Qs. Claim and adjudication of disputes under the employee state insurance act 1948.

Ans. Employees Insurance Court:

It is the court which decides all the disputes arising under the ESI Act, 1948. As per Section
74 of ESI Act,

the State Government shall constitute an Employees’ Insurance Court for such local area
as may be specified

in the notification. The Court shall consist of one or more judges as the State Government
may think fit. The

State Government may appoint the same Court for two or more local areas or two or more
Courts for the

same local area.

Matters to be decided by the Employees State Insurance Court

All disputes s arising under the ESI Act, 1948, shall be decided by the Employees Insurance
Court. Section

75 provides that the following matters are to be decided by the ESI Court

I. Whether any person is an employee or whether he is liable to pay the employee’s

contribution, or

II. The rate Of wages or average daily wages of an employee for the purpose of ESI Act, or

III. The rate of contribution which is payable by a principal employer in respect of any
employee, or

IV. The person who is or was the principal employer in respect of any employee, or

V. The right of any person to any benefit under the ESI Act and the amount and duration
thereof, or

VI. Any other matter which is in dispute between a principal employer and the Corporation
or between

principal employer and an immediate employer or between an employee and principal or

immediate

employer.

Following claims are to be decided by the ESI Court:

I. Claim for recovery of contributions from the principal employer;

II. Claim by a principal employer to recover contribution from immediate employer if any;

III. Claim against a principal employer under Section 68 (where principal employer fails or
neglects to

pay any contribution);

IV. Claim under Section 70 for the recovery of the value or amount of benefits received by a
person

when he is not lawfully entitled to such benefits; and

V. Any claim for the recovery of any benefit admissible under the Act.

Institution of proceedings, etc:

Subject to the provisions of the ESI Act and any rules made by the State Government in this
regard, all

proceedings before the Employees Insurance Court shall be instituted in the Court
appointed for the local

area in which the insured person was working at the time the question or dispute arose
(Section 76).

Commencement of proceedings:

The proceedings before an Employees Insurance Court shall be commenced by

application. Every such

application should be made within a period of three years from the date on which cause of
action arose

(Section 77).

Powers of Employees Insurance Court:

The Employees Insurance Court enjoys the powers of a Civil Court for the purposes of –

I. summoning and II. enforcing the attendance of witnesses,

III. compelling the discovery and production of documents and material objects,

IV. administering oath and recording evidence.

An order of the ESI court shall be enforceable as if it were a decree passed in a suit by a
Civil Court (Section

78).

Appeal

The Court can refer any question of law to the High Court for decision. The decision of the
ESI court can be

appealed against in the High Court within 60 days if it involves a substantial question of
law. Except for

this, no appeal shall lie from an order of an Employee’s Insurance Court (Section 82).

Obligation of employer under Factory Act 1948 Health, welfare and safety of worker.

INTRODUCTION

In Great Britain, the second half of the 18th century, there was a rapid growth of industrial
towns &

factories. As it was started without planning, they employed the women as well as their
children in factories

who needed to work for more than 12 hours a day. Some of the employees took initiative to
implement

labour legislations; Factories Act came into existence in 1819. After some modifications,
the final amended

of Factories Act took place in 1948

FACTORIES ACT IN INDIA

In India, the First factories Act was passed in 1881. This Act was basically designed to
protect children and

to provide few measures for health and safety of the workers. This law was applicable to
only those

factories, which employed 100 or more workers. In 1891 another Factories Act was passed
which extended

to the factories employee 50 or more workers.

FACTORIES ACT INCLUDES:

Health

Safety

Welfare

Working Hours of Adults

Annual Leave With wages

DEFINITIONS:

Factory is defined in section 2(m) of the Act. It means any premises including a) Whereon
10 or more

workers are working, or were working on any day of the preceding 12 months, and in any
part of which a

manufacturing process is being carried on with the aid of power, or is ordinarily so carried
on; or

b) Whereon 20 or more workers are working, or were working on any day of the preceding 12
months, and

in any part of which a manufacturing process is being carried on without the aid of power,
or is ordinarily so

carried on. But does not include a mine subject to the operation of the Mines Act, 1952 or a
mobile unit

belonging to the Armed forces of the Union, a railway running shed or a hotel, restaurant or
eating place. .

OBJECTIVES:

The main objective of Factories Act, 1948 is…

I. Ensure adequate safety measures and

II. promote the health and safety and welfare of the workers employed in factories.

III. The act also makes provisions regarding employment of women and young persons

IV. Annual leave with wages etc.

PROVISIONS REGARDING HEALTH:

1. Cleanliness (sec.11)

2. Disposal of Wastes & Effluents (sec.12)

3. Ventilations & Temperature (sec.13)

4. Dust & Fumes (sec.14)

5. Artificial Humidification (sec. 15)

6. Overcrowding (sec.16)

7. Lighting (sec.17)

8. Drinking Water (sec.18)

9. Latrines & Urinals (sec.19)

10. Spittoons (sec.20)

1. Cleanliness (Sec. 11):

I. Dirt should be swiped and cleaned daily.

II. Floor of workroom should be cleaned at least once in a week.

III. If the floor is wet through any manufacturing process effective drainage shall be
provided.

IV. Inside walls, partition, ceilings, tops of rooms should be painted or vanished and
repainted and

revarnishedonce in 5 year.

