking with him any necessary
instrument or equipment;

(h) in case of any article or substance found in any premises, being an article or substance
which appears to him as havi caused or is likely to cause danger to the health or safety the
workers, direct it to be dismantled or subject it to an processor test (but not so as to damage
or destroy it unles the same is, in the circumstances necessary for carryin out the purpose of
this Act) and take possession of an such article or substance or a part thereof and detain it fo
so long as is necessary for such examination;

(i) exercise such other power as may be prescribed.

ectors are the Inspectors: The functions and duties of the Inspectors

(a) to carry out duties as laid down under the Act, namely, Section 9 (b) and (c);

(b) to ensure that statutory provisions and rules framed are carried out properly; and

(c) to launch prosecutions against factory owners under the provisions of Chapter X of the
Act, in case of breach or default on the part of the factory owners.

(iii) Certifying Surgeons (Sec. 10): Section 10 of the Act empowers the State Government to
appoint qualified medical practitioners as Certifying Surgeons for the purposes of the Act.
These surgeons are appointed to discharge duties within the local limits placed under their
control or for such factory or class or description of factories as may be assigned to them. The

55
certifying surgeons with the approval of the State Government may appoint qualified medical
practitioners to exercise any of his powers for such period as he may specify.

Disqualification for appointment No person shall be appointed or authorized to exercise the

powers of certifying surgeons or, having been so appointed or authorized, continue to
exercise the powers:

(a) who is or becomes the occupier of a factory;

(b) who is or becomes directly or indirectly interested therein or in any process or business
carried therein or in any patent or machinery connected therewith; or

(c) who is otherwise in the employment of the company, provided the State Government may,
by order in writing and subject to such conditions as may be specified in the order, exempt
any person or class or persons from the above provisions in respect of any factory or class or
description of factories.

Duties of Certifying Suny be prescribed in connection with Surgeons: The Certifying

Surgeons

(a) the examination and certification of young persons under the Act;

(b) the examination of persons engaged in factories in such dangerous occupations or

processes as may be prescribed

(c) the exercising of such medical supervision for any factory or class or description of
factories where:

(i) cases of illness have occurred which it is reasonable to believe are due to the nature of the
manufacturing process carried on, or other conditions of work prevailing therein;

(ii) by reason of any change in the manufacturing process carried on or in the substances used
therein or. by reasons of the adoption of any new manufacturing process, there is a likelihood
of injury to the health of workers employed in that manufacturing process;

(iii) young persons are about to be employed in any work which is likely to cause injury to
their health.

Q.11. Explain briefly the provisions relating to penalties and procedures under the
Factories Act, 1948, as per labour code.

Ans. In order to protect the interest of the workers working in the factories, both the occupier
and the manager of a factory are jointly and severally liable to a fine for an offence under the
Act.1 The detailed provisions are laid down in this Chapter for imposing various types of
penalties upon the occupier and the manager for contravening the statutory obligation
imposed upon them under the Act, not only 'occupiers' and 'managers' are made punishable
for the offence committed by them but even 'workers' are made punishable for contravening
the provisions of the Act in certain cases. The main object of penal provisions in the Act is to
require the occupiers, managers and workers to comply with the various provisions of the Act

56
failing which they would expose themselves to fine and punishment as prescribed in the Act.
The detailed provisions of the Act with regard to the various penalties are as follows:

(1) (a) General Penalty for offences. The general penalty for offences is contained in section
92 of the Act. Under this section any contravention by the occupier or the manager (except in
cases where liability rests on one of them under the Act) of any provisions of the Act, rules or
order given in writing would expose them to a penalty which may extend to two years'
imprisonment, or fine up to one lakh rupees, or both Provided that where in contravention of
any of the provisions relating to the safety as laid down in Chapter IV or any rule made
thereunder or dangerous manufacturing process or operation as laid down in section 87 has
resulted in an accident causing death or serious bodily injury, then, in that case, the fine shall
not be less than twenty-five thousand rupees in the case of an accident causing death and five
thousand rupees in the case of an accident causing serious bodily injury. This is subject to the
condition that only 'owner' of the premises will be punishable for the above contraventions, in
case the liability is imposed upon him exclusively under section 93 of the Act.

In case the contravention is continued after the conviction, the court is empowered to impose
further fine which may extend to seventy-five rupees for each day on which the contravention
is continued. Some of the offences which fall within the purview of the present section are
permitting the workers to do work during the period of rest, continuing work in a factory
beyond the closing hours, omission to fence engine in a factory and employment of children
contrary to the provisions of the Act. For prosecution under the present section, onus lies on
the prosecution to prove that workmen were employed by the management.1

(b) Enhanced penalty for previous conviction. If within two years from the date of the
previous conviction of an offence under section 92, the same person commits an offence of
the same nature, then, in that case, he can be imprisoned which may extend to three years, or
with fine which shall not be less than thirty-five thousand rupees but may extend to two lakh
rupees, or both provided the court may for adequate and special reasons mentioned in the
judgment impose a fine less than ten thousand rupees. This is subject to the further condition
that where contravention of any of the provisions relating to 'safety' of Chapter IV or any
rules made thereunder or dangerous manufacturing process or operation as laid down in
section 87 has resulted in an accident causing death or serious bodily injury, then, in that
case, the fine shall not be less than thirty-five thousand rupees in the case of an accident
causing death and ten thousand rupees in the case of an accident causing serious bodily
injury. If the offence is repeated after an interval of more than two years, such enhanced
punishment cannot be inflicted upon a person found guilty for the second time. [Sec. 94.]

