SHORT NOTES ON IMPORTANT
CENTRAL LABOUR LEGISLATIONS
Topics/Acts included:
Sr.
No.
ACT NAME Page
Nos.
1. EMPLOYEES’ PROVIDENT FUNDS & MISC. PROVISIONS ACT,
1952 & THE SCHEMES
2-3
2. EMPLOYEES’ STATE INSURANCE ACT, 1948 & SCHEME 4-5
3. FACTORIES ACT, 1948 6-7
4. INDUSTRIAL DISPUTES ACT, 1947 8-9
5. PAYMENT OF BONUS ACT, 1965 10-11
6. PAYMENT OF GRATUITY ACT, 1972 12-13
7. PAYMENT OF WAGES ACT, 1936 14-15
8. MATERNITY BENEFIT ACT, 1961 16-17
9. MINIMUM WAGES ACT, 1948 18-19
10. EMPLOYEE’S COMPENSATION ACT, 1923 20-21
11. CONTRACT LABOUR(REGULARATION & ABOLITION) ACT,1970 22-23
12. INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1961 24-25
EMPLOYEES’ PROVIDENT FUNDS & MISC. PROVISIONS ACT,
1952 & THE SCHEMES
Object of the Act
To provide wider terminal benefits to the Workers on completion of their employment.
Applicability
Every specified factory OR establishment in which 20 or more persons are employed.
Any factory or Establishment can also voluntarily cover under the Act, even if the
number of employees are less than 20.
Eligibility
• Any person who is employed for work of an establishment or employed through
contractor in or in connection with the work of an establishment and drawing
salary upto Rs.6,500/- p.m. (Basic + DA).
• Any disabled employee appointed after 1.4.2008 drawing salary upto Rs.25,000/-
• Any international worker (irrespective of salary limit)
Payment of Contribution
• The employer shall pay the contribution payable to the EPF, DLI and Employees’ Pension
Fund in respect of the member of the Employees’ Pension Fund employed by him directly
by or through a contractor.
• It shall be the responsibility of the principal employer to pay the contributions payable to
the EPF, DLI and Employees’ Pension Fund by himself in respect of the employees directly
employed by him and also in respect of the employees directly employed by him and also
in respect of the employees employed by or through a contractor.
Rates of Contribution
• Employer - 12%
• Employee - 12%
• Govt. - 1.16%
SCHEME EMPLOYEE’S
EMPLOYER’S CENTRAL
GOVT’S
Provident
Fund Scheme 12%
Amount > 8.33% (in case where
contribution is 12% of 10%)
10% (in case of certain
Establishments as per details given
earlier)
NIL
Insurance
Scheme NIL 0.5 NIL
Pension
Scheme NIL
8.33% (Diverted out of Provident
Fund (12) 1.16%
2
• The employer also will pay administrative charges @ 1.11% on maximum limit of
Rs.6500 whereas an exempted establishment will pay inspection charges @ 0.005% on
the total wages paid.
Benefits
• Withdrawal of accumulated amount with interest on exit from employment.
• Advances in severely restricted circumstances like buying house,
marriage/education, etc.
• Pension to the employees under Employees’ Pension Scheme a
• Insurance under Employees’ Deposit Linked Insurance Scheme.
Damages on Delayed Payment
• Less than 2 months ….@ 5% per annum
• Two months and above but less than upto four months …. @10% per annum
• Four months and above but less than upto six months …. @ 15% per annum
• Six months and above ….@ 25% per annum
• Simple Interest @12% p.a. on delayed payment of contribution.
Penal Provision
• For contraventions of Provisions of the Act, imprisonment upto 3 years and fine upto
Rs.10,000/-.
• For repeated contraventions of the Act, imprisonment upto 5 years and fine upto
Rs.25,000/-.
3
EMPLOYEES’ STATE INSURANCE ACT, 1948 &
SCHEME
Object of the Act
To provide social insurance for the employees.
Applicability of the Act & Scheme
Is extended in area-wise to factories employing 10 or more persons and establish-ments
employing 20 or more person.
Coverage of employees
Employees drawing gross wages upto Rs.15000/- per month, engaged either
directly or thrugh contractor
Rate of Contribution of the wages
Employers’ 4.75%
Employees’ 1.75%
Manner and Time Limit for making Payment of contribution
The total amount of contribution (employee’s share and employer’s share) is to
be deposited with the authorised bank through a challan in the prescribed form
in quadruplicate on or before 21st of month following the calendar month in
which the wages fall due.
Benefits to the employees under the Act
Medical, sickness, extended sickness for certain diseases, enhanced sickness,
dependents maternity, besides funeral expenses, rehabilitation allowance,
medical benefit to insured person and his or her spouse.
WAGES FOR ESI CONTRIBUTIONS
To be deemed as wages
• Basic pay
• Dearness allowance
• House rent allowance
• City compensatory allowance
• Overtime wages (but not to be taken into account for determining the coverage
of an employee)
• Payment for day of rest
4
• Production incentive
• Bonus other than statutory bonus
• Night shift allowance
• Heat, Gas & Dust allowance
• Payment for unsubstituted holidays
• Meal/food allowance
• Suspension allowance
• Lay off compensation
• Children education allowance (not being reimbursement for actual tuition fee)
NOT to be deemed as wages
• Contribution paid by kthe employer to any pension/provident fund or under ESI
Act.
• Sum paid to defray special expenses entailed by the nature of employment –
Daily allowance paid for the period spent on tour.
• Gratuity payable on discharge.
• Pay in lieu of notice of retrenchment compensation
• Benefits paid under the ESI Scheme.
• Encashment of leave
• Payment of Inam which does not form part of the terms of employment.
• Washing allowance
• Conveyance Amount towards reimbursement for duty related journey
Contribution period
1st April to 30th September.
1st October to 31st March
Contribution period
If the person joined insurance employment for the first time, say on 5th January,
his first contribution period will be from 5th January to 31st March and his
corresponding first benefit will be from 5th October to 31st December.
Penal Provision
• For contraventions of Provisions of the Act, imprisonment upto 2 years and fine
upto Rs.5,000/-.
• For repeated contraventions of the Act, imprisonment upto 5 years and fine
upto Rs.25,000/-.
5
FACTORIES ACT, 1948
Applicability of the Act
To any premises where manufacturing activities are carried out with the aid of power and
where 10 or more workers are/were working OR where manufacturing activities are
carried out without the aid of power and where 20 or more workers are/were working.
Employer to ensure health of workers pertaining to
• Cleanliness Disposal of wastes and effluents
• Ventilation and temperature dust and fume
• Overcrowding Artificial humidification Lighting
• Drinking water Spittoons.
Safety Measures
• Facing of machinery
• Work on near machinery in motion.
• Employment prohibition of young persons on dangerous machines.
• Striking gear and devices for cutting off power.
• Self-acting machines.
• Casing of new machinery.
