Labour Laws in India

July 11

2011

This project report introduces various labour laws enacted by Central and State governments of Indian Constitution. It covers all the labour laws in detail along with Jurisdiction system for any labour dispute.

B.K. Birla Institute of Engineering & Technology

Pilani, Rajasthan, IN

Project Report On

Labour Laws in India

Submitted To:
Chhavi Gupta
Deptt. of Humanities & Social Sciences BKBIET, Pilani

Submitted By:
Kundan Singh
CSE, 2nd Year

Ashutosh Sharma
CSE, 2nd Year

Certificate
This is to certify that this project report, titled Labour Laws in India is carried out by Kundan Singh and Ashutosh Sharma of Computer Science Engineering of BK Birla Institute of Engineering & Technology, Pilani as a part of their curriculum for the course titled Humanities and Social Sciences.

Chhavi Gupta

To secure to each labourer the whole product of his labour, or as nearly as possible, is a worthy object of any good Government said Abraham Lincoln.

Preface
In simple words, Labour laws in any country are enacted to bring employee and employer at the same level , thereby mitigating the difference between two everwarring groups. Labour laws in Indian Constitution are enacted and regulated by Central and various State Governments while introducing different authorized administration levels. The labour laws in India were introduced in 19th century to protect rights of labors. Indian Constitution has flexibility to update or modify different laws. In this report we have covered different labour laws in detail along with the Jurisdiction system for any labour dispute. We have also covered the contacts of different labour commissioners. In this report we have tried to cover the best on Labour Laws in India from our study and research.

Contents

Introduction What is Labour Law? Classification of Various Labour Laws Labour Jurisdiction- State vs Central Labour Policy of India Central Labour Laws The Factories Act, 1948 Child Labour (Prohibition and Regulation) Act, 1986 Bonded Labour System (Abolition) Act, 1976 The Employment Exchanges Act, 1959 Apprentices Act, 1961 Employees Prvdnt Fund and Provisions Act, 1952 The Employees State Insurance Act (ESI Act), 1948 Payment of Gratuity Act, 1972 Payment of Bonus Act, 1965 Payment of Wages Act, 1936 Labour Law Concessions Labour Laws and SSI Labour Laws and SEZ Judicial facility for any labour dispute Judicial System in India Where to file? What matters fall in the jurisdiction of Industrial Tribunals? What matters fall within the Jurisdiction of Labour Courts? Stages of adjudication in labour or industrial disputes Mediation in Labour Disputes Address of Labour Commissioners Reference

1 1 2 6 9 11 11 19 24 27 29 35 42 46 48 53 56 56 61 63 63 63 64 65 65 66 70 74

Introduction
What is Labour Law ?
Wikipedia, the internet encyclopedia defines labour law as Labour Law is the body of laws, administrative rulings, and precedents which address the relationship between and among employers, employees, and labor organizations, often dealing with issues of public law. The terms Labour Laws and Employment Laws, are often interchanged in the usage. This has led to a big confusion as to their meanings. Labour Laws are different from employment laws which deal only with employment contracts and issues regarding employment and workplace discrimination and other private law issues. Labour Laws harmonize many angles of the relationship between trade unions, employers and employees. In some countries (like Canada), employment laws related to unionised workplaces are different from those relating to particular individuals. In most countries however, no such distinction is made. The final goal of labour law is to bring both the employer and the employee on the same level, thereby mitigating the differences between the two ever-warring groups. Origins of Labour Laws Labour laws emerged when the employers tried to restrict the powers of workers' organisations and keep labour costs low. The workers began demanding better conditions and the right to organise so as to improve their standard of living. Employers costs increased due to workers demand to win higher wages or better working conditions. This led to a chaotic situation which required the intervention of Government. In order to put an end to the disputes between the everwarring employer and employee, the Government enacted many labour laws. In India the labour laws are so numerous, complex and ambiguous that they promote litigation rather than the resolution of problems relating to industrial relations. The labour movement has contributed a lot for the enactment of laws protecting labour rights in the 19th and 20th centuries. The history of labour legislation in India can be traced back to the history of British colonialism. The influences of British political economy were naturally dominant in sketching some of these early laws. In the beginning it was difficult to get enough regular Indian workers to run British
Page | 1

establishments and hence laws for chartering workers became necessary. This was obviously labour legislation in order to protect the interests of British employers. The British enacted the Factories Act with a really self-centered motive. It is well known that Indian textile goods offered serious competition to British textiles in the export market. In order to make India labour costlier, the Factories Act was first introduced in 1883 because of the pressure brought on the British parliament by the textile moguls of Manchester and Lancashire. Thus we received the first stipulation of eight hours of work, the abolition of child labour, and the restriction of women in night employment, and the introduction of overtime wages for work beyond eight hours. While the impact of this measure was clearly for the welfare of the labour force the real motivation was undoubtedly the protection their vested interests. India provides for core labour standards of ILO for welfare of workers and to protect their interests. India has a number of labour laws addressing various issues such as resolution of industrial disputes, working conditions, labour compensation, insurance, child labour, equal remuneration etc. Labour is a subject in the concurrent list of the Indian Constitution and is therefore in the jurisdiction of both central and state governments. Both central and state governments have enacted laws on labour issues. Central laws grant powers to officers under central government in some cases and to the officers of the state governments in some cases.

Classification of Various Labour Laws

There are over 45 legislations on labour from the Central Government and the number of legislations enacted by the State Governments is close to four times that of the Central Acts. Labour Laws can be classified into the following eight categories:

Laws related to Industrial Relations 1 2 The Trade Unions Act, 1926 The Industrial Employment (Standing Orders) Act, 1946

2|Page

3 4

The Industrial Employment (Standing Orders) Rules, 1946 The Industrial Disputes Act, 1947

Laws related to Wages 1 The Payment of Wages Act, 1936 The Payment of Wages Rules, 1937 2 The Minimum Wages Act, 1948 The Minimum Wages (Central) Rules, 1950 3 The Working Journalist (Fixation of Rates of Wages) Act, 1958 Working Journalist (Conditions of service) and Miscellaneous Provisions Rules, 1957 4 The Payment of Bonus Act, 1965 The Payment of Bonus Rules, 1975

Laws related to Specific Industries 1 2 3 4 5 The Factories Act, 1948 The Dock Workers (Regulation of Employment) Act, 1948 The Plantation Labour Act, 1951 The Mines Act, 1952 The Working Journalists and other Newspaper Employees (Conditions of Service and Misc. Provisions) Act, 1955 The Working Journalists and other Newspaper Employees (Conditions of Service and Misc. Provisions) Rules, 1957 6 7 8 The Merchant Shipping Act, 1958 The Motor Transport Workers Act, 1961 The Beedi & Cigar Workers (Conditions of Employment) Act, 1966

3|Page

9 10

The Contract Labour (Regulation & Abolition) Act, 1970 The Sales Promotion Employees (Conditions of Service) Act, 1976 The Sales Promotion Employees (Conditions of Service) Rules, 1976

11

The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Act, 1979

Service) 12 13

The Shops and Establishments Act The Cinema Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981 The Cinema Workers and Cinema Theatre Workers (Regulation of Employment) Rules, 1984 The Cine Workers Welfare Fund Act, 1981.

14 15 of 16 1997 17 18 19 20 21

The Dock Workers (Safety, Health & Welfare) Act, 1986 The Building & Other Construction Workers (Regulation of Employment & Conditions Service) Act, 1996 The Dock Workers (Regulation of Employment) (inapplicability to Major Ports) Act,

The Mica Mines Labour Welfare Fund Act, 1946 The Limestone & Dolomite Mines Labour Welfare Fund Act, 1972 The Beedi Workers Welfare Fund Act, 1976 The Beedi Workers Welfare Cess Act, 1976 The Iron Ore Mines, Manganese Ore Mines & Chrome Ore Mines Labour Welfare Fund Act, 1976

22

The Iron Ore Mines, Manganese Ore Mines & Chrome Ore Mines Labour Welfare Cess Act, 1976

23 24 25 Act,

The Cine Workers Welfare Fund Act, 1981 The Cine Workers Welfare Cess Act, 1981 The Employment of Manual Scavengers and Construction of Dry latrines Prohibition 1993
4|Page

26

The Coal Mines (Conservation and Development) Act, 1974

Laws related to Equality and Empowerment of Women 1 2 The Maternity Benefit Act, 1961 The Equal Remuneration Act, 1976

Laws related to Deprived and Disadvantaged Sections of the Society 1 2 The Bonded Labour System (Abolition) Act, 1976 The Child Labour (Prohibition & Regulation) Act, 1986

Laws related to Social Security 1 2 3 4 The Workmens Compensation Act, 1923 The Employees State Insurance Act, 1948 The Employees Provident Fund & Miscellaneous Provisions Act, 1952 The Payment of Gratuity Act, 1972

Laws related to Employment & Training 1 The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 The Employment Exchanges (Compulsory Notification of Vacancies) Rules, 1959 2 The Apprentices Act, 1961

Others 1 2 3 The Fatal Accidents Act, 1855 The War Injuries Ordinance Act, 1943 The Weekly Holiday Act, 1942
5|Page

4 5 6 7 8

The National and Festival Holidays Act The War Injuries (Compensation Insurance) Act, 1943 The Personal Injuries (Emergency) Provisions Act, 1962 The Personal Injuries (Compensation Insurance) Act, 1963 The Labour Laws (Exemption from Furnishing Returns and Maintaining Register by Certain Establishments) Act, 1988

The Public Liability Insurance Act, 1991

Labour Jurisdiction-State vs Central

Under the Constitution of India, Labour is a subject in the Concurrent List where both the Central & State Governments are competent to enact legislation subject to certain matters being reserved for the Centre. Constitutional Status Union List Concurrent List

Entry No. 55 : Regulation of labour and safety Entry No. 22: Trade Unions; industrial and in mines and oil fields labour disputes.

Entry No. 61: Industrial disputes concerning Entry No.23: Social Security and insurance, Union employees employment and unemployment.

Entry No.65: Union agencies and institutions Entry No. 24: Welfare of about including for "Vocational ...training..." conditions of work, provident funds, employers 'invalidity and old age pension and maternity benefit.

Matters relating to Social Security are Directive Principles of State Policy and the subjects in the Concurrent List. The following social security issues are mentioned in the Concurrent List (List III in the Seventh Schedule of the Constitution of India) Item No. 23: Social Security and insurance, employment and unemployment.
6|Page

Item No. 24: Welfare of Labour including conditions of work, provident funds, employers liability, workmens compensation, invalidity and old age pension and maternity benefits. Part III Fundamental Rights Article16. Equality of opportunity in matters of public employment.(1) There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State. (2) No citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect of, any employment or office under the State. (3) Nothing in this article shall prevent Parliament from making any law prescribing, in regard to a class or classes of employment or appointment to an office under the Government of, or any local or other authority within, a State or Union territory, any requirement as to residence within that State or Union territory] prior to such employment or appointment. (4A) Nothing in this article shall prevent the State from making any provision for reservation in matters of promotion to any class or classes of posts in the services under the State in favour of the Scheduled Castes and the Scheduled Tribes which, in the opinion of the State, are not adequately represented in the services under the State. (4B) Nothing in this article shall prevent the State from considering any unfilled vacancies of a year which are reserved for being filled up in that year in accordance with any provision for reservation made under clause (4) or clause (4A) as a separate class of vacancies to be filled up in any succeeding year or years and such class of vacancies shall not be considered together with the vacancies of the year in which they are being filled up for determining the ceiling of fifty per cent reservation on total number of vacancies of that year. (5) Nothing in this article shall affect the operation of any law which provides that the incumbent of an office in connection with the affairs of any religious or denominational institution or any

7|Page

member of the governing body thereof shall be a person professing a particular religion or belonging to a particular denomination. Article24. Prohibition of employment of children in factories, etc. No child below the age of fourteen years shall be employed to work in any factory or mine or engaged in any other hazardous employment.

