[Link].

com Contact@8274005990

Labour Laws
ALC/UPSC
Study Notes-I

1|Page
[Link] Contact@8274005990

Table of Contents

Chapter-1.- The Contract Labour (Regulation and Abolition) Act, 1970

Chapter-2.- Payment of Bonus Act, 1965

Chapter-3.- Employees' Provident Funds and Miscellaneous Provisions Act, 1952

Chapter-4.- Employees’ State Insurance Act, 1948

Chapter-5.- Industrial Dispute Act,1947
Chapter-6.- The Maternity Benefits Act,1961

Chapter-7.- The Building and Other Construction Workers’ (Regulation of

Employment And Conditions Of Service) Act, 1996

Chapter-8.- Trade Unions Act,1926

Chapter-9.- The Payment of Wages Act, 1936

Chapter-10.- The Minimum Wages Act, 1948

Chapter-11.- Payment of Gratuity Act, 1972

Chapter-12.- The Factories Act, 1948

Chapter-13.- Employees’ Compensation Act, 1923

Chapter-14.- Industrial Employment (Standing Orders) Act, 1946

2|Page
[Link] Contact@8274005990

In the Constitution of India Act 1950, articles 14-16, 19(1)(C), 23-24,

38, and 41-43A directly concern labour rights:

✓ Article 14 states everyone should be equal before the law.

✓ Article 15 specifically says the state should not discriminate against

citizens.

✓ Article 16 extends a right of "equality of opportunity" for employment

or appointment under the state.

✓ Article 19(1) (c) gives everyone a specific right "to form associations
or unions".

✓ Article 23 prohibits all trafficking and forced labour.

✓ Article 24 prohibits child labour under 14 years old in a factory, mine

or "any other hazardous employment"

✓ Article 38(1) says that in general the state should "strive to promote
the welfare of the people" with a "social order in which justice, social,
economic and political, shall inform all the institutions of national
life. In article 38(2) it goes on to say the state should "minimise the
inequalities in income" and based on all other statuses.

✓ Article 39 the State shall, in particular, direct its policy towards

securing (a) that the citizens, men and women equally, have the right
to an adequate means of livelihood; (d) that there is equal pay
for equal work for both men and women.

✓ Article 41 creates a "right to work", which the National Rural

Employment Guarantee Act 2005 attempts to put into practice.

✓ Article 42 requires the state to "make provision for securing just and
human conditions of work and for maternity relief".

✓ Article 43 says workers should have the right to a living wage and
"conditions of work ensuring a decent standard of life".

✓ Article 43A, inserted by the Forty-second Amendment of the

Constitution of India in 1976, creates a constitutional right to
codetermination by requiring the state to legislate to "secure the
participation of workers in the management of undertakings"

3|Page
[Link] Contact@8274005990

[Link] Contract Labour (Regulation and Abolition) Act, 1970

Objective of CLRA-
❖ This Act is to regulate and abolish the employment of contract labour in
certain establishment.
To whom the Act applies

❖ The Act applies to every establishment in which 20 or more workmen are

employed or were employed on any day of the preceding 12 months.
❖ The establishments in which intermittent or casual work is performed do
not come within the purview of the Act.
❖ However, an establishment wherein work is performed for 120 days or more
in the preceding 12 months or more than 60 days in a year on work of a
seasonal character will not be deemed as carrying out the work of
intermittent nature.
❖ Appropriate Government may give two months' notice, to apply the
provisions of this Act to any establishment or contractor employing less than
20.

It shall not apply to establishments in which work only of an intermittent or

casual nature is performed.

Who will decide whether intermittent nature or not???

Appropriate government board will decide, and decision will be final.

❖ The work performed in an establishment shall not be deemed to be of an

intermittent nature-
if it was performed for more than one hundred and twenty days
in the preceding twelve months, or
if it is of a seasonal character and is performed for more than sixty
days in a year.

Prohibition on Employment of Contract Labour

❖ The Central and the State Government can prohibit employment

of contract labour in any process, operation or other work in
any establishment
❖ After considering the conditions of work and benefits provided for the
contract labour in that establishment
❖ other relevant factors include: -

✓ is incidental to, or necessary for the industry, trade,

business, manufacture or occupation that is carried on in
the establishment:

✓ is of perennial or perpetual nature of sufficient duration

4|Page
[Link] Contact@8274005990

✓ is done ordinarily through regular workmen in that establishment

or an establishment similar thereto

✓ is sufficient to employ considerable number of

wholetime workmen.

Appropriate Government means-

Central Government in relation to –

❖ any Railway, Cantonment Board, Major Port, Mines, Oil-field, Any

establishment of a banking or insurance company
❖ 51% or more stake of central government
❖ Organisation formed by central Law

In relation to any other establishment the Government of State in which the

establishment is situated.

Contract Labour- A workman shall be employed as "contract labour” in

connection with the work of an establishment when he is hired in
connection with such work by or through a contractor, with or without the
knowledge of the principal employer

Contractor-A person who undertakes to produce a given result for the

establishment, through contract labour or who supplies contract labour for
any work of the establishment and includes a sub-contractor

✓ other than a mere supply of goods or articles of manufacture

to such establishment

Establishment means-

✓ any office or department of the Government or a local

authority, or
✓ any place where any industry, trade, business, manufacture
or occupation is carried on;

Principal employer-

✓ Head of Department of the factory, establishment, office.

✓ Owner or Occupier or Manager of the factory/mine

Workman- means any person employed in connection with the work of any
establishment to do any skilled, semi-skilled or un-skilled manual, supervisory,
technical or clerical work for hire or reward, but does not include any such
person-

5|Page
[Link] Contact@8274005990

✓ who is employed mainly in a managerial or administrative capacity (nature

of Job)
✓ who, being employed in a supervisory capacity draws wages exceeding five
hundred rupees per mensem, either by the nature of the duties attached to
the office or by reason of the powers vested in him, functions mainly of a
managerial nature

who is an out-worker?
✓ A person to whom any articles or materials are given out by
or on behalf of the principal employer to be made up, cleaned,
washed, altered, ornamented, finished, repaired, adapted or
processed for sale for the purposes of the trade or business of
the principal employer and
✓ the process is to be carried out either in the home of the out-
worker or in some other premises, not being premises under
the control and management of the principal employer.
Core activity of an establishment- means any activity for which the
establishment is set up and includes any activity which is essential or
necessary to the core activity

Central Advisory Contract Labour Board-The Central Board shall consist

of-
✓ a chairman to be appointed by the Central Government.
✓ the Chief Labour Commissioner (Central), ex-officio.
✓ such number of members, not exceeding 17 but not less than
11, as the Central Government may nominate to represent that
Government, the Railways, the coal industry, the mining
industry, the contractors, the workmen and any other interests
which, in the opinion of the Central Government, ought to be
represented on the Central Board.
State Board shall consist of-
✓ a chairman to be appointed by the State Government
✓ the Labour Commissioner, ex officio, or in his absence any other
officer nominated by the State Government in that behalf
✓ such number of members, not exceeding 11 but not less than 9,
as the State Government may nominate to represent that
Government, the industry, the contractors, the workmen and any
other interests which, in the opinion of the State Government,
ought to be represented on the State Board.

Appointment of registering officers-

✓ Gazetted Officer of government.
✓ Every principal employer of an establishment to which this
Act applies shall, make an application to the registering
officer for registration of the establishment.

6|Page
[Link] Contact@8274005990

✓ If the application for registration is complete in all respects,

the registering officer shall register the establishment and
issue a certificate of registration.

Prohibition of employment of Contract Labour-

✓ The appropriate Government may after consultation with the
Central Advisory Board or the State Advisory Board, may be,
prohibit by notification in the Official Gazette employment of
contract labour in any process, operation or other work in any
establishment.
✓ Before issuing such notification, the appropriate Government
shall examine the conditions of work and benefits provided
for the contract labour in that establishment and other
relevant factors.

****Andhra Pradesh hight court judgment -The principal employer may engage
contract labour or a contractor to any core activity if-

✓ the normal functioning of the establishments is such that the activity is

ordinarily done through contractors or
✓ the activities are such that they do not require full time workers for the major
portion of the working hours in a day or for longer periods, as the case may
be
✓ any sudden increase of volume of work in the core activity which needs to be
accomplished in a specified time.

Licensing of contractors -

✓ No contractor to whom this Act applied shall undertake or execute any work
through contract labour except under and in accordance with a licence
issued in that behalf by the Licensing Officer.
✓ Every contractor to whom the Act applies has to obtain a licence from the
Licensing Officer of the area in which the establishment is located
✓ The certificate of licence contains the following information: -
• That licence shall be non-transferable
• That the maximum number of workmen that can be
employed as contract labour in that establishment along
with other particulars such as rates of wages payable,
hours of work and other service conditions of the
workmen

The licence is valid for 12 months

Welfare and health of contract labour- It is the responsibility of the

contractor to provide canteen, rest shelter, drinking water, latrines,
urinals, washing facilities and first - aid boxes.

7|Page
[Link] Contact@8274005990

✓ Canteen- Where employment of contract Labour is likely to continue for six

months and the number of contract labour employed is 100 or more, an
adequate canteen must be set up.
✓ Rest Room -Wherever employment of contract labour is likely to continue for
3 months or more and contract labour is required to halt at night, restrooms
are to be maintained and that must made available within 15 days
✓ Drinking water(health provision)- Wholesome drinking water shall be
supplied at convenient places. In case of new establishments within 7 days
of the commencement of the employment of contract labour.
✓ Washing facilities -Adequate and suitable facilities for washing be provided
✓ Urinals and latrines-
• Where females are employed, at least one latrine for every 25
females
• Where males are employed, at least one latrine for every 25
males.
• Where the number of males or females exceeds 100, one for every
50 thereafter.
✓ First-aid facilities-First-aid boxes at the rate of not less than one box for
every 150-contract labour or part thereof should be maintained and shall be
readily accessible during all working hours.

Responsibility for payment of wages -

✓ A contractor shall be responsible for payment of wages and such wages shall
be paid before the expiry of 7th day of the month (in case less than1000), 10th
of the month in rest case.
✓ Every principal employer shall nominate a representative duly authorised
by him to be present at the time of disbursement of wages by the contractor
and it shall be the duty of such representative to certify the amounts paid as
wages.
✓ It shall be the duty of the contractor to ensure the disbursement of wages in
the presence of the authorised representative of the principal employer.
✓ In case the contractor fails to make payment of wages within the prescribed
period or makes short payment, then the principal employer shall be liable
to make payment of wages in full or the unpaid balance due, as the case may
be, to the contract labour employed by the contractor and recover the
amount so paid from the contractor either by deduction from any amount
payable to the contractor under any contract.

****Obstructs an inspector in the discharge of his duties shall be punishable

with imprisonment for a term which may extend to three months, or with fine
which may extend to five hundred rupees.

The contractor shall maintain the following registers in English or in Hindi (Section-
29)

(a) Muster Roll

8|Page
[Link] Contact@8274005990

(b) Register of Wages

(c) Register of Deductions

(d) Register of Overtime

(e) Register of Fines

(f) Register of Advances

(g)Wage Slips

****Application for registration-Form-I and Registration Certificate form-II

**** In case the contractor fails to make payment of wages within time, or
makes short payment, then the Principal Employer shall be liable to make
payment of wages in full or the unpaid balance due.

Direct Absorption of Contract Labour (Judgment)

❖ Persons who get displaced, on the expiry of the contract/licence period, do
not get any statutory right for absorption in regular service under the
employer.

❖ Non-registration under section 7, by the principal employer or the contractor

not having a license u/s 12 are not that the workmen could be
automatically deemed to be treated as the employees of the principal
employer.

[Link] of Bonus Act, 1965

The purpose of offering a bonus is to distribute the benefit received by the company
to the employees. This added perk helps to improve employee morale and
productivity. It also encourages them to efficiently work towards their goals.
Amendments: -
(a) Revision of wage threshold for eligibility: The wage threshold for
determining eligibility of employees has been revised from INR 10,000 to INR
21,000 per month, covering a larger pool of employees.
(b) Change in the wage ceiling used for calculation of bonus: Previously the
maximum bonus payable was 20%. The minimum bonus payment was also
capped at 8.33% of Rs. 7000 Or the minimum wage for scheduled employment, as
fixed by the appropriate Government, whichever is higher.

Coverage
❖ It extends to the whole of India
❖ every factory and every other establishment in which twenty or more persons
are employed on any day during an accounting year

9|Page
[Link] Contact@8274005990

Employees Entitled: -
❖ Every employee receiving salary up to 21000 per month
❖ If he has worked for at least 30 working days in that year
❖ Part Timers/daily wagers are also eligible for bonus
❖ But it is not applicable to employees working in Insurance, Red Cross,
Educational Education, Hospitals, Local bodies, RBI.

Definition: -
➢ Accounting year: - the year commencing on the 1st day of April
➢ Allocable surplus means—
• Companies made the arrangements prescribed under the
Income-tax Act for the declaration and payment -67% of the
available surplus in an accounting year
• Banking company 60% of such available surplus

➢ Salary or wage- means

• all remuneration (other than remuneration in respect of
overtime work) capable of being expressed in terms of
money, if the terms of employment, were fulfilled, be
payable to an employee in respect of his employment or of
work done in such employment and includes dearness
allowance, but does not include—
• the value of any house accommodation or of supply of light,
water, medical attendance or other amenity or of any
service or of any concessional supply of food grains or other
articles
• any travelling concession
• any bonus (including incentive, production and attendance
bonus)
• any contribution paid or payable by the employer to any
pension fund or provident fund or for the benefit of the
employee under any law for the time being in force
• any retrenchment compensation or any gratuity or other
retirement benefit payable to the employee or any ex-
gratia payment made to him
• any commission payable to the employee.
• Explanation. --Where an employee is given in lieu of the
whole or part of the salary or wage payable to him, free food
allowance or free food by his employer, such food allowance
or the value of such food shall, be deemed to from part of
the salary or wage of such employee.

Disqualification for bonus.:- is dismissed from service for—

(a) fraud
(b) riotous or violent behaviour while on the premises of the establishment
(c) theft, misappropriation or sabotage of any property of the establishment.

Set on and set off of allocable surplus. —

10 | P a g e
[Link] Contact@8274005990

❖ Where for any accounting year, the allocable surplus exceeds the amount of
maximum bonus payable to the employees in the establishment then, the
excess shall, to a limit of 20% of the total salary or wage of the employees
employed in the establishment in that accounting year, be carried forward
for being set on in the succeeding accounting year and so on up to and
inclusive of the fourth accounting year to be utilised for the purpose of
payment of bonus in the manner illustrated in the Fourth Schedule.

❖ Where for any accounting year, there is no available surplus or the allocable
surplus in respect of that year falls short of the amount of minimum bonus
payable to the employees in the establishment, and there is no amount of
sufficient amount carried forward and set on which could be utilised for the
purpose of payment of the minimum bonus, then, such minimum amount or
the deficiency, as the case may be, shall be carried forward for being set off
in the succeeding accounting year

❖ The principle of set on and set off as illustrated in the Fourth Schedule

****Time period for payment of Bonus: -within the period of 8 months from the close
of the accounting year.
****Payment of minimum bonus: - a minimum bonus which shall be 8.33 per cent.
of the salary of wage earned by the employee during the accounting year or one
hundred rupees, whichever is higher, whether or not the employer has any allocable
surplus in the accounting year
****An employee is found guilty of misconduct causing financial loss to the employer,
then, it shall be lawful for the employer to deduct the amount of loss from the amount
of bonus payable by him to the employee under this Act in respect of that accounting
year only.
**** Recovery of bonus due from an employer.:- every such application from
employee shall be made within one year from the date on which the money became
due to the employee from the employer. Where any dispute arises between an
employer and his employees with respect to the bonus shall be deemed to be an
industrial dispute
****Penalty.:- Contravenes any of the provisions of this Act or fails to comply with
the direction or requisition-he shall be punishable with imprisonment for a term
which may extend to 6 months, or with fine which may extend to one 1000 rupees,
or with both
****Payment of bonus linked with production or productivity. --

❖ where an agreement or a settlement has been entered between employees and

employer - for payment of an annual bonus linked with production or
productivity in lieu of bonus based on profits payable under this Act, then,
such employees shall be entitled to receive bonus in excess of twenty per cent.
of the salary or wage earned by them during the relevant accounting year

11 | P a g e
[Link] Contact@8274005990

[Link]' Provident Funds and Miscellaneous Provisions Act, 1952

(Came into force on 14 March 1952)

There are various schemes in this act: -

❖ The Employees’ Provident Funds Scheme, 1952,

❖ The Employees’ Deposit-linked Insurance Scheme, 1976, and
❖ The Employees’ Pension Scheme, 1995

Objectives: -

• It institutes a compulsory contributory fund for the future of the employee

after his retirement or for his dependents in case of his early death.

➢ The Act applies to:

• every factory establishment in any industry specified in
Schedule I of the Act and in which 20 or more persons are
employed and
• any other establishment employing 20 or more persons which
the central government may specify by notification in the official
gazette.
• The central government may add to Schedule I any other
industry if it is of the opinion that provident fund scheme should
be framed.

❖ Contract Labour is included but casual labour is excluded for counting the
strength of employees. An apprentice is also not included.
❖ Directors, working patterners, Managing Partners, domestic servants and
contractors are not employees.
❖ It is applicable to educational institution but not charitable institutions.

****This wage-ceiling is 15,000 with effect from 1 September, 2014. The EPFO has
recently proposed to enhance this wage-ceiling to 21,000 per month.

The Act does not apply to the following categories of establishments:

➢ Establishments registered under Cooperative Societies Act employing less
than 50 persons and working without the aid of power.
➢ Newly set-up establishment for an initial period of 3 years.
➢ Any other establishment belonging to or under the control of the central or
state government and whose employees are entitled to the benefit of
contributory provident fund or old age pension in accordance with any scheme
or rule framed by the appropriate government.

Definitions: -

Appropriate Government:
➢ In relation to an establishment belonging to the central government are,
railway company, a major port, a mine or an oilfield or a controlled industry
or in relation to an establishment having departments or branches in more

12 | P a g e
[Link] Contact@8274005990

than one state and in relation to any other establishment, the state
government.

Basic Wages:
➢ All emoluments which are earned by an employee while on duty or on leave or
on holidays with wages in accordance with the terms of contract of
employment but does not include
• the cash value of any food concession,
• any dearness allowance, house rent allowance, overtime allowance,
bonus, commission or any other similar allowance payable to the
employee in respect of his employment or of work done in such
employment,
• any presents made by the employer [Sec. 2(b)].

Employee:
➢ Any person who is employed for wages in any kind of work, in connection with
the work of an establishment, and who gets his wages directly or indirectly
from the employer, and includes any person employed by or through a
contractor
➢ engaged as an apprentice, not being an apprentice engaged under the
Apprentices Act,1961

The central government is empowered to frame:

Employees’ Provident Funds Scheme [Sec. 5]

Employees’ Pension Scheme [Sec. 6A]
Employees’ Deposit linked Insurance Scheme [Sec. 6C]

Employees’ Provident Funds Scheme

➢ The central government is empowered to frame the Employees’ Provident
Funds Scheme for the establishment of provident funds under the Act

Central Board of Trustees

❖ After framing of the Scheme, a Provident Fund has to be established, the

Central Board of Trustees. The Central Board of Trustees is to consist of:
• a chairman and a vice-chairman appointed by the central
government
• not more than 05 central government officials
• not more than 15 representatives of state governments
• 10 representatives of employers in consultation with
organizations of employers, and
• 10 employees’ representatives in consultation with organizations
of employees, all appointed by the central government.

****The accounts of income and expenditure of the fund will be audited annually by
Comptroller and Auditor General of India and forwarded to the central government

Executive Committee
For assisting the Central Board of Trustees, the central government may appoint the
Executive Committee. The Executive Committee is to consist of:

13 | P a g e
[Link] Contact@8274005990

• a chairman from amongst the members of the Central Board,

• 02 official members of the Board,
• 03 representatives of the state governments,
• 03 representatives of employers,
• 03 representatives of employees, all from amongst the members of
the Central Board and
• Central Provident Fund Commissioner ex-officio.

State Board

❖ The central government is also empowered to constitute State Board of

Trustees as laid down in the Employees’ Provident Fund Scheme. The powers
and functions of the State Board are to be assigned by the central government.

Contribution: -

• Employee contribution to EPF: 12% of salary.

• Employer contribution to EPF: 3.67% of salary.

• Employer contribution to EPS: 8.33% of salary
• EPF admin charge :0.50%(employer)
• EDLIS admin charge :0%(employer)

Employees’ Pension Scheme: - EPF Pension which is technically known as

Employees’ Pension Scheme (EPS), is a social security scheme. The scheme makes
provisions for employees working in the organized sector for a pension after their
retirement at the age of 58 years. However, the benefits of the scheme can be availed
only if the employee has provided a service for at least 10 years (this does not have
to be continuous service).
Pension contribution not to be paid: -
✓ When an employee crosses 58 years of age and is in service (EPS membership
ceases on completion of 58 years).
✓ When an EPS pensioner is drawing Reduced Pension and re-joins as an
employee. In both the cases the Pension Contribution @8.33% is to be added
to the Employer Share of PF. (Pension contribution is not to be diverted and
total employer share goes to the PF).
✓ In all other cases Pension Contribution is payable. A member joining after 50
years age, if not a pensioner does not have choice of not getting the Pension
Contribution on grounds that he will not complete 10 years of eligible service.
The social security cover is applicable till he/she is a member.

The pension amount in PF depends on the pensionable salary of the member and the
pensionable service. The member’s monthly pension amount is calculated as per the
following formula:

14 | P a g e
[Link] Contact@8274005990

Member’s Monthly Salary = Pensionable salary X Pensionable service / 70

❖ The maximum pensionable salary is limited to ₹ 15,000 every month.

****Contribution is payable out of the employer’s share of PF and no contribution is

payable by employee.

Types of Pensions: -
➢ Widow pension or vridha pension is applicable to the widow of the member
eligible for a pension. The pension amount will be payable until the death of
the widow or her remarriage
➢ Child Pension: -In case of death of the member, monthly children pension is
applicable for the surviving children in the family in addition to the monthly
widow pension. The monthly pension will be paid till the child attains the age
of 25 years.
➢ Orphan Pension: -In case the member dies and has no surviving widow, his
children will be entitled to get the monthly orphan pension of 75% of the value
of monthly widow pension.

Employees’ Deposit-Linked Insurance Scheme

➢ The Employees’ Deposit-linked Insurance scheme for the purpose of providing
insurance benefits to the employees covered under the Act
➢ The employer is required to pay to the fund not more than one per cent of the
aggregate of the basic wages, dearness allowance and retaining allowance.
➢ The employer is also required to pay to the fund an additional amount not
exceeding one-fourth of the contribution for insurance as determined by the
central government to defray administrative expenses.
➢ This amount is not to be spent to meet the cost of any benefits provided under
the Scheme.
➢ The insurance fund is also to vest in the Central Board of Trustees.

❖ The scheme came into force with effect from 1 August 1976. All the members
of the Employees’ Provident Funds

15 | P a g e
[Link] Contact@8274005990

❖ Following is the formula to compute the EDLI pay-out:

[Employee’s Average monthly salary for the last 12 months (capped at

INR 15,000 per month) * 30] + Bonus Amount (INR 2,50,000)
❖ The maximum benefit an employee can receive under EDLI is INR 7,00,000.

Following are the key features of the Employees Deposit Linked Insurance Scheme
(EDLI) that apply to all the beneficiaries of the policy:

❖ The claim amount is 30 times the salary of the employee.