• Prohibition of employment of women and children near cotton-openers.
• Hoists and lifts.
Working Hours, Spread Over & Overtime of Adults
• Weekly hours not more than 48 hours.
• Daily hours, not more than 9 hours.
• Intervals for rest at least ½ hour on working for 5 hours.
• Spreadover not more than 10½ hours.
• Overlapping shifts prohibited.
• Extra wages for overtime double than normal rate of wages.
• Restrictions on employment of women before 6AM and beyond 7 PM.
Welfare Measures
• Washing facilities
• Facilities for storing and drying clothing
• Facilities for sitting
• First-aid appliances – one first aid box not less than one for every 150 workers.
• Canteens when there are 250 or more workers.
• Shelters, rest rooms and lunch rooms when there are 150 or more workers.
• Creches when there are 30 or more women workers.
• Welfare office when there are 500 or more workers.
6
Employment of Young Persons
• Prohibition of employment of young children i.e. below 14 years.
• Adolescent workers (15 to 18 years of age) are permitted with less working
hours and special conditions.
Annual Leave with Wages
A worker having worked for 240 days @ one day for every 20 days of working.
Penal Provision
• For contraventions of Provisions of the Act, imprisonment upto 7 years or fine
upto Rs.2,00,000/-.
• For continuous contraventions of the Act, imprisonment upto 10 year and/or
fine upto Rs.5,000/- per day
7
INDUSTRIAL DISPUTES ACT, 1947
Object of the Act
Provisions for investigation and settlement of industrial disputes and for certain
other purposes.
Important Definition
Industry – has attained wider meaning than defined except for domestic employment,
covers from shops with nominal employees to big industrial units.
Workman – Includes almost all category of employees, except person doing
Managerial and Administrative work, and also Supervisors earning wages more
than Rs.10,000/- p.m.
Machinery to deal with Disputes
Works Committee–Joint Committee with equal number of employers and employees’
representatives for discussion of certain common problems.
Conciliation–is an attempt by Govt. Official in helping to settle the disputes.
Adjudication – Labour Court, Industrial Tribunal or National Tribunal to hear and decide
the dispute.
Persons Bound by Settlement
• When in the course of conciliation proceedings etc., all persons working or
joining subsequently.
• Otherwise than in course of conciliation, upon the parties to the settlement.
Period of Operation of Settlements and Awards
• A settlement for a period as agreed by the parties, or
• Period of six months on signing of settlement.
• An award for one year after its enforcement.
Conditions for Laying off
Failure, refusal or inability of an employer to provide work due to
• Shortage of coal, power or raw material.
• Accumulation of stocks.
• Breakdown of machinery.
• Natural calamity.
Lay off Compensation
Payment of wages except for intervening weekly holiday compensation 50% of
total or basic wages and DA for a period of lay off upto maximum 45 days in a
year.
8
Notice of Change
21 days notice to be given by an employer to workmen about changing the
conditions of service as provided in IVth Schedule.
Prohibition of strikes & lock out
• Without giving to the employer notice of strike, as hereinafter provided, within six
weeks before striking.
• Within fourteen days of giving such notice.
• Before the expiry of the date of strike specified in any such notice as aforesaid.
• During the pendency of any conciliation proceedings before a conciliation officer and
seven days after the conclusion of such proceedings.
• During the pendency of conciliation proceedings before a Board and seven days after
the conclusion of such proceedings.
• During the pendency of proceedings before a Labour Court, Tribunal or National
• Tribunal and two months, after the conclusion of such proceedings.
• During the pendency of arbitration proceedings before an arbitrator and two months
after the conclusion of such proceedings, where a notification has been issued under
Sub-Section(3A) of section 10A
• During any period in which a settlement or award is in operation, in respect of
any of the matters covered by the settlement or award.
Prior Permission from the Govt.
When there are more than 100 workmen (in UP 300 or more) during proceeding 12
months, prior permission to be obtained by the Employer for Lay Off, Retrenchment or
Closure.
Retrenchment of Workmen Compensation & Conditions
No employees who has worked for 240 days in a year shall not be
retrenched unless paid/given:
• Retrenchment compensation @ 15 days’ wages for every completed year of
service.
• Given One month’s notice or wages in lieu thereof.
• Reasons for retrenchment
• Complying with principle of ‘last come first go’.
Notice for Closure of an Undertaking
• 60 days’ notice to the authorities for intended closure in prescribed form, when
there are minimum 50 workers and less than 100 workers.
• To apply for Prior permission from Govt. atleast 90 days before the intended
closure, when there are 100 or more workmen during preceding 12 months (in UP
300 or more workmen)
Penal Provision
• For breach of provisions of the Act, the employer shall be punishable with
imprisonment upto 6 months and/or fine not exceeding Rs.5,000/-.
• On continuity of offence fine upto Rs.200/- per day.
9
PAYMENT OF BONUS ACT, 1965
Object of the Act
To provide certain statutory right to the employees to share the profit of the
employer.
Applicability of Act
Every factory where in 10 or more persons are employed and Other
establishments in which 20 or more persons are employed on any day during an
accounting year.
Certain States like Maharashtra has made this Act applicable to all the
Establishments employing minimum 10 employees.
Exemption for newly set up Establishments
Newly set up establishment is exempted from paying bonus for the initial 5
years, provided no profit is made during these years. If the employer derives
profit in any of the first five years, he has to pay bonus for that year.
Eligibility for Bonus
• Employees (other than Apprentice) drawing salary (basic + DA) upto
Rs.10,000/- p.m.
• An employee will be entitled only when he has worked for 30 working
days in that financial year.
Benefits
• Minimum Bonus is 8.33% of total salary earnings (basic + DA) for the
financial year. (Calculation to be done as if the maximum salary were
Rs.3,500/- p.m.)
• Maximum bonus is 20%
Disqualification & Deduction of Bonus
On dismissal of an employee for
• Fraud; or
• riotous or violent behaviour while on the premises of the establishment; or
• theft, misappropriation or sabotage of any property of the establishment or
• Misconduct of causing financial loss to the Employer to the extent that bonus
can be deducted for that year.
10
Time Limit for Payment of Bonus
Within 8 months from the close of accounting y ear.
Set-off and Set-on
As per Schedule IV. Sec. 15
Maintenance of Registers and Records
• A register showing the computation of the allocable surplus , in Form ‘A’.
• A register showing the set-on and set-off of the allocable surplus, in form ‘B’.
• A register showing the details of the amount of bonus paid, in Form ‘C’
Filing of Retun.
Annual Return to be filed in form ‘D’ to the concerned Authority.
Penal Provision
For breach of provisions of the Act, the employer shall be punishable with
imprisonment upto 6 months and/or fine not exceeding Rs.1,000.
11
PAYMENT OF GRATUITY ACT, 1972
Object of the Act
To provide certain reward to the employees for a long meritorious service, at the
end of their services.