V. if washable paints are used it can be repainted once in 3 years.and washable once in 6
months.

Health

Safety

Welfare

Working Hours of Adults

Annual Leave With wages

DEFINITIONS:
Factory is defined in section 2(m) of the Act. It means any premises including a) Whereon
10 or more

workers are working, or were working on any day of the preceding 12 months, and in any
part of which a

manufacturing process is being carried on with the aid of power, or is ordinarily so carried
on; or

b) Whereon 20 or more workers are working, or were working on any day of the preceding 12
months, and

in any part of which a manufacturing process is being carried on without the aid of power,
or is ordinarily so

carried on. But does not include a mine subject to the operation of the Mines Act, 1952 or a
mobile unit

belonging to the Armed forces of the Union, a railway running shed or a hotel, restaurant or
eating place. .

OBJECTIVES:

The main objective of Factories Act, 1948 is…

I. Ensure adequate safety measures and

II. promote the health and safety and welfare of the workers employed in factories.

III. The act also makes provisions regarding employment of women and young persons

IV. Annual leave with wages etc.

PROVISIONS REGARDING HEALTH:

1. Cleanliness (sec.11)

2. Disposal of Wastes & Effluents (sec.12)

3. Ventilations & Temperature (sec.13)

4. Dust & Fumes (sec.14)

5. Artificial Humidification (sec. 15)

6. Overcrowding (sec.16)

7. Lighting (sec.17)
8. Drinking Water (sec.18)

9. Latrines & Urinals (sec.19)

10. Spittoons (sec.20)

1. Cleanliness (Sec. 11):

I. Dirt should be swiped and cleaned daily.

II. Floor of workroom should be cleaned at least once in a week.

III. If the floor is wet through any manufacturing process effective drainage shall be
provided.

IV. Inside walls, partition, ceilings, tops of rooms should be painted or vanished and
repainted and

revarnishedonce in 5 year.

V. if washable paints are used it can be repainted once in 3 years.and washable once in 6
months.

VI. other cases white or colour wash may be carried out once in every 14 months.

VII. Doors, windows, wooden or metallic frame work shetters should be painted once in
every 5 years.

2. Disposal of wastes and effluents (Sec.12):

There should be such arrangement in the factory that the wastes and effluents easily
disposed off. Sec. 12(2)

provide state Gov. can form rules regarding the arrangements and it shall be approved by
the authority.

3. Ventilation and Temperature (Sect.13)

Effective and suitable provision shall be made in every factory for securing and maintaining
in every

workroom (a) Adequate ventilation and the circulation of fresh air, and (b) Workers therein
reasonable

conditions of comfort and prevention from injury to health. Beside this, where the nature of
the work carried
on in the factory involves production of excessively high temperatures, adequate measures
as are necessary

shall be taken to protect the workers.

4. Dust and Fume (Sect. 14)

In a factory in which manufacturing process is carried on, there may be given off any dust
or fume. Its

inhalation by workers in any workroom is injurious or offensive to the workers employed.

So, in order to

prevent this the point of origin of the dust, fume or other impurity, shall be enclosed as far
as possible. On

the other hand, in any factory no stationary internal combustion engine shall be operated
unless the exhaust

is conducted into the open air.

5. Artificial humidification (Sec. 15)

In respect of all factories in which the humidity of the air is artificially increased, the State
Government may

make rules,- (a) prescribing standards of humidification; (b) regulating the methods used
for artificially

increasing the humidity of the air; (c) directing prescribed tests for determining the
humidity of the air to be

correctly carried out and recorded; (d) prescribing methods to be adopted for securing
adequate ventilation

and cooling of the air in the workrooms.

6. Overcrowding (Sec. 16): • The overcrowding affects the workmen not only in the
discharge of duties but

also their health. The working space should be 9.9 cubic meters of space per worker in
every workroom

before the commencement of this Act. And after the commencement of this Act, the space
per worker is

14.2 cubic meter.

7. Lighting (Sec. 17)

The Factories Act makes following provisions in this respect,

(a) There shall be provided and maintained sufficient and suitable lighting, natural or
artificial, or both, in

every part of the factory.

(b) In every factory all glazed windows and skylights be used and workrooms shall be kept
clean on both the

inner and outer surface.

(c) The State Government prescribes standards of sufficient and suitable lighting for
factories or for any

class of description of factories or for any manufacturing process.

8. Drinking water (Sec. 18)

The provisions in this respect under the Factories Act, are;

(a) Arrangements shall be made to provide and maintain sufficient supply of wholesome
drinking water.

Points should be marked as “DRINKING WATER” in the language understood by majority of

workers. It

should be situated within 6 M of any washing palace, urinal, latrine, spittoon, ect.,,

(b) Provision shall be made for cooling drinking water during hot weather by effective
means and for

distribution thereof in every factory wherein more than two hundred and fifty workers are
ordinarily

employed.

(c) Examine as prescribed by the authorities of the supply and distribution of drinking water
in factories.

9. Latrine and Urinal (Sec. 19)

The Factories Act makes following provisions in this respect, 1.

(a) sufficient latrine and urinal accommodation of prescribed types shall be provided and
conveniently
situated to make them accessible to workers at all times while they are at the factory;

(b) separate enclosed accommodation shall be provided for male and female workers and
there should be

adequately lighted and ventilated;

(d) they shall be maintained in a clean and sanitary condition at all times;

(e) sweepers shall be employed whose primary duty would be to keep latrines, urinals and
washing places

clean.

