acts detailed

8/12/2019 Acts Detailed

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INDUSTRIAL LAW AND LABOUR LAW

The terms Industrial law and Labour Law are often used interchangeably in ourcountry. The scope of the term industrial is, however much wider. Broadly

speaking industrial law covers all statutes and case law pertaining to industry. ssuch it covers not only laws affecting or relating to industry and labour but alsolaws pertaining to ta!ation and corporate matters. In the restricted sense, theterm Industrial law is "confined only to those laws which have bearing on industryin its relation to or as affecting labour#. In this sense industrial law is a termsynonymous with labour law, which obviously covers only those laws which areprimarily concerned with labour.

The Labour Law is used to denote that body of laws which deal withemployment and non$employment, wages, working conditions, industrialrelations, social security and labour welfare of industrially employed persons.

The origin and growth of labour law may be ascribed mostly to the developmentof organi%ed industry where a large number of workers, are employed "underconditions which tend to be detrimental to their health safety and welfare andagainst which they are unable to protect themselves#.


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IMPORTANCE OF LABOUR LAWS

Labour laws proceeds from two basic concepts&

'. The relationship between workers and employers is one of partnershipin the maintenance of production and the building up of the nationaleconomy.

(. The community as a whole as well as individual employers are under anobligation to protect the well$being of workers and to secure to them,their due share in the gains of economic developments.

The need of knowing and applying these laws is two fold, namely&

'. To improve the service conditions of industrial labour so as to provide for

them, the ordinary amenities of life and by that process,

(. To bring about industrial peace in its turn accelerate productive activity ofthe country resulting in its prosperity.

To sum up labour legislation is necessary for the following reasons&

'. Individual workers are economically weak. They can not bargain with theemployers for the protection of their rights and even for subsistencewages.

(. The workers are e!posed to certain risks in the factories. s such , inorder to make provision for their health, safety, and welfare, legislation isneeded.

). In order to increase the bargaining power of labour, legislation isnecessary to encourage the formation of trade unions.

*. In order to avoid industrial disputes which lead to strikes and lock$outs,labour legislation is needed.

+. Laws for providing compensation to workmen who die or are inured

during and in course of employment are also needed.

6. Labour legislatio a!"a#es t$e iterests o% t$e &or'ig (eo(le a!t$us $el(s i t$e !e"elo()et o% t$e atioal e#oo)* o a sou!a! sel%+reliat basis.


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CONTRACT LABOUR ,RE-ULATION AND ABOLITION ACT/0123

-urpose of the ct is to regulate employment of contract labour and to providefor abolition of contract labour in certain cases.

Establishment to which Act applies $ The ct is applicable to everyestablishment in which ( or more workmen are employed as contract labourorwere so employed anytime during last '( months. /0ection '1)21a23. It will notapply to establishment where work of an intermittent or casual nature isperformed. /0ection '1+21a23.

4stablishment means any office or department of 5overnment or a localauthority or any place where any industry, trade, business, manufacturing oroccupation is going on. /0ection (1'21e23. 4very such establishment is re6uired toget itself registered under the ct. /0ection 73.

8anager or occupier of factory or head of department of 5overnment9localauthority is termed as -rincipal 4mployer. /0ection (1'21g23. -rincipal 4mployershould maintain register of contractors in prescribed form. /0ection (:3. ;e isre6uired to ensure that contractor makes ade6uate provision for canteen, restrooms, supply of drinking water, latrines, urinals, wash rooms etc. to contractlabour. If contractor fails to do so within prescribed time, the -rincipal 4mployershall provide the amenities.


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Controlling authority =


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A((li#abilit* o% t$e A#t + The ct applies to 1a2 4very establishment which is afactory engaged in industry specified in 0chedule I to the ct and in which ( ormore persons are employed and 1b2 any other establishment or class ofestablishment employing ( or more persons which may be specified by


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provident fund or pension. @ Tea factories in ssam @ 4!emption granted bys ?,+2 canbecome member with permission of ssistant -A


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PFC is liable under Consumer Protection Act$ The >egional -rovident Aund


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EMPLO4EES: PENSION SC=EME/ 011

This scheme has been introduced w.e.f. '?th Covember, :+. The 0cheme isapplicable to all subscribers of 4mployers -rovident Aund. It is also compulsoryto persons who were subscribers as on '?.''.:+.