(c) The liability of owner of premises in certain

cases. Where in any premises separate buildings are leased to different occupiers for use as
separate factories, the owners of the premises are made responsible for the provision and
maintenance of common facilities and services such as approach road, drainage, water
supply, lighting, and sanitation. Similarly, where in any premises separate buildings are
leased to different occupiers for use as separate factories, the owner has been made liable for
contravention of the provisions of this Act, relating to health, safety and welfare like an
occupier or manager of a factory. The liability of the owner in such cases varies with the parts
leased and situation of different buildings. in one premises. The Inspector subject to the
control of the State Government in such cases is vested with the powers to issue orders to the
owner which he is required to comply with failing which he can be prosecuted for
contravening the provisions of the Act. [Sec. 93.] In case the owner happens to be a
partnership firm or public limited company, then a nominated partner, and the director

57
respectively residing in India shall be deemed 'owner' for the purpose of liability; [Sec. 100
(3).]

Provided further that in case of a factory belonging to the Central Government or any State
Government or any local authority, the person or persons shall be deemed to be the occupier
of that factory for the above purposes.

The premises were given over to the partnership firm in return for periodic payment. The
owner had no control over them. The owner was prosecuted for failure to take out licenses by
the firm. The Supreme Court had held that in such a case the owner is not liable.1

Where lunch room is not provided as per the rules framed under the Factories Act, and the
occupier is a private company, a shareholder may be prosecuted and punished. If it is a public
company, a Director thereof would be liable.2

(2) Penalty for obstructing Inspector. The Inspector has been assigned the most important role
in the Scheme of the Act and the rules framed thereunder. The duty is cast upon him to see
that the provisions of the Act meant for the health, safety and welfare of the workers are
complied with by the occupier and the manager. Therefore, whoever wilfully obstructs an
inspector in the exercise of any power conferred on him under the Act or the rules or fails to
produce on demand any registers or other documents kept in his custody in pursuance of the
Act or the rules or conceals or prevents any worker in a factory from appearing before him
for the purpose of examination can be punished with imprisonment up to 6 months, or with
fine up to ten thousand rupees, or both. [Sec. 95.]

(3) Penalty for wrongfully disclosing results of analysis of samples. Whoever wrongfully
discloses or publishes the results of any samples taken by the Inspector for the purpose of
testing any substance used or intended to be used in a factory commits an offence. Such
persons can be punished with imprisonment up to 6 months, or fine up to rupees 10,000/-, or
both. [Sec. 96.] Thus, for imposing punishment under this provision, this publication or
disclosure of wrong result of analysis is necessary.

(4) Penalty for contravention of the provisions of Sections 41B, 41C and 41H; (6-A).-(1)
Whoever fails to comply with or contravenes any of the provisions of sections 41B, 41C, and
41H, or the rules made thereunder, shall in respect of such failure or contravention be
punishable with imprisonment for a term which may extend to seven years and with fine
which may extend to two lakh rupees and in case the failure or contravention continues, with
additional fine which may extend to five thousand rupees for everyday for which such failure
or contravention continues after the conviction for the first such failure or contravention.

(2) If the failure or contravention continues beyond the period of one year after the date of
conviction, the offender shall be punishable with imprisonment for a term which may extend
to 10 years.

(5) Penalty for offences by workers. Like the occupier and manager, the worker also is made
punishable for contravening the provisions of the Act or the rules framed thereunder or orders
passed under the Act whereby any duty or liability is imposed on a worker. The maximum
penalty which can be imposed upon such defaulting worker is five hundred rupees. Where a
worker is convicted of an offence, the occupier or manager shall escape his liability as
imposed upon him except in those cases where they failed to take all reasonable measures for
its prevention. [Sec. 97 (2).] The liability of the workers is provided in sections 19(3), 22(1),
25, 36, 47, 98 and 111 (1).

58
Reading section 26 (3) with section 97, it is clear that prohibition of the worker against
entering any such pit, etc. is absolute and if any worker enters such pit, etc., he is guilty under
section 97 (1). Section 97 (2) would come into operation and it would be for the prosecution
to prove that the occupier or manager had failed to take all reasonable measures.

(6) Penalty for using false certificate of fitness. Whoever knowingly uses or attempts to use a
false certificate or uses or attempts to use a certificate granted to another person or permits
the use of or attempts to use a certificate granted to a person by another person is made guilty
of an offence under the present provision. [Sec. 98.] The section makes both the persons
guilty of an offence who knowingly uses a certificate granted to another person and
knowingly allows the use of a certificate granted to him by another person. The above
certificate of fitness is required to be issued by the Certifying Surgeon permitting an
adolescent to work as an adult worker in a factory. The penalty for this offence is
imprisonment which may extend to two months, or fine which may extend to one thousand
rupees, or both.

(7) Penalty for permitting double employment of a child. If a child works in a factory on any
day on which he has already been working in another factory, the parents or guardian of the
child or the person having custody of or control over him are made punishable with fine up to
one thousand rupees if they obtain any direct benefit from the wages earned by a child as a
result of double employment. [ Sec. 99.] There must be consent or connivance of the parents
or guardians of the person having control or custody of the child, as the case may be, in the
double employment of the child; in the absence of such consent or connivance, such persons
shall not be liable.

(8) Exemption of occupier or manager from liability-Procedure thereof. The occupier or

manager of a factory is exempted from the liability for being prosecuted of an offence
punishable under the Act, if the following conditions are cumulatively satisfied:

(i) that the occupier or manager has duly made a complaint charging another person as the
actual offender;

(ii) that the occupier or manager has given at least 3 days' notice in writing to the prosecutor
of his intention to make a complaint in the court; and

(iii) the person charged as the actual offender has been brought before the court by him at the
time of hearing the charge against him.

 BEST OF LUCK 

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