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LABOUR LAW-II
IMPORTANT QUESTIONS:
1.Minimum wages – wages act 1936 & 1948?
2.ESI act-1948?
3.child labour?
4.Gratuity act 1986?
5.workmen compensation act 1923?
6.Factories act 1948?

SHORT QUESTIONS:
1.Labour welfare?
2.ESI corporation?
3.Maternity benefits?
4.Bonus-concept, right to claim, commission {full bench formula}?
5.Social security?
6.Child labour rights?
7.Whitley commission?
8.Fair-wage?
9.Social insurance?
10.Occupational disease?
11.living wages?
12.Allocable wages?

Long questions:
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1.Minimum wages-wages act 1936 & 1948?

Ans. MINIMUM WAGES 1948:
 The minimum wages act 1948 was to secure the welfare of
unorganised workers in certain industries by fixing the
minimum rates of wages
 The act contemplates that minimum wages rates must ensure
for him not only his subsistence and that of his family but also
preserve his efficiency as a workman
 The minimum wages act 1948 is an act of parliament
concerning Indian Labour Law that sets the minimum wages
that must be paid to skilled and unskilled labours
OBJECTIVES OF THE ACT:
 To provide minimum wages to the workers working in
organized sector
 To stop exploitation of the workers
 To empower the government to take steps for fixing minimum
wages and to revising it in timely manner
 To apply this law on most of the sections in organized sector
PAYMENT OF WAGES ACT 1936:
 The payment of wages act 1936 regulates payment of wages
to employees [direct and indirect] the act is intended to be a
remedy against unauthorized deductions made by employer
and/or unjustified delay in payment of wages
REGULAR PAY:
 Payment should be made before the 7th day of a month where
the number of workers is less than 1000 and 10th day
otherwise the wage-period shall not exceed 1 month
MODE OF PAYMENT:
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 Under the act payment has to be made in currency notes or

coins cheque payment or crediting to bank account is allowed
with consent in writing by the employee [section 6]
DEDUCTION FROM WAGES:
 Employer is allowed to effect only authorized deductions as
specified in the act this includes fines [section 8] absence from
duty [section 9] damages or loss [section 10] deduction for
services [amenities] given to employer [section 11] recovery
of advances and loans [section 12,13] and payment to
cooperative society and insurance [section 13]
 Claims for excessive deduction and non-payment: employers
individually or through trade union can approach the
authority [labour office] for relief [section 15,16,17]

2.ESI act-1948?
Ans. ESI- [EMPLOYEES’STATE INSURANCE] is a public society
security and health insurance fund for Indian workers the fund is
managed by the employees’ state insurance corporation [ESIC]
according to rules and regulation stipulated in the ESIC act 1948
 Employees ‘state insurance corporation [ESIC] established by
ESI act is an autonomous body under the ministry of labour
and employment government of India
 As it is a legal entity the corporation can raise loans and take
measures for discharging such loans with the prior sanction of
the central government and it can acquire both movable and
immovable property and all incomes from the property shall
vest with the corporation
 The corporation can san set up hospitals either independently
or in collaboration with state government or other private
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entities but most of the dispensaries and hospitals are run by

concerned state governments
BENEFITS:
The following types of benefits are covered under ESIC act 1948:
 MEDICAL BENEFIT: Full medical care is provided to an insured
person and his family members from the very first day he
enters into an insurable employment with his employer
without an upper limit on expenses
 SICKNESS BENEFIT: sickness benefit is given in the form of
cash compensation to be insured worker at the rate of 70
percent of wages payable during the period of certified
sickness for a minimum of 91 days in a year
 MATERNITY BENEFIT: Maternity benefit for the confinement
or pregnancy is payable for a period of 12 weeks [84 days] at
the rate 100% of average daily wages
 DISABLEMENT BENEFIT: disablement benefit is paid at the
rate of 90% of the wage payable
 In case of temporary disablement: so long as disability
continues
 In case of permanent disablement: monthly payment
depending upon the extent of loss
 DEPENDENTS BENEFITS: Dependent benefits is paid to the
dependents of a deceased insured person at the rate of 90% of
wage in the form of monthly payment in cases where death
occurs due to employment injury or occupational hazards
 FUNERAL EXPENSES: An amount of rs. 15,000-/ is payable to
the dependents or to the person who perform last rites from
day one of entering insurable employment

