INDIAN INSTITUTE OF MODERN MANAGEMENT (IIMM)

Registration No. : IIMM/DH/1/2007/5516

Course : PM & HRD

ASSIGNMENT :-LABOUR LAWS

Answer 2. (a) Trade Union Act 1926

This Act may be called the Trade Union Act 1926. The original Act of 1926 was amended in 1929 so as
to provide for the procedure of appeal against the decision of Registrar. The Royal Commission of
Labour after examining the working of the Act made the following recommendations:

1. The Act was to be re-examined within three years. The limitations imposed upon the activities of trade
unions and their office-bearers were to be reconsidered so as to ensure that the conditions are not such as to
prevent any bonafide trade union to be registered.

2. The Accounts of trade unions should be audited free of charge by Government officials.

3. Minimum two-thirds members of the executives of trade union should be persons actually engaged or
employed in industry to which the union belongs.

4. Trade unions should not be precluded from initiating and carrying on cooperative societies.

As regards the action taken on Commission’s recommendations the Government of India reserved the
first recommendation. As regard the second, the Government did not consider the legislation necessary;
recommendation was made to provincial Governments some of which adopted it.

Indian Trade Unions (Amendment) Act, 1947

Although the Indian Trade Union Act, 1926 provide for registration of Trade Union after fulfilling
the various specified requirements, yet it imposed no obligation to recognize or deal with it even if it in
spirit as well as in letter. This matter was discussed several times in various Labour Ministers’.
Conferences and meetings of Standing labour Committees. Ultimately, the Act was amended in the year
1947 which provided for compulsory recognition by employers of representative trade unions. The
following provisions were made therein:

1. Compulsory recognition of trade unions by employers. Any dispute in regard to registration was to decided
by the Labour Court appointed under the Act.

2. Recognition was only to be granted if the union was representative of all the workers employed in the
industry of industries.

3. In case the registered Trade Union has applied for recognition to the employer but could not get
recognition within three months, it could move the Labour Court for making an order directing such
recognition of Trade Union.

4. The executive of recognized Trade Union is entitled to negotiate with the employer in respect of matters
connected with the employment, non-employment, terms of employment, conditions of work of all or any
or its members.

5. Certain acts were declared to be unfair practices from the point of trade and certain others for the
employers.

Trade Union Bill, 1950

The amending Act of 1947 did not provide for inspection of books of Trade Unions by the
Registrar of Trade Unions. This was commented upon by the Chief Labour Commissioner in his report on
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the enquiry into the representative character of all India Trade Union Congress and the Indian Federation
of Labour. He made a suggestion that if the trade unions were to be developed on healthy basis, it was
necessary that some provisions should be incorporated in the Act for periodical inspections of registers,
records, and account books of trade unions by the Registrar or by other persons deputed by him. On the
basis of such discussions, the Trade union Bill was introduced in the Parliament in February 1950 but
lapsed with the dissolution of the Parliament.

The desirability of enacting suitable legislation was considered by the Indian Labour Conference
held in October 1952, the Indian Trade Union (Amendment) Act of 1960 made some changes in Section
2(f), 3,4,6,14,16 and 28 of the Act. By the Indian Trade Union (Amendment) Act of 1964 the word ‘Indian’
has been deleted from the Act.

The Act was again amended in 1970 (51 of 1970). The Parliament passed the Trade union
Amendment Bill 200. It will remove the multiplicity of trade unions; promote internal democracy and
orderly growth and regulation of the unions. The present bill is based on the recommendations of the
Ramanujam Committee. The committee had recommended a minimum of 100 workers or 10 percent of the
workforce for a trade union to be recognized.

Object:

Article 19 (1) a and c of our constitution guarantees to every citizen freedom of speech and
expression and right to form associations and unions to ventilate their views and grievance.

Scope:

It is law relating to registered trade unions. It gives detailed procedure for registration and working
of Trade Union. Certain immunities from criminal and civil actions are granted to the members of Trade
Union and their official.

Trade Union

Trade Union means any combination, whether temporary or permanent formed primarily for the
purpose of regulating the relations between workmen and employers, or between workmen and workmen,
or between employers and employers or for imposing restrictive conditions on the conduct of any trade or
business, and included any federation of two or more Trade Unions:

Provided that this Act shall not affect

I). any agreement between partners as to their own business;

II). Any agreement between an employer and those employed by him a to such employment.

III). any agreement between an employer and those employed by him a to such employment, or
instruction in any profession, trade or handicraft.

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Answer 2. (b) Employers and employees may agree whatever arrangements for recognising trade unions for
collective bargaining that they find suitable. Acas is willing and able to assist organisations with voluntary
recognition arrangements. If, a voluntary agreement cannot be reached then a trade union may invoke the
statutory recognition procedure in organisations where employers have 21 or more workers.

Schedule A1 of the Trade Union and Labour Relations (Consolidation) Act 1992, sets out the legal
process for unions and employers when dealing with a request from a trade union to be recognised for
collective bargaining.