Part IV Directive Principles of State Policy

Article 41 Right to work, to education and to public assistance in certain cases The State shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want. Article 42 Provision for just and humane conditions of work and maternity relief The State shall make provision for securing just and humane conditions of work and for maternity relief. Article43. Living wage, etc., for workers 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 a decent standard of life and full enjoyment of leisure and social and cultural opportunities and, in particular, the State shall endeavour to promote cottage industries on an individual or co-operative basis in rural areas. Article43A. Participation of workers in management of industries.The State shall take steps, by suitable legislation or in any other way, to secure the participation of workers in the management of undertakings, establishments or other organisations engaged in any industry.

Labour Policy of India

8|Page

Labour policy in India has been evolving in response to specific needs of the situation to suit requirements of planned economic development and social justice and has two-fold objectives, viz., maintaining industrial peace and promoting the welfare of labour. Labour Policy Highlights Creative measures to attract public and private investment. Creating new jobs New Social security schemes for workers in the unorganised sector. Social security cards for workers. Unified and beneficial management of funds of Welfare Boards. Reprioritization of allocation of funds to benefit vulnerable workers. Model employee-employer relationships. Long term settlements based on productivity. Vital industries and establishments declared as `public utilities`. Special conciliation mechanism for projects with investments of Rs.150 crores or more. Industrial Relations committees in more sectors. Labour Law reforms in tune with the times. Empowered body of experts to suggest required changes. Statutory amendments for expediting and streamlining the mechanism of Labour Judiciary. Amendments to Industrial Disputes Act in tune with the times. Efficient functioning of Labour Department.

9|Page

 More labour sectors under Minimum Wages Act. Child labour act to be aggressively enforced. Modern medical facilities for workers. Rehabilitation packages for displaced workers. Restructuring in functioning of employment exchanges. Computerization and updating of data base. Revamping of curriculum and course content in industrial training. Joint cell of labour department and industries department to study changes in laws and rules.

10 | P a g e

Central Labour Laws

The Factories Act, 1948
Objectives 1. To ensure adequate safety measures and to promote the health and welfare of the workers employed in factories. 2. To prevent haphazard growth of factories through the provisions related to the approval of plans before the creation of a factory.

Applicability of the Act 1. Applicable to the whole of India including Jammu & Kashmir. 2. Covers all manufacturing processes and establishments falling within the definition of factory. 3. Applicable to all factories using power and employing 10 or more workers, and if not using power, employing 20 or more workers on any day of the preceding 12 months.

Scheme of the Act 1. The Act consists of 120 Sections and 3 Schedules. 2. Schedule 1 contains list of industries involving hazardous processes 3. Schedule 2 is about permissible level of certain chemical substances in work environment. 4. Schedule 3 consists of list of notifiable diseases.

Important provisions the Act Facilities and Conveniences - The factory should be kept clean. [Section 11]. There should be arrangement to dispose of wastes and effluents. [Section 12]. Ventilation should be adequate. Reasonable temperature for comfort of employees should be maintained. [Section 13]. Dust and fumes should be controlled below permissible limits. [Section 14]. Artificial humidification
11 | P a g e

should be at prescribed standard level. [Section 15]. Overcrowding should be avoided. [Section 16]. Adequate lighting, drinking water, latrines, urinals and spittoons should be provided. [Sections 17 to 19]. Adequate spittoons should be provided. [Section 20]. Welfare - Adequate facilities for washing, sitting, storing cloths when not worn during working hours. [Section 42]. If a worker has to work in standing position, sitting arrangement to take short rests should be provided. [Section 44]. Adequate First aid boxes shall be provided and maintained [Section 45]. Facilities in case of large factories - Following facilities are required to be provided by large factories - * Ambulance room if 500 or more workers are employed * Canteen if 250 or more workers are employed. It should be sufficiently lighted and ventilated and suitably located. [Section 46]. * Rest rooms / shelters with drinking water when 150 or more workmen are employed [Section 47] * Crches if 30 or more women workers are employed. [Section 48] * Full time Welfare Officer if factory employs 500 or more workers [Section 49] * Safety Officer if 1,000 or more workmen are employed. Safety - All machinery should be properly fenced to protect workers when machinery is in motion. [Section 21 to 27]. Hoists and lifts should be in good condition and tested periodically. [Section 28 and 29]. Pressure plants should be checked as per rules. [Section 31]. Floor, stairs and means of access should be of sound construction and free form obstructions. [Section 32]. Safety appliances for eyes, dangerous dusts, gas, fumes should be provided. [Sections 35 and 36]. Worker is also under obligation to use the safety appliances. He should not misuse any appliance, convenience or other things provided. [Section 111]. In case of hazardous substances, additional safety measures have been prescribed. [Sections 41A to 41H]. - - Adequate fire fighting equipment should be available. [Section 38]. - - Safety Officer should be appointed if number of workers in factory are 1,000 or more. [Section 40B]. Working Hours - A worker cannot be employed for more than 48 hours in a week. [Section 51]. Weekly holiday is compulsory. If he is asked to work on weekly holiday, he should have full holiday on one of three days immediately or after the normal day of holiday. [Section 52(1)]. He cannot be employed for more than 9 hours in a day. [Section 54]. At least half an hour rest

12 | P a g e

should be provided after 5 hours. [Section 55]. Total period of work inclusive of rest interval cannot be more than 10.5 hours. [Section 56]. A worker should be given a weekly holiday. Overlapping of shifts is not permitted. [Section 58]. Notice of period of work should be displayed. [Section 61]. Overtime Wages - If a worker works beyond 9 hours a day or 48 hours a week, overtime wages are double the rate of wages are payable. [Section 59(1)]. A workman cannot work in two factories. There is restriction on double employment. [Section 60]. However, overtime wages are not payable when the worker is on tour. Total working hours including overtime should not exceed 60 in a week and total overtime hours in a quarter should not exceed 50. Register of overtime should be maintained. - - An employee working outside the factory premises like field workers etc. on tour outside headquarters are not entitled to overtime. R Ananthan v. Avery India 1972(42) FJR 304 (Mad HC) * Director of Stores v. P S Dube 1978 Lab IC 390 = 52 FJR 299 = 1978 I LLN 464 = 36 FLR 420. Employment of Women - A woman worker cannot be employed beyond the hours 6 a.m. to 7.00 pm. State Government can grant exemption to any factory or group or class of factories, but no woman can be permitted to work during 10 PM to 5 AM. Shift change can be only after weekly or other holiday and not in between. [Section 66]. Night Shift for women: Factories Act is proposed to be amended to allow night shift for women workers. The Government has decided to amend Section 66 of the Factories Act, 1948 to allow employment of women workers between 7.00 pm and 6.00 am. The demand of womens organisations and in tune with the present economic globalization, the Government has decided to bring in then required changes in the Act. This flexibility would be available to all manufacturing units including the apparel sector. This decision has been taken after meetings with the representatives of the employers and the trade unions. The proposed Bill will empower the State Governments for allowing the necessary flexibility in employment of women during night shift in factories.

13 | P a g e

The proposed amendment would inter-alia provide that the employer has to ensure occupational safety and adequate protection to the women workers. However, the State Government or any person authorised by it would be allowing employment of women during night only after consulting the workers or their representative organisations and concerned employers or their representatives. The State Governments are also empowered to frame their own rules for allowing such permissions. Record of Workmen - A register (muster roll) of all workers should be maintained. No worker should be permitted to work unless his name is in the register. Record of overtime is also required to be maintained. [Section 62]. Leave - A worker is entitled in every calendar year annual leave with wages at the rate of one day for every 20 days of work performed in the previous calendar year, provided that he had worked for 240 days or more in the previous calendar year. Child worker is entitled to one day per every 15 days. While calculating 240 days, earned leave, maternity leave upto 12 weeks and lay off days will be considered, but leave shall not be earned on those days. [Section 79]. Leave can be accumulated upto 30 days in case of adult and 40 days in case of child. Leave admissible is exclusive of holidays occurring during or at either end of the leave period. Wage for period must be paid before leave begins, if leave is for 4 or more days. [Section 81]. Leave cannot be taken for more than three times in a year. Application for leave should not normally be refused. [These are minimum benefits. Employer can, of course, give additional or higher benefits]. Wages for OT and Leave Salary - 'Wages' for leave encashment and overtime will include dearness allowance and cash equivalent of any benefit. However, it will not include bonus or overtime. Child Employment - Child below age of 14 cannot be employed. [Section 67]. Child above 14 but below 15 years of age can be employed only for 4.5 hours per day or during the night. [Section 71]. He should be certified fit by a certifying surgeon. [Section 68]. He cannot be employed during night between 10 pm to 6 am. [Section 71]. A person over 15 but below 18 years of age is termed as adolescent. He can be employed as an adult if he has a certificate of

14 | P a g e

fitness for a full day's work from certifying surgeon. An adolescent is not permitted to work between 7 pm and 6 am. [Section 70]. There are more restrictions on employment of female adolescent. - - Register of child workers should be maintained. [Section 73]. Display on Notice Board - A notice containing abstract of the Factories Act and the rules made thereunder, in English and local language should be displayed. Name and address of Factories Inspector and the certifying surgeon should also be displayed on notice board. [Section 108(1)]. Notice of Accidents, Diseases Etc. - Notice of any accident causing disablement of more than 48 hours, dangerous occurrences and any worker contacting occupational disease should be informed to Factories Inspector. [Section 88]. Notice of dangerous occurrences and specified diseases should be given. [Sections 88A and 89]. Obligation regarding Hazardous Processes / Substances - Information about hazardous substances / processes should be given. Workers and general public in vicinity should be informed about dangers and health hazards. Safety measures and emergency plan should be ready. Safety Committee should be appointed. List of Industries Involving Hazardous Processes THE FIRST SCHEDULE [See Section 2(cb)] 1. Ferrous metallurgical Industries 2. Non-ferrous metallurgical Industries 3. Foundries (ferrous and non-ferrous) 4. Coal (including coke) industries. - Coal, Lignite, Coke, etc. 5. Power Generating Industries 6. Pulp and paper (including paper products) industries
15 | P a g e

7. Fertiliser Industries 8. Cement Industries 9. Petroleum Industries 10. Petro-chemical Industries 11. Drugs and Pharmaceutical Industries 12. Fermentation Industries (Distilleries and Breweries) 13. Rubber (Synthetic) Industries 14. Paints and Pigment Industries 15. Leather Tanning Industries 16. Electro-plating Industries 17. Chemical Industries 18. Insecticides, Fungicides, herbicides and other Pesticides Industries 19. Synthetic Resin and Plastics 20. Man-made Fibre (Cellulosic and non-cellulosic) Industry 21. Manufacture and repair of electrical accumulators 22. Glass and Ceramics 23. Grinding or glazing of metals 24. Manufacture, handling and processing of asbestos and its products 25. Extraction of oils and fats from vegetable and animal sources
16 | P a g e

26. Manufacture, handling and use of benzene and substances containing benzene 27. Manufacturing processes and operations involving carbon disulphide 28. Dyes and Dyestuff including their intermediates 29. Highly flammable liquids and gases. THE THIRD SCHEDULE [See Sections 89 and 90] LIST OF NOTIFIABLE DISEASES 1. Lead poisoning, including poisoning by any preparation or compound of lead or their sequelae. 2. Lead tetra-ethyl poisoning 3. Phosphorus poisoning or its sequelae. 4. Mercury poisoning or its sequelae. 5. Manganese poisoning or its sequelae. 6. Arsenic poisoning or its sequelae. 7. Poisoning by nitrous fumes. 8. Carbon disulphide poisoning. 9. Benzene poisoning, including poisoning by any of its homologues, their nitro or amido derivatives or its sequelae. 10. Chrome ulceration or its sequelae. 11. Anthrax.
17 | P a g e

12. Silicosis. 13. Poisoning by halogens or halogen derivatives of the hydrocarbons of the aliphatic series. 14. Pathological manifestations due to (a) radium or other radio-active substances. (b) X-rays. 15. Primary epitheliomatous cancer of skin. 16. Toxic anaemia. 17. Toxic jaundice due to poisonous substances. 18. Oil acne or dermatitis due to mineral oils and compounds containing mineral oil base. 19. Byssionosis. 20. Asbestosis. 21. Occupational or contract dermatitis caused by direct contract with chemicals and paints. These are of two types, that is primary irritants and allergic sensitizers. 22. Noise induced hearing loss (exposure to high noise levels). 23. Beriyllium poisoning. 24. Carbon monoxide 25. Coal miners' pnoumoconiosis. 26. Phosgene poisoning. 27. Occupational cancer.