3.Child labour?
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Ans. It is noted that child labour exploitation in India is very old. it

continues even today, and the childhood of millions of children is
being crushed in the race of modernity
To eradicate this problem, the Child Labour (Prohibition and
Regulation) Act was passed in the year 1986
 According to the Child Labour (Protection and Regulation) Act,
1986, a “child” is defined as a person who has not completed
the age of 14 years. At such a young age, a child is expected to
play, study and be carefree about his life. But in reality,
expectations rarely meet reality, Especially in the case of poor
children
 Children are voluntarily or forcefully employed to work in
harsh conditions and environments that pose a threat to their
lives. Child labour leads to underdevelopment of complete
mental and physical development, resulting in stunted growth
of children
MAIN REASON OF CHILD EMPLOYMENT:
(I) POVERTY (ii) PAST LOANS/DEBTS (iii) PROFESSIONAL
REQUIRMENTS
 It is impossible to control child labour in developing countries
because it is believed that children feed their families, and
help feed themselves. because of illiteracy, poverty and
unemployment
 The poor financial status of the people in India compels them
to borrow money. The illiterate population goes to
moneylenders and sometimes mortgages their belongings in
return for the loans taken by them
 There are some industrial ones such as the “bangle making”
industry, where delicate hands and tiny fingers are required
to perform very fine work with utmost excellence and
precision.
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Punishments in the Laws related to child Labour:

 A contravention under section-3 shall be punishable with
imprisonment for a term which shall not be less than 3
months which may extend to 1 year or with a fine which shall
not be less than 10 thousand rupees but which may extend to
20 thousand rupees, or with both.
 A continuing offence under section (3) shall be punishable
with imprisonment for a term which shall not be less than six
months which may extend to 2 years
4.Gratuity act 1972?
Ans. GRATUITY: gratuity is the amount an employee gets when he
leaves a company as a token of appreciation for the services
rendered
 Gratuity is considered as a token of appreciation for the
services provided by the employee however an employee
must have to fulfil certain conditions to get eligible for
gratuity
 A person is eligible to receive gratuity only if he has
completed five years of service with an organization these five
years must be continuous and there should not be any gap in
the services of the employees with that company gratuity is
usually paid at the time of retirement but can be paid earlier
as well in case of unforeseen conditions such as death of the
individual
 In India, gratuity is a type of retirement benefit. It is a
payment made with the intent of monetarily helping an
employee after his or her retirement. It was held by the
Supreme Court of India in Indian Hume Pipe Co Ltd Vs Its
Workmen that the general principle underlying a gratuity
scheme is that by service over a long period the employee is
entitled to claim a certain amount as a retirement benefit
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 The Payment of Gratuity Act was passed by the Parliament of

India on 21 August 1972 and it came into force on 16
September 1972
The Payment of Gratuity Act, 1972:
 The Payment of Gratuity Act, 1972 is an Indian law that makes
certain industries pay a one-time gratuity to retired
employees. The law applies to railways, ports, factories,
oilfields, plantations, mines and shops
Application and extent:
 The act applies to all factories, mines, oilfields, plantations,
ports and railway companies. But in the case of shops or
establishments, other than those stated before, it applies to
those organisations with 10 or more persons are employed on
any day of the preceding 12 months.
 If the number of employee falls below 10, the employer must
still pay gratuities. Thus, no employer will be able to refuse
gratuity under this act by reducing the number of employees.
The act does not apply to apprentices and persons who hold
civil posts under the Central Government or State
Governments and are subjected to any other act or rule other
than this act

5.Workmen compensation act 1923?