❖ EDLI applies to all the employees whose basic salary is less than INR 15,000
per month. If the basic salary is above INR 15,000 per month, then the
maximum benefits one can receive is INR 7,00,000.
❖ EDLI offers a bonus of INR 2,50,000. The minimum amount of benefit that
EPFO offers is INR 2,50,000 with retrospective effect.
❖ Organisations with more than 20 employees have to register for EPF. As a
result, an employee who holds an EPF account will automatically become
eligible for the Employees Deposit Linked Insurance Scheme (EDLI). In other
words, employees don’t have to contribute towards EDLI separately.
❖ Employees Deposit Linked Insurance Scheme protects the insured person
round the clock with no exceptions to the insurance coverage.
❖ Employers can take other group insurance policies. However, the benefits
from such a scheme have to be equal to or more than the benefits offered
under EDLI.
❖ Employer’s contribution is at 0.5% of the basic salary or a maximum of Rs.75
per month per employee. If the company has no other group insurance
policies, the maximum contribution is capped at INR 15,000 per month.
❖ EDLI considers both the basic salary and dearness allowance together for all
calculations.
❖ The benefit is directly credited to the claimant’s account.
❖ Age and other factors do not have any impact on the employee’s eligibility for
the scheme.
❖

Benefits
➢ On the death of a member while in employment of the same establishment for
a continuous period of 12 months preceding
➢ the month in which he died; the persons entitled to receive the provident fund
accumulations of the deceased are also
➢ to be paid, in addition, an amount equal to the average monthly wages drawn
multiplied by 20 times

Employees' Provident Funds Appellate Tribunal

➢ The central government is empowered to constitute one or more Employees’
Provident Funds Appellate Tribunals to exercise the powers and discharge the
functions specified under the Act.
➢ No order of the central government appointing a person as the presiding officer
is to be questioned and no act or proceeding before a tribunal is to be called
in question on the ground merely by defect in the constitution of the Tribunal.
➢ The appellate tribunal is to consist of one person only.

16 | P a g e
[Link] Contact@8274005990

➢ A person is qualified for the appointment as a presiding officer of the tribunal

if the person is or has been or is qualified to be a Judge of a High Court or a
District Judge.
➢ The presiding officer of the tribunal will hold office for a term of five years or
until they attain the age of 65 years.

Interest Payable by the Employer

The employer is liable to pay simple interest at the rate of 12 per cent per annum or
at a higher rate as specified in the scheme on any amount due from him under the
Act.
Pandit Deendayal Upadhayay Shramev Jayate Karyakram (2014)

➢ Pandit Deen Dayal Upadhayay Shramev Jayate Karyakram launched in 2014

reforming Employees’ Provident Fund Schemes in a major way.
➢ The main components of the Karyakram having relevance to the PF scheme
include:
• Portability of the provident fund account of the employees through
a Universal Account Number (UAN) which be linked with bank
account,
• Introduction of a minimum monthly pension of 1,000,
• Establishment of Shram Suvidha or labour facilitation portal and
making inspection transparent and accountable, (iv) providing easy
and convenient employees’ access to PF accounts and insurance
scheme
• Rationalizing submission of returns by employers.
Schedule: -
I- List of industries engaged in the manufacturing.
II- Matters related to Provident Fund Scheme
III- Matters related to Pension Scheme
IV- Matter related to Insurance Scheme

[Link]’ State Insurance Act, 1948

****The recommendations of B. P. Adarkar

Objective: -
The Employees’ State Insurance Act 1948 (the ESI Act) provides for medical, cash,
maternity, disability and dependent benefits to the Insured Persons under the Act.
The ESI Act is administered by Employees’ State Insurance Corporation (ESIC).
Benefits provided under the ESI Act are funded by the contributions made by the
employers and the employees.
****Current ESIC contribution Rate:
Employers’ share: 3.25%
Employees share: 0.75%

SCOPE: -

17 | P a g e
[Link] Contact@8274005990

➢ It applies to all factories (including those belonging to the government) other

than seasonal factory. With effective from 2011, benefits extended to all
shop, hotels, restaurants, motor transport, cinemas wherein 10 or more
persons are employed.

➢ Exemption: -Factories with less than 10 persons, Seasonal Factories, Mines,

a railway running sheds. The Act does not apply to a factory or establishment
belonging to or under the control of the government whose employees are in
the receipt of benefits substantially similar or superior to the benefits provided
under this Act.

➢ The central government in consultation with the ESI Corporation, and the
state government with the approval of the central government may extend any
or all provisions of the Act to any other establishment or class of
establishments— industrial, commercial, agricultural or otherwise, but one-
month prior notification in the official gazette is necessary

➢ The wage-ceiling for coverage under the ESI Act has been enhanced to 21,000
per month.

➢ An employer/establishment covered under ESI Act is exempted from

Maternity Benefit Act and Employees Compensation Act.

Important Definitions
1) Appropriate Government
The definition of “appropriate government” divides powers between the Central and
State governments effectively. The Central government is appropriate in cases of
establishments that the Central government controls.
It is the appropriate government for railway administration, major ports, mines, and
oil fields. In all other cases, the appropriate government is the State government.
2) Confinement
Pregnancy which leads to the birth of a living child is called “confinement” under this
Act. It can also mean the birth of a child (living or dead) after 26 weeks of pregnancy.
3) Contribution
Principal employers under this Act have to pay a sum of money to the Employees
State Insurance Act Corporation according to relevant provisions.
This money is basically later payable to employees by the ESI Corporation for their
benefits. Every employer to whom the Act applies has to make this contribution.
4) Dependant

18 | P a g e
[Link] Contact@8274005990

Dependant means any of the following relatives of a deceased insured person,

namely:
(i) a widow legitimate or adopted son who has not attained the age of 25 years,
an unmarried legitimate or adopted daughter or a widowed mother;
(ii) if wholly dependent on the earnings of the insured person at the time of
his death, legitimate or adopted son or daughter who has attained the age
of 25 and is infirm;
(iii) if wholly or in part dependent on the earnings of the insured person at the
time of his death,
o parent other than a widowed mother,
o a minor illegitimate son, an unmarried illegitimate
daughter, or a daughter legitimate or adopted or
illegitimate if married and a minor or if widowed and
a minor,
o a minor brother or an unmarried sister or a widowed
sister if a minor,
o a widowed daughter-in-law, (e) a minor child of a
predeceased son,
o a minor child of a predeceased daughter where no
parent of the child is alive,
o a paternal grandparent if no parent of the insured
person is alive

According to the Act, dependants are certain relatives of a deceased worker. These
include his widow, a son below 25 years of age, an unmarried daughter and his
widowed mother.
A son/daughter above 25 years can also be a dependant if he/she is wholly
dependent on the worker. In certain cases, dependants can also be a minor
illegitimate child, minor sibling, a parent other than widowed mother, etc.
5) Employment Injury
An employee can receive financial support under this Act for specific injuries that
occur in employment only.
Hence, the Act refers to them as “employment injuries”.
These injuries must be a result of an accident or occupational disease arising in the
course of employment. It is immaterial whether the workers contract these
occupational diseases within India or outside.
6) Employee
Employee means any person employed for wages in or in connection with the work
of a factory or establishment covered under the Act and
(i) who is directly employed by the principal employer,

19 | P a g e
[Link] Contact@8274005990

(ii) who is employed by or through an immediate employer on the premises of the

factory or establishment or under the supervision of the principal employer
or his agent,
(iii) whose services are temporarily hired to the principal employer by the person
with whom the person entered into a contract of service.
(iv) but does not include: (i) Any member of the Indian naval, military or air force,
(ii) Any person so employed whose wages (excluding remuneration for
overtime work) exceed such wages as prescribed by the central government
(presently, the maximum wage ceiling is 21,000 a month.
(v) There are certain employees who are not liable to pay a contribution to the
ESI Corporation under this Act. These employees are called as exempted
employees.

7) Family
In short “family” is very similar to the definition of dependants. It includes a worker’s
spouse, minor child, unmarried daughter, dependent parents, minor siblings, etc.
8) Factory
A “factory” means any premises (or its precincts) wherein 10 or more employees work
or have been working. These workers should be in employment for the preceding
twelve months.
Furthermore, some manufacturing process must take place on such premises. Mines
or railway running sheds, however, cannot come under the definition of factories.
9) Insured Person
An insured person under this Act is basically an employee to whom contribution is
payable. Furthermore, he can claim all other benefits under the Act.
10) Principal Employer
A principal employer is generally the owner or occupier of a factory to which the Act
applies. It can also include the owner’s managing agent or factory manager and legal
representative of a deceased owner/occupier.
In the case of departments of the Central government, the principal employer is the
department’s head. In all other establishments, the person in charge of supervision
and control is usually the principal employer.
11) Sickness
Sickness basically means a condition for which an employee has to undergo medical
treatment. He may even have to abstain from working during the duration of such
sickness.
12) Seasonal Factory
There are certain kinds of factories which work seasonally for some specific purposes
only. These include manufacturing processes like cotton ginning, cotton/jute
pressing, manufacturing or coffee, etc.

20 | P a g e
[Link] Contact@8274005990

Furthermore, this includes a factory that works for not more than 7 months in a
year in similar pursuits.
13) Wages
Wages include remuneration payable to an employee in cash under the terms of an
express or implied contract of employment.
It may also include all other amounts payable to employees as wages under other
laws. However, wages do not include pension, traveling allowances, gratuity and
other similar sums.
14) Permanent Partial/Total Disablement
The ESI Act contains a few categories of disablements for which employees can claim
compensation. These may be either permanent or temporary. Permanent
disablements may further be either partial or total.
Permanent disablement means disablement of permanent nature which affects an
employee’s earning capacity. Part II of the Second Schedule deals with these injuries,
whereas Part I describes permanent total injuries.

Sec. 41-The principal employer is entitled to recover the amount of both the
employee’s and employer’s contributions paid in respect of an employee employed by
or through an immediate employer. The immediate employer is required to maintain
a register of employees employed by or through them

The section 46 of the Act envisages following social security benefits: -

1. Sickness benefit
2. Maternity benefit
3. Disablement benefit
4. Dependants’ benefit
5. Medical benefit
6. Funeral expenses
7. Confinement expenses
8. Vocational rehabilitation
9. Physical rehabilitation
10. Unemployment allowances and skill-upgradation training

Standard Benefit Rate

All the major cash benefits under the scheme are related to Standard Benefit Rate: -
Standard Benefit Rate = Total Wages paid during the Contribution Period /
Number of Days for which these Wages were Paid

21 | P a g e
[Link] Contact@8274005990

****An important point to be noted here is that, whereas one of the qualifying
conditions for the sickness, maternity and medical benefits is that necessary
contributions must have been paid during the prescribed preceding period. The
disablement and dependants’ benefits and funeral expenses are available without
any such qualifying conditions. As the Employees’ Compensation Act provides for
the payment of compensation without requiring any contribution from the
employees, the Employees’ State Insurance Act, 1948, also does not require the
employees to pay contributions for becoming entitled to disablement and
dependants’ benefits and funeral expenses.
Medical Benefit :

➢ Full medical care is provided to an Insured person and his family members
from the day he enters insurable employment.

➢ There is no ceiling on expenditure on the treatment of an Insured Person or

his family member. Medical care is also provided to retired and permanently
disabled insured persons and their spouses on payment of a token annual
premium of Rs.120/-.

Sickness Benefit (SB) :

➢ Sickness Benefit in the form of cash compensation at the rate of 70 per cent
of wages is payable to insured workers during the periods of certified sickness
for a maximum of 91 days in a year.

➢ In order to qualify for sickness, benefit the insured worker is required to

contribute for 78 days in a contribution period of 6 months.

1. Extended Sickness Benefit (ESB) : SB extendable upto two years in the case of
34 malignant and long-term diseases at an enhanced rate of 80 per cent of wages.

2. Enhanced Sickness Benefit : Enhanced Sickness Benefit equal to full wage is

payable to insured persons undergoing sterilization for 7 days/14 days for male and
female workers respectively.

(c) Maternity Benefit (MB) :

➢ Maternity Benefit for confinement/pregnancy is payable for Twenty-Six (26)

weeks, which is extendable by further one month on medical advice at the rate
of full wage subject to contribution for 70 days in the preceding Two
Contribution Periods.

(d) Disablement Benefit

➢ Temporary disablement benefit (TDB) : From day one of entering insurable

employment & irrespective of having paid any contribution in case of
employment injury. Temporary Disablement Benefit at the rate of 90% of wage
is payable so long as disability continues.

22 | P a g e
[Link] Contact@8274005990

➢ Permanent disablement benefit (PDB) : The benefit is paid at the rate of 90%
of wage in the form of monthly payment depending upon the extent of loss of
earning capacity as certified by a Medical Board
(e) Dependants Benefit (DB) : DB paid at the rate of 90% of wage in the form of
monthly payment to the dependants of a deceased Insured person in cases where
death occurs due to employment injury or occupational hazards.

(f) Other Benefits :

1. Funeral Expenses: An amount of Rs.15,000/- is payable to the dependents

or to the person who performs last rites from day one of entering insurable
employment.
2. Confinement Expenses: An Insured Women or an [Link] respect of his wife
in case confinement occurs at a place where necessary medical facilities
under ESI Scheme are not available.
In addition, the scheme also provides some other need-based benefits to insured
workers.

1. Vocational Rehabilitation: To permanently disabled Insured Person for

undergoing VR Training at VRS.
2. Physical Rehabilitation: In case of physical disablement due to
employment injury.
3. Old Age Medical Care: For Insured Person retiring on attaining the age of
superannuation or under VRS/ERS and person having to leave service due
to permanent disability insured person & spouse on payment of Rs. 120/-
per annum.
Rajiv Gandhi Shramik Kalyan Yojana:
This scheme of Unemployment allowance was introduced w.e.f. 01-04-2005. An
Insured Person who become unemployed after being insured three or more years,
due to closure of factory/establishment, retrenchment or permanent invalidity are
entitled to: -

• Unemployment Allowance equal to 50% of wage for a maximum period of

upto Two Years.
• Medical care for self and family from ESI Hospitals/Dispensaries during
the period IP receives unemployment allowance.
• Vocational Training provided for upgrading skills - Expenditure on
fee/travelling allowance borne by ESIC.
Atal Beemit Vyakti Kalyan Yojana (ABVKY) :
➢ This scheme is a welfare measure for employees covered under ESI Act, 1948,
in the form of relief payment upto 90 days, once in a lifetime.

➢ The Scheme was introduced 2018 on pilot basis for a period of two years
initially.

➢ The rate of unemployment relief under the scheme to 50% of wages, provided
the Insured Person should have been in insurable employment for a minimum

23 | P a g e
[Link] Contact@8274005990

period of two years immediately before her/his unemployment and should

have contributed for not less than 78 days in the contribution period
immediately preceding to unemployment and minimum 78 days in one of the
remaining three contribution periods in two years prior to unemployment.

Incentive to employers in the Private Sector for providing regular employment to the
persons with disability :

• Minimum wage limit for Physically Disabled Persons for availing ESIC
Benefits is 25,000/-.
• Employers' contribution is paid by the Central Government for 3 years.

**** "FULL" Medical Care i.e., all facilities as for IPs including hospitalisation.
Benefits to Retired IPs

Medical Benefit to Retired Insured Persons and Permanent Disabled Insured

Persons: -

On payment of Rs.10/- P.M. in lump sum for one year in advance, Medical Benefit
can be provided (under Section 56 of the Act) to:

i. An Insured Person and his or her spouse who leaves insurable employment
on attaining the age of superannuation after being insured for not less than
five years, till the period for which contribution is paid.
ii. An Insured Person and his/her spouse who ceases to be in insurable
employment on account of permanent disablement due to employment
injury shall be entitled to medical benefit.

Compulsory ESI Registration Of Employees

➢ As per the new provision, the employees of the organized sector are now
compulsorily required to obtain ESIC registration online within 10 days from
the date of their appointment.
➢ The employers are now required to provide the ESI registration Card to all
their employees, which will serve as the evidence of ESI registration.
➢ As per the ESI Act, a certain contribution has to be deposited against
employees as well as employers within the due date. Now a new rule suggests
that ESI contribution against employees has to be deposited within 42 days
from the end of the month of the ESI contribution. The employer shall not be
able to deposit the employee’s ESI contribution after 42 days, and shall have
to bear the penalty of ₹10,000/-.

➢ Another new provision has now introduced a threshold limit for employee’s
ESI contribution. Accordingly, the employees whose salary is ₹176/- per day
or less need not to pay ESI contribution. Their share of ESI contribution shall
be born by the Government. Nevertheless, the Employer shall still have to bear
their share of ESI contribution.

Composition of The ESI Corporation

The ESI Corporation consists of the following members:

24 | P a g e
[Link] Contact@8274005990

1. 01 chairman, appointed by the central government

2. 01 vice-chairman, appointed by the central government
3. Not more than 5 persons appointed by the central government
4. 01 person each representing each of the states in which the Act is in force appointed
by the state government concerned
5. 01 person appointed by the central government to represent the union territories
6. 10 persons representing employers appointed by the central government in
consultation with employers’ organizations recognized for the purpose by the central
government
7. 10 persons representing employees appointed by central government in consultation
with employees’ organizations recognized for the purpose by the central government
8. 02 persons representing the medical profession appointed by the central government
in consultation with organizations of medical practitioners recognized for the purpose
by the central government
9. 03 members of parliament (two from the Lok Sabha and one from Rajya Sabha),
elected by the members of the houses concerned
10. The Director General of the Corporation (ex-officio)
The term of office of members of the Corporation shall be 4 years.

Employees’ State Insurance Fund: -

➢ The Act provides for the creation of the Employees’ State Insurance Fund
consisting of contributions and grants, donations or gifts from the central or
state government, local authority or any private body or individual. The fund
is to be held and administered by the Corporation. The account is to be
operated by such officers as authorized by the standing committee with the
approval of the Corporation.
Standing Committee, The Act also provides for the constitution of a standing
committee of the Corporation consisting of the following members:
1. 01 chairman appointed by the central government.
2. 03 members of the Corporation appointed by the central government.
3. 03 members of the Corporation representing three state governments specified from
time to time by the central government.
4. 8 members elected by the Corporation in the following manner
o 03 members from among the members of the Corporation representing
employers
o 03 members from among the members of the Corporation representing
employees
o 01 member from among the members of the Corporation representing the
medical profession
o 01 member from among the members of the Corporation elected by
Parliament
o The Director General of the Corporation (ex-officio).

25 | P a g e
[Link] Contact@8274005990

The term of office of the elected members is 02 years from the date on which the
election is notified. Appointed members remain in office during the pleasure of the
central government
Purposes For Which ESI Fund May Be Spent
1. Payment of benefits and provision of medical treatment and attendance
2. Payment of fees and allowances to members of the Corporation, standing
committee, medical benefit council, regional boards, local committees, and regional
and local medical benefit council
3. Payment of salaries and allowances, gratuity, pensions and contributions to
provident or other benefit fund for the officers and staff of the Corporation 4.
Establishment and maintenance of hospitals, dispensaries or other institutions for
provision of medical and other ancillary services
5. Payment of contributions to state government, local authority or any private body
or individual towards the cost of medical treatment or attendance
6. Defraying the cost of auditing the accounts of the Corporation and the valuation
of its assets and liabilities
7. Defraying the cost of the Employees’ Insurance Courts set up under the Act 8.
Payment of any sum under any contract entered into by the Corporation, the
standing committee, or duly authorized officer
9. Defraying the cost and other charges of instituting or defending any civil or
criminal proceedings arising out of any action taken under the Act
10. Defraying expenditure on measures for the improvement of the health and
welfare of insured persons and for the rehabilitation and re-employment of insured
persons who have been disabled or injured

Composition of the Medical Benefit Council

1. The Director General, the ESI Corporation ex-officio as chairman
2. The Director General, Health Services ex-officio as co-chairman
3. The Medical Commissioner of the Corporation (ex-officio)
4. 01 member representing each of the states in which the Act is in force, appointed by
the state government concerned
5. 03 members representing employers appointed by the central government in
consultation with such organizations of employers as recognized for the purpose by
the central government
6. 03 members representing employees appointed by the central government in
consultation with such organizations of employees as recognized for the purpose by
the central government
7. 03 members (of whom not less than one must be a woman), representing the medical
profession, appointed by the central government in consultation with such
organizations of medical practitioners as recognized for the purpose by the central
government.

26 | P a g e
[Link] Contact@8274005990

Social Security Officers

The ESI Corporation is empowered to appoint social security officers for enquiring
into the correctness of particulars furnished in the returns submitted by employers
and for ascertaining the compliance of the provisions of the Act.

**** Pandit Deendayal Upadhyay Shramev Jayate Karykram (2014)

The ESI scheme has also been brought within the ambit of labour reforms
programme envisaged under the Pandit Deendayal Upadhayay Shramev Jayate
Karyakram launched in October, 2014 by the NDA government at the centre led by
prime minister Narendra Modi. The important components of the programme having
relevance to the ESI scheme include:
(i) Setting up of Shram Suvidha Portal or labour facilitation portal
which will enable employers and employees to have easy access to
the scheme;
(ii) Providing unified Labour Identification Number (LIN) to
units/employers with a view to simplifying business regulations and
promote e-filing of returns; and
(iii) Improving inspection and making it transparent, accountable and
convenient. The programme also envisages the establishment of
Central Analysis and Intelligence Unit under the Ministry of Labour
and Employment for picking up establishments for inspection.
****If an employer is not satisfied with order of Social Security Officer, he may raise
further appeal within 60 days, after depositing 25% of the contribution.

****Punishment for false statement: - 2000/- or 6 months or both

****Punishment for failure to pay contributions: - 01 year, which may be extended
to 3 years of imprisonment and fine of 10,000/-
****ESI Court- a person from judicial officer or is a legal practitioner of 5 years shall
be qualified to be a judge of the Employees Insurance Court.

