INDUSTRIAL RELATIONS AND LABOUR LEGISLATION

Meaning of IR

Industrial relations encompasses ‘the processes of regulation and control over workplace
relations, the organisation of tasks, and the relations between employers and their
representatives, and employees and their representatives, and is the sum of economic, social and
political interactions in workplaces where employees provide manual and mental labour in
exchange for rewards allotted by employers, as well as the institutions established for the
purpose of governing workplace relations’

Objectives of IR

 Understand the key strategic issues in industrial relations.

 Explain the unitary, pluralist and radical approaches to industrial relations.

 Appreciate the role of employers, trade unions and governments in industrial relations.

 Understand individual and collective bargaining, conciliation and arbitration

Theories of IR

• Dunlop’s System Theory (1958) The credit for applying the systems concept to
industrial relations goes to Dunlop.

• “He analyses industrial relations systems as a sub-system of society. “An industrial

relations system at any one point time in its development is regarded as comprised of
certain actors, contexts, ideology which binds the industrial relations system together
and a body of rules created to govern the actors at the workplace and work community”.

• Dunlop’s System model

• IR=f(a,t,m,P,I)

• A= actors-Labour, Employers Govt.

• T=Technological Context

• M=Market Context

• P=Power Context

• I=Ideological context that helps to bind together

• The IR system as a web of rules formed by the interaction of the government, business
and labour, influenced by the existing and emerging economic, socio-political and
technological factors.
 The Structural Contradictions Theory of Hyman, 1971

• Marxian analysis of industrial relations and trade unionism has also taken several forms
broadly categorical into pessimistic and optimistic approaches.

• The pessimistic school talks of limitations of trade union consciousness and feels that
unless the working class joins hands with intellectuals, it is not possible, to bring in a
new social order.

• Optimist school, however, sees the role of working classes as not only maintenance and
enhancement of wage level, but also to carry class struggle against capitalist class in
thrust towards creating a classless society.

The pluralist Theory of Flanders(1970)/ Oxford Model

• According to him, Conflict is inherent in an industrial system. Hence, collective

bargaining is required a s formal system to settle conflicts. Collective bargaining central
to the industrial relations system.

• It can be expressed in the form of an equation

R=f(b) or r =f (c )

Where r = the rules governing industrial relations

b = collective bargaining

c = conflict resolved through collective bargaining

Human Relations theory

• The main proponent of this theory is Keith Davis. According to him, human relations
are “the integration of people into a work-situation that motivates them to work together
productively, cooperatively and with economic, psychological and social satisfactions.

• The goals of human relations are

• 1. to get people to produce

• 2. to co-operate through mutuality of interest and

• 3. to gain satisfaction from their relationships. The human relations approach highlights
certain policies and techniques to improve employee morale, efficiency and job
satisfaction.

• 4. Focussed on to remove labour-management relations.

The Trusteeship theory of Mahatma Gandhi

• Gandhi had immense faith in the goodness of man and he believed that many of the evils
of the modern world have been brought about by wrong systems and not by wrong
individuals. He insisted on recognising each individual worker as a human being. He
 believed in non-violent communism, going so far as to say that “if communism comes
without any violence, it would be welcome”. He laid down certain conditions for a
successful strike.

• They were:

• a. the cause of the strike must be just and there should be no strike without a grievances;

• b. there should be no violence; and

• C. non-strikers or “blacklegs” should never be molested.

Difference between IR and HRM

S.No Dimension TIR EER/HRM

1. Nature of relations Pluralist Unitarist

2 Contract Emphasis on terms of Beyond contract, innovative

contract defined ways
rules,contract

3 Conflict Institutionalised De-emphasised is

patholoigical

4 Union legitimacy Unions are acceptable Not considered desirable

Nurturing.

5. Managerial task in Monitoring Nurturing

relation to labour

6 Key relation Labour-management Customer

7 Pay Standardised, based on job Performance related

evaluation

8 Basis of labour-mgt Collective bargaining Individual contract

relations contract

9 Job design Division of labour Team work

10 Conflict handling Reach temporary truce, Managing climate and

reactive culture-proactive

11 Key people PM/IR Line specialists

 12 Focus of attention Personnel procedures Various culture and
structure-related personnel
strategies.

Unitarist- Pluralisti Marxis

Co- Evolutio
Authoritarian
Confli Revolutio
Approaches to industrial

Inp Conversio Outp

Institutions
Conflict Regulatio
and
(differences) n
processes

HR Management Control
Systems Social
of
Wider approaches to industrial
the

Labour Comparativ

Approaches to IR

Unitary approach

• Industrial relations is grounded in mutual cooperation, individual treatment, teamwork

and the sharing of common objectives.

• The underlying assumption is that it is to the benefit of all to focus on common interests
and promote harmony.

• Conflict is regarded as destructive.

Assumptions about workplace relations

• management and employees share common interest

• one source of legitimate authority (management)

 Assumptions about workplace conflict

• - inevitable, aberration, destructive, to be avoided

• - caused by poor management, dissidents, agitators or poor communication

Assumptions about trade unions

• - a competing and illegitimate source of authority

• - an unwarranted intrusion in the workplace

• - create conflict where none would otherwise exist

Assumptions about collective bargaining

• - creates and institutionalizes unnecessary divisions of interest

• - serves to generate workplace conflict rather than resolve it

PLURALIST APPROACH

Regards conflict as inevitable because employers and employees have conflicting

interests.

• Trade unions are seen as legitimate representatives of employee interests.

• Sees stability in industrial relations as the product of concessions and compromises

between management

and unions.

Assumptions about workplace relations

• - managers and employees have different objectives

• - multiple sources of legitimate authority

Assumptions about workplace conflict

• - inevitable, caused by different opinions and values, benefit to an organization

• - avoid by accepting trade unions, include in decision-making

Assumptions about the workplace role of trade unions

• - not the cause of conflict

• - are expression of diverse workplace interests that always exist

• - a legitimate part of workplace relations

Assumptions about the role of collective bargaining

• - deals with problems on a collective basis

• - most efficient means for institutionalising employment rules

• - fairer outcomes by balancing employee and management power

RADICALOR MARXIST APPROACH

• Marxists, like the pluralists, regard conflict between management and employees as
inevitable.

• Sees industrial conflict as an aspect of class conflict.

• The solution to worker alienation and exploitation is the overthrow of the capitalist
system.

• Assumptions about workplace relations

• - reflects a wider class conflict between capital and labour

• - reflects coercion of working class into dominant capitalist values

• Assumptions about workplace conflict

• - inevitable: capital seeks to reduce costs, workers seek fairer price for labour

• - will only cease by revolutionary change in distribution of property and wealth

• Assumptions about trade unions

• - should raise revolutionary consciousness of workers

• - should not limit action to improving material lot of workers

• - union leaders who accommodate management betray the workers

• Assumptions about collective bargaining

• - merely offers temporary accommodations

• - leaves important managerial powers in tact

History of IR

• The relations between labour and management in the industry form the subject matter of
industrial relations.

• The first labour legislation was in the form of the Factories Act.

• Industrial revolution in England acted as a landmark event in transforming the industrial

situation all over

the world.
 • This was followed by World war I, labour unrest and a mass awakening of a labour.
This was followed by various legislations by the Government- Indian Industrial
Commission, Indian Industrial Commission, Indian Factories Act, Trade Disputes Act
etc.

• The Government also appointed the Royal commission on labour to enquire into and
report on the existing conditions of workers in the country.

• The Second World War brought in unprecedented expansion of Indian industry with
emphasis on maintenance of harmonious and peaceful relations between workers and
management. Strikes and industrial disputes were brought under the compulsory
arbitration of Government.

• In the post-independence phase the labour scenario underwent major change. The
constitution of India provided for freedom of association to all citizens which gave rise
to trade unions. ID Act was enacted in 1947 which regulated worker-employer relations.
Other acts like ESI Act and Minimum Wages Act were enacted for workers welfare.

• The first five year plan emphasises setting up a tripartite body for sorting out matters of
conflict with a mutually agreed grievance procedure.

• The Second plan also dealt with code of discipline and in building a strong trade union
movement.

• The third five year \plan envisaged setting up tribunals for resolution of industrial
disputes.

• IR in the Fourth plan continued to be regulated by legislative measures. National

conference of labour was set up.

• The fifth plan envisaged improvements in worker participation, communication systems

and incentive systems in addition to setting up of shop councils.

• The sixth plan promoted professional management in the industrial harmony, employee
welfare and a cooperative attitude.

• Essential Service Maintenance Act was also promoted.

• Events like liberalisation and globalisation are continuously influencing the IR scene
even today leading to increased recognition and importance being given to the human
resources.

Understanding of IR

 IR do not emerge in vaccum, they are born out of employment relationship in an

industrial setting. Without the existence of two parties, i.e., labour and management, this
relationship cannot exist.

 IR are characterized by both conflict and co-operation.

 As the labour and management do not operate in isolation but are part of a larger system
which includes environmental issues technology of the workplace, country’s socio-economic
and political environment, nation’s labour policy, attitude of trade unions, workers and
employers and impact of the new wave of global markets, global supply demand and economy.

 It also involve the study of conditions conducive to the labour, management co-
operation as well as the practices and procedures required to elicit the desired co-operation from
both the parties.

 IR also study the laws, rules, regulations, agreements, awards of court, customs and
traditions, as well as policy framework laid down by the government for eliciting co-operation
between labour and management and defining rights obligation of both the parties.

Importance of IR

Prior to the IR, the problem of IR was literally non-existent as the owners were themselves
producers or the production was carried out by the family members themselves. As with
emergence of factories, the cottage industries were thrown in back gear, which compelled a
large number of workers to leave the farms and become wage earners in factories with meager
wages under tiring working conditions. Gradually two groups, the haves, the status dominated
and aspiring class and other haves not, both having different interests and ideologies developed
their own unions to give a tough fight to other.

The government came on the scene for regulating the working conditions of employees’
production, work methods, supply of better skilled workers etc. changed the complexion of
industrial relations considerably. Further changes in the techniques and methods of production,
work methods, supply of better skilled workers etc. changed the complexion of IR considerably.

IR patterns, Organized sector and their impact on unorganized.

The pattern of IR in the organized sector of economy has a definite impact on labor
management relations in unorganized sector. The trends and pattern established in the organized
sector spills over or influences the practices of even the most unorganized industries.

Unions are important force in the important force in the Indian political system: The impact of
Indian trade unions on the political system is much wider than on industry. In addition, the
unions sponsored by the ruling party do influence the legislative process through the intense
lobbying activities.

Varying patterns of IR
 In India, the patterns of industrial relations are not only in sharp contrast both in
unorganized and organized sector, but also within the latter, they exhibit a considerable
variation. In the unorganized sector due to non-unionization of the workers, the
grievances are usually redressed by the threat of dismissal, thus the problem of IR.

Status difference in the workers of public and private sector: The workers in the public
sector were considered to be government employees and accordingly, were givea fair
deal. In contrast to it, the workers in the private sector had to suffer on many counts,
Though situation started changing due to liberalization.

Scope and aspects of IR

The IR are therefore, part and parcel of industrial life, such they include

i Labor relations i.e., relations between union and management

ii Employer-employee relations i.e., relations between management and employees

iii Group relations,i.e., relations between various groups of workmen; and

iv Community or public relations, i.e., relations between industry and society.

The main aspect of IR:

i Promotion and development of healthy labor-management relations

ii Maintenance of industrial peace and avoidance of industrial strife

iii Development of industrial democracy.

The existence of strong, well organized, democratic and responsible trade unions and
associations of employers. These organizations enhance the job security of employees help in
increased workers’ participation in management.

Collective bargaining recognizes equality of status between two conflicting groups and prepares
the ground in an atmosphere of trust and goodwill.

Welfare work, whether statutory or non-statutory, provided by the state, trade unions and
employers create, maintain and improve labor management relations and thereby contribute to
industrial peace.

The industrial peace can be largely nurtured through the following means:

Machinery should be set up for the prevention and settlement of industrial disputes: It can be
brought about by developing various legislative and administrative enactments like Trade
Unions Acts, Industrial Disputes act, etc.
The Government should have the power to refer disputes to adjudication when the situation
tends to get out of hand and industry is faced with economic collapse due to continued
stoppage of production on account of long strikes/lockouts.

The Government enjoys the power to maintain the status quo: This power is exercised when the
government, after referring the dispute to arbitration, finds that either party is continuing the
strike or lockout.

The provision of the bipartite and tripartite forums for the settlement of disputes. These forums
act on the basis of the Code of discipline in industry, the code of conduct, the code of efficiency
and welfare, model standing orders.
Development of Industrial democracy:

Establishment of the shop councils and joint management councils at the floor and plant level,
which endeavor to improve the working and living conditions of employee, to improve
productivity, encourage suggestions from employees to assist in the administration of laws and
agreements, serve as a channel between management and employees.

Recognition of Human Rights in Industry: This implies that lab our is not a commodity of
commerce which can be purchased and disposed. The workers are required to be treated as
human beings whose sense of self-respect is to be fostered.

Increase in lab our productivity: The factors which contribute to higher productivity are:
improvement in the level of efforts and skills of workers; improvement in production, process,
materials, equipment, layout, work methods etc.

The availability of proper work environment is necessary so that he worker can effectively carry
out his assignment , as it is this environment which stimulates or depresses, improves or
destroys the relations between labor and management.

