seminar on labour l - wirc-icai
TRANSCRIPT
SEMINAR ON LABOUR LAWS
Organised by:-
WESTERN INDIA REGIONAL COUNCIL OF
THE INSTITUTE OF CHARTERED
ACCOUNTANTS OF INDIA
(WIRC),
“ICAI BHAWAN”, 27 CUFFE PARADE, COLOBA, MUMBAI – 400 005
Date:- 8th November 2014
Faculty Trainer:-
Adv. Ramesh L. Soni
Management Consultant and Advisor on Labour Laws
2
Index
Sr. No
Topic
Page
No.
1 Employees’ State Insurance Act, 1948 4
2 The Payment of Wages Act, 1936 67
3 Definition of Wages 75
4 Maharashtra Minimum Wages Chart 78
5 The Payment of Bonus Act, 1965 90
6 The Maharashtra Labour Welfare Fund Act,
1953
96
7 Payment of Gratuity Act, 1972 100
8 Maharashtra Profession Tax Act, 1975 117
9 Statutory Compliance: - Various Returns 127
10 Useful Website &Disclaimer 130
3
4
Employ ees’ State Insuranc e Act ,
1948 Long Back in 1923, the Government, by enacting the Workmen‘s Compensation Act, provided
some Social security to the industrial workers. The benefit provided by this act was, however,
limited to compensation for injury caused by accident. Besides, the cost of compensation was to
be borne entirely by the employer.
By enacting the Employee‘s State Insurance Act, 1948, the Government introduced a scheme of
social insurance for the industrial workers. Under the scheme, the workers also are required to
contribute to a social insurance fund, which is to be utilised for conferring benefits on them. The
Employee‘s State Insurance Act, 1948, provides to the workers not only accident benefit but also
other benefits such as sickness benefit, maternity benefit and medical benefit.
Object:-
The object of the Act is to secure sickness, maternity, disablement and medical benefits to
employees of factories and establishments and dependents‘ benefits to the dependents of such employees.
Coverage under the ESI Act, 1948:-
The Act is applicable to the *Factory, u/s 2(12) has amended to facilitate coverage of smaller
factories and all factories which employ 10 or more persons whether are run by power or
without power (w.e.f. 1st June 2010)
Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants,
cinemas including preview theatre, road motor transport undertakings and newspaper
establishment employing 20 or more persons.
There is exception, by virtue of notification dt:- 31st Mach 2008, a person with disability
under Disabilities Act, 1955 and National Trust for Welfare of Persons with Disabilities Act,
1999 is entitled to be covered under the Act even through his wage exceeds Rs. 15000/- p.m.
(w. e. f. 1st May 2010) The Rule 50 of Central Rules stands suitably modified as to cover
persons with disability drawing wages up to Rs. 25000/- p.m.
(ONCE COVERED; COVERED FOR EVER)
The Factory or Establishment shall continue to be governed by the Act notwithstanding the fall
in the number of persons employed or discontinuance of the use of power w.e.f. 23rd Oct 1989
Areas Covered:-
The ESI Scheme is being implemented area-wise by stages. The Scheme has already been
implemented in different areas in the all States & Union Territories i.e. Delhi, Chandigarh and
Pondicherry
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Non Implemented States:-
Nagaland, Manipur, Tripura, Sikkim, Arunachal Pradesh and Mizoram.
Applicability:
a) All Factories Employing 10 or more persons whether they are run by Power or without Power
(w.e.f. 1st June 2010)
b) Shop Employing 20 or more persons
c) The existing wage-limit for coverage under the Act, is Rs.15,000/- per month, excluding
overtime wages. (with effect from 1.05.2010)
d) Disabled Employees wage limit for coverage under the Act, is Rs. 25000/- per month, Insurance
Number is to be taken from respective branch office.
e) Any Establishment which the State Government may specifically notify as being covered.
f) Certain States like Delhi, Punjab, Karnataka, Andhra Pradesh ESIC Applicable on 10 employees
to different industries. (School, Hospitals, etc.)