[Link] Dispute Act,1947

Some Important Definitions: -

➢ Industrial Dispute: - Any dispute or difference between
employers and employers or between employers and workmen, or
between workmen and workmen, which is connected with the
employment or non-employment or the terms of employment or with
the conditions of labour of any person [Sec. 2 (K)]. Where any employer
discharges, dismisses, retrenches or otherwise terminates the
services of an individual worker any dispute or difference between the
worker and employer connected with, or arising out of, such discharge,
dismissal, retrenchment or termination is deemed to be an industrial
dispute

27 | P a g e
[Link] Contact@8274005990

➢ Strike: - A cessation of work by a body of persons

employed in any industry acting in combination, or a concerted refusal,
or a refusal under a common understanding, of any number of persons
who are or have been so employed to continue to work or to accept
employment [Sec. 2 (q)]

➢ Lock-out: -The closing of a place of employment, or the

suspension of work, or the refusal by an employer to continue to employ
any number of persons employed by them [Sec. 2 (I)]

➢ Workman: - Any person (including an apprentice)

employed in any industry to do any manual, unskilled, skilled,
technical, operational, clerical or supervisory work for hire or reward,
includes any such person who has been dismissed, discharged or
retrenched in connection with, or as a consequence of, any dispute, but
does not include any such person:

1. Army Air Force Navy Police

[Link] is employed mainly in a managerial or administrative
capacity
3. Who, being employed in a supervisory capacity, draws wages
exceeding 10,000 per mensem or exercises, either by the nature
of the duties attached to the office, functions mainly of a
managerial nature [Sec. 2 (s)]

➢ Lay-off: - The failure, refusal, or inability of an employer on

account of shortage of coal, power or raw materials or the
accumulation of stocks or the breakdown of machinery or
natural calamity to give employment to a workman whose
name is borne on the muster rolls of his industrial
establishment and who has not been retrenched. Every
workman whose name is borne on the muster rolls of the
industrial establishment and who presents themselves for
work at the establishment at the time appointed for the
purpose during normal working hours and is not given
employment by the employer within two hours, is deemed to
have been laid-off for that day. laid-off for the day, he is entitled
to full basic wages and dearness allowance [Sec. 2 (kkk)]
➢ Retrenchment: - The termination by the employer of the
service of a workman for any reason whatsoever, otherwise
than as a punishment inflicted by way of disciplinary action,
but does not include:
• voluntary retirement of the workman; or
• retirement of the workman on reaching the age of
superannuation if the contract of employment between
the employer and the workman concerned contains a
stipulation in that behalf;

28 | P a g e
[Link] Contact@8274005990

• termination of the service of the workman as a result of

the non-renewal of the contract of employment between
the employer and the workman
• termination of the service of a workman on the ground
of continued ill health [Sec. 2 (oo)]

➢ Settlement: - A settlement, arrived at in the course of a conciliation

proceeding and includes a written agreement between the employer and
workmen arrived in the course of conciliation proceeding where such
agreement has been signed by the parties and a copy of the same has
been sent to an officer authorized in this behalf by the appropriate
government and the conciliation officer [Sec. 2 (p)]

➢ Industry:- Any systematic activity carried on by cooperation between

an employer and worker (whether such workmen are employed by such
employer directly or by or through any agency, including a contractor)
for the production, supply or distribution of goods or services with a
view to satisfy human wants or wishes (not being wants or wishes
which are merely spiritual or religious in nature), (i) any capital has
been invested for the purpose of carrying on such activity or (ii) such
activity is carried on with a motive to make any gain or profit
but does not include the following:

• Any agricultural activity, Hospitals or dispensaries, Educational,

scientific, research or training institutions, Khadi or village industries,
Any domestic service.
Section 2A: Dismissal, etc., of an individual workman to be deemed to be an
industrial dispute
(1) Where any employer discharges, dismisses, retrenches, or otherwise
terminates the services of an individual workman, any dispute or difference
between that workman and his employer connected with, or arising out of,
such discharge, dismissal, retrenchment or termination shall be deemed
to be an industrial dispute.
(2) Workmen may make an application direct to the Labour Court or
Tribunal for adjudication of the dispute after the expiry of forty-five days
from the date he has made the application to the Conciliation Officer of the
appropriate Government for conciliation of the dispute, and in receipt of
such application the Labour Court or Tribunal shall have powers and
jurisdiction to adjudicate upon the dispute, as if it were a dispute referred
to it by the appropriate
(3) It will be made to the Labour Court or Tribunal before the expiry of three
years from the date of discharge, dismissal, retrenchment or otherwise
termination of service
Section 3: Works Committee
(1) In the case of any industrial establishment in which one hundred or more
workmen are employed or have been employed on any day in the preceding
twelve months, the appropriate Government may by order require the employer

29 | P a g e
[Link] Contact@8274005990

to constitute a Works Committee consisting of representatives of employers

and workmen engaged in the establishment so however that the number of
representatives of workmen on the Committee shall not be less than the
number of representatives of the employer.
(2) It shall be the duty of the Works Committee to promote measures for securing
and preserving good relations between the employer and workmen and to
comment upon matters. The Works Committee duly constituted under the Act
does not represent the workmen for all purposes; but only for the purpose of
the functions of the Works Committee.
(3) The functions of the Works Committee: - The Works Committee was not
intended to supplant or supersede the Unions for the purpose of collective
bargaining. they are not authorised to consider real or substantial changes in
the conditions of service. their task is only to smooth away frictions that might
arise between the workmen and the management in day-to-day work.

Section 4: Conciliation officers (1) The appropriate Government may, by

notification in the Official Gazette, appoint such number of persons as it thinks fit,
to be conciliation officers, charged with the duty of mediating in and promoting the
settlement of industrial disputes. (2) A conciliation officer may be appointed for a
specified area or industries.
Section 5: Boards of Conciliation
(1) The appropriate Government may as occasion arises by notification in the Official
Gazette constitute a Board of Conciliation for promoting the settlement of an
industrial dispute.
(2) A Board shall consist of a chairman and two or four other members, as the
appropriate Government thinks fit.
(3) The chairman shall be an independent person and the other members shall be
persons appointed in equal numbers to represent the parties to the dispute and any
person appointed to represent a party shall be appointed on the recommendation of
that party.
(4) A Board, having the prescribed quorum, may not act in the absence of the
chairman or any of its members.
Section 6: Courts of Inquiry
(1) The appropriate Government may as occasion arises by notification in the Official
Gazette constitute a Court of Inquiry for inquiring into any matter appearing to be
connected with or relevant to an industrial dispute.
(2) A Court may consist of one independent person. Where a Court consists of two
or more members, one of them shall be appointed as the chairman.
(3) A Court, having the prescribed quorum, may not act in the absence of the
chairman or any of its members.
Section 7: Labour Courts

30 | P a g e
[Link] Contact@8274005990

(1) The appropriate Government may, by notification in the Official Gazette,

constitute one or more Labour Courts for the adjudication of industrial disputes
relating to any matter specified in the Second Schedule
(2) A Labour Court shall consist of one person only to be appointed by the
appropriate Government.
(3) A person shall not be qualified for appointment as the presiding officer of a Labour
Court, unless—
(a) he is, or has been, a Judge of a High Court or
(b) he has, for a period of not less than three years, been a District Judge or an
Additional District Judge or
(c) he has held any judicial office in India for not less than seven years or
(e) he has been the presiding officer of a Labour Court constituted under any
Provincial Act or State Act for not less than five years.
(f) he is or has been a Deputy Chief Labour Commissioner (Central) or Joint
Commissioner of the State Labour Department, having a degree in law and at least
seven years’ experience in the labour department including three years of experience
as Conciliation Officer.
(g) he is an officer of Indian Legal Service in Grade III with three years’ experience in
the grade.
Section 7A: Tribunals-
(1) The appropriate Government may, by notification in the Official Gazette,
constitute one or more Industrial Tribunals for the adjudication of industrial
disputes relating to any matter, whether specified in the Second Schedule or the
Third Schedule and for performing such other functions as may be assigned to them
under this Act.
(2) A Tribunal shall consist of one person only to be appointed by the appropriate
Government.
(3) A person shall not be qualified for appointment as the presiding officer of a
Tribunal unless—
(a) he is, or has been, a Judge of a High Court, (aa) he has, for a period of not less
than three years, been a District Judge or an Additional District Judge.
(b) he is or has been a Deputy Chief Labour Commissioner (Central) or Joint
Commissioner of the State Labour Department, having a degree in law and at least
seven years’ experience in the labour department including three years of experience
as Conciliation Officer.
(c) he is an officer of Indian Legal Service in Grade III with three years’ experience in
the grade.
Section 7B: National Tribunals
(1) The Central Government may, by notification in the Official Gazette, constitute
one or more National Industrial Tribunals for the adjudication of industrial disputes

31 | P a g e
[Link] Contact@8274005990

which, in the opinion of the Central Government, involve questions of national

importance or are of such a nature that industrial establishments situated in more
than one State are likely to be interested in, or affected by, such disputes.
(2) A National Tribunal shall consist of one person only to be appointed by the Central
Government.
(3) A person shall not be qualified for appointment as the presiding officer of a
National Tribunal unless he is, or has been, a Judge of a High Court.

Section 9A: Notice of change

No employer, who proposes to effect any change in the conditions of service
applicable to any workman in respect of any matter specified in the Fourth
Schedule. Employer will notify the change and it should not within twenty-one days
of giving such notice, provided that no notice shall be required for effecting any such
change— (a) where the change is affected in pursuance of any settlement or award.
Section 9A makes it obligatory upon an employer who proposes to effect any change
in the conditions of service applicable to any workman in respect of any matter
specified in the Fourth Schedule to give a notice of desired or intended change.

Section 9C: Setting up of Grievance Redressal Machinery

(1) Every industrial establishment employing twenty or more workmen shall have
one or more Grievance Redressal Committee for the resolution of disputes arising
out of individual grievances.
(2) The Grievance Redressal Committee shall consist of equal number of members
from the employer and the workmen.
(3) The chairperson of the Grievance Redressal Committee shall be selected from the
employer and from among the workmen alternatively on rotation basis every year.
(4) The total number of members of the Grievance Redressal Committee shall not
exceed more than six: Provided that there shall be, as far as practicable one-woman
member if the Grievance Redressal Committee has two members and in case the
number of members are more than two, the number of women members may be
increased proportionately.
(5) Notwithstanding anything contained in this section, the setting up of Grievance
Redressal Committee shall not affect the right of the workman to raise industrial
dispute on the same matter under the provisions of this Act. (6) The Grievance
Redressal Committee may complete its proceedings within thirty days on receipt
of a written application by or on behalf of the aggrieved party.
(7) The workman who is aggrieved of the decision of the Grievance Redressal
Committee may prefer an appeal to the employer against the decision of Grievance
Redressal Committee and the employer shall, within one month from the date of
receipt of such appeal, dispose of the same and send a copy of his decision to the
workman concerned.

32 | P a g e
[Link] Contact@8274005990

Section 10: Reference of disputes to Boards, Courts or Tribunals

(1) Where the appropriate Government is of opinion that any industrial dispute
exists, it may at any time, by order in writing, — (a) refer the dispute to a
Board for promoting a settlement
(2) or refer any matter appearing to be connected with or relevant to the dispute
to a Court for inquiry;
(3) or refer the dispute or any matter appearing to be connected with, or relevant
to, the dispute, if it relates to any matter specified in the Second Schedule,
to a Labour Court for adjudication;
(4) refer the dispute, in the Second Schedule or the Third Schedule, to an
Industrial Tribunal for adjudication: Provided that where the dispute relates
to any matter specified in the Third Schedule and is not likely to affect more
than one hundred workmen, the appropriate Government may, if it so thinks
fit, make the reference to a Labour Court.
****No proceedings pending before a Labour Court, Tribunal or National Tribunal in
relation to an industrial dispute shall lapse merely by reason of the death of any of
the parties to the dispute being a workman.
Section 10A: Voluntary reference of disputes to arbitration
Where any industrial dispute exists and the employer and the workmen agree to
refer the dispute to arbitration, they may, at any time before the dispute has been
referred under S. 10 to a Labour Court or Tribunal or National Tribunal, by a written
agreement, refer the dispute to arbitration and the reference shall be to such
person or persons (including the presiding officer of a Labour Court or Tribunal or
National Tribunal) as an arbitrator.
A copy of the arbitration agreement shall be forwarded to the appropriate
Government and the conciliation officer and the appropriate Government shall,
within one month from the date of the receipt of such copy, publish the same in the
Official Gazette.
The appropriate Government may, by order, prohibit the continuance of any strike
or lock-out in connection with such dispute.
Section 11: Procedure and powers of conciliation officers, Boards, Courts and
Tribunals
A conciliation officer or a member of a Board, or Court or the presiding officer of a
Labour Court, Tribunal or National Tribunal may for the purpose of inquiry into
any existing or apprehended industrial dispute, after giving reasonable notice, enter
the premises occupied by any establishment to which the dispute relates.
Every Board, Court, Labour Court, Tribunal and National Tribunal shall have the
same powers as are vested in a Civil Court under the Code of Civil Procedure,1908.
Section 11A: Powers of Labour Courts, Tribunals and National Tribunals to give
appropriate relief in case of discharge or dismissal of workmen
Powers of Labour Courts, Tribunals and National Tribunals to give appropriate
relief in case of discharge or dismissal of workmen.- Where an industrial dispute

33 | P a g e
[Link] Contact@8274005990

relating to the discharge or dismissal of a workman has been referred to a Labour

Court, Tribunal or National Tribunal for adjudication and, in the course of the
adjudication proceedings, the Labour Court, Tribunal or National Tribunal, as the
case may be, is satisfied that the order of discharge or dismissal was not justified, it
may, by its award, set aside the order of discharge or dismissal and direct
reinstatement of the workman on such terms and conditions, if any, as it thinks fit,
or give such other relief to the workman including the award of any lesser
punishment in lieu of discharge or dismissal as the circumstances of the case may
require
Section 12: Duties of conciliation officers
(1) The conciliation officer shall hold conciliation proceedings in the prescribed
manner the dispute relates to a public utility service and a notice under section 22
has been given.
(2) The conciliation officer shall, for the purpose of bringing about a settlement
of the dispute, without delay, investigate the dispute
(3) If a settlement of the dispute or of any of the matters in dispute is arrived at in
the course of the conciliation proceedings the conciliation officer shall send a report
thereof to the appropriate Government together with a memorandum of the
settlement signed by the parties to the dispute.
(4) If no such settlement is arrived at, the conciliation officer shall, as soon as
practicable after the close of the investigation, send to the appropriate Government
a full report setting forth the steps taken by him for ascertaining the facts and
circumstances relating to the dispute and for bringing about a settlement thereof,
together with a full statement of such facts and circumstances, and the reasons on
account of which, in his opinion, a settlement could not be arrived at.
(5) If, on a consideration of the report, the appropriate Government is satisfied that
there is a case for reference to a Board, Labour Court, Tribunal or National Tribunal,
it may make such reference. Where the appropriate Government does not make such
a reference it shall record and communicate to the parties concerned its reasons
therefor.
(6) A report under this section shall be submitted within fourteen days of the
commencement of the conciliation proceedings or within such shorter period as may
be fixed by the appropriate Government.
Section 13: Duties of Board
(1) Where a dispute has been referred to a Board under this Act, it shall be the duty
of the Board to bring about a settlement of the same and for this purpose the Board
shall without delay, investigate the dispute
(2) If a settlement of the dispute or of any of the matters in dispute is arrived at in
the course of the conciliation proceedings, the Board shall send a report thereof to
the appropriate Government together with a memorandum of the settlement signed
by the parties to the dispute.

34 | P a g e
[Link] Contact@8274005990

(3) If no such settlement is arrived at, the Board shall, as soon as practicable after
the close of the investigation, send to the appropriate Government a full report setting
forth the proceedings and steps taken by the Board for ascertaining the facts and
circumstances relating to the dispute and for bringing about a settlement its
recommendations for the determination of the dispute.
(4) The Board shall submit its report under this section within two months of the
date, on which the dispute was referred to it.
14. Duties of Court of Inquiry. - A Court shall inquire into the matters referred to it
and report thereon to the appropriate Government ordinarily within a period of six
months from the commencement of its inquiry.
15. Duties of Labour Courts, Tribunals and National Tribunals. - Where an industrial
dispute has been referred to a Labour Court, Tribunal or National Tribunal for
adjudication, it shall hold its proceedings expeditiously
16. Form of report or award: -
(1) The report of a Board or Court shall be in writing and shall be signed by all the
members of the Board or Court
(2) The award of a Labour Court or Tribunal or National Tribunal shall be in writing
and shall be signed by its presiding officer.
17. Publication of reports and awards. - (1) Every report of a Board or Court together
with any minute of dissent recorded therewith, every arbitration award and every
award of a Labour Court, Tribunal or National Tribunal shall, within a period of
thirty days from the date of its receipt by the appropriate Government.
17A. Commencement of the award. - (1) An award (including an arbitration award)
shall become enforceable on the expiry of thirty days from the date of its publication
under section 17.
But if, the appropriate Government finds that the award will effect on public grounds
affecting national economy or social justice to the whole or any part of, Central
Government may, by notification in the Official Gazette, declare that the award shall
not become enforceable on the expiry of the said period of thirty days.
**** the appropriate Government or the Central Government may, within ninety days
from the date of publication of the award under section 17, make an order rejecting
or modifying the award
**** Where any award as rejected or modified by an order is laid before the Legislature
of a State or before Parliament, such award shall become enforceable on the expiry
of fifteen days and where no order is made the award shall become enforceable on
the expiry of the period of ninety days.

17B. Payment of full wages to workman pending proceedings in higher courts:

When Labour Courts pass award of reinstatement, these are often contested by an
employer in the Supreme Court or High Courts. It is felt that the delay in the
implementation of the award causes hardship to the workman concerned. It is,
therefore, proposed to provide the payment of wages last drawn by the workman

35 | P a g e
[Link] Contact@8274005990

concerned, under certain conditions, from the date of the award till the case is finally
decided in the Supreme Court or High Courts.
18. Persons on whom settlements and awards are binding: -
➢ A settlement arrived at by agreement between the employer and workman in
the course of conciliation proceeding shall be binding on the parties to the
agreement.
➢ An arbitration award which has become enforceable shall be binding on the
parties to the agreement who referred the dispute to arbitration.
➢ an award shall be binding on: -
• all parties to the industrial dispute
• all persons who were employed in the establishment or part of the
establishment and all persons who subsequently become employed
in that establishment
19. Period of operation of settlements and awards. -
➢ A settlement shall come into operation on such date or on the date on which
the memorandum of the settlement is signed by the parties to the dispute.
➢ Such settlement shall be binding for such period as is agreed upon by the
parties, and if no such period is agreed upon, for a period of six months
➢ An award shall, subject to the provisions of this section, remain in operation
for a period of one year
➢ that the appropriate Government may, before the expiry of the said period,
extend the period of operation by any period not exceeding one year at a time
as it thinks fit so, however, that the total period of operation of any award does
not exceed three years from the date on which it came into operation.

Section 20: Commencement and conclusion of proceedings

(1) A conciliation proceeding shall be deemed to have commenced on the date on
which a notice of strike or lock-out under section 22 is received by the
conciliation officer or on the date of the order referring the dispute to a Board. (2) A
conciliation proceeding shall be deemed to have concluded—

• where a settlement is arrived at, when a memorandum of the

settlement is signed by the parties to the dispute;
• where no settlement is arrived at, when the report of the conciliation
officer is received by the appropriate Government or when the report of
the Board is published under section 17, as the case may be; or
• when a reference is made to a Court, Labour Court, Tribunal or
National Tribunal under section 10 during the pendency of conciliation
proceedings.
(3) Proceedings before an arbitrator under section 10A or before a Labour Court,
Tribunal or National Tribunal shall be deemed to have commenced on the date of the
reference of the dispute for arbitration or adjudication, as the case may be and such
proceedings shall be deemed to have concluded on the date on which the award
becomes enforceable under section 17A.

36 | P a g e
[Link] Contact@8274005990

Section 21: Certain matters to be kept confidential

There shall not be included in any report or award under this Act any information
obtained by a conciliation officer, Board, Court, Labour Court, Tribunal, National
Tribunal or an arbitrator in the course of any investigation or inquiry as to a trade
union or as to any individual business except the evidence given before such officer,
Board, Court, Labour Court, Tribunal, National Tribunal or arbitrator,
if the trade union, person, firm or company, in question has made a request in
writing to the conciliation officer, Board, Court, Labour Court, Tribunal, National
Tribunal or arbitrator, that such information shall be treated as confidential.

Strikes and Lock-outs

Section 22: Prohibition of strikes and lock-outs
(1) No person employed in a public utility service shall go on strike in breach of
contract—
(a) without giving to the employer notice of strike, hereinafter provided, within six
weeks before striking; or
(b) within fourteen days of giving such notice; or
(c) before the expiry of the date of strike specified in any such notice or
(d) during the pendency of any conciliation proceedings before a conciliation officer
and seven days after the conclusion of such proceedings.
(2) No employer carrying on any public utility service shall lock-out any of his
workmen—
(a) without giving them notice of lock-out as hereinafter provided, within six weeks
before locking out; or
(b) within fourteen days of giving such notice; or
(c) before the expiry of the date of lock-out specified in any such notice as
aforesaid; or
(d) during the pendency of any conciliation proceedings before a conciliation officer
and seven days after the conclusion of such proceedings.
(3) The notice of lock-out or strike under this section shall not be necessary where
there is already in existence a strike, lock-out in the public utility service, but the
employer shall send intimation of such lock-out or strike on the day on which it is
declared, to such authority as may be specified by the appropriate Government
(4) If on any day an employer receives from any persons employed by him any such
notices as are referred to in sub-section (1) or gives to any persons employed by him
any such notices as are referred to in sub-section (2), he shall within five days to the
appropriate Government.

37 | P a g e
[Link] Contact@8274005990

Section 23: General prohibition of strikes and lock-outs - No workman who is

employed in any industrial establishment shall go on strike in breach of contract and
no employer of any such workman shall declare a lock-out—
(a) during the pendency of conciliation proceedings before a Board and seven days
after the conclusion of such proceedings;
(b) during the pendency of proceedings before a Labour Court, Tribunal or National
Tribunal and two months after the conclusion of such proceedings;
(bb) during the pendency of arbitration proceedings before an arbitrator and two
months after the conclusion of such proceedings, where a notification has been
issued under sub-section (3A) of section 10A or
(c) during any period in which a settlement or award is in operation, in respect of any
of the matters covered by the settlement or award.

Section 24: Illegal strikes and lock-outs

(1) A strike or a lock-out shall be illegal if—

• it is commenced or declared in contravention of section 22 or section 23; or

• it is continued in contravention of an order made under sub-section (3) of
section 10 or sub-section (4A) of section 10A.
• Where a strike or lock-out in pursuance of an industrial dispute has already
commenced and is in existence at the time of the reference of the dispute to a
Board, an arbitrator, a Labour Court, Tribunal or National Tribunal, the
continuance of such strike or lock-out shall not be deemed to be illegal,
provided that such strike or lock-out was not at its commencement in
contravention of the provisions of this Act or the continuance thereof was not
prohibited
• A lock-out declared in consequence of an illegal strike or a strike declared in
consequence of an illegal lock-out shall not be deemed to be illegal.

Section 25: Prohibition of financial aid to illegal strikes and lock-outs No person
shall knowingly expend or apply any money in direct furtherance of support of any
illegal strike or lock-out.

Lay-off and retrenchment

CHAPTER VA
Section 25A: Application of Sections 25C to 25E
(1) Sections 25C to 25E inclusive shall not apply to industrial establishments to
which Chapter V-B applies, or—
(a) to industrial establishments in which less than fifty workmen on an average per
working day have been employed in the preceding calendar month or

38 | P a g e
[Link] Contact@8274005990

(b) to industrial establishments which are of seasonal character or in which work is

performed only intermittently.
(2) If a question arises whether an industrial establishment is of a seasonal character
or whether work is performed therein only intermittently, the decision of the
appropriate Government thereon shall be final.
Section 25B: Definition of continuous service for the purposes of this Chapter —
(1) a workman shall be said to be in continuous service for a period if he is, for that
period, in uninterrupted service, including service which may be interrupted on
account of sickness or authorised leave or an accident or a strike which is not illegal,
or a lock-out or a cessation of work which is not due to any fault on the part of the
workman.
(2) where a workman is not in continuous service within the meaning of clause (1)
for a period of one year or six months, he shall be deemed to be in continuous
service under an employer— (a) for a period of one year, if the workman, during a
period of twelve calendar months preceding the date with reference to which
calculation is to be made, has actually worked under the employer for not less than—
(i) one hundred and ninety days in the case of a workman employed below ground
in a mine (ii) two hundred and forty days (b) for a period of six months, if the
workman, during a period of six calendar months preceding the date with reference
to which calculation is to be made, has actually worked under the employer for not
less than— (i) ninety-five days, in the case of a workman employed below ground in
a mine; and (ii) one hundred and twenty days.

****Is a Part-time Employee would be Entitled to Benefit of Continuous Service Under

Sec. 25-B and Protection of Sec. 25-F- The Supreme Court in Divisional Manager,
New India Assurance Co. Ltd. v. A. Sankaralingam.
Section 25C: Right of workmen laid-off for compensation: -
Whenever a workman (other than a badli workman or a casual workman), whose
name is borne on the muster rolls of an industrial establishment and who has
completed not less than one year of continuous service under an employer, is laid-
off, whether continuously or intermittently, he shall be paid by the employer for all
days during which he is so laid-off, except for such weekly holidays as may intervene,
compensation which shall be equal to 50% of the total of the basic wages and
dearness allowance that would have been payable to him had he not been so
laid-off: Provided that if during any period of twelve months, a workman is so laid-
off for more than 45 days, no such compensation shall be payable in respect of any
period of the lay-off after the expiry of the first forty-five days.
Section 25D: It is duty of an employer to maintain muster rolls of workmen in
industrial establishment.