Components of IR system

An industrial relations system is made up of certain institutions, which are popularly known as
‘three actors” of the system.

1 Workers and their Organization: When the bulk of workforce is employed in the
production of goods and services, the relations between t hem impersonal and dehumanized.
Further, if they are forced to work in an alienated, monotonous, unhygienic work environment
where t heir activities are closely regulated and controlled by the managerial personnel, their
dissatisfaction with system forces them to revolt against it, so workers form their unions.

2 .The Management: The employer/management is the key actor in the system of IR

around which the whole process revolves. As they not only provide jobs to workers but also lay
down the terms and conditions of their employment, administer various social security and labor
welfare programme over and above managing various aspects of industries that directly or
indirectly influence the total system. Leadership styles that are commonly practiced by the
managers to manage people at work.
 They are an exploitative and authoritative system, benevolent authoritative system, with
further growth of lab our legislation and the development of trade unions.

3. The Government: In the system of industrial relations, government acts as a

regulator and judge. Till 19th century, the Government almost everywhere including
India, adopted a policy of laissez faire, i.e. it did not bother to intervene between the
employer and workers’ problems . As such, parties were left free to settle the score the
way they liked to combine for a common cause-for protest against the inhuman
conditions. Government attitude changed in the end of the 19 th century, The Government
was constrained to bring in some type of protective legislation relating to conditions of
work etc.
In the early forties of the present century and after independence, the Government laid
emphasis on the need for consultation between the representatives of labour,
management and the Government in tripartite and bipartite forums.

These three actors in the system interact with each other to yield the basic output. Which
si the set of rules that govern working conditions and the terms of employment.

Approaches/Perspectives of IR

The IR can be viewed from the various angles which may range from the economic and
soical, political to the legal, psychological and managerial.

An economist tries to interpret the problem of IR in terms of interpersonal forces of the

laws of demand and supply. To a politician, the dynamics of IR, conflict revolves round
the problem of class war, for a psychologist, IR can be best studied in terms of work
behavior and attitude of labour and management and the like. A few approaches to IR
are discussed.

a . Psychological Approach to IR: The psychologists are of the view that the problem of
IR are deeply rooted in the perception and the attitude of focal participants. For ex. A
photograph of an ordinary middle aged person served as input, which both groups were
expected to rate. It is interesting to note that both the groups rated the photograph in different
manner, i.e., the Union leaders referred the person in the photograph as “ Manager” where the
group of Executives saw Union leaders referred the person in the photograph as “Manager”
where the group of Executives” saw “Union leader” in the photograph.

b This variance in perception of parties is largely because of their individual perception.

The conflict between labor and management occurs because every group negatively
views/percieves the behavior of other i.e. even the honest intention of a party is looked with
suspicion.

b. Sociological Approach to IR: The industry is a social world made up of groups with
differing personalites, educational background, family breeding, emotions, likes and dislikes
and host of other personal factors such as attitudes and behaviour. Since ages, the problems of
IR have been looked upon as one basically concerned with wages, employment, conditions and
labour welfare. But in fact sociological aspects of the problem are more importatn than others.
This largely includes various sociological factors like value system, customs, norms, symbols
and attitude and perception of both labour and management that affect the IR in varied ways.

c. Human relations Approach to IR

Management of people at work is an exclusive prerogative of HR specialists, the various HR

policies including those relating to leadership and motivation have profound influence on their
work behaviour. For instance, a manager, using an autocratic style, designs, a close supervision
system and feels that display of atuhority would drives people to work. But this style leads to
dissatisfaction and hatred among people whereas in a democratic style, it is held that a desired
organisational behaviour can be cultivated if employees needs and wants are properly satisfied.
The manager working with such a style positively motivates people. Infact, no style is good or
bad is every situation demands a specific leadership behavour on the part of HR specialist.

4. Gandhian Approach to IR

Gandhiji advocated that for resolving disputes the following rules to be observed.

a. The workers should seek redressal of reasonalbe demands only thorugh collective action.

b. If they have to organise a strike, trade unions should seek by ballot authority from all workers
to do so, remain peaceful and use non-violent methods.

c. The workers should avoid strkes as far as possible in industries of essential services;

d.The workers should avoid formation of unions in philanthropic organisation.

e. The strikes should be resorted to only as a last resort after all other legitimate measures have
failed.

 THE TRADE UNIONS’ ACT, 1926

 I OBJECT: To provide for the registration of trade unions and to define

law relating to registered trade unions.

 II APPLICABILITY: It extends to the whole of India.

 III TRADE UNIONS:

 means any combination whether temporary or permanent formed primarily for the
purpose of regulating the relations between workmen and employers for imposing
restrictive conditions on the conduct of any trade or business, and includes any
federation of two or more trade unions.

 IV MODE OF REGISTRATION:

 Any seven or more members of a trade union may apply for registration of a trade union
in Form - A to the Registrar appointed for the area.
 Along with byelaw, Seven ordinary members of the union to make an application for
registration of the union, and a treasury chalan of Rs.100/- remitted as registration fee.
(Section 4 and 5 read with Regulation: 3 & 5)

 V REGISTRATION CERTIFICATE:

 On receipt of the application for registration, the Registrar, after making reasonable
enquiry issue a Registration Certificate in Form - B (Section 8 & read with Regulation
6)

 VI CANCELLATION OF REGISTRATION :

 A certificate of Registration may be withdrawn or cancelled by the Registrar:

 1. On an application of a Trade Union in Form-H, or

 2. If the Registrar is satisfied that the certificate is obtained by fraud of mistake or that
the trade union had ceased to exist or willfully and after notice from the Registrar contra
vent any provisions of the Act or rules etc. (Section 10 read with Regulations 8 to 12)

 VII APPEAL :

 Any person aggrieved by any order of the Registrar may appeal within two months to
the Civil Court not inferior to the court of an Additional or Assistant Principal Civil
Court.

 (Section 11 read with Regulation 13)

 VIII CHANGE OF NAME

 Any registered trade union may with the consent of not less than 2/3 of its total
members may make application in Form-L, for the change of its name (Section - 23 read
with Regulation – 16-72)

 XI ANNUAL RETURNS

 Every trade union shall send annual returns to the Registrar on or before the 1st day of
May of the year succeeding the calendar year in Form-E in the case of individual trade
unions and in Form-F in the case of federation of trade unions (Section 28 read with
Regulation 21)

 XII PENALTIES

 Offences punishable for the failure to submit returns may extend to Rs.5/- and in the
case of continuing default with an additional fine which may extend to Rs.5/- for each
week and shall not exceed Rs.50.00. Any person who willfully makes, or causes to be
made any false entry or any omission from the general statement required by Section 28
etc. shall be punishable which may extend to Rs.500/-. Registered trade unions,
furnishing false informations, shall be punishable with fine which may extend to
Rs.200/- (Section 31)
  XIII WHO CAN FILE PROSECUTIONS:

 1. Registrar

 2. Persons with the previous sanction of the Registrar.

 3. Aggrieved person under Section 32.

 The complaint shall be filed within six months of the date on which the offence is
alleged to have been committed.

 No court inferior to that of a Presidency Magistrate or a Magistrate of First Class shall

try any offence under the Act.

 XIV AUTHORITIES UNDER THE ACT:

1. Registrar of Trade Unions (under Section - 3)

 Labour Commissioner

 2. Additional Registrar of Trade Unions

 Additional Labour Commissioner

 3. Deputy Registrar of Trade Unions

 Joint Labour Commissioner

 IX AMALGAMATION OF TRADE UNIONS

 IX AMALGAMATION OF TRADE UNIONS: Any two or more registered trade unions

may

 become amalgamated together as one trade union provided the votes of at least one half
of the members of each or every such trade union entitled to vote and at least 60% of the
votes recorded are in favor of the proposal. Notice of the amalgamation shall be sent to
the Registrar Form-R (Section 24 to 26 read with Regulation 18)

 X DISSOLUTION

 X DISSOLUTION: When a registered trade union is dissolved the notice of dissolution

shall be sent to the Registrar in Form - Q, within 14 days of the dissolution along with
the registration certificate (Section 27 read with Regulation 19)

______________________________________________________________________

 Employee rights

 *be paid the right wage for the job you do

 *protection from unfair dismissal (subject to statutory exclusion periods)

 general protections of your ‘workplace rights’

 *protection from unlawful discrimination

 *sick leave, annual leave, public holidays, family leave and long service leave

 *freedom to belong to or not belong to a union.

 *receive your wages without unlawful deduction (lawful deductions include tax or any
deduction you authorize in writing).

 Obligations

 arrive at work on time

 dress suitably for the job (including wearing appropriate safety equipment if required)

 work to the best of your ability

 respect your employer, colleagues and customers

 take care of your employer's property

 follow your employer’s 'reasonable and lawful' instructions (that is, instructions that are
not illegal, don't threaten your health and safety and you are capable of doing)

 obey safety rules

 ask for help if you need it

 know what the employer expects you to do if you can’t be at work for any reason (for
example, your employer’s policy on what to do if you need to advise you are sick)

 not discriminate or harass others in the workplace

 not act in a way that puts you – or others – at risk of injury in the workplace

 Collective Bargaining

 According to Dale Yoder, “Collective bargaining is the term used to describe a situation
in which the essential conditions of employment are determined by bargaining process
undertaken by representatives of a group of workers on the one hand and of one or more
employers on the other.”

 In the words of Flippo, “Collective bargaining is a process in which the representatives

of a labour organisation and the representatives of business organisation meet and
attempt to negotiate a contract or agreement, which specifies the nature of employee-
employer-union relationship.”
  Features of Collective Bargaining

 I. It is a collective process. The representatives of both workers and management

participate in bargaining.

 II. It is a continuous process. It establishes regular and stable relationship between the
parties involved. It involves not only the negotiation of the contract, but also the
administration of the contract.

 III. It is a flexible and dynamic process. The parties have to adopt a flexible attitude
through the process of bargaining.

 IV. It is a method of partnership of workers in management

 Subject Matter of collective bargaining

The Indian Institute of Personnel Management suggested the following subject matter of
collective bargaining:

I. Purpose of agreement, its scope, and the definition of important terms

II. Rights and responsibilities of the management and of the trade union

III. Wages, bonus, production norms, leave, retirement benefits, and terms and conditions of
service

IV. Grievance redressal procedure

V. Methods and machinery for the settlement of possible future disputes

 Importance of Collective Bargaining

Importance to employees

 Collective bargaining develops a sense of self respect and responsibility among the
employees.

 It increases the strength of the workforce, thereby, increasing their bargaining capacity
as a group.

 Collective bargaining increases the morale and productivity of employees.

 It restricts management’s freedom for arbitrary action against the employees. Moreover,
unilateral actions by the employer are also discouraged.

 Effective collective bargaining machinery strengthens the trade unions movement.

 The workers feel motivated as they can approach the management on various matters
and bargain for higher benefits.

 It helps in securing a prompt and fair settlement of grievances. It provides a flexible

means for the adjustment of wages and employment conditions to economic and
technological changes in the industry, as a result of which the chances for conflicts are
reduced.

 Importance of Collective Bargaining

Importance to employers

 It becomes easier for the management to resolve issues at the bargaining level rather
than taking up complaints of individual workers.

 Collective bargaining tends to promote a sense of job security among employees and
thereby tends to reduce the cost of labor turnover to management.

 Collective bargaining opens up the channel of communication between the workers and
the management and increases worker participation in decision making.

 Collective bargaining plays a vital role in settling and preventing industrial disputes.

 Importance of Collective Bargaining

Importance to society

 Collective bargaining leads to industrial peace in the country

 It results in establishment of a harmonious industrial climate which supports which helps

the pace of a nation’s efforts towards economic and social development since the
obstacles to such a development can be reduced considerably.
  The discrimination and exploitation of workers is constantly being checked.

 It provides a method or the regulation of the conditions of employment of those who are
directly concerned about them.

 Pre-requisites for collective bargaining:

Effective negotiations and enforcement requires a systematic preparation of the base or ground
for bargaining which involves the following three steps:

 Recognition of the Bargaining Agent. The management should give recognition to the
trade union for participating in the collective bargaining process. In case there is more
than one union, selection could be done through verification of membership by a
government agency giving representation to all the major unions through joint
consultations. Thus, the bargaining agent of the workers should be properly identified
before initiating any action.

 Deciding the Level of Bargaining. Whether the dealings are confined to enterprise
level, industry level, regional or national level should be decided as the contents, scope
and enforcement agencies differ in each case.

 Determining the Scope and Coverage of Bargaining. It would be better to have a

clear understanding of what are the issues to be covered under bargaining. Many a time,
bargaining is restricted to wage and working conditions related issues but it would be
advantageous for both the management and union to cover as many issues as possible to
prevent further friction and disputes. Therefore, all the important and interrelated issues
are to be taken for consideration.

 Problems of Collective Bargaining

 I. Due to the dominance of outsiders in trade unionism in the country, there is

multiplicity of unions which are weak and unstable, and do not represent majority of
the employees. Moreover, there are inter-union rivalries, which further hinder the
process of collective bargaining between the labour and the management.

 II. Since most of the trade unions are having political affiliations, they continue to be
dominated by politicians, who use the unions and their members to meet their political
ends.