Applicability
Every factory, mine, oil field, plantation, port, railways, shop or establishment
employing 10 or more employees
Once Act applies, it continues to apply even if employment strength falls below
10.
Eligibility
• Any person employed on wages/salary (irrespective of designation)
and completed 5 years of continuous service (except in case of death),
shall be eligible for gratuity at the end of their services.
Benefits
• 15 days wages (basic + DA) for every completed year of service.
• Maximum gratuity payable is Rs.10,00,000/-
Calculation Method
Monthly salary
-------------------
Gratuity = 26 X 15 days X No. of year of service
Forfeiture of Gratuity
Gratuity can be forefeited on termination of an employee
• for moral turpitude or riotous or disorderly behaviour.
• Wholly or partially for wilfully causing loss, destruction of property etc.
Display of Notice
Certain notices & abstract of Act are to be displayed at conspicuous place at the
main entrance in English language or the language understood by majority of
employees of the factory/establishment.
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Nomination
To be obtained by employer after expiry of one year’s service, in Form ‘F’
Penal Provision
• Imprisonment upto 2 years or fine upto Rs.20,000 for avoiding to make
payment by making false statement or representation.
• For other contraventions of the Act, imprisonment upto one year and/or fine
upto Rs.10,000/-
13
PAYMENT OF WAGES ACT, 1936
Object of the Act
The main object of the Act is to regulate the payment of wages of certain
classes of employed persons, avoid unnecessary delay in the payment of wages
and to prevent unauthorised deductions from the wages.
Applicability of Act
• Factories, industrial Establishments, Tramway service or motor transport
service, Air transport service, Dock, Wharf or Jetty, Inland vessel, Mine,
quarry or oil-field Plantation, Workshop, construction activities or other
establishment etc.
• In the state of Maharashtra the Act is extended to Shops & commercial
establishments.
Coverage of Employees
The employees drawing average wage upto Rs.10,000/- p.m.
Time of payment of wages
The wages of every person employed be paid:
• When less than 1000 persons are employed shall be paid before the
expiry of the 7th day of the following month.
• When more than 1000 workers, before the expiry of the 10th day of the
following month.
Mode of Payment of Wages
• All wages shall be paid in current coins or currency notes or in both.
• After obtaining the authorization, either by cheque or by crediting the
wages in employee’s bank Account
• Wages exceeding Rs.3000/- to be paid by cheque/through bank
(Applicable in Maharashtra only)
Fines as prescribed by
•Not to imposed unless the employer is given an opportunity to show cause
To record in the register (Sec.8)
14
Deduction from wages
Deductions such as, fine, deduction for amenities and services supplied by the
employer, advances paid, over payment of wages, loan, granted for housebuilding
or other purposes, income tax payable, in pursuance of the order of the
Court, PF contributions, cooperative societies, premium for Life Insurance,
contribution to any fund constituted by employer or a trade union, recovery of
losses, ESI contributions etc. can be made from the wages, in accordance with
Section 7.
Maximum Deductions
• The maximum permissible deductions is 50% of the wages
• In the event of deduction include payment to co-operative societies, the
maximum permissible deduction is 75% of the wages.
Penal Provision
• Penalties for breach of provisions are from Rs.200/- to Rs.1000/-.
• Repeat offences attract 1 month to 6 months imprisonment and fine from
Rs.500/- to Rs.3000/-
• Delayed wage payments attract penalty f Rs.100/- per day
15
JUNEJA & ASSOCIATES (for circulation for clients’ only)
MATERNITY BENEFIT ACT, 1961
Object of the Act
To protect the dignity of motherhood and to provide certain benefits to women
employees at the time of child-birth.
Coverage of the Act
Upon all women employees either employed directly or through contractor employed in
mines, factories, plantations and also in other establishments if the State Government so
decides. Also applicable to every shop or establishment in which ten or more
persons are employed.
Conditions for eligibility of benefits
Women indulging temporary of 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 proceeding the date of her expected delivery.
This Act shall not be applicable when and where ESI Act is applicable.
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.3500/- 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 ten weeks (six weeks plus one month) before the date of her expected
delivery, if she asks for it.
• Two nursing breaks in the course of her daily work until the child is 15 months old.
• No discharge or dismissal while she is on maternity leave.
• No change to her disadvantage in any of the conditions of her employment while on
maternity leave.
• Pregnant women discharged or dismissed may still claim maternity benefit from the
employer.
Exception : Women dismissed for gross misconduct lose their right under the Act for
Maternity Benefit
Maintenance of Registers and Records
Every employer shall prepare and maintain such registers, records and musterrolls
and in such manner as may be prescribed by Rules.
16
Penal Provision
For breach of provisions of the Act, the employer shall be punishable with
imprisonment upto one year and/or fine not exceeding Rs.5,000.
MINIMUM WAGES ACT, 1948
Object of the Act
To fix minimum rates of wages in certain category of employments & industries.
Applicability of Act
• The Act will applicable to certain schedule of employment in respect of which
Minimum rates of wages have been fixed by the Act.
• It applicable to employees directly employed or employed through contractors,
in such schedule of Industry.
Fixation of Minimum Rates of Wages
• The appropriate government to fix minimum rates of wages from time to time
for various industries/schedule of employments.
Procedure for fixing and revising Minimum Rates of Wages
Appointing Committee issue of Notification etc.
Composition of Committee
Representation of employer and employee in schedule employer in equal number and
independent persons not exceeding 1/3rd or its total number one such person to be
appointed by the Chairman.
Payment of Minimum Rates of Wages
Employer to pay to every employee engaged in schedule employment at a rate
not less than minimum rates of wages as fixed by Notification by not making
deduction other than prescribed.
Minimum time rate wages for piece work
Not less than minimum rates wages as fixed.
Overtime
For Over time work, the wages to be paid at double the normal rate. (1½ times or for
agriculture labour)
Maintenance of registers and records
• Annual Returns
• Register for Overtime
• Register of Wages
• Wages slip
• Muster Roll
18
Penal Provision
For breach of provisions of the Act, the employer shall be punishable with
imprisonment upto 6 months and/or fine upto Rs.500/-.
19
EMPLOYEE’S COMPENSATION ACT, 1923
Object of the Act
This Act earlier known as “Workmen’s Compensation Act is introduced as a kind
of Social Security Scheme for the workmen who suffer employment injury,
occupational decease etc.
Applicability
To those employers employing persons listed in Schedule II of the Act and to
whom ESI Act, not applicable.
Coverage of Workmen
All workers irrespective of their status or salaries either directly or through
contractor or a person recruited to work abroad.
Eligibility
• Any workman who is injured by accident arising out of and in the course
of his employment OR contracts occupational disease peculiar to his
occupation.
Benefits
• In case of death results from injury, 50% of monthly wages X relevant
factor OR Rs.1,20,000/- whichever is more.