Section 25E: Workmen not entitled to compensation in certain cases

No compensation shall be paid to a workman who has been laid-off—

39 | P a g e
[Link] Contact@8274005990

(i) if he refuses to accept any alternative employment in the same establishment

from which he has been laid-off, or in any other establishment belonging to the same
employer situate in the same town or village or situate within a radius of five miles
from the establishment to which he belongs, if, in the opinion of the employer, such
alternative employment does not call for any special skill
(ii) if he does not present himself for work at the establishment at the appointed
time during normal working hours at least once a day
(iii) if such laying-off is due to a strike or slowing-down of production on the part
of workmen in another part of the establishment.

Section 25F: Conditions precedent to retrenchment of workmen

No workman employed in any industry who has been in continuous service for not
less than one year under an employer shall be retrenched by that employer until—

• the workman has been given one month’s notice in writing indicating the
reasons for retrenchment and the period of notice has expired, or the workman
has been paid in lieu of such notice, wages for the period of the notice
• the workman has been paid, at the time of retrenchment, compensation which
shall be equivalent to fifteen days’ average pay for every completed year of
continuous service in excess of six months
Why this is enacted???
The Legislature has enacted S. 25F, which provides some conditions to be complied
with before retrenching a workman with a double purpose, i.e.
(a) to save the employer from carrying the economic deadweight of surplusage of
labour on the one hand; and
(b) to provide compensation for workmen being thrown out of employment and to
soften the rigour of hardship due to unemployment caused by retrenchment which
was not their own creation. The Legislature has thus attempted to strike a balance
between the two conflicting interests.
****Section 25F of the Industrial Disputes Act prescribes conditions precedent to
retrenchment of workmen employed in an industrial establishment. The conditions
prescribed are: (a) one month’s notice to the workmen by the employer indicating
the reasons for retrenchment or payment of wages for the period of notice in lieu of
such notice ****(b) payment of compensation at the time of retrenchment at the rate
equivalent to 15 days’ average pay for every completed year of continuous service
or any part thereof in excess of six months
Section 25FF: Compensation to workmen in case of transfer of undertakings
Where the ownership or management of an undertaking is transferred, whether by
agreement or by operation of law, from the employer in relation to that undertaking
to a new employer, every workman who has been in continuous service for not less
than one year in that undertaking immediately before such transfer shall be entitled
to notice and compensation in accordance with the provisions of S. 25F.

40 | P a g e
[Link] Contact@8274005990

Section 25FFA: Sixty days’ notice to be given of intention to close down any
undertaking
(1) An employer who intends to close down an undertaking shall serve, at least sixty
days before the date on which the intended closure is to become effective, a notice,
in the prescribed manner, on the appropriate Government stating clearly the reasons
for the intended closure of the undertaking: Provided that nothing in this section
shall apply to— (a) an undertaking in which—
(i) less than fifty workmen are employed, or
(ii) less than fifty workmen were employed on an average per working day in the
preceding twelve months
(b) an undertaking set up for the construction of buildings, bridges, roads, canals,
dams or for other construction work or project.
25FFF. Compensation to workmen in case of closing down of undertakings-(1)
Where an undertaking is closed down for any reason, every workman who has been
in continuous service for not less than one year in that undertaking immediately
before such closure shall, be entitled to notice and compensation in accordance with
the provisions of section 25F, as if the workman had been retrenched. (Fifteen
days’ average pay for every completed year of continuous service in excess of six
months)
****Provided that where the undertaking is closed down on account of unavoidable
circum-stances beyond the control of the employer, the compensation to be paid
to the workman under clause (b) of section 25F shall not exceed his average pay for
three months.
**** An undertaking which is closed down by reason merely of—
(i) financial difficulties (including financial losses)
(ii) accumulation of undisposed of stocks
(iii) the expiry of the period of the lease or licence granted to it
(iv) in a case where the undertaking is engaged in mining operations,
exhaustion of the minerals in the area in which such operations are carried
on, shall not be deemed to be closed down on account of unavoidable
circumstances beyond the control of the employer within the meaning of
the provision to this.
**** where an undertaking engaged in mining operations is closed down by reason
merely of exhaustion of the minerals in the area shall be entitled to any notice or
compensation in accordance with the provisions of section 25F, if—
(a) the employer provides the workman with alternative employment at the same
remuneration as he was entitled to receive, and on the same terms and conditions of
service as were applicable to him, immediately before the closure
(b) the service of the workman has not been interrupted by such alternative
employment and
(c) the employer is, under the terms of such alternative employment or otherwise,
legally liable to pay to the workman, in the event of his retrenchment, compensation

41 | P a g e
[Link] Contact@8274005990

on the basis that his service has been continuous and has not been interrupted by
such alternative employment.
****Where any undertaking set-up for the construction of buildings, bridges, roads,
canals, dams or other construction work is closed down on account of the completion
of the work within two years from the date on which the undertaking had been set-
up, no workman employed therein shall be entitled to any compensation under
clause (b) of section 25F, but if the construction work is not so completed within two
years, he shall be entitled to notice and compensation under that section.
25G. Procedure for retrenchment. - Where any workman in an industrial
establishment, is to be retrenched and he belongs to a particular category of
workmen in that establishment, in the absence of any agreement between the
employer and the workman in this behalf, the employer shall ordinarily retrench the
workman who was the last person to be employed in that category, unless for
reasons to be recorded the employer retrenches any other workman.
**** 25H. Re-employment of retrenched workmen
CHAPTER VB
Special Provisions Relating to Lay-Off, Retrenchment and Closure in Certain
Establishments 25k.
Application of Chapter VB- The provisions of this Chapter shall apply to an industrial
establishment (not being an establishment of a seasonal character or in which work
is performed only intermittently) in which not less than 100 workmen were
employed on an average per working day for the preceding twelve months.
25M. Prohibition of lay-off. -
(1) No workman (other than a badli workman or a casual workman) whose name
is borne on the muster rolls of an industrial establishment to which this
Chapter applies shall be laid-off by his employer except with the prior
permission of the appropriate Government or such authority by notification
in the Official Gazette (except****lay-off is due to shortage of power or to
natural calamity, and in the case of a mine, such lay-off is due also to fire,
flood, excess of inflammable gas or explosion].
25N. Conditions precedent to retrenchment of workmen. -
(1) No workman employed in any industrial establishment to which this Chapter
applies, who has been in continuous service for not less than one year under
an employer shall be retrenched by that employer until, -- (a) the workman
has been given three months' notice in writing indicating the reasons for
retrenchment and the period of notice has expired, or the workman has been
paid in lieu of such notice, wages for the period of the notice

(2) Where an application for permission has been made and the appropriate
Government or the specified authority does not communicate the order
granting or refusing to grant permission to the employer within a period of
sixty days from the date on which such application is made, the permission
applied for shall be deemed to have been granted on the expiration of the said
period of sixty days.

42 | P a g e
[Link] Contact@8274005990

25-O. Procedure for closing down an undertaking: -

(1) An employer who intends to close down an undertaking of an industrial
establishment to which this Chapter applies shall, in the prescribed manner,
apply, for prior permission at least ninety days before the date on which the
intended closure is to become effective, to the appropriate Government,
stating clearly the reasons for the intended closure of the undertaking and a
copy of such application shall also be served simultaneously on the
representatives of the workmen.
(2) If the appropriate government does not respond within 60 days, the
permission shall be deemed to have been granted.
(3) Appropriate government may reference to a Tribunal under this sub-section,
it shall pass an award within a period of thirty days from the date of such
reference.
(4) every workman who is employed in that undertaking immediately before the
date of application for permission under this section, shall be entitled to
receive compensation which shall be equivalent to fifteen days' average pay
for every completed year of continuous service or any part thereof in
excess of six months.
Section 33 of Industrial Disputes Act 1947: -Conditions of service, etc., to
remain unchanged under certain circumstances during pendency of
proceedings

✓ Due to an ongoing dispute between the employer and the employee, such
employee shall not be punished for any kind of misconduct connected with
the dispute be discharged or punished through dismissal or any such
alternatives.

✓ It provides that in such scenario where the employee is being dismissed then
he shall be paid wages for one month and appropriate application shall be
made by the employee to the authority before which the proceeding is pending.

✓ It further provides that action as mentioned shall not be taken against the
protected workman, and such protected workman as recognized shall be one
per cent of the total number of workmen employed therein subject to a
minimum number of five protected workman and a maximum number of one
hundred protected workmen.

Section 33A of Industrial Disputes Act 1947

Special provision for adjudication as to whether conditions of service, etc., changed during a period
of proceeding
✓ any employee aggrieved due to any contravention of the provisions as laid
down under section 33 may make a complaint to the appropriate forum as
has been provided.

43 | P a g e
[Link] Contact@8274005990

Section 33C: -Recovery of money due from an employer

➢ A workman is owed some money by the employer concerning an award

granted. In this scenario, the workman shall file an application to the
appropriate Government for the recovery of the amount due.

➢ application shall be filed within 1 year from the date on which the
money becomes due and may even be filed later subject to the
satisfaction of the appropriate Government
Penalties: -
➢ For lay off and retrenchment without permission, the employer shall
be punishable with imprisonment for 1 month or with fine of 1000
or both.
➢ For closure without permission, the employer shall be punishable with
imprisonment for 6 month or with fine of 5000 or both.
Unfair Labour Practice-

• Any person who commits any unfair labour practice shall be

punishable with imprisonment for a term which may extend to six
months or with fine which may extend to one thousand rupees or
with both.
Strike: -

• Any workman who commences, continues, a strike which is illegal

under this Act, shall be punishable with imprisonment for a term
which may extend to one month, or with fine which may extend to
fifty rupees, or with both
• Any employer who commences, continues, a lock out which is illegal
under this Act, shall be punishable with imprisonment for a term
which may extend to one month, or with fine which may extend to
1000 rupees, or with both
• Any person who instigates or incites others to take part in, a strike
or lock-out which is illegal, shall be punishable with imprisonment
which may extend to six months, or with fine which may extend to
one thousand rupees, or with both.
• Any person who knowingly expends or applies any money in support
of any illegal strike or lock-out shall be punishable with
imprisonment for six months, or with fine which may extend to
one thousand rupees, or with both.
• Any person breaches any term of any settlement or award, which is
binding on him, can get imprisonment of 6 months or with a fine or
both.
• Any person who wilfully disclose confidential information, can get
imprisonment of 6 months, or with fine of Rs. 1000 or both.
• Any employer who closes down any undertaking without permission,
can get imprisonment of 6 months or with fine of Rs. 5000 or both.

44 | P a g e
[Link] Contact@8274005990

Amendements,2010.
1. Supervisor drawing wages not exceeding Rs. 10000 per month added in the
definition of workmen
2. Added Section 2A
3. Added Section 9C-Grievance Redressal Committee submits its report in 30
days.
****Schedules: -
Schedule 1- Industries which may be declared to be public Utility Services
Schedule 2- Matters within the jurisdiction of Labour Court
Schedule 3- Matters within the jurisdiction of Industrial Tribunals
Schedule 4-Conditions of service for change of which notice to be given
Schedule 5-Unfair Labour Practices.

[Link] Maternity Benefits Act,1961

An Act to regulate the employment of women in certain establishment for certain
period before and after child-birth and to provide for maternity benefit and certain
other benefits. full paid absence from work.

Where it is applicable!!!
employing 10 or more than 10 persons in Factories, Mines, Plantation, Shops &
Establishments.
No employer shall knowingly employ a woman in any establishment during the eight
weeks immediately following the day of her delivery or her miscarriage.

No woman shall work in any establishment during the eight weeks immediately
following the day of her delivery of her miscarriage.
AND
at the period of one month immediately preceding the period of six weeks, before the
date of her expected delivery (amended 8weeks but no one month immediately
preceding the period given).
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
But qualifying period of eighty days-who has immigrated into the State of Assam 120
days.

45 | P a g e
[Link] Contact@8274005990

Right to payment of maternity benefit --The average daily wage for the period of
her actual absence immediately preceding and including the day of her delivery and
for the six weeks immediately following that day.

woman who is pregnant, such notice shall state the date from which she will be
absent from work, not being a date earlier than six weeks from the date of her
expected delivery.
The amount of maternity benefit for the period preceding the date of her expected
delivery shall be paid in advance by the employer within forty-eight hours of
production of such proof
Nursing breaks -- Every woman delivered of a child who returns to duty after such
delivery shall, in addition to the interval for rest allowed to her, be allowed in the
course of her daily work two breaks of the prescribed duration for nursing the child
until the child attains the age of fifteen months.
Dismissal during absence or pregnancy. -- (1) Where a woman absents herself from
work in accordance with the provisions of this Act, it shall be unlawful for her
employer but gross misconduct the employer may, by order in writing communicated
to the woman, deprive her of the maternity benefit or medical bonus or both. When?

(i) wilful destruction of employer's goods or property

(ii) assaulting any superior or co-employee at the place of work
(iii) criminal offence involving moral turpitude resulting in conviction in a court of
law
(iv) theft, fraud, or dishonesty in connection with the employer's business or
property and
(v) wilful non-observance of safety measures or rules on the subject or wilful
interference with safety devices or with fire-fighting equipment.
And
Any woman deprived of maternity benefit or medical bonus or both may, within sixty
days from the date on which the order of such deprivation is communicated to her
appeal in Form 'G
Penalty for contravention of Act by employers-three months fine which may extend
to five hundred rupees or with both
No pregnant woman shall, on a request being made by her in this behalf, be required
by her employer to do during the period of one month immediately preceding the
period of six weeks before the date of her expected delivery and also for any period
during this period of six weeks for which she does not avail of leave of absence, any
work which is of an arduous nature or which involves long hours of standing, or
which in way is likely to interfere with her pregnancy or the normal development of
the foetus, or is likely to cause her miscarriage or otherwise to adversely affect her
health.

46 | P a g e
[Link] Contact@8274005990

woman on production of a certificate in Form 'B' -she is pregnant and is expected to

be delivered of a child within six weeks of the date of production of the certificate

Agar nahi diya hai toh!!!

Any woman who has not given the notice when she was pregnant may give such
notice as soon as possible after the delivery
Every woman entitled to maternity benefit under the Act shall also be entitled to
receive from her employer a medical bonus of 2[Rs.3500], if no pre-natal,
confinement and post-natal care is provided for by the employer free of charge.

Two breaks of 15 minutes' duration for nursing the child until the child attains the
age of fifteen months.

The Maternity (Amendment) Act 2017

Establishments employing 50 or more employees are also required to provide crèche
facilities, either separately or along with common facilities
Key amendments!!!
• Increased Paid Maternity Leave:
The Maternity Benefit Amendment Act has increased the duration of paid maternity
leave available for women employees from the existing 12 weeks to 26 weeks. Under
the Maternity Benefit Amendment Act, this benefit could be availed by women for a
period extending up to a maximum of 8 weeks before the expected delivery date and
the remaining time can be availed after childbirth.

8weeks After baby birth 18weeks

For women who are having 2 or more surviving children, the duration of paid
maternity leave shall be 12 weeks (i.e. 6 weeks before and 6 weeks after expected
date of delivery).
• Maternity leave for adoptive and commissioning mothers:
Maternity leave of 12 weeks to be available to mothers adopting a child below the
age of three months from the date of adoption as well as to the "commissioning
mothers". The commissioning mother has been defined as biological mother who
uses her egg to create an embryo planted in any other woman.
• Work from Home option:
The Maternity Benefit Amendment Act has also introduced an enabling provision
relating to "work from home" for women, which may be exercised after the expiry of

47 | P a g e
[Link] Contact@8274005990

the 26 weeks' leave period. Depending upon the nature of work, women employees
may be able to avail this benefit on terms that are mutually agreed with the employer.
• Creche facility:
The Maternity Benefit Amendment Act makes creche facility mandatory for every
establishment employing 50 or more employees. Women employees would be
permitted to visit the crèche 4 times during the day (including rest intervals)
The Maternity Benefit Amendment Act makes it mandatory for employers to educate
women about the maternity benefits available to them at the time of their
appointment.

From Where
From whereititcomes from -
comes from:

Maternity Protection Convention,2000(No.183)- Provides for 14 weeks of

maternity benefit to woman.

• Cash Benefit- Health and maintain suitable standard of living

• Pregnant or Nursing mother, not to obliged to perform work which is
determined harmful
• Prohibition from description based on maternity
• Prohibit employer to terminate
• Woman returning after leave join at same or equivalent position

****In 2000, ILO recommended to extend to at least 18 weeks.

Important Points: -
➢ The Maternity Benefit Act, 1961, has a very wide coverage. It is applicable to
factories, mines, plantations and shops and establishments employing 10 or
more persons, and vests in the government extensive powers to extend its
application to any other classes of industries and establishments. The Act
does not ordinarily apply to establishments covered under the ESI Act, 1948.

➢ The second National Commission on Labour (2002) has recommended

significant changes in the field of maternity protection legislation in the
country. The Commission has recommended the extension of the Maternity
Benefit Act and its application to all women workers, and has also suggested
a separate maternity benefit legislation for women workers in the unorganized
sector.

➢ The ILO Conventions relating to maternity protection are: Maternity Protection

Conventions (No. 3), 1919; (No. 103), 1952; and (No. 183), 2000.

➢ Maternity Protection-The first Convention dealing with maternity protection

was the Maternity Protection Convention (No. 3), adopted in 1919. The
Maternity Protection Convention (Revised) (No. 103), 1952 deals with

48 | P a g e
[Link] Contact@8274005990

maternity protection immediately before and after child birth. It provides that
no woman worker should be required to work for at least 12 weeks at the time
of her confinement and at least six weeks of this period should follow the birth
of the child. Such a woman worker should also be entitled to receive cash and
medical benefits as a matter of right by social insurance or public funds, and
is not to be discharged during the period of her maternity leave.

➢ The Maternity Protection (Agriculture) Recommendation (No. 12), 1921,

applies the principle of the Convention to women workers employed in
agriculture. The Maternity Protection Recommendation (No. 95), 1952
supplements Convention No. 103, and provides that the period of maternity
leave may be extended to 14 weeks in case a woman’s health makes such an
extension desirable. It further provides that the amount of maternity benefit
should be at par with the earnings of the woman and her seniority right should
be preserved during the period of maternity leave. The breaks for nursing
should be at least an hour and a half daily and the pregnant woman should
not be allowed to work overtime or during night.

➢ Maternity Protection Convention (No. 183), 2000, which revises the Maternity
Protection Convention (Revised), 1952, contains improved standards relating
to maternity benefit. The ratifying member state is required to take steps to
ensure that pregnant or breastfeeding women are not obliged to perform work
which is prejudicial to the health of the mother or the child. A woman is
entitled to maternity leave for a period not less than 14 weeks which will
include a period of six weeks’ compulsory leave after childbirth. She is also
entitled to a further period of leave in the case of illness or complications
arising out of pregnancy or childbirth, the duration of which will be in
accordance with national law and practice. The cash benefit is not to be less
than two-thirds of the woman’s previous earnings. It will be unlawful for an
employer to terminate the employment of a woman during her pregnancy or
absence on leave. Steps should be taken to ensure that maternity does not
become a source of discrimination in employment. The breastfeeding mothers
are entitled to one or more daily breaks or a daily reduction of hours of work
to breastfeed her child. The ratifying member state is required to examine
periodically the appropriateness of extending the period of maternity leave or
increasing the amount of cash benefit. The Maternity Protection
Recommendation (No. 191), 2000 specifies details relating to cash and medical
benefits, health protection, nursing breaks.

[Link] Building and Other Construction Workers’ (Regulation Of Employment

And Conditions Of Service) Act, 1996
Objective: - An Act to regulate the employment and conditions of service of building
and other construction workers and to provide for their safety, health and welfare
measures and for any other matters connected.
Where it applies-10 or more building workers in any building or other construction
work on any day of the preceding twelve months.

49 | P a g e
 [Link] Contact@8274005990

****public sector undertaking means any corporation established by or under any

Central, State or Provincial Act or a Government company as defined in section 617
of the Companies Act, 1956 which is owned, controlled or managed by the Central
Government.
Building or other construction work means the construction, alteration, repairs,
maintenance or demolition, of or, in relation to, buildings, streets, roads, railways,
J tramways, airfields, irrigation, drainage, embankment and navigation works, flood
U control works (including storm water drainage works), generation, transmission and
S distribution of power, water works (including channels for distribution of water), oil
T and gas installations, electric lines, wireless, radio, television, telephone, telegraph
R and overseas communications, dams, canals, reservoirs, watercourses, tunnels,
E bridges, viaducts, pipelines, towers, cooling towers, transmission towers and such
A other work as may be specified in this behalf by the appropriate Government, by
D notification but does not include any building or other construction work to which
the provisions of the Factories Act, 1948 or the Mines Act, 1952
Building worker- means a person who is employed to do any skilled, semi-skilled or
unskilled, manual, supervisory, technical or clerical work for hire or reward, whether
the terms of employment be expressed or implied, in connection with any building
or other construction work but does not include any such person— (i) who is
employed mainly in a managerial or administrative capacity or (ii) who, being
employed in a supervisory capacity, draws wages exceeding 1600/- rupees per
mensem or exercises, either by the nature of the duties attached to the office or by
reason of the powers vested in him, functions mainly of a managerial nature.

Central Advisory Committee: - The Central Advisory Committee shall consist of—
(a) a Chairperson to be appointed by the Central Government
(b) 03 Members of Parliament of whom 02 shall be elected by the House of the People
and 01 by the Council of States—members
(c) the Director-General—member, ex-officio
(d) such number of other members, not exceeding 13 but not less than 09, as the
Central Government may nominate to represent the employers, building workers,
associations or architects, engineers, accident insurance institutions and any other
interests which, in the opinion of the Central Government, ought to be represented
on the Central Advisory Committee.
**** The Chairperson of the Central Advisory Committee shall hold office as such for
a period of three years. The Central Advisory Committee shall meet at such places
and at such times as may be decided by the Chairperson of such Committee and it
shall meet at least once in six months. No business shall be transacted at any
meeting of the Central Advisory Committee unless at least six members of such
Committee are present in that meeting which shall include at least one member of
Parliament

50 | P a g e
[Link] Contact@8274005990

State Advisory Committee: - The State Advisory Committee shall consist of— (a) a
Chairperson to be appointed by the State Government
(b) 02 members of the State Legislature to be elected from the State Legislature—
members
(c) a member to be nominated by the Central Government
(d) the Chief Inspector—member, ex-officio
(e) such number of other members, not exceeding 11, but not less than 07, as the
State Government may nominate to represent the employers, building workers,
associations of architects, engineers, accident insurance institutions and any other
interests which, in the opinion of the State Government, ought to be represented on
the State Advisory Committee.
Expert committees: - Advise that Government for making rules under this Act
(BOCW experience)
REGISTRATION OF ESTABLISHMENTS
Registering Officers: - Gazetted Officers of Government, and works within defined
jurisdictional area
Registration of Establishments:-(1) Every employer shall register the establishment
within 60 days on its commencement and the particulars regarding any change in
later stage shall be intimated by the employer to the registering officer within thirty
days of such change. An employer shall, at least 30 days before the commencement
of any building or other construction work, send notice to the inspector about
commencement of work.
If the registering officer is satisfied registration can be revoked, and employer may
appeal within 30 days to appellate officer.
Registration of Building Workers as Beneficiaries-
(a) every building worker registered as a beneficiary under this Act shall be
entitled to the benefits provided by the Board from its Fund under this Act.
Fund means BOCW welfare fund.
(b) Every building worker who has completed either 18 years of age, but has not
completed 60 years of age, and who has been engaged in any building or other
construction work for not less than 90 days during the preceding twelve
months shall be eligible for registration as a beneficiary under this Act.