 III. There is a lack of definite procedure to determine which union is to be recognised

to serve as a bargaining agent on behalf of the workers

 IV. In India, the law provides an easy access to adjudication. Under the Industrial
Disputes Act, the parties to the dispute may request the Government to refer the matter
to adjudication and the Government will constitute the adjudication machinery, i.e.,
labour court or industrial tribunal. Thus, the faith in the collective bargaining process is
discouraged.
  V. There has been very close association between the trade unions and political
parties. As a result, trade union movement has leaned towards political orientations
rather than collective bargaining.

General advantages and disadvantages of collective bargaining

 Pros

 Can lead to high-performance workplace where labor and management jointly engage in
problem solving, addressing issues on an equal standing.

 Provides legally based bilateral relationship.

 Management’s rights are clearly spelled out.

 Employers’ and employees’ rights protected by binding collective bargaining agreement.

 Multi-year contracts may provide budgetary predictability on salary and other

compensation issues.

 Unions may become strong allies in protecting higher education from the effects of an
economic slowdown.

Promotes fairness and consistency in employment policies and personnel decisions within and
across institutions.

 Employees may choose whether they want union representation.

 A strong labor management partnership may enable the workforce development needed
for engaging the technology revolution.

Cons

 Management’s authority and freedom are much more restricted by negotiated rules.

 Creates significant potential for polarization between employees and managers.

 Disproportionate effect of relatively few active employees on the many in the bargaining
unit. This is particularly the case when collective bargaining involves a system-wide
structure of elections.

 Increases bureaucratization and requires longer time needed for decision making.

 Increases participation by external entities (e.g., arbitrators, State Labor Relations

Board) in higher education’s decision making.

 More difficult for employees at smaller campuses to have their voices heard.

 Protects the status quo, thereby inhibiting innovation and change. This is particularly
the case when the change involves privatizations.
  Higher management costs associated with negotiating and administering the agreements.

 Eliminates ability of management to make unilateral changes in wages, hours, and other
terms and conditions of employment.

 Restricts management’s ability to deal directly with individual employees.

 Increased dependence on the private sector for certain services, particularly those
requiring technological competence, may be compromised.

 Contract administration is a very difficult process to manage and significantly changes

the skill set required of managers and supervisors.

 Workers participation in Management(WPM)

 WPM is the participation resulting from the practices which increase the scope for
employees’ share of influence in decision-making at different tiers of organizational
hierarch with associated assumption of responsibility.

 Workers’ participation may be viewed as:

 An instrument for increasing the efficiency of enterprises and establishing harmonious

relations;

o A device for developing social education for promoting solidarity among workers and for
tapping human talents;

o A means for achieving industrial peace and harmony which leads to higher productivity and
increased production;

o A humanitarian act, elevating the status of a worker in the society;

o An ideological way of developing self-management and promoting industrial democracy.

Other objectives of WPM can be cited as:

o To improve the quality of working life (QWL) by allowing the workers greater influence and
involvement in work and satisfaction obtained from work; and

 To secure the mutual co-operation of employees and employers in achieving industrial

peace; greater efficiency and productivity in the interest of the enterprise, the workers,
the consumers and the nation.

 The main implications of workers’ participation in management as summarized by ILO:

o Workers have ideas which can be useful;
 o Workers may work more intelligently if they are informed about the reasons for and
the intention of decisions that are taken in a participative atmosphere.

 Importance of WPM

 Unique motivational power and a great psychological value.

 Peace and harmony between workers and management.

 Workers get to see how their actions would contribute to the overall growth of the
company.

 They tend to view the decisions as `their own’ and are more enthusiastic in their
implementation.

 Participation makes them more responsible.

 They become more willing to take initiative and come out with cost-saving suggestions
and growth-oriented ideas.

 Scope and ways of participation:

 One view is that workers or the trade unions should, as equal partners, sit with the
management and make joint managerial decisions. The other view is that workers should
only be given an opportunity, through their representatives, to influence managerial
decisions at various levels. In practice, the participation of workers can take place by
one or all the methods listed below:


Participation at the Board level:

 This would be the highest form of industrial democracy.

 The workers’ representative on the Board can play a useful role in safeguarding the
interests of workers.

 He or she can serve as a guide and a control element.

 He or she can prevail upon top management not to take measures that would be
unpopular with the employees.

 He or she can guide the Board members on matters of investment in employee benefit
schemes like housing, and so forth.

The Government of India took the initiative and appointed workers’ representatives on the
Board of Hindustan Antibiotics (Pune), HMT (Bangalore), and even nationalized banks.
The Tatas, DCM, and a few others have adopted this practice.

 Participation through ownership:

  This involves making the workers’ shareholders of the company by inducing them to
buy equity shares.
o In many cases, advances and financial assistance in the form of easy repayment
options are extended to enable employees to buy equity shares.

Examples of this method are available in the manufacturing as well as the service sector.

Advantage:

o Makes the workers committed to the job and to the organization.

Drawback:
o Effect on participation is limited because ownership and management are two different things.

 Participation through complete control:

 Workers acquire complete control of the management through elected boards.

 The system of self-management in Yugoslavia is based on this concept.

 Self-management gives complete control to workers to manage directly all aspects of

industries through their representatives.

 Advantages:

o Ensures identification of the workers with their organization.

o Industrial disputes disappear when workers develop loyalty to the organization.
o Trade unions welcome this type of participation.

Conclusion: Complete control by workers is not an answer to the problem of participation

because the workers do not evince interest in management decisions.

 Participation through Staff and Works Councils:

 Staff councils or works councils are bodies on which the representation is entirely of the
employees.

 There may be one council for the entire organization or a hierarchy of councils.

 The employees of the respective sections elect the members of the councils.

Such councils play a varied role.

 Their role ranges from seeking information on the management’s intentions to a full
share in decision-making.

 Such councils have not enjoyed too much of success because trade union leaders fear
the erosion of their power and prestige if such workers’ bodies were to prevail.
  Participation through Joint Councils and Committees:

 Joint councils are bodies comprising representatives of employers and employees.

 This method sees a very loose form of participation, as these councils are mostly
consultative bodies.

 Work committees are a legal requirement in industrial establishments employing 100 or

more workers.

 Such committees discuss a wide range of topics connected to labour welfare.

 Examples of such committees are welfare committee, safety committee, etc.

 Such committees have not proven to be too effective in promoting industrial democracy,
increasing productivity and reducing labour unrest.

 Participation through Collective Bargaining:

 Through the process of CB, management and workers may reach collective agreement
regarding rules for the formulation and termination of the contract of employment, as
well as conditions of service in an establishment.

 Even though these agreements are not legally binding, they do have some force.

 For CB to work, the workers’ and the employers’ representatives need to bargain in the
right spirit. But in practice, while bargaining, each party tries to take advantage of the
other.

 This process of CB cannot be called WPM in its strongest sense as in reality; CB is

based on the crude concept of exercising power for the benefit of one party.

 WPM, on the other hand, brings both the parties together and develops appropriate
mutual understanding and brings about a mature responsible relationship.

 Participation through Job Enlargement and Job Enrichment:

Excessive job specialization that is seen as a by-product of mass production in industries, leads
to boredom and associated problems in employees. Two methods of job designing – job
enlargement and job enrichment– are seen as methods of addressing the problems. Job
enlargement means expanding the job content – adding task elements horizontally. Job
enrichment means adding `motivators’ to the job to make it more rewarding.

This is WPM in that it offers freedom and scope to the workers to use their judgment. But this
form of participation is very basic as it provides only limited freedom to a worker concerning
the method of performing his/her job. The worker has no say in other vital issues of concern to
him – issues such as job and income security, welfare schemes and other policy decisions.
 Participation through Suggestion Schemes:

 Employees’ views are invited and reward is given for the best suggestion.

 With this scheme, the employees’ interest in the problems of the organization is aroused
and maintained.

 Progressive managements increasingly use the suggestion schemes.

 Suggestions can come from various levels.

The ideas could range from changes in inspection procedures to design changes, process
simplification, paper-work reduction and the like.

 Out of various suggestions, those accepted could provide marginal to substantial benefits
to the company.
The rewards given to the employees are in line with the benefits derived from the
suggestions.

 Participation through Quality Circles:

 Concept originated in Japan in the early 1960s and has now spread all over the world.

 A QC consists of seven to ten people from the same work area who meet regularly to
define, analyze, and solve quality and related problems in their area.

 Training in problem-solving techniques is provided to the members.

QCs are said to provide quick, concrete, and impressive results when correctly
implemented.

 Advantages:
o Employees become involved in decision-making, acquire communication and
analytical skills and improve efficiency of the work place.
o Organization gets to enjoy higher savings-to-cost ratios.
o Chances of QC members to get promotions are enhanced.

 The Indian Scenario:QC

 Tried by BHEL, Mahindra and Mahindra, Godrej and Boyce among others.

 Workers got to get out of their daily routine and do something challenging.

 These circles require a lot of time and commitment on the part of members for regular
meetings, analysis, brainstorming, etc.

 Most QCs have a definite life cycle – one to three years.

 Few circles survive beyond this limit either because they loose steam or they face simple
problems.

 QCs can be an excellent bridge between participative and non-participative approaches.

  For QCs to succeed in the long run, the management needs to show its commitment by
implementing some of the suggestions of the groups and providing feedback on the
disposition of all suggestions.

 Empowered Teams:

 Empowerment occurs when authority and responsibility are passed on to the employees
who then experience a sense of ownership and control over their jobs.

 Employees may feel more responsible, may take initiative in their work, may get more
work done, and may enjoy the work more.

 For empowerment to occur, the following approach needs to be followed as compared

to the traditional approach:

 Features of empowered or self-directed teams:

 Empowered to share various management and leadership functions.

 Plan, control and improve their work.

 Often create their schedules and review their performance as a group.

 May prepare their own budgets and co-ordinate their work with other departments.

 Usually order materials, keep inventories and deal with suppliers.

 Frequently responsible for acquiring any new training they might need.

 May hire their own replacement to assume responsibility for the quality of their
products or services.

 Total Quality Management:

 TQM refers to the deep commitment, almost obsession, of an organization to quality.

 Every step in company’s processes is subjected to intense and regular scrutiny for ways
to improve it.

Quality in the job of the QC Personnel.

 Meet the customer’s requirement on time, the first time, and 100% of the time.

 Strive to do error-free work.

 Manage by prevention, not correction.

 Measure the cost of quality.

 TQM is called participative because it is a formal programme involving every employee

in the organization; making each one responsible for improving quality everyday.
 Financial Participation:

 This method involves less consultations or even joint decisions.

Performance of the organization is linked to the performance of the employee.

 The logic behind this is that if an employee has a financial stake in the organization,
he/she is likely to be more positively motivated and involved.

 Some schemes of financial participation:

Profit-linkedpay
Profit sharing and Employees’ Stock Option schemes.
Pension-fund participation.

 Advantages

 Technology and organizations today are so complex that specialized work-roles are
required.

 This means employees will not be able to participate effectively in matters beyond their
particular environment.

 Everybody need not want participation.

 The role of trade unions in promoting participative management has been far from
satisfactory.

 Employers are unwilling to share power with the workers’ representatives.

Managers consider participative management a fraud.

 Evolution of WPM in India:

 The beginning towards WPM was made with the Industrial Disputes Act, 1947, which
made Works Committees mandatory in industrial establishments employing 100 or more
workers.

 The Industrial Policy Resolution adopted by the government in 1956 stated that there
should be some joint consultation to ensure industrial peace, and improve employer-
employee relations.

 The functions of both these joint bodies were to be consultative and were not binding on
themanagement.
The response to these schemes was encouraging to begin with, but gradually waned.

 A study team was appointed in 1962 to report on the working of joint councils and
committees.

 The team identified some reasons for their failure. No concrete steps were taken to
remove the difficulties, or change the pattern of participative management.
 During the emergency of 1975-77, the interest in these schemes was revived by the then
Prime Minister by including Workers’ Participation in industry in the government’s 20-
point programme.

 The government started persuading large enterprises to set up joint consultative

committees and councils at different levels.

 The Janata Government who came to power in 1977 carried on this initiative.

 In was again emphasized by the Congress government who came back n 1979.
This continued in a “non-statutory vein” till the late 1980s, and the response from the
employers and employees stayed luke-warm.
o Then, the 42nd Amendment to the Constitution was made.

 Article 43-A reads: 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 organizations engaged in any industry.

 Thus, participative management is a constitutional commitment in India.

And then, on May 30,1990; the government introduced the Participation of Workers in
Management Bill in the Rajya Sabha.

 The bill requires every industrial enterprise to constitute one or more `Shop-Floor
Councils’ at the shop floor level, and`Establishment Council’ at the establishment level.

 These councils will have equal representation of employers and employees.

 Shop-Floor councils enjoy powers over a wide range of functions from production,
wastage control to safety hazards.

 The Establishment Council enjoys similar powers. The bill provides for the constitution
of a Board of Management of every corporate body owning an industrial establishment.

 The bill also provides for penalties on individuals who contravene any provision of the
bill.

 In spite of all these efforts, only the government and the academicians have been
interested in participative management.
But participative management is staging a comeback.

 The compulsions of emerging competitive environment have made employee

involvement more relevant than ever before.

 Managers and the managed are forced to forget their known stands, break barriers, and
work in unison.

 Managers and workers are partners in the progress of business.