• In case of Permanent total disablement resulted from the injury, 60% of
monthly wages X relevant factor OR Rs.1,40,000/- whichever is more
• Where permanent , partial disablement or termporary disablement results
from injurty, as per prescribed schedule.
• In case of death funeral expenses of Rs.5,000/-
• Relevant factor is based on the age of workman
• For the purpose of calculation of compensation, the monthly salary ceiling
is Rs.8000/-, as per Central Govt. Notification dated 31.05.2010.
• In the event of death or in the event of any dispute, the compensation to
be deposited with the Commissioner within one month.
20
When an employee is not liable for compensation
• In respect of any injury which does result in the total or partial disablement of
the workman for a period exceeding three days.
• In respect of any injury, not resulting in death or permanent total disablement
caused by an accident which is directly attributable to-
• The workman having been at the time thereof under the influence of drink or
drugs, or
• 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
• Willful removal or disregard by the workman of any safety guard or other
device which he knew to have been provided for the purpose of securing the
safety of workman.
Report of accident
Report of fatal Accident and Serious Injury within 7 days to the Commissioner
(not application when ESI Act applies).
Bar upon contracting out
• Any workman relinquishing his right for personal injury not permissible.
• Bar of benefit under other enactments :- When a person is entitled to any of
the benefits provided by this Act, he shall not be entitled to receive any
similar benefit admissible under the provisions of any other enactment.
Penal Provision
In case of default by employer - 50% of the compensation amount +
interest to be
paid to the workman or his dependents as
the case may be.
Other offences attract fine upto Rs.5000/-
21
CONTRACT LABOUR(REGULARATION & ABOLITION)
ACT,1970
Object of the Act
To regulate the employment of contract labour in certain establishments and to
provide for its abolition in certain circumstances and for matters connected
therewith.
Applicability
• Every establishment in which 20 or more workmen are employed or were
employed on any day of the preceding 12 months as contract labour.
• Every contractor who employs or who employed on any day of the preceding
twelve months 20 or more workmen.
Registration of Establishment
Every Principal employer employing 20 or more workers through the contractor
has to register with the Authority by paying prescribed fees.
Licensing of Contractor
• Every Contractor engaging 20 or more workers should obtain License from
the Authority by required fees and keeping specified Security Deposit.
• The License is issued for specified period.
Prohibition of Employment of Contract Labour
Only by the appropriate Government through issue of notification after
consultation with the Board (and not Courts) can order the prohibition of
employment of contract labour.
Welfare measures to be taken by the Contractor
• Canteen facility (if workers are 100 or more)
• First Aid facilities.
• Rest Rooms
• Drinking water, latrines and washing facilities.
Liability of Principal Employer
• To ensure provision for canteen, restrooms, sufficient supply of drinking water, latrines
and urinals, washing facilities.
• Principal employer entitled to recover from the contractor for providing such amenities
or to make deductions from amount payable.
22
Registers of Contractors
By Principal employer
• To maintain a register of contractor in respect of every establishment in prescribed
form.
By Contractor
• Maintain Muster Roll and a Register of Wages in Form XVI and Form XVII respectively
when combined.
• Register or wage-cum-Muster Roll in prescribed Form
• Register of Deductions for damage or loss.
• Register or Fines
• Register of Advances
• Register of Overtime
• To issue wage slips to the workmen at least a day prior to the disbursement of wages.
• Obtain the signature or thumb impression of the worker concerned against the entries
relating to him on the Register of wages or Muster Roll-Cum-Wages Register.
• When covered by Payment of Wages Act, register and records to be maintained under
the rules
• To display an abstract of the act and Rules in English and Hindi and in the language
spoken by the Majority of workers in such forms as may be approved by appropriate
authority.
• To display notices showing rates of wages, hours of work, wage period, dates of
payment, names and addresses of the inspector and to send copy to the inspector and
any change forthwith
• To issue an employment card to each worker in prescribed form.
• To issue service certificate to every workman on his termination in prescribed form.
Penal Provision
• For contraventions of Provisions of the Act, imprisonment upto 3 months or
fine upto Rs.1,000/-.
• For continuous contraventions of the Act, fine of Rs.100/- per day
23
JUNEJA & ASSOCIATES (for circulation for clients’ only)
INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1961
Object of the Act
To standardize the service conditions of the workmen employed in any
industrial establishment. The Act lay down uniformity in the service
conditions of the employees in Industrial Establishments, so that the
employer and the employees know in clear manner their rights and
obligations.
Applicability of the Act
• Every industrial establishment wherein 100 or more employees are
employed. In many States like Maharashtra, the Act is made
applicable if the number of employees is 50 or more.
• There are some establishments where this Act is not Applicable such
as any establishment/industry covered by Bombay Industrial
Relations Act, 1946, M.P. Industrial Employment (Standing Orders)
Act, 1961 & Industrial Establishments employing persons covered by
Civil Service Rules.
Matters to be provided in Standing orders
• Classification of workmen, e.g., whether permanent, temporary,
apprentices, probationers, or badlis. Manner of intimating to workmen
periods and hours of work, holidays, pay-days and wage rates.
• Shift working.
• Attendance and late coming.
• Conditions of, procedure in applying for, and the authority which may
grant, leave and holidays.
• Requirement to enter premises by certain gates, and liability to
search.
• Closing and re-opening of sections of the industrial establishments,
and temporary stoppages of work and the right and liabilities of the
employer and workmen arising therefrom.
• Termination of employment, and the notice thereof to be given by
employer and workmen.
• Suspension or dismissal for misconduct, and acts or omissions which
constitute misconduct.
Additional Matters
• Service Record
• Token tickets,
• Record of age,
• Fixing Age of retirement
• Medical Examination
• Secrecy
• Exclusive Service
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Submissions of Draft Standing Orders
The employer has to submit draft Standing orders for certification within
six months from the date when the Act becomes applicable to an
industrial establishment.
Temporary Application of Model Standing Orders
Till the certification is done by the Certifying Officer, the Model Standing
orders provided by the Rules shall be applicable to the Establishment.
Procedure for Certification of Standing Orders
• The Draft Standing Order to be submitted to the Certifying Officer.
• The Certifying Officer has to forward a copy of draft standing orders to
the trade union or in the absence of union, to the workmen of the
industry.
• The trade union or the other representatives, as the case may be, are
to be heard. (Sec.5)
• After hearing both the parties and after making necessary changes
and amendment, the Certifying Officer shall certify the Standing
order.
Date of commencement of Operation of Standing Orders
On the date of expiry of 30 days from certification or on the expiry of 7
days from the Appellate order if any passed.
Display of Standing Orders
The certified Standing Orders should be displayed in English language or
in the language understood by majority of workmen on a notice board at
or near the entrance of the Establishment.
Penal Provisions
• For contraventions of provisions of the Act, a fine upto Rs. 5000/- can
be imposed.