Note:-
As soon as the above conditions are fulfilled the employer should furnish the details in Form-
01 to ESIC office for registration under the ESI Act, 1948 & Obtaining of the Company‘s Code Number.
Following Employees also Entitled for ESI Coverage (Gross Salary/Wages Rs. 15,000/-P.M.):- The employees have been held to be covered under the Act (establishment or factory should be covered under the ESI Act):-
1) Persons employed in a canteen of a club 2) Drivers employed by the transport organisation 3) Persons engaged in the distribution and sale of products 4) Persons carrying administrative work of processing the orders and executing sales 5) Hawkers employed for sale of products 6) Employees of cycle stand and canteen run in cinema theatres by contractors 7) Members of editorial and administrative staff of a printing press publishing newspaper 8) A home worker rolling beed is at home 9) Medical Representative 10) Persons employed in a hospital attached to an maintained by factory 11) Part-time doctor employed by ambulance room 12) Book binders engaged by a contractor 13) Sales clerk working in a factory
� Is Directors Coverable?
A directors and the managing director of a company, who is paid a less than Rs. 15,000/- remuneration per month, have been held to be an employee for the coverage purpose
� Is Partners Coverable?
A partner engaged for the work of the factory or establishment and being paid monthly even less than Rs. 15,000/- P.M is not an employee as defined under the definition of ESI Act.
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� Is OT counted for Coverage Purposes?
An employee whose wages (excluding OT wages) exceed Rs. 15,000/-P.M at any time after the beginning of the contribution period, shall continued to be covered until the end of that contribution period.
� Is Consultants are employees???
Consultants do not work in the premised of the company. Their work is carried out in their own places. They are engaged as consultants in the matter of carrying on the business of the respondent first as retaining tax consultants such engagement cannot create employer- employee relationship.
� Employer Contribution not to be deducted:-
No deduction shall be made from the wages / salary of any employee for the employers contribution payable or paid in respect of him.
� Recovery of Contribution in respect of Contract Labour:-
The Principal Employer may deduct the amount of contributions both employers and employees, payable in respect of employees engaged through the contractor, from the bill of the
contractor. The Contract is entitled to deduct the employee contribution from the wages payable to such contract employee in respect of the period for which the contribution is payable
Following Documents are required for deciding Final Date of Coverage under ESI Act / EPF
Survey:
I. Manufacturing Unit:-
1. Date of 1st Trial Production. 2. 1st Electricity Bill. 3. Details of Gala Purchase (viz. copy of the Agreement) 4. 1st Sale Bill 5. 1st Purchase Bill (Machinery Purchase Bill etc.) 6. V.A.T, P.Tax & T.I.N Number Certificate / Service tax registration certificate (if
applicable). 7. Books of accounts (Ledger, cash books etc.) since beginning. 8. Balance sheet/P & L account (in case of Limited company Annual Report since
beginning) 9. Shops & Establishment Registration Certificate/ Factory Licence. 10. Partnership deed (in case of Partnership firm) & Memorandum of Association &
Articles (in case of Limited co.)
11. Salary / Wage register & Attendance Register since beginning. 12. Month wise strength of number of employees since beginning. 13. List of Directors/partners/owners along with their residential addresses. 14. Name of the Bankers, Address of the Bank and Name of the Person responsible for
financial affairs.
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II. Restaurant / Residential Hotel 1. Above all documents except Date of 1st Trial Production.
2. Invitation card or paper- cutting of the advertisement Regarding The Inauguration of the Restaurant/Hotel 3. Eating House Licence from the Public Health Department (BMC) 4. Licence for public entertainment in the premises issued by the police department. 5. 1 Sale bill (either restaurant or room sale bill whichever is earlier) 6. Room sale register. 7. Exercise Certificate. 8. Bar permit Licence (if any)
III.
1.