IBDTIC $ The employers contribution of E.))J will be diverted to thefund of -ension 0cheme. 4mployee does not have to make any contribution.4mployers contribution is '(J9 'J. In such cases, E.))J is diverted to-ension scheme and balance '.?7J9).?7J as the case may be, will be in creditof employees name in -rovident Aund account. The E.))J is on ma!imumsalary of >s. ?,+. If some employers are paying contribution on salary ine!cess of >s. ?,+, the e!cess contribution will be credited to -rovident Aundaccount and not to -ension scheme.

Co separate administration charges or inspection charges are payable, as these

are already paid along with -rovident Aund contribution.

B4C4AIT0 DCG4> T;4 0


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otherwise punish an employee during the period employee is in receipt ofsickness benefit or maternity benefit. ;e also cannot dismiss, discharge orotherwise punish employee when he is in receipt of disablement benefit or isunder medical treatment or is absent from work due to sickness.

This gives protection to employee when he is in receipt of sickness benefit ormaternity benefit. 4mployer cannot take disciplinary action against employee insuch cases. This provision is grossly misused by employees.

T$is (ro"isio ,o% se#tio 2@ is a((li#able ol* i #ase o% (uiti"e a#tio%or all 'i!s o% )is#o!u#t !urig &$i#$ e)(lo*ee $as re#ei"e! si#'essbee%its. T$is (rote#tio is ot a((li#able i #ase o% aba!o)et o%e)(lo*)et or &$e ter)iatio is auto)ati# as (er #otra#t.

Applicability of E!# !cheme " The scheme is applicable to all factories. /section'1*23. The ppropriate 5overnment can also make it applicable to any other

industrial, commercial, agricultural or other establishments, by issuing notificationand giving ? month notice. /section '1+23.

Thus, 40I ct can be made applicable to shops also. ;owever, since5overnment has to provide for hospitals and medical facilities, the ct can bemade applicable to different parts of 0tate at different dates. Thus, if a factory isat a place where 40I< is unable to provide medical facilities, 40I ct may not bemade applicable to that area. 5overnment can e!empt a factory or establishmentor persons or class of persons from provisions of 40I ct, if the employees aregetting better medical facilities9 /e.g. if 5overnment is convinced that the factoryitself is providing very good medical facilities e.g. like TI0


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Employer under ESI Act -rincipal 4mployer means @ owner or occupier offactory @ ;ead of department in case of 5overnment department and @ -ersonresponsible for supervision and control, in case of any other establishment./section (1'723. $ $ 4mployees working though contractor are also covered.s. ?,+ per month can be presentlycovered under the 40I ct scheme. /section (1:23.

4mployees include @ persons employed through contractor @ pprentices otertanthose covered under pprentices ct @ -ersons employed in administrationoffice, department or branch for purchase or sale of products. @ s.?,+ p.m. /pro!isoto section (1:23.

Contribution to E!#C Fund " Both employee and employer have to makecontribution to 40Is '+9$.

4mployers contribution is *.7+J of total wage bill of all employees in respect ofevery wage period. Thus, it is not necessary to calculate employerKs contribution

separately for each employee. *.7+J of gross wages should be calculated androunded off to ne!t + paise. 4mployees drawing wages lower than >s (+ per daydo not have to pay employeeKs share. The contribution has to be paid within ('days from close of the month. It is payable by a challan in authori%ed bank. $ $ Ifthe contribution is not paid in time, interest '(J is payable. /section ):1+21a23.

In addition, 40I< authorities can impose damages varying between +J to (+Jof arrears of contribution.


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4mployer cannot deduct employers contribution from the salary of employee./section *1)23.

LIBILITH A ->IC = In case of employees of contractor,liability is of -rincipal 4mployer.

Wage for purpose of E!# Act " 9Wages: )eas all re)ueratio (ai! or(a*able i #as$ to e)(lo*ee a##or!ig to ter)s o% #otra#t o% e)(lo*)eta! i#lu!es a* (a*)et )a!e to a e)(lo*ee i res(e#t o% (erio! o%aut$orie! lea"e/ lo#'+out/ la*+o%%/ stri'e &$i#$ is ot illegal a! ot$era!!itioal re)ueratio (ai! at iter"al ot e#ee!ig t&o )ot$s. It !oesot i#lu!e #otributio (ai! b* e)(lo*er to a* (esio %u! or(ro"i!et %u! Tra"ellig allo&a#e Rei)burse)et o% e(eses )a!eb* ature o% e)(lo*)et o% t$e e)(lo*ee gratuit*. ;se#tio 7,77 T -H 4NDL >48DC4>TIC = It is duty of eachemployer not to make any discrimination while paying remuneration to anyworker of opposite se!. ;e should pay same wages to workmen of both se!es forperforming same work or work of a similar nature. /section *3.