10. Spittoons (Sec. 20)

There shall be provided sufficient number of spittoons in convenient places and they shall
be maintained in a

clean and hygienic condition. The State Government may make rules prescribing the type
and the number of

spittoons to be provided and their location in any factory.

SAFETY

(SEC.21-35) Chapter IV of the Factories Act, 1948, deals with the provisions relating to the
safety of the

workers in a factory.

1. Fencing of machinery (Sec. 21)

According to Section 21 of Factories Act, 1948, in every factory, the dangerous parts of all
machineries

should be securely fenced. The following should be securely fenced (a) every part of an
electric generator, a

motor or rotary convertor; (b) every part of transmission machinery; and (c) every
dangerous part of any

other machinery,

2. Work On Or Near Machinery In MotionSec 22:

Examination shall be carried out only by specially trained male workers.Such workers
should wear tight
fitting clothes. Such worker shall not handle a belt at moving pulley. No woman or young
person shall be

allowed to clean, lubricate or adjust any part of prime mover

3.Employment of young persons on dangerous machines (Sec.23)

Section 23 provides that young person shall be required or allowed to work at any machine
to which he has

been fully instructed as to the dangers arising in connection with the machine and the
precautions to be

observed and- (a) has received sufficient training in work at the machine, or (b) is under
adequate

supervision by a person who has a through knowledge and experience of the machine.

4. Striking gear and devices for cutting off power (Sec. 24)

Section 24 provides that suitable striking gear or other efficient mechanical appliance shall
be maintained

and used to move driving belts to and from fast and loose pulleys which form part of the
transmission

machinery, and such gear or appliances shall be so constructed, placed and maintained as
to prevent the belt

from creeping back on to the fast pulley. Further driving belts, when not in use, shall not be
allowed to rest

or ride upon shafting in motion. Besides these, in every factory suitable devices for cutting
off power in

emergencies from running machinery shall be provided and maintained in every work-
room.

5. Self-acting machines (Sec. 25)

No traversing part of a self-acting machine in any factory and no material carried thereon
shall, if the space

over which it runs is a space over which any person is liable to pass, whether in the course
of his
employment or otherwise, be allowed to run on its outward or inward traverse within a
distance of forty-five

centimeters from any fixed structure which is not part of the machine

6. Prohibition of employment of women and children near cotton- openers (Sec. 27)

In any part of a factory where a cotton-opener is at work for pressing cotton, no woman or
child shall be

employed. Provided that the Inspector may in any particular case specify in writing that the
women and

children may be employed on the side of the partition where the feed-end is situated.

7. Hoists and lifts (Sec. 28)

Every hoist and lift shall be of good mechanical construction, sound material and adequate
strength,

properly maintained ,protected by an enclosure fitted with gates, and shall be thoroughly
examined by a

competent person .

8. Lifting machines, chains, ropes and lifting tackles (Sec. 29)

Every lifting machine and every chain, rope and lifting tackle for the purpose of raising or
lowering persons,

goods or materials, all parts, including the working gear, whether fixed or movable, of every
lifting machine

and every chain, rope or lifting tackle shall be of good construction, sound material and
adequate strength

and free from defects. It should be properly maintained.

9. Protection of eyes (Sec. 35)

Prescribed process should be taken which involves risk of injury to the eyes from particles
or fragments

thrown off in the course of the process, or risk to the eyes by reason of exposure to
excessive light. Effective

screens or suitable goggles shall be provided for the protection of persons employed.
10. Precautions against dangerous fumes, gases, etc (Sec. 36)

No person shall be allowed to enter any chamber, tank, vat, pit, pipe, flue or other confined
space in any

factory in which any gas, fume, vapour or dust is likely to be present.

WELFARE

There are many welfare provisions mentioned under the Act—

1. Washing facilities (Sec. 42)

In every factory adequate washing facilities should be provided for both male and female
workers. They

should be conveniently accessible and kept clean. The State Government prescribes
standards for adequate

and suitable facilities for washing.

2. Facilities for storing and drying clothing (Sec. 43)

There should be suitable places for keeping the clothing not worn during working hours and
for the drying

of the wet clothing.

3. Facilities for sitting (Sec. 44)

In every factory suitable arrangements for sitting as well as standing shall be provided and
maintained for all

workers for rest which they may require in course of their work.

4. First-aid appliances (Sec. 45)

There should be readily accessible during all working hours the first-aid boxes or
cupboards equipped with

the prescribed contents, and the number of such boxes or cupboards to be provided and
maintained shall not

be less than one for every one hundred and fifty workers ordinarily employed . Each first-aid
box or

cupboard shall be kept in the charge of a separate responsible person.

Each first aid box or cup-boards shall contain the following equipments :- (i) 6 small
sterilized dressings. (ii)

3 medium size sterilized dressings. (iii) 3 large size sterilized dressings. (iv) 3 large size
sterilized burn

dressings. (v) 1 (1 oz.) bottle containing a two per cent, alcoholic solution of iodine. (vi) 1 (1
oz.) bottle

containing sal-volatile having the dose and mode of administration indicated on the label.
(vii) A snake-bite

lancet. (viii) 1 (1 oz.) bottle of potassium permanganate crystals. (ix) 1 pair scissors. (x) 1
copy of the first

aid leaflet issued by the Chief Adviser, Factories, Government of India. (xi) Tables aspirin
(Grs. 5) One

dozen. (xii) Burn Ointment. One tube. (xiii) Dettol. One phial (about 2 ozs.)