(c) An application for registration shall be made to the officer authorised by the
Board. Every application shall be accompanied by such documents together
with such fee not exceeding 50 rupees.
(d) The Board shall give to every beneficiary an identity card with his photograph
with enough space for entering the details of the building or other construction
work done by him
(e) A building worker who has been registered as a beneficiary under this Act
shall cease to be as such when he attains the age of 60 years or when he is

51 | P a g e
 [Link] Contact@8274005990

not engaged in building or other construction work for not less than 90 days
in a year
(f) A building worker who has been registered as a beneficiary under this Act
shall, until he attains the age of sixty years, contribute to the Fund and the
Board, if satisfied that a beneficiary is unable to pay his contribution due to
any financial hardship, waive the payment of contribution for a period not
exceeding three months at a time.
(g) When a beneficiary has not paid his contribution for a continuous period of
not less than one year, he shall cease to be a beneficiary.

Building and Other Construction Workers’ Welfare Boards: -

Every State Government shall constitute a Building and Other Construction Workers’
Welfare Board. The Board shall consist of a chairperson, a person to be nominated
by the Central Government and such number of other members, not exceeding 15,
as may be appointed to it by the State Government. Board shall include an equal
number of members representing the State Government, the employers and the
building workers and that at least one member of the Board shall be a woman.
The Board shall appoint a Secretary and such officers and employees as it considers
necessary for the efficient discharge of its functions under this Act. The Secretary of
the Board shall be its chief executive officer.
(1) The Board may—
(a) provide immediate assistance to a beneficiary in case of accident

F (b) make payment of pension to the beneficiaries who have completed the age of sixty
u years
n (c) sanction loans and advances to a beneficiary for construction of a house not
c exceeding such amount and, on such terms, and conditions as may be prescribed
t
(d) pay such amount in connection with premia for Group Insurance Scheme of the
i beneficiaries as may be prescribed
o
n (e) give such financial assistance for the education of children of the beneficiaries as
s may be prescribed
(f) meet such medical expenses for treatment of major ailments of a beneficiary or,
such dependant, as may be prescribed
(g) make payment of maternity benefit to the female beneficiaries
(h) make provision and improvement of such other welfare measures and facilities
Building and other Construction Workers’ Welfare Fund-There shall be credited-
(a) any grants and loans made to the Board by the Central Government
(b) all contributions made by the beneficiaries
(c) all sums received by the Board from such other sources as may be decided by
the Central Government

52 | P a g e
[Link] Contact@8274005990

The accounts of the Board shall be audited by the Comptroller and Auditor-General
of India annually and any expenditure incurred in connection with such audit shall
be payable by the Board to the Comptroller and Auditor General of India
Wages for overtime work-Where any building worker is required to work on any day
in excess of the number of hours constituting a normal working day, he shall be
entitled to wages at the rate of twice his ordinary rate of wages.
Welfare: -
(a) Drinking water-a sufficient supply of wholesome drinking water may be
arranged and no such point shall be situated within six metres of any washing
place, urinal or latrine
(b) Latrines and urinals: -
(c) Accommodation: -
(d) Creches: -50 female, facility for 6 years or below children
(e) First aid
(f) Canteens: -250
Safety and Health Measures: - In every establishment wherein five hundred or
more building workers are ordinarily employed, the employer shall constitute a
Safety Committee consisting of such number of representatives of the employer
and the building workers. the employer shall also appoint a safety officer who
shall possess such qualifications.
Notice of certain accidents: - Where in any establishment an accident occurs
which causes death or which causes any bodily injury by reason of which the
person injured is prevented from working for a period of forty-eight hours or more
immediately following the accident. Where a notice relates to an accident-causing
death of five or more persons, the authority shall make an inquiry into such
accident within one month of the receipt of the notice.
Penalty for contravention of provisions regarding safety measures: -
Imprisonment for a term which may extend to three months, or with fine which
may extend to two thousand rupees, or with both.
Penalty for failure to give notice of the commencement of the building or other
construction work:- he shall be punishable with imprisonment for a term which
may extend to three months, or with fine which may extend to two thousand
rupees, or with both.

Penalty for obstructions Inspector: - shall be punishable with imprisonment for

a term which may extend to three months, or with a fine which may extend to
one thousand rupees, or with both.
No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of
the first class shall try any offence punishable under this Act.
Few Points to remember: -
➢ Safety Committees:-(1) Every establishment wherein five hundred
or more building workers are ordinarily employed, there shall be a
Safety Committee constituted by the employer which shall be
represented by equal number of representatives of employer and

53 | P a g e
[Link] Contact@8274005990

building workers employed in such establishment. Safety Officer:-

(1) In every establishment wherein five hundred or more building
workers are ordinarily employed, the employer shall appoint Safety
Officers
➢ Reporting of accidents: - Notice of any accident on the
construction site: -
• causes loss of life, disables a building worker disables a building
worker from working for a period of forty-eight hours or more
immediately following the accident
• fatal accidents- within four hours and seventy-two hours, in case
of other accidents
• Notice of any accident at a construction site which causes loss
of life disables such building worker from work for more than ten
days following the accident, shall also be sent to— (i) the officer
in charge of the nearest police station; (ii) the District Magistrate
➢ Medical Facilities: - Ambulance Room: - in case more than five
hundred building workers are employed at such construction site
there is an ambulance room with effective communication system
and in case five hundred or less workers are employed at such
construction site there is an ambulance room at such construction
site or an arrangement with a nearby hospital for providing an
ambulance room
➢ Hours of work, intervals of rest and spread over etc.:--(1) No
building worker employed in building or other construction work
shall be required or allowed to work for more than nine hours a day
or forty-eight hours a week.
• No building worker employed in building or other construction work
shall be required or allowed to work continuously for more than five
hours unless he had an interval of rest of not less than half an hour
• each building worker employed in building and other construction
work shall be allowed a day of rest every week
• Every employer shall- maintain-a) muster-roll and a register of
wages b) a register of deductions for damage or loss, register of fines
and register of advances c) a register of overtime

[Link] Unions Act,1926

Objective: -The Trade Unions Act,1926 was enacted with the object of
➢ Providing for the registration of Trade Unions
➢ Verification of the membership of trade unions registered so that
they may acquire a legal and corporate status.
**** The first Factories Act was adopted in 1881.

54 | P a g e
[Link] Contact@8274005990

**** The Bombay Millhands’ Association formed in 1890 under the leadership of
Narayan Lokhande was the first workers’ organisation in India.

****The first systematic attempt to form a trade union on permanent basis was done
in 1906 in the Postal Offices at Bombay and Calcutta.

**** The Madras Labour Union was founded in 1918. Thiru Vi. Ka. and B.P. Wadia,
the nationalist leaders, founded the Union.

**** Anusuyaben Sarabhai- founded the famous Mazdoor Mahajan-Textile Labour

Association, in 1920.
**** The year 1920 also witnessed the formation of the All-India Trade Union
Congress (AITUC). The main body of labour legislation and paradoxically enough,
even the formation of the AITUC owes virtually to the activities of the International
Labour Organization (ILO).
**** The treaty of Versailles established two bodies -the League of Nations and the
ILO. India was recognised as a founder member of ILO. This is a tripartite body on
which each member state nominates its representatives. For the foundational
conference of ILO held in 1919, the Government of India nominated N.M. Joshi as
the labour member in consultation with the Social Service League.

**** Accordingly, the Supreme Court in Food Corporation of India Staff Union v. Food
Corporation of India1 directed that the following norms and procedure shall be
followed for assessing the representative character of trade unions by the “secret
ballot system” and they are as follows. (i) As agreed, to by the parties the relative
strength of all the eligible unions by way of secret ballot be determined under the
overall supervision of the Chief Labour Commissioner (Central) (CLC) as the
appropriate Government is the Central Government in this case.

(ii) The CLC will notify the Returning Officer who shall conduct the election with the
assistance of the management. The Returning Officer shall be an officer of the
Government of India, Ministry of Labour.
(iii) The CLC shall fix the month of election while the actual date/dates of election
shall be fixed by the Returning Officer. The Returning Officer shall require to furnish
sufficient number of copies of the lists of all the employees/workers. The said list
shall constitute the voters list.
(iv) The management shall display the voters list on the notice boards and other
conspicuous places and shall also supply copies thereof to each of the unions for
raising objections, if any. The unions will file the objections to the Returning Officer
within the stipulated period and the decision of the Returning Officer shall be final.

55 | P a g e
[Link] Contact@8274005990

**** The dispute raised before the Supreme Court in M.T. Chandersenan v. N.
Sukumaran2 was that whether subscriptions not having been paid as required by
the bye-laws, the members who have defaulted payment of their subscription can be
members of the union. There is no doubt that if subscriptions are not paid in
accordance with the bye-laws, persons who have failed to pay cannot be considered
as members of the union. The Court directed that the subscriptions have to be paid
and he is bound to accept the arrears as well as the current subscription and enroll
them as members.
****Principle to Govern Trade Unions: -

• Doctrine of vested Interest: - It states that wages and other conditions of

employment should not be mixed with work.
• Doctrine of supply and Demand: -It holds that collective action on the part of
workers enables the attainment of their objectives.
• Doctrine of Living Wages: -It talk empowering workers to demand living wages.
• Doctrine of Partnership: -it accepts workers as patterners.
• Doctrine of Socialism: - It implies that every worker has a right to work and
leisure, maintenance in old age, sickness and equal pay for equal work.
Definitions
Appropriate Government: - Central Government-for whose objects are not confined
to one State, and for other trade unions State Government is appropriate
government.
Registrar means— (i) a Registrar of Trade Unions appointed by the appropriate
Government, and includes any Additional or Deputy Registrar of Trade Unions.
Trade dispute- means any dispute between employers and workmen or between
workmen and workmen, or between employers and employers which is connected
with the employment or non-employment, or the terms of employment or the
conditions of labour, of any person, and “workmen” means all persons employed in
trade or industry whether or not in the employment of the employer with whom the
trade dispute arises.

Trade Union- means any combination, whether temporary or permanent, formed

primarily for the purpose of regulating the relations between workmen and employers
or between workmen and workmen, or between employers and employers, or for
imposing restrictive conditions on the conduct of any trade or business, and includes
any federation of two or more Trade Unions.
This Act shall not affect—
➢ any agreement between partners as to their own business
➢ any agreement between an employer and those employed by him as to such
employment
➢ any agreement in consideration of the sale of the goodwill of a business or of
instruction in any profession, trade or handicraft.

Mode of registration-

56 | P a g e
[Link] Contact@8274005990

Any 7 or more members of a Trade Union may, by subscribing their names to the
rules of the Trade Union may, apply for registration of the Trade Union under this
Act.
➢ no trade union of workmen shall be registered unless at least 10 per cent or
100 of the workmen, whichever is less, engaged or employed in the
establishment or industry with which it is connected are the members of such
Trade Union.
➢ The application shall not become invalid merely by reason that, at any time
after the date of the application, but before the registration of the Trade Union,
some of the applicants, but not exceeding half of the total number of persons
who made the application, have ceased to be members of the Trade Union.
Application for registration
Every application for registration of a Trade Union shall be made to the Registrar,
and shall be accompanied by a copy of the rules of the Trade Union and a statement
of the following particulars, namely:
➢ the names, occupations and addresses of the members making the application
➢ the name of the Trade Union and the address of its head office
➢ the titles, names, ages, addresses and occupations of the office-bearers of the
Trade Union.
➢ Where a Trade Union has been in existence for more than 1year before the
making of an application for its registration, the application together with, a
general statement of the assets and liabilities of the Trade Union
Registration and Certificate of registration: -
➢ The Registrar, on being satisfied that the Trade Union has complied with
all the requirements of this Act in regard to registration, shall register the
Trade Union by entering in a register, the particulars relating to the Trade
Union contained in the statement accompanying the application for
registration.
➢ The Registrar, on registering a Trade Union, shall issue a certificate of
registration.
**** A registered Trade Union of workmen shall at all times continue to have not less
than ten per cent or one hundred of the workmen, whichever is less, subject to a
minimum seven, engaged or employed in an establishment or industry with which it
is connected, as its members.
Cancellation of Registration-if the Registrar is satisfied that the certificate has been
obtained by fraud or mistake, or that the Trade Union has ceased to exist or has
wilfully and after notice from the Registrar contravened any provision of this Act,
may cancel the registration. Giving not less than two months’ previous notice in
writing specifying the ground on which it is proposed to withdraw or cancel the
certificate.

Appeal: -Any person aggrieved by any refusal of the registrar to register a Trade
Union or by the withdrawal or cancellation of a certificate of registration may appeal

57 | P a g e
[Link] Contact@8274005990

to Appellate Court. In the event of the dismissal of an appeal by the inferior court,
the person aggrieved shall have a right of appeal to the High Court.
Certain Acts not to apply to registered Trade Unions-
The following Acts, namely:
(a) The Societies Registration Act, 1860 (21 of 1860),
(b) The Cooperative Societies Act, 1912 (2 of 1912),
(c) The Companies Act, 1956 (1 of 1956); shall not apply to any registered Trade
Union,

Objects on which general funds may be spent the general funds of a registered Trade
Union shall not be spent on any other objects than the following, namely:
➢ the payment of salaries, allowances and expenses to office-bearers of the
Trade Union
➢ the payment of expenses for the administration of the Trade Union, including
audit of the accounts of the general funds of the Trade Union
➢ the prosecution or defence of any legal proceeding to which the Trade Union
or any member
➢ the compensation of members for loss arising out of trade disputes
➢ allowances to members or their dependants on account of death, old age,
sickness, accidents or unemployment of such members
➢ the issue of, liability under policies of assurance on the lives of members, or
under policies insuring members against sickness, accident or unemployment
➢ the provision of educational, social or religious benefits for members
(including the payment of the expenses of funeral or religious ceremonies for
deceased members) or for the dependants of members
➢ the upkeep of a periodical published
➢ the payment of a minimum subscription by members of the Trade Union
which shall not be less than—
• one rupee per annum for rural workers;
• three rupees per annum for workers in other unorganised sectors;
and
• twelve rupees per annum for workers in any other case

Constitution of a separate fund for political purposes- A registered Trade Union may
constitute a separate fund, from contributions separately levied for or made to that
fund, from which payments may be made, for the promotion of the civic and political
interests of its members.

Criminal conspiracy in trade disputes

➢ This section grants immunity to the office-bearers or members of a registered
trade union from punishment under sub-section (2) of S. 120-B of the Indian

58 | P a g e
[Link] Contact@8274005990

Penal Code dealing with criminal conspiracy. Such immunity is provided to

the office bearers or members of the registered trade unions provided that an
offence arises out of any agreement made between the members whose
purpose is to further the objects of the Trade Union. However, such immunity
is not available if any agreement is made to commit an offence.

➢ No suit or other legal proceeding shall be maintainable in any Civil Court

against any registered Trade Union or any office-bearer or member thereof in
respect of any act done in contemplation or furtherance of a trade dispute

Right to inspect books of Trade Union

The account books of a registered Trade Union and the list of members shall be open
to inspection by an office-bearer or member of the Trade Union.

Rights of minors to membership of Trade Unions

Any person who has attained the age of 15 years may be a member of a registered
Trade Union and enjoy all the rights of a member and execute all instruments and
give all acquittances necessary to be executed or given under the rules.
Disqualifications of office-bearers of Trade Unions

• he has not attained the age of eighteen years

• he has been convicted by a Court in India of any offence involving moral
turpitude and sentenced to imprisonment, unless a period of five years has
elapsed since his release.
Proportion of office-bearers to be connected with the industry

At least 50% of the total number of the office-bearers of every registered Trade Union
in an unorganised sector shall be persons actually engaged or employed in an
industry with which the Trade Union is connected.
Change of name
Any registered Trade Union may, with the consent of not less than 2/3rd of the total
number of its members, to change its name.
Amalgamation of Trade Unions
Any two or more registered Trade Unions may become amalgamated together as one
Trade Union with or without dissolution or division of the funds of such Trade
Unions. The votes of at least ½ of the members of each or every such trade Union
entitled to vote are recorded, and that at least 60 per cent of the votes recorded are
in favour of the proposal.
Notice of change of name or amalgamation

59 | P a g e
[Link] Contact@8274005990

In case of change of name of Trade Union or amalgamation of multiple unions, the

Secretary and seven members of the Trade Union will give notice in writing for
changing its name.
Dissolution
When a registered Trade Union is dissolved, notice of the dissolution signed by seven
members and by the Secretary of the Trade Union shall, within fourteen days of the
dissolution, be sent to the Registrar.
Returns

• There shall be sent annually to the Registrar, a general statement, audited in

the prescribed manner, of all receipts and expenditure of every registered
Trade Union during the year ending on the 31st December.

• A copy of every alternation made in the rules of a registered Trade Union shall
be sent to the Registrar within 15 days of making of the alternation.

• Failure to submit returns:- If default is made on the part of any registered

Trade Union in giving any notice or sending any statement or other document
as required by or under any provision of this Act, office-bearer or other person,
shall be punishable with fine which may extend to five rupees and, in the
case of a continuing default, with an additional fine which may extend to five
rupees for each week after the first during which the default continues:
Provided that the aggregate fine shall not exceed fifty rupees.

• Any person who wilfully makes, or causes to be made, any false entry in, or
any omission from, the general statement, shall be punishable with fine which
may extend to five hundred rupees.

• For providing False information, regarding membership, rules of trade union-

Fine Rs. 200

TRADE UNION (AMENDMENT) BILL, 2000

The Bill amends the Trade Unions Act, 1926 to change among other things the
minimum statutory requirement for registration of trade unions. It curtails the
multiplicity of trade unions.

• The Bill stipulates that the minimum requirement for registration of trade
unions will be 10 per cent of the workforce engaged in an establishment or
100 whichever is less.
• In no case a union shall be registered without a minimum strength of seven
members.
• It also provides that the office bearers of the trade unions will be elected
and their duration will not be more than 3 years.
• It seeks to enhance the proportion of office bearers actually engaged or
employed in the establishment / industry with which the trade union is
connected from one-half to two-third of the total number of office bearers.

60 | P a g e
[Link] Contact@8274005990

• It also proposes to revise minimum rate of subscription by members of the

trade union one rupee per annum for rural workers, three rupees per
annum for workers in other unorganised sectors and 12 rupees per annum
in all other cases. A provision for filing an appeal before the industrial
tribunal/labour court in case of non-registration/restoration of registration
has been provided.

Based on the recommendations of the Ramanujam Committee and

subsequent deliberations held thereon at different forum, a Bill for amending the
Trade Unions Act, 1926 was drawn up in consultation with the Ministry of Law.
[Link] Payment of Wages Act, 1936
Payment of wages legislation in India has been patterned after the Truck Acts 1831
of Great Britain.
**** Truck System Widely prevalent in England prior to the enactment of Truck Act,
1831, the system involved remunerating the workers in kind or in any other way, but
not in money. In its early form, the practice was characterized by paying the workers
a share of what they helped to produce. With the rise of the manufacturing industry,
many companies started paying their workers in full or in part with tokens which
were exchangeable at the company stores, often at highly inflated prices.
**** Common Law A system of laws, especially in England and extended to its
colonies, that have been developed from customs and from decisions made by judges,
not created by Parliament
****Payment of wages: -Only in Bank A/c (No Cash No Kind)
****On the recommendation of Royal Commission on Labour the Payment of Wages
Act, 1936 was enacted.

Scope: -
The Act applies to payment of wages to:
1. Persons employed in any factory.
2. Persons employed upon any railway by a railway administration or either directly
or through a subcontractor, by a person fulfilling a contract with a railway
administration.
3. Persons employed in any of the following industrial or other establishments:
(a) Tramway service or motor transport service engaged in carrying passengers or
goods or both by road for hire or reward
(b) Air transport service other than such service belonging to or exclusively employed
in the military, naval or air forces of the union or the civil aviation department of the
government of India
(c) Dock, wharf or jetty
(d) Inland vessel, mechanically propelled

61 | P a g e
[Link] Contact@8274005990

(e) Mine, quarry or oil-field

(f) Plantation
(g) Workshop or other establishment in which articles are produced, adapted or
manufactured, with a view to their use, transport or sale
(h) Establishment in which any work relating to the construction, development or
maintenance of buildings, roads, bridges or canals or relating to operations
connected with navigation, irrigation or the supply of water or relating to the
generation, transmission and distribution of electricity or any other form of power is
being carried on (Building and other construction)
(i) Any other establishment or class of establishments which the appropriate
government having regard to its nature, the need for protection of persons employed.
(j) Appropriate Government may, after giving three months’ notice, extend the
provisions of this Act to any class of persons employed in any establishment.
(k) This Act applies to wages payable to an employed person in respect of a wage
period if such wages for that wage period do not exceed 24,000 rupees
➢ The appropriate government in relation to railways, air transport services,
mines and oilfields is the central government, and in relation to all other cases,
the state government.

****Definition of Wages: - The term ‘wages’ has been defined as all remuneration
(whether by way of salary, allowances or otherwise) expressed in terms of money or
capable of being so expressed which would, if the terms of employment, were fulfilled,
be payable to a person employed in respect of his employment or of work done in
such employment, and includes the following:
1. Any remuneration payable under any award or settlement between the parties or
order of a court.
2. Any remuneration to which the person employed is entitled in respect of overtime
work or holidays or any leave period.
3. Any additional remuneration payable under the terms of employment (whether
called a bonus or by any other name).
4. Any sum which by reason of the termination of employment of the person
employed.
5. Any sum to which the person employed is entitled under any scheme framed
under any law for the time being in force.
The following do not come under the definition of wages:
1. Any bonus (whether under a scheme of profit-sharing or otherwise) which does
not form part of the remuneration payable under the terms of employment or which
is not payable under any award or settlement between the parties or order of a court.

62 | P a g e
[Link] Contact@8274005990

2. The value of any house accommodation, or of the supply of light, water, medical
attendance or other amenity or of any service excluded from the computation of
wages by a general or special order of the state government.
3. Any contribution paid by the employer to any pension or provident fund, and the
interest which may have accrued.
4. Any travelling allowance or the value of any travelling concession.
5. Any sum paid to the employed person to defray special expenses entailed on him
by the nature of his employment.
6. Any gratuity payable on the termination of employment.
**** Workmen whose services are terminated in consequence of a transfer of an
undertaking, whether by agreement or by operation of law, have a statutory right
under S. 25 FF of the Industrial Disputes Act to compensation. The same is the
position in the case of closure under S. 25FFF. Such compensation would be “wages”
as defined by Payment of Wages Act as amended by Act 68 of 1957.

Responsibility for payment of wages

➢ Every employer is responsible for payment of wages to persons employed by
him.
➢ The manager of a factory is responsible for such payment in case of persons
employed (otherwise than by a contractor) in the factory.
➢ In case of a contractor, a person designated by such contractor who is directly
under his charge, and in any other case, the person designated by the
employer are responsible for wage payment [Sec.3].
Fixation of Wages Period: -The person responsible for payment of wages has to fix
wage periods in respect of which wages are payable, but no wage period is to exceed
one month [Sec.4]
Time of Payment of Wages: -
➢ The wages of every person employed upon or in any railway, factory or
industrial or other establishment upon or in which less than one thousand
persons are employed will have to be paid before the expiry of the seventh
day after the last day of the wage period
➢ Where one thousand or more persons are employed, wages are to be paid
before the expiry of the 10th day after the last day of the wage period.
➢ However, in the case of persons employed on a dock, wharf or jetty or in a
mine, balance of wages found due on completion of the final tonnage account
of the ship or wagons loaded or unloaded, as the case may be, will have to be
paid before the expiry of the seventh day from the day of such completion.
➢ In case the employment of any person is terminated by the employer, the
wages will have to be paid before the expiry of the second working day from
the day on which his employment is terminated.
➢ Where the employment of any person in an establishment is terminated due
to the closure of the establishment for any reason other than the weekly or
other recognized holiday, the wages will have to be paid before the expiry of

63 | P a g e
[Link] Contact@8274005990

the second day on which employment is so terminated. Every such payment

is to be made on a working day. [Sec.5]

****Wages to be paid in (2017 Amendment): - All wages shall be paid in the bank
account of the employee.
Permissible or Authorized Deductions: -
The Act requires the payment of wages free from any deductions except those
authorized under it. The permissible deductions under the Act are discussed below.
1. Deductions for Fines: Deductions with respect to fines are authorized under the
Act but several conditions have to be fulfilled before they are made.