0ame work or work of similar nature means work in respect of which the skill,effort and responsibility re6uired are the same, when performed under similar

working conditions, by a man or woman and the difference, if any, between theskill, effort and responsibility re6uired of a man and those re6uired of a womanare not of practical importance in relation to the terms and conditions ofemployment. /section (1h23.

C GI0I8ICTIC F;IL4 >4DIT84CT > ->8TIC = Thereshould be no discrimination on recruitment, promotion, training or transfer, e!ceptwhere employment of women is restricted. /section +3. These provisions are not


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applicable when priority is to be given to schedules castes, schedules tribes, e!$servicemen or retrenched employees.

GI0-LH C CTIG $ notice containing abstract of the act and therules made there$under, in 4nglish and local language should be displayed.

Came and address of Aactories Inspector and the certifying surgeon should alsobe displayed on notice board. /section 'E1'23.

FACTORIES ACT ,01>?

This is one of the earliest welfare legislation. The obect is to secure to workershealth, safety, welfare, proper working hours and other benefits. Aactories ct isenacted primarily with obect to of protecting workers employed in factoriesagainst industrial and occupational ha%ards. The ct re6uires that workersshould work in healthy and sanitary conditions and for that purpose it providesthat precautions should be taken for safety of workers and prevention of

accidents. Incidental provisions have also been made.

Aactories ct, ':*E was engrafted in the 0tatute Book where emphasis had beenon the welfare of the workers. Aactory Inspectors have been placed with heavyresponsibility on them. The ct undoubtedly is welfare legislation and cannot betermed to be a complete code in itself. In this case, it was held that if a workmanis found working during period not notified beforehand, prosecution can belaunched.

KAactoryK means any premises where ' or more workers are working and amanufacturing process is carried out with aid of power 1( if manufacture is

without aid of power2. /section (1m23. 8anufacturing process means process ofaltering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning,breaking up, demolishing or otherwise treating or adopting any article orsubstance. It also includes @ pumping oil, water, sewage or any other substance @5enerating, transforming or transmitting power @


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need not be a director Besides KoccupierK, name of K8anagerK should also beinformed. ny change in name of 8anager shall also be informed. /section 71*23.

GDTI40 A 4O4>H 8CDA4> = 4very manufacturer or importer of anyarticle or substance in factory shall design it in such a way that it is safe to use

and carry. de6uate safety information about the article should be given. /section7B3.

FACILITIES AND CON5ENIENCES + T$e %a#tor* s$oul! be 'e(t #lea.;se#tio 00


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F>MIC5 ;D>0 $ worker cannot be employed for more than *E hours in aweek. /section +'3. Feekly holiday is compulsory. If he is asked to work onweekly holiday, he should have full holiday on one of three days immediately orafter the normal day of holiday. /section +(1'23. ;e cannot be employed for morethan : hours in a day. /section +*3. t least half an hour rest should be provided

after + hours. /section ++3. Total period of work inclusive of rest interval cannot bemore than '.+ hours. /section +?3. worker should be given a weekly holiday.verlapping of shifts is not permitted. /section +E3. Cotice of period of workshould be displayed. /section ?'3.

O4>TI84 F540 $ If a worker works beyond : hours a day or *E hours aweek, overtime wages are double the rate of wages are payable. /section +:1'23.

workman cannot work in two factories. There is restriction on doubleemployment. /section ?3. ;owever, overtime wages are not payable when theworker is on tour. Total working hours including overtime should not e!ceed ? ina week and total overtime hours in a 6uarter should not e!ceed +. >egister of

overtime should be maintained. n employee working outside the factorypremises like field workers etc. on tour outside head6uarters are not entitled toovertime.

48-LH84CT A F84C $ woman worker cannot be employed beyond thehours ? a.m. to 7. pm. 0tate 5overnment can grant e!emption to any factoryor group or class of factories, but no woman can be permitted to work during '-8 to + 8. 0hift change can be only after weekly or other holiday and not inbetween. /section ??3.

>4G0 A F>M84C $ register 1muster roll2 of all workers should be

maintained. Co worker should be permitted to work unless his name is in theregister. >ecord of overtime is also re6uired to be maintained. /section ?(3.