Conditions for recognition by order of a Labour Court:

a) That all its ordinary members are workmen employed in the same industry or in industry closely
allied to or connected with one another;

b) That it is representative of all the workmen employed by the employer in that industry or those
industries;

c) That its rule do not provide for the exclusion from membership of any class of the workmen;

d) That its rules provide for the procedure for calling of strike;

e) That it is a registered trade union and that it has complied with all the provisions of this Act.

Application to and grant of recognition of Labour Courts (Section 28-E):

1) Where a registered Trade Union having applied for recognition to an employer has failed to obtain
recognition within 90 days from the date of making such application, it may apply in writing
setting out such particulars as may be prescribed, to the Labour Court for recognition by that
employer. {Section 28-E(1)].

2) A single application may be made for recognition by more than one employer, or by an association
of employers as well as one or more members thereof.

3) The Labour Court may call for further information.

4) The Labour Court shall, after serving notice in the prescribed manner on the employer, investigate
whether the trade union fulfils the conditions for recognition set out in section 28-D, and in
deciding whether the condition set out in clause (b) thereof is fulfilled, the Labour Court shall have
regard to, but shall not be bound by the fact whether the proportion which the number of workmen
referred to in the said clause who are member of the trade union and are not in arrears of their
subscription for any period exceeding3 months beards to the total number of such workmen is less,
or not less than such percentage, if any, as may be prescribed in this behalf either generally or in
respect of any particular locality or any particular employer or class of employers or any particular
industry or class of industries.

5) If the Labour Court is satisfied, it shall make an order directing such recognition.

6) Every order made under sub-section shall be forwarded to the appropriate government which shall
notify it in the official Gazette, an while a recognition directed by such order is in force the trade
union shall in its relation with the employer concerned, have all the rights of a recognized trade
union under this act and shall for all others purposes be deemed to be a recognized trade union.

Rights of recognized Trade Unions (Section 28-F):

1) The executive of a recognized Trade Union shall be entitled to negotiate with employers in respect
of matters connected with the employment or non-employment or the terms of employment or the
conditions of labour of all or any of its members and the employee shall receive and send replies to
letters sent by the executive and grant interviews to that body regarding such matters. [Section 28-
F(1)].

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2) Nothing in sub-section shall be construed as requiring an employer to send replies to letters or
grant interviews regarding matters on which as a result of previous discussion with executive of the
trade union, the employer has arrived at a conclusion, whether in agreement with executive or not
unless a period of at least 3 months has elapsed since the said conclusion was intimated to the
executive, or unless there has been a change in circumstances.

3) Any dispute between the employer and the executive as to whether a conclusion has been arrived
at, or whether there has been a change in circumstances shall be referred to the Registrar whose
decision shall be final.

4) The executive shall be entitled to display notices of the trade union, and the employer shall afford
them reasonable facilities for that purpose.

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Answer 3. (a) Industrial Dispute

An ‘industrial dispute’ means any dispute or difference between employees and employers, or
between employers and workmen, or between workmen and workmen, which is connected with the
employment or non-employment or the terms and conditions of employment of any person.

An ‘industrial dispute’ must necessarily be a dispute in an industry. An industrial dispute has three
ingredients:

a) There should be real and substantial dispute or difference.

b) The dispute or difference must be between employers and or workmen
c) The dispute or difference must be connected with the employment or non-employment, or with the
conditions of labour of any person.

Besides, all disputes relating to the matters specified in Schedules II and III, shall also constitute
industrial dispute.

i). The propriety or legality of an order passed by an employer under the Standing Orders;
ii). The application and interpretation of Standing Order.
iii). Discharge or dismissal of workmen including reinstatement of, or grant of relief to, workmen
wrongfully dismissed.
iv). Withdrawal of any customary concession or privilege.
v). Illegality or otherwise of a strike or lock-out;
vi). Wages including the period and mode of payment.
vii). Compensatory and other allowances.
viii). Hours of work and rest intervals.
ix). Leaves with wages and holidays.
x). Bonus, profit sharing, provident fund and gratuity.
xi). Shift working otherwise than in accordance with Standing Orders.
xii). Classification by grades.
xiii). Rules of discipline.
xiv). Rationalization and
xv). Retrenchment of workmen and closure of establishment.

Further, the following disputes have been held to be industrial disputes---

a) Allegation of wrongful termination of services

b) Compulsory retirement of employee
c) Claim for reinstatement of dismissed workmen
d) Dispute connected with minimum wages
e) Disputes regarding payment to be made under Production Bonus Scheme
f) Claim for compensation for wrongful dismissal
g) Dispute regarding interpretation of Standing Orders
h) Disputes relating to lock-out or bona fide and genuine closure of business.
i) Non-implementation of award and claim for compensation payable by workmen to the employer
for loss caused by strike,

Strikes and Lock-outs

Strike means suspension or cessation of work by a group of employees employed in any industry,
acting in combination. Partial stoppage of work, hunger strike accompanied with cessation of work fall
within the definition of strike. Lock-out it temporary shutting down or closing the place of business by the
employer. It differs from closure of the undertaking. While in the case of closure the employer does not
merely close down the place of business but finally closes the business itself, in the case of lock-out the
employer closes the place of business only.