• Fine can be imposed on any employed person only when it has approval of
state Government and has to be exhibited in the prescribed manner on the
premises in which employment is carried on.
• No fine is to be imposed on any employed person until he has been given an
opportunity to show cause against the fine.
• No fine is to be imposed on any person who has not attained 15th year of age.
• The total amount of fine which may be imposed in any one wage period on any
employed person is not to exceed three per cent of the wages payable to them
in respect of that wage period.
• Fine imposed on any employed person is not recoverable from them by
instalments or after the expiry of 90 days from the day on which it was
imposed.
• All fines and realizations have to be recorded in a prescribed register.
2. Deductions for Absence from Duty:

• The Act also authorizes deductions with respect to absence from duty. Such
deductions can be made only on account of the absence of an employed person
from the place or places where he is required to work in accordance with the
terms of his employment.
• The amount of such deduction is not to exceed the wage for the actual period
of unauthorized absence. If 10 or more persons acting in concert, absent
themselves without due notice and without reasonable cause, such a
deduction for absence from duty may include such amount not exceeding
their wages for 8 days as may by any such terms be due to the employer in
lieu of the notice as required under the terms of contract of employment.
• An employed person is deemed to be absent from the place where he is
required to work, if although present in such place, he refuses in pursuance
of a stay-in-strike or for any other unreasonable cause to carry out his work.
3. Deductions for Damage or Loss:

• Deductions for damage to or loss of goods expressly entrusted to the

employed person for custody or for loss of money for which he is required
to account, where such damage or loss is directly attributable to his neglect
or default.

64 | P a g e
[Link] Contact@8274005990

• However, the amount of such deduction is not to exceed the amount of the
damage or loss caused to the employer.
• Such a deduction is not to be made until the employed person has been
given an opportunity of showing cause against the deduction.
4. Deductions for House Accommodation and Services Rendered: Deductions
may also be made for house accommodation supplied by the employer and for such
amenities and services supplied by the employer as the state government may
authorize.
5. Deductions for Recovery of Advances or for Adjustment of Over-payment for
Wages: Deductions for recovery of advances or for adjustment of over-payments of
wages are also permissible under the Act. ****no deduction is to be made for
advances for travelling expenses.
6. Deductions for Recovery of Loans: The Act authorizes deductions for recovery
of loans made from any fund constituted for the welfare of labour.
7. Deductions of Income Tax: payable by the employed person.
8. Deductions Required to be Made by the Order of a Court.
9. Deductions for Subscription to and for Repayment of Advances: from any
provident fund to which the Provident Funds Act, 1925
10. Deductions for Payments to Cooperative Societies and Insurance Scheme
11. Deductions, on the Written Authorization of the Employed Person: for
contribution to the Prime Minister’s National Relief Fund or to such other Fund as
the central government
12. Deductions, on the Written Authorization of the Employed Person: for the
payment of his contribution to any fund constituted by the employer or a trade union
registered under the Trade Unions Act, 1926, for the welfare of the employed persons
or the members of their families or both and approved by the state government.
**** Deduction of Wages for Go-slow/Strike:-(Read it, very import Interview Q.)
There cannot be two opinions that go-slow is a serious misconduct being a covert
and a more damaging breach of the contract of employment. It is an insidious method
of undermining discipline and, at the same time, a crude device to defy the norms of
work. It has been roundly condemned as an industrial action and has not been
recognised as a legitimate weapon of the workmen to redress their grievances. In fact,
the model standing orders as well as the certified standing orders of most of the
Industrial establishments define it as a misconduct and provide for a disciplinary
action for it. Hence, once it is proved, those guilty of it have to face the consequences
which may include deduction of wages and even dismissal from service. The
simplistic method of deducting uniform percentage of wages from the wages of all
workmen, calculated on the basis of the percentage fall in production compared to
the normal or average production, may not always be equitable. It is, therefore,
necessary that in all cases where the factum of go-slow and/or the extent of the loss
of production on account of it, is disputed, there should be a proper inquiry on
charges which furnish particulars of the go-slow and the loss of production on that
account. The rules of natural justice require it, and whether they have been followed
or not will depend on the facts of each case. Even in a case where action is resorted

65 | P a g e
[Link] Contact@8274005990

to on a mass-scale, some employees may not be a party to the action and may have
genuinely desired to discharge their duties but could not do so for failure of the
management to give the necessary assistance or protection or on account of other
circumstances. The management will not be justified in deducting wages of such
employees without holding an inquiry.
****Total Amount of Deductions The total amount of deductions in any wage period
is not to exceed 75 per cent of wages in cases where such deductions made for
payments to cooperative societies and 50 per cent in other cases.
Section 8: Fines (again revise it****)

• No fine shall be imposed on any employed person until he has been given an
opportunity of showing cause against the fine
• The total amount of fine which may be imposed in any one wage-period on
any employed person shall not exceed an amount equal to three per cent of
the wages payable to him in respect of that wage-period.
• No fine shall be imposed on any employed person who is under the age of
fifteen years.
• No fine imposed on any employed person shall be recovered from him by
instalments or after the expiry of ninety days from the day on which it was
imposed.
Claims: -
The appropriate government is empowered to appoint authorities to hear and decide
claims arising out of deductions from wages or delay in payment of wages including
incidental matters. The authorities who may be appointed for the purpose include:
(i) Commissioner of Workmen’s Compensation, or
(ii) any officer of the central government exercising functions as Regional
Labour Commissioner or Assistant Labour Commissioner with a minimum
of two years’ experience, or
(iii) any officer of the state government not below the rank of Assistant Labour
Commissioner, or
(iv) a presiding officer of a labour court or tribunal constituted under the
Industrial Disputes Act, 1947, or state law, or
(v) any other officer with experience of a Judge of a Civil Court.
Application in this regard may be made by the person himself or any legal practitioner
or any official of a registered trade union authorized in writing to act on his behalf or
an inspector appointed under the Act or any other person with the permission of the
authority. Such an application has to be made within 12 months from the date on
which the deduction from wages was made or from the date on which the payment
of wages was due to be made. Applications may be admitted after the expiry of the
above period of 12 months if the applicant satisfies the authority that he had
sufficient cause for not making the application within such a period
Appeal: -
An appeal against the decision of an authority, appointed under the Act may be made
within ****30 days before the Court of Small Causes in a presidency town and before
the District Court in other cases.

66 | P a g e
[Link] Contact@8274005990

Penalties: -
1. Non-payment of wages in time (except contravention relating to payment on a
working day) [Sec.5], or making unauthorized deductions from wages [Sec.7] or
imposing fines in contravention of the provisions of the Act [Sec.8] is punishable with
fine not less than `1,500 and which may extend to 7,500.
2. Failure or refusal to maintain required records or registers or to furnish required
information or return or giving false information is also punishable with fine from
1,500 to 7,500.
3. Wilfully obstructing an inspector in the discharge of his duties or refusing or
neglecting to afford him facilities of inspection, inquiry and so on, or to produce the
required register or document or preventing any person from appearing before an
inspector is punishable with a maximum fine of 7,500 but a minimum of 1,500.
4. Contravention of the provisions relating to fixation of wage periods [Sec.4] or
failure to make payment of wages on a working day [Sec.5(4)] or non-payment of
wages crediting in bank account on the employee’s authorization [Sec.6] or non-
maintenance of register for recording fines [Sec.8(8)] or deductions for damage or loss
or non-display of abstracts of the Act [Sec.25] is punishable with fine which may
extend to 3,750.
5. If a person repeats an offence involving contravention of the same provision,
imprisonment for a term not less than 1 month but not more than six months and
with fine which is not to be less than 3,750 but not more than 22,500.
6. Failure or neglecting to pay wages by the date fixed by the authority is punishable
with an additional fine which may extend to 750 for each day of default.
7. Failure of the employer to nominate or designate a person with regard to
responsibility for wage payment [Sec.3] is punishable with fine of 3,000.

**** Recommendations of The Second NCL (2002) The second National

Commission on Labour (2002) has recommended enactment of an integrated wages
legislation covering such areas as fixation and revision of minimum wages, mode and
manner of wage payment, and bonus. The Commission has also suggested the
appointment of recovery officers under the Act, as has been done under the
Employees’ Provident Fund and Miscellaneous Provisions Act, 1952.
**** Payment of undisbursed wages in case of death of employed person

• Subject to the other provisions of the Act, all amounts payable to an employed
person as wages, if such amounts could not or cannot be paid on account of
his death. It will be paid to-
(a) be paid to the person nominated by him in this behalf or
(b) where no such nomination has been made, be deposited with the prescribed
authority.

67 | P a g e
[Link] Contact@8274005990

[Link] Minimum Wages Act, 1948

(The Act came into force from the 15th of March 1948)
Scope
The Act empowers the central and the state governments, to fix minimum rates of
wages in respect of workers employed in the following industries or employments
listed in the Schedule of the Act, which contains Parts I and II. (Industry related) are
covered under part-I and (Agriculture related) Scheduled employments under part-II
of the Act.
Objective: -The main objectives:
1. Prevention of extra hard work, toil and poverty arising from unduly low wages.
2. Fixation of just and fair wages for preventing industrial disputes.
3. Control of inflationary pressures.
4. Raising purchasing power with a view to speeding up the pace of economic
recovery.
5. Wage regulation as a part of a national-income distribution policy and
programmes of planned economic development

Definitions: -

• Child- means a person who has not completed his fourteenth year of age
• Adolescent- means a person who has completed his fourteenth year of age but
has not completed his eighteenth year.
• Adult- means a person who has completed his eighteenth year of age
• Cost of living index number- means the cost-of-living index number applicable
to employees in such employment.
Fixation of Minimum Rates of Wages: -
➢ The Act empowers the appropriate government—central and state
governments—in respect of employments in their respective jurisdictions, to
fix minimum rates of wages for
• time-work
• piece-work
• guaranteed time-rate (to apply in the case of employees employed on piece-
work) and
• minimum rate of wages for overtime work.
**** Different minimum rates of wages may be fixed for different scheduled
employments, different classes of work in the same scheduled employment,
adults, adolescents, children and apprentices, and for different localities.
****The rates may also be fixed by the hour, by the day, By the Month.
Any minimum rate of wages fixed or revised by the appropriate government may
consist of:

68 | P a g e
[Link] Contact@8274005990

(i) a basic wage rate and a cost-of-living allowance

(ii) a basic rate with or without the cost-of-living allowance and the cash
equivalent of the concession, in respect of supplies of essential
commodities, at concession rates
(iii) an all-inclusive rate allowing for the basic rate, cost of living allowances
and the cash value of the concession.
The appropriate government may, refrain from fixing minimum rates of wages in
respect of any scheduled employment in which there are, less than 1000
employees engaged in such employment.

Procedures for Fixing Minimum Rates of Wages

The Act provides for two distinct procedures for the fixation of minimum rates of
wages.

1. Under the first, the appropriate government may appoint a committee, and
sub-committees for different areas (for assisting the committee in its
deliberations) to hold enquiries, and to advise on the question of wage-fixation.
On receipt of the recommendations of the committee, the appropriate
government is required to fix minimum rates of wages in respect of the
employment concerned, by making notification in the official gazette.
2. Under the second procedure the appropriate government may by notification
in the official gazette, publish its own proposals of minimum rates of wages
for information of persons likely to be affected and specify a date, not less than
two months from the date of notification, on which the proposals will be taken
into consideration.
****The minimum rates of wages fixed under either of the procedures are to come
into force on the expiry of three months from the date of notification.
➢ Advisory Boards
The central and the state governments are required to appoint advisory boards for
coordinating the work of committees and sub-committees and advising the
government generally in the matter of fixing and revising minimum rates of wages.
The Advisory Board is also to consist of equal number of representatives of the
employers and employees, and independent persons not exceeding one-third of the
total number of members—all nominated by the central or state government
➢ Central Advisory Board The central government is required to appoint a
central advisory board for the purpose of advising the central and state
governments in the matters of the fixation and revision of minimum rates of
wages and other relevant matters under the Act and for coordinating the work
of the advisory boards. The central advisory board is to consist of an equal
number of representatives of employers and employees, and independent
persons not exceeding one-third of the total number of members—all
nominated by the central government. One of the independent members
will be appointed as the chairman

69 | P a g e
[Link] Contact@8274005990

Revision of Minimum Rates of Wages: -The minimum rates of wages fixed under
the Act are generally to be revised at a maximum interval of five years. The process
of revision of minimum rates of wages in the respective Scheduled Employments is
being taken up for every 5 years against the Scheduled Employments where the VDA
component is a part of wages and for every two years, where the VDA is not
incorporated.

Indian Labour Conference

In the year 1957, the Indian Labour Conference has recommended to adopt the
following 5 elements while fixing minimum wages: -
1) For the purpose of fixation of minimum wages, a family is taken, as a norm, to
include three units (one earner, wife and children)
2) Dr. Aykrovd’s prescription of the average of 2700 calories of nutrition may be taken
as the standard for calculating the minimum nutritional requirements.
3) Provision of 72 yards of cloth by considering a family as four units in connection
with the requirements of 18 yards of cloth per capita, per annum. 4) For the purposes
of fixation of house rent, the rates of rent granted by Industrial Housing Plan may be
considered.
5) 20 per cent of the minimum wages may be ear-marked for meeting the expense on
fuel, light and other ancillaries.
****Indian Labour conference for fixation of Wage has directed that keeping in view
the Socio-economic aspect “25% of the Total minimum wages shall also be taken into
account for Children education, medical requirement, minimum recreation including
festivals/ceremonies and provision for old age, marriage etc.

Types of Wages: -
Fair wage

➢ Fair wage means which is something more than the minimum wages. It is a
mean between the minimum wage and the living wage. So, the lower limit of
the fair wage must surely be the minimum wage whereas the upper limit is
the fair wage which is capacity of the industry to pay further the comparisons
definitely with the average payment of same work in other occupations or
trades which requires the same amount of ability. Basically, it is economic
position and its future prospects on which fair wage depends.
Minimum Wages: -

➢ The term Minimum Wage has not been defined in the Minimum Wages Act,
1948. The minimum wage is the lowest wage in the scale below which the
efficiency of a worker is likely to be inspired. The minimum wage includes not
only the bare physical necessities but also a modicum of comfort otherwise
known as conventional necessities. The Minimum wages must, therefore,

70 | P a g e
[Link] Contact@8274005990

provide not merely for the bare subsistence of life but also for the preservation
of the efficiency of the worker. For this purpose, the minimum wage must also
provide for the same measure of education, medical requirements, and
amenities.

➢
Therefore any employer who is unable to pay this minimum wage to workers
has no right to exist. Where a person provides labour or service to another for
remuneration which is less than the minimum wages, such labour is 'forced
labour' within the meaning of Article 23 of the Indian Constitution and thereby
entitles the person to invoke Article 32 or Article 226 of the Constitution of
India.
Living Wages
➢ Living wages are defined as those wages which are consistent to provide
certain facilities as well as some basic necessities to the employee. So, it
means that wage level which is satisfactory to provide for the basic necessities
and such niceties that are advised necessary for the betterment of the
employee as well as his family in accordance with his social status.

➢ The living wage should enable the male earner to provide himself and his
family not merely the basic essentials of food, clothing and shelter but a
measure of frugal comfort including education for the children, protection
against ill-health, requirement of essential social needs and measures of
insurance against old age.
➢
Article 43 of the Constitution of India states that the state shall endeavour to
secure by suitable legislation or economic organisation or in any other way to
all workers, agricultural, industrial or otherwise work, a living wage,
conditions of work ensuring decent standard of life and full enjoyment of
leisure and social and cultural opportunities.
****Every employer shall, on or before the 1st day of February in each year, upload
unified annual return in Form III on the web portal of the Central Government in the
Ministry of Labour and Employment
****The Labour Investigation Committee known as Rege Committee, appointed by
the Government of India in 1944, also made investigations in respect of wages and
earnings in industrial employments and submitted a main report.
****The international labour organization also adopted conventions and
recommendations relating to minimum wage fixing machinery. The Minimum Wage
Fixing Machinery Convention (No. 26), 1928, provides for the creation of wage-fixing
machinery in certain trades. The convention requires consultation with
representatives of employers and workers, before such machinery is applied in trade.
The minimum wages fixed by the machinery are to be binding on employers and
workers. India ratified the convention in 1955, after the enactment of the Minimum
Wages Act, 1948. The Minimum Wage Fixing Machinery Recommendation (No. 30),
1928, requires such a machinery to investigate into the conditions relevant to the
trades and to consult the affected interests before fixing minimum wages.

71 | P a g e
[Link] Contact@8274005990

****Sweating: -Sweating generally means to work under unhealthy conditions, for

long hours, or at excessive high speed and for low wages. It also involves taking
advantage of the weak position of workers who are unskilled and unorganized.
****In 1948, under the act a tripartite committee “The Tripartite Committee of Fair
Wage” was appointed to set definitions and guidelines for formulating a wage
structure in India. The committee defined- The minimum wage must be provided not
merely for the bare subsentence of life but also for the preservation of efficiency of
the workers by providing for some measures of education, medical requirement and
amenities.
****The Commissioner of Labour notifies the increase of average Consumer Price
Index Numbers on 1st April and 1st October every year taking into account and
minimum wages are revised accordingly.
****Sweatshop: - A factory or shop where labour is employed under unhealthy
working conditions, for long hours, at excessive high speed and for small wages.
Employment of children and women in such establishments was a common practice.
The early textile industry was one in which sweatshops were widely prevalent.
**** Wage Board Wage Board is a tripartite body, having representation of the
employers and labour besides, independent members. The representatives of the
former two interests are nominated by their central organizations; others are
nominated by the Government. It is an important machinery of State regulation of
wages. Growth and Development

[Link] of Gratuity Act, 1972

(The Act came into force from 16 September 1972)

The following observations of Justice Gajendragadkar in the famous case Indian

Hume Pipe Co. Ltd. v. Their Workmen (1960) are of particular significance:

➢ Gratuity is a kind of retirement benefit like the provident fund or pension. At one
time, it was treated as payment gratuitously made by the employer to the
employee, but as a result of a long series of decisions of industrial tribunals,
gratuity has now come to be regarded as a legitimate claim. Gratuity paid to
workmen is intended to help them after retirement benefit after superannuation
or on termination of service, resignation, death or physical disablement.

➢ It is payable upon service for a more or less prolonged period of time. It is no

longer considered a bounty. The employees are entitled to claim it as a matter
of right.

**** Gratuity act is the primary act and considered to be a social security benefit for
the employee

Amendment: -

****Amendment in 2009- redefined the term ‘employee’ the Supreme Court

judgement of 2004, educational institutions have been brought under the coverage
of the Act.

72 | P a g e
[Link] Contact@8274005990

**** The amendment 2010, the ceiling limit of the maximum amount of gratuity
payable i.e., Rs.10 lakh. This upper cap prescribed by Section 4(3) of the Act, has
been removed. Section 4(5) of the Act prescribes that if the terms of employment
contract provide for a higher amount of gratuity over and above the ceiling limit
stated in the Act, then the employee will be entitled to such higher amount.

**** 7th Central Pay Commission, whereby the ceiling of gratuity for Central
Government employees has been enhanced from Rs. 10 lakhs to Rs. 20 lakhs

**** maternity leave period of 'twenty-six weeks ' will be calculated in order to
continuous service for the payment of gratuity Act and the entire duration of a female
employee's statutory maternity leave will now be considered while calculating
continuous period of service for gratuity payments.

Its application: -

➢ The Act extends to the whole of India.

➢ It applies to: (i) every factory, mine, oilfield, plantation, port and railway
company; (ii) every shop or establishment
➢ In which 10 or more persons are employed or were employed on any day of
the Preceding 12 months.
➢ A shop or establishment in which this Act has become so applicable is to be
governed by this Act even if the number of persons employed will falls below
10

Definitions: -

Employee: Means

• any person (other than an apprentice) who is employed for wages, whether the
terms of such employment express or implied, in any kind of work, manual in
connection with the work of a factory, mine, oil-field, plantation, port, railway
company, shop or other establishment, to which this Act applies, but does not
include any such person who holds a post under the central government or a
state government and is governed by any other Act or by any rules providing
for payment of gratuity [Inserted by amending Act of 2009].

Family: In relation to an employee, family shall be deemed to consist of

(I) in the case of a male employee,

• himself, his wife, his children, whether married or unmarried, his dependent
parents and the dependent
• parents of his wife and the widow and the children of his predeceased son,
(II) in the case of a female employee,
• employee, herself, her husband, her children, whether married or unmarried,
her dependent parents and the
• dependent parents of her husband and the widow and the children of her
predeceased son,

Qualifying Conditions
➢ Gratuity is payable under the Act on the termination of employee’s
employment

73 | P a g e
[Link] Contact@8274005990

(i) on superannuation,
(ii) retirement or resignation, or
(iii) death or disablement due to accident or disease.

➢ In order to become entitled to gratuity, it is necessary for the employee to have

rendered continuous service for not less than five years but the condition
of having put in five years of continuous service does not apply where-
• termination of the employment of the employee is due to disablement
or death.
• In case of the employee’s death, gratuity is to be paid to the nominee
or the guardian of the nominee or the legal heir.

Continuous service’ means

• uninterrupted service, including service interrupted on account of sickness,

accident, leave, absence from duty without leave (not being absence in respect
of which an order imposing a punishment or penalty or treating the absence as
break in service, has been passed in accordance with the standing orders, rules
or regulations governing the employees of the establishment), lay-off, strike or
a lock-out or cessation of work not due to any fault of the employee.

• An employee, is considered to be in continuous service if they have actually

been employed by the employer during the period of one year, immediately
preceding, for not less than 190 days if employed below ground, and 240 days
in other cases.

• For counting the period of continuous service of six months, the

corresponding period is 95 days and 120 days, respectively,

• The number of days on which an employee has actually worked will include:

(i) the number of days on which he has been laid-off under agreement,
standing orders or law,
(ii) leave on full wages earned in the previous year,
(iii) absence due to temporary disablement and
(iv) maternity leave not exceeding 26 weeks.
(v) An employee in a seasonal establishment is said to be in continuous
service if they have actually worked for not fewer than 75 per cent
of the number of days on which the establishment was in operation
during the year

Rate and Amount of Gratuity

CALCULATION OF GRATUITY

• Calculation of gratuity depends upon two variables:

• Salary
• Superannuation

74 | P a g e
[Link] Contact@8274005990

• In calculating the gratuity fifteen days salary is given for every completed
year and as the number of working days in a month is considered to be 26
only (excluding the Sundays) therefore the formula for calculating the gratuity
would be:

Formula: Last drawn salary x 15/26 x Completed years of Service (including a

part of year in excess of six months)

****In case of an employee working in a seasonal establishment he shall be paid

gratuity at the rate of 7 days wages for each season.

****In case of a piece-rated employee, daily wages are computed on the average of
total wages received for a period of three months immediately preceding the
termination of employment and for this purpose overtime wages paid are not to be
taken into account.