LEA5E + A &or'er is etitle! i e"er* #ale!ar *ear aual lea"e &it$&ages at t$e rate o% oe !a* %or e"er* 73 !a*s o% &or' (er%or)e! i t$e(re"ious #ale!ar *ear/ (ro"i!e! t$at $e $a! &or'e! %or 7>3 !a*s or )orei t$e (re"ious #ale!ar *ear. C$il! &or'er is etitle! to oe !a* (er e"er*0 !a*s. W$ile #al#ulatig 7>3 !a*s/ eare! lea"e/ )aterit* lea"e u(to 07&ee's a! la* o%% !a*s &ill be #osi!ere!/ but lea"e s$all ot be eare! ot$ose !a*s. ;se#tio 21 9T CG L4O4 0L>H $ KFagesK for leave encashment andovertime will include dearness allowance and cash e6uivalent of any benefit.;owever, it will not include bonus or overtime.

CTI


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contacting occupational disease should be informed to Aactories Inspector./section EE3. Cotice of dangerous occurrences and specified diseases should begiven. /sections EE and E:3.

BLI5TIC >45>GIC5 ;Q>GD0 ->


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Establishments to which the Act is applicable + T$e A#t a((lies toK ,ae"er* %a#tor* and ,b e"er* ot$er establis$)et i &$i#$ t&et* or )ore(ersos are e)(lo*e! o a* !a* !urig a a##outig *ear. ;se#tio 0,@s ),+ is not entitled to any bonusunder the ct.

Thus, minimum bonus E.))J will be >s (,+ and ma!imum (J will be>s ?, for the year, when salary of employee e!ceeds >s (,+ but is lessthan >s ),+.

Computation of amount available for distribution as bonus + Theestablishment has to prepare a balance sheet and profit and loss account of theyear and calculate the gross profit, available surplus and allocable surplus asper method and formula given in Bonus ct.

%inimum bonus+ E"er* e)(lo*er s$all be bou! to (a* to e"er* e)(lo*ee

i res(e#t o% a* a##outig *ear/ a )ii)u) bous &$i#$ s$all be ?.@@(er #et o% t$e salar* or &age eare! b* t$e e)(lo*ee !urig t$ea##outig *ear or oe $u!re! ru(ees/ &$i#$e"er is $ig$er/ &$et$er orot t$e e)(lo*er $as a* allo#able sur(lus i t$e a##outig *ear. W$erea e)(lo*ee $as ot #o)(lete! %i%tee *ears o% age at t$e begiig o% t$ea##outig *ear/ t$e )ii)u) bous (a*able is ?.@@8 or Rs 63 &$i#$e"eris $ig$er. ;se#tio 03


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Fhile computing number of working days, an employee shall be deemed to haveworked in an establishment even on the days on which 1a2 ;e was laid off 1b2 ;ewas on leave with salary9wages1c2 ;e was absent due to temporary disablementcaused by accident arising out of and in course of employment and 1d2 4mployeewas on maternity leave with salary9wages. /section '*3.

Payment of ma&imum bonus + Fhere in respect of any accounting year, theallocable surplus e!ceeds the amount of minimum bonus payable to theemployees, the employer shall, in lieu of such minimum bonus, be bound to payto every employee in respect of that accounting year bonus which shall be anamount in proportion to the salary or wage earned by the employee during theaccounting year subect to a ma!imum of twenty per cent of such salary or wage./section ''1'23. $ $ In computing the allocable surplus under this section, theamount set on or the amount set off under the provisions of section '+ shall betaken into account in accordance with the provisions of that section. /section''1(23.

Thus, ma!imum bonus payable to employee is (J in any accounting year.

!alary or wages for calculating bonus $ Fhere the salary or wage of anemployee e!ceeds >s (,+ per month, the bonus payable to such employeeunder sections ' or '' shall be calculated as if his salary or wages were >s(,+ per month. /section ')3. In other words, employees drawing salary orwages between >s (,+ to >s ),+ per month are entitled to bonus on thebasis of >s (,+ per moth salary only.

GI0-LH C CTIG $ notice containing abstract of the act and the

rules made there$under, in 4nglish and local language should be displayed.Came and address of Aactories Inspector and the certifying surgeon should alsobe displayed on notice board. /section 'E1'23.