5.Shelters, rest-rooms and lunch-rooms.-sec 47

In every factory wherein more than one hundred and fifty workers are ordinarily employed
adequate and

suitable shelters or rest-rooms and a suitable lunch-room, with provision for drinking
water, where workers

can eat meals brought by them, shall be provided and maintained for the use of the
workers.

6. Canteens (Sec. 46)

In a factory wherein more than two hundred and fifty workers are ordinarily employed, a
canteen or

canteens shall be provided. Besides the foodstuffs to be served therein, the construction,
accommodation,

furniture and other equipment of the canteen should be of good standards. The shelters or
rest rooms or

lunch rooms to be provided shall be sufficiently lighted and ventilated and shall be
maintained in a cool and

clean condition.
No person shall be allowed to enter any chamber, tank, vat, pit, pipe, flue or other confined
space in any

factory in which any gas, fume, vapour or dust is likely to be present.

WELFARE

There are many welfare provisions mentioned under the Act—

1. Washing facilities (Sec. 42)

In every factory adequate washing facilities should be provided for both male and female
workers. They

should be conveniently accessible and kept clean. The State Government prescribes
standards for adequate

and suitable facilities for washing.

2. Facilities for storing and drying clothing (Sec. 43)

There should be suitable places for keeping the clothing not worn during working hours and
for the drying

of the wet clothing.

3. Facilities for sitting (Sec. 44)

In every factory suitable arrangements for sitting as well as standing shall be provided and
maintained for all

workers for rest which they may require in course of their work.

4. First-aid appliances (Sec. 45)

There should be readily accessible during all working hours the first-aid boxes or
cupboards equipped with

the prescribed contents, and the number of such boxes or cupboards to be provided and
maintained shall not

be less than one for every one hundred and fifty workers ordinarily employed . Each first-aid
box or

cupboard shall be kept in the charge of a separate responsible person.

Each first aid box or cup-boards shall contain the following equipments :- (i) 6 small
sterilized dressings. (ii)
3 medium size sterilized dressings. (iii) 3 large size sterilized dressings. (iv) 3 large size
sterilized burn

dressings. (v) 1 (1 oz.) bottle containing a two per cent, alcoholic solution of iodine. (vi) 1 (1
oz.) bottle

containing sal-volatile having the dose and mode of administration indicated on the label.
(vii) A snake-bite

lancet. (viii) 1 (1 oz.) bottle of potassium permanganate crystals. (ix) 1 pair scissors. (x) 1
copy of the first

aid leaflet issued by the Chief Adviser, Factories, Government of India. (xi) Tables aspirin
(Grs. 5) One

dozen. (xii) Burn Ointment. One tube. (xiii) Dettol. One phial (about 2 ozs.)

5.Shelters, rest-rooms and lunch-rooms.-sec 47

In every factory wherein more than one hundred and fifty workers are ordinarily employed
adequate and

suitable shelters or rest-rooms and a suitable lunch-room, with provision for drinking
water, where workers

can eat meals brought by them, shall be provided and maintained for the use of the
workers.

6. Canteens (Sec. 46)

In a factory wherein more than two hundred and fifty workers are ordinarily employed, a
canteen or

canteens shall be provided. Besides the foodstuffs to be served therein, the construction,
accommodation,

furniture and other equipment of the canteen should be of good standards. The shelters or
rest rooms or

lunch rooms to be provided shall be sufficiently lighted and ventilated and shall be
maintained in a cool and

clean condition.

Unit 3
Qs. Concept of wages (Minimum Wages, Fair Wages and Living Wages)

Introduction

Wage is a remuneration to labour for the work done for the service rendered by it to the
employer. There are

different theories on the concept of wages as enunciated by economists and sociologists,

which explain

various aspects of wage problems. However, these theories are not applicable in all
circumstances. Meaning and Definition of Wage

According to Section 2(h) of the Minimum wages Act, 1948 the term "wages" means all
remuneration

capable of being expressed in terms of money which would if the terms of the contract of
employment

express or implied were fulfilled be payable to a person employed in respect of his

employment or of work

done in such employment and includes house rent allowance but does not include –

(i) the value of –(a) any house accommodation supply of light water medical attendance
or(b) any other

amenity or any service excluded by general or special order of the appropriate government;

(ii) any contribution paid by the employer to any person fund or provident fund or under any
scheme of

social insurance;

(iii) any travelling allowance or the value of any traveling concession;

(iv) any sum paid to the person employed to defray special expenses entailed on him by the
nature of his

employment; or

(v) any gratuity payable on discharge;

Concepts of Wages

Broadly Speaking, the wages can be classified into the following categories:

(a) Living Wage

(b) Fair Wage

(c) minimum Wage

(a) Living Wage -

The concept of "Living wage" is the wage rate which prevails in most of the economically
advanced

Countries. The term Living Wage has not been defined under the Minimum wages Act,
1948. South

Australian Act of 1912 defines it as 'Living Wage means a sum sufficient for the normal and
reasonable

needs of the average employee living in a locality, where the work under consideration is
done or is to be

done.