Gratuity Act 1972

Section 1
Extent and Application

It extends to the whole of India

Applicable to:

every factory, mine, oilfield, plantation, port and railway company;

every shop or establishment in which 10 or more persons are employed, or were employed, on
any day of the preceding twelve months

Section2
Definitions

S.2 (e) "employee" means any person employed to do any skilled, semi-skilled, or unskilled,
manual, supervisory, technical or clerical work

it does not include an apprentice

S.2 (s) "wages" includes dearness allowance but does not include any bonus, commission, house
rent allowance, overtime wages and any other allowance.

MEANING OF GRATUITY

THE TERM “GRATUITY” WAS CONSIDERED AS AN AMOUNT GIVEN FREELY

AND COULD NOT BE DEMANDED AS A MATTER OF RIGHT BY THE
EMPLOYEES. IN MANY CASES GRATUITY WAS GIVEN AS A MATTER OF
FAVOUR.

EMPLOYERS USED TO PAY GRATUITY AS A REWARD FOR LONG,CONTINOUS &

MERITRORIOUS SERVICE.

WITH A VIEW TO ENSURE A UNIFORM PATTERN OF THE PAYMENT OF

GRATUITY TO THE EMPLOYEES ,THE “CENTRALGOVERNMENT ENACTED
THE”THE PAYMENT OF GRATUITY ACT,1972”.

Section: 4
Gratuity when payable ?

Gratuity shall be payable to an employee

Who has rendered continuous service for not less than 05 years

on the termination of his employment -

on his superannuation, or

on his retirement or
resignation, or

on his death or disablement due to accident or disease:

Note:-

The completion of continuous service of five years shall not be necessary where the termination
of the employment of any employee is due to death or disablement:

How to calculate the Amount of Gratuity

Monthly rated employee :

At the rate of 15 days wages based on the rate of wages last drawn by the employee
concerned:

Formula:-last drawn wages X 15 days X No. of completed year of service

26

piece-rated employee, daily wages :

On the average of the total wages received by him for a period of three months
immediately preceding the termination of his employment excluding overtime wages

seasonal establishment

At the rate of seven days wages for each season.

Maximum Limit Rs.3,50,000/-

Higher benefits can be paid if the employer so desires.

Can Gratuity be withheld by the employer ?

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.

The gratuity payable to an employee may be wholly or partially forfeited

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

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: 6
Nomination

Each employee, who has completed one year of service, shall make nomination for to receive
the amount of gratuity.
In his nomination, an employee may, distribute the amount of gratuity payable to him amongst
more than one nominee.

If at the time of making nomination he has already family, he can not make nomination in
favour of a person who is not a member of his family. If he does so it shall be void.

Fresh nomination in favour of one or more members of his family is required where he has not
family at the time of making nomination..

If a nominee predeceases the employee, the interest of the nominee shall revert to the employee
who can make a fresh nomination.

Every nomination, fresh nomination or alteration of nomination, as the case may be, shall be
sent by the employee to his employer, who shall keep the same in his safe custody.

Section: 7
Determination of the amount of gratuity

A person who is eligible for payment of gratuity shall send a written application to the
employer.

The employer shall 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 as soon as gratuity becomes payable and whether or not an application
has been made by the concerned employee.

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

Section: 9
Penalties

Knowingly making false statement/ false representation to avoid to make payment à

imprisonment up to 06 months, or with fine which may extend to Rs.10,000/- or with both.

Breach, or makes default in complying with any of the provisions of this Act à imprisonment
for 03 months to 01 year, or with fine which shall not be less than Rs.10,000/- but which may
extend to Rs.20,000/- or with both:

Non-payment of any gratuity à imprisonment 6 months to 02 years + a fine.

 Payment of Bonus Act

 The practice of paying bonus in India appears to have originated during First World War
when certain textile mills granted 10% of wages as war bonus to their workers 1917.
 In certain of industrial disputes demand for payment of bonus cases was also included.
In 1950, the Full Bench of the Labour Appellate evolved a formula for determination of
bonus.

 A plea was made to raise that formula in 1959. At the second and third meetings of the
Eighteenth Session of Standing Labour Committee (G.O.I.) held in New Delhi in
March/April 1960, it was agreed that a Commission beappointed to go into the question
of bonus and evolve
suitable norms.

 Eligibility

 Every employee shall be entitled to be paid by his employer in an accounting year,

bonus, in accordance with the provisions of this Act, provided he has worked in the
establishment for not less than thirty working days in that year

 Disqualification for bonus

 Notwithstanding anything contained in this Act, an employee shall be disqualified from

receiving bonus under this Act, if he is dismissed from service for –

 (a) fraud; or

 (b) riotous or violent behavior while on the premises of

 the establishment; or

 (c) theft, misappropriation or sabotage of any property of the establishment

 Payment of minimum bonus

 Every employer shall be bound to pay to every employee a minimum bonus which shall
be 8.33 percent of the salary or wage earned by the employee during the accounting year
.

 Payment of maximum bonus

 If the allocable surplus exceeds the amount of minimum bonus payable to the employees
under that section, the employer shall, in lieu of such minimum bonus, be bound to pay
to every employee in respect of that accounting; year bonus which shall be an amount in
proportion to the salary or wage earned by the employee during the accounting year
subject to a maximum of twenty per cent, of such salary or wage.

 In computing the allocable surplus under this section, the amount set on or the amount
set off under the provisions shall be taken into account in accordance with the provisions
of that section

 Computation of number of working days

 An employee shall be deemed to have worked in an establishment in any accounting

year also on the days on which–
 (a) he has been laid off under an agreement or as
permitted by standing orders under the Industrial
Employment (Standing Orders) Act, 1946

 (b) he has been on leave with salary or wage;

 he has been absent due to temporary

disablement caused by accident arising out of
and in the course of his employment; and

 (d) the employee has been on maternity leave

with salary or wage, during the accounting
year

 Set on and set off allocable surplus

 Where for any accounting year, the allocable surplus exceeds the amount of maximum
bonus payable to the employees in the establishment, then, the excess shall, subject to a
limit of twenty per cent. of the total salary or wage of the employees employed in the
establishment in that accounting year, be carried forward for being set on in the
succeeding accounting year and so on

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

 Where in any accounting year any amount has been carried forward and set on or set off
under this section, then, in calculating bonus for the succeeding accounting year, the
amount of set on or set off carried forward from the earliest accounting year shall first
betaken into account

 Where any money is due to an employee by way of bonus from his employer under a
settlement or an
award or agreement, the employee himself or any other person authorized by him in
writing in this behalf, or in the case of the death of the employee, his assignee or heirs
may, without prejudice to any other mode of recovery, make an application to the
appropriate Government or such authority as the appropriate Government may specify in
this behalf is satisfied that any money is so due, it shall issue a certificate for that
amount to the Collector who shall proceed to recover the same in the same manner as an
arrears of land revenue

 Provided that every such application shall be made within one year from the date on
which the money became due to the employee from the employer
  Provided further that any such application may be entertained after the expiry of the said
period of one year, if the appropriate Government is satisfied that the applicant had
sufficient cause for not making the application within the said period.

 set on--first we calculate allocable surplus and out of that surplus we pay bonus and after
paying max bonus i.e 20% ,if some amount left balance is called set on and this amount
is kept in reserve for future .

set off-if in any accounting year you do not have sufficient surplus and even you are not
able to pay minimum bonus of 8.33% than legally you have to pay 8.33%,so balance
amount which you do not have in surplus will be shown as set off for future and you
have to take care of set off/on in future before deciding rate of bonus.

 PF ACT 1952

PF act was came into force in 1952 in order to secure the life of an employee for rendering his
services to organization, this is a statutory liability of employer to give PF amt to an employee.

This amount is paid after the retirement from the services.

Applicability of the act

 PF is applicable in any organization where 20 or more persons are employed

 PF is applicable in every state except J & k.

 Benefits of the act

 To provide Monetary benefits to survive after retirement.

 To minimize risk against health, sickness, disablement of the employee and his
dependents.

 Old age Pension benefits.

 Widow pension.

 To maintain dignity & Social status.

 PF Contribution

PF is deducted on basic salary. If employee's basic is less than or equals to Rs.6500 he will be
covered in pf.

12 % Employee side

3.67%(epf part)+ 8.33 % (Pension part)

13.61% Employer side

3.67 (EPF)+8.33 (Pension)+ 1.1(Admin charge) + 0.5(EDLI) +

0.01(Inspection charge /admin on edli)

Employees Deposit linked insurance scheme.

Challans & Returns

PF challans are submitted on 15 th of every month, 5 days grace period is given to submit
challans.

PF Returns are submitted twice a year-

PF RETURNS

Form 5 is used to submit pf monthly return in which new employee details is mentioned.

Form 10 is used to submit pf monthly return in which left employee details is

mentioned.

Form 12A that is used for the same purpose which contains consolidated details of that
particular month-new joinees, left employees & employees/employer pf contribution.

Form 3A is used for pf annual return.

 Workmen Compensation Act

 The Workmen’s Compensation Act, aims to provide workmen and/or their dependents
some relief in case of accidents arising out of and in the course of employment and
causing either death or disablement of workmen.

 It provides for payment by certain classes of employers to their workmen compensation

for injury by accident.

 EMPLOYEES ENTITLED TO COMPENSATION

 Every employee (including those employed through a contractor but excluding casual
employees), who is engaged for the purposes of employer’s business and who suffers an
injury in any accident arising out of and in the course of his employment, shall be
entitled for compensation under the Act.

 EMPLOYER’S LIABILITY FOR COMPENSATION (ACCIDENTS)

 The employer of any establishment covered under this Act, is required to compensate an
employee:
a. Who has suffered an accident arising out of and in the course of his employment,
resulting into (i) death, (ii) permanent total disablement, (iii) permanent partial
disablement, or (iv) temporary disablement whether total or partial, or
b. Who has contracted an occupational disease.
 HOWEVER THE EMPLOYER SHALL NOT BE LIABLE

 a. In respect of any injury which does not result in the total or partial disablement of the
workmen for a period exceeding three days;
b. In respect of any injury not resulting in death, caused by an accident which is directly
attributable to-
i. the workmen having been at the time thereof under the influence or drugs, or
ii. the willful disobedience of the workman to an order expressly given, or to a rule
expressly framed, for the purpose of securing the safety of workmen, or
iii. The willful removal or disregard by the workmen of any safeguard or other device
which he knew to have been provided for the purpose of securing the safety of
workmen.
The burden of proving intentional disobedience on the part of the employee shall lie
upon the employer.
iv. when the employee has contacted a disease which is not directly attributable to a
specific injury caused by the accident or to the occupation; or
v. When the employee has filed a suit for damages against the employer or any other
person, in a Civil Court.

 WHAT IS DISABLEMENT

 Disablement is the loss of the earning capacity resulting from injury caused to a
workman by an accident.
· Disablement’s can be classified as (a) Total, and (b) Partial. It can further be classified
into (i) Permanent, and (ii) Temporary, Disablement, whether permanent or temporary is
said to be total when it incapacitates a worker for all work he was capable of doing at the
time of the accident resulting in such disablement.

 ACCIDENT ARISING OUT OF AND IN THE COURSE OF EMPLOYMENT

 An accident arising out of employment implies a casual connection between the injury
and the accident and the work done in the course of employment. Employment should
be the distinctive and the proximate cause of the injury. The three tests for determining
whether an accident arose out of employment are:
1. At the time of injury workman must have been engaged in the business of the
employer and must not be doing something for his personal benefit;
2. That accident occurred at the place where he as performing his duties; and
3. Injury must have resulted from some risk incidental to the duties of the service, or
inherent in the nature condition of employment.

 The general principles that are evolved are:

 · There must be a casual connection between the injury and the accident and the work
done in the course of employment;

· It is not necessary that the workman must be actually working at the time of his death
or that death must occur while he was working or had just ceased to work;
  COMPENSATION IN CASE OF OCCUPATIONAL DISEASES

 Workers employed in certain types of occupations are exposed to the risk of contracting
certain diseases, which are peculiar and inherent to those occupations. A worker
contracting an occupational disease is deemed to have suffered an accident out of and in
the course of employment and the employer is liable to pay compensation for the same.
Occupational diseases have been categorized in Parts A, B and C of Schedule III. The
employer is liable to pay compensation:
a. When a workman contracts any disease specified in Part B, while in service for a
continuous period of 6 months under one employer.

 b. When a workman contracts any disease specified in Part C, while he has been in
continuous service for a specified period, whether under one or more employers.

 CALCULATION OF COMPENSATION

 The amount of compensation payable by the employer shall be calculated as follows:

(a) In case of death. - 50% of the monthly wages X Relevant Factor or Rs. 50,000,
whichever is more and Rs.1000 for funeral expenses.
(b) In case of total permanent disablement Specified under -60% of the monthly wages
X Relevant Factor or Rs. 60,000, whichever is more.

 (d) In case of partial permanent disablement .-Such percentage of the compensation

payable in case (b) above, as is proportionate to the loss of earning Capacity (as assessed
by a qualified medical practitioner).
(e) In case of temporary disablement (whether total or partial). - A half-monthly
installment equal to 25% of the monthly wages, for the period of disablement or 5 years,
whichever is shorter

 WHEN COMPENSATION TO BE DEPOSITED WITH COMMISSIONER ?