PA4MENT OF -RATUIT4 ACT/ 0127

5ratuity is a lump sum payment to employee when he retires or leaves service. Itis basically a retirement benefit to an employee so that he can live lifecomfortably after retirement. ;owever, under 5ratuity ct, gratuity is payableeven to an employee who resigns after completing at least + years of service.

OIG40 A> 8ICI8D8 5>TDITH CLH = The 5ratuity ct providesonly for minimum gratuity payable. If employee has right to receive highergratuity under a contract or under an award, the employee is entitled to gethigher gratuity. /section *1+23.

Employers liable under the scheme " The ct applies to every factory, mine,plantation, port, and railway company. It also applies to every shop andestablishment where ' or more persons are employed or were employed on any


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day in preceding '( months. /section'1)23. 0ince the ct is also applicable to allshops and establishments, it will apply to motor transport undertakings, clubs,chambers of commerce and associations, local bodies, solicitors offices etc. , ifthey are employing ' or more persons.

Employees eligible for gratuity ' 4mployee means any person 1other thanapprentice2 employed on wages in any establishment, factory, mine, oilfield,plantation, port, railway company or shop, to do any skilled, semi$skilled orunskilled, manual, supervisory, technical or clerical work, whether terms of suchemployment are e!press or implied, and whether such person is employed in amanagerial or administrative capacity. ;owever, it does not include any


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get more if obtainable under an award or contract with employer, as made clearin section *1+23.

+o Compulsory insurance of gratuity liability ' 0ection * provides thatevery employer must obtain insurance of his gratuity liability with LI< or any other

insurer. ;owever, 5overnment companies need not obtain such insurance. I% ae)(lo*ee is alrea!* )e)ber o% gratuit* %u! establis$e! b* a e)(lo*er/$e $as o(tio to #otiue t$at arrage)et. I% a e)(lo*er e)(lo*ig )oret$a 33 (ersos establis$es a a((ro"e! gratuit* %u!/ $e ee! otobtai isura#e %or gratuit* liabilit*. + + =o&e"er/ t$is se#tio $as ot *etbee broug$t ito %or#e. =e#e/ (resetl*/ su#$ #o)(ulsor* isura#e isot e#essar*.

,ratuity cannot be attached " 5ratuity payable cannot be attached in e!ecutionof any decree or order of any civil, revenue or criminal court, as per section ') ofthe ct.

GI0-LH C CTIG $ notice containing abstract of the act and therules made there$under, in 4nglish and local language should be displayed.Came and address of Aactories Inspector and the certifying surgeon should alsobe displayed on notice board. /section 'E1'23.

INDUSTRIAL DISPUTES ACT/ 01>2

The obect of the ct is to make provisions for investigation and settlement ofindustrial disputes. ;owever, it makes other provisions in respect of lay off,retrenchment, closure etc. The purpose is to bring the conflicts between

employer and employees to an amicable settlement. /"e Act is acie!inge#actly opposite3. The ct provides machinery for settlement of disputes, ifdispute cannot be solved through collective bargaining.

-#ndustry. under #ndustrial /isputes Act ' The definition of industry is asfollows = Industry means any business, trade, undertaking, manufacture orcalling of employers and includes any calling, service, employment, handicraft orindustrial occupation or avocation of workmen. /section (123. Thus, the definitionis very wide. The scope is much wider than what is generally understood by theterm industry.

Thus, many hospitals, educational institutions, universities, charitable institutionsand welfare organi%ations have got covered under the ct. -rofessions, clubs,cooperatives, research institutes etc. are also covered.

-#ndustry /ispute. and -Wor0man. ' The definition of industrial dispute andworkman is as follows $


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ICGD0T>IL GI0-DT4 = Industrial dispute means any dispute or differencebetween employers and employers, or between employers and workmen, orbetween workmen and workmen, which is connected with the employment ornon$employment or the terms and conditions of employment or with theconditions of labour, of any person. /section (1k23. $ $ 0ection ( provides that

dismissal, discharge, retrenchment of even a single workman will be industrialdispute even if no other workman or any union is a party to the dispute.

F>M8C = Forkman means any person 1including apprentice2 employed inany industry to do any manual, clerical or supervisory work for hire or reward. Itincludes dismissed, discharged or retrenched person also. ;owever, it does notinclude 1i2 rmed Aorces i.e. those subect to ir Aorce ct, rmy ct or Cavy ct1ii2 -olice or employees of prison 1iii2 4mployed in mainly managerial oradministrative capacity or 1iv2 person in supervisory capacity drawing wagese!ceeding >s ',? per month or functions are is mainly of managerial nature./section (1!23.