****For computing the gratuity payable to an employee who is employed, after

disablement, on reduced wages, the wages for the period preceding the disablement
are to be taken into account, and wages for the period subsequent to disablement
are to be taken to be the wages as so reduced

Deduction from and Forfeiture of Gratuity

➢ The amount of gratuity payable to an employee may be forfeited to the extent
of the damages or loss caused, if their 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.

➢ The amount of gratuity payable to an employee may also be partially or wholly

forfeited if their services have been terminated for riotous or disorderly
conduct or any act of violence, or for any act constituting an offence involving
moral turpitude if the offence has been committed in the course of
employment

Determination and Payment of Gratuity

➢ As soon as gratuity becomes payable, the employer is required to determine

the amount of gratuity and give notice in writing to the person entitled to
gratuity and also to the controlling authority specifying the amount of gratuity
so determined.
➢ The person entitled to receive the amount of gratuity is also required to send
to the employer an application in the prescribed form and within the
prescribed time. If the amount is undisputed, the employer is required to pay
the gratuity to the person to whom it is payable within 30 days from the date
it becomes payable. If the amount is not paid within the period, the employer
will be required to pay simple interest at a rate not exceeding the rate notified
by the central government from time to time (presently it is 10%).

75 | P a g e
[Link] Contact@8274005990

➢ However, such interest is not payable if the delay has been due to the fault of
the employee.
➢ If the amount is disputed, the employer is required to deposit the amount
determined by him with the controlling authority. The employee may also
apply to the Controlling Authority for settling the dispute. After making
necessary enquiries and giving the parties a reasonable opportunity to be
heard, the Controlling Authority will take a decision in the matter.
➢ If a person is aggrieved by the order of the Controlling Authority, he can
appeal to the appropriate government or an authority. The appropriate
government or the appellate authority may, after giving the parties a
reasonable opportunity of being heard, confirm, modify or reverse the decision
of the Controlling Authority

Recovery of Gratuity
➢ If the amount of gratuity payable under the Act is not paid by the employer
within the prescribed time, the Controlling Authority, on the application of the
aggrieved person, will issue a certificate for the amount to the Collector, who
will recover the same, along with compound interest as prescribed by the
central government, as arrears of land revenue and pay it to the person
entitled to it.
➢ Before issuing a certificate, the Controlling Authority will give the employer a
reasonable opportunity of showing cause against the issue of the certificate.
The amount of interest, in no case, is to exceed the amount of gratuity payable
under the Act

Compulsory Insurance

➢ Every employer, must take an insurance for his liability to pay gratuity under
the Act from the Life Insurance Corporation of India.
➢ The government may, however, exempt such as employer from the
requirement of compulsory insurance, who had already established an
approved gratuity fund in respect of his employees, and an employer,
employing 500 or more persons, who establishes an approved gratuity fund.
➢ Every employer covered under the Act is required to get his establishment
registered with the Controlling Authority, but no employer is to be registered
unless he has taken an insurance or has established an approved gratuity
fund.

Nomination

➢ Every employee who has completed a year of service is required to make

nomination to receive gratuity in the event of his death.
➢ The employee may make more than one nomination. If the employee has a
family, nomination must be made in favour of the family members.
➢ Only when the employee does not have a family, others may be nominated,
but if the employee subsequently acquires a family, nomination of other
persons will become invalid and he will have to make fresh nomination from
amongst his family members.

Inspectors

➢ The central and state governments are empowered to appoint Inspectors for
the purposes of the Act. The Inspector is a public servant.
➢ The Inspector empowered to:

76 | P a g e
[Link] Contact@8274005990

(i) require the employer to furnish necessary information;

(ii) enter and inspect the establishments for examining registers, records,
notices or other relevant documents;
(iii) examine the employer and employees;
(iv) make copies of, or take extracts from, registers, records and other
documents.
(v) He also has the power to search or seize documents under the Code of
Criminal Procedure

Penalties Under the Payment of Gratuity Act, 1972

➢ Knowingly making false statement or false representation for the purpose of

avoiding payment or enabling any other person to avoid such payment is
punishable with imprisonment up to 6 months or with fine up to 10,000 or
with both
➢ Contravening or making default in complying with any provisions of the Act
or rule or order made under it is punishable with imprisonment from 3 months
to 1 year or fine from 10,000 to 20,000 or with both

➢ Non-payment of gratuity payable under the Act is punishable with

imprisonment from 6 months to 2 years or with fine from 10,000 to 20,000 or
with both

➢ Failure to make payment by way of premium to compulsory insurance or

contribution to an approved gratuity fund is punishable with fine up to 10,000
and in the case of a continuing offence with a further fine which may extend
to 1,000 for each day during which the offence continues

Cognizance of Offences, and Others

➢ No court will take cognizance of an offence punishable under the Act except
on a complaint made by or under the authority of the appropriate government.
➢ If the amount of gratuity has not been paid or recovered within six months
from the expiry of the prescribed time, the appropriate government will have
to authorize the Controlling Authority to make a complaint against the
employer to a magistrate having jurisdiction to try to the offence.
➢ The Controlling Authority is required to make the complaint within 15 days
from the date of such authorization.
➢ No court inferior to that of a metropolitan magistrate or a judicial magistrate
of the first class is authorized to try any offence punishable under the Act
➢ If the other person is not brought before the court within a period of 3 months,
the court will start hearing the charge against the employer.

[Link] Factories Act, 1948

(The Act came into force from 01 April 1949)

Objectives of Factories Act

1. To consolidate and amend the law regulating the workers working in the
factories.

77 | P a g e
[Link] Contact@8274005990

2. To protect workers employed in factories against industrial and occupational

hazards.
3. To secure for the workers employment conditions conducive to their health
and safety.
4. To safeguard the interest of workers and protect them from exploitation, the
act prescribes certain standards with regard to safety, welfare and working
hours of workers, apart from other provisions.

****The First Schedule-List of Industries Involving Hazardous Processes

****The Second Schedule-Permissible Levels of Certain Chemical Substances
in Work Environment
****The Third Schedule-List of Notifiable Diseases

****This Act may be called the Factories Act, 1948. It extends to the whole of India.
It shall come into force on the 1st day of April, 1949.
Definitions: -
(a) "adult" means a person who has completed his eighteenth year of age;
(b) "adolescent" means a person, who has completed his fifteenth year of age but
has not completed his eighteenth year;
(c) "child" means a person who has not completed his fifteenth year of age; (ca)
"competent person", -the Chief Inspector for the purposes of carrying out tests,
examinations and inspections required to be done in a factory under the provisions
of this Act
(cb) "hazardous process" means any process or activity in relation to an industry
specified in the 'First Schedule where, unless special care is taken, raw materials
used therein, bye-products, wastes or effluents thereof would- (i) cause material
impairment to the health of the persons engaged in or connected therewith, or (ii)
result in the pollution of the general environment
(d) "young person" means a person, who is either a child or an adolescent
(f) "week" means a period of seven days beginning at midnight on Saturday night or
such other night as may be approved in writing for a particular area by the Chief
Inspector of Factories.
(k) "manufacturing process" means any process for- (i) making, altering, repairing,
ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing
or otherwise treating or adopting any article or substance with a view to its use, sale,
transport, delivery or disposal or (ii) pumping oil, water, sewage, or any other
substance or (iii) generating, transforming or transmitting power
(l) "worker" means a person employed directly or by or through any agency (including
a contractor) with or without the knowledge of the principal employer whether for
remuneration or not in any manufacturing process, or in cleaning any part of the
machinery

78 | P a g e
[Link] Contact@8274005990

(m) "factory" means any premises including the precincts thereof- (i) where 10 or
more workers are working, or were working on any day of the preceding twelve
months, and in any part of which a manufacturing process is being carried on with
the aid of power, (ii) whereon 20 or more workers are working, or were working on
any day of the preceding twelve months, and manufacturing process is being carried
on without the aid of power,
- but does not include a mine subject to the operation of the Mines Act, 1952 or a
mobile unit belonging to the armed forces of the Union, a railway running shed
or a hotel, restaurant or eating place
(n) "occupier" of a factory means the person, who has ultimate control over the
affairs of the factory,
Section 5. Power to exempt during public emergency: - any case of public emergency
the State Government may exempt any factory from the provision of this act. But no
such notification shall be made for a period exceeding 03 months at a time. (Public
emergency' means a grave emergency whereby the security of India or of any part of
the territory thereof is threatened)
Section 6. Approval, licensing and registration of factories. -

• Occupier may submit the plans of any class or description of factories

to the Chief Inspector or the State Government. The permission in
writing of the State Government or the Chief Inspector to be obtained
for the site on which the factory is to be situated and for the
construction or extension of any factory or class or description of
factories
• no licence shall be granted or renewed unless the notice by occupier is
given.
• In case no order is communicated to the applicant within three
months from the date on which it is so sent, the permission applied for
in the said application shall be deemed to have been granted.
• Where a State Government or a Chief Inspector refuses to grant
permission to the site, construction or extension of a factory or to the
registration and licensing of a factory, the applicant may within thirty
days from the date of such refusal, appeal to the Central Government

Section 7. Notice by occupier. -

(1) The occupier shall, at least fifteen days before he begins to occupy or, use
any premises as a factory, send to the Chief Inspector a written notice containing
all credentials. Including the name of Occupier and manager of the factory.
(2) In respect of all establishments, which come within the scope of the Act for
the first time the occupier shall send a written notice to the Chief Inspector
containing the particulars within 30 days from the date of the commencement of
this Act.
(3) Before a factory engaged in a manufacturing process which is ordinarily
carried out for less than one hundred and eighty working days in the year,
resumes working, the occupier shall send a written notice to the Chief Inspector

79 | P a g e
[Link] Contact@8274005990

containing the particulars that least 30 days before the date of the
commencement of work.
(4) Whenever a new manager is appointed, the occupiers shall send to the
Inspector a written notice and to the Chief Inspector a copy of within 07 days
from the date on which such person takes over charge.
The Inspecting Staff Section 7A
General duties of the occupier -
(1) Every occupier shall ensure, the health, safety and welfare of all workers while
they are at work in the factory.
8. Inspectors -
(1) The State Government may appoint to be Inspectors for the purposes of this
Act
(2) The State Government may, by notification in the Official Gazette, appoint
any person to be a Chief Inspector who shall, in addition to powers conferred on
Chief Inspector under this Act, exercise the powers of an Inspector throughout
the State.
(3) The State Government may, appoint as many Additional Chief Inspectors,
Joint Chief Inspectors and Deputy Chief Inspectors and as many other officers as
it thinks fit to assist the Chief Inspector
(4) Every District Magistrate shall be an Inspector for his district.
Section 9. Powers of Inspectors -
(a) enter with such assistants, any place which is used, or which he has reason
to believe, is used as a factory;
(b) make examination of the premises, plant, machinery, article or substance
(c) inquire into any accident or dangerous occurrence, whether resulting in bodily
injury, disability or not, and take on the spot
(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,
as he may consider necessary in respect of any offence under this Act, which he
has reason to believe, has been committed;
Section 10. Certifying Surgeons. –
(1) The State Government may appoint qualified medical practitioners to be
certifying surgeons for the purposes of this Act
(2) A certifying surgeon, shall carry out such duties as may be prescribed in
connection with-
(a) the examination and certification of young persons under this Act

80 | P a g e
[Link] Contact@8274005990

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

Occupations or processes as may be prescribed;
(c) the exercising of such medical supervisions in case, cases of illness have
occurred, which it is reasonable to believe are due to the nature of the
manufacturing process carried on.

Chapter III.- Health Section

Section-11. Cleanliness. -
Every factory shall be kept clean and free from effluvial arising from any drain,
privy or other nuisance, and in particular-
(a) accumulation of dirt and refuse shall be removed daily by sweeping or by any
other effective method from the floors and benches of workrooms and from
staircases and passages and disposed of in a suitable manner
(b) the floor of every workroom shall be cleaned at least once in every week by
washing, using disinfectant where necessary
(c) all inside walls and partitions, all ceilings or tops of rooms and all walls, sides
and tops of passages and staircases shall- (i) where they are painted otherwise
than with washable water paint or varnished, be repainted or revarnished at least
once in every period of five years, where they are painted with washable water
paint, be repainted with at least one coat of such paint at least once in every
period of three years and washed at least once in every period of six months.

• where they are painted or varnished or where they have smooth impervious
surfaces, be cleaned at least one in every period of fourteen months.
• in any other case, be kept whitewashed, or colour washed, and the
whitewashing or colour washing shall be carried out at least once in every
period of fourteen months
• all doors and window-frames and other wooden or metallic framework and
shutters shall be kept painted or varnished and the painting or varnishing
shall be carried out at least once in every period of five years

Section 12. Disposal of wastes and effluents. -

(1) Effective arrangements shall be made in every factory for the treatment of
wastes and effluents due to the manufacturing process carried on
Section 13. Ventilation and temperature. -
(1) Adequate ventilation by the circulation of fresh air and such a temperature
as will secure to workers therein reasonable conditions of comfort and
prevent injury to health.

Section 14. Dust and fume. -

81 | P a g e
[Link] Contact@8274005990

(1) In every factory in which, by reason of the manufacturing process carried on,
there is given off any dust or fume or other impurity of such a nature and to
such an extent as is likely to be injurious or offensive to the workers employed
therefore exhaust appliance is necessary be installed.

Section 15. Artificial humidification. -

Section 16. Overcrowding. –

• No room in any factory shall be overcrowded to an extent injurious to the

health of the workers employed
• there shall be in every workroom of a factory in existence on the date of
commencement of this Act at least 9.9 cubic metres and of a factory built
after the commencement of this Act at least 14.2 cubic metres of space
for every worker employed
• no account shall be taken of any space which is more than 4.2 metres
above the level of the floor of the room.

Section 17. Lighting. - (1) In every part of a factory where workers are working or
passing, there shall be provided and maintained sufficient and suitable lighting,
natural or artificial, or both.
18. Drinking water. –
(1) In every factory effective arrangement shall be made to provide and maintain
at suitable points conveniently situated for all workers employed therein a
sufficient supply of wholesome drinking water.
(2) All such points shall be legibly marked "drinking water" in a language
understood by a majority of the workers employed in the factory and no such
points shall be situated within 6 metres of any washing place, urinal, latrine,
spittoon, open drain carrying sullage
(3) In every factory wherein more than two hundred and fifty workers are
ordinarily employed, provisions shall be made for cooling drinking water during
hot weather by effective means and for distribution thereof.
19. Latrines and urinals. - (1) In every factory- 1/25 for male and female
separately.

• In every factory wherein more than two hundred and fifty workers are
ordinarily employed- (a) all latrine and urinal accommodation shall be of
prescribed sanitary types (b) the floors and internal walls, up to a height
of ninety centimetres of the latrines and urinals and the sanitary blocks
shall be laid in glazed tiles or otherwise finished to provide a smooth
polished impervious surface
• the floors, portions of the walls and blocks so laid or finished and the
sanitary pans of latrines and urinals shall be thoroughly washed and
cleaned at least once in every seven days with suitable detergents or
disinfectants or with both.

Section 20. Spittoons. –

82 | P a g e
[Link] Contact@8274005990

• 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.
• Whoever spits in contravention shall be punishable with fine not exceeding
five rupees.

Chapter Iv.- Safety Section

• No woman or young person shall be allowed to clean, lubricate or adjust

any part of a prime-mover or of any transmission machinery while
prime-mover or transmission machinery is in motion, or to clean,
lubricate
• No young person shall be required or allowed to work at any machine
until he has received sufficient training in work at the machine

Section 27. Prohibition of employment of women and children near cotton-

openers. - No woman or child shall be employed in any part of a factory for pressing
cotton in which a cotton-opener is at work premises.
****Excessive weights. – 30 Kg- Female and 50Kg-Male may carry.

Section 35. Protection of eyes.

Section 40B. Safety Officers. - (1) In every factory- wherein one thousand or more
workers are ordinarily employed will having Safety Officer.
Chapter IVA. - Provisions relating to Hazardous Processes Section
41A. Constitution of Site Appraisal Committees. –
(1) The State Government may, for purposes of advising it to consider applications
for grant of permission for the initial location of a factory involving a hazardous
process or for the expansion of any such factory, appoint a Site Appraisal
Committee consisting of-

• The Chief Inspector of the State who shall be its Chairman

• a representative of the Central Board for the Prevention and Control of Water
Pollution appointed by the Central Government
• a representative of the Central Board for the Prevention and Control of Air
Pollution
• a representative of the State Board
• a representative of the State Board for the Prevention and Control of Air Pollution
• a representative of the Department of Environment in the State
• a representative of the Meteorological Department of the Government of India
• an expert in the field of occupational health
• a representative of the Town Planning Department of the State Government, and
not more than five other members who may be co-opted by the State
Government who shall be-,

83 | P a g e
[Link] Contact@8274005990

(I) a scientist having specialised knowledge of the

hazardous process which will be involved in the
factory,
(II) a representative of the local authority within whose
jurisdiction the factory is to be established, and
(III) not more than three other persons as deemed fit by
the State Government

(2) The Site Appraisal Committee shall examine an application for the establishment
of a factory involving hazardous process and make its recommendation to the State
Government within a period of 90 days of the receipt of such application.
(3) Where any process relates to a factory owned or controlled by the Central
Government or to a corporation or a company owned or controlled by the Central
Government, the State Government shall co-opt in the Site Appraisal Committee a
representative nominated by the Central Government as a member of that
Committee.
(4) The Site Appraisal Committee shall have power to call for any information from
the person making an application for the establishment or expansion of a factory
involving a hazardous process.
Section 41B. Compulsory disclosure of information by the occupier -
(1) The occupier of every factory involving a hazardous process shall disclose and all
information regarding dangers including health hazards.
(2) The occupier shall, at the time of registering the factory involving a hazardous
process lay down a detailed policy with respect to the health and safety of the workers
employed
(3) Every occupier of a factory shall, - (a) if such factory engaged in a hazardous
process on the commencement of the Factories (Amendment) Act, 1987 within a
period of thirty days of such commencement and (b) if such factory purposes to
engage in a hazardous process at any time after such commencement, within a
period of thirty days before the commencement of such process, inform the Chief
Inspector of the nature and details of the process.
Section 41D: -

• Empowers the Central Government to appoint Inquiry Committee to

enquire whether such a factory is observing the standards of health and
safety of workers as well as of the general public as prescribed and make
recommendations.
• Its recommendations shall be however of advisory nature The Committee
shall have a chairman and two members.

Section 41G. Workers' participation in safety management. –

(1) The occupier shall, in every factory where a hazardous process takes place, or
where hazardous substances are used or handled, set up a Safety Committee

84 | P a g e
[Link] Contact@8274005990

consisting of equal number of representatives of workers and management to

promote co-operation between the workers and the management
(2) The composition of the Safety Committee, the tenure of office of its members and
their rights and duties shall be such as may be prescribed.
Section 41H. Right of workers to warn about imminent danger. -
(1) Where the workers employed in any factory engaged in a hazardous process
have reasonable apprehension that there is a likelihood of imminent danger
to their lives or health due to any accident, they may, bring the same to the
notice of the occupier, agent, manager or any other person who is in-charge
of the factory.

****Under provisions of section 41A of this Chapter the State Government in

empowered to form a Site Appraisal Committee to examine the application for
establishment of a factory involving hazardous process and send its
recommendations to the State Government.
Chapter V.- Welfare
Section 42. Washing facilities. –
(1) In every factory- (a) adequate and suitable facilities for washing shall be provided
and maintained for use of the workers therein (b) separate and adequately screened
facilities shall be provided for the use of male and female workers (c) such facilities
shall be conveniently accessible and shall be kept clean.
Section 43. Facilities for storing and drying clothing.
Section 44. Facilities for sitting
Section 45. First-aid-appliances. –
➢ There shall, in every factory, be provided and maintained so as to be readily
accessible during all working hours first-aid boxes or cupboards equipped
with the prescribed contents, and the number of such boxes or cupboards to
be provided and maintained shall not be less than one for every one
hundred and fifty workers ordinarily employed at any one time in the
factory.
➢ In every factory wherein more than five hundred workers are ordinarily
employed there shall be provided and maintained an ambulance room of the
prescribed size, containing the prescribed equipment and in the charge of
such medical and nursing staff as may be prescribed and those facilities shall
always be made readily available during the working hours of the factory.

Section 46. Canteens. - The State Government may make rules requiring that in
any specified factory wherein more than two hundred and fifty workers are
ordinarily employed, a canteen or canteens shall be provided and maintained by the
occupier.
****Canteen Management Committee is Bipartite.

85 | P a g e
[Link] Contact@8274005990

Section 47. Shelters, rest-rooms and lunch-rooms. - (1) In every factory wherein
more than one hundred and fifty workers are ordinarily employed adequate and
suitable shelters or rest-rooms and a suitable lunch-room, with provision for
drinking water, where workers can eat meals brought by them, shall be provided and
maintained for the use of the workers.
Section 48. Creches - In every factory wherein more than thirty women workers
are ordinarily employed there shall be provided and maintained a suitable room or
rooms for the use of children under the age of six years of such women.
Section 49. Welfare Officers. - (1) In every factory wherein five hundred or more
workers are ordinarily employed the occupier shall employ in the factory such
number of welfare officers.
Chapter VI. - Working Hours of Adults
Weekly hours. –
No adult worker shall be required or allowed to work in a factory for more than forty-
eight hours in any week.
Weekly holidays. –
➢ No adult worker shall be required or allowed to work in a factory on
first day of the week, unless- (a) he has or will have a holiday for whole
day on one of three days immediately before or after the said day,
and (b) the manager of the factory has, delivered a notice at the office
of the Inspector of his intention to require the worker to work on the
said day and of the day which is to be substituted, and (ii) displayed a
notice to that effect in the factory

➢ no substitution shall be made which will result in any worker working

for more than ten days consecutively without a holiday for a whole
day.

➢ Compensatory 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.

➢ Daily hours. - no adult worker shall be required or allowed to work in

a factory for more than nine hours in any day.

➢ Intervals for rest. - (1) The periods of work of adult workers in a factory
each day shall be so fixed that no period shall exceed five hours and
that no worker shall work for more than five hours before he has had
an interval for rest of at least half an hour. Even in exemption any
factory, cannot exceed six.

86 | P a g e
[Link] Contact@8274005990

➢ Spread over. – It will not be more than ten and a half hours in any
day: Provided that the Chief Inspector may, increase the spread over
up to twelve hours.

Extra wages for overtime. –

(1) Where a worker works in a factory for more than nine hours in any day or for
more than forty-eight hours in any week, he shall, in respect of overtime work, be
entitled to wages at the rate of twice his ordinary rate of wages.
****"Standard family- means a family consisting of the worker, his or her spouse and
two children below the age of fourteen years requiring in all three adult consumption
units. Explanation. - "Adult consumption unit" means the consumption units of a
male above the age of fourteen years, and the consumption unit of a female above
the age of fourteen years and that of a child below the age of fourteen years shall be
calculated at the rates of 8 and 6, respectively of one adult consumption unit.
Section 60. Restriction on double employment. - No adult worker shall be
required or allowed to work in any factory on any day on which he has already been
working in any other factory, save in such circumstances as may be prescribed.
****the following limits of work inclusive of overtime: -
➢ The total number of hours of work in any day shall not exceed ten
➢ The spread over, inclusive of intervals for rest, shall not exceed twelve
hours in any one day
➢ The total number of hours of work in a week including overtime, shall not
exceed sixty
➢ The total number of hours of overtime shall not exceed fifty for any one
quarter.

****Government the Chief Inspector may, exempt on such conditions if Any

exemption granted) shall be subject to the following conditions, namely:
➢ The total number of hours of work in any day shall not exceed twelve;
➢ The spread over, inclusive of intervals for rest, shall not exceed thirteen
hours in any one day;
➢ The total number of hours of work in any week, including overtime,
shall not exceed sixty
➢ 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.