Following Points Jointly Are Taken into Consideration While Clubbing The Units:-
Unit of Ownership (i.e. Management & Control)
2. Unit of Labour (i.e. transferability of employees)
3. Geographical Proximity (i.e. vicinity, bonafides in keeping the unit a part)
4. Source of Finance (i.e. whether source of finance is same)
5. Supervision & Control (i.e. whether managed by same person)
6. Service Conditions of Workmen (i.e. rules applicable, employment contract, if any)
7. Functional Integrality (i.e. integrated whole- part & parcel of main unit, primary &
dominant activity, subsidiary, minor, incidental)
8. Unit of Purpose (i.e. production & business, interrelated business)
9. General (i.e. books of accounts / similarity of nomenclature)
Code Number:-
On receipt of the Employer‘s Registration Form the Regional Office examines the coverage and
if it is satisfied that the Act applied to the factory / establishment, will allot a 17 digit Code
Number along with User ID and Password to the employer. Only one code Number is allotted
to a factory / establishment even though functionally it may have more than one unit / sub-
unit within the same premises/precinct/station. The Code Number so allotted is required to be
indicated by the employer in all Correspondence with the Corporation, Regional Office and
Local Office.
Sub Code Number:-
There may be a case where an employer is having the main factory / establishment at one
station and sub-unit, branch office, sales office or registered office at another implemented
station, either within the same State or outside that State. In all such cases, Principle Employer is
required to furnish necessary details to the Regional Director concerned for allotment of Sub-
Code Number to each sub-unit, branch office, sales office & registered office etc.
Return of contribution is required to be submitted separately for the main Code Number and
each Sub-Code Number. The employees working in the branch office/sale office etc. can
draw/claim benefit locally from the nearby Local Office with which the branch office / sales
office, etc. are attached. Similarly, it would be convenient for the workers to avail medical
benefit from the nearby ESI dispensary in the State.
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Contributions:-
E.S.I. Scheme being contributory in nature, all the employees in the factories or establishments
to which the Act applies shall be insured in a manner provided by the Act. The contribution
payable to the Corporation in respect of an employee shall comprise of employer‘s contribution
and employee‘s contribution at a specified rate. The rates are revised from time to time.
Currently, the employee‘s co ntribution rate (w.e.f. 1.1.97) is 1.75% of the wages and that
of
emplo y er‘s is 4.75% o f the wag es paid/payable in respect of the employees in every
wage period. Employees in receipt of a daily average wage up to Rs.100/- are exempted
from payment of contribution. Employers will however contribute their own share in respect of
these employees.
Wages for ESI contributions: - (To be deemed a wages)
1. Basic Pay.
2. Dearness Allowance
3. House Rent Allowance
4. City Compensatory Allowance
5. Overtime Wages (but not to be taken into account for determining the coverage of an employee)
6. Payment of day of rest
7. Production incentive.
8. Bonus other than Statutory
9. Night shift allowance
10. Heat, Gas & Dust allowance
11. Payment for un-substituted holidays
12. Meal / food allowance
13. Suspension allowance
14. Lay off compensation
15. Children education allowance (not being reimbursement for actual tuition fee)
Maintenance of Registers & Returns:-
1. Every Employer should maintain a Register in Form 7 Regulation 32 in respect of every
employee of his factory or establishment.
2. Every employer shall submit the half yearly Return of Contribution in From 5. Before
12th May & 11th November of current year with Triplicate copies of Challan.
3. The return of contribution includes the Name of Employee, Insurance Number of
Employees, detail of contribution paid in particularly period and details of wages /
salary paid the in that period, average daily wages/ salary paid.
4. If number of employees goes beyond 40 number then Return of Contribution in Form 5
should be attested by Chartered Accountant
5. ESIC Bound Inspection Book.
6. ESIC Accident Register under Rule 66
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Recovery:-
If any employer fails to pay the amount due in respect of any contribution or any other amount
payable under the Act, the Corporation can recover from the employer damages up to cent
percent of the areas. The corporation is empowered to recover the contribution and the
damages as an arrear of land revenue.