Adjudication of disputes= The ct provides for Forks


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Gischarge or dismissal of a workman @ Fithdrawal of any customary concessionor privilege @ Illegality or otherwise of a strike or lock$out @ other matters whichare not under Industrial Tribunal. /0econd 0chedule to the ct3

>4A4>4C


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ser"i#e/ b* (a*ig #o)(esatio eJual to 38 o% salar* ,basi# (lus DA,se#tio 7C o% IDA. E)(lo*er #a o%%er $i) alterate e)(lo*)et/ i% t$ealterate e)(lo*)et !oes ot #all %or a* s(e#ial s'ill or (re"iouse(erie#e/ a! la* o%% #o)(esatio &ill ot be (a*able i% e)(lo*eere%uses to a##e(t t$e alterate e)(lo*)et ,se#tio 7E.

bove provisions of compensation for lay off do not apply to 1a2 Industrialestablishments employing less than + workmen 1b2 seasonal industry 1c24stablishments employing ' or more workmen, as in their case, prior approvalof ppropriate 5overnment is necessary u9s (+81'2.

>4T>4Cetrenchment means termination by the employer ofservice of a workman for any reason, other than as a punishment inflicted by adisciplinary action. ;owever, retrenchment does not include voluntary retirementor retirement on reaching age of superannuation or termination on account ofnon$renewal of contract or termination on account of continued ill$health of a

workman. /section (1oo23.

>etrenchment means discharge of surplus labour or staff by employer. It is notby way of punishment. The retrenchment should be on basis of last in first outbasis in respect of each category, i.e. unior$most employee in the category1where there is e!cess2 should be retrenched first. /section (+53. If employerwants to re$employer persons, first preference should be given to retrenchedworkmen. /section (+;3.

worker who has completed one year of service can be retrenched by givingone month notice 1or paying one months salary2 plus retrenchment

compensation, at the time of retirement, '+ days average wages for everycompleted year of service 1section (+A2.

If number of workmen are ' or more, prior permission of ppropriate5overnment is necessary u9s (+C1'23.

84CIC5 A OI


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Provisions for large industries for lay off and closure " Large industriesemploying ' or more workmen on an average for preceding '( months cannotlay$off, retrench or close down the undertaking without permission from5overnment 1sections (+8 to (+$ of Industrial Gisputes ct2. Invariably, suchpermission is almost never given, whatever may be the merits of the case.

+otice of change in conditions of service = 0ection : provides that anemployer cannot effect any change in the conditions of service applicable to anyworkman without giving (' days notice. 0uch notice is not re6uired if there issettlement or award of Labour


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number of persons employed by him. /section (1l23. Forkers go on strike, whilelock$out is to be declared by employer.

$ages during stri%e period - Fages during strike period are payable only if thestrike is both legal and ustified2, it was held that when lockout by employer is

legal and ustified, workmen are not entitled to payment of wages for the periodduring which the lock$out continued.

+o wor0 no pay " Pri#i(le o% 9No &or' o (a*: $as bee a##e(te! b*Su(re)e Court. T$e (ri#i(le o% 9o &or' o (a*: is also a((li#able &$e a)a &as eligible %or (ro)otio but &as ot (ro)ote! a! i %a#t !i! ot&or' i t$e $ig$er (ost. I su#$ #ase/ $e is ot eligible to get (a* %or $ig$ers#ale

ILL45L 0T>IM4 > LM8C IC 8TT4>0 >4LT4G T GI0-DT4 =4mployer shall not discharge, dismiss or punish any workman in matter for anymisconduct concerned to dispute, without permission of authority before whichproceedings are pending. /section ))1'21b23. -unishment which is not connectedto dispute can be made in accordance with standing orders without anypermission.

->T4M8C $ In every establishment, 'J of total workmen arerecogni%ed as -rotected workman u9s ))1)2 1but minimum + and ma!imum'2. In case of such workmen, order for his dismissal, discharge or punishmentcannot be passed without permission of authority before which proceedings arepending, &eter te issue is related to dispute or not. 0uch permission isre6uired only during the period proceedings are pending and not after mainreference is decided.


