An overview On Industrial Relations

COMPLIANCES UNDER LABOUR LAW

Presented By: Mahipal Negi

Industrial / factory Acts

Wages Acts

Social Security Acts in India

Audit Observations

Latest Notifications(s)

Glimpseson

Compliance of Labour

Laws

Registering & Licensing of

New and Existing Display Of

Abstract and Notices

Statutory Challans and Remittances

Maintaining Statutory

Registers and Records

Timely Filling of Statutory

Returns

Statutory Obligations

& Responsibilities

Audit of Contractor /

Vendor Compliances

In a Nutshell

Factories Act, 1948

Contract Labour

[Regulation & Abolition ] Act, 1970

Industrial Dispute Act,

1947

Industrial Acts

OBJECTIVE OF THE ACT

The Act has been enacted primarily with the object of protecting workers employed in factories against industrial and occupational hazards

HOW to achieve Objective ??? For that purpose, it seeks to impose upon

the owner or the occupier certain obligations to protect the workers and to secure for them employment in conditions

conductive to Their

health, safety and Welfare

FACTORY ACT, 1948

APPLICABILITY OF THE ACT

At any place wherein manufacturing process is

carried on whereon 10 or more workers are working or were working on any day of 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;

whereon 20 or more workers are working or were working on any day of 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.

Health Safety Welfare Working Hours Of AdultsAnnual Leave With wages

Main points

Health, Safety and Welfare

Every occupier shall ensure, so far as is reasonably practicable, the health, safety and welfare of all workers while they are at work in the factory.

the provision and maintenance of plant and systems of work in the factory that are safe and without risks to health

ensuring safety and absence of risks to health in connection with the use, handling, storage and transport of articles and substances

information, instruction, training and supervisions as are necessary to ensure the health and safety of all workers at work

the maintenance work place condition that is safe and without risks to health

the provision, maintenance or monitoring of such working environment in the factory for the workers that is safe, without risks to health and adequate as regards facilities and arrangements for their welfare at work.

Daily hours (sec. 54) : not more than 9 hours in day.

Weekly hours (sec. 51) : 48 hours in a week.

Weekly holidays (sec. 52) : No adult worker shall be required or allowed to work in a factory on the first day of the week.

Compensatory holidays (sec. 53) : within the month in which the holidays were due to him or within the two months immediately following that month, compensatory holidays of equal number to the holidays so lost.

Intervals for rest (sec. 55) : ½ an hour after working of 5 hours , but state govt. in special circumstances on written application can allow continue working not more than 6 hours.

Working Hours Of Adults

A worker having worked for 240 days @ one day for every 20

days and for child one day for working of 15 days. Accumulation of leave for 30 days

Annual Leave With wages

CONTRACT LABOUR (REGULARATION & ABOLITION)

ACT, 1970 & THE RULES

Object of the ActTo regulate the employment of

contract labour in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith.

Applicability (Sec 1)

Every establishment in which 20 or more workmen are employed or were employed on any day of the preceding 12 months as contract labor.

Every contractor who employs or who employed on any day of the preceding twelve months 20 or more workmen.

Major CompliancesIt is obligatory on every “contractor”

not to undertake or execute any work through contract work without obtaining a valid license from the licensing officer

“Principal Employer” has the statutoryresponsibility on behalf of company to ensure compliances under Contract Labour (Regulation &Abolition) Act, 1970 and Rules framed there under.

Compliance to be ensured by the contractor under

The Contract Labour (Regulation And Abolition) Act,

1970 Apply in Form-IV [see rule 21] for license in triplicate copy along

with license fee [see rule 26] & security [see rule 24] (Refundable)

Application should encloses Form-V which is given by Principalemployer to contractor.

Grant/renewal of license in Form-VI [rule 23&25/29]

After obtaining a License the contractor should submit a copyto P.E.

Intimation of Commencement/Completion of Contract Workin Form-VI-A by Contractor [see rule 25(2)-viii]

OBLIGATION OF CONTRACTOR Application for License Form-IV License Form-VI Notice of Commencement /Completion Form VI A of Work

(within 15 days of actual commencement or completion of work)

Renewal of license Form VII Identity Card Form X Display of Act and Rules under rule 60 Muster Roll, Register of Wages, Registers of Overtime,

Advances, Deduction, Fines to be maintained by the Contract under the Payment of Wages Act and Rules made thereunder or the Minimum Wages Act and Rules made thereunder if covered under those Act.