• For repeated or continuous contravention of the Act, further fine of
Rs. 200/- per day can be imposed
25
CENTRAL LABOUR LEGISLATIONS
Topics/Acts included:
Sr.
No.
ACT NAME Page
Nos.
1. EMPLOYEES’ PROVIDENT FUNDS & MISC. PROVISIONS ACT,
1952 & THE SCHEMES
2-3
2. EMPLOYEES’ STATE INSURANCE ACT, 1948 & SCHEME 4-5
3. FACTORIES ACT, 1948 6-7
4. INDUSTRIAL DISPUTES ACT, 1947 8-9
5. PAYMENT OF BONUS ACT, 1965 10-11
6. PAYMENT OF GRATUITY ACT, 1972 12-13
7. PAYMENT OF WAGES ACT, 1936 14-15
8. MATERNITY BENEFIT ACT, 1961 16-17
9. MINIMUM WAGES ACT, 1948 18-19
10. EMPLOYEE’S COMPENSATION ACT, 1923 20-21
11. CONTRACT LABOUR(REGULARATION & ABOLITION) ACT,1970 22-23
12. INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1961 24-25
EMPLOYEES’ PROVIDENT FUNDS & MISC. PROVISIONS ACT,
1952 & THE SCHEMES
Object of the Act
To provide wider terminal benefits to the Workers on completion of their employment.
Applicability
Every specified factory OR establishment in which 20 or more persons are employed.
Any factory or Establishment can also voluntarily cover under the Act, even if the
number of employees are less than 20.
Eligibility
• Any person who is employed for work of an establishment or employed through
contractor in or in connection with the work of an establishment and drawing
salary upto Rs.6,500/- p.m. (Basic + DA).
• Any disabled employee appointed after 1.4.2008 drawing salary upto Rs.25,000/-
• Any international worker (irrespective of salary limit)
Payment of Contribution
• The employer shall pay the contribution payable to the EPF, DLI and Employees’ Pension
Fund in respect of the member of the Employees’ Pension Fund employed by him directly
by or through a contractor.
• It shall be the responsibility of the principal employer to pay the contributions payable to
the EPF, DLI and Employees’ Pension Fund by himself in respect of the employees directly
employed by him and also in respect of the employees directly employed by him and also
in respect of the employees employed by or through a contractor.
Rates of Contribution
• Employer - 12%
• Employee - 12%
• Govt. - 1.16%
SCHEME EMPLOYEE’S
EMPLOYER’S CENTRAL
GOVT’S
Provident
Fund Scheme 12%
Amount > 8.33% (in case where
contribution is 12% of 10%)
10% (in case of certain
Establishments as per details given
earlier)
NIL
Insurance
Scheme NIL 0.5 NIL
Pension
Scheme NIL
8.33% (Diverted out of Provident
Fund (12) 1.16%
2
• The employer also will pay administrative charges @ 1.11% on maximum limit of
Rs.6500 whereas an exempted establishment will pay inspection charges @ 0.005% on
the total wages paid.
Benefits
• Withdrawal of accumulated amount with interest on exit from employment.
• Advances in severely restricted circumstances like buying house,
marriage/education, etc.
• Pension to the employees under Employees’ Pension Scheme a
• Insurance under Employees’ Deposit Linked Insurance Scheme.
Damages on Delayed Payment
• Less than 2 months ….@ 5% per annum
• Two months and above but less than upto four months …. @10% per annum
• Four months and above but less than upto six months …. @ 15% per annum
• Six months and above ….@ 25% per annum
• Simple Interest @12% p.a. on delayed payment of contribution.
Penal Provision
• For contraventions of Provisions of the Act, imprisonment upto 3 years and fine upto
Rs.10,000/-.
• For repeated contraventions of the Act, imprisonment upto 5 years and fine upto
Rs.25,000/-.
3
EMPLOYEES’ STATE INSURANCE ACT, 1948 &
SCHEME
Object of the Act
To provide social insurance for the employees.
Applicability of the Act & Scheme
Is extended in area-wise to factories employing 10 or more persons and establish-ments
employing 20 or more person.
Coverage of employees
Employees drawing gross wages upto Rs.15000/- per month, engaged either
directly or thrugh contractor
Rate of Contribution of the wages
Employers’ 4.75%
Employees’ 1.75%
Manner and Time Limit for making Payment of contribution
The total amount of contribution (employee’s share and employer’s share) is to
be deposited with the authorised bank through a challan in the prescribed form
in quadruplicate on or before 21st of month following the calendar month in
which the wages fall due.
Benefits to the employees under the Act
Medical, sickness, extended sickness for certain diseases, enhanced sickness,
dependents maternity, besides funeral expenses, rehabilitation allowance,
medical benefit to insured person and his or her spouse.
WAGES FOR ESI CONTRIBUTIONS
To be deemed as wages
• Basic pay
• Dearness allowance
• House rent allowance
• City compensatory allowance
• Overtime wages (but not to be taken into account for determining the coverage
of an employee)
• Payment for day of rest
4
• Production incentive
• Bonus other than statutory bonus
• Night shift allowance
• Heat, Gas & Dust allowance
• Payment for unsubstituted holidays
• Meal/food allowance
• Suspension allowance
• Lay off compensation
• Children education allowance (not being reimbursement for actual tuition fee)
NOT to be deemed as wages
• Contribution paid by kthe employer to any pension/provident fund or under ESI
Act.
• Sum paid to defray special expenses entailed by the nature of employment –
Daily allowance paid for the period spent on tour.
• Gratuity payable on discharge.
• Pay in lieu of notice of retrenchment compensation
• Benefits paid under the ESI Scheme.
• Encashment of leave
• Payment of Inam which does not form part of the terms of employment.
• Washing allowance
• Conveyance Amount towards reimbursement for duty related journey
Contribution period
1st April to 30th September.
1st October to 31st March
Contribution period
If the person joined insurance employment for the first time, say on 5th January,
his first contribution period will be from 5th January to 31st March and his
corresponding first benefit will be from 5th October to 31st December.
Penal Provision
• For contraventions of Provisions of the Act, imprisonment upto 2 years and fine
upto Rs.5,000/-.
• For repeated contraventions of the Act, imprisonment upto 5 years and fine
upto Rs.25,000/-.
5
FACTORIES ACT, 1948
Applicability of the Act
To any premises where manufacturing activities are carried out with the aid of power and
where 10 or more workers are/were working OR where manufacturing activities are
carried out without the aid of power and where 20 or more workers are/were working.
Employer to ensure health of workers pertaining to
• Cleanliness Disposal of wastes and effluents
• Ventilation and temperature dust and fume
• Overcrowding Artificial humidification Lighting
• Drinking water Spittoons.
Safety Measures
• Facing of machinery
• Work on near machinery in motion.
• Employment prohibition of young persons on dangerous machines.
• Striking gear and devices for cutting off power.
• Self-acting machines.
• Casing of new machinery.
• Prohibition of employment of women and children near cotton-openers.