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1nfair Labour Practices Se#tio 7T (ro$ibits u%air labour (ra#ti#es b*e)(lo*er or &or')a or a tra!e uio. I% a* (erso #o))its u%air labour(ra#ti#e/ $e is (uis$able &it$ %ie u(to Rs 0/333 a! i)(riso)et u(to 6)ot$s. ;se#tio 7U


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establishment 1h2 termination of employment, suspension, dismissal etc. formisconduct and acts or omissions which constitute misconduct 1i2 >etirementage 12 8eans of re$dressal of workmen against unfair treatment or wrongfule!actions by employer 1k2 ny other matter that may be prescribed.

Coverage of Act " The ct is applicable to all industrial establishmentsemploying ) or more workmen. /section '1)23.

Industrial establishment means 1i2 an industrial establishment as defined insection (1i2 of -ayment of Fages ct 1ii2 Aactory as defined in section (1m2 ofAactories ct 1iii2 >ailway 1iv2 4stablishment of contractor who employs workmenfor fulfilling contract with owner of an industrial establishment. /section (1e23.

Approval of !tanding Orders " 4very employer covered under the ct has toprepare 0tanding rders, covering the matters re6uired in the 0tandingrders. Aive copies of these should be sent to


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rules etc. as misconducts. The


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employer is paying total sum which is higher than minimum rates of wages fi!edunder the ct including the cost of living inde! 1OG2, he is not re6uired to payOG separately. Thus, even if rates fi!ed by 0tate 5overnment indicate basicand G separately, it is not necessary to show them separately by employer inhis wage sheet. It is sufficient if employer pays total amount which is e6ual to or

more than total minimum wages 1including G2 as specified by 0tate5overnment in a notification.

EMPLO4ER TO CLOSE UNIT IF =E CANNOT AFFORD TO PA4 MINIMUMWA-ES + I% a e)(lo*er #aot (a* )ii)u) &ages/ $e $as to #lose !o&t$e u!erta'ig. Pa*ig #a(a#it* is ot rele"at #osi!eratio %or rate o%)ii)u) &ages. Cost o% li"ig a! geeral &ages i lo#alit* are rele"at.

Mii)u) &ages are (a*able irres(e#ti"e o% %ia#ial (ositio o% i!i"i!uale)(lo*er.


PA4MENT OF WA-ES ACT/ 01@6

The ct is to regulate payment of wages to certain class of employed persons.The ct applies to payment of wages to persons employed in factory or railways.It also applies to any industrial or other establishment specified in section (1ii2./section '1*23. Aactory means factory as defined in section (1m2 of Aactories

ct. Industrial or other establishment specified in section (1ii2 are $ @ Tramway ormotor transport services @ ir transport services @ Gock wharf or etty @ Inlandvessels @ 8ines, 6uarry or oil$field @ -lantation @ Forkshop in which articles areproduces, adopted or manufactured. The ct can be e!tended to otherestablishment by 0tate9s ',?. /section'1?23. The limit is being increased to >s ?.+ by amending the ct.

4very employer is responsible for payment to persons employed by him onwages. /section )3.

84CIC5 A F540 $ Fages means all remuneration e!pressed in terms ofmoney and includes remuneration payable under any award or settlement,overtime wages, wages for holiday and any sum payable on termination ofemployment. ;owever, it does not include bonus which does not form part ofremuneration payable, value of house accommodation, contribution to -A,traveling allowance or gratuity. /section (1vi23


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=OW WA-ES S=OULD BE PAID + Wages #a be (ai! o !ail*/ &ee'l*/%ortig$tl* or )ot$l* basis/ but &age (erio! #aot be )ore t$a a)ot$. ;se#tio >


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Trade dispute means any dispute between workmen and employers or betweenworkmen and workmen, or between employers and employers. ;owever, itshould be connected with employment or non$employment, or the conditions oflabour, of any person. Forkman means all persons employed in trade orindustry, whether or not in the employment of the employer with whom the trade

dispute arises. /section (1g23.

ny seven or more members of a Trade Dnion can apply for registration, bysubscribing their names to rules of trade Dnion and complying with provisions ofthe ct for registration of Trade Dnion. /section *1'23. >ight and liabilities of a>egistered Trade Dnion are specified in section '+.

egistration of trade union= ppropriate 5overnment shall appoint a personas >egistrar of Trade Dnions for each 0tate. /section )1'23. pplication forregistration is re6uired to be made signed by at least 7 members. pplicationshould be accompanied by rules of trade union. and other re6uired details./section +3. >ules should contain provisions as prescribed in section ?. >egistrarshall register Trade Dnion and enter particulars in the register maintained by him./section E3. Trade Dnion will have a registered office. /section '(3.