Otherwise contractor has to maintain Muster-cum-wage register, attendance-cum-wage slip

under the payment of Wages Rules, 1963

CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970Sec 29: Maintenance of registers and other

recordsTo maintain register of workers for each

registered establishment in Form XIII. To issue an employment card to each worker

in Form XIV. To issue service certificate to every workman

on his termination in Form XV. Rules 75, 76 and 77Form-VIII - At All times a register of particulars

of contract labour and other records in Form-VIII [see rule 55] as prescribed

Form-XXI [rule 63(2)] : Half / Annual return before 15th of July and February respectively

Muster Roll, Wages Register, Deduction Register and Overtime Register by Contractor

Every contractor shall • Maintain Muster Roll and a Register of Wages in Form XVI and Form XVII respectively when combined.

Register or wage-cum-Muster Roll in Form XVII where the wage period is a fortnight or less.

Maintain a Register of Deductions for damage or loss, Register or Fines and Register of Avances in Form XX, from XXI and Form XXII respectively.

Maintain a Register of Overtime in Form XXIII. To issue wage slips in Form XIX, 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

Muster Roll, Register of wages, Register of Deductions, Register of Overtime, Register of

Fines, Register of Advances, Wage slip. Rule 79 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 Rule 80

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 for with with Rule 81

Minimum Wages

Act,1948

Payment of wages Act,

1936Payment of Bonus Act, 1965 & the

Rules

Wages Acts

MINIMUM WAGES ACT, 1948

OBJECTIVETo provide minimum wages to the workers

working in organized sector

To stop exploitation of the workers

To empower the government to take steps for fixing minimum wages and to revising it in a timely manner

To apply this law on most of the sections in organized sector (scheduled employment)

Appropriate government : sec. 2(b)

In relation to scheduled employment carried on by Central Government or railways or est. under Central Act - the Central Government

In all other cases – the State Government

Wages: sec.2(h)

Minimum wages: all remuneration capable of being paid in money terms for work done if terms of contract were fulfilled

Consist of Basic + Dearness Allowance + House Rent Allowance

Every 5 years, basic rates of every industry are decided by Minimum Wages Committee

Dearness Allowance changes every six months and is decided by Government

Records to be maintained: [sec. 18]

The Registers should contain the following particulars-

(i) particulars of employed persons

(ii) the work performed by them(iii) the wages paid to them(iv) the receipts given by them

Payment of Wages Act, 1936

OBJECTIVETo regulate the payment of wages of

certain classes of employed person

ApplicabilityIt applies in the first instance to the

payment of wages to persons employed in any factory and to persons employed in an industrial or other establishment specified

COMPLIANCES UNDER PAYMENT OF WAGES ACT, 1936

Sec 4 Fixation of wage-periods: wage periods shall not exceeding one month.

Sec13-A: Maintenance of registers and records Details of persons employed, the work performed, wages paid as prescribed and has not destroyed the same before a period of three years after the date of last entry made therein.

Bills of the contractor to be passed on the basis of these records maintained and submitted to respective department.

Time of payment of wages Sec. 5

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 theexpiry of the 10th day of the

followingmonth.

RESPONSIBILITY FOR PAYMENT OF WAGESUnder Section-12 of Contract Labour (Regulation And Abolition) Act, 1970

A contractor shall be responsible for payment of wages to each workeremployed by him as contract labour and such wages shall be paid before theexpiry of such period as may be prescribed.

Every principal employer shall nominate a representative duly authorized by him to be present at the time of disbursement of wages by the contractor and it shall be the duty of such representative to certify the amounts paid as wages in such manner as may be prescribed.

It shall be the duty of the contractor to ensure the disbursement of wages inthe presence of the authorized representative of the principal employer.

In case the contractor fails to make payment of wages within the prescribedperiod or makes short payment, then the principal employer shall be liable to make payment of wages in full or the unpaid balance due, as the case may be, to the contract labour employed by the contractor and recover the amount so paid from the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor.

Social Security in India

Article 43 of the Constitution speaks of “state's responsibility to provide social security to the citizens of this country”

Principal Social Security Laws of India Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 Employees’ State Insurance Act, 1948 Workmen’s Compensation Act, 1923 Maternity Benefit Act, 1961 Payment Gratuity Act, 1972

Employees’ Provident Fund andMiscellaneous Provisions Act,

1952

The Act aims at providing social security and timely monetary assistance to industrial employees and their families when they are in distress and/or unable to meet family and social obligations and to protect them in old age, disablement, early death of the bread winner and in some other contingencies.