Strike and lock-out are two coercive measures resorted to by the employees and the employers,
respectively, for compelling the employers or employees to accept their demands or conditions of service.

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 Sections 22 to 25 of the Act aim at restricting the right to strike or lock-out, which is to be exercised
under certain conditions only and after all peaceful measures to aver the same have been exhausted.

Illegal Strikes and Lock outs

Any strike or lock out commenced or declared or continued, in contravention of any of the above
restrictions or any prohibitory order of the government under section 10 or 10 –A, shall be illegal. No
person should knowingly finance any illegal strike or lock out.

A strike or lock out in pursuance of an industrial dispute, which has already commenced before the
reference of such dispute to arbitration (u/s 10A) or for adjudication (u/s10), shall not become illegal
merely by its continuance after such reference, unless the strike or lock out was illegal at its
commencement.

Further, a lock out declared in consequence of an illegal strike or a strike declared in consequence
of an illegal lock out shall not be deemed to be illegal.

If the strike is illegal, workmen are not only liable to lose wages but are also liable to punishment
by way of discharge or dismissal. Workers are, however, entitled to wages for the period of lock out which
is illegal and unjustified.

The employer cannot demand a written undertaking from the striking workman not to repeat such
an act after the strike is called off.

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Answer 3. (b) Offences and Penalties provided under the Industrial Dispute Act

The Industrial Disputes Act, 1947 came into existence in April 1947. It was enacted to make
provisions for investigation and settlement of industrial disputes and for providing certain safeguards to the
workers. The Act contains 40 sections divided into 7 chapters. Chapter – I deals with the title, definitions,
etc. Chapter – II contains the various authorities under the Act. These authorities include Conciliation
Officers, Labour Courts and Tribunals. Chapter – III contains the main scheme of the Act such as
reference of disputes to Labour Courts and Industrial Tribunals. Chapter – IV lays down the procedure,
power and duties of the authorities constituted under the Act. Chapter – V contains provisions to prohibit
strikes and lock-outs, declaration of strikes and lock-outs as illegal, and provisions relating to lay-off and
retrenchment and closure. Chapter-VI contains provisions of various penalties under the Act. Chapter–VII
contains miscellaneous provisions.

Offences Penalties

1. Any employer who lays-off or retrenches Imprisonment upto one month or fine upto Rs.
workman without obtaining prior permission from 1000 or both.
the government.

2. Closure of an undertaking without obtaining Imprisonment upto six months or fine upto
prior approval of the government. Rs.5000 or both.

3. Closure of an undertaking in contravention of Imprisonment upto one year or fine upto Rs. 5000
an order refusing to grant permission for closure, or both. In case of a continuing offence a further
or non-compliance of an order to reopen a closed fine upto Rs.2000 per day.
undertaking.

4. Closure of an undertaking without giving a Imprisonment upto 6 months of fine upto Rs.
notice to the workmen under Section 25-FFA. 5000 or both.

5. Any workman who participates or acts in Imprisonment upto one month or fine upto Rs. 50
furtherance of an illegal strike. or both.

6. An employer who declares an illegal lock out Imprisonment upto one month or fine upto Rs.
or acts in furtherance of the same. 1000 or both.

7. Any person, who instigates or incites another Imprisonment upto six month or fine upto Rs.
person to take part in, or fiancés any illegal strike 1000 or both.
or lock out, or commits any unfair labour practice.

8. Any person who commits a breach of any Imprisonment upto six months or fine or both.
settlement or award binding on him. Incase of a continuing breach an additional fine
upto Rs.200 per day.

9. Any person who wilfully discloses any Imprisonment upto 6 months or fine upto Rs.
information which is declared to be confidential 1000/- or both.
u/s 21.

10. Contravention of any other provision of the Fine upto Rs.100.

Act or the rules made there under.

Reference of Certain Individual Disputes to Grievance Settlement Authorities

(1) The employer in relation to every industrial establishment in which fifty or more workmen are
employed or have been employed on any day in the preceding twelve months, shall provide for, in

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accordance with the rules made in that behalf under this Act, a Grievance Settlement Authority for the
settlement of industrial disputes connected with an individual workman employed in the establishment.

(2) Where an industrial dispute connected with an individual workman arises in an establishment referred
to in sub-section (1), a workman or any trade union of workmen of which such workman is a member,
refer, in such manner as may be prescribed, such dispute to the Grievance Settlement Authority provided
for by the employer under that sub-section for settlement.

(3) The Grievance Settlement Authority referred to in sub-section (1) shall follow such procedure and
complete its proceedings within such period as may be prescribed.