Collection of Contribution
An employer is liable to pay his contribution in respect of every employee and deduct
employee‘s contribution from wages bill and shall pay these contributions at the above
specified rates to the Corporation within 21 days following the end of the Calendar month in
which the contributions fall due. The Corporation has authorized designated branches of the
State Bank of India and some other banks to receive the payments on its behalf.
Contribution Period and Benefit Period
There are two contribution periods each of six months duration and two corresponding benefit
periods also of six months duration as under.
Contribution Period Corresponding Cash Benefit Period
1st April to 30th Sept. 1st January of the following year to 30th June.
1st Oct. to 31st March 1st July to 31st December of the year following
Benefits:-
1) Employee is covered immediately on becoming an employee under the ESI Act, along
with his / her family members, Free medical treatment is offered to covered employees
and their family members, at hospital and dispensaries run by the ESI Corporation. No
limit of expenditure on treatment taken from ESIC Hospital / Dispensary
2) Maternity benefit for 12 weeks of which not more than 6 weeks should be preceding
confinement
3) Injury during/ in course of employment resulting in temporary / permanent disablement
entitles the covered employee to a regular payment to substitute his lost wages.
4) Death during course of employment entitles specified dependents to a regular payment.
5) Onetime payment of Rs. 10,000/- (w.e.f 01/04/2011) to help meet funeral expenses.
6) Rajiv Gadhi Shramik Kalyan Yojna (Unemployment to the IPs who have been rendered
unemployed involuntarily due to closure of factory / establishment / retrenchment or
permanent disablement) w.e.f. 1st April 2005
7) Vocational Rehabilitation Scheme is provided in case of disablement of ain Insured Person
of under 45 years of age and 40 % or more disablement. There is a provision of Free
Supply of physical aids and appliances such as cruthers, wheelchairs, dentures,
spectalcles under the act to insured person
8) Insured person can avail cashless treatment in the hospitals referred by ESI Hospital.
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9) An insured person who retires on attaining the age of superannuation shall be eligible to
receive only medical benefits for himself and his spouse if (i) he had been in the insurable
employment for not less than 5 years and (ii) if he pays contribution of Rs. 120/- every
year in advance.
10) Dependent Parents whose earnings from all sources upto Rs. 5000/- pm (w.e.f.
01/04/2011) are eligible for medical benefits.
11) w.e.f 4th August 2011 an insured person whose claim for any permanent disablement
benefit (PDB) has been admitted shall be paid Rs. 100 (Rupees One Hundred Only) as
conveyance allowance, in addition to his PDB payment, on each visit to Branch Office for
submission of life certificate as required under Regulation 107 of ESI (General)
Regulations. 1950.
12) Treating commuting accidents as employment injury.
13) Payment of long – term benefits (PDB/DB) through Electronic Clearing System (ECS)
14) Minimum dependants‘ pension of Rs. 1200/- per family.
Following Family Members of an insured employee are entitled to get medical
treatment benefits:-
Where medical benefit is extended to families of insured employees, medical treatment is
available to:-
(a) The Husband or wife of the insured employee,
(b) The minor legitimate or adopted children of the insured employee dependent upon him,
&
(c) The dependent parents of the insured employee, whose monthly income is upto Rs. 5000/-
Maternity Benefit:-
Eligibility:-
1. Woman shall be insured.
2. Contributions to be payable for not less than 70 Days (seventy days) in the preceding two
contributions periods
3. She shall not be on duty for wages.
4. To attend medical examination, if so required.
5. To submit medical certificate form Insurance Medical Officer.
Purpose:-
1. For confinement.
2. For Miscarriage
3. For Sickness caused by Pregnancy, confinement, miscarriage etc.
Quantum of Benefit:-
1. Payable at twice the standard benefit rate specified under Rule 54 or Rs. 25 whichever is
higher.
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2. Confinement expenses (Medical Bonus) of Rs. 5000/- w.e.f. 01/10/2013 when medical
facilities not available.