Ans. The workmen compensation act 1923 is an enactment that
was issued by the central government and was implemented by
various state governments which gives social security to workers
this security is offered by the law for people who work
 The act was formed after it was noted that labourers were
getting more exposed to danger with the use of advanced and
sophisticated machinery the common law had it that the
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employer would only take up the compensation responsibility

if it is found that the industrial accident was a result of his
negligence
 The Workmen's Compensation Act 1923 was introduced on 5
March 1923. It includes Employer's liability compensation,
amount of compensation. Workmen Compensation Insurance
covers employees under Workmen Compensation Act, Fatal
Accident Act and common law.
Defences of the Employer:
the employer was liable to pay compensation only if he was guilty
of negligence. Even in case of proved negligence, the employer
could get rid of his liability by using any of the following defences:
1. The Doctrine of Assumed Risks- If the employee knew the
nature of the risks he was undertaking when working in a
factory, the employer had no liability for injuries. The court
assumed in such case that the workman had voluntarily
accepted the risks inci-dental to his work. The doctrine
followed from the rule Volenti Non Fit Injuria, which means
that one, who has volunteered to take a risk of injury, is not
entitled to damages if injury actually occurs.
2. The Doctrine of Common Employment- Under this rule, when
several Persons work together for a common purpose and one
of them is injured by some act or omission of another, the
employer is not liable to pay compensation for the injury.
3. The Doctrine of Contributory Negligence-Under this rule’ a
person is not entitled to damages for injury if he was himself
guilty of negligence and such negligence contributed to the
injury.
The three aforesaid defences and the rule “no negligence no
liabi-lity made It almost impossible for an employee to obtain
relief in cases of accident. The Workmen’s Compensation Act ‘of
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1923 radi-cally changed the law. According to this Act, the

employer is liable to pay compensation irrespective of
negligence

6.Factories act 1948?

Ans. FACTORIES ACT 1948:
 The factory is a building or premise where people use
machines and physical labour to produce goods. The factories
act, 1948 were passed by the constituent assembly on 28th
August 1948, the governor-general of India gave his assent on
September 23, 1948, and it came into force on 1st April 1949.
 It provides safeguards to health, safety and welfare of
workers in the factories as well as protection to the exploited
workers to increase their working conditions in the industries
or factories. It will also monitor the owners of the premises
and strict observations will be made concerning factories and
other working conditions of labourers. The Act covers 120
sections, 11 chapters and 3 schedules.
OBJECT OF THE ACT:
 To prevent human beings from working long hours with bodily
strain or manual labour.
 To provide the employees to work in healthy and hygienic
conditions.
 To safeguard the workers from hazardous works and the
prevention of accidents.
 To ensure annual leaves with wages.
 To protect women and children in the course of employment
SALIENT FEATURES OF THE ACT:
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 Working hours of the workers should not exceed 48 hours per

week and there must be a weekly holiday.
 For the protection of the health of the workers the Act lays
down, there must be prevention and precautions in every
factory. There must be restrooms, adequate lighting,
ventilators, temperature to be provided. The workplace
should be kept clean and hygiene.
 To ensure the safety of the workers, the factories should be
fully fenced and children should not be allowed to work in
hazardous and confined areas. Also, the state government has
to monitor every factory to ensure the safety measures are
taken and followed as per the guidelines.
 For the welfare of the workers, there must be restrooms,
lunchrooms, first aid appliances, shelters, crèches to be
provided. The facilities for washing to be provided and
maintained

SHORT ANSWERS:
1.Labour welfare?
Ans. WELFARE: The term “Welfare” refers to a staff of living of an
individual or a group in the context of his physical, social and
psychic environment.
LABOUR WELFARE:
 Labour welfare relates to taking care of the well-being of
workers by employers, trade unions, governmental and non-
governmental institutions and agencies
 Welfare includes anything that is done for the comfort and
improvement of employees and is provided over and above
the wages.
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 Employee welfare includes monitoring of working conditions,

creation of industrial harmony through infrastructure for
health, industrial relations and insurance against disease,
accident and unemployment for the workers and their
families.
SCOPE OF LABOUR WELFARE:
Welfare service are divided into two groups –
(a) Welfare services within the premises of the factory (intra-mural)
such as – drinking and washing facilities, bathing, canteen, rest
room, shelter, prevention of fatigue and safety devices and
(b) Welfare amenities outside the establishment (extra-mural)
include social security measures like social insurance, social
assistance, recreation, sports, workers’ education, etc.
On the whole labour welfare aims at minimizing stress and strains
of industrial workers. It observes that workers get clean and neat
environment of work. They should get safe working conditions with
minimum hazards of work life. They should be able to live a life
with dignity, status and self-respect