(4) No reference shall be made under Chapter III with respect to any dispute referred to in this section
unless such dispute has been referred to the Grievance Settlement Authority concerned and the decision of
the Grievance Settlement Auth6rity is not acceptable to any of the parties to the dispute.]

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Answer 4. (a) Factories Act 1948

The Factories Act is the principal legislation, which governs the health, safety, and welfare of
workers in factories. The Act extends to the whole of India. Mines and Railways workers are not included
as they are covered by separate Acts. The new Act addressed the issues of safety, health, and welfare. Many
amendments were aimed to keep the Act in tune with the developments in the field of health and safety.
However, it was not until 1987 that the elements of occupational health and safety, and prevention and
protection of workers employed in hazardous process, got truly incorporated in the Act.
The Factories Act, 1948 is divided into twelve chapters comprising of a total of 141 sections and
upplemented by three schedules.

Objectives

The main objective of the Factories Act is the Act has been enacted primarily with the object of
protecting workers employed in factories against industrial and occupational hazards. For that purpose, it
seeks to impose upon the owner or the occupier certain obligations to protect the workers and to secure for
them employment in conditions conductive to their health and safety.

i). To regulate working conditions in factories,

ii). To ensure that basic minimum requirements for the safety, health and welfare of the factory
workers are provided.

Scope and Coverage

The factories Act extends to the whole of India and is applicable to all ‘factories’ including
government factories. A ‘factory’ as per section 2(m) means ‘any premises including the precincts thereof

i). wherein 10 or more workers are employed on any day of the preceding

ii). Wherein 20 or more workers are employed on any day of the preceding 12 months and a
manufacturing process is carried on without the aid of power’.

Thus factory is a premise, where a manufacturing process is carried on. The word ‘premises’ must
not be restricted to mean buildings alone and shall cover opened lands as well. A manufacturing process
need not necessarily end in a substance being manufactured but it essentially involves transformation, so
that the articles become commercially known as another a different from that at which it began its
existence.

Thus, while salt works are ‘premises’ and hence a ‘factory’, substations or zonal stations of a power
station, though fall under ‘premises’ are not regarded as ‘factory’ since no manufacturing process is carried
thereon.

‘Factory’, however, does not include a mine covered under the Mines Act, 1952, a mobile unit of
the armed forces, a railway shed or a hotel, restaurant or eating place.

Applicability of the Act

The act applies to all factories. The State Government may, by notification in the official Gazette,
declare that all or any of the provisions of the act shall apply to any place wherein manufacturing process is
caused on with or without the aid of power or is so ordinarily carried on, not with standing that:

The number of persons employed therein is less than ten, if working with the aid of power and less
than twenty if working without the aid of power, or the persons working therein are not employed by the
owner thereof but are working with the permission of, or under agreement with, such owner.

However, no such declaration can be made where the manufacturing process is being carried o by
the owner only with the aid of his family.

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Obligations of the Employer

 Approval, licensing and registration of factory

 Notice of resumption of work
 Notice regarding appointment of manager
 General duties of occupier
 General duties of manufacturers
 Health measures
 Safety Measures
 Handling of hazardous Processes
 Welfare measures
 Working hours of adults
 Employment of young persons
 Annual leave with wages
 Issue of Notices
 Display of Notices
 Timely submission of Returns.
 Appeal

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Answer 4. (b) Rights of Employers and Employee under Factories Act -1948

A factory under the Act is defined as a place using power, employs 10 or more workers or 20 or
more workers without power or was working any day of the preceding 12 months. However, under section
85, the state governments are empowered to extend the provisions of the Act to factories employing fewer
workers also. This section has been used to extend the coverage of the Act to workplaces like power looms,
rice mills, flour mills, oil mills, saw mills, pesticide formulating units and other chemical units where
hazards to health are considered to put workers at risk.

The Act does not permit the employment of women and young in a dangerous process or operation.
Children are defined, “who have not attained an age of 15 years”, are not permitted to be hired (Sec. 2, 67)
and need to have medical fitness certificates if he/she is has to work and age is not confirmed (Sec 69).

Rights of Employers

The obligations of the employees can also be reckoned as rights of the employers. Besides these,
some more rights have been vested in the employers under the Factories Act.

1) Right to carry on the plan of setting up a new factory or extension of an existing one, if no adverse order is
communicated to him within 3 months of the application for approval.

2) Right to appeal to the Central Government against the State Government’s refusal to grant approval to his
application for setting up a factory.

3) Right to restrain a child or a young person not holding a certificate of fitness, from working in the factory.

4) Right of appeal against the order of the Inspector or Chief Inspector, to the prescribed appellate authority,
within 30 days of the service of the order.

5) Right to demand an application for leave from the worker and a medical certificate when leave is availed
on the ground of illness?

Rights of Employees

1) The obligations of the employers are, practically speaking, the rights of the employees. The workers have a
right to claim the minimum health and safety measures and welfare amenities as provided for in the Act,
observance of working hours, holidays, overtime, annual leave and special protection against hazardous
processes and dangerous substances, etc.