 The amount of compensation is not payable to the workman directly. It is generally

deposited along with the prescribed statement, with the Commissioner who will then pay
it to the workman. Any payment made to the workman or his dependents, directly, in the
following cases will not be deemed to be a payment of compensation:

i. in case of death of the employee;

ii. in case of lump sum compensation payable to a or a minor or a person of unsound mind or
whose entitlement to the compensation is in dispute or a person under a legal disability.
The receipt of deposit with the Commissioner shall be a sufficient proof of discharge of the
employer’s liability.

 AMOUNTS PERMISSIBLE TO BE PAID TO THE WORKMAN/ DEPENDENTS

DIRECTLY

Following amounts may be paid directly to the workman or his dependents:

a. In case of death of the workman, any advance on account of compensation up to [an
amount equal to three months’ wages of such workman] may be paid to any dependent.
 b. In case of lump sum compensation payable to an adult male worker not suffering from
any legal disability.
In case of half-monthly payments payable to any workman.

 REGISTRATION OF AGREEMENTS OF COMPENSATION

1. Where the amount payable as compensation has been settled by agreement a

memorandum thereof shall be sent by the employer to the Commissioner, who shall, on
being satisfied about its genuineness, record the memorandum in a registered manner.

2. However where it appears to the Commissioner that the agreement ought not to be
registered by reason of the inadequacy of the sum or amount, or by reason that the
agreement has been obtained by fraud or undue influence or other improper means he
may refuse to record the agreement and may make such order including an order as to
any sum already paid under the agreement as he thinks just in the circumstances.

3. An agreement for payment of compensation which has been registered shall be

enforceable under this act notwithstanding anything contained in the Indian Contract
Act, or any other law for the time being in force.
EFFECT OF FAILURE TO REGISTER AGREEMENT
When a memorandum of any agreement is not sent to the Commissioner for registration,
the employer shall be liable to pay the full amount of compensation, which he is liable to
pay under the provisions of this Act.

FILING OF CLAIMS

 A claim for the compensation shall be made before the Commissioner.

No claim for compensation shall be entertained by the Commissioner unless the notice
of accident has been given by the workman in the prescribed manner, except in the
following circumstances:


a. in case of death of workman resulting from an accident which occurred on the
premises of the employer, or at any place where the workman at the time of the accident
was working died on such premises or such place or in the vicinity of such premises or
place;
b. in case the employer has knowledge of the accident from any other source, at or about
the time of its occurrence;
c. in case the failure to give notice or prefer the claim, was due to sufficient cause.

LIMITATION


Workman, to the Commissioner, may file the claim for accident compensation in the
prescribed form, within 2 years from the occurrence of the accident or from the date of
death. The claim must be preceded by
 (i) a notice of accident, and

(ii) the claimant-employee must present himself for medical examination if so required
by the employer.

DUTIES OF EMPLOYERS / EMPLOYEES

 · To pay compensation for an accident suffered by an employee, in accordance with the

Act.
· To submit a statement to the Commissioner (within 30 days of receiving the notice) in
the prescribed form, giving the circumstances attending the death of a workman as result
of an accident and indicating whether he is liable to deposit any compensation for the
same.
· To submit accident report to the Commissioner in the prescribed form within 7 days of
the accident, which results in death of a workman or a serious bodily injury to a
workman.
· To maintain a notice book in the prescribed from at a place where it is readily
accessible to the workman.
· To submit an annual return of accidents specifying the number of injuries for which
compensation has been paid during the year, the amount of such compensation and other
prescribed particulars.

DUTIES OF EMPLOYEES

· To send a notice of the accident in the prescribed form, to the Commissioner and the
employer, within such time as soon as it is practicable for him. The notice is
precondition for the admission of the claim for compensation.
· To present himself for medical examination, if required by the employer.

THE EMPLOYEE’S STATE INSURANCE ACT 1948

• ESI Scheme …

• ESI Scheme for India is an integrated social security scheme tailored to provide Social
Production to workers and their dependents, in the organised sector, in contingencies,
such as Sickness, Maternity and Death or Disablement due to an employment injury or
Occupational hazard

1. Employees’ Contribution – 1.75% of the Wages

2. Employers’ Contribution – 4.75% of the Wages

TOTAL - 6.5 % of the Wages

• Benefits to Employees …
 • ESI Scheme Major Social Security Benefits in Cash and Kind include …

1. Medical Benefit – for self & Family

2. Sickness Benefit – for self

3. Maternity Benefit - for self

4. Disablement Benefit

a). Temporary Disablement Benefit – for self

b). Permanent Disablement Benefit – for self

5. Dependents’ Benefit – for dependents in case of death due to employment injury

• Benefits to Employees …

• In addition, the Scheme also provides some other need based benefits to insured
workers. These are:

i). Funeral Expenses – to a person who

performs the last rites of IP

ii). Rehabilitation allowances – for self

iii). Vocational Rehabilitation - for self

iv). Old age Medicare – for self and spouse

v). Medical Bonus – for insured women and IP’s wife

• Medical Benefit …

• Medical Benefit means Medical care of IPs and their families, wherever covered for
medical benefit.

• The Standard medical care consists of out-door treatment, in-patient treatment, all
necessary drugs and dressing, pathological and radiological specialist consultation and
care, ante-natal and post natal care, emergency treatment etc.,

• Out-door medical care is provided at the state Insurance Dispensaries or Mobile

Dispensaries manned by full-time doctors (service’ system) or at the private clinics of
Insurance Medical Practitioners (Panel System)

• Medical Benefit …

• Insured worker and members of his family are eligible for medical care from the very
first day of the worker coming under ESI Scheme.
• A worker who is covered under the scheme for first time is eligible for medical care for
the period of three months. If he/she contributes at least for 78 days in a contribution
period the eligibility is there up to the end of the corresponding benefit period.

• A worker is also eligible for extended sickness benefit when he/she is suffering from any
one of the long term 34 diseases listed in the Act. This is admissible after the worker has
been under ESI these conditions are satisfied medical benefit is admissible for a
maximum period of 730 days for the IP and his/ her family.

• Sickness Benefit …

• Sickness signifies a state of health necessitating Medical treatment and attendance and
abstention from work on Medical grounds. Financial support extended by the
corporation is such a contingency is called sickness Benefit

• Sickness Benefit represents periodical payments made to an Insured Person for the
period of certified sickness after completing 9 Months in insurable employment.

• Benefits to Employees …

• To qualify for this benefit, contributions should have been payable for atleast 78 days in
the relevant contribution period.

• The Maximum duration for availing sickness Benefit is 91 days in two consecutive
benefit periods

• Standard benefit rate – this rate corresponds to the average daily wage of an Insured
person during the corresponding contribution period and is roughly half of the daily
wage rate.

• Extended Sickness Benefit …

• Extended Sickness Benefit is a Cash Benefit paid for prolonged illness (Tuberculosis /
Leprosy, Mental and Malignant diseases) due to any of the 34 Specified diseases

• The IP should have been in continuous employment for a period of 2 years and should
have contributed for atleast 156 days in 4 preceding contribution periods

• Extended Sickness Benefit …

• The daily rate of Extended Sickness Benefit is 40% more than the standard Sickness
Benefit rate admissible

• After exhausting sickness Benefit Payable for 91 days the Extended Sickness Benefit is
payable upto further period of 124 / 309 days that can be extended upto 2 years in
special circumstances

• Enhanced Sickness Benefit …

• Is Cash Benefit for IP undergoing sterilisation operation of vasectomy / tuberctomy for

family planning.
 • The contributory conditions are the dame as for claiming sickness benefits

• The daily rate of this benefit is double the standard benefit rate. Say, not less than the
daily wage.

• The benefit rate of this benefit is double the standard benefit rate. Say, not less than the
daily wage.

• The benefit is available upto 7 days for vasectomy and upto 14 days for tubectomy
operations.

• Maternity Benefit…

• Maternity Benefit is cash payable to an Insured women for the specified period of
abstention from work for confinement or mis-carriage or for sickness arising out of
pregnancy, “confinement” “premature birth of child or miscarriage” “confinement”
connotes labour after 26 weeks of pregnancy whether the result issue is alive or dead,

• “Miscarriage” means expulsion of the contents of a pregnant uterus at any period prior
to or during 26th week of pregnancy.

• Maternity Benefit…

• Criminal abortion or miscarriage does not, however, entitle to benefit.

• The contribution condition is the same as for Sickness Benefit.

• The daily benefit rate is double the sickness Benefit rate and is thus roughly equivalent
to the full wages. Benefits is paid for Sundays also.

• Maternity Benefit…

• The Benefit is paid as follows (Duration)

a). For Confinement

For a total period 12 Weeks beginning not more than 6 weeks before the expected date of
child birth, if the insured women dies during confinement or with in 6 weeks thereafter, leaving
behind the living child, the benefit continues to be payable for the whole of the period. But the
child also die during that period, the benefit will be paid upto and including the day of the death
of the child.

• Maternity Benefit…

b). For Miscarriage

For the period of 6 weeks following the

date of miscarriage

c). For sickness arising out of pregnancy,

 confinement, Premature birth of child or

miscarriage :

For an additional period or upto four weeks.

In all the cases, the benefit is paid only if the insured women does not work for
remuneration during the period for which benefit is claimed. There is no waiting period.

• Maternity Benefit…

• Medical Bonus

Medical Bonus is lump sum payment made to an Insured woman or the wife of an insures
person in case she does not avail medical facility from an ESI hospital at the time of delivery of
a child. This bonus of Rs. 250/- has been increased to Rs. 1000/- from 1st April 2003

• Disablement Benefit …

a). Temporary disablement benefit :

• In case of temporary disability arising out of an employment injury or occupational

disease.,

• Disablement benefit is admissible to insured person for the entire period so certified by
an Insurance Medical officer / Practitioner for which IP does not work for wages.

• The benefit is not subject to any contributory condition and is payable at a rate which is
not less than 70% of daily average wages.

• However, not payable if the incapacity lasts for less than 3 days excluding the date of
accident.

• Permanent disablement benefit …

• In case an employment injury or occupational disease results in permanent, partial or

total loss of earning capacity,

• Periodical payments are made to the IP for life at a rate depending on the actual loss of
earning capacity as may be determined and certified by a duly-constituted Medical
Board.

• The rates of Disablement Benefits are determined in accordance with the provisions of
Rule 57 of ESI (Central) Rules, 1991.

• In order to product erosion in real value of the periodical payments of Permanent

Disablement benefits, against rise in the cost of living index, periodical increases are
granted, based on actuarial calculation

• Permanent disablement benefit …

 • Commutation of periodical payments into lump sum (one time payment) is permissible
where the permanent disablement stands assessed as final.

• Commutation of Permanent Disablement Benefit into lump sum payment is also

allowed in case the total commuted value does not exceed Rs.10000/- (The ceiling is
now being raised to Rs.30000/-).

• Dependants’ Benefit …

• Dependents Benefit is a monthly pension payable to the eligible dependents of an

insured person who dies as a result of an Employment Injury or occupational disease

• Beneficiaries and Duration of benefit

a). Widow / widows during life or until remarriage

b). Legitimate or adopted son until age 18 or if legitimate son is infirm, till infirmity lasts.

c). Legitimate or adopted unmarried daughter until age 18 or until marriage, whichever is
earlier, or if infirm, till infirmity lasts and she continues to be unmarried.

In the absence of any widow or legitimate child, the benefit is payable to a parent or
grandparent for life, to any other male dependent until age 18 or to an unmarried or widowed
female dependent until age 18.

How much …

• The total divisible benefit is equivalent to the temporary disablement benefit rate
(roughly 70% of the wage rate). The widow / widows share 3/5 th of the benefit and the
legitimate or adopted son and daughter 2/5th each of the benefit. If the total benefit so
divided exceeds the full rate, there is a proportionate reduction in the respective shares
of the beneficiaries.

• The amount of pension paid to the dependents of a deceased insured person is reviewed
vis-à-vis the cost of living index and increases are granted from time to time to
compensate for erosion in its real value.

Maternity Benefit Act 1961

 F Object of the Act

{ To protect the dignity of motherhood and the dignity of a new person’ birth by providing for
the full and healthy maintenance of the woman and her child at this important time when she is
not working

 F Coverage of the Act

Upon all women employees either employed directly or through contractor except domestic
women employed in mines, factories, plantations and also in other establishments if the State
Government so decides. Therefore, if the State Government decides to apply this Act to women
employees in shops and commercial establishments, they also will get the benefit of this Act.
Sec.3

 Conditionsforeligibilityof benefits

 Women indulging temporary or unmarried are eligible for maternity benefit when she is
expecting a child and has worked for her employer for at least 80 days in the 12 months
immediately preceding the date of her expected delivery.

Sec. 5

GCONDITIONS FOR CLAIMING BENEFITS

 Ten weeks before the date of her expected delivery, she may ask the employer to give
her light work for a month. At that time she should produce a certificate that she is
pregnant.

 She should give written notice to the employer about seven weeks before the date of her
delivery that she will be absent for six weeks before and after her delivery. She should
also name the person to who payment will be made in case she cannot take it herself.

 She should take the payment for the first six weeks before she goes on leave.

 She will get payment for the six weeks after child-birth within 48 hours of giving proof
that she has had child. She will be entitled to 2 nursing breaks of 15 minutes each in the
course of her daily work till her child is 15 months.