Living wages are wages without which working people cannot live and perform their duties
as a citizen. It

varies from country to country depending upon the price level of necessaries of life, and it
is determined by

the socio-economic conditions of a particular country. The living wage should enable the
wage earner to

provide for himself and his family not merely the bare essentials of food, clothing and
shelter but the

measure of frugal comfort including education for the children protection against ill health,
requirements for

essential social needs and a measure of insurance against the more important misfortune
ilcluding old age.

In India, there is no statutory definition for the term 'living wage'. According to Article 43 of
the Indian

Constitution, the State shall endeavor to Secure to all workers living wages, conditions of
ensuring a decent

standard of life and full enjoyment of leisure and social and cultural opportunities.
Workmen v/s Reptakus Breet & co. Ltd it was held by the court that a living wage has been
promised to

the workers under the constitution in part IV under article 43

(b) Fair WageFair wage is a mean between the living wage and the minimum wage. A fair
wage is related to fair workload and the earning capacity. It can say that it is more than
minimum wage but less than the living wage. It

may roughly be said to approximate to the need based minimum, in the sense of the wage
which is adequate

to cover the normal needs of the average employee regarded as a human being in a
civilized society. Fair

wage is fixed, taking into consideration, the present economic position and further
prospects of the Industry.

Between these two limits (Living Wage and the Minimum Wage) actual wage would depend
upon a

consideration of certain factors namelyi) the productivity of Labour.

ii) the prevailing rates of wages in the same industry for similar occupations in the same or
similar

occupations in the same or neighbouring localities;

iii) the level of national income and its distribution; and the place of the industry in the
economy of the

country.

The Concept of fair wages, therefore, involves a rate sufficiently high to enable the worker
to provide a

standard family with food, shelter, clothing, medical care and education for children
appropriate to his status

in life but not at a rate exceeding the wage-earning capacity of the class of establishment
concerned. As time

passed and prices rise even the fair wage fixed for the time being tends to sag downwards
and then revision

becomes necessary.
(c) Minimum Wage -

The term 'Minimum Wage' has not been defined in the said Act ( Minimum Wages Act, 1948)
The

minimum wage is the lowest wage in the scale below which the efficiency of a worker is
likely to be

inspired. The minimum wage includes not only the bare physical necessities but also a
modicum of comfort

otherwise known as conventional necessities. The Minimum wages must, therefore,

provide not merely for

the bare subsistence of life but also for the preservation of the efficiency of the worker. For
this purpose, the

minimum wage must also provide for the same measure of education, medical
requirements, and amenities.

Therefore any employer who is unable to pay this minimum wage to workers has no right to
exist. Where a

person provides labour or service to another for remuneration which is less than the
minimum wages, such

labour is 'forced labour' within the meaning of Article 23 of the Indian Constitution and
thereby entitles the

person to invoke Article 32 or Article 226 of the Constitution of India.

Kamani Metal Alloys Ltd. V/s Workmen in this case Supreme court held that an employer
cannot be

allowed to run the scheduled industry if he is unable to pay even the minimum wages to his
employees.

Qs. Fixation of minimum rate of wages under minimum wages act 1948

Ans. INTRODUCTION

Workers in developing countries like India with a high rate of unemployment can be
exploited by employers

because of their existing low bargaining power. In such a circumstance, the worker may
receive wages that
is much below the expected level and can result in the inability of the workers to meet his
daily needs.

OBJECTIVES OF THE MINIMUM WAGES ACT

I. To ensure that the employee can have the basic physical needs, good health and a level
of comfort.

II. To ensure a secure and adequate living wage for all laborers in the interest of the
publicIII. To ensure that the employee has enough to provide for his family. Ensuring a
decent life standard

that pertains to the social comfort of the employee.

PROCEDURE FOR REVIEW AND FIXATION OF MINIMUM WAGE

The requirements for the review and fixation of a minimum wage is under Section 5 of the
1948 minimum

wage Act. The rule provides that:

1. Committees and sub-committees, Advisory Board and Central advisory board shall be

appointed by the appropriate government as it deems fit; to inform it on the possible review

and fixation of the minimum wage rate.

2. The government shall notify the persons concerned by making a publication in one of the
national

dailies and specify a date not later than a period of two months from the publication date
before the

commencement of the hearing on the matter.

After the government must have considered the inputs from representatives of the persons
concerned or the

advice of the committee, is shall review or fix the minimum rate through a publication in the
official news

media based on each schedule of employment. The enforcement of the fixation or review
shall not be more

than three months from the date of publication.

The appropriate government shall work in conjunction with the minimum wages Advisory
Board while

reviewing the wages. The review is limited to the employment that are under the schedule.
However,

Section 27 of the Act empowers the appropriate government to add any employment to the
schedule.

The prevailing economic conditions, cost of living in a place, conditions which the work is
performed and

nature of work to be performed shall be used as the factors to determine the fixation of the
minimum wage.

BASIS FOR FIXING OF MINIMUM WAGE

Under section 3 the government is empowered to fix the minimum wage on the Basos of:

1 Cost of Living Index – the government may fix:

I. Minimum time rate which is the time factor on which the minimum wage can be fixed.

II. Minimum piece rate which allows the minimum wage to be fixed based on the pieces of
items

manufactured by the industry.