2) A worker has the right to obtain from the occupier, information relating to workers health and safety at
work.

3) A worker has the right to get himself trained by or through the occupier, in respect of workers’ health and
safety.

4) A worker has the right to represent to the Inspector directly or through his representative in the matter of
inadequate provision for protection of his health or safety in the factory.

5) A worker has the right not to pay any fee or charge for the facilities or appliances provided by the
employer.

6) A worker has the right to claim wages for or in lieu of leave allowable to him, under the provisions of the
Payment of Wages Act.

Provision for Prevention of Overcrowding. -

(1) No room in any factory shall be overcrowded to an extent injurious to the health of the workers
employed therein.

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(2) Without prejudice to the generality of sub-section (1) there shall be in every workroom of a factory in
existence on the date of the commencement of this Act at least 1[9.9 cubic metres] and of a factory built
after the commencement of this Act at least 2[14.2 cubic metres] of space for every worker employed
therein, and for the purposes of this sub-section no account shall be taken of any space which is more than
3[4.2 metres] above the level of the floor of the room.

(3) If the Chief Inspector by order in writing so requires, there shall be posted in each workroom of a
factory a notice specifying the maximum number of workers who may, in compliance with the provisions
of this section, be employed in the room

(4)The Chief Inspector may by order in writing exempt, subject to such conditions, if any, as he may think
fit to impose, any workroom from the provisions of this section, if he is satisfied that compliance therewith
in respect of the room is unnecessary in the interest of the health of the workers employed therein.

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Answer 5. (a) Payment of Gratuity Act, 1972

Gratuity is a kind of retirement benefit, like provident fund or pension. It is a payment which is
intended to help an employee after his retirement whether the retirement is the result of the rules of
superannuation or of some physical disability. The general principle underlying gratuity schemes is that by
faithful service over a long period the employee is entitled to claim a certain amount as retirement benefit
[Indian Hume Pipe co. Ltd. Vs. It’s Workmen, AIR (1960) SC 251]. Thus it is earned by an employee as a
reward for long and meritorious service.

The payment of Gratuity Act, 1972, a long-awaited and progressive social security measure, was
passed by Parliament in August, 1972.

The act came in to force on 16th September, 1972. It was amended twice in 1984. the latest
amendment to the act was made in 1998.

Extent of the Act

The Act applies to---

a) Every factory, mine, oilfield, plantation, port and railway company

b) Every shop or establishment within the meaning of any law for the time being in force in relation to
shops and establishments in a State, in which 10 or more persons are employed, or were employed,
on any day of the preceding 12 months

c) Such other establishments, or class establishments, in which 10 or more employees are employed,
or were employed, on any day of the preceding 12 months, as the Central government may, by
notification published in the Official Gazette, specify in this behalf [Sec.1(3).

In view of the wide definition of establishment the Municipalities are covered by Sec. 1 (3). The
Act, being a social legislation, should be given more extensive application [Chairman Lal vs. Municipal
Committee, Panipat, (1987) Lab IC 638 (P&H)].

A shop or establishment to which the Act has become applicable shall continue to be governed by
the Act notwithstanding that the number of persons employed therein at any time after the Act has become
so applicable falls below 10. This provision is intended to check the tendency among the employers to
artificially reduce the number of employees so as to get out of coverage under the Act [Sec.1 (3-AS)].

The Act does not apply to---

a) Apprentices

b) Persons who hold civil posts under the Central Government or a State Government and are
governed by any other Act or by any rules providing for payment of gratuity [Sec.2 (e)].

The Government may, however, exempt any establishment covered by this Act from the provisions
of the Act, if its employees are in receipt of gratuity or pensioners benefits not less favourable than the
benefits provided by this act [Sec.5(1)].

Forfeiture of gratuity

Forfeiture to the extent of damage. The gratuity of an employee whose services have been
terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of,
property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused. Mere
holding back the possession of official premises does not justify withholding of gratuity [Ranjill Chimnalal
Sharma vs. Elphinstone spg. & Wvg. Mill Co. Ltd. (1984 Lab IC 1703]. Again, mere dismissal from
services does no disentitle an employee to gratuity [K. Jayachandra vs. Canara Bank, (1984) 1 LLN 734
(Ker.)]

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a) The gratuity of an employee, whose services have been terminated for any act, wilful omission or
negligence causing any damage or loss to, or destruction of, property belonging to the employer,
shall be forfeited to the extent of the damage or loss so caused;

b) The gratuity payable to an employee shall be wholly forfeited-

(i) If the services of such employee have been terminated for his riotous or disorderly conduct or any other
act of violence on his part, or

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

His service is terminated on account of misconduct and the charge is proved against him. The
misconduct has to result in the damage or loss or destruction of property of the employer. The loss is
deducted from the amount of gratuity payable to the employee.
a) If the service of the employee is terminated for proven misconduct of riotous or disorderly
conduct,
b) any other act of violence committed by him/her, or
c) An offence involving moral turpitude committed by him/her during the course of employment,
the gratuity payable may be wholly or partially forfeited.