Section 66. Further restriction on employment of women. –

➢ No woman shall be required or allowed to work in any factory except between
the hours 6 A.M. and 7 P.M.
➢ No such variation shall authorise the employment of any woman between the
hours of 10 P.M. and 5 A.M.

Chapter VII.- Employment of Young Persons Section

87 | P a g e
[Link] Contact@8274005990

67. Prohibition of employment of young children. –

➢ No child who has not completed his fourteenth year shall be required or
allowed to work in any factory.
➢ Certificate of fitness. - A certifying surgeon shall, on the application of any
young person or his parent or guardian accompanied by a document signed
by the manager of a factory a certificate of fitness is a young person,

Chapter VIII.- Annual Leave with Wages

Annual leave with wages. -
➢ Every worker who has worked for a period of 240 days or more in a factory
during a calendar year shall be allowed during the subsequent calendar
year, leave with wages for a number of days calculated at the rate of –
(i) if an adult, one day for every twenty days of work
performed by him during the previous calendar year
(ii) if a child, one day for every fifteen days of work performed
by him during the previous calendar year.

****Provided that the total number of days of leave that may be carried forward to a
succeeding year shall not exceed thirty in the case of an adult or forty in the
case of a child
**** A worker may at any time apply in writing to the manager of a factory not less
than fifteen days before the date on which he wishes his leave to begin, to take all
the leave or any portion
****Provided further that the number of times in which leave may be taken during
any year shall not exceed three.
****Notice of certain accident. -
➢ Where in any factory an accident occurs which causes death, or which
causes any bodily injury by reason of which the person injured is
prevented from working for a period of forty-eight hours or more
immediately following the accident,
➢ Where a notice given of an accident-causing death, the authority to whom
the notice is sent shall make an inquiry into the occurrence within one
month of the receipt of the notice

****Notice of certain diseases. - any disease specified in the Third Schedule

****Power to direct inquiry into cases of accident or disease. - The State Government
may appoint a competent person to inquire into the causes of any accident occurring
in a factory or into any case where a disease specified in the Third Schedule.

Penalties and Procedure

Any factory there is any contravention of Imprisonment for a term which may
the provisions of this Act, the occupier extend to two years or with fine which
or manager of the factory shall each be may extend to one lakh rupees or with
guilty of an offence both

88 | P a g e
[Link] Contact@8274005990

If the offence continues after conviction

Further fine upto 1000/- for each day
on which the offence continues
On Subsequent conviction of the same Imprisonment upto 3 years or fine upto
offence 2 lakhs
Failure to comply safety measures 25,000/-
resulting into Death
Failure to comply safety measures 5000/-
resulting into Serious bodily injury
Failure to comply with precaution Imprisonment upto 7 years and fine
against hazardous processes upto 2 Lakhs.
Obstruct Inspector Imprisonment upto 6 months and fine
upto 10,000/-

[Link]’ Compensation Act, 1923

(Come into force on the first day of July, 1924)

Defence Mechanisms available to the employer in such compensation cases under

the common law were the following:
1. Doctrine of assumed risk
2. Doctrine of contributory negligence
3. Doctrine of common employment and fellow servants’ responsibility
4. Doctrine that ‘personal claim comes to an end with the death of either party’
5. Doctrine of unknown persons’ responsibility
Doctrine of Assumed Risk:
➢ Under the doctrine of assumed risk, the employer argued that the employee
took the risk upon themselves (volenti non fit injuria) when they accepted.
➢ However, the employer generally did not adopt this line of defence where the
regular work of the employee was obviously dangerous. But where the
employee was asked to undertake a dangerous operation outside ordinary
duties, the employer had a good defence.
➢ The defence is not tenable where the employer was being sued for the breach
of a statutory duty.

Doctrine of Contributory Negligence:

➢ Under this line of defence, the employer could say that the injury was caused
entirely due to the workman’s fault.
➢ A defence of contributory negligence also arose if, in addition to the employer’s
negligence, the injured employee was negligent and the injury was the result
of both the causes.

Doctrine of Common Employment and Fellow Servant’s Responsibility:

➢ The doctrine of common employment was adopted by the employers in respect
of accidents resulting from the negligence of fellow workmen.

89 | P a g e
[Link] Contact@8274005990

➢ Under this doctrine, the employer contended that the worker knew at the time
of employment that they were exposed to the risk of injury because of the
negligence on the part of fellow workers also, and that they were supposed to
have contracted on the term that, as between themselves and the master, they
would run that risk.
➢ Thus, the employer was not liable to pay damages in respect of injuries arising
from the carelessness of fellow-workmen.

Doctrine that ‘Personal Claim Comes to an End with the Death of Either Party’:
➢ This line of defence pertained to fatal accidents. As the claim of a workman
was based on the personal negligence of the employer, the employer argued
that ‘personal claim comes to an end with the death of either party (Actio
personalis moritur cum persona).

Doctrine of Unknown Person’s Responsibility:

➢ In case of accidents caused by the negligence of an unknown person, the
employer contended that he was not liable to pay damages for such accidents,
as his liability was confined only in respect of accidents resulting from his
personal negligence.
➢ The conception of negligence as the only basis for a claim to compensation
was ultimately done away with under the Workmen’s Compensation Acts.

A significant amendment was made in the Act in 2009 under which the name of the
Act was changed to Employees’ Compensation Act, 1923. This was done in view of the
recommendations of the National Commission on Labour (2002), which had suggested
the use of the word ‘employee’ in place of ‘workman’ in order to ensure gender
neutrality. Thus, wherever the word ‘workman’ or ‘workmen’ occurs, it will be treated
as ‘employee’ or ‘employees’, respectively. The amending Act has enhanced the
amount of compensation in cases of both disablement and death, has sought to modify
the definition of ‘employee’ with a view to removing ambiguity and has laid down the
eligibility criteria for the appointment of commissioners.
****Schedule I-

• Part-I-List of injuries deemed to result in permanent total disablement

• Part-II- List of injuries deemed to result in permanent partial
disablement

****Schedule II-List of persons who, are included in the definition of workmen

****Schedule III-List of occupational diseases
****Schedule IV-Factors for working out lump sum equivalent of compensation
amount in case of Permanent disablement and death.
**** An Act to provide for the payment by certain classes of employers to their
Employees of compensation for injury by accident.

Main features of the Act

90 | P a g e
[Link] Contact@8274005990

The “Employees Compensation Act, 1923” is an Act to provide payment in the form
of compensation by the employers to the employees for any injuries they have
suffered during an accident. Earlier this Act was known as the Workmen
Compensation Act, 1923. When the employer is not liable to pay compensation-

1. If the injury does not end in the entire or partial disablement of the
employee for a period exceeding three days.
2. If the injury, not leading in death or permanent total disablement, is caused
by an accident which is directly attributable to:

• The employee having at the time of the accident is under the influence of
drink or drugs;
• The wilful disobedience of the employee to an order if the rule is expressly
given or expressly framed, for the purpose of securing the safety of
employees; or
• The wilful removal or disregard by the employee of any safety guard or other
device which has been provided for the purpose of securing the safety of
employees.

Who will be receiving the compensation on behalf of the deceased?

Dependants: -

• A widow or a minor who is a legitimate son or unmarried daughter or a

widowed mother is entitled to compensation
• If the family of the deceased is wholly dependent on the earnings of the
employee at the time of his death or a son or daughter who has attained
the age of eighteen years
• A widower
• A parent other than a widowed mother
• A minor illegitimate son, an unmarried illegitimate daughter or a daughter
legitimate or illegitimate or adopted if married and a minor or if widowed
and a minor
• A minor brother or an unmarried sister or a widowed sister if a minor
• A widowed daughter-in-law
• A minor child of a predeceased son
• A minor child of a predeceased daughter where no parent of the child is
alive
• A paternal grandparent if no parent of the employee is alive.

"Managing agent" means any person appointed or acting as the representative of

another person for the purpose of carrying on such other person's trade or business,
but does not include an individual manager subordinate to an employer

91 | P a g e
[Link] Contact@8274005990

"Minor" means a person who has not attained the age of 18 years
Partial disablement" means, where the disablement is of a temporary nature, such
disablement as reduces the earning capacity of a workman in any employment in
which he was engaged at the time of the accident resulting in the disablement, and,
where the disablement is of a permanent nature, such disablement as reduces his
earning capacity in every employment which he was capable of undertaking at that
time.
Ram, who worked in a printing business, got his fingers cut off by accident. This is
―Partial Disablement‖ as it reduces his capacity to work in any such employment of
similar nature.
Every injury specified in Part II of Schedule I shall be deemed to result in permanent
partial disablement.
"Total disablement" means such disablement, whether of a temporary or permanent
nature, as incapacitates a workman for all work which he was capable of performing
at the time of the accident resulting in such disablement
Permanent total disablement shall be deemed to result from every injury specified in
Part I of Schedule I, mentioned below
or
from any combination of injuries specified in Part II thereof where the aggregate
percentage of the loss of earning capacity, as specified in the said Part II against
those injuries, amounts to 100% or more

To be eligible for the Employees’ Compensation Act’s benefits there are some
requirements which need to be fulfilled:

1. You must be an employee of the Company or Organisation.

2. You must have been injured at the workplace or the job was as such that
you have been injured.
3. Arising out of and in the course of employment (‘arising out of employment
are understood to mean that “during the course of employment, injury has
resulted from some risk incidental to the duties the service which unless
engaged in the duty owing to the master it is reasonable to believe the
employee 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 employee has
exposed himself to do an added peril by his own imprudence.)

**** Doctrine of added peril

When an employee performs something which is not required in his duty, and which
involves extra danger, the employer cannot be held liable to pay compensation for
the injuries caused. In the case of Devidayal Ralyaram V/S Secretary of State, It was

92 | P a g e
[Link] Contact@8274005990

ruled that the doctrine of added peril was used as Défense and the employer was not
liable for the compensation.

**** Doctrine Of Notional Extension –

➢ Ordinarily a man’s employment does not begin until he has reached the place
where he has to work and does not continue after he has left the place of his
employment. Travelling to and from the employer’s establishment is prima
facie not in the course of employment. But there are instances where there
may be reasonable extension of time and place and an employee may be
regarded as in the course of his employment even though he had not reached
or had left his employer’s premises.
➢ When there is a causal connection between the accident and the place where
the employee is working, compensation is payable for the disability or death
of the person according to the Employees Compensation Act. This is the
Doctrine of Notional Extension of the workplace.

Employer's Liability for Compensation. [Sec 3]

(1) If personal injury is caused to a employee by accident arising out of and
in the course of his employment, his employer shall be liable to pay
compensation in accordance with the provisions of this Chapter:
(2) Employer shall not be liable to pay compensation in the following
situations, (a) Any injury which does not result in the total or partial
disablement of the workman for a period exceeding 3 days, employer
is not liable to pay the compensation.
(3) Accidents caused due to,
(i) the workman having been at the time thereof under the
influence of drink or drugs, (alcohol) or
(ii) the wilful disobedience of the workman to an order expressly
given, or to a rule expressly framed, for the purpose of
securing the safety of workmen, or
(iii) the wilful removal or disregard by the workman of any safety
guard or other device which he knew to have been provided
for the purpose of securing the safety of workmen

Occupational Diseases.
➢ An occupational disease is any chronic ailment that occurs as a result of work
or occupational activity. It is an aspect of occupational safety and health. An
occupational disease is typically identified when it is shown that it is more
prevalent in a given body of workers than in the general population, or in other
worker populations. If any injury or disease is caused which is specified in
Part A, B and C of Schedule III, it shall be deemed to have been an
occupational disease or injury ―arising out of and in the course of
employment‖ enabling the employee to claim compensation.

93 | P a g e
[Link] Contact@8274005990

Amount of Compensation
➢ This section deals with how compensation is to be calculated for injured or
deceased employee.
➢ 2. Calculation of the compensation is made on the monthly wage or salary of
employee.
➢ 3. The amount of compensation varies from employee death, permanent total
disablement, permanent partial disablement and temporary disablement.
1. Compensation in Case of Death: • 50% of the Monthly Wage x Relevant
factor as per the age of the worker • Funeral expenses of Rs. 5000 is also
payable • The minimum amount payable is Rs. 120,000
2. Compensation in case of Permanent Total Disability (PTD) • 60% of the
Monthly Wage x Relevant factor as per the age of the worker • Minimum
amount payable in this case is Rs. 140,000
3. Compensation in case of Permanent Partial Disability (PPD) • A
percentage of the compensation payable under PTD. This percentage
needs to be estimated based on the ―extent of the reduction in earning
capacity‖ of the worker.
4. Compensation in case of Temporary Disability (Total or Partial) • 25%
of the Monthly Wage of the Worker payable every half month • The
compensation is payable if the worker is disabled for more than three
consecutive days • The maximum tenure for the compensation is five
years

**** Where the Employees’ State Insurance Act, 1948, is in force, the injured
employees or their dependants do not have the right to compensation under the
Employees’ Compensation Act. The Employees’ State Insurance Act, 1948, provides
benefits in the event both of disablement and death resulting from injury [Sec. 61 of
the ESI Act]
Compensation to be paid when due and penalty for default: -
➢ Compensation under section 4 shall be paid as soon as it falls due.
➢ In cases where the employer does not accept the liability for compensation
still, he will be bound to make provisional payment, and, such payment shall
be deposited with the Commissioner or made to the employee.
➢ Where any employer is in default in paying the compensation due under this
Act within one month from the date it fell due, the Commissioner shall-
• direct that the employer shall, in addition to the amount of the
arrears, pay simple interest thereon at the rate of 12% per
annum
• if, in his opinion, there is no justification for the delay, direct
that the employer, in addition to the amount of the arrears and
interest thereon, pay a further sum not exceeding 50% of such
amount by way of penalty.

94 | P a g e
[Link] Contact@8274005990

Notice and claim: -

➢ No claim for compensation shall be entertained by a Commissioner unless
notice of the accident has been given in the manner hereinafter provided as
soon as practicable after the happening thereof and unless the claim is
preferred before him within 70 [two years] of the occurrence of the accident or
in case of death within 70 [two years] from the date of death
➢ Every such notice shall give the name and address of the person injured and
shall state in ordinary language the cause of the injury and the date on which
the accident happened

Section 10A- Power to require from employers’ statements regarding fatal accidents:
-
➢ Where a commissioner receives information from any source that a [an
employee] has died as a result of an accident arising out of and in the course
of his employment, he may send by registered post a notice to the workman's
employer requiring him to submit, within thirty days of the service of the
notice
➢ If the employer is of opinion that he is liable to deposit compensation, he shall
make the deposit within thirty days of the service of the notice
➢ If the employer is of opinion that he is not liable to deposit compensation, he
shall in his statement indicate the grounds on which he disclaims liability

Reports of fatal accidents and serious bodily injuries: -

➢ in death serious bodily injury-within seven days

Medical examination: -
➢ Where an employee has given notice of an accident, he shall, if the employer,
before the expiry of three days from the time at which service of the notice
has been affected offers to have him examined free of charge by a qualified
medical practitioner
➢ before the expiry of the period within which he is liable to submit himself for
medical examination, voluntarily leaves without having been so examined the
vicinity of the place in which he was employed, his right to compensation shall
be suspended until he returns and offers himself for such examination

Contracting Out: - Any contract or agreement which makes the employee give up or
reduce his right to compensation from the employer is null and void insofar as it
aims at reducing or removing the liability of the employer to pay compensation under
the act.
****In the case of the death of a master or seaman, the claim for compensation shall
be made within 107 [one year] after the news of the death has been received by the
claimant
Circumstances under which employer is liable to pay compensation to the
employee
Compensation in case of death of employee:-

95 | P a g e
[Link] Contact@8274005990

While calculating the compensation of the workman, age of the workman and
relevant factor is taken in to account.
50% of monthly wages of the deceased employee (X) relevant factor with
corresponding age of injured workman specified in Schedule IV.
or
1,20,000/- rupees of compensation.
Whichever is more.
Example: Muniyappa, a worker aged 35 meets with an accident and dies while at
work (i.e. in the course of employment). At the time he drew a monthly wage of
Rs.21,500/-. As per Schedule IV of the Act the relevant factor applicable to his case
would be Rs. 197.06. As such, the amount of compensation payable to his dependants
will be arrived at in the following way:
(i) 50% of Rs. 15000= 7500
(ii) 7500 x relevant factor (i.e.197.06) =
Rs.14,77,950 /- (total compensation payable)

Compensation in case of permanent total disablement [Sec 4(1) (b)]

60% of monthly wages of employee (X) relevant factor with corresponding age of
injured workman specified in Schedule IV .
or
1, 40,000/- rupees of compensation.
Whichever is more.
For above the calculation of the compensation in case of death or permanent partial
disablement, the monthly wage of workman is limited to 15000/- Rupees only. Or
the government may prescribe and change the monthly wage amount for calculation
of the compensation.

Compensation in case of permanent partial disablement [Sec 4(1) (c)]

Injury specified in Part II of Schedule I.
The calculation of the compensation is similar to that of permanent total
disablement.
Example:
Part II of schedule I
Nature of injury Percentage of loss of disablement
(1) Amputation to shoulder joint 90%
(2) Amputation to below shoulder 80%
(3) loss of fingers of one hand 50%

96 | P a g e
[Link] Contact@8274005990

(24) Loss of all toes of one foot 20%

(48) part of some loss of bone 3%
Part II of schedule I contains 48 entries specifying various nature of injuries in left-
hand column and corresponding percentage of disablement.
In case of (1) Amputation to shoulder joint
90% of monthly wages of employee X relevant factor with corresponding age of
injured workman specified in Schedule IV.
or
1, 40,000/- rupees of compensation.
Whichever is more.

[Link] Employment (Standing Orders) Act, 1946

Standing orders refer to somewhat permanently arranged orders in contrast to ad
hoc orders framed and executed keeping in view the needs of particular situations or
particular cases
In industrial establishments, these denote orders framed and enforced by
management in regard to specified terms and conditions of employment such as
recruitment, classification of workmen, schedule of working hours, attendance and
late-coming, leave and holidays, redressal of grievances, acts or omissions
constituting misconduct and similar other matters
In India, the first legislative measure providing for framing and certification of
standing orders was the Bombay Industrial Disputes Act, 1938, which aimed at
defining the conditions of employment with sufficient precision, and to make them
known to workmen

• on the basis of the resolutions of the Indian Labour Conference, (Standing

Orders) Act, 1946 came to be passed as a central legislation.

The Act applies to

• every industrial establishment employing 100 or more workmen

• but the central and state governments can apply the provisions of the Act to
any industrial establishment employing fewer than 100 workmen.
• However, a two months’ prior notice by notification in the official gazette is
necessary.

• The Act does not apply to (i) industries covered by the Bombay Industrial
Relations Act, 1946, and (ii) industrial establishments, to which the Madhya
Pradesh Industrial Employment (Standing Orders) Act, 1961, applies.

97 | P a g e
[Link] Contact@8274005990

Definitions: -
Certifying Officer: Labour Commissioner or a Regional Labour Commissioner, and
includes any other officer appointed by the central or state government, by
notification in the official gazette, to perform all or any of the functions of a Certifying
Officer under the Act [Sec. 2 (c)].
Employer: The owner of an industrial establishment and includes: (i) manager of a
factory; (ii) the authority appointed by the Government of India for the purpose, in
the case of an industrial establishment under the control of any department under
its control, and where no authority has been appointed, the head of the department;
and (iii) a person responsible to the owner for the supervision and control of the
industrial establishment, in other cases [Sec. 2 (d)].
Industrial Establishment: (i) An industrial establishment as defined in the Payment
of Wages Act, 1936, (ii) a factory;(iii) a railway; and (iv) the establishment of a person
who, for the purpose of fulfilling a contract with the owner of any industrial
establishment, employs workmen [Sec. 2 (e)].
Submission of Draft Standing Orders: -

• The employer of every industrial establishment covered under the Act is

required to submit to the Certifying Officer five copies of the draft standing
orders proposed by him for adoption in his industrial establishment. The draft
should make provision for every matter set out in the schedule and where
model standing orders have been prescribed, it should be in conformity with
the model.
• The draft standing orders should be accompanied by a statement giving
prescribed particulars relating to workmen employed in the industrial
establishment including the name of the trade union to which they belong.
A group of employers in similar industrial establishments may submit a joint
draft of standing orders.
Certification of Standing Orders: -

• On receipt of the draft standing orders, the Certifying Officer is required to

forward a copy of the same to the trade union of workmen
• The objections are to be submitted within 15 days of the receipt of the notice.
After giving the employer and the trade union or representatives of workmen
an opportunity of being heard, the Certifying Officer will take decision whether
or not any modification of or addition to the draft submitted is necessary and
make a written order accordingly.
• After making the required modifications or additions by trade unions,
Certifying Officer will certify the draft standing orders and send copies of the
certified standing within seven days of certification
• Any employer, workman, trade union or other prescribed representatives of
workmen aggrieved by the order of the Certifying Officer may appeal to the
appellate authority within 30 days from the date on which copies are sent to
them
• certified standing orders come into operation on the expiry of 30 days from
the date on which their authenticated copies are sent to the persons
concerned, if no appeal has been made

98 | P a g e
[Link] Contact@8274005990

• if appealed, after expiry of seven days from the date on which copies of the
order of the appellate authority have been sent to the concerned persons
• Certified standing orders are normally to remain unmodified for a period of six
months from the date of their operation
• The Certifying Officer and the appellate authority have the powers of a civil
court for the purpose of receiving evidence, administering oaths, enforcing the
attendance of witnesses, and compelling the discovery and production of
documents. They are also deemed to be a civil court within the meaning of the
Code of Criminal Procedure, 1973
Payment of Subsistence Allowance
❖ Where any workman is suspended by the employer pending investigation
or injury into complaints or charges of misconduct against him, the
employer is required to pay to such workman subsistence allowance at the
following rates:
1. At the rate of 50 per cent of the wages which the workman was entitled
to immediately preceding the date of such suspension, for the first 90 days
of suspension.

2. At the rate of 75 per cent of the wages for the remaining period of
suspension—if the delay in the completion of disciplinary proceedings
against such workman is not directly attributable to the conduct of the
workman.
****In case a dispute arises regarding the payable subsistence allowance, The
decision of the Labour Court will be final and binding on the parties.
Penalties: -
❖ Failure to submit draft standing orders -is punishable with fine up to
5,000, and in the case of a continuing offence with a further fine up to 200
per day

❖ Contravention of standing orders finally certified is punishable with fine

up to 100, and in the case of a continuing offence with a further fine of 25
per day
****Classification of Workmen
(a) Workmen shall be classified as:
(i) Permanent
(ii) Probationers
(iii) Badlis
(iv) Temporary
(v) Casual
(vi) Apprentices

99 | P a g e
[Link] Contact@8274005990

(b) A ‘permanent workman’ is a workman who has been engaged on a permanent

basis and includes any person who has satisfactorily completed a probationary
period of three months in the same or in another occupation in the industrial
establishment, including breaks due to sickness, accident, leave, lockout, strike (not
being an illegal strike) or involuntary closure of the establishment.
(c) A ‘probationer’ is a workman who is provisionally employed to fill a permanent
vacancy in a post and has not completed three months’ service therein. If a
permanent employee is employed as a probationer in a new post, they may, at any
time during the probationary period of three months, be reverted to their old
permanent post.
(d) A ‘badli’ is a workman who is appointed in the post of a permanent workman or
probationer who is temporarily absent.
(e) A ‘temporary workman’ is a workman who has been engaged for work which is
of an essentially temporary nature likely to be finished within a limited period
(f) A ‘casual workman’ is a workman whose employment is of a casual nature.
(g) An ‘apprentice’ is a learner who is paid an allowance during the period of his
training.

……………………………………………………………………………………………………….

100 | P a g e