III. Guaranteed time rate which is a combination of piece rate and time rate with reference
to time work

basis and pieces of items manufactured by the industry on which the minimum wage is
based.

IV. Overtime rate which is minimum wage fixed based on overtime work performed by
employees,

irrespective of the time work or piece rate.

2 The Different minimum wage for various industrial areas – Section 3 (3) (a) of the Act
provides that

different minimum rates may be fixed for different:

I. scheduled employment

II. classes of work in a schedule of employment

III. locations.

V. Adults, children, adolescent and apprentices have different rates of wages.

3 The Minimum rate of wages on the basis of a basic rate of wages featured in other
allowances – Section 4

provides that any minimum rate of wages revised or fixed based on the scheduled
employments under

Section 3 may contain:

I. A special allowance and a basic rate of wages that shall be known as ‘cost of living
allowance’. The

rate of cost of living allowance shall be reviewed periodically in a manner that is directed by
the

appropriate government. The fixed rate shall correspond with the present living cost in the
country

and with the number of workers.

II. A basic rate of wages that is not only limited to the cost of living allowance, cash value
based on

prices of commodities.

4 An all-inclusive rate that is based on the cost of living allowance, and the value of cash.

The cost of living allowance and cash value in respect of the essential commodities
supplied shall be

calculated by an authorized body. The calculation shall be carried out by the competent
body based on the

directives of the appropriate government.

FACTORS CONSIDERED AS IRRELEVANT IN FIXATION OF MINIMUM WAGES

The following factors are irrelevant in fixation of minimum wages:

I. The fact that an employer may have difficulties in business

II. Financial abilities of the employer

III. Losses that may have been incurred by the company in the previous year
IV. The inability of the employer to import raw materials

V. The regional industrial principles.

ROLE OF THE WAGE COMMITTEE

The wage committee or sub-committee inaugurated by the appropriate government shall

be made up of the

same number of representatives of both employees and employers. An independent

person with no direct or

indirect interest in the schedule of employment shall be made the chairman of the
committee. Experience

and knowledge shall be the criteria for one’s membership in the committee.

The government is at the discretion of regarding or disregarding the recommendations from

the committee it

had appointed. The purpose of the committee is to advise; therefore, the government is not
bound to accept

all of its recommendations. Irregularities that may have occurred in the constitution of the
committee will

not affect the validity of a notice that may have been published by the appropriate
government.

THE ROLE OF ADVISORY BOARD

Section 7 provides that the appropriate government shall shoulder the responsibility for
inaugurating an

advisory board to:

Coordinate the obligations of committees and sub-committees appointed by the

government Inform the

appropriate government on matters related to fixing and reviewing of the minimum wage.

The procedure for the functioning of the Advisory board is not prescribed in the minimum
wage Act.

However, the board can set up its peculiar procedure. A Central Advisory Board shall be
constituted by theCentral Government to advise and counsel both the Central and State
government on fixation and review of
minimum wages rates and the works of the Advisory boards as stated in the Act.

Those who are to serve as members of the board shall be nominated by the Central
Government from

representatives of both the labor and the employers. Independent members of the board
shall not exceed

one-third of the total members. An official of the government can be one of the
independent members and

from this class shall the chairman emerge.

CONSEQUENCES OF NON-COMPLIANCE WITH THE MINIMUM WAGES ACT

Non-payment and underpayment of the minimum wage are considered as a culpable

offense. The penalty to

an offender may be up to 5 years imprisonment with a fine of Rs 10000 as provided in

Section 22 of the Act.

CASE LAWS

In the case between the State of Madras and P.N. Ram Chander Rao in 1956, the court
ruled that any

notification not specifying the manner and what interval special allowance made payable
to be adjusted is a

defect and impaired by an apparent error of law .

In the case between Cashew Manufacturers and Exporters Association v/s State of Kerala
in 1999, the

high court ruled that the government is not bound by the Advisory Board’s report.

In the case between S.D. Basha and the State of Madras, it was held that in a condition
where the

members appointed into the committee are bereft of knowledge and experience, such a
committee shall be

invalid. A committee with men of no knowledge and experience is illegal

Qs. Employers liability to pay compensation, Amount of compensation, Notice and claim
Ans. Introduction

The Workmen Compensation Act, 1923 has made it the responsibility of the employer to
provide

compensations to workers under them who fall as victims of accidents within the course of
employment.

This is regardless of the degree of the accident that could have either led to disablement or
even death of a

worker. The employer stands liable to that. This is the social and economic security granted
to workmen.

Workmen Commissioners have been given the mandate to establish the amount of
compensation required

according to the degree of the accident whenever an application for a compensation is

made.

Employer’s Liability For Compensation

S.3(1) holds the employer liable to pay a compensation to a workman when:

I. A personal injury is attained by the workman.

II. An accident is the cause of the injury.

III. The accident occurred out of and during the course of employment.

IV. The effects of the injury upon the workman is either death, permanent or temporary
disablement or

total or partial disablement.

V. There is an employment relationship.

Personal Injury

The Act provides that the injuries bracketed as personal injury include physical, bodily and
mental injury

and occupational disease.

Disability

Disability is the unfitness to work that results from personal injury during the course of
employment. There
are four types of disabilities, namely:

1. Permanent disability: The ability to work is no longer present forever and can never be
regained. 2.

Temporary disability: The ability to work is lost only for some time. It is subject to transition
and can be

regained.