2.ESI Corporation?
Ans. ESI CORPORATION:
 The ESI Act exercises its function through the Employees’
State Insurance Corporation, established via Section 3, a body
created to maintain social security. It was established on 24
February, 1952. The corporation is supposed to grant relief to
the employees in case of medical emergencies.
Constitution of Corporation
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The composition of the ESIC is defined in Section 4, and it is as

follows:
 The Director-General.
 Chairman, appointed by the Central Government.
 Vice-Chairman appointed by the Central Government.
 Not more than 5 persons nominated by the Central
Government.
 1 person to represent each state.
 1 person representing the Union Territories.
 10 persons representing employers.
 10 persons representing employees.
 2 persons representing the medical profession.
 3 members of parliament (2: Lok Sabha and 1: Rajya Sabha).
Term of office of members of the Corporation:
 Via Section 5, the following members are appointed for up to
a 4-year period: Director-General, Chairman, Vice-Chairman
The 5 people nominated by Central Government The
members representing each state The members representing
each Union Territory.
Authentication of orders, decisions, etc:
 The signature of the Director-General of ESIC is the only
necessary requirement to authenticate an outgoing order or a
decision, there is no other way to authenticate or enforce an
order.
 The Director-General can also temporarily delegate his
authority to any other officer. In this case, the signature of the
authorised officer will also suffice to authenticate an order.

3.Maternity benefits?
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Ans. MATERNITY BENEFITS:

As per Section 46(1)(b) of the ESI Act, an insured woman can claim
periodical payments in case of occurrence of any of the following
situations:
 confinement (labour leading to birth or birth after 26 weeks)
 miscarriage
 sickness arising out of pregnancy
 premature birth of child
The benefit is payable for three months, with an extension of one
month, if required. The minimum work duration must be 70 days in
the year preceding the year of pregnancy.

4.Bonus-concept, right to claim, commission [full bench formula]?

Ans. BONUS-CONCEPT: Bonus is a reward that is paid to an
employee for his good work towards the organisation. The basic
objective to give bonus is to share the profit earned by the
organisation amongst the employees and staff members. In India
there is a principle law relating to this procedure of payment of
bonus to the employees and that principle law is named as
Payment of Bonus Act, 1965
 The Payment of Bonus Act applies to every factory and
establishment employing not less than 20 persons on any day
during the accounting year. The establishments covered under
the Act shall continue to pay bonus even if the number of
employees fall below 20 subsequently.
RIGHT OF EMPLOYERS:
The following rights to be claimed out by the employers:
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 Right to notice any disputes relating to application or

interpretation of any provision of the Act, to the Labour Court
or Labour Tribunal.
 Right to make a valid deduction from the bonus due to an
employee, such as festival bonus paid and financial loss
created by the misbehaviour of the workers.
 Right to take the bonus of an employee, who has been
dismissed from service for misbehaviour, violent behaviour,
fraud, misappropriation or sabotage of any property of the
establishment.
RIGHT OF EMPLOYEES:
The following rights to be claimed out by the employees:
 Right to claim bonus due under the Act and to request an
application to the Government for the redemption of bonus
amount which is unpaid, within one year of its being due.
 Right to notice any dispute to the Labour Court/Tribunal.
 Employees who are not eligible for the Payment of Bonus Act,
cannot raise a dispute about the bonus under the Industrial
Disputes Act.
 Right to seek clarification and obtain information, on any item
in the accounts of the establishment
FULL-BENCH FORMULA:
According to the Labour Appellate Tribunal formula which came to
be known as “Full Bench Formula”, the surplus available for
distribution had to be determined by debiting the following “prior
charges” against gross profit.
(a) Provision for depreciation,
(b) Reserve for rehabilitation,
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(c) Return of 6 per cent on the paid-up capital, and