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Answer 5. (b) Determination of the amount of gratuity

Application for gratuity. An employee who is eligible to receive gratuity unde the Act, or any
person authorized, in writing, to act on his behalf, shall send an application to the employer ordinarily
within 30 days from the date the gratuity became payable for payment of such gratuity. But where the date
of superannuation or retirement of an employee is known, the employee may apply to the employer before
30 days of the date of superannuation or retirement.

The other rules relation to application for gratuity is as follows:

1. A nominee of an employee who is eligible for payment of gratuity shall apply ordinarily within 30
days from the date the gratuity became payable to him.

2. A legal heir of an employee who is eligible for payment of gratuity shall apply ordinarily within
one year from the date of gratuity became payable to him by the employer.

3. An application for payment of gratuity filed after the expiry of the specified period shall be
entertained by the employer, if the application adduces sufficient cause for the delay.

4. A person who is eligible for payment of gratuity under this Act or any person authorised, in
writing, to act on his behalf shall send a written application to the employer, within such time and
in such form, as may be prescribed, for payment of such gratuity.

5. As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-
section (1) has been made or not, determine the amount of gratuity and give notice in writing to the
person to whom the gratuity is payable and also to the controlling authority specifying the amount
gratuity so determined.

6. The employer shall arrange to pay the amount of gratuity within thirty days from the date it
becomes payable to the person to whom the gratuity is payable.

7. If the amount of gratuity payable under sub-section (3) is not paid by the employer within the
period specified in sub-section (3), the employer shall pay, from the date on which the gratuity
becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate
notified by the Central Government from time to time for repayment of long-term deposits, as that
Government may, by notification specify:

Determination of gratuity. As soon as gratuity become payable the employer shall determine the
amount of gratuity and give notice in writing to the arson to whom the gratuity is payable. Notice is also to
be given to the controlling authority specifying the amount of gratuity so determine, irrespective of the fact
whether an application for payment of gratuity has been made or not.

Payment of gratuity. The employer shall arrange to pay the amount of gratuity within 30 days
from the date it becomes payable to the person to whom the gratuity is payable.

The government may specify rate of interest by notification published in the official Gazette. The
interest shall be payable from the date on which the gratuity become payable to the date on which it is paid.
No such interest shall however be payable if the delay in the payment is due to the default of the employer
and the employer has obtained permission on this ground.

Recovery of gratuity.

If the amount of gratuity payable under this Act is not paid by the employer, within the prescribed
time, to the person entitled thereto, the controlling authority shall, on an application made to it in this
behalf by the aggrieved person, issue a certificate for that amount to the Collector, who shall recover the
same, together with compound interest thereon at such rate as the Central Government may, by
notification, specify, from the date of expiry of the prescribed time, as arrears of land revenue and pay the
same to the person entitled thereto :

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 Provided that the controlling authority shall, before issuing a certificate under this section, give the
employer a reasonable opportunity of showing cause against the issue of such certificate:

Provided further that the amount of interest payable under this section shall, in no case exceed the
amount of gratuity payable under this Act.

The controlling authority shall, on an application made to it in this behalf by the aggrieved person,
issue a certificate for that amount to the Collector. The Collector shall recover the amount together with
compound interest thereon at such rates as the Central Government may, by notification published in the
Official Gazette, specify from the date of expiry of the prescribed time, as arrears of land revenue and pay
the same the person entitled thereto.

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Answer 6. (a) Method of Calculating Wages

The lump sum compensation in case of permanent disablement and half-monthly payments in
the case of temporary disablement is paid according to the wage group to which the workman belongs.
It is necessary to see how wages are determined. Monthly wages mean any wages due to a workman in
a month notwithstanding that in actual practice wages are paid by day or any other period or at piece
rate. The monthly wages be calculated as under:

1) Where the injured person has been in service of an employer during a continuous period of not less
than 12 months previous to the accident, the monthly wages of the workman shall be one-twelfth of
the total wages fallen due to for payment in the last twelve months.

2) If the injured workman has been in the continuous service of the employer for less than one month, in
that case the monthly wages shall be the average monthly amount which during the twelve months
immediately preceding the accident was being earned by a workman employed on the same work. If
there was no such workman, the average monthly amount, which was being earned by a workman
employed on similar work in the same locality will be monthly wages of the injured workman.

3) In other case including those in which it is not possible for want of necessary information to calculate
the monthly wages under clause, the monthly wages shall be thirty times the total wages earned in
respect of the last continuous period of service immediately preceding the accident divided by the
number of days comprising such period.