18 | P a g e

28. Isocyanates poisoning. 29. Toxic nephirits.

Child Labour (Prohibition & Regulation) Act, 1986

In India, there are a number of Acts which prohibit the employment of children below 14 years and 15 years in certain specified employments. However, there is no procedure laid down in any law for deciding in which employments, occupations or processes the employment of children should be prohibited. There is also no law to regulate the working conditions of children in most of the employments where they are not banned from working and are working under extremely shady and questionable conditions. Objectives of Child Labour (Prohibition & Regulation) Act, 1986 (i) Ban the employment of children, i.e. those who have not completed their fourteenth year, in specified occupations and processes; (ii) Lay down a procedure to decide modifications to the Schedule of banned occupations or processes; (iii) Regulate the conditions of work of children in employments where they are not prohibited from working; (iv) Lay down enhanced penalties for employment of children in violation of the provisions of this Act, and other Acts which forbid the employment of children; (v) To obtain uniformity in the definition of 'child' in the related laws.

Scheme of the Act The Act consists of 26 Sections and 1 Schedule with 2 Parts. 1. Part A consists of list of occupations where child labour is banned. 2. Part B consists of list of processes where child labour is banned. Important Provisions of the Act Who is a child? According to the definition given u/s 2(ii) of the Act, a child means a person who has not completed his fourteenth year of age.
19 | P a g e

Where is the child labour prohibited to work? No child is permitted to work in any the occupations set forth in Part A of the Schedule or any workshop wherein any of the processes set forth in Part B of the Schedule is carried on. (Section 3) Exemption: The above prohibition does not apply to any workshop wherein any process is carried on by the occupier with the aid of his family or to any school established by, or receiving assistance or recognition from, Government. Where child labour is permitted? Except the prohibitory occupations set forth in Part A or processes set forth in Part B of the Schedule, child labour is permitted to be employed but the conditions of their work is required to be regulated in accordance with Part III of the Act. Responsibilities of employers towards child labour: Please refer to the note regarding the responsibilities of the employer for the proper implementation of the Act and the Rules. Penalties: For the contravention of Section 3 a person is punishable with not less than three months imprisonment which may extend to one year or with fine not less than Rs.10,000/- rupees which may be extended up to Rs. 20,000/- or with both. For other offence, the punishment may be simple imprisonment up to one month or with fine up to Rs. 10,000/- of both. A conviction u/s 67 of the Factories Act, 1948 or u/s 21 of the Motor Transport Workers Act, 1961 will attract the penalties under the Child Labour (Prohibition & Regulation) Act, 1986. Salient Features of Legislative Provisions Prohibiting and Regulating Employment of Children 1. As per the Child Labour (Prohibition & Regulation) Act, 1986 child means a person who has not completed is 14th year of age.

2. The Act prohibits employment of children in 13 occupations and 57 processes contained in Part A & B of the Schedule to the Act (Section 3).

3. Under the Act, a Technical Advisory Committee is constituted to advice for inclusion of further occupations & processes in the Schedule.
20 | P a g e

4. The Act regulates the condition of employment in all occupations and processes not prohibited under the Act (Part III).

5. Any person who employs any child in contravention of the provisions of Section 3 of the Act is liable for punishment with imprisonment for a term which shall not be less than three months but which may extend to one year or with fine which shall not be less than Rs 10,000 but which may extend to Rs 20,000 or both (Section 14).

6. The Central and the State Governments enforce the provisions of the Act in their respective spheres.

Employment of children as domestic servants and in dhabas banned from October 2006: The government has decided to prohibit employment of children as domestic servants or servants or in dhabas (roadside eateries), restaurants, hotels, motels, teashops, resorts, spas or in other recreational centres. The ban has been imposed under the Child Labour (Prohibition & Regulation) Act, 1986 and will be effective from 10th October 2006. The Ministry of Labour has recently issued a notification to this effect giving three-month mandatory notice. The Ministry has warned that anyone employing children in these categories would be liable to prosecution and other panel action under the Act. It may be recalled that the government servants have already been prohibited from employing children as domestic servants. By issuing this notification, the Government has imposed these restrictions on everyone. The decision has been taken on the recommendation of the Technical Advisory Committee on Child Labour headed by the Director General, ICMR. The Committee considers the occupations mentioned in the above notification as hazardous for children and has recommended their inclusion in the occupations which are prohibited for persons below 14 years under the Child Labour (Prohibition & Regulation) Act, 1986. The Committee while recommending a ban on
21 | P a g e

employing children in these occupations had said that these children are subjected to physical violence, psychological traumas and at times even sexual abuse. It said that invariably such incidents go unnoticed and unreported as they take place in the close confines of the households or dhabas or restaurants. It said that these children are made to work for long hours and are made to undertake various hazardous activities severely affecting their health and psyche. The Committee has said that the children employed in road-side eateries and highway dhabas were the most vulnerable lot and were easy prey to sex and drug abuse as they came in contact with all kinds of people. The measure is expected to go a long way in ameliorating the condition of hapless working children. The Labour Ministry is also contemplating to strengthen and expand its rehabilitative Scheme of National Child Labour Project, which already covers 250 child labour endemic districts in the country. THE SCHEDULE PART A OCCUPATIONS Any occupation connected with - (1) Transport of passengers, goods or mails by railway; (2) Cinder picking, clearing of an ash pit or building operation in the railway premises; (3) Work in a catering establishment at a railway station, involving the movement of a vendor or any other employee of the establishment from one platform to another or into or out of a moving train; (4) Work relating to the construction of a railway station or with any other work where such work is done in close proximity to or between the railway lines; (5) A port authority within the limits of any port. (6) Work relating to selling of crackers and fireworks in shops with temporary licences. (7) Abattoirs/slaughter Houses. PART B

22 | P a g e

PROCESSES (1) Bidi-making. (2) Carpet-weaving. (3) Cement manufacture, including bagging of cement. (4) Cloth printing, dyeing and weaving. (5) Manufacture of matches, explosives and fire-works. (6) Mica-cutting and splitting. (7) Shellac manufacture. (8) Soap manufacture. (9) Tanning. (10) Wool-cleaning. (11) Building and construction industry. (12) Manufacture of slate pencils (including packing). (13) Manufacture of products from agate. (14) Manufacturing processes using toxic metals and substances, such as, lead, mercury, manganese, chromium, cadmium, benzene, pesticides and asbestos. (15) "Hazardous processes" as defined in Sec. 2 (cb) and dangerous operations as defined in rules made under Sec. 87 of the Factories Act, 1948 (63 of 1948). (16) Printing as defined in Sec. 2(k) (iv) of the Factories Act. 1948 (63 of 1948). (17) Cashew and cashew nut decaling and processing.
23 | P a g e

(18) Soldering processes in electronic industries.

Bonded Labour System (Abolition) Act, 1976

Objective: The object of the Act is to provide for the abolition of bonded labour system with a view to preventing the economic and physical exploitation of the weaker Sections of the people and for matters connected therewith or incidental thereto. Scheme of the Act The Act consists of 27 Sections with some of the important Sections listed below: 2 3 4 5 6 7 8 9 10 Definitions Act to Have Overriding Effect Abolition of Bonded Labour System Agreement, Custom, Etc., to be Void Liability to Repay Bonded debt to Stand Extinguished Property of Bonded Labourer to be freed from Mortgage, Etc. Freed Bonded Labourer Not to be Evicted from Homestead, etc. Creditor not to Accept Payment Against Extinguished Debt Authorities Who may be Specified for Implementing the Provisions of this Act

24 | P a g e

11 12 13 14 15 16 17 18

Duty of District Magistrate and other officers to ensure credit Duty of District Magistrate and Officers Authorised by Him Vigilance Committee Functions of Vigilance Committee Burden of Proof Punishment for Enforcement of Bonded Labour Punishment for Advancement of Bonded Debt Punishment for Extracting Bonded Labour under the Bonded Labour System Punishment for Omission or Failure to restore possession of Property to Bonded Labourers Abetment to be an Offence Offences to be Tried by Executive Magistrates Cognizance of Offences Offences by Companies Protection of Action Taken in Good Faith Jurisdiction of Civil Courts Barred

19

20 21 22 23 24 25

System of Bonded Labour and its forms: It is outcome of customary obligations, forced labour, beggar or indebtedness under which a debtor agrees to render service. In different parts
25 | P a g e

of the country, it was known by the different names such as Adiyamar, baramasia, basahya, bethu, bhagela, cherumar, garru-galu hari, harwai, holya, jana jeetha, kamiya, khundit-mundit, kuthia, lakhari, munjhi, mat, munish system, nit-majdoor, paleru, paduyal, pannayilal, sagri, sanji, sanjawat, sewak, sewakia, seri, vetti. Who is bonded Labour? According to the definition given in Section 2(g) of the Act, bonded labour means service arising out of loan/debt/advance. It represents the relationship between a creditor and a debtor wherein the debtor undertakes to mortgage his services or the services of any of his family members to the creditor for a specified or unspecified period with or without wages accompanied by denial of choice of alternative avenues of employment, or to deny him freedom of movements, then the person would normally be covered under the definition of a bonded labour. Whom to approach in case of bondage? The aggrieved person or any person on his behalf can approach to the District Magistrate who is chairman of the Vigilance Committee constitute under the Act and has been entrusted with certain duties and responsibilities for implementing the provisions of the Act. Matter can also be brought to the notice of the Sub Divisional Magistrate of the area or any other person who is a member of the Vigilance Committee of District or Subdivision. Relief available to the victim: The bonded labour is to be immediately released from the bondage. His liability to repay bonded debt is deemed to have been extinguished. Freed bonded labour shall not be evicted from his homesteads or other residential premises which he was occupying as part of consideration for the bonded labour. A rehabilitation grant of Rs. 120,000/to each of the bonded labour is to be granted and assistance for his rehabilitation provided. Penalties: The offence under the Act is cognizable and bailable any person who is contravenes provisions of the act is punishable with imprisonment for a term which may extend to three years and also with a fine which may extend to two thousand rupees. W.e.f. 1.5.2000 (Rs. 4000/- from 1978, Rs. 6250/- w.e.f. 1.2.86 & Rs. 10,000/- w.e.f. 1.4.95)

26 | P a g e

The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959

The main purpose of the Act is to provide for the compulsory notification of vacancies to employment exchanges. The employer is required on a compulsory basis, to notify to the Employment Exchanges all vacancies other than vacancies in unskilled categories, temporary vacancies and vacancies proposed to be filled through promotion and tender to the Employment Exchanges, return relating to the staff strengths at regular intervals. The Act extends to the whole of India. Scheme of the Act There are only 10 Sections in total and some of the important Sections are: Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Section 9 Application of the Act: The Act covers the employers in establishments both in public and private sectors. The Act is applicable to establishments which are engaged in non-agricultural activities and employing 25 or more workers. The enforcement of the Act is the responsibility of States and Union
27 | P a g e

Definitions Act not to apply in relation to certain Vacancies Notification of Vacancies to Employment Exchanges Employers to furnish information and returns in prescribed form Right of access to records or documents Penalties Cognizance of Offences Protection of Action taken in good faith

Territories. Most of the States/Union Territories have set up special enforcement machinery for this purpose. Right of Access to Records or Documents: Such officer of the Government as may be prescribed in this behalf, or nay person authorized by him in writing, shall have access to any relevant record or document in the possession of any employer required to furnish any information or returns under Section 5 of this Act. Such officer is also empowered to enter at any reasonable time, any premises where he believes that such record or document to be and inspect and take copies of relevant records or documents or ask any question necessary for obtaining information required under that Section (Section 6). Penalties (Section 7) (1) If any employer fails to notify to the employment exchanges prescribed for the purpose any vacancy in contravention of sub-Section (1) or sub-Section (2) of Section 4, he shall be punishable for the first offence with fine which may extend to five hundred rupees and for every subsequent offence with fine which may extend to one thousand rupees. (2) If any person - (a) required to furnish any information or return - (i) refuses or neglects to furnish such information or return, or (ii) furnishes or causes to be furnished any information or return which he knows to be false, or (iii) refuses to answer, or gives a false answer to, any question necessary for obtaining any information required to be furnished under Section 5; or (b) impedes the right of access to relevant records or documents or the right of entry conferred by Section 6, he shall be punishable for the first offence with fine which may extend to two hundred and fifty rupees and for every subsequent offence with fine which may extend to five hundred rupees.