• Hoists and lifts.
Working Hours, Spread Over & Overtime of Adults
• Weekly hours not more than 48 hours.
• Daily hours, not more than 9 hours.
• Intervals for rest at least ½ hour on working for 5 hours.
• Spreadover not more than 10½ hours.
• Overlapping shifts prohibited.
• Extra wages for overtime double than normal rate of wages.
• Restrictions on employment of women before 6AM and beyond 7 PM.
Welfare Measures
• Washing facilities
• Facilities for storing and drying clothing
• Facilities for sitting
• First-aid appliances – one first aid box not less than one for every 150 workers.
• Canteens when there are 250 or more workers.
• Shelters, rest rooms and lunch rooms when there are 150 or more workers.
• Creches when there are 30 or more women workers.
• Welfare office when there are 500 or more workers.
6
Employment of Young Persons
• Prohibition of employment of young children i.e. below 14 years.
• Adolescent workers (15 to 18 years of age) are permitted with less working
hours and special conditions.
Annual Leave with Wages
A worker having worked for 240 days @ one day for every 20 days of working.
Penal Provision
• For contraventions of Provisions of the Act, imprisonment upto 7 years or fine
upto Rs.2,00,000/-.
• For continuous contraventions of the Act, imprisonment upto 10 year and/or
fine upto Rs.5,000/- per day
7
INDUSTRIAL DISPUTES ACT, 1947
Object of the Act
Provisions for investigation and settlement of industrial disputes and for certain
other purposes.
Important Definition
Industry – has attained wider meaning than defined except for domestic employment,
covers from shops with nominal employees to big industrial units.
Workman – Includes almost all category of employees, except person doing
Managerial and Administrative work, and also Supervisors earning wages more
than Rs.10,000/- p.m.
Machinery to deal with Disputes
Works Committee–Joint Committee with equal number of employers and employees’
representatives for discussion of certain common problems.
Conciliation–is an attempt by Govt. Official in helping to settle the disputes.
Adjudication – Labour Court, Industrial Tribunal or National Tribunal to hear and decide
the dispute.
Persons Bound by Settlement
• When in the course of conciliation proceedings etc., all persons working or
joining subsequently.
• Otherwise than in course of conciliation, upon the parties to the settlement.
Period of Operation of Settlements and Awards
• A settlement for a period as agreed by the parties, or
• Period of six months on signing of settlement.
• An award for one year after its enforcement.
Conditions for Laying off
Failure, refusal or inability of an employer to provide work due to
• Shortage of coal, power or raw material.
• Accumulation of stocks.
• Breakdown of machinery.
• Natural calamity.
Lay off Compensation
Payment of wages except for intervening weekly holiday compensation 50% of
total or basic wages and DA for a period of lay off upto maximum 45 days in a
year.
8
Notice of Change
21 days notice to be given by an employer to workmen about changing the
conditions of service as provided in IVth Schedule.
Prohibition of strikes & lock out
• Without giving to the employer notice of strike, as hereinafter provided, within six
weeks before striking.
• Within fourteen days of giving such notice.
• Before the expiry of the date of strike specified in any such notice as aforesaid.
• During the pendency of any conciliation proceedings before a conciliation officer and
seven days after the conclusion of such proceedings.
• During the pendency of conciliation proceedings before a Board and seven days after
the conclusion of such proceedings.
• During the pendency of proceedings before a Labour Court, Tribunal or National
• Tribunal and two months, after the conclusion of such proceedings.
• During the pendency of arbitration proceedings before an arbitrator and two months
after the conclusion of such proceedings, where a notification has been issued under
Sub-Section(3A) of section 10A
• During any period in which a settlement or award is in operation, in respect of
any of the matters covered by the settlement or award.
Prior Permission from the Govt.
When there are more than 100 workmen (in UP 300 or more) during proceeding 12
months, prior permission to be obtained by the Employer for Lay Off, Retrenchment or
Closure.
Retrenchment of Workmen Compensation & Conditions
No employees who has worked for 240 days in a year shall not be
retrenched unless paid/given:
• Retrenchment compensation @ 15 days’ wages for every completed year of
service.
• Given One month’s notice or wages in lieu thereof.
• Reasons for retrenchment
• Complying with principle of ‘last come first go’.
Notice for Closure of an Undertaking
• 60 days’ notice to the authorities for intended closure in prescribed form, when
there are minimum 50 workers and less than 100 workers.
• To apply for Prior permission from Govt. atleast 90 days before the intended
closure, when there are 100 or more workmen during preceding 12 months (in UP
300 or more workmen)
Penal Provision
• For breach of provisions of the Act, the employer shall be punishable with
imprisonment upto 6 months and/or fine not exceeding Rs.5,000/-.
• On continuity of offence fine upto Rs.200/- per day.
9
PAYMENT OF BONUS ACT, 1965
Object of the Act
To provide certain statutory right to the employees to share the profit of the
employer.
Applicability of Act
Every factory where in 10 or more persons are employed and Other
establishments in which 20 or more persons are employed on any day during an
accounting year.
Certain States like Maharashtra has made this Act applicable to all the
Establishments employing minimum 10 employees.
Exemption for newly set up Establishments
Newly set up establishment is exempted from paying bonus for the initial 5
years, provided no profit is made during these years. If the employer derives
profit in any of the first five years, he has to pay bonus for that year.
Eligibility for Bonus
• Employees (other than Apprentice) drawing salary (basic + DA) upto
Rs.10,000/- p.m.
• An employee will be entitled only when he has worked for 30 working
days in that financial year.
Benefits
• Minimum Bonus is 8.33% of total salary earnings (basic + DA) for the
financial year. (Calculation to be done as if the maximum salary were
Rs.3,500/- p.m.)
• Maximum bonus is 20%
Disqualification & Deduction of Bonus
On dismissal of an employee for
• Fraud; or
• riotous or violent behaviour while on the premises of the establishment; or
• theft, misappropriation or sabotage of any property of the establishment or
• Misconduct of causing financial loss to the Employer to the extent that bonus
can be deducted for that year.
10
Time Limit for Payment of Bonus
Within 8 months from the close of accounting y ear.
Set-off and Set-on
As per Schedule IV. Sec. 15
Maintenance of Registers and Records
• A register showing the computation of the allocable surplus , in Form ‘A’.
• A register showing the set-on and set-off of the allocable surplus, in form ‘B’.
• A register showing the details of the amount of bonus paid, in Form ‘C’
Filing of Retun.
Annual Return to be filed in form ‘D’ to the concerned Authority.
Penal Provision
For breach of provisions of the Act, the employer shall be punishable with
imprisonment upto 6 months and/or fine not exceeding Rs.1,000.
11
PAYMENT OF GRATUITY ACT, 1972
Object of the Act
To provide certain reward to the employees for a long meritorious service, at the
end of their services.