Since the nature of disablement is temporary, it is normally bound or due to disappear or it may
grow worse or be aggravated into a permanent disablement. In either case, the compensation be
dependent upon the nature of disablement, it is always open to review and adjustment. Any
arrangement for the half monthly payments made under an agreement between the parties or under an
order of a Commissioner for workmen’s compensation can be review on the move of the either party.
Any such application must be supported by a certificate from a qualified medical practitioner to the
effect that there has been change in the condition of the workman. In accordance with the rules framed
by Government of India, an application for review can be made with a medical certificate in the
following cases:

I. By the employer on the ground that since the right to compensation was determined, the
workman’s wages have increased.

II. By the workman on the ground that since the right to compensation was determined, his wages
have diminished.

III. By the workman on the ground that the employer, having commenced to pay compensation, has
ceased to pay the same notwithstanding the fact that there has been no change in the workman’s
condition such as to warrant such cessation.

IV. Either by the employer or by the workman on the ground that determination of the rate of
compensation there is a mistake or error apparent on the fact of the record.

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Answer 6. (b) Withdrawal or Cancellation of Trade Union

Section 10 provides a certificate of registration of a Trade Union may be withdrawn or cancelled by

the Registrar-

a) on the application of the Trade Union to be verified in such manner as may be prescribed;

b) if the Registrar; is satisfied that the certificate has been obtained by fraud or mistake or that the
Trade Union has ceased to exist or has wilfully and after notice from the Registrar contravened any
provision of this Act or allowed any rule to continue in force which is inconsistent with any such
provision or has rescinded any rule providing for any matter provision for which is required by
section 6:

c) certificate has been obtained by mistake or fraud

d) Trade union has ceased to exist

e) After notice from Registrar to trade union having wilfully contravened any provisions of this Act

f) Allowed any rule to continue against the provisions of this Act

g) Trade union has on its own applied for its withdrawal or cancellation.

Provided that not less than two months previous notice in writing specifying the ground on which it
is proposed to withdraw or cancel the certificate shall be given by the Registrar to the Trade Union before
the certificate is withdrawn or cancelled otherwise than on the application of the Trade Union.

At least two months previous notice specifying the ground on which it is proposed to withdraw or
cancel the certificate, shall be given by the Registrar to the Trade Union before such cancellation of
registration. In absence notice any proceeding for cancellation or withdrawal of registration is illegal.

COMMENTS

a) The Order of cancellation of registration of Trade Union passed by the Registrar without hearing
the Union is violative of principles of natural justice and illegal, hence liable to be quashed; Nagda
Rashtra Sevak Karamchari Congress v. Industrial Court, 1997 (77) FLR 139.

b) Registration of a trade union, once registered, cannot be cancelled save and except under section
10; Phillips Workers Union v. Registrar of Trade Unions, (1989) 58 FLR 58 (Cal).

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Answer 6. (c) Conciliation Proceedings

If the employer and the workmen fail to arrive at a settlement through negotiations, the
Conciliation Officer may intervene as a mediator, endeavour to reconcile the difference of opinion and help
the labour and management in achieving a successful settlement. However, Conciliation Officer is not
competent to decide the various points of issue between the opposing parties. Intervention by the
Conciliation Officer is mandatory in case an industrial dispute has arisen in a pubic utility service and a
notice of strike or lock-out (u/s 22) has been served.

The Conciliation Officer shall send a report of proceedings to the Government, as to whether a
settlement has been achieved or not, within 14 days of the commencement of the conciliation proceedings
or within such extended time as may be allowed and in the prescribed manner. If a settlement is arrived at
as a result of conciliation proceedings, a memorandum of settlement is worked out and it becomes binding
on all parties concerned for a period agreed upon.

A settlement arrived at in the course of conciliation proceedings with a recognized majority union
will be binding on all workmen of it establishment, even to those who belong to the minority union which
had objected to the settlement.

Where a dispute is referred to the Conciliation Board shall endeavour to bring about a settlement of
the same after investigating into the dispute. If a settlement has been arrived at, the Board shall send a
report thereof together with a memorandum of settlement signed by the parties to the dispute, to the
appropriate Government, within two months of the reference or within such extended time as may be
allowed.

If no settlement is arrived at, the Board shall also send a similar detailed report as required above
from the conciliation Officer.

The Settlement

A settlement arrived at, in the course of conciliation proceedings come into operation

a) On such date as is agreed upon by the parties to the dispute

b) Where no such date is agreed upon, on the date on which the memorandum of settlement is signed
by the parties to the dispute.

The settlement shall be binding

a) for the period agreed upon by the parties

b) where no such period is agreed upon, for a period of six months from the date on which the
memorandum of settlement is signed.

The settlement shall remain binding for a further period until the expiry of two months from the
date on which a notice in writing for termination of the settlement is given by any one party to the other
party of parties.