28 | P a g e

Cognizance of Offences - No prosecution for an offence under this Act shall be instituted except by, or with the sanction of, such officer of Government as may be prescribed in this behalf or any person authorised by that officer in writing (Section 8).

Protection of action taken in good faith - No suit, prosecution or other legal proceedings shall lie against any person for anything which is in good faith done or intended to be done under this Act (Section 9).

Apprentices Act, 1961

The main purpose of the Act is to provide practical training to technically qualified persons in various trades. The objective is promotion of new skilled manpower. The scheme is also extended to engineers and diploma holders. The Act applies to areas and industries as notified by Central government. [Section 1(4)]. Scheme of the Act There are 38 Sections in total and 1 Schedule. This Schedule is about modifications in the Workmens Compensation Act, 1923 w.r.t its application to apprentices under the Apprentices Act, 1961. Obligation of Employer Every employer is under obligation to provide the apprentice with the training in his trade in accordance with the provisions of this Act and the rules made there under. If the employer is not himself qualified in the trade, he has to ensure that a person who possesses the prescribed qualification is placed in charge of the training of the apprentice. Every employer has to provide adequate instructional staff, possessing such qualifications as may be prescribed for imparting practical and theoretical training and facilities for trade test of apprentices; and Every employer is under obligation to take apprentices in prescribed ratio of the skilled workers in his employment in different trades. [Section 11].
29 | P a g e

 In every trade, there will be reserved places for scheduled castes and schedules tribes. [Section 3A]. Ratio of trade apprentices to workers shall be determined by Central Government. Employer can engage more number of apprentices than prescribed minimum. [Section 8(1)]. The employer has to make arrangements for practical training of apprentice [Section 9(1)]. Employer will pay stipends to apprentices at prescribed rates. If the employees are less than 250, 50% of cost is shared by Government. If employer is employing more than 250 workers, he has to bear full cost of training. Obligations of Apprentices: Every trade apprentice undergoing apprenticeship training shall have the following obligations, namely: To learn his trade conscientiously and diligently and endeavour to qualify himself as a skilled craftsman before the expiry of the period of training; To attend practical and instructional classes regularly; To carry out all lawful orders of his employer and superiors in the establishments; and To carry out his obligations under the contract of apprenticeship. In case of graduate or technician apprentice or technician (vocational) apprentice, apart from the aforestated obligations, the Act imposes further obligation to learn his subject in Engineering or Technology or Vocational Course. (Section 12) Who can be an Apprentice - Apprentice should be of minimum age of 14 years and he should satisfy the standard of education and physical fitness as prescribed. [Section 3]. Reservation of training places for scheduled castes: Section 3A provides that in every designated trade, training places shall be reserved by the employer for the Scheduled Castes and Scheduled Tribes (as defined in clauses (24) and (25) of

30 | P a g e

Article 366 of the Constitution) and where there is more than one designated trade in an establishment, such training places shall be reserved on the basis on the total number of apprentices in all the designated trades in such establishment. The reservation shall be such as may be prescribed having regard to the population of the Scheduled Castes and Scheduled Tribes in the State concerned. Duration of Training - Duration of training period and ratio of apprentices to skilled workers for different trades has been prescribed in Apprenticeship Rules, 1991. Duration of Apprenticeship may be from 6 months to 4 years depending on the trade, as prescribed in Rules. Period of training is determined by National Council for training in Vocational Trades (established by Government of India)-(Section 6). Contract with Apprentice Apprentice appointed has to execute a contract of apprenticeship with employer. The contract has to be registered with Apprenticeship Adviser. If apprentice is minor, agreement should be signed by his guardian. [Section 4(1)] Apprentice is entitled to casual leave of 12 days, medical leave of 15 days and extraordinary leave of 10 days in a year. Date of commencement of apprenticeship training: The apprenticeship training shall be deemed to have commenced on the date on which the contract of apprenticeship has been entered into. Registration: The employer shall send the contract to the Apprenticeship adviser for registration within three months of the date on which it was signed (Rule 6). The contract shall be registered by the Apprenticeship Adviser on being satisfied that the person described as an apprentice in the said contract is qualified under this Act. Registration of contract of apprenticeship under Section 4(4) is not a necessary ingredient of definition of apprentice. (Bhaskaran v. KSEB (1986) 1 LLN 869). Payment to apprentices:

31 | P a g e

This is a contractual as well as statutory obligation imposed under Section 13 of the Act that an employer pays to every apprentice during the period of training such stipend at a rate not less than the prescribed minimum rate and this rate will be specified in the contract. An employer shall pay such stipend at such intervals and subject to such conditions as may be prescribed. However, an apprentice shall not be paid on the basis of piece-work nor he shall take part in any output bonus or other incentive scheme. Termination of contract: The contract of apprenticeship training shall terminate on the expiry of the period of apprenticeship training. Either party can make application for termination of contract to the Apprenticeship Adviser and thereafter send a copy of the same to the other party, who on being satisfied that the parties have failed to carry out the terms and conditions of the contract and it is desirable in the interests of the parties or any of them to terminate the contract, shall register the same. However, the employer shall pay the prescribed amount of compensation to the apprentice where the contract is terminated for failure on the part of the employer to honour the contract. Where the contract is terminated for failure on the part of the apprentice, he or his guardian shall refund the cost of the training to the employer. (Section 7) Legal Position of Apprentices - An apprentice is not a workman during apprentice training. [Section 18] Provisions of labour law like Bonus, PF, ESI. Act, gratuity, Industrial Disputes Act etc. are not applicable to him. However, provisions of Factories Act regarding health, safety and welfare will apply to him. Apprentice is also entitled to get compensation from employer for employment injury. [Section 16]. An employer is under no obligation to employ the apprentice after completion of apprenticeship. [Section 22(1)]. However, in UP State Road Transport Corpn v. UP Parivahan Nigam Shishukh Berozgar Sangh AIR 1995 SC 1114 = (1995) 2 SCC 1 , it was held that other things being equal, a trained apprentice should be given preference over direct recruits. It was also held that he need not be sponsored by the employment exchange. Age bar may also be relaxed, to the extent of training period. The concerned institute should maintain a list of persons already trained and in

32 | P a g e

between trained apprentices, preference should be given to those who are senior. same view in UP Rajya Vidyut Parishad v. State of UP 2000 LLR 869 (SC). Stipend payable- The minimum rate of stipend payable per month is as follows - (a) Engineering graduates - Rs 1,970 p.m. for post-institutional training (b) Sandwich course students for degree examination - Rs 1,400 p.m. (c) diploma holders - Rs 1,400 p.m. for postinstitutional training (d) Sandwich course students for degree examination - Rs 1,140 p.m. (e) Vocational certificate holder - Rs 1,090 p.m. [w.e.f. May 2001] In case of 4 year training, the stipend is as follows first year Rs 820 pm. Second year Rs 940 pm. Third year Rs 1,090 pm. Fourth year Rs 1,230 pm. [From May 2001]. Offences And Penalties (Section 30) - (1) If any employer - (a) engages as an apprentice a person who is not qualified for being so engaged, or (b) fails to carry out the terms and conditions of a contract of apprenticeship, or (c) contravenes the provisions of this Act relating to the number of apprentices which he is required to engage under those provisions, he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both. (2) If any employer or any other person - (a) required to furnish any information or return - (i) refuses or neglects to furnish such information or return, or (ii) furnishes or causes to be furnished any information or return which is false and which he either knows or believes to be false or does not believe to be true, or (iii) refuses to answer, or gives a false answer to any question necessary for obtaining any information required to be furnished by him, or (b) refuses or willfully neglects to afford the Central or the State Apprenticeship Adviser or such other person, not below the rank of an Assistant Apprenticeship Adviser, as may be authorised by the Central or the State Apprenticeship Adviser in writing in this behalf any reasonable

33 | P a g e

facility for making any entry, inspection, examination or inquiry authorised by or under this Act, or (c) requires an apprentice to work overtime without the approval of the Apprenticeship Adviser, or (d) employs an apprentice on any work which is not connected with his training, or (e) makes payment to an apprentice on the basis of piecework, or (f) requires an apprentice to take part in any output bonus or incentive scheme, he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both. Penalty where no specific penalty is specified (Section 31) - If any employer or any other person contravenes any provision of this Act for which no punishment is provided in Section 30, he shall be punishable with fine which shall not be less than one thousand rupees but may extend to three thousand rupees.

Offences by Companies (Section 32) - (1) If the person committing an offence under this Act is a company, every person who, at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-Section shall render any such person liable to such punishment provided in this Act if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in sub-Section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any negligence on the part of, any director,
34 | P a g e

manager, secretary or other officer of the company, such director, manager, secretary, or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation: For the purposes of this Section, - (a) "company" means a body corporate and includes a firm or other association of individuals; and (b) "director" in relation to a firm means a partner in the firm.

Cognizance of Offences (Section 33) - No court shall take cognizance of any offence under this Act or the rules made there under except on a complaint thereof in writing made by the Apprenticeship Adviser or the officer of the rank of Deputy Apprenticeship Adviser and above within six months from the date on which the offence is alleged to have been committed.

Employees Provident Fund and Miscellaneous Provisions Act, 1952

Objectives To make provisions for the future of the industrial worker after he retires or for his dependents in the case of his early death. Compulsory Provident Fund Family Pension Deposit linked insurance

Scope and coverage Application to factories and establishments employing 20 or more persons. Can be made applicable by central government to establishments employing less than 20 persons or if the majority of employees agree. Excludes establishments employing 50 or more persons or 20 or more persons but less than 50 persons, until the expiry of three years in the case of the former, and five years in

35 | P a g e

the case of the former, and five years in the case of the latter, from the date of setting up of establishment. Applicable to all persons who are employed directly or indirectly through contractors in any kind of work. Eligibility Employees drawing pay not exceeding Rs. 6,500/- per month.