Total disability: Totally lost the capacity to work.

1. Partial disability: Capacity to work is partially lost.

Death is the greatest effect of an accident. In the event of death, the workman’s
dependants have the right to

claim the compensation.

Accidents arising from and during the course of employment

This endeavours to explain the meaning of ‘arising out of employment’ which is likely to
either be

misunderstood or understood partially. Besides meaning that the injury occurred as a

result of the activities

of the employment, it also means that the injury does not necessarily have to be connected
directly to the

results of the accident.

Cases where an employer is not liable for compensation

The following conditions provide cases where employers are not liable for the
compensation of a workman:

I. When an injury does not lead to the total or partial disablement of the workman for a
duration that

goes for more than 3 days.

II. When an injury which did not lead to death that was triggered by an accident is as a
result of:

III. The influence of drugs or alcohol at the time of the accident. 4. Intentional defiance of a
rule that was
made to ensure the safety of all workmenIV. Doing away with a safety equipment
intentionally that had been provided for the safety of the

workman.

Employers are able to unhook themselves from the responsibility of compensation if they
are able to prove

the above mentioned cases in the event of a workman’s injury. However, regardless of the
stated conditions,

an employer is liable to pay the compensation if the workman dies.

Occupational disease

Certain occupations expose workers to particular diseases. These diseases are inherent.
For instance,

workers in the textile mills and cigarette factories are prone to contracting Tuberculosis.

1. 3(2) provides that an occupational disease is termed to be an accidental injury. This also
holds the

employer responsible for the compensation of a workman who has contracted a disease
that can be directly

attributed to a particular injury through an accident that resulted or occurred during

employment.

The doctrine of Notional Extension of Employment

The theory of Notional Extension was executed by S.C. in:

1. Sourashtra Salt Mfg. Co. V/S Bai Bula Raja, AIR 1958 S.C. 881

The Supreme Court ruled that there are situations whereby an employer will have to
account for the injury of

the workmen even if the workman was not within the premises when the accident
occurred.

1. Works Manager and Wagon Shop E.I.R v/s Mahabir, AIR 1954 ALL. 32

The employer was liable in a case whereby one of the workmen was run over by an engine
and was injured.
The workshop was located quite a distance from the railway station. The workers have to
cross a railway

line before reaching the factory more preferably than using a different sub-way.

Case Laws

Moondra & Co. v/s Mst. Bhawani.

A truck owner employed a driver to drive a petrol tanker. However the driver discovered a
leak in the tank

and sought for the permission of the owner to enter into the tank and look for the source of
the leak. The

driver lit a matchstick which then caused a fire in the tank. Having received burn injuries,
the driver died.

The ruling was that the dependents of the driver are entitled to a compensation since the
accident occurred

out of employment.

Bhayabhai v/s Central Railway, AIR 1955, BOM. 105.

A workman in the railway had a job that entailed repairing clocks at different stations. While
on his way to

repair a clock in one of the stations, the workman was stabbed and died eventually. The
court ruled that the

death of the workman was as a result of an accident that happened in the line of
employment.

Arya Muni v/s Union of India & Others, ILJ Pg 94 All. H.C.

A spark hit the eye of a worker in a factory that led to the losing of his eye. There was a
notice written in

English that ordered all workers to put on goggles while working in the factory. The goggles
were in stock

as it was later stated by the employer. He further said that the workman did not ask for
them and that is why

none of the goggles was supplied to him by his superior. However, the workman said that
he did not
understand English and he had requested to be given goggles but none was supplied. The
ruling concluded

that the workman had not disobeyed the factory rule intentionally. He is therefore liable to
claim for

compensation.

Amount of compensation

Workers’ compensation settlement is estimated in the following manner based on the

incidence which has

led to the compensation:

Before the calculation of settlement under workmen compensation insurance policy

following points should

be noted:

a) Maximum monthly wage allowed for the calculation of compensation under the Act is
Rs. 8000

b) Workers from the age of 18 years and above are eligible for the compensation

c) Relevant Factor is an age-based multiplier defined in Schedule IV of the Workmen

Compensation

Act

1. Compensation in Case of Death:

a) 60% of the Monthly Wage x Relevant factor as per the age of the worker

b) Funeral expenses of Rs. 5000 is also payable

c) The minimum amount payable is Rs. 140,000

2. Compensation in case of Permanent Total Disability (PTD)

a) 50% of the Monthly Wage x Relevant factor as per the age of the worker

b) The minimum amount payable in this case is Rs. 120,000

3. Compensation in case of Permanent Partial Disability (PPD)

A percentage of the worker’s compensation will be payable under PPD. This percentage
needs to be
estimated based on the “extent of the reduction in earning capacity” of the worker.

a) Compensation in case of Temporary Disability (Total or Partial)

b) 25% of the Monthly Wage of the Worker payable every half month

c) The compensation is payable if the worker is disabled for more than three consecutive
days

d) The maximum tenure for the compensation is five years

Notice and claim

After the occurrence of the accident to the workman, giving notice to the employer is must.

After the occurrence of the accident to workman or the death of the workman, with in
2years notice should

be given to the employer. Without giving notice of accident or death of the workman, claim
of compensation

is not considered by the commissioner. Every notice given to employer about the accident
of the workman

should contain the following details

a) Name of the injured workman.

b) Address of the injured workman.

c) Date on which the accident happened. Notice should be registered post addressed.