Employees’ Provident Fund andMiscellaneous Provisions Act, 1952

EMPLOYEES’ PROVIDENT FUND SCHEME

EMPLOYEES’ PENSION SCHEME

EMPLOYEES’ DEPOSIT LINKED INSURANCE SCHEMEEDLI

EPF

EPS

Rates of ContributionSCHEME EMPLOYEE’S EMPLOYER’S CENTRAL

GOVT’S

Provident FundScheme

12% 3.67% NIL

InsuranceScheme EDLI

NIL 0.5% NIL

Pension Scheme NIL 8.33% of Max.of Rs. 15000/-

1.16%

Additional 0.85 % as Administrative Charges by theEmployer

Account codes for PF (Employer -12% & employee – 13.36 %) Entries in revenue ledger

Project accountants are requested to pls. reconcile the PF entries at least once in 3 months

Account Code Account descp %age

71161 EPF Employee contribution - S/c workmen 1276570 EPF Employer contribution - S/c workmen 3.6776589 EPS Employer contribution - S/c workmen 8.3378425 EDLI Fund 0.578530 PF / Admn. Charges 0.8578549 DLIF Admin charges 0.01

  Total : 25.36

76597 PF/EPS recovered from s/c workmen (credit) 12 or 25.36

Payment of Contribution

The employer shall pay the contribution payable to the EPF, and Employees’ Pension Fund in respect of the Member of the Employees’ Pension Fund employed by him directly by or through a contractor.

PF Compliance Ensure the compliance of 36-B of The Employees’ Provident Fund Scheme, 1952. 36-B. Duties of contractors

Every contractor shall, within 7 days of the close of every month,

submit o the principal employer a statement showing the recoveries of contributions in respect of employees employed by or through him along with the copy of challan.

EPFO had Launched an online application for receipt of Electronic Challan cum Return (ECR)

EPFO has made it mandatory to submit online return and challanusing e-sewa and eReturn

ECR and Online Challan will be accepted as a proof of submission of contribution by contractors for contract workers employed by him

Role & Responsibility of Contractor

Monthly Returns- Online Filing monthly PF returns with the EPFO within 15 days of the close of each month, Submit a copy of ECR and Online challan with Bill

1. Provide list of new employees joined in the establishment during the preceding month & are qualified to become member in fund (Form-5)

2. Provide list of employees leaving service during the preceding month (Form-10)

3. Employer should file 'Nil' returns if there is no new employee or no employee leaving the service during the preceding month

4. Provide the total no. of members last month, new members joined and existing members resigned in the preceding month & total no. of present subscribers to be fund (Form-12A)

Employees’State Insurance Act, 1948

Coverage of shops and other establishments from 20 to 10 or more persons. Remaining State Governments/UTs are in the process of reducing the same.

Extension of ESI scheme to Construction site workers (Notification No. P-12, 11/11/60/2010 – Rev II; dated. 31/07/2015) w.e.f 1st August 2015.

ESI Scheme

All employees to insured under the ESI Scheme and provisions ofthe Employees' State Insurance Act, 1948Contribution & Benefit Period …Employees’ Contribution – 1.75% of the WagesEmployers’ Contribution – 4.75% of the Wages

Contribution towards the scheme on a monthly basis.

Employees – Benefits underEmployees’ State Insurance Corporation

Under ESI Scheme, the comprehensive and need based

package of Social Security Benefits in Cash and kind

include the following:1) Medical Benefit2) Sickness Benefit3) Maternity Benefit4) Disablement Benefit5) Dependent Benefit6) Funeral Benefit ( Upto Rs.10000/-)

WHO IS RESPONSIBLE FOR INDUSTRIAL RELATIONS ?

Workmen Compensation claims -> Fatal accidents (Documents required)Information to Cluster/HQ/clients/

Police / WCCFIR / Post mortem report National Insurance Claim FormDeath Certificate / Age Proof

certificateAccident report / Attendance cardDisbursement of NIC form “A”

voucher through W C Commissioner

DOCUMENTS REQUIRED FOR SETTLEMENT

TEMPORARY DISABLEMENT

Claim formAccident reportMedical

certificateFitness

certificate

PERMANENT PARTIAL DISABLMENT

Claim formAccident reportMedical

CertificateFitness Certificate% of disability

CertificateAge ProofAttendance Card

What happens in the event ofNon-Compliance?

Fines Penalties Lawsuit Loss of credibility Loss of contract Show cause notice to Directors / CMD Closure of business Future business

LATEST NOTIFICATION(S) …… Extension of ESI scheme to Construction site workers

(Notification No. P-12, 11/11/60/2010 – Rev II; dated. 31/07/2015) w.e.f 1st August 2015.

Cost impact for jobs : 4.75% of subcontractor gross wages per month

UAN number activation (Regional PFC notification no. R-I/P-20/UAN/2014/104/18763 dated. 3rd March 2015) Mobile nos. of workmen is a must

Reduction of Admin charges from 1.10 % to 0.85% w.e.f 1st Jan2015 (Notification dated. 2nd Feb2015)

EDLI assurance benefit increased from 1,30,000/- to 3,60,000/- w.e.f 1st Sept2014

Gazette notification on enhancement of statutory wage ceiling to Rs. 15,000/- from existing Rs. 6,500/- , fixing min. pension of Rs. 1000/- per month and 20% additional relief on the amount of assurance benefit under EDLI Scheme, 1976 (Notification no. 13637 ; dated. 28th Aug2015)

Thank You !