Schemes framed under the Act The Employees Provident Funds Schemes, 1952; The Employees Pension Scheme, 1995 and The Employees Deposit Linked Insurance Scheme, 1976

Benefits Apart from terminal disbursal of non-refundable withdrawals for Life Insurance Policies House building Medical treatment Marriage Higher education Family pension Retirement-cum-withdrawal benefits Deposit linked insurance Amount equal to the average balance in Provident Fund of deceased subject to a maximum of Rs. 65,000/ As per Preamble to the Act, the EPF Act is enacted to provide for the institution of provident funds, pension fund and deposit lined insurance fund for employees in factories and other establishments. The Employees Provident Funds and Miscellaneous Provisions Act is a social security legislation to provide for provident fund, family pension and insurance to employees.
36 | P a g e

Employee has to pay contribution towards the fund. Employer also pays equal contribution. The employee gets a lump sum amount when he retires, which will be useful to him after retirement. The Act covers three schemes i.e. PF (Provident Fund scheme), FPF (Family Pension Fund scheme) and EDLI (Employees Deposit Linked Insurance scheme). The EPF Act contains basic provisions in respect of applicability, eligibility, damages, appeals, recovery etc. The three schemes formed by Central Government under the Act make provisions in respect of those schemes. Applicability of the Act - The Act applies to (a) Every establishment which is a factory engaged in industry specified in Schedule I to the Act and in which 20 or more persons are employed and (b) any other establishment or class of establishment employing 20 or more persons which may be specified by Central government by notification in official gazette. - - Central Government can also apply provisions of the Act to any establishment even if it employs less than 20 persons. [Section 1(3)]. In RPFC v. T S Hariharan 1971 Lab IC 951 (SC), it was held that temporary workers should not be counted to decide whether the Act would apply. Even if the provisions of PF Act are not applicable in a particular establishment, if employer and majority of employees agree, the Central Provident Fund Commissioner can apply the provisions to that establishment by issuing a notification in Official Gazette. [Section 1(4)]. Once the provisions of Act become applicable, it continues to be applicable even if number of employees fall below 20. [Section 1(5)]. Coverage of Act - The Act has been extended to * Factories * Mines other than coal mines * Hotels and restaurants * Plantation of tea, coffee, rubber [Tea factories in Assam have been excluded vide para 1(3)(a) of EPF Scheme] * Trading and commercial establishments engaged in purchase, sale or storage of goods * Establishments of exporters, importers, advertisers, stock exchanges * Canteens * Establishments of Attorneys, CA, ICWAs, Engineers and Contractors, architects and medical practitioners * Hospitals * Travel agencies * Banks doing business only in one State * General Insurance * Expert services * Clubs and societies rendering services to their members * Agricultural farms * Financial Establishments other than banks * Building and
37 | P a g e

construction Industry * Poultry farming * University, college or schools. - - The Act has been extended w.e.f. 1.4.2001 vide notification dated 22.3.2001, to * courier services * Aircraft or airlines other than aircraft or airline owned or controlled by Government * Establishment engaged in rendering cleaning and sweeping services. Once an establishment is covered under PF, all its departments and branches wherever they are situated are also covered. Other Non-Factory Establishments Covered - Besides factories, other establishments employing 20 or more persons can be covered under the Act u/s 1(3)(b). Various notifications have been issued extending the provisions of PF Act to non-factory establishments. Some major among them are - plantation, mines, coffee, hotels and restaurants, cinema and theatres, trading and commercial establishments, laundry, canteens, establishments of attorneys/CA/

ICWA/engineers/ architects/medical practitioners, hospitals, financial establishments (other than IFCI, UTI, IDBI, SFC), building and construction industry, poultry, university, college, schools, scientific institutions etc. Transitory Provisions when Act is extended - It is possible that when PF Act is extended to certain establishment, some PF scheme may be already in existence. Such scheme will continue and the balance amount in such scheme to credit of the employee will be transferred to the Provident Fund under statutory scheme of PF Act. [Section 15]. Establishment to include all departments and branches - Where an establishment consists of different departments or has branches, whether situate in the same place or in different places, all such departments or branches shall be treated as parts of the same establishment. [Section 2A]. Applicability: The Scheme applies to all the establishments to which the Employees' Provident Fund Scheme applies. Membership:

38 | P a g e

All the members of the Employees' Provident Fund Scheme are covered as members of the Employees' Deposit Linked Insurance Scheme also. Contribution: Under this Scheme, the members do not contribute any amount as contribution. However, the employer pays an amount equal to 0.5% of the total wages paid to the members as contribution. Administrative Charges: As regards Administrative charges, the employer is required to pay an amount equal to 0.01% of the wages subject to a minimum of Rs. 2/- per month. Exemption: (Section 17(2A) of the Act and Para 28 of Employees' Deposit Linked Insurance Scheme, 1976) The provisions are available as per Section 17(2A) of the Act and para 28(1) and 28(4) of the Employees' Deposit Linked Insurance Scheme , 1976 for grant of exemption to an establishment or to an employee or to a class of employees as the case may be, from the operation of all or any of the provisions of the Scheme, where the Life Assurance benefit of the Scheme in the establishment is more beneficial than the benefits provided under the statutory Scheme. Inspection Charges: An employer of an establishment exempted from the provisions of the Employees' Deposit Linked Insurance Scheme is required to pay inspection charges at the rate of 0.005% subject to a minimum of Re.1/- per month. Assurance Benefit: The benefit provided under the Employees' Deposit Linked Insurance Scheme is called Assurance Benefit. On the death of the member while in service, the nominee or any other person entitled to receive the Provident Fund benefits will, in addition to the Provident Fund, receive the Assurance Benefit under Employees' Deposit Linked Insurance Scheme.
39 | P a g e

Scale of Assurance Benefit: From 1-4-93 onwards the amount of Assurance Benefit payable is an amount equal to the average balance in the amount of deceased in the Fund during the preceding 12 months or during the period of his membership whichever is less, except where the average balance exceeds Rs. 25,000/- amount payable shall be Rs. 25,000/- plus 25% of the amount in excess of Rs.25,000/subject to a ceiling of Rs. 65,000/-. The Form prescribed for claiming the Assurance Benefits under the Employees' Deposit Linked Insurance Scheme, 1976, is Form 5(IF). What are the periodical returns to be sent by an employer to the Provident Fund Office? The employer of an un-exempted establishment has to forward the following returns. These returns will include details required under the three schemes namely, Employees Provident Fund Scheme, 1952, Employee Deposit Linked Insurance Scheme,1976 and Employee Pension Scheme, 1995.

a) Form-9(Revised): The details of employees enrolled as members of Employees' Provident FundS'52, Employees' Deposit Linked Insurance'76 & Employees' Pension Scheme'95 on coverage of the establishment- This is to be submitted immediately after coverage, within 15 days of coverage.

b) Form-12A: The details of the contributions recovered form the members & paid along with details of employers' contribution & administrative charges- This is to be submitted monthly by 25th of following month.

c) Form-5: The details of the employees enrolled newly to the Provident Fund- To be submitted along with Form-12A every month within 15 days of the following month.

d) Form-10: The details of the employees leaving service during the month- To be submitted along with
40 | P a g e

form-12A.

e) Challans: The triplicate copy of challans in token of having remitted the Provident Fund dues in the bankto be submitted along with form-12A every month.

f) Form-2(Revised): Nomination form- To be submitted along with form-5/9.

g) Form-3A: The details of wages & contributions in respect of each member, to be prepared financial year wise- To be submitted to the Provident Fund office by 30th of April every year.

h) Form-6A: Yearly consolidated statement of contributions- To be forwarded yearly along with form-3A. It should be ensured that all the form-3A are entered in form-6A, irrespective of whether the form3A was forwarded for the broken period and the total dues as per the form-12A for the whole year agrees with the total of form-6A within 30th April.

i) Form-5A: Return of ownership of the establishment- To be forwarded immediately after coverage & whenever there is a change in the ownership, it has to be intimated with in 15 days of change. j) Specimen signature: Specimen signature of the officer/officers who are authorized to sign the returns/documents relating to Provident Fund forwarded immediately after coverage & whenever there is a change in authorized officer.

41 | P a g e

 The Employees State Insurance Act (ESI Act), 1948

The ESI Act has been passed to provide for certain benefits to employees in case of sickness, maternity and employment injury and to make provisions for related matters. As the name suggests, it is basically an insurance scheme i.e. employee gets benefits if he is sick or disabled. ESIC - Employees State Insurance Corporation (ESIC) has been formed to supervise the scheme under Section 3 of the Act. The Corporation supervises and controls the ESI scheme. No Dismissal or Punishment During Period of Sickness - Section 73 of the Act provides that no employer shall dismiss, discharge or reduce or otherwise punish an employee during the period employee is in receipt of sickness benefit or maternity benefit. He also cannot dismiss, discharge or otherwise punish employee when he is in receipt of disablement benefit or is under medical treatment or is absent from work due to sickness. This gives protection to employee when he is in receipt of sickness benefit or maternity benefit. Employer cannot take disciplinary action against employee in such cases. This provision is grossly misused by employees. However, in Buckingham & Carnatic Co v. Venkatayya - AIR 1964 SC 1272 = 1963(7) FLR 343 = (1964) 4 SCR 265 = (1963) 2 LLJ 638 = 25 FJR 25 (SC), it was rightly held that this provision (of Section 73) is applicable only in case of punitive action for all kinds of misconduct during which employee has received sickness benefits. This protection is not applicable in case of abandonment of employment or when termination is automatic as per contract. followed in Rajveer Singh v. Judge 1996 LLR 61 (Raj HC), where it was hold that provisions of Section 73 are not applicable when termination of an employee is automatic. Applicability of ESI Scheme - The scheme is applicable to all factories. [Section 1(4)]. The Appropriate Government can also make it applicable to any other industrial, commercial, agricultural or other establishments, by issuing notification and giving 6 month notice. [Section 1(5)].

42 | P a g e

Regional Offices / Branch Offices Get Covered - Regional offices of a factory, which have their connection to the factory and where the Principal Employer has control over the regional offices, the regional offices will be covered under ESIC - Hyderabad Asbestos Cement Products v. ESIC - AIR 1978 SC 356 = (1978) 2 SCR 345 = (1978) 1 SCC 194. If head office is covered under ESIC, branch offices are also covered when branch and principal office are interdependent and there is unity of relationship. - Transport Corporation of India v. ESIC 1999(7) SCALE 63 = 2000 LLR 113 = 83 FLR 970 = 1999 AIR SCW 4340 = AIR 2000 SC 238 (SC 3 member bench). Definition of factory as per ESI Act - The Factory means any premises where manufacturing process is carried out. If manufacture is without aid of power, the Act is applicable if persons employed are at least 20. If manufacture is with aid of power, the Act applies if persons employed are at least 10. [Section 2(12)]. - - However, mines have been excluded. - Manufacturing process has same meaning as defined under Factories Act. [Section 2(14AA)]. One a factory or establishment is covered, it continues to be covered even if number of employees reduce. [Section 1(6)] Construction Workers Not Covered Construction workers employed in construction activities are not covered under ESIC. ESIC circular No. P-12(11)-11/27/99 Ins.IV dated 14-61999. - - However, if administrative office employs 20 or more eligible employees, that establishment and employees working in administrative office will be covered. Employer under ESI Act Principal Employer means * owner or occupier of factory * Head of department in case of Government department and * Person responsible for supervision and control, in case of any other establishment. [Section 2(17)]. - - Employees working though contractor are also covered. Contractor is termed as Immediate Employer. Immediate employer means a person who has undertaken the execution, on the premises of factory or establishment to which this Act applies. He may do on his own or under the supervision of Principal Employer. The work should be part of work of factory or establishment of principal employer or is preliminary or incidental to the work of factory or establishment. [Section 2(13)].

43 | P a g e

Primary liability of ESI contribution is of Principal Employer. [Section 40(1)]. He can recover the contribution paid by him from the immediate employer i.e. contractor. [Section 41]. Employee under ESI Act - Employee means any person employed for wages in or in connection with work of a factory or establishment to which the ESI Act applies. Earlier employees drawing wages upto Rs. 6,500 per month were covered under the ESI Act scheme. [Section 2(9)]. However, w.e.f 1st April 2004, this wage ceiling has been increased to Rs. 7,500 per month. Employees include * persons employed through contractor * Apprentices other than those covered under Apprentices Act * Persons employed in administration office, department or branch for purchase or sale of products. * Casual workers engaged in work incidental to or connected with work of factory or establishment * Employees working at head office when factory is located at different place * Canteen staff, watch and ward staff are employees * Staff in hospital attached to factory are employees. - - Members of Indian Naval, Military or Air Forces are excluded. Following are not Employees - * Persons drawing wages over Rs. 7,500 per month * member of Army, Navy or Air Force. * Partners of firm are not employees even if they are drawing wages - RD, ESIC v. Ramanuja Match Industry AIR 1985 SC 278 = 1985(1) SCC 218 = 1998(6) SCALE 38 * Persons employed in Government establishments. * construction workers engaged in raising additional building subsequent to initial set up of factory. Contribution to ESIC Fund - Both employee and employer have to make contribution to ESIC. The employer has to deduct contribution from wages of employee and pay to ESIC both the employers contribution as well as employees contribution. [Section 39(1)]. The contribution is payable for wage period i.e. the period in respect of which wages are payable to employee. [Section 39(2)]. Normally, wage period is a month. The employees contribution is 1.75% of wages. It should be rounded off to next 5 paise. Employees contribution is not payable when daily wages are below Rs 15/-.