Qs. Settlement of disputes under the workmen compensation Act, 1923

Ans. The claims for compensation broadly fall in three categories, namely (i) uncontested
cases of

disablement; (ii) disputed cases of disablement and (iii) fatal cases. The procedures for
settlement of the

three types of cases are as given below

(i) Uncontested Cases:

(a) After a workman has given notice of the accident, the employer is expected to arrange
for medical
examination of the workman. It must be free of charge. The medical Examination will
indicate the nature of

the disablement.

(b) If the disablement is of temporary nature the employer will pay compensation as half
monthly payments,

direct to the workmen.

(c) If the disablement is of permanent nature compensation will be paid in lump sum by the
employer to the

workman if he is a male over 18 years of age. In the case of woman and minors, the
employer will deposit

the amount of compensation with the Commissioner, for disbursement.

(d) Where a workman has agreed to accept and has taken a smaller sum than the amount
fixed by the Act his

right to bring proceed ings for the balance are protected.

(e) Any agreement with the workman for a lump sum payment must be registered with the
Commissioner by

the employer.

(ii) Disputed Cases:

a) If the employer refuses to pay compensation or does not pay the full amount due, the
workman has to

make an application to the Commissioner for Workman’s Compensation appointed by the

State Government

or Union Territory. The application has to be made in Form ‘F* prescribed under the
Workman’s

Compensation Rules. An illiterate person can have the application prepared under the
direction of the

Commissioner.

(b) A claim for compensation must be preferred before the Commissioner within 2 years of
the occurrence
of the accident or in the case of death within 2 years of the date of death. In the case of
contracting of a

disease the accident is deemed to have occurred on the first of the day during which the
workman was

continuously absent in consequence of the disablement caused by the disease.

(iii) Fatal Cases:

(a) The amount of compensation due has to be deposited by the employer with the
Commissioner for

Workmen’s Compensation. The Act specifically provided that no payment made directly by
the employer

shall be deemed to be a payment of compensation.

(b) The Commissioner shall distribute the lump sum amount of compensation to the
dependants in such

proportion as he may decide.

(c) If the employer does not deposit the compensation the dependant or dependants have
to make an

application to the Commissioner in Form ‘G’ prescribed under the Workmen’s

Compensation Rules for the

issue of an order to deposit compensation.

Appointment of Commissioners [Section 20] :

The State Government may appoint any person to be a Commissioner for Workmen’s
Compensation for the

specified areas. If more than one Commissioner has been appointed for any area, the State
Government may,

by general or specific order regulate the business between them. Every Commissioner
shall be deemed to be

a public servant within the meaning of the Indian Penal Code. Any Commissioner may
choose one or more

persons possessing special knowledge to assist him in holding the inquiry.

Jurisdiction of Commissioners:

The parties are free to settle the matter amicably by the agreement. If the parties
concerned could not settle

the matter by mutual agreement, they may refer the matter for decision to the
Commissioner for workmen’s

compensation. According to, Section 19 of this Act, the Commissioner has jurisdiction over
the following

matters:

1. Liability of any person to pay compensation,

2. Whether a person injured is or is not .a workman,

3. The nature and extent of disablement,

4. The amount or duration of compensation.

No Civil Court has jurisdiction to settle, decide or deal with any question which is under
this Act, required

to be settled, decided or dealt by a commissioner.

Venue of Proceedings and transfer for Proceedings:

As per Section 21, any matter under the Act to be done by or before a Commissioner, the
same shall be done

for the area in which

a) The accident took place which resulted in the injury or

b) The workman or in case of this death, the dependent claiming the compensation
ordinarily resides or

c) The employer has his registered office.

Where any proceeding pending before the Commissioner is sought to be transferred before
any other

Commissioner, such transfer cannot be ordered by the Commissioner himself unless prior
sanction of the

State Government is obtained. If the second Commissioner works for another State, then
prior approval of
the Government of the State is required to be obtained for transfer.

Powers and Duties of the Commissioner: The powers and duties of the commissioner are:

a) To deposit and distribute compensation [Section 8].

b) Powers to require from employers statement regarding fatal accident (Section 10A).

c) Power of settlement of disputes [Section 19(1)].

d) Power of transfer [Section 21 (2)].

e) Power to require further deposit in case of fatal accident [Section 22A].

f) Power of Civil Court [Section 23].

g) Power to order costs [Section 26].

h) Power to submit cases [Section 27].

i) Power to withhold certain payments pending decisions of an appeal [Section 30A].

j) Power of recovery [Section 31].

k) Power and duty to record evidence.

The Commissioner shall have all the powers of a Civil Court for the following purposes:

a) Taking evidence on oath,

b) Enforcing the attendance of witnesses, and

c) Compelling the production of documents and material objects.

Appearance of Parties [Section 24]:

Any appearance, application or act which is required to be made by any person before a
Commissioner, may

be made or done on behalf of such person by a legal practitioner or by an official of the

insurance company

or a registered trade union or by an Inspector appointed under the Factories Act 1948 or
under Mines Act or

any other officer authorized by the State Government.

Method of recording evidence:

Section 25 provides that the Commissioner shall make a brief memorandum of the
substance of the evidence

of every witness. The memorandum should be written and signed by the Commissioner
with his own hand

and shall form past of the record