Applicability
Every factory, mine, oil field, plantation, port, railways, shop or establishment
employing 10 or more employees
Once Act applies, it continues to apply even if employment strength falls below
10.
Eligibility
• Any person employed on wages/salary (irrespective of designation)
and completed 5 years of continuous service (except in case of death),
shall be eligible for gratuity at the end of their services.
Benefits
• 15 days wages (basic + DA) for every completed year of service.
• Maximum gratuity payable is Rs.10,00,000/-
Calculation Method
Monthly salary
-------------------
Gratuity = 26 X 15 days X No. of year of service
Forfeiture of Gratuity
Gratuity can be forefeited on termination of an employee
• for moral turpitude or riotous or disorderly behaviour.
• Wholly or partially for wilfully causing loss, destruction of property etc.
Display of Notice
Certain notices & abstract of Act are to be displayed at conspicuous place at the
main entrance in English language or the language understood by majority of
employees of the factory/establishment.
12
Nomination
To be obtained by employer after expiry of one year’s service, in Form ‘F’
Penal Provision
• Imprisonment upto 2 years or fine upto Rs.20,000 for avoiding to make
payment by making false statement or representation.
• For other contraventions of the Act, imprisonment upto one year and/or fine
upto Rs.10,000/-
13
PAYMENT OF WAGES ACT, 1936
Object of the Act
The main object of the Act is to regulate the payment of wages of certain
classes of employed persons, avoid unnecessary delay in the payment of wages
and to prevent unauthorised deductions from the wages.
Applicability of Act
• Factories, industrial Establishments, Tramway service or motor transport
service, Air transport service, Dock, Wharf or Jetty, Inland vessel, Mine,
quarry or oil-field Plantation, Workshop, construction activities or other
establishment etc.
• In the state of Maharashtra the Act is extended to Shops & commercial
establishments.
Coverage of Employees
The employees drawing average wage upto Rs.10,000/- p.m.
Time of payment of wages
The wages of every person employed be paid:
• When less than 1000 persons are employed shall be paid before the
expiry of the 7th day of the following month.
• When more than 1000 workers, before the expiry of the 10th day of the
following month.
Mode of Payment of Wages
• All wages shall be paid in current coins or currency notes or in both.
• After obtaining the authorization, either by cheque or by crediting the
wages in employee’s bank Account
• Wages exceeding Rs.3000/- to be paid by cheque/through bank
(Applicable in Maharashtra only)
Fines as prescribed by
•Not to imposed unless the employer is given an opportunity to show cause
To record in the register (Sec.8)
14
Deduction from wages
Deductions such as, fine, deduction for amenities and services supplied by the
employer, advances paid, over payment of wages, loan, granted for housebuilding
or other purposes, income tax payable, in pursuance of the order of the
Court, PF contributions, cooperative societies, premium for Life Insurance,
contribution to any fund constituted by employer or a trade union, recovery of
losses, ESI contributions etc. can be made from the wages, in accordance with
Section 7.
Maximum Deductions
• The maximum permissible deductions is 50% of the wages
• In the event of deduction include payment to co-operative societies, the
maximum permissible deduction is 75% of the wages.
Penal Provision
• Penalties for breach of provisions are from Rs.200/- to Rs.1000/-.
• Repeat offences attract 1 month to 6 months imprisonment and fine from
Rs.500/- to Rs.3000/-
• Delayed wage payments attract penalty f Rs.100/- per day
15
JUNEJA & ASSOCIATES (for circulation for clients’ only)
MATERNITY BENEFIT ACT, 1961
Object of the Act
To protect the dignity of motherhood and to provide certain benefits to women
employees at the time of child-birth.
Coverage of the Act
Upon all women employees either employed directly or through contractor employed in
mines, factories, plantations and also in other establishments if the State Government so
decides. Also applicable to every shop or establishment in which ten or more
persons are employed.
Conditions for eligibility of benefits
Women indulging temporary of 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 proceeding the date of her expected delivery.
This Act shall not be applicable when and where ESI Act is applicable.
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.3500/- 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 ten weeks (six weeks plus one month) before the date of her expected
delivery, if she asks for it.
• Two nursing breaks in the course of her daily work until the child is 15 months old.
• No discharge or dismissal while she is on maternity leave.
• No change to her disadvantage in any of the conditions of her employment while on
maternity leave.
• Pregnant women discharged or dismissed may still claim maternity benefit from the
employer.
Exception : Women dismissed for gross misconduct lose their right under the Act for
Maternity Benefit
Maintenance of Registers and Records
Every employer shall prepare and maintain such registers, records and musterrolls
and in such manner as may be prescribed by Rules.
16
Penal Provision
For breach of provisions of the Act, the employer shall be punishable with
imprisonment upto one year and/or fine not exceeding Rs.5,000.
MINIMUM WAGES ACT, 1948
Object of the Act
To fix minimum rates of wages in certain category of employments & industries.
Applicability of Act
• The Act will applicable to certain schedule of employment in respect of which
Minimum rates of wages have been fixed by the Act.
• It applicable to employees directly employed or employed through contractors,
in such schedule of Industry.
Fixation of Minimum Rates of Wages
• The appropriate government to fix minimum rates of wages from time to time
for various industries/schedule of employments.
Procedure for fixing and revising Minimum Rates of Wages
Appointing Committee issue of Notification etc.
Composition of Committee
Representation of employer and employee in schedule employer in equal number and
independent persons not exceeding 1/3rd or its total number one such person to be
appointed by the Chairman.
Payment of Minimum Rates of Wages
Employer to pay to every employee engaged in schedule employment at a rate
not less than minimum rates of wages as fixed by Notification by not making
deduction other than prescribed.
Minimum time rate wages for piece work
Not less than minimum rates wages as fixed.
Overtime
For Over time work, the wages to be paid at double the normal rate. (1½ times or for
agriculture labour)
Maintenance of registers and records
• Annual Returns
• Register for Overtime
• Register of Wages
• Wages slip
• Muster Roll
18
Penal Provision
For breach of provisions of the Act, the employer shall be punishable with
imprisonment upto 6 months and/or fine upto Rs.500/-.
19
EMPLOYEE’S COMPENSATION ACT, 1923
Object of the Act
This Act earlier known as “Workmen’s Compensation Act is introduced as a kind
of Social Security Scheme for the workmen who suffer employment injury,
occupational decease etc.
Applicability
To those employers employing persons listed in Schedule II of the Act and to
whom ESI Act, not applicable.
Coverage of Workmen
All workers irrespective of their status or salaries either directly or through
contractor or a person recruited to work abroad.
Eligibility
• Any workman who is injured by accident arising out of and in the course
of his employment OR contracts occupational disease peculiar to his
occupation.
Benefits
• In case of death results from injury, 50% of monthly wages X relevant
factor OR Rs.1,20,000/- whichever is more.