 Her employer cannot discharge her or change her conditions of service while she is on
maternity leave.

Sec.5

 Cash Benefits

 Leave with average pay for six weeks before the delivery

 Leave with average pay for six weeks after the delivery

 A medical bonus of Rs. 1000, if the employer does not provide free medical care to the
woman.

 An additional leave with pay up to one month if the woman shows proof of illness due
to the pregnancy, delivery, miscarriage, or premature birth.

 In case of miscarriage, six weeks leave with average pay from the date of miscarriage.

 Non Cash Benefits & Privilege

 Light work for 10 weeks (6 weeks plus 1 month) before the date of her expected
delivery, if she asks for it.

 2 Nursing breaks in the course of her daily work until the child 15 months old.
  No discharge or dismissal while she is on maternity leave.

 No charge to her disadvantage in any of the conditions of her employment while on

maternity leave.

 Leave for Miscarriage & Tubectomy Operation

 Leave with wages at the rate of maternity benefit, for a period of 6 weeks immediately
following the day of her miscarriage or her medical termination of pregnancy.

 Entitled to leave with wages at the rate of maternity benefit for a period of 2 weeks
immediately following the day of her tubectomy operation.

 Leave for illness arising out of pregnancy etc.,

 Forfeiture of maternity benefit

o If permitted by her employer to absent herself under the provisions of sec.6 for any
period during such authorised absence, she shall forfeit her claim to the maternity
benefit for such period.

o For discharging or dismissing such a woman during or on account of her absence from
work, the employer shall be punishable with imprisonment which shall not be less than 3
months, but it will extend to one year and will find, but not exceeding Rs. 5000/-

Industrial Disputes Act

 What are Industrial Disputes?

 Industrial Dispute means any dispute or differences between employers and employers
or between employers and workmen or between workmen and workmen which is
connected with the employment or non-employment or the terms of employment or with
the conditions of labour of any person

 What are the different categories of Industrial Disputes?

The Second Schedule of the I.D. Act deals with matters within the jurisdiction of Labour
Courts which fall under the category of Rights Disputes.

 The propriety or legality of an order passed by an employer under the standing orders;

 The application and interpretation of standing orders which regulate conditions of

employment.

 Discharge or dismissal of workmen including reinstatement of, or grant of relief to

workmen wrongfully dismissed;

 Withdrawal of any customary concession or privilege;

  Illegality or otherwise of a strike or lock-out;

The Third Schedule of the I.D. Act deals with matters within the jurisdiction of Industrial
Tribunals which could be classified as Interest Disputes.

 These are :

 Wages, including the period and mode of payment;

 Compensatory and other allowances;

 Hours of work and rest intervals;

 Leave with wages and holidays;

 Bonus, profit sharing, provident fund and gratuity;

 Shift working otherwise than in accordance with standing orders;

 Classification by grades;

 Rules of discipline;

 Rationalization;

 Retrenchment of workmen and closure of establishment; and

 Any other matter that may be prescribed.

 Who can raise an Industrial Dispute?

 Any person who is a workman employed in an industry can raise an industrial dispute.

 A workman includes any person (including an apprentice) employed in an industry to do

manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or
reward.

 It excludes those employed in managerial or administrative capacity.

 Industry means any business, trade, undertaking, manufacture and includes any service,
employment, handicraft, or industrial occupation or avocation of workmen.

 How to raise an Industrial Dispute?

 A workman can raise a dispute directly before a Conciliation Officer in the case of
discharge, dismissal, retrenchment or any form of termination of service. In all other
cases listed at 2 above, the dispute has to be raised by a Union / Management.


Purpose of the Act

 SETTLEMENT MACHINERIES
 CONCILITAION

 ARBITRATION

 COURT OF INQUIRY

-INDUSTRIAL TRIBUNAL

NATIONAL TRIBUNAL

 Works Committee

 It shall be the duty of the Works Committee to promote measures for

securing and preserving amity and good relations between the employer
and workmen and, to that end, to comment upon matters of their common
interest or concern and endeavour to compose any material difference of
opinion in respect of such matters

 Conciliation officer

 The appropriate Government may, by notification in the Official Gazette, appoint such
number of persons as it thinks fit, to be conciliation officers, charged with the duty of
mediating in and promoting the settlement of industrial disputes.

 A conciliation officer may be appointed for a specified area or for specified industries in
a specified area or for one or more specified industries and either permanently or for a
limited period.

 Board of conciliation

 Provided that, if any party fails to make a recommendation as aforesaid within the
prescribed time, the appropriate Government shall appoint such persons as it thinks fit to
represent that party.

 (4) A Board, having the prescribed quorum, may act notwithstanding the absence of the
Chairman or any of its members or any vacancy in its number:

 Provided that if the appropriate Government notifies the Board that the services of the
Chairman or of any other member have ceased to be available, the Board shall not act
until a new chairman or member, as the case may be, has been appointed

 Courts of inquiry

 Labour courts

 (3) A person shall not be qualified for appointment as the Presiding Officer of a Labour
Court, unless -
(a) he is, or has been, a Judge of a High Court; or
(b) he has, for a period of not less than three years, been a District Judge or
 an Additional District Judge; or]
(c) he has held any judicial office in India for not less than seven years ; or
(d) he has been the Presiding Officer of a Labour Court constituted under

 any Provincial Act or State Act for not less than five years

 Industrial tribunals

 The appropriate Government may, by notification in the Official Gazette, constitute one
or more Industrial Tribunals for the adjudication of industrial disputes relating to any
matter and for performing such other functions as may be assigned to them under this
Act.

 (2) A Tribunal shall consist of one person only to be appointed by the

 appropriate Government.

 (3) A person shall not be qualified for appointment as the presiding officer of a

 Tribunal unless:

 (a) he is, or has been, a Judge of a High Court; or

 (b) he has, for a period of not less than three years, been a District Judge or an
Additional District Judge.

 (4) The appropriate Government may, if it so thinks fit, appoint two person as assessor,
to advise the tribunal

 National tribunals

 The Central Government may, by notification in the Official Gazette,

 constitute one or more National Industrial Tribunals for the adjudication of industrial
disputes which, in the opinion of the Central Government, involve questions of national
importance or are of such a nature that industrial establishments situated in more than
one State are likely to be interested in, or affected by, such disputes.

 (2) A National Tribunal shall consist of one-person only to be appointed by the Central
Government.

 (3) A person shall not be qualified for appointment as the presiding officer of a

 National Tribunal unless he is, or has been, a Judge of a High Court.

 (4) The Central Government may, if it so thinks fit, appoint two persons as assessors to
advise the National Tribunal in the proceeding before it

 Strike

1. By workmen
2. Refusal to work/ accept employment

 Lockout

 By employee

 Temporary closure

 Refusal to continue to employ the persons employed

 Illegal strikes

 Without giving 14 days notice

 Commenced after 42 days of notice

 Prior to the date indicated in the notice

 In non PUs

 During the pendency of proceedings

 Strike/lock out will be illegal if Govt bans.

 Lay off

 Temporary suspension or permanent termination of employees.

 Where in 50 or more workers are employed, shall be laid off by prior permission of the
appropriate government.

 Lay off compensation

 50% of Basic + DA

 Alternative employment within 5 miles not eligible for compensation.

 Retrenchment

 It is a way of downsizing, cutting costs.

 One month notice /pay for small Co.

 3 months notice /pay in larger establishments.

 Retrenchment Compensation

 15 days wages for every completed year.

 Closure

 Permanent closure of place of employment.

 No permission is required in case of smaller establishments

  For larger establishments, 90 days prior in advance to get permission from the
government.

CONTRACT LABOUR (REGULARATION & ABOLITION) ACT, 1970 & THE RULES
CHECKLIST
Applicability Registration of
 Every establishment in which 20 or Establishment
Object of the Act more workmen are employed or Principal employer
To regulate the were employed on any day of the employing 20 or more
employment of preceding 12 months as contract workers through the
contract labor in labor. contractor or the
certain establishments  Every contractor who employs or contractor(s) on deposit of
and to provide for its who employed on any day of the required fee in Form 1
abolition in certain preceding twelve months 20 or Sec. 7
circumstances and for more workmen.
matters connected Revocation of Licensing of Contractor
Prohibition of Employment of
therewith. Registration  Engaging 20 or more
Contract Labour When obtained by than 20 workers and on
Only by the appropriate Government Misrepresentation or deposit of required fee
through issue of notification after suppression in Form IV.
consultation with the Board (and not Of material facts etc. after  Valid for specified
Courts) can order the prohibition of opportunity to the period.Sec.12, Rule 21
employment of contract labor. principal
Employer
Welfare measures to be taken by the Contractor
Revocation or Suspension &  Contract labor either one hundred or more employed by a
Amendment of Licences contractor for one or more canteens shall be provided and
 When obtained by misrepresentation maintained.
or suppression of material facts.  First Aid facilities.
 Failure of the contractor to comply  Number of rest-rooms as required under the Act.
with the conditions or contravention  Drinking water, latrines and washing facilities. Sec. 16 & 17
Laws, Agreement Liability of Principal Employer
of Act or or standing
the Rules.
orders inconsistent with the  To ensure provision for canteen, restrooms, sufficient supply of
Act-Not Permissible drinking water, latrines and urinals, washing facilities.
Unless the privileges in the contract  Principal employer entitled to recover from the contractor for
between the parties or more favorable providing such amenities or to make deductions from amount
than the prescribed in the Act, such payable. Sec. 20
Muster Roll, Wages Register, Deduction Register and Overtime Register
contract will be invalid and the by Contractor
workers will continue to get more  Every contractor shall
favorable benefits.  Maintain Muster Roll and a Register of Wages in Form XVI and Form XVII
Registers of Contractors respectively when combined.
 Principal employer  Register or wage-cum-Muster Roll in Form XVII where the wage period is a
 To maintain a register of fortnight or less.
contractor in respect of every  Maintain a Register of Deductions for damage or loss, Register or Fines and
establishment in Form XII. Register of Avances in Form XX, from XXI and Form XXII respectively.
 Maintain a Register of Overtime in Form XXIII.
 Contractor Rule  To issue wage slips in Form XIX, to the workmen at least a day prior to the
74 disbursement of wages.
 To maintain register of workers  Obtain the signature or thumb impression of the worker concerned against the
for each registered establishment entries relating to him on the Register of wages or Muster Roll-Cum-Wages
 PENALTIES
Sec. Offence Punishment
Sec. 22 Obstructions For obstructing the inspector or failing to produce registers etc.

- 3 months’ imprisonment or fine upto Rs.500, or both.

Sec.23 Violation For violation of the provisions of Act or the Rules,

EMPLOYEES’ PROVIDENT FUNDS & MISC. PROVISIONS ACT, 1952

& THE SCHEMES
CHECKLIST
Eligibility Applicability
Any person who is employed  Every establishment which is factory engaged in any industry
for work of an establishment specified in Schedule 1 and in which 20 or more persons are
or employed through employed.
contractor in or in connection  Any other establishment employing 20 or more persons which
with the work of an Central Government may, by notification, specify in this behalf.
Paymentestablishment.
of Contribution  Any establishment employing even less than 20 persons can be
 The employer shall pay the covered voluntarily u/s 1(4) of the Act.
contribution payable to the Benefits
EPF, DLI and Employees’ Employees covered enjoy a benefit of Social Security in the form of an
Pension Fund in respect of the unattachable and unwithdrawable (except in severely restricted
member of the Employees’ circumstances like buying house, marriage/education, etc.) financial
Pension Fund employed by him nest egg to which employees and employers contribute equally
directly by or through a throughout the covered persons’ employment.
contractor. This sum is payable normally on retirement or death. Other Benefits
 It shall be the responsibility of include Employees’ Pension Scheme and Employees’ Deposit Linked
the principal employer to pay Insurance Scheme. Rates of Contribution
the contributions payable to
the EPF, DLI and Employees’
SCHEME EMPLOYEE’S EMPLOYER’S CENTRAL
Pension Fund by himself in
respect of the employees GOVT’S
directly employed by him and
also in respect of the Amount > 8.33%
employees directly about
employed (in case where
Clarification contribution is
by him Contribution
and also in respect of
the revision
employees employed by from
or 12% of 10%)
After in wage ceiling 10% (in case of
Provident Fund NIL
Rs.5000 to Rs.6500 w.e.f. 1.6.2001 12% certain
Scheme
per month, the government will Establishments
continue to contribute 1.16% upto as per details
the actual wage of maximum given earlier)
Rs.6500 per month towards
Employees’ Pension Scheme. The Insurance NIL
employer’s share in the Pension NIL 0.5
Damages
Scheme
Scheme will be Rs.541 w.e.f.
1.6.2001.  Less than 2 months ….@ 17% per

Under Employees’ Deposit-Linked annum

Insurance Scheme the contribution
 Two months and above but less than upto four months
@ 0.50% is required to be paid
upto a maximum limit of Rs.6500. ….@22% per annum

The employer also will pay

 Penal Provision
Liable to be arrested without warrants being a cognizable offence.

Defaults by employer in paying contributions or

EMPLOYEES’ STATE INSURANCE
ACT, 1948 & the SCHEME inspection/administrative charges attract imprisonment upto 3 years
CHECK LIST
and fines upto Rs.10, 000 (S.14). For any retrospective application, all

dues have to be paid by employer with damages upto 100% of

arrears.