(d) Return on working capital at a lower rate than the return on
paid-up capital.
The formula laid down by Labour Appellate Tribunal was followed
all over the country by industrial tribunals in awarding bonus,
though demands for its revision continued to be made from time to
time
Bonus Commission:
 The bonus issue came up for discussion before the Standing
Labour Committee in 1960. The Committee recommended
that a Bonus Commission should be to go into the question of
profit bonus in a comprehensive manner
 Regarding the concept of bonus, Commission endorsed the
view that bonus could be claimed as a matter of right by the
workers. The Commission said that bonus should be
constructed as a share of the workers in the prosperity of the
concern in which they are employed This will help to bridge
the gap between the actual wages and the need based wage
in case of low paid workers
 The Commission rejects the view that bonus be incorporated
in the wages structure on the ground that while wage rates
are fixed on the industry-cum-region basis, profits are variable
and linked with the units’ ability to pay. It also does not
accept the view that bonus should be linked with incentives
because profit bonus is a very different thing from incentives
bonus.
5.Social security?
Ans. SOCIAL SECURITY: William Beveridge has defined social
security as a means of securing an income to take the place of
earring when they are interrupted by unemployment sickness or
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accident to provide for the retirement through old age to provide

against loss of support by death of another person or to meet
exceptional expenditure connected with birth death or marriage
 The purpose of social security is to provide an income up to a
minimum and also medical treatment to bring the
interruption of earnings to an end as soon as possible
OBJECTIVES OF SOCIAL SECURITIES:
The objectives of social securities can be sub-summed under three
categories:
1. Compensation
2. Restoration
3. Prevention
COMPENSATION: Compensation ensures security of income it is
based on this consideration that during the period of contingency
of risks the individual and his/her family should not be subjected to
a double calamity i.e. destitution and loss of health, limb, life or
work
RESTORATION: reemployment so as to restore him/her to earlier
condition in a sense it is an extension of compensation
PREVENTION: these measures imply to avoid the loss of
productivity capacity due to sickness unemployment or invalidity to
earn income
6.Child labour rights?
Ans. CHILD LABOUR RIGHTS:
There various provisions relating to safeguard and protect working
conditions for the benefit of child workers.
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 The Act provides that no child shall be permitted to work

between 7 p.m. and 8 a.m. and shall not be permitted to work
over time.
 No child shall work for more than 3 hours before he has an
interval of one hour. Spread over has been fixed at six hours.
 cannot work in more than one establishment on any day. A
weekly holiday is allowed. The Act also provides health and
safety measures for the children.
 Section 13 of the Act describes to provide child workers
facilities of drinking water, latrines and urinals, cleanliness,
disposal of wastes and effluents, ventilation and temperature,
etc. should be provided by the employer.
 Measures for safety from dust and fume, artificial
humidification, fencing of machinery etc., also need to be
provided by the employer
7.Whitley commission?
Ans. WHITLEY COMMISSION:
 The Royal Commission on Labour (or the Whitley Commission
on Labour) was a Royal Commission set up in 1929 to
investigate the working conditions on plantations in India
COMMISSION:
 The Commission was chaired by John Henry Whitley. The
commission submitted its report in 1931.The report surprised
many by concurring with the criticisms of Mahatma Gandhi
and others that poverty was the cause of India's social and
industrial problems. It was also critical of British employers'
role in perpetuating the problems
 The Royal Commission on Labour in 1931 pointed out the
need for systematic collection of labour statistics. It observed
that the policy must be built on facts as the uncertainty of
facts would lead to confusion and conflict regarding its aim.
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 The Commission recommended the adoption of suitable