44 | P a g e

Employers contribution is 4.75% of total wage bill of all employees in respect of every wage period. Thus, it is not necessary to calculate employer's contribution separately for each employee. 4.75% of gross wages should be calculated and rounded off to next 5 paise. Employees drawing wages lower than Rs 25 per day do not have to pay employee's share. The contribution has to be paid within 21 days from close of the month. It is payable by a challan in authorised bank. - - If the contribution is not paid in time, interest @ 12% is payable. [Section 39(5)(a)]. In addition, ESIC authorities can impose damages varying between 5% to 25% of arrears of contribution u/s 85B. Employer cannot deduct employers contribution from the salary of employee. [Section 40(3)]. Liability of Principal Employer In case of employees of contractor, liability is of Principal Employer. In Britannia Industries v. ESIC (2001) 98 FJR 520 (Mad HC), it was held that Principal Employer will be liable to penalty and damages also if contribution is not paid on due date. same view in Padmini Products v. ESIC 2000(2) Kar LJ 369 (Karn HC). Wage for purpose of ESI Act - Wages means all remuneration paid or payable in cash to employee according to terms of contract of employment and includes any payment made to an employee in respect of period of authorised leave, lock-out, lay-off, strike which is not illegal and other additional remuneration paid at interval not exceeding two months. It does not include * contribution paid by employer to any pension fund or provident fund * Travelling allowance * Reimbursement of expenses made by nature of employment of the employee * gratuity. [Section 2(22)]. Thus, wages include basic pay, dearness allowance, city compensatory allowance, payment of day of rest, overtime wages, house rent allowance, incentive allowance, attendance bonus, meal allowance and incentive bonus. However, wages do not include annual bonus, unilateral rewards scheme (inam), ex gratia payments made every quarter or every year travelling allowance, retrenchment compensation, encashment of leave and gratuity.

45 | P a g e

Contribution period and Benefit period - Contribution period is (a) 1st September to 31st March (b) 1st April to 30th September. The corresponding benefit period is (a) following 1st July to 31st December (b) following 1st January to 30th June. Thus, benefit period starts three months after the contribution period is over. The relevance of this definition is that sickness benefit and maternity benefit is available only during benefit period. Thus, an employee gets these benefits only after 9 months after joining employment and paying contribution. However, other benefits are available during contribution period also. Benefits to employees covered under ESI Act - An employee is entitled to get benefits which are medical benefits as well as cash benefits. He also can get disablement benefit. The Employees State Insurance Corporation, ESIC, has on the 15th of June06, taken a historic decision to takeover the ESI scheme in the States subject to the willingness of the State Governments. The decision was taken at the 136th meeting of the ESI Corporation held under the chairmanship of the former Labour and Employment Minister, Shri Chandrasekhar Rao.

Payment of Gratuity Act, 1972

Gratuity is a lump sum payment to employee when he retires or leaves service. It is basically a retirement benefit to an employee so that he can live life comfortably after retirement. However, under Gratuity Act, gratuity is payable even to an employee who resigns after completing at least 5 years of service. In DTC Retired Employees v. Delhi Transport Corporation 2001(4) SCALE 30 = 2001 AIR SCW 2005, it was observed that gratuity is essentially a retiring benefit which as per Statute has been made applicable on voluntary resignation as well. Gratuity is reward for good, efficient and faithful service rendered for a considerable period. ACT PROVIDES FOR MINIMUM GRATUITY ONLY The Gratuity Act provides only for minimum gratuity payable. If employee has right to receive higher gratuity under a contract or under an award, the employee is entitled to get higher gratuity. [Section 4(5)].

46 | P a g e

Employers liable under the scheme - The Act applies to every factory, mine, plantation, port, and railway company. It also applies to every shop and establishment where 10 or more persons are employed or were employed on any day in preceding 12 months. [Section1(3)]. Since the Act is also applicable to all shops and establishments, it will apply to motor transport undertakings, clubs, chambers of commerce and associations, local bodies, solicitors offices etc. , if they are employing 10 or more persons. Employees eligible for gratuity Employee means any person (other than apprentice) employed on wages in any establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi-skilled or unskilled, manual, supervisory, technical or clerical work, whether terms of such employment are express or implied, and whether such person is employed in a managerial or administrative capacity. However, it does not include any Central/State Government employee. [Section 2(e)]. Thus, the Act is applicable to all employees - workers as well as persons employed in administrative and managerial capacity. Gratuity is payable to a person on (a) resignation (b) termination on account of death or disablement due to accident or disease (c) retirement (d) death. Normally, gratuity is payable only after an employee completes five years of continuous service. In case of death and disablement, the condition of minimum 5 years service is not applicable. [Section 4(1)]. The Act is applicable to all employees, irrespective of the salary. Amount of gratuity payable - Gratuity is payable @ 15 days wages for every year of completed service. In the last year of service, if the employee has completed more than 6 months, it will be treated as full year for purpose of gratuity. - - In case of seasonal establishment, gratuity is payable @ 7 days wages for each season. [Section 4(2)]. MAXIMUM GRATUITY PAYABLE Maximum gratuity payable is Rs 4 lakhs. [Section 4(3)]. [Of course, employer can pay more. Employee has also right to get more if obtainable under an award or contract with employer, as made clear in Section 4(5)].

47 | P a g e

INCOME-TAX EXEMPTION - Gratuity received upto Rs. 3.50 lakhs is exempt from Income Tax. Gratuity paid above that limit is taxable. [Section 10(10) of Income Tax Act]. - - However, employee can claim relief u/s 89 in respect of the excess amount. Gratuity cannot be attached - Gratuity payable cannot be attached in execution of any decree or order of any civil, revenue or criminal court, as per Section 13 of the Act.

Payment of Bonus Act, 1965

The term bonus has not been defined in the Payment of Bonus Act, 1965. Websters International Dictionary, defines bonus as something given in addition to what is ordinarily received by or strictly due to the recipient. The Oxford Concise Dictionary defines it as something to the good into the bargain (and as an example) gratuity to workmen beyond their wages. L.A.T Formula regarding payment of bonus: A dispute relating to payment of bonus by the Cotton Mills of Bombay was decided by the Industrial Court, Bombay. An appeal against the award of the Industrial Court was considered by the Full Bench of the then Labour Appellate Tribunal (Mill Owners Association, Bombay v. Rashtriya Mill Mazdur Sangh, Bombay, 1959 II LLJ 1247). In its decision, the LAT laid down the principles involved in the grant of bonus to workers. These principles are known as the LAT Formula. According to the formula, the following prior charges were to be deducted from gross profits: 1. 2. 3. 4. Provision for depreciation; Reserve for rehabilitation; Return of 6 per cent on the paid up capital; and Return on the working capital at a lower rate than the return on paid-up capital.

The balance, if any, was called available surplus and the workmen were to be awarded a reasonable share out of it by way of bonus for the year.

48 | P a g e

The Act is applicable to (a) any factory employing 10 or more persons where any processing is carried out with aid of power (b) Other establishments (established for purpose of profit) employing 20 or more persons. Minimum bonus payable is 8.33% and maximum is 20%. Bonus is payable annually within 8 months from close of accounting year. Bonus is payable to all employees whose salary or wages do not exceed Rs 3,500 per month provided they have worked for at least 30 days in the accounting year. However, for calculation of bonus, maximum salary of Rs 2,500 is considered. Establishments to which the Act is applicable - The Act applies to (a) every factory; and (b) every other establishment in which twenty or more persons are employed on any day during an accounting year. [section 1(3)]. Act not to apply to certain classes of employees: Section 32 of the Act provides that the Act shall not apply to the following classes of employees: 1. Employees employed by any insurer carrying on general insurance business and the

employees employed by the Life Insurance Corporation of India; 2. 3. Seamen as defined in clause (42) of Section 3 of the Merchant Shipping Act, 1958; Employees registered or listed under any scheme made under the Dock Workers

(Regulation of Employment) Act, 1948 and employed by registered or listed employers; 4. Employees employed by an establishment engaged in any industry called on by or

under the authority of any department of Central Government or a State Government or a local authority; 5. a) Employees employed by: The Indian Red Cross Society or any other institution of a like nature

including its branches; b) c) Universities and other educational institutions; Institutions (including hospitals, chambers of commerce and social welfare

institutions) established not for the purpose of profit; 6. 7. Employees employed through contractors on building operations; Employees employed by the Reserve Bank of India;

49 | P a g e

8. a) b)

Employees employed by: The Industrial Finance Corporation of India; Any Financial Corporation established under Section 3, or any Joint Financial

Corporation established under Section 3A of the State Financial Corporations Act, 1961; c) d) e) f) fa) The Deposit Insurance Corporation; The National Bank for Agriculture and Rural Development; The Unit Trust of India; The Industrial Development Bank of India; The Small Industries Development Bank of India established under Section 3 of the

Small Industries Development Bank of India Act, 1989; fb) The National Housing Bank; Any other financial institution (other than Banking Company) being an establishment in public sector, which the Central Government may by notification specify having regard to (i) its capital structure; (ii) its objectives and the nature of its activities; (iii) the nature and extent of financial assistance or any other concession given to it by the Government; and (iv) any other relevant factor. Apart from the above, the appropriate Government has necessary powers under Section 36 to exempt any establishment or class of establishments from all or any of the provisions of the Act for a specified period having regard to its financial position and other relevant circumstances and it is of the opinion that it will not be in the public interest to apply all or any of the provisions of this Act thereto. It may also impose such conditions while according the exemptions as it may consider fit to impose. Important Definitions: Accounting Year Accounting Year means-

50 | P a g e

1.

In relation to a corporation, the year ending on the day on which the books

and accounts of the corporation are to be closed and balances; 2. In relation to a company, the period in respect of which any profit and loss

account of the company laid before it in annual general meeting is made up; 3. (a) (b) In any other casethe year commencing on the 1st day of April; or if the accounts of an establishment maintained by the employer thereof are

closed and balances on any day other than the 31st day of March, then, at the option of the employer, the year ending on the day on which its accounts are so closed and balanced. Provided that an option once executed by the employer under paragraph (b) of this sub-clause shall not again be exercised except with the previous permission in writing of the prescribed authority and upon such conditions as that authority may think fit. [Section 2(1)] Award: Award means an interim or a final determination of any industrial dispute or of any question relating thereto by any Labour Court, Industrial Tribunal or National Tribunal constituted under the Industrial Disputes Act, 1947 or by any other authority constituted under any corresponding law relating to investigation and settlement of industrial disputes in force in a State and includes an arbitration award made under Section 10A of that Act or under that law [Section 2(7)]. Establishment in Private Sector: It means any establishment other than an establishment in public sector.[Section 2(15)] Salary or Wages: The Salary or Wage means all remuneration (other than remuneration in respect of over-time work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance (that is to say, all cash

51 | P a g e

payments, by whatever name called, paid to an employee on account of a rise in the cost of living) but does not include: 1. 2. any other allowance which the employee is for the time being entitled to; the value of any house accommodation or of supply of light, water, medical attendance or

any other amenity or of any service or of any concessional supply of foodgrains or other articles; 3. 4. 5. any traveling 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; 6. any retrenchment compensation or any gratuity or other retirement benefit payable to the

employee or any ex-gratia payment made to him; 7. any commission payable to the employee [Section 2(21)]

Factory has same meaning as per Factories Act. [section 2(17) of Bonus Act]. The words used are number of persons employed. Hence, all persons employed are to be considered, including those who are not eligible for bonus. Thus, all employees including those, whose salary or wages exceed Rs 3,500 per annum will have to be considered for purpose of deciding eligibility. MEANING OF ESTABLISHMENT - The word establishment is not defined in the Act. Normally, establishment is a permanently fixed place for business. The term establishment is much wider than factory. It covers any office or fixed place where business is carried out. DUTIES / RIGHTS OF EMPLOYER

DUTIES To calculate and pay the annual bonus as required under the Act To submit an annul return of bonus paid to employees during the year, in Form D, to the

Inspector, within 30 days of the expiry of the time limit specified for payment of bonus.
52 | P a g e

To co-operate with the Inspector, produce before him the registers/records maintained,

and such other information as may be required by them. To get his account audited as per the directions of a Labour Court/Tribunal or of any such

other authority. RIGHTS An employer has the following rights: Right to forfeit bonus of an employee, who has been dismissed from service for fraud,

riotous or violent behaviour, or theft, misappropriation or sabotage of any property of the establishment. Right to make permissible deductions from the bonus payable to an employee, such as,

festival/interim bonus paid and financial loss caused by misconduct of the employee. Right to refer any disputes relating to application or interpretation of any provision of the

Act, to the Labour Court or Labour Tribunal.