Coverage Rate of
Applicability of Contribution of
THE ESI SCHEME TODAY
the Act & Of employees the wages No. of implemented Centres 677
Scheme
No. of Employers covered 2.38
Is extended in
lacs
area-wise to Drawing wages Employers’
factories using 4.75% No. of Insured Persons 85 lacs
power and
employing 10 or
Upto
more persons and No. of Beneficiaries 330
to non-power
using
manufacturing Manner and Time Limit
units and For making Payment of contribution Benefits
establish-ments
employing 20 or
more person upto To the employees under the Act
Rs.7500/- per The total amount of contribution
month w.e.f. (employee’s share and employer’s share)
1.4.2004. It has
is to be deposited with the authorized Medical, sickness, extended
also been extend-
bank through a challan in the prescribed sickness for certain diseases,
form in quadruplicate on ore before 21 st of enhanced sickness, dependents

WAGES FOR ESI CONTRIBUTIONS Contributio Contribution

n period period
Registers/files to be maintained by the employers
To be deemed as NOT to be deemed as
wages wages
If the person joined
 Basic pay insurance employment
 Contribution paid by 1st April to 30th for the first time, say on
 Dearness allowance kthe employer to any September. 5th January, his first
 House rent allowance pension/provident fund
or under ESI Act. contribution period will
 City compensatory be from 5th January to
allowance  Sum paid to defray
special expenses 31st March and his
 Overtime wages (but Penalties
corresponding first
entailed by the nature
not to be taken into
of employment – Daily
account for
allowance paid for the
determining the Different punishment have been prescribed for
period spent on tour.
coverage of an
employee)  Gratuity payable on different types of offences in terms of Section
discharge.
 Payment for day of 85: (I) (six months imprisonment and fine
rest  Pay in lieu of notice of
retrenchment Rs.5000), (ii) (one year imprisonment and fine),
 Production incentive
compensation and 85-A: (five years imprisonment and not less
 FACTORIES ACT, 1948
CHECK LIST

Employer to ensure health of Registration &

Applicability of the Act workers pertaining to Renewal of Factories

Any premises whereon 10 or  Cleanliness Disposal of wastes

more persons with the aid of and effluents
power or 20 or more workers  Ventilation and temperature To be granted by Chief
are/were without aid of dust and fume Inspector of Factories
power working on any dyad  Overcrowding Artificial on submission of
preceding 12 months, humidification Lighting
prescribed form, fee
wherein Manufacturing  Drinking water Spittons.
Secs. 11 to 20 and plan.
process is being carried on.

Safety Measures  Self-acting machines. Welfare Measures

 Casing of new machinery.
 Prohibition of employment
 Facing of machinery of women and children  Washing facilities
 Work on near machinery in motion. near cotton-openers.  Facilities for storing and drying
 Employment prohibition of young  Hoists and lifts. clothing
persons on dangerous machines.  Facilities for sitting
 Striking gear and devices for cutting  First-aid appliances – one first
Working Hours, Spread Over & Overtime of Adults
off power. aid box not less than one for
Weekly hours not more than 48. every 150 workers.
Daily hours, not more than 9 hours.  Canteens when there are 250
or more workers.
Intervals for rest at least ½ hour on working for 5 hours.  Shelters, rest rooms and lunch
rooms when there are 150 or
Spreadover not more than 10½ hours. more workers.
 Creches when there are 30 or
Overlapping shifts prohibited. more women workers.
Employment of Young Persons WelfareLeave
Annual office with
whenWages
there are
500 or more workers.

 Prohibition of employment of young children e.g. 14 years. A worker having worked for 240
 Non-adult workers to carry tokens e.g. certificate of fitnekss. days @ one day for every 20 days
 Working hours for children not more than 4 ½ hrs. And not and for a child one day for working
permitted to work during night shift.
of 15 days.
Secs. 51, 54 to 56, 59 & 60
OFFENCE PENALTIES
Sec.92 to
 For contravention of the Provisions of the Act or  Imprisonment upto 2 years or fine upto Rs.1,00,000 or
Rules both
 On Continuation of contravention  Rs.1000 per day
 On contravention of Chapter IV pertaining to  Not less than Rs.25000 in case of death.
safety or dangerous operations.  Not less than Rs.5000 in case of serious injuries.
  Subsequent contravention of some provisions  Imprisonment upto 3 years or fine not less than
Rs.10, 000 which may extend to Rs.2, 00,000.
 Obstructing Inspectors  Imprisonment upto 6 months or fine upto Rs.10,
000 or both.
 Wrongful disclosing result pertaining to results  Imprisonment upto 6 months or fine upto Rs.10,
of analysis. 000 or both.
 For contravention of the provisions of Sec.41B,  Imprisonment upto 7 years with fine upto Rs.2,
41C and 41H pertaining to compulsory 00,000 and on continuation fine @ Rs.5, 000 per
disclosure of information by occupier, specific day.
responsibility of occupier or right of workers to  Imprisonment of 10 years when contravention
work imminent danger. continues for one year.

INDUSTRIAL DISPUTES ACT, 1947

Object of the Act
Provisions for investigation and settlement of industrial disputes and for certain other purposes.

Important Clarifications Power of Labour Court to give Right of a Workman during

Industry – has attained wider meaning than defined Appropriate Relief Pendency of Proceedings in High
except for domestic employment, covers from barber Labour Court/Industrial Tribunal can Court
shops to big steel companies. Sec.2 (I) Modify the punishment of dismissal or Employer to pay last drawn wages
Works Committee–Joint Committee with equal discharge of workmen and give to reinstated workman when
number of employers and employees’ appropriate relief including proceedings challenging the award
representatives for discussion of certain common Persons Bound
reinstatement. Sec.11Aby Settlement of his reinstatement are pending in
problems. Sec.3  When in the course of conciliation the Period higher
of Operation Courts.
of
proceedings etc., all persons Settlements and Awards
working or joining subsequently.  A settlement for a period as
Conciliation–is an attempt by a third party in agreed by the parties, or
helping to settle the disputes Sec.4  Otherwise than in course of
settlement upon the parties to the  Period of six months on
Lay off & Payment of Compensation – signing of settlement.
Conditions for Laying off Tribunal or settlement. Sec.18
Adjudication – Labour Court, Industrial  An award for one year after
Failure, refusal or inability of an employer to its enforcement. Sec.19
provide work due to Notice of Change
21 days by an employer to workmen Prior Permission for Lay off
 Shortage of coal, power or raw material. about changing the conditions of When there are more than 100
 Accumulation of stocks. service as provided in Ivth Schedule. workmen during proceeding 12
 Breakdown of machinery. Sec.9A months. Sec.25-M
 Natural calamity. Sec.25-C

Lay off Compensation

Payment of wages except for Prohibition of Strikes & Lock Outs
intervening weekly holiday  Without giving to the employer notice of strike,  During the pendency of proceedings before a Labour
compensation 50% of total or as hereinafter provided, within six weeks before Court, Tribunal or National
striking.  Tribunal and two months, after the conclusion of such
basic wages and DA for a  Within fourteen days of giving such notice. proceedings.
period of lay off upto maximum  Before the expiry of the date of strike specified  During the pendency of arbitration proceedings
45 days in a year. in any such notice as aforesaid. before an arbitrator and two months after the
 During the pendency of any conciliation conclusion of such proceedings, where a notification
Sec.25-C
Prior Permission by the has been issued under Sub-Section(3A) of section
proceedings before a conciliation officer and
Government for Retrenchment seven days after the conclusion of such 10A
 When there are more than 100 (in proceedings.  During any period in which a settlement or award is
UP 300 or more) workmen during  During the pendency of conciliation proceedings in operation, in respect of any of the matters covered
preceding 12 months. Conditions of service etc. to remain unchanged under certain
by the circumstances
settlement or award. during pendency
Secs.22&23of
before a Board and seven days after the
 Three months’ notice or wages proceedings
conclusion of such proceedings.
thereto.  Not to alter to the prejudice of workmen concerned the condition of service.
 Form QA  To seek Express permission of the concerned authority by paying one month’s wages on
 Compensation @ 15 days’ wages. dismissal, discharge or punish a protected workman connected with the dispute.
Sec. 25-N  To seek approval of the authority by paying one month’s wages before altering condition of
Prohibition of unfair labour service, dismissing or discharging or punishing a workman. Sec.33
practice either by employer or
Retrenchment of Workmen Compensation & Conditions
workman or a trade union as
 Workman must have worked for 240 days.
stipulated in fifth schedule
 Retrenchment compensation @ 15 days’ wages for every completed year to be calculated at last
Both the employer and the Union
drawn wages
can be punished. Sec.25-T  One month’s notice or wages in lieu thereof.
 Reasons for retrenchment
Closure of an Undertaking  Complying with principle of ‘last come first go’.
60 days’ notice to the labour authorities  Sending Form P to Labour Authorities.
for intended closure in Form QA.
Sec.25FFA Conditions of service etc. to remain unchanged under certain circumstances during pendency of
proceedings
 Not to alter to the prejudice of workmen concerned the condition of service.
Prior permission atleast 90 days before
 To seek Express permission of the concerned authority by paying one month’s wages on dismissal, discharge or
in Form O by the Government when
punish a protected workman connected with the dispute.
there are 100 ore more workmen during
 To seek approval of the authority by paying one month’s wages before altering condition of service, dismissing
preceding 12 months (in UP 300 or more
or discharging or punishing a workman. Sec.33
workmen) Sec.25-O
PENALTIES <Punishment
Offence
Sec.25-U Committing unfair labour practices Imprisonment of upto 6 months or with fine upto Rs.3, 000.

26 Illegal strike and lock-ourts Imprisonment upto one month or with fine upto Rs.50 (Rs.1000 for
lock-out) or with both.
27 MATERNITY Instigation etc. for illegal strike or lock-outs.
BENEFIT ACT, 1961 Imprisonment upto 6 months or with fine upto Rs.1, 000
28
CHECK LIST
Giving financial aid to illegal strikes and lock-outs.
Imprisonment for 6 months or with fine upto Rs.1, 000
29 Breach of settlement or Coverage
award of the Act
Object of the Act Conditions for eligibility
Upon all women employees either employed
To protect the dignity of benefits
directly or through contractor except
of motherhood and domestic women employees employed in
the dignity of a new Women indulging temporary
mines, factories, plantations and also in of unmarried are eligible for
person’s birth by other establishments if the State maternity benefit when she
providing for the full Government so decides. Therefore, if the is expecting a child and has
and healthy State Government decides to apply this Act worked for her employer for
maintenance of the to women employees in shops and at least 80 days in the 12
woman and her child months immediately
commercial establishments, they also will
at this important time proceeding the date of her
get the benefit of this Act. Bihar, Punjab

Cash Benefits Conditions for eligibility of

 Leave with average pay for six weeks before the delivery. benefits
 Leave with average pay for six weeks after the delivery.
 A medical bonus of Rs.25 if the employer does not provide free medical care to the
woman.
 Ten weeks before the date of
 An additional leave with pay up to one month if the woman shows proof of illness due
her expected delivery, she
to the pregnancy, delivery, miscarriage, or premature birth. may ask the employer to
 In case of miscarriage, six weeks leave with average pay from the date of give her light work for a
miscarriage. month. At that time she
Non Cash Benefits/Privilege should produce a certificate
 Light work for ten weeks (six weeks plus one month) before the date of her expected that she is pregnant.
delivery, if she asks for it.  She should give written
 Two nursing breaks in the course of her daily work until the child is 15 months old. notice to the employer about
seven weeks before the date
 No discharge or dismissal while she is on maternity leave.
of her delivery that she will
 No change to her disadvantage in any of the conditions of her employment while on be absent for six weeks
maternity leave. before and after her delivery.
 Pregnant women discharged or dismissed may still claim maternity benefit from the She should also name the
employer. person to whom payment will
be made in case she can not
Leave for Miscarriage Leave for illness arising out of take it herself.
& Tubectomy Operation  She should take the payment
pregnancy etc. etc. for the first six weeks before
she goes on leave.
 Leave with wages at the rate of A woman suffering from illness  She will get payment for the
maternity benefit, for a period of arising our of pregnancy, delivery, six weeks after child-birth
six weeks immediately following within 48 hours of giving
premature birth of child proof that she has had a
the day of her miscarriage or her
medical termination of pregnancy. (Miscarriage, medical termination child.
 Entitled to leave with wages at the of pregnancy or tubectomy  She will be entitled to two
operation) be entitled, in addition nursing breaks of fifteen
rate of maternity benefit for a minutes each in the course
period of two weeks immediately to the period of absence allowed of her daily work till her child
following the day of her tubectomy to her leave with wages of
atpregnancy
the is fifteen months old.
Prohibition of dismissal during absence

operation. Her
Discharge or dismissal of a woman employed during or on account of such absence or to give notice or discharge employer
or dismissal on cannot
such a
day that the notice will expire during such absence or to very her disadvantage. discharge her or change her
 Discharge or dismissal during or on account of such absence or to give notice of discharge or dismissal on such a day that the notice will
expire during such absence, or to vary to her disadvantage any of the conditions of her service.
 At the time during her pregnancy, if the woman but for such discharge or dismissal would have been entitled to maternity benefit or
medical bonus, etc.
 Not barred in case of dismissal for cross misconduct. Sec.