legislation enabling the Competent Authority to collect and
collate information regarding the living, working and socio-
economic conditions of industrial labour.
 Whitley was offered a knighthood for his work on this report,
but he declined
8.Fair-wage?
Ans. Fair wage is a mean between the living wage and the
minimum wage. A fair wage is related to fair work-load and the
earning capacity. It can say that it is more than minimum wage
but less than the living wage.
 It may roughly be said to approximate to the need
based minimum, in the sense of the wage which is adequate
to cover the normal needs of the average employee regarded
as a human being in a civilized society. Fair wage is fixed,
taking into consideration, the present economic position and
further prospects of the Industry
 Between these two limits (Living Wage and the Minimum
Wage) actual wage would depend upon a consideration of
certain factors namely -
I) the productivity of Labour.
ii) the prevailing rates of wages in the same industry for
similar occupations in the same or similar occupations in the
same or neighbouring localities;
iii) the level of national income and its distribution; and
iv) the place of the industry in the economy of the country.
The Concept of fair wages, therefore, involves a rate sufficiently
high to enable the worker to provide a standard family with food,
shelter, clothing, medical care and education for children
appropriate to his status in life but not at a rate exceeding the
wage-earning capacity of the class of establishment concerned
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9.Social insurance?
Ans. SOCIAL-INSURANCE:
“Social insurance is a giving return for contribution benefits up to
subsistence level as of rights and without means and tests so that
individual may build freely up to it.” -- Sir William Beveridge
From the analysis of the above mentioned definition the following
features of social insurance are identified:
(i) Schemes of Social Insurance is financed by the small contribution
made by the employees and major portion by the employers.
(ii) In all the schemes of social insurance Participation is compulsory
with only few exceptions.
(iii) Under these schemes contributions are accumulated in special
funds out of which benefits are paid.
(iv) If there happen to be surplus funds not needed to pay current
benefits are invested to earn further future income.
The scope of social insurance is very wide covering
(i) Worker state insurance schemes 1948.
(ii) Maternity benefits act, 1961.
(iii) Coal Mines provident fund and bonus schemes 1948.
(iv) Seamen’s provident Fund Act 1966.
(v) Medical schemes and Facilities under their central and state
govt employees who make monthly contribution to the Health
schemes.
(vi) The Indian Railway too runs hospital and dispensaries for the
employees and their family.
10.Occupational disease?
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Ans. An occupational disease or an “industrial disease” is an injury,

illness or medical condition that a worker gets by working at
specific job or in a particular industry. Typically, a large group of
workers from the same job or industry will all share similar illness
symptoms or injuries or will be diagnosed with the same work-
related disease. Occupational diseases are often a result of working
in unsafe working conditions.
 Workers’ compensation claims and personal injury lawsuits
are often filed as a result of a worker suffering from an
occupational disease. Work-related disease laws and
occupational exposure laws exist to protect workers.
 Industries that are commonly associated with occupational
diseases in workers may include mining, factory assembly
plants, animal slaughterhouses, textile factories, hairdressing
and nail salons.
Some common forms of an occupational diseases may include:
 Lung diseases including emphysema;
 Cancers or illnesses caused by chemicals like asbestos;
 Skin conditions including eczema, burns, and blistering caused
by contact with chemicals, electricity or machinery;
 Back and spine injuries from heavy lifting

11.living wage?
Ans. LIVING WAGE: The concept of "Living wage" is the wage rate
which prevails in most of the economically advanced Countries. The
term Living Wage has not been defined under the Minimum Wages
Act, 1948.
 South Australian Act of 1912 defines it as 'Living Wage means
a sum sufficient for the normal and reasonable needs of the
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average employee living in a locality, where the work under

consideration is done or is to be done
 Living wages are wages without which working people cannot
live and perform their duties as a citizen. It varies from
country to country depending upon the price level of
necessaries of life, and it is determined by the socio-economic
conditions of a particular country.
 In India, there is no statutory definition for the term 'living
wage'. According to Article 43 of the Indian Constitution, the
State shall endeavour to Secure to all workers living wages,
conditions of ensuring a decent standard of life and full
enjoyment of leisure and social and cultural opportunities
12.Allocable wages?
Ans. Bonus payable under the Act is linked with profits. The
employer has to calculate "gross profits" of his establishment in the
manner specified in section 4. Then, from "gross profits" so
calculated he has to deduct the sums referred to in section 6 as
prior charges. The balance is called "available surplus". A
percentage of the available surplus calculated in accordance with
the provisions of sub-section (4) of section 2 is called "allocable
surplus."
Where, in respect of any year the allocable surplus exceeds the
amount of minimum bonus payable to the employees' the
employer must pay to every employee in respect of that year bonus
in proportion to the salary or wage earned by the employee during
the year subject to a maximum of twenty per cent of such salary or
wage.

Sumaiya Mehmood