Payment of Wages Act, 1936

Objectives To ensure regular and prompt payment of wages and to prevent the exploitation of a

wage earner by prohibiting arbitrary fines and deductions from his wages. Applicability of the Act Application for payment of wages to persons employed in any factory. Not applicable to wages which average Rs 6,500 per month or more. Wages include all remuneration, bonus, or sums payable for termination of service, but

do not include house rent reimbursement, light vehicle charges, medical expenses, TA, etc. Important provisions of the Act Responsibility of the employer for payment of wages and fixing the wage period.

53 | P a g e

Procedures and time period in wage payment. Payment of wages to discharged workers. Obligations and rights of employers. Obligations and rights of employees.

The Act is to regulate payment of wages to certain class of employed persons. The main purpose of this Act is to ensure regular and timely payment of wages to the employed persons, to prevent unauthorized deductions being made from wages and arbitrary fines being imposed on the employed persons. The Act extends to the whole of India. Application of the Act: The Act applies to payment of wages to persons employed in factory or railways. It also applies to any industrial or other establishment specified in Section 2(ii). [Section 1(4)]. Factory means factory as defined in Section 2(m) of Factories Act. - - Industrial or other establishment specified in Section 2(ii) are - * Tramway or motor transport services * Air transport services * Dock wharf or jetty * Inland vessels * Mines, quarry or oil-field * Plantation * Workshop in which articles are produces, adopted or manufactured. - - The Act can be extended to other establishment by State/Central Government. Presently, the Act applies to employees drawing wages upto Rs 6,500. [Section 1(6)]. Every employer is responsible for payment to persons employed by him on wages. [Section 3]. MEANING OF WAGES - Wages means all remuneration expressed in terms of money and include remuneration payable under any award or settlement, overtime wages, wages for holiday and any sum payable on termination of employment. However, it does not include bonus which does not form part of remuneration payable, value of house accommodation, contribution to PF, traveling allowance or gratuity. [Section 2(vi)] HOW WAGES SHOULD BE PAID - Wages can be paid on daily, weekly, fortnightly or monthly basis, but wage period cannot be more than a month. [Section 4]. Wages should paid on a working day. Wages are payable on or before 7th day after the wage period. In case of
54 | P a g e

factories employing more than 1,000 workers, wages can be paid on or before 10th day after wage period is over. [Section 5(1)]. [Normally, wage period is a month. Thus, normally, wages should be paid by 7th of following month and by 10th if the number of employees are 1,000 or more]. - - Wages should be paid in coins and currency notes. However, with

authorisation from employee, it can be paid by cheque or by crediting in his bank account. [Section 6]. DEDUCTIONS PERMISSIBLE - Deduction on account of absence of duty, fines, house accommodation if provided, recovery of advance, loans given, income tax, provident fund, ESI contribution, LIC premium, amenities provided, deduction by order of Court etc. is permitted. Maximum deduction can be 50%. However, maximum deduction upto 75% is permissible if deduction is partly made for payment to cooperative society. [Section 7]. FINES Specific notice specifying acts and omissions for which fine can be imposed should be exhibited on notice board etc. Such notice can be issued only after obtaining specific approval from State Government. Fine can be imposed only after giving employee a personal hearing. Fine can be maximum 3% of wages in a month. Fine cannot be recovered in instalments. [Section 8].

55 | P a g e

Labour Law Concession

Labour Laws and SSI
The Government of India has made several attempts to revamp, relax and simplify labour laws relating to Small Scale Industries. One of them is the simplification procedure envisaged by the Labour Act enacted in 1988 to assist the small establishments. The Act, namely "Labour Laws (exemption from furnishing returns and maintaining registers by certain establishment) Act, 1988" covers labour related acts and thus provides:

Establishment employing 10-19 persons is required to maintain only 3 register and to submit an annual core return only.

Establishment employing less than 10 persons to maintain only 1 register and submit only an annual core return.

Only one Inspector will be responsible for various labour laws, except in case of Factory Act and Boiler Act.

The Labour Policies for Small Scale Industries is governed by comprehensive laws. The following laws and policies are applicable for Small Scale Industries in India: 1. Apprentices Act, 1961 2. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966 3. Bonded Labour System (Abolition) Act, 1976 4. Child Labour (Prohibition & Regulation) Act, 1986 5. The Children (Pledging of Labour) Act, 1933 6. The Contract Labour (Regulation & Abolition) Act, 1970 7. The Employees Provident Funds and Misc. Provisions Act, 1952 8. Employees State Insurance Act, 1948 9. Employers Liability Act, 1938 10. Employment Exchange (Compulsory Notification of Vacancies) Act, 1959 11. Equal Remuneration Act, 1976 12. The Factories Act, 1948 13. The Industrial Disputes Act
56 | P a g e

14. The Industrial Employment (Standing Orders) Act,1946 15. The Inter-state Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 16. Labour Laws (Exemption from Furnishing Returns & Maintaining Registers by Certain Establishments) Act, 1988 17. Maternity Benefit Act, 1961 18. The Minimum Wages Act, 1948 19. The Payment of Bonus Act, 1965 20. The Payment of Gratuity Act, 1972 21. The Payment of Wages Act, 1936 22. The Sales Promotion Employees (Conditions of Service) Act, 1976 23. The Shops and Establishments Act, 1953 24. The Trade Union Act, 1926 25. Workmens Compensation Act, 1923 26. The Weekly Holidays Act, 1942 27. The Plantation Labour Act, 1951 The Small Industries Development Organization under the Ministry of Small Scale Industries plays the role of a nodal agency for the development of small industries in India. This agency has identified the labour reforms carried out by various State Governments which are as under: Andhra Pradesh ORDER/NOTIFICATION/DATE Labour Laws G.O. Ms.No.33 Dt.5-7-99 Amendment notified vide Andhra Pradesh Gazette No.30 SUBJECT Amendment to labor Enactments

Amendment to the provisions of State Act shall apply to every industrial establishment where in 50 or more workmen are employed on any day of the preceding Twelve months.

57 | P a g e

G.O Ms.No.34 Dt.5-7-1999

Factories Act, 1948

Exempting establishments engaged in manufacturing processes from the rules 4, 5, & 6 under the Factories Act 1948 G.O Ms.No.37 Dt.3-8-1999 Exemption from rule 22,23 and 29 under Factories Act 1948 And under ANDHRA PRADESH SHOPS AND ESTABLISHMENTS ACT - for those engaged in manufacturing processes (relate to national holidays and other festivals) G.O Ms .No.38 Dt.3-8-1999 Amendment to the ANDHRAPRADESH PAYMENT OF GRATUITY RULES 1972 and omitting rule 32 from U Substitution of the words "employee nominee" in place of employees. G.O Ms .No.34 Dt.5-7-1999 Amendment 6-A:Manufacturing process: Nothing in rules

to the ANDHRA PRADESH FACTORIES 4,5,and 6 shall apply to a factory under the Factories AND ESTABLISHMENTS (NATIONAL Act 1948 (Central Act 63 of 1948) or an FESTIVALS & OTHER HOLIDAYS) RULES, 1974 establishment in manufacturing process as designated in section 2(k) of the Factories Act,1948. Uttar Pradesh ORDER/NOTIFICATION Notification No.432/6-PR, Kanpur, Dt. 10-8-2000 The Factories Act, 1948

SUBJECT Labour Laws:

Section 92

There should be a classification of offences/violations depending upon their

58 | P a g e

seriousness. The punishment provided should be commensurate to the seriousness of the violation. U.P. Factories Rules, 1950

Rule 7 Registration and Grant of License

It is suggested that there is an urgent need to move toward long period licensing so that Entrepreneurs do not have to face problems of annual renewals.

U.P. Industrial Disputes Act, 1947

Section 2(F) Retrenchment

The utility of the UP Industrial Disputes Act, 1947 is no more; therefore it should be repealed. If such repealment is not considered proper, Section 2(bb) and 2(c) be added to Section 2 (s) of the UP ID Act, 1947.

Section 2(bb) relates to termination of the service of the workmen as a result of nonrenewal of the contract of employment.

Section 2(c) relates to termination of the service of the workmen on the ground of continued ill-health.

Section 6 (B) Settlement outside conciliation proceedings

It is suggested that Section 18(3) of the Industrial Disputes Act, 1947 be substituted in place of Section 6 B.
59 | P a g e

Section 18(3) relates to a settlement arrived at in the course of conciliation proceedings under this Act.

Minimum Wages Act, 1958

Section 3 fixing of Minimum Rates of Wages

It is suggested that 23 categories of employment in Part I of the Schedule and Employment in Agriculture of Part II are excessive categories. It should be limited to two categories: skilled and unskilled workers.

Trade Unions Act, 1926

Section 22 relating to proportion of officers to be connected with the Industry.

It is suggested that not less than 3/4th of the total number of office bearers be substituted to one half of the total number of Section 22.

Contract Labour (Regulation and Abolition Act, 1970)

Section 10 prohibition of employment of Contract Labour

It is suggested that Exemption under the Contract Labour Act to export oriented shall be granted by the appropriate Government in Time Bound Schedule. So that Export Oriented Units can fulfil the

60 | P a g e

export in the scheduled time. G O Dt. 3-3-1994 (Labour Department) Approval of Plants of the Non-hazardous factories (Delegation of Power to Industries Department Officers).

It was issued by Labour Department for one year on experimental basis. It is suggested that the validity of this GO be extended permanently.

Labour Laws and SEZ

The Government of India has offered a number of incentives both monetary as well as non-monetary to the units operating in SEZ. In order to create a conducive business environment in which the entrepreneurs and enterprises have complete freedom to conduct their business operations and to remain globally competitive, State Governments have been empowered to amend the Labour Laws according to their requirements. The following are some of the changes brought in by State Governments with respect to Labour Law Regulations: 1. The powers of the Labour Commissioner are delegated to the designated Development Commissioner or other authority in respect of the area within the SEZs. 2. Modalities have been devised for the grant of various permissions required from the Labour Commissioner within the SEZs themselves through the stationing of exclusive personnel for the purpose or through other means so that clearances relating to various labour laws can be provided at a single point in the SEZs. 3. Except in emergent circumstances, the prior permission of the Development Commissioner or other designated authority of the SEZs would be required for the conduct of inspections of these agencies of industrial units and other establishments within the SEZs. 4. The Powers of the Chief Inspector of Factories & Boilers are delegated to the designated Development Commissioner or other authority in respect of the area within the SEZs.