Failure to Display Forfeiture of maternity benefit

Extract of Act If permitted by her employer to absent herself under the provisions of section 6 for
Imprisonment may any period during such authorized absence, she shall forfeit her claim to the
extend to one year maternity benefit for such period.
 For discharging or dismissing such a woman during or on account of her absence

MINIMUM WAGES ACT, 1948

CHECK LIST

Object of the Act Fixation of Minimum Rates of Wages

To provide for fixing  The appropriate government to fix minimum rates of wages. The
minimum rates of employees employed in para 1 or B of Schedule either at 2 or either part of
wages in certain notification u/s 27.
 To make review at such intervals not exceeding five years the minimum
employments
Minimum Rates of rates or so fixed and revised the minimum rates.
Wages Government can also fix Minimum Wages for
 Time work  Piece work at piece rate  Piece work for the purpose of
Such as Basic rates of securing to such employees on a time work basis  Overtime work done by
wages etc. Variable DA employees for piece work or time rate workers.
and Value of other
Procedure for fixing Composition of Payment of
and revising Minimum Committee Minimum Rates of
Rates of Wages Representation of Wages
Fixing Hours for
employer and Employer to pay to
Normal Working every employee
Appointing Committee employee in schedule engated in schedule
issue of Notification etc.
Overtime employer in equal employment at a rate
number and not less than minimum
rates of wages as fixed
 Shall constitute a To be fixed by the hour, by independent persons
by Notification by not
normal working day the day or by such a longer rd
not exceeding 1/3 or making deduction
inclusive of one or wage-period works on any its total number one other than prescribed.
more specified day in excess of the number such person to bewho works for less Sec.12
Wages of workers than
intervals.
of hours constituting normal appointed by
normaltheworking days
 To provide for a day
of rest in every working day.
period of seven days Save as otherwise hereinafter provided, be entitled
with remuneration. Payment for every hour or for to receive wages in respect of work done by him
 To provide for part of an hour so worked in on that day as if he had worked for a full normal
payment
Wages forfortwo
work on of work
class excess at the overtime rate working of
Maintenance day.
registers and records
a day
Where anofemployee
rest at adoes
ratetwo ordouble
more of the ordinary
Register rate of – Form I Rule 21(4)
of Fines
not less than the  Annual Returns – Form III Rule 21 (4-A)
classes of work to each of which a
different minimum rate of wages is  Register for Overtime – Form IV Rule 25
 Register of Wages–Form X, Wages slip–Form XI, Muster Roll–Form V
applicable, wages at not less than the
Rule 26
minimum rate in respect of each such  Representation of register – for three year Rule 26-A
class.
Minimum time Sec. rate
16 wages for piece Claims by employees
work  To be filed by before authority constituted under the Act within 6
Not less than minimum rates wages months.
as fixed .  Compensation upto 10 times on under or non-payment of wages

PENALITIES Offence Punishment

For paying less than minimum Imprisonment upto 6 months

rates of wages or with fine upto Rs.500/-
Sec. 20 For contravention of any Imprisonment upto 6 months
provisions pertaining to fixing or with fine upto Rs.500/-
hours for normal working day
etc.
 TRADE UNIONS ACT, 1926
CHECKLIST

Object of the Act

To provide for the registration of Trade Union and in certain respects

Registration of trade Union Registration of trade Union

 Any 7 or more members of a trade union may, by Prescribed form with following details.
subscribing their names to the rules of the trade union  Names, occupations and address of the
and its compliance. members’ place of work.
 There should be at least 10%, or 100 of the work-  Address of its head office; and
men, whichever is less, engaged or employed in the
establishment or industry with which it is connected.  Names, ages, addresses and occupations
of its office bearers.
 It has on the date of making application not less than 7
Sec. 5
Minimum requirements for Cancellation of Criminal conspiracy in trade
membership of trade Registration disputes
union

 If the certificate has been No office bearer or member of a

Not less than 10%, or 100 obtained by fraud or registered trade union shall be liable to
of the workmen, whichever is mistake or it has ceased to
punishment under sub section (2) of
less, exist or has willfully
contravened any provision conspiracy u/s 120B of IPC in respect of
of this Act. any agreement made between the
Subject to a minimum of 7,  If it ceases to have the members for the purpose of furthering
requisite number of
Disqualification of office bearers Returns
any such object of the Trade Union.
of Trade Union

Annually to the Registrar, on or before such date as may

If one has not attained the age of 18 years. be prescribed, a general statement, audited in the
prescribed manner, of all receipts and expenditure of
Conviction for an offence involving moral every registered Trade Union during the year ending on
turpitude. the 31st December.

Penalties Offence Punishment

 For making false entry in or  Fine upto Rs.500. On

any omission in general continuing default, additional
statement required for fault, Rs.5 for each week (not
sending returns. exceeding Rs.50).
U/s 31
 For making false entry in the  Fine upto Rs.500.
form.

U/s 32
 Supplying false information  Fine upto Rs.200.
regarding Trade Union

PAYMENT OF BONUS ACT, 1965 & THE RULES

CHECKLIST
 Applicability of Act Establishment
Every factory where in 10 or more persons are
employed with the aid of power or
Establishment includes
An establishment in which 20 or more persons are
employed without the aid of power on any day during Separate establishment

Computation of available surplus Components of

Bonus
If profit and loss accounts
are prepared and
Income taxes and direct taxes as maintained in respect of
payable. Salary or wages any such department or
includes dearness undertaking or branch,
Depreciation as per section 32 of allowance but no other then such department or
Income Tax Disqualification
Act. allowances undertaking or branch is
& Deduction of Bonuse.g. over-
time, house rent, treated as a ofseparate
Computation gross
establishment.
profit
On dismissal of an employee for For banking company, as
per First Schedule.
 Fraud; or
 riotous or violent behavior while on the premises of the
establishment; or
 theft, misappropriation or sabotage of any property of the Others, as per
Eligible Employees
establishment or
 Misconduct of causing financial loss to the Employer to the
extent that bonus
Eligibility can be deducted
of Bonus for that year.
Payment of Minimum Bonus Employees drawing wages
8.33% of the salary or upto Rs.3500 per month or
Rs.100 (on completion of 5 less.
An employee will be entitled years after 1st Accounting year
only when he has worked even if there is no profit) For calculation
purposes Rs.2500 per
for 30 working days in that
month maximum will be
Time Limit for Set-off and taken even if an
Payment of Bonus Set-on employee is drawing
Within 8 months from the As per Schedule IV. upto Rs.3500 per
close of accounting y ear. month.
Sec.
Maintenance of Registers and 15
Records etc. Sec.12
Note: The proposal to
enhance the existing
 A register showing the computation of the allocable surplus referred to in clause (4) of section 2, in
form A.

 A register showing the set-on and set-off of the allocable surplus, under section 15, in form B

PENAL
Act For contravention
not applicable of anyofprovision
to certain employees of Insurance,
LIC, General the UptoDockYards,
6 months Red or with
Cross, fine upto
Universities
&TY
EducationalAct or the Rule
Institutions, Rs.1000.
Chambers of Commerce, Social Welfare Sec.28
Institutions, Building Contractors,

PAYMENT OF
Sec. Sec.
GRATUITY
1ACT, 1972 & THE RULES
Applicability 2(s)
Wages for
Calculation
CHECKLIST
Every factory,
mine, oil field, @ 15 days’
plantation, port, wages for every
Sec. completed year
railways,
company, shop, as if the month
2(e)
 Employee Qualifying
period
Sec.
All employees Rule
1
Calculation Calculation irrespective of On rendering of 4
Piece- Seasonal status or 5 years’ service,
rated employee either Display of
salary
employee Notice
termination,
resignation or
@ 7 days’
retirement. On conspicuous
@ 15 days wages for Entitlement
wages for every place at the main
every completed On completion entrance in
completed year of English language
year on an service. Sec. or the language
average of 3 4(3) understood by
Rule majority of
months’
Sec.6 Maximum 9 employees of the
Rule 6 Ceiling
Mode of Rule
Nomination payment
9
Rs.3, Penalties
To be obtained
50,000 Cash or, if so
by employer desired, by
Bank Draft or  Imprisonment
after expiry of
for 6 months or
one year’s Sec. Cheque
fine upto Rs.10,
000 for avoiding
Sec.8 4(6) Sec. to make
Rule 8 Forfeiture of Gratuity 13 payment by
making false
Recovery of Protection of
state-ment or
Gratuity Gratuity
 On termination of an representa -tion.
employee for moral
turpitude or riotous or
To apply within disorderly behavior. Can’t be  Imprisonment
30 days in  Wholly or partially for attached in not less than 3
Form I when willfully causing loss, execution of months and upto
any decree one year with
fine on default in
comply-ing with
the provisions of
Act or Rules.

PAYMENT OF WAGES ACT, 1936

CHECKLIST
Applicability of Act Object of the Act Wages to be paid in
 Factory industrial To regulate the payment of wages of current coins or
Establishment certain classes of employed persons currency notes
 Tramway service or motor Time of payment of wages All wages shall be paid
transport service engaged in The wages of every person employed is in current coins or
carrying passengers or good paid. currency notes or in
or both by road for hire or When less than 1000 persons are both.
reward.  Air transport
employed shall be paid before the
service Dock, Wharf or Jetty
expiry of the 7th day of the following After obtaining the
 Inland vessel, mechanically
propelled month. authorization, either by
 Mine, quarry or oil-field Cheque or by crediting
 Coverage of Employees Deduction made from wages Deduction for absence
Drawing average wage upto Deductions such as, fine, deduction for from duties for
Rs.6500 pm as amended w.e.f. amenities and services supplied by the unauthorized absence
Fines as prescribed by
6.9.05.
Not to imposed unless the employer, advances paid, over
employer is given an payment of wages, loan, granted for
opportunity to show cause house-building or other purposes, Absence for whole or any
income tax payable, in pursuance of part of the day –
To record in the register the order of the Court, PF contributions,
cooperative societies, premium for Life If ten or more persons
Insurance, contribution to any fund absent without
Deductions for service Deduction
constituted by for damageoror aloss
employer trade reasonable cause,
rendered union, recovery of losses, ESI deduction of wages upto
When accommodation amenity 8 days.
or service has been accepted For default or negligence of an
by the employee. employee resulting into loss. Show

Sec.11 Sec. 9

On contravention of S.5 (except sub-sec.4), S.7, S.8 Fine not less than Rs.1000, which may extend to
(except Ss.8), S.9, S.10 (except Ss.2) and Secs.11 to Rs.5000. On subsequent conviction fine not less
13. than Rs.5000, may extend to Rs.10, 000. On
contravention S.4, S.5 (4), S6, S.8 (8), S.10 (2) or
S.25 fine not less than Rs.1000. – may extend to
Rs.5000. On subsequent On conviction fine not
less.

 For failing to maintain registers or records; or

 Willfully refusing or without lawful excuse
neglecting to furnish information or return; or  Fine which shall not be less than Rs.1000 but may
 Willfully furnishing or causing to be furnished any extend to Rs.5000 – On record conviction fine not
information or return which he knows to be false less than Rs.5000, may extend to Rs.10, 000.
or  For second or subsequent conviction, fine not less
 Refusing to answer or willfully giving a false than Rs.5000 but may extend to Rs.10,000
answer to any question necessary for obtaining
any information required to be furnished under
this Act.
 Willfully obstructing an Inspector in the discharge
of his duties under this Act; or
 Refusing or willfully neglecting to afford an
Inspector any reasonable facility for making any
WORKMEN’S COMPENSATION
entry, inspection etc. Fine not less than Rs.1000 extendable
ACT, 1923refusing to produce on the demand of an
 Willfully
CHECKLIST
inspector any register or other document kept in Upto Rs.5000 – On subsequent conviction fine
pursuance of this Act; or preventing any person for
appearance etc. Coverage of Workmen not less than Rs.5000 Employer’s liability
– may extent to pay
to Rs.10,000
Applicabilit All workers irrespective of their status compensation to a workman
y or salaries either directly or through On death or personal injury resulting
contractor or a person recruited to into total or partial disablement or
work abroad. Sec.1 (3) occupational disease caused to a
All over India
workman arising out of and during
Amount of compensation
the course of employment.
 Where death of a workman results from the injury
 An amount equal to fifty per cent of the monthly wages of When an employee is not liable
the deceased workman multiplied by the relevant factor for compensation
on an amount of eighty thousand rupees, whichever is
more.
 Where permanent total disablement results from the injury.
 In respect of any injury which does
 An amount equal to sixty per cent of the monthly wages
result in the total or partial
of the injured workman multiplied by the relevant factor
disablement of the workman for a
or an Wages
amount of ninety thousand
Notice rupees, whichever is
period exceeding three days.
more Accident  In respect of any injury, not
Procedure for calculation
resulting in death or permanent
When the monthly wages total disablement caused by an
Higher the age – Lower the compensation
are more than Rs.4000 per As soon as accident which is directly
 Report of accident Bar upon contracting out
Rule 11 Form EE

Any workman relinquishing his right

Report of fatal Accident and Serious Injury within 7 days to for personal injury not permissible.
the Commissioner (not application when ESI Act applies).
Sec.14
PENALTY

 In case of default by employer  50% of the compensation amount + interest to be paid to the
 Deposit of Compensation workman or his dependents as the case may be.
 Within one month with the Compensation Commissioner
Sec.4A