UGC NET CODE 55

Labour Acts Reference Guide & Important Definitions

SECTION 1: MAJOR LABOUR ACTS IN INDIA

1. THE TRADE UNIONS ACT, 1926

Year: 1926 (Amended 1960)

Scope: Regulates formation and functioning of trade unions in India

Key Provisions:

• Registration of unions with Registrar

• Minimum 7 members required for formation

• Rights of registered unions - collective bargaining, representation

• Immunity from civil liability for legitimate union activities

• Funds management and accounting transparency

• Amalgamation of unions process

Objective: Protect worker rights and regulate union functioning

2. THE INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1946

Applies to: Industrial establishments with 100+ workers
Key Provisions:

• Employers must certify standing orders defining terms and conditions of employment

• Standing Orders must cover: - Classification of workers, Hours of work, Holidays, Wages, Discipline and conduct,
Termination, Grievances

• Workers must be informed of standing orders

• Can be modified only by certified amendment

Objective: Provide clarity on employment terms and reduce disputes

3. THE INDUSTRIAL DISPUTES ACT, 1947

Most Important Act - Comprehensive coverage required
Key Definitions:

• Industrial Dispute: Difference between employers and workers concerning employment, nonemployment, or
conditions of labor

• Strike: Cessation of work by workers, temporary withdrawal of labor

• Lockout: Suspension of work by employer to compel workers to accept terms

Key Procedures:

• Conciliation - Friendly settlement through conciliation officer (non-binding)

• Arbitration - Settlement by arbitrator (binding on both parties)

• Adjudication - Decision by Labor Court/Industrial Tribunal (binding)

Important Sections:

• Section 10 - Reference to Conciliation Officer

 • Section 22 - Prohibition on strikes and lockouts (48 hours notice, during conciliation)

• Section 25 - Lay-off compensation

• Section 25-C - Retrenchment - Conditions include notice, compensation, preference to seniority

Objective: Promote industrial peace and provide dispute resolution mechanism

4. THE FACTORIES ACT, 1948

Applies to: Factories employing 10+ workers with machinery
Key Areas Covered:

• Health: Sanitation, ventilation, lighting, drinking water

• Safety: Safety of machinery, emergency exits, first aid, accident prevention

• Working Hours: Maximum 48 hours per week, overtime payment (2x wages)

• Leave: Earned leave (1 day per 20 days worked), Casual leave, Sick leave

• Welfare: Rest rooms, canteen, childcare, medical facilities

• Inspection: Factory Inspector appointed for supervision

Objective: Ensure safety, health, and welfare of factory workers

5. THE EMPLOYEES' STATE INSURANCE ACT, 1948

Applies to: Most factories and certain other establishments with 10+ workers

Coverage: Provides social security protection against employment injuries and certain disabilities
Key Benefits:

• Medical and cash benefits during sickness

• Compensation for disability due to employment injury

• Benefit to dependents on worker death

• Medical treatment and rehabilitation

Administration: ESI Corporation manages the scheme

6. THE PAYMENT OF WAGES ACT, 1936

Applies to: All establishments except agricultural and domestic workers
Key Provisions:

• Wages must be paid regularly (at least monthly)

• Wages include basic + DA + allowances (not perquisites)

• Permissible Deductions: Damage/loss caused by willful negligence, Fines (if stood rules notified), Advances to
employees, Court orders

• Impermissible Deductions: For absence, bad work, deposits, charitable contributions, damages unrelated to
misconduct

• Maximum deduction 50% of wages in any month (except court/law orders)

• Deductions must not reduce wages below statutory minimum

Objective: Protect worker's right to fair wages and prevent arbitrary deductions

7. THE MINIMUM WAGES ACT, 1948

Critical Act - High weightage in exams

Objective: Ensure minimum living wages to workers

 Key Concepts:

• Minimum Wage: Statutory minimum amount employer must pay

• Fair Wage: Higher than minimum, based on skill and productivity

• Living Wage: Wages sufficient for decent living

Fixation Process:

• State Government appoints Wage Board for each scheduled employment

• Board reviews demand, supply, cost of living, productivity

• Minimum wage fixed per hour, day, or month

Factors for Fixation:

• Cost of living

• Living standards in locality

• Productivity of workers

• Ability of employers to pay

Revision: Every 5 years or when cost of living index increases by 20%

8. THE PAYMENT OF BONUS ACT, 1965

Applies to: Establishments with 20+ workers

Bonus Definition: Additional compensation payable for services rendered beyond salary
Eligibility:

• Minimum 30 days worked in accounting year

• Only workers earning up to ■21,000/month eligible (as per latest rules)

Bonus Calculation:

• Minimum Bonus: 8.33% of wages for accounting year

• Maximum Bonus: 20% of wages for accounting year

• Bonus = (Salary in accounting year) × (Profit Percentage / 100%)

When due: Paid within 8.5 months after close of accounting year

9. THE MATERNITY BENEFIT ACT, 1961

Applies to: Female workers in factories and certain other establishments
Key Provisions:

• Maternity Leave: 26 weeks (12 weeks before + 14 weeks after delivery)

• Maternity Benefit: Full wages paid during maternity leave

• Miscarriage Benefit: 6 weeks with full wages

• Medical Bonus: Additional ■500 if no medical help provided

• Nursing Break: Two 15-minute breaks daily (up to 12 months after delivery) to nurse child

• Crèche Facility: Childcare at workplace if 50+ women employed

• Protection against dismissal during maternity

10. THE EQUAL REMUNERATION ACT, 1976

Scope: Ensures equal pay for equal work regardless of sex
Key Provisions:
 • Equal remuneration for men and women for same work or work of similar nature

• Employers must ensure no discrimination in pay

• Applies to all aspects of remuneration - salary, allowances, benefits

• Applies to recruitment, promotion, training, working conditions

Remedies: Complaint to Labor Authority or Court

11. THE PAYMENT OF GRATUITY ACT, 1972

High weightage act - Very important

Applies to: Establishments with 10+ workers (factories, shops, offices)

Definition of Gratuity: Terminal benefit paid on retirement/separation after completing service

Eligibility:

• Minimum 5 years continuous service

• On retirement, resignation (after 5 years), termination without misconduct, death

Calculation:

• Gratuity = (Last drawn monthly salary) × (Service in completed years) × (50/1200)

• Maximum limit: ■20 lakhs (as of recent amendments)

Payment: Within 30 days of separation

Not payable in cases of: Dismissal for misconduct, Resignation before 5 years, Unauthorized absence

12. THE EMPLOYEES' PROVIDENT FUND AND MISCELLANEOUS PROVISIONS ACT, 1952
Very Important - Crucial topic for exam

Coverage: Applicable to factories and establishments with 20+ workers

Key Components:

• Provident Fund (PF): Mandatory retirement savings scheme

• Pension Scheme: For disability and dependents

• Insurance Scheme: Family protection

Contribution:

• Employee: 12% of basic + DA

• Employer: 12% of basic + DA

• Employee contribution can be extended up to 12% with consent

Withdrawal:

• Partial withdrawal for marriage, education, medical, house

• Full withdrawal after retirement (60 years) or termination after 5 years

Pension: After 10 years service, converted to pension on retirement

13. THE MINES ACT, 1952

Scope: Safety and health in mining operations
Key Areas:

• Safety standards in mines

• Health and welfare of mine workers

• Working hours and rest days

 • First aid and medical facilities

• Accident prevention and reporting

• Child and women protection in mines

14. THE CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970

Scope: Regulates employment through contractors and permits abolition in certain cases
Key Concepts:

• Contract Labour: Workers employed through contractors for specific jobs

• Contractor: Person who undertakes work on behalf of employer

Main Provisions:

• Registration of contractors mandatory

• Contractors must provide statutory benefits

• Abolition possible for jobs that can be done by permanent staff

• Workers entitled to same facilities as permanent workers

• Payment of wages must be on time through contractor

SECTION 2: IMPORTANT DEFINITIONS AND CONCEPTS

Employee: Person employed under a contract of employment, working for wages

Employer: Person who employs workers directly or indirectly

Wages: All remuneration capable of being expressed in money including basic, DA, allowances but excluding
benefits

Strike: Cessation of work by group of workers with intent to compel employer to accept demands

Lockout: Suspension of work by employer to compel workers to accept terms

Industrial Dispute: Any difference between employers and employees about employment, nonemployment, or
conditions of labor

Standing Orders: Rules regulating employment terms and conditions in establishment

Retrenchment: Permanent termination of services by employer due to redundancy, not for misconduct