• In case of Permanent total disablement resulted from the injury, 60% of
monthly wages X relevant factor OR Rs.1,40,000/- whichever is more
• Where permanent , partial disablement or termporary disablement results
from injurty, as per prescribed schedule.
• In case of death funeral expenses of Rs.5,000/-
• Relevant factor is based on the age of workman
• For the purpose of calculation of compensation, the monthly salary ceiling
is Rs.8000/-, as per Central Govt. Notification dated 31.05.2010.
• In the event of death or in the event of any dispute, the compensation to
be deposited with the Commissioner within one month.
20
When an employee is not liable for compensation
• In respect of any injury which does result in the total or partial disablement of
the workman for a period exceeding three days.
• In respect of any injury, not resulting in death or permanent total disablement
caused by an accident which is directly attributable to-
• The workman having been at the time thereof under the influence of drink or
drugs, or
• 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
• Willful removal or disregard by the workman of any safety guard or other
device which he knew to have been provided for the purpose of securing the
safety of workman.
Report of accident
Report of fatal Accident and Serious Injury within 7 days to the Commissioner
(not application when ESI Act applies).
Bar upon contracting out
• Any workman relinquishing his right for personal injury not permissible.
• Bar of benefit under other enactments :- When a person is entitled to any of
the benefits provided by this Act, he shall not be entitled to receive any
similar benefit admissible under the provisions of any other enactment.
Penal Provision
In case of default by employer - 50% of the compensation amount +
interest to be
paid to the workman or his dependents as
the case may be.
Other offences attract fine upto Rs.5000/-
21
CONTRACT LABOUR(REGULARATION & ABOLITION)
ACT,1970
Object of the Act
To regulate the employment of contract labour in certain establishments and to
provide for its abolition in certain circumstances and for matters connected
therewith.
Applicability
• Every establishment in which 20 or more workmen are employed or were
employed on any day of the preceding 12 months as contract labour.
• Every contractor who employs or who employed on any day of the preceding
twelve months 20 or more workmen.
Registration of Establishment
Every Principal employer employing 20 or more workers through the contractor
has to register with the Authority by paying prescribed fees.
Licensing of Contractor
• Every Contractor engaging 20 or more workers should obtain License from
the Authority by required fees and keeping specified Security Deposit.
• The License is issued for specified period.
Prohibition of Employment of Contract Labour
Only by the appropriate Government through issue of notification after
consultation with the Board (and not Courts) can order the prohibition of
employment of contract labour.
Welfare measures to be taken by the Contractor
• Canteen facility (if workers are 100 or more)
• First Aid facilities.
• Rest Rooms
• Drinking water, latrines and washing facilities.
Liability of Principal Employer
• To ensure provision for canteen, restrooms, sufficient supply of drinking water, latrines
and urinals, washing facilities.
• Principal employer entitled to recover from the contractor for providing such amenities
or to make deductions from amount payable.
22
Registers of Contractors
By Principal employer
• To maintain a register of contractor in respect of every establishment in prescribed
form.
By Contractor
• Maintain Muster Roll and a Register of Wages in Form XVI and Form XVII respectively
when combined.
• Register or wage-cum-Muster Roll in prescribed Form
• Register of Deductions for damage or loss.
• Register or Fines
• Register of Advances
• Register of Overtime
• To issue wage slips to the workmen at least a day prior to the disbursement of wages.
• Obtain the signature or thumb impression of the worker concerned against the entries
relating to him on the Register of wages or Muster Roll-Cum-Wages Register.
• When covered by Payment of Wages Act, register and records to be maintained under
the rules
• To display an abstract of the act and Rules in English and Hindi and in the language
spoken by the Majority of workers in such forms as may be approved by appropriate
authority.
• To display notices showing rates of wages, hours of work, wage period, dates of
payment, names and addresses of the inspector and to send copy to the inspector and
any change forthwith
• To issue an employment card to each worker in prescribed form.
• To issue service certificate to every workman on his termination in prescribed form.
Penal Provision
• For contraventions of Provisions of the Act, imprisonment upto 3 months or
fine upto Rs.1,000/-.
• For continuous contraventions of the Act, fine of Rs.100/- per day
23
JUNEJA & ASSOCIATES (for circulation for clients’ only)
INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1961
Object of the Act
To standardize the service conditions of the workmen employed in any
industrial establishment. The Act lay down uniformity in the service
conditions of the employees in Industrial Establishments, so that the
employer and the employees know in clear manner their rights and
obligations.
Applicability of the Act
• Every industrial establishment wherein 100 or more employees are
employed. In many States like Maharashtra, the Act is made
applicable if the number of employees is 50 or more.
• There are some establishments where this Act is not Applicable such
as any establishment/industry covered by Bombay Industrial
Relations Act, 1946, M.P. Industrial Employment (Standing Orders)
Act, 1961 & Industrial Establishments employing persons covered by
Civil Service Rules.
Matters to be provided in Standing orders
• Classification of workmen, e.g., whether permanent, temporary,
apprentices, probationers, or badlis. Manner of intimating to workmen
periods and hours of work, holidays, pay-days and wage rates.
• Shift working.
• Attendance and late coming.
• Conditions of, procedure in applying for, and the authority which may
grant, leave and holidays.
• Requirement to enter premises by certain gates, and liability to
search.
• Closing and re-opening of sections of the industrial establishments,
and temporary stoppages of work and the right and liabilities of the
employer and workmen arising therefrom.
• Termination of employment, and the notice thereof to be given by
employer and workmen.
• Suspension or dismissal for misconduct, and acts or omissions which
constitute misconduct.
Additional Matters
• Service Record
• Token tickets,
• Record of age,
• Fixing Age of retirement
• Medical Examination
• Secrecy
• Exclusive Service
24
Submissions of Draft Standing Orders
The employer has to submit draft Standing orders for certification within
six months from the date when the Act becomes applicable to an
industrial establishment.
Temporary Application of Model Standing Orders
Till the certification is done by the Certifying Officer, the Model Standing
orders provided by the Rules shall be applicable to the Establishment.
Procedure for Certification of Standing Orders
• The Draft Standing Order to be submitted to the Certifying Officer.
• The Certifying Officer has to forward a copy of draft standing orders to
the trade union or in the absence of union, to the workmen of the
industry.
• The trade union or the other representatives, as the case may be, are
to be heard. (Sec.5)
• After hearing both the parties and after making necessary changes
and amendment, the Certifying Officer shall certify the Standing
order.
Date of commencement of Operation of Standing Orders
On the date of expiry of 30 days from certification or on the expiry of 7
days from the Appellate order if any passed.
Display of Standing Orders
The certified Standing Orders should be displayed in English language or
in the language understood by majority of workmen on a notice board at
or near the entrance of the Establishment.
Penal Provisions
• For contraventions of provisions of the Act, a fine upto Rs. 5000/- can
be imposed.
• For repeated or continuous contravention of the Act, further fine of
Rs. 200/- per day can be imposed
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