61 | P a g e

5. Modalities have been devised for grant of various permissions required from the Chief Inspector of Factories & Boilers within the SEZs themselves through the stationing of exclusive personnel for the purpose or through other means so that clearances relating to various labour laws can be provided at a single point in the SEZs. 6. Except in emergent circumstances, the prior permission of the Development Commissioner or other designated authority of the SEZs would be required for the conduct of inspections by these agencies of industrial units and other establishments within the SEZs. 7. All industrial units and other establishments in the SEZs area declared as Public Utility Service under the provisions of the Industrial Disputes Act. 8. Subject to the State Legislature approval and Government of Indias assent, amendments shall be proposed to the Industrial Disputes Act. The proposed amendments include, inter-alia, limiting the applicability of Chapter VB to industries employing 300 or more workmen, etc. Similarly, the Contract Labour (Regulation & Abolition) act is proposed to be amended to exclude certain peripheral service activities. Incase it is not found feasible to amend these statues as proposed, similar amendments will be proposed only for units and establishments within the SEZs. 9. Several provisions of Industrial Disputes Act and Factories Act have been identified which have created unnecessary hindrances in the smooth functioning of the SEZs. The State Governments have resolved to do away with those provisions or simplify them. 10. Apart from this, the State Governments are also empowered to get the inspection done by some external agency regarding the health and safety aspects of the labourers working in the units of the SEZ. 11. Many State Governments have notified have a single reporting format for SEZ units which would cover all the applicable labour laws.

62 | P a g e

Judicial facility for any labour dispute

Judicial System in India
The judicial system in India is quite well-established and independent. The Supreme Court of India in New Delhi is the highest Court of Appeal. Each State has a High Court along with subsidiary District Courts, which enforce the rule of law and ensure fundamental rights of citizens, guaranteed by the Constitution of India.

India has a three-tier court system with a typical Indian litigation starting from a District Court and reaching its logical conclusion in the Supreme Court of India. The High Courts along with the various State level forums, situated mostly in the State capitals, constitute the middle rung of this three-tier system. District level courts are the courts of first instance in dispute resolution except in cases where they are prevented from being so by virtue of lack of pecuniary jurisdiction. Cases involving violation of fundamental rights are filed in respective High Court or Supreme Court.

A number of special courts and tribunals have been constituted in India to deal with specific disputes: 1. Tax Tribunals 2. Consumer Dispute Redressal Forums 3. Insurance Regulatory Authority of India 4. Industrial Tribunals 5. Debts Recovery Tribunals 6. Company Law Board 7. Motor Accidents Claims Tribunals 8. Labour Courts

Where to file?
Most of the labour disputes are referred to the Labour Courts/Industrial Tribunals through the Department of Labour under the respective State Government. The process for labour dispute

63 | P a g e

starts with filing of a petition before Labour Conciliation Officer and in case no compromise is possible, the said officer sends a failure report to the Government. After consideration of the said report, the Government may send a reference to the Labour Court/Industrial Tribunal. In certain matters, the labour dispute can be directly filed in the court concerned.

Labour Courts These courts are found in every district and they form the courts of original jurisdiction under which various labour laws and rules are enforced.

Appellate Labour Courts These courts hear only the Appeals and revisions originating from the judgements and orders of the subordinate original labour courts and officers, under the provisions of various labour and related laws.

a) When an industrial dispute has been referred to a Labour Court for adjudication, it is the duty of the Labour Court to (i) (ii) Hold proceedings expeditiously, and To submit its award to the appropriate Government soon after the conclusion of the proceedings. b) However, no deadline has been laid down with respect to the time within which the completion of proceedings has to be done. Nonetheless, it is expected that these Courts hold their proceedings without getting into the technicalities of a Civil Court. c) It has been held that the provisions of Article 137 of the Limitation Act do not apply to reference of disputes to the Labour Courts. These Courts can change the relief granted by refusing payment of back wages or directing payment of past wages too. Court Fee No Court fee is payable on the petitions filed before Labour Courts and Industrial Tribunals.

What matters fall within the jurisdiction of Industrial Tribunals?

1. Wages, including the period and mode of payment
64 | P a g e

2. Compensatory and other allowances 3. Hours of work and rest intervals 4. Leave with wages and holidays 5. Bonus, profit sharing, provident fund and gratuity 6. Shift working otherwise than in accordance with standing orders 7. Classification by grades 8. Rules of discipline 9. Retrenchment of workmen and closure of establishment

What matters fall within the Jurisdiction of Labour Courts?

1. The propriety or legality of an order passed by an employer under the standing orders 2. The application and interpretation of standing order 3. Discharge or dismissal of workmen including re-instatement of, or grant of relief to, workmen wrongfully dismissed. 4. Withdrawal of any customary concession or privilege 5. Illegality or otherwise of a strike or lock-out; and 6. All matters other than those being referred to Industrial Tribunals.

Stages of adjudication in labour or industrial disputes

The first is receiving a reference from the appropriate Government or filing of the labour dispute in the Labour Court. The next step is sending notice to the Management and after filing of the response by them, the matter is fixed for adjudication. The fourth step is recording the evidence of the parties and hearing the arguments. It is appropriate to mention here that advocates cannot appear in Labour Courts/Industrial Tribunals, unless permitted.
65 | P a g e

The final conclusion of the dispute After hearing the parties, the Labour Court/Industrial Tribunal decides the dispute and the said final decision is called an Award. A copy of the award is to be published by the Labour Department as per rules. Copies of the same are also sent to the parties concerned. Execution of Awards In case the management does not comply with the terms of the award, the workman may pray for its execution by moving an application before the concerned Conciliation Officer.

Mediation in Labour Disputes

Mediation is an exercise of resolving a dispute by settlement with the help of a Mediator who is a neutral third party. The mediator may be: a) b) An Advocate c) An otherwise trained professional When a sitting judicial officer acts as a mediator in a case, his services are available free of cost and without any other charges on any of the parties. Role of the Mediator A mediator helps the parties in arriving at an amicable solution through negotiation. He facilitates the parties in reaching a mutually acceptable agreement. The parties need not agree to the terms of settlement, if they are not satisfied. Judges and arbitrators make decisions that are imposed on parties but a mediator helps the parties to evaluate the probable outcome of a dispute and then leads them to an acceptable settlement. Process of Mediation A mediator meets both the parties in a joint mediation session. The initial meeting provides for:

66 | P a g e

a) An introduction to the participants and the mediation process. b) An opportunity to discuss issues affecting settlement that are important for the mediator to know. c) An opportunity to determine what information would be helpful for the mediator to have at or in advance of the mediation. The joint session provides an opportunity for each participant, either directly or through counsel, to express their view of the case to the other participants and how they would like to approach settlement. The opening statements are intended to begin the settlement process, not to be adversarial or a restatement of positions. MEDIATION PROCEDURE Formal procedures as in a Court or arbitration are completely absent in mediation proceedings. Both parties and their advocates participate freely without any set procedures or any rules of evidence. In these private meetings, the mediator often assists parties to prioritize their interest and options for settlement and to assess the relative strengths and weaknesses of their positions. Once a settlement is reached, the mediator records it with the signatures of the parties.

Some important points in the Mediation Process a) All mediation proceedings are confidential. Documents generated for the mediation are also confidential and may not be introduced during a subsequent trial should the case not settle. b) Counsel and parties with settlement authority must attend mediation sessions. Certain exceptions may be granted for institutional parties or if a party is a unit of government. c) Unless the presiding judge indicates otherwise, referral of a case to mediation does not stay other proceedings in the case or alter applicable litigation deadlines. A judicial officer may, while referring a case to mediation, fix a time limit for completing the mediation process.

Advantages of Mediation Method for Dispute Resolution

67 | P a g e

(i) Procedures more satisfying results a) Helps settle all or part of the dispute much sooner than regular trial. b) Permits a mutually acceptable solution that a court would not have the power to order. c) Saves time and money d) Preserve ongoing business or personal relationships e) Increases satisfaction and thus results in a greater likelihood of a lasting resolution.

(ii) Allows more flexibility, control and participation a) Tailors the procedures used to seek a resolution b) Broadens the interests taken into consideration c) Fashions a business-driven or other creative solution that may not be available from the court. d) Protects confidentiality e) Eliminates the risks of litigation

(iii) Enables a better understanding of the case a) Provides an opportunity for clients to communicate their views directly and informally b) Helps parties get to the core of the case and identify the disputed issues. c) Helps parties agree to exchange key information directly.

(iv) Improves case management Narrows the issues in dispute and identifies areas of agreement and disagreement.

(v) Reduces hostility a) Improves the quality and tone of communication between parties. b) Decreases hostility between clients and lawyers.
68 | P a g e

c) Reduces the risk that parties will give up on settlement efforts.

How to Initiate Mediation? Where both the parties agree in a pending case to try to get their dispute settled through Mediation, the Court will record the same and send the file to Mediation Centre.

69 | P a g e

 Address of Labour Commissioners

(i) Andaman and Nicobar Islands

Telephone: (03192) 233138 / 232547 Email: [email protected] Website: http://labour.and.nic.in/ (ii) Delhi

Office of the Labour Commissioner Government of N.C.T. Of Delhi 5, Sham Nath Marg, Delhi - 110054. Tel Nos. Fax: 91-11-23967495 91-11-23962823

E-mail Address: [email protected] Website: http://labour.delhigovt.nic.in/ (iii) Gujarat

Office of Labour Commissioner, Block No. 14, 2nd Floor, Udoyg Bhavan, Sector - 11. Gandhinagar - 382 013. Gujarat. Telephone: +91-232-57500 (O) Fax: Mobile: +91-232-57502 +91-98250 49181

Website: www.labourandemployment.gov.in
70 | P a g e

(iv)

Himachal Pradesh

Labour Commissioner cum Director of Employment New Himrus Bhawan, Circular Road, Shimla-171001. Telephone: (0177) 2625085 Email: [email protected]; [email protected] Website: http://himachal.nic.in/Employment/ (v) Karnataka

Commissioner of Labour Mr. K.S. Manjunath Karmika Bhavan, ITI Compound, Bannerghatta Road, Bangalore-560 029. Telephone: (080) 2653 1252 Website: www.labour.kar.nic.in (vi) Kerala

Office of the Labour Commissioner, Housing Boards Building, Thiruvanathapuram, Kerala. Telephone: (0471) 2330414 Website: www.labourkerala.gov.in (vii) Maharashtra

Office of the Labour Commissioner,

71 | P a g e

Commerce Centre, Tardeo Road, Mumbai. Website: http://industry.maharashtra.gov.in (viii) Nagaland Office of the Joint Labour Commissioner Government of Nagaland, District Labour Office, Wokha, Nagaland. Telephone: +91 (371) 2271168 Email: [email protected] Website: www.labourngl.nic.in (ix) Rajasthan

Commissioner of (Labour & Employment) Department Office of Labour Commissioner, Govt. of Rajasthan Jaleb Chowk, Jaipur-302002, Rajasthan Phone No: 0141-2607473, 2618517, 2619256 Website: www.rajlabour.nic.in (ix) Punjab

Department of Labour Commissioner, Punjab,

72 | P a g e

SCO No. 47-48, Sector - 17 E, Chandigarh - 160017 Phone: + 91-172-2702486 Fax: + 91-172-2704091 Email: [email protected] Website: www.pblabour.gov.in (x) Lakshadweep

District Employment Officer District Employment Exchange Union Territory of Lakshadweep Kavaratti - Pin:682 555 Phone: 04896262082 Fax: 04896263035 Email : [email protected] Website : www.lakemployment.gov.in (xi) Tamil Nadu

Labour Commissionerate DMS Complex, Teynampet, Chennai 600 006. Telephone:2432 1438/ 2432 1408/2432 1509 Website: http://www.tn.gov.in/department/labour.htm

73 | P a g e

Reference

Ministry of Labour and Employment , Govt. of India Office of chief labour Commissioner (Central), New Delhi Directorate General, Employment and Training, New Delhi Collectorate office, Jhunjhunu, Rajasthan Web reference www.labour.nic.in www.labourbureau.nic.in www.dget.nic.in www.ilo.org/global/lang--en/index.htm

74 | P a g e