Other provisions= ther important provisions are as follows $

T>G4 DCIC I0 BGH ->T4 = >egistered Trade Dnion shall be abody corporate by the name under which it is registered. It will have perpetualsuccession and a common seal. It can ac6uire both movable and immovableproperty in its own name and contract in its own name. /section ')3.

ADCG A> -LITI-040 $ Trade Dnion can constitute separate fundfor political purposes. /section '?3.

4R4C0 = 4very registered trade union will prepare a generalstatement of assets and liabilities of trade Dnion as on )'st Gecember. Thestatement will be sent to >egistrar along with information about change of officebearers during the year. /section (E1'23.


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I88DCITH A>8 ->OI0IC A I8ICL G4GI0-DT40 = ffice bearer of a trade union shall not be liable to punishment u9s'(B1(2 of Indian -enal


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Inury which does not result in total or partial disablement of workman for a

period e!ceeding ) days

Inury caused by an accident directly attributable to @ workman under

influence of drinks or drugs @ willful disobedience of e!press orders forsafety @ willful removal of safety guard or device. /4ven if such case, if the

workman dies or suffers permanent total disablement, the employer will beliable3.

48-LH84CT GI0404 = 4mployer is liable if a workman contracts anyspecified occupational disease, while he is in service of employer for at least ?months. /section )1(23.

48-LH4>0 ADLT I0 I88T4>IL $ The compensation is payable evenwhen there was no fault of employer.

M8C F0 4L400 $

A F>M84C 48-LH4G I0 CT IT4>I = In definition ofworkman in schedule II, in most of the cases, number of workmen employed isnot the criteria. In most of cases, employer will be liable even if ust one workmanis employed. The ct applies to a workshop even if it employs less than (workmen and is not a factory under Aactories ct.

Wor0man under the Act= Forkman means @ railway servant @ crew of ship @


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only for purpose of calculating the compensation. 8a!imum compensation is >s.*,+7,E if a person at the time of death was '? years of age an. In addition,funeral e!penses upto >s (,+ are payable.

In case of permanent total disablement, minimum compensation is >s. :,.

8a!imum compensation is an amount e6ual to ?J of monthly wages ofdeceased workman multiplied by factor depending on age 18ore the age, lowerthe compensation2. 8a!imum compensation payable is >s. +,*E,*:?, if workmanwas '? years of age at the time of accident. In case of permanent partialdisablement, compensation is payable on basis of percentage of loss of earningcapacity.

Co compensation is payable if disablement is upto only three days.

->T4


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PUNIS=MENT

ny punishment of suspension or dismissal can be imposed after conducting aGomestic 4n6uiry. -rinciples of natural ustice have to be followed. Terminationof an employee without following principles of natural ustice is violative of rticle(' of

For (ro(er #o!u#t o% eJuir* ,0 E)(lo*ee s$oul! be i%or)e! o% #$argesle"ele! agaist $i) ,7 Witesses s$oul! be or!iaril* ea)ie! be%ore$i). ,@ T$e e)(lo*ee s$oul! be gi"e %air o((ortuit* to #ross ea)iet$e &itesses i#lu!ig $i)sel% ,> T$e eJuir* o%%i#er s$oul! re#or! $is

%i!igs &it$ reasos.

The workman is issued with a 0how epresentative. The workman is not allowed to engage alawyer to defend his case. fter en6uiry, the 4n6uiry fficer has to give hisfindings and state whether he finds the workman guilty or not guilty. ;e shouldgive reasons for his views. ;owever, the 4n6uiry fficer should not give his

opinion about the punishment that should be imposed on the workman. eport e.g. the workman mayagree that he is guilty but may plead for leniency, or he may point outdiscrepancies in the report of 4n6uiry fficer. fter the reply of workman, theauthori%ed 8anager will go through en6uiry papers, report of 4n6uiry fficer andobservations9reply of workman on the report of 4n6uiry fficer. The uthori%ed8anager will then issue suitable order. The Gisciplinary uthority should not belower in rank or grade than the ppointing uthority

GI0-LH C CTIG $ notice containing abstract of the punishment

rules and the rules made there$under, in 4nglish and local language should bedisplayed. Came and address of Aactories Inspector and the certifying surgeonshould also be displayed on notice board. /section 'E1'23.

acts detailed

Documents