Lay-off: Temporary suspension of work without termination of employment

Gratuity: Terminal benefit paid to worker on separation after completion of service

Bonus: Additional compensation beyond salary for services rendered

Minimum Wage: Statutory lowest wage that employer must pay for specified work

Fair Wage: Higher than minimum wage, based on average wages in industry and productivity

Living Wage: Wage sufficient for worker to maintain decent living standard

Maternity Benefit: Cash benefit to pregnant worker during confinement period

Occupational Disease: Disease caused by exposure to conditions inherent to job

Workmen's Compensation: Lump sum compensation for permanent disability or death due to employment

Collective Bargaining: Negotiation between employer and workers' representatives for employment terms

Trade Union: Organization of workers formed to protect and promote labor interests

Conciliation: Process of bringing disputing parties to amicable settlement

Arbitration: Binding settlement of dispute by neutral third party (arbitrator)

Adjudication: Binding determination of dispute by labor court or tribunal

Internship: Practical training program for developing skills in specific field

Apprenticeship: System combining theoretical knowledge with practical experience under skilled worker

Job Analysis: Systematic process of gathering and analyzing information about job contents and requirements

Job Description: Written statement of job contents, duties, responsibilities, and working conditions

Job Specification: Written statement of knowledge, skills, abilities required for job

Recruitment: Process of attracting qualified candidates for vacant positions

Selection: Process of choosing best candidate(s) from applicants

Induction: Process of introducing new employee to organization and job

Training: Planned activity to enhance knowledge and skills for current job

Development: Continuous process of improving capabilities for career growth

Performance Appraisal: Systematic evaluation of employee's job performance

Motivation: Drive or desire to achieve goals

Leadership: Process of influencing others to achieve objectives

Group: Collection of individuals who interact regularly with common purpose

Team: Specialized group with complementary skills working toward common goal

Communication: Exchange of information, ideas, and feelings between people

Compensation: Total monetary and non-monetary rewards given to employee

Benefit: Non-wage compensation provided to employees

Incentive: Reward given for superior performance or goal achievement

Grievance: Expression of dissatisfaction about employment conditions

Discipline: Process of correcting employee behavior to ensure compliance

Suspension: Temporary removal from work as disciplinary action

Dismissal: Permanent termination of employment for serious misconduct

Resignation: Voluntary termination by employee

SECTION 3: KEY STATISTICS AND FIGURES FOR EXAM

MINIMUM NUMBER OF WORKERS FOR APPLICABILITY

• Factories Act, 1948: 10+ workers

• Employees' State Insurance Act: 10+ workers

• Payment of Bonus Act: 20+ workers

• Payment of Gratuity Act: 10+ workers

• Employees' PF Act: 20+ workers

• Contract Labour Act: 20+ workers for principal employer

• Industrial Employment (Standing Orders) Act: 100+ workers

IMPORTANT NUMERIC VALUES

• PF Contribution: Employee 12%, Employer 12% of basic + DA

• Gratuity Maximum: ■20 lakhs (limit)

• Gratuity Eligibility: 5 years continuous service minimum

• Bonus Minimum: 8.33% of wages

• Bonus Maximum: 20% of wages

• Maternity Leave: 26 weeks (12 before + 14 after delivery)

• Miscarriage Benefit: 6 weeks with full wages

• Nursing Break: 2 × 15 minutes daily up to 12 months

• Maximum Deduction from Wages: 50% of monthly wages

• Minimum Wage Revision: Every 5 years or when cost of living increases 20%

• Trade Union Registration Minimum: 7 members

• Strike Notice Period: 48 hours (before declaration)

YEAR OF ENACTMENT (Important for exam)

• 1926 - Trade Unions Act

• 1936 - Payment of Wages Act

• 1946 - Industrial Employment (Standing Orders) Act

• 1947 - Industrial Disputes Act

• 1948 - Factories Act & Minimum Wages Act & ESI Act

• 1952 - PF Act & Mines Act

• 1961 - Maternity Benefit Act

• 1965 - Payment of Bonus Act

• 1972 - Payment of Gratuity Act

• 1970 - Contract Labour Act

• 1976 - Equal Remuneration Act

• 1979 - Interstate Migrant Workmen Act

• 1986 - Child Labour (Prohibition and Regulation) Act

• 1996 - Building and Other Construction Workers Act