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Answer 6. (d) Medical Benefit Council under Employee’s state Insurance Act 1948

(1) The Central Government shall constitute a Medical Benefit Council consisting of -

(a) the Director General, Health Services, ex officio, as Chairman;

(b) a Deputy Director-General, Health Services, to be [appointed] by the Central Government;

(c) the Medical Commissioner of the Corporation, ex officio,

(d) one member each representing each of the States (other than Union territories) in which this Act is
in force to be appointed by the State Government concerned;

(e) three members representing employers to be appointed by the Central Government in consultation
with such organisations of employers as may be recognised for the purpose by the Central
Government;

(f) three members representing employees to be appointed by the Central Government in consultation
with such organisations of employees as may be recognised for the purpose by the Central
Government; and

(g) three members, of whom not less than one shall be a woman, representing the medical profession,
to be appointed by the Central Government in consultation with such organisations of medical
practitioners as may be recognised for the purpose by the Central Government.

(2) Save as otherwise expressly provided in this Act, the term of office of a member of the Medical
Benefit Council, other than a member referred to in any of the clause (a) to (d) of sub-section (1), shall
be four years from the date on which his appointment] is notified:

Provided that a member of the Medical Benefit Council shall, notwithstanding the expiry of the said
period of' four years continue to hold office until the appointment of his successor is notified.

(3) A member of the Medical Benefit Council referred to in clauses (b) and (d) of sub-section (1) shall
hold office during the pleasure of the Government appointing him.

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Answer 6. (f) Employee’s Pension Scheme

(1) This Scheme may be called the Employees’ Pension Scheme, 1995.
(2) (a) This Scheme shall come into force on the 16th day of November, 1995;
(b) Subject to the provisions of this Scheme the employees have an option to become the members of
the Scheme with effect from 1st April, 1993.
(3) Subject to the provisions of section 16 of the Employees’ Provident Funds and Miscellaneous
Provisions Act, 1952, this Scheme shall apply to the employees of all factories and other establishments
to which the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, applies or is applied
under sub-section (3) or sub-section (4) of section 1 or section 3 thereof.
Definitions.
In this Scheme unless the context otherwise requires:—
(i) “Act” means the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of
1952);
(ii)“actual service” means the aggregate of periods of service rendered from the 16th November, 1995, or
from the date of joining any establishment whichever is later to the date of exit from the employment of
the establishment covered under the Act;
(iii) “Commissioner” means a Commissioner for Employees’ Provident Funds appointed under section
5D of the Act;
(iv)“contributory service” means the period of “actual service” rendered by a member for which the
contributions to the fund have been received [or are receivable];
(v) “Eligible member” means “an employee who is eligible to join the Employees’ Pension Scheme”;
(vi) “Existing member” means an existing employee who is a member of the Employees’ Family Pension
Scheme, 1971;
(vii) “Family” means—
(i) Wife in the case of a male member of the Employees’ Pension Fund;
(ii) Husband in the case of a female member of the Employees’ Pension Fund; and
(iii) Sons and [***] daughters of a member of the Employees’ Pension Fund.
Explanation.—the expression “sons” and “daughters” shall include children [legally adopted by the
member];
(viii)“pension” means the pension payable under the Employees’ Pension Scheme and also includes the
family pension admissible and payable under the Employees’ Family Pension Scheme, 1971,
immediately preceding the commencement of the Employees’ Pension Scheme, 1995, with effect from
16th November, 1995;
(ix) “Member” means an employee who becomes a member of the Employees’ Pension Fund in
accordance with the provisions of this Scheme.
(x) “Non-contributory service” is the period of “actual service” rendered by a member for which no
contribution to the “Employees’ Pension Fund” has been received [or is receivable];
(xi) “Orphan” means a person, none of whose parents is alive
(xii)“past service” means the period of service rendered by an existing member from the date of joining
the Employees’ Family Pension Fund till 15th November, 1995;

Employees’ Pension Fund.

(1) From and out of the contributions payable by the employer in each month under section 6 of the Act or
under the rules of the Provident Fund of the establishment which is exempted either under clauses (a) and
(b) of sub-section (1) of section 17 of the Act or whose employees are exempted under either paragraph 27
or paragraph 27A of the Employees’ Provident Funds Scheme, 1952, a part of contribution representing
8.33 per cent of the employee’s pay shall be remitted by the employer to the Employees’ Pension Fund
within 15 days of the close of every month by a separate bank draft or cheque on account of the
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Employees’ Pension Fund contribution in such manner as may be specified in this behalf by the
Commissioner. The cost of the remittance, if any, shall be borne by the employer.
(2) The Central Government shall also contribute at the rate of 1.16 per cent of the pay of the members of
the Employees’ Pension Scheme and credit the contribution to the Employees’ Pension Fund:
Provided that where the pay of the member exceeds rupees [six thousand and five hundred] per month
the contribution payable by the employer and the Central Government be limited to the amount payable on
his pay of rupees [six thousand and five hundred] only.
(3) Each contribution payable under sub-paragraphs (1) and (2) shall be calculated to the nearest rupee,
fifty paisa or more to be counted as the next higher rupee and fraction of a rupee less than fifty paisa to be
ignored.
(4) The net assets of the Family Pension Scheme, 1971, shall vest in and stand transferred to the
Employees’ Pension Fund.

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