3. No limit for benefit payable in case of Miscarriage / Confinement arises.
Duration of Payment:-
1. For twelve weeks in case of confinement.
2. For six weeks in case of miscarriage.
3. For twelve weeks in case of woman‘s death in or after pregnancy
4. For additional days not exceeding one month in case of sickness arising out of pregnancy,
confinement, miscarriage.
Time for Payment:-
First payment to be made not later than 14 days
Second and subsequent payments in the following month
Requirement by insured woman to claim maternity benefit
Claim for Maternity Benefit for Confinement:-
1. Insured woman to give notice of pregnancy in Form 19 before confinement to Branch
Office.
2. To submit a Certificate of Pregnancy in Form 20 from Insurance Medical Officer.
3. To submit a Certificate of Expected Confinement in Form 21 from Insurance Medical
Officer.
4. To submit a Claim for Maternity Benefit in Form 22 from Insurance Medical Officer within
30 days of occurrence of confident.
Claim for miscarriage from Insurance Medical officer:-
To submit a certificate of miscarriage in Form 18 within 30 days of miscarriage
Claim for Sickness out of Pregnancy / Miscarriage etc.:-
1. To submit claim in Form 9
2. To submit medical certificate in Form 7 or 8.
Claim in case of death of insured woman:-
1. Nominee specified in Form I by the deceased woman to submit claim in Form 20 of Reg. 89 A
2. Legal Representative (if no nominee) to submit claim in Form 20.
3. To submit death certificate in Form 21
Rate of Payment of Maternity Benefit:-
The rate of payment of the maternity benefit is 100% of the average daily wages.
Medical Bonus:-
Insured Women or Insured Person in respect of his wife are entitled for medical bonus for
Rs 5,000/- provided the confinement occurs at a place where necessary medical facilities are not
available under ESIC institutions w.e.f. 01st October 2013, maximum benefit is given Twice in
entire lifetime of Insured Women.
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In the case of Accident to employee (I.P) while on duty:-
Accident Report in form no 12 is required to submitted to the appropriate Branch Office as well
as to Insurance Medical / I.M.P within 24 Hours of the receipt of notice of injury. In case of fatal
or serious accidents, it must be submitted IMMEDIATELY to avoid legal penal action under
section 85.
1) If the injured person is serious, i.e. it is likely to cause death or permanent disablement
or loss of a member; and
2) In any other case within 24 hours after the receipt of the notice under regulation 65 or of
the time when the accident came to the notice of the employer or of a foreman or other
official under whose supervision the insured person was employed at the time of the
accident or any other person designated for the purpose of the employer.
• Provided that in case of a serious injury, and particularly when the injury results in
death at the place of employment, the report to the Insurance Medical Officer and the
Branch Office shall be sent through a special messenger, or otherwise, as speedily as
may be practicable under the circumstances.
• Provided further that if the accident does not involve absence of the injured person
from work initially, the employer may send report to the Branch Office and the
Insurance Medical Officer but shall do so within 48 hours after the absence from work
subsequently the results from the injury.
Records to be kept ready for ESI Inspection:-
1. Attendance Register / Muster Roll.
2. Salary / Wage Register/ Payroll
3. EC Statement (Employees & Employer‘s Contribution) Statement.
4. Employee‘s Register U/R 32 (Form 7)
5. Accident Register in Form 11.
6. Return of Contribution (RC- Form 5)
7. Receipted Copies of Challan
8. Bound Inspections Book
9. Books of Accounts viz. Cash/Bank Book, Expenses register, Sales/ Purchase Register,
Petty Cash Book, Ledger, Supporting Bill and Vouchers, along with Delivery Challan (if
any), & Balance Sheet.
10. At the time of ESI inspection when job work done outside the factory / establishment
premises, which are not having independent code number & engaging less than 10 or
20 employees also when no supervision was exercised & when principle employer do
not have any rejection power then following detail / statement to be given to the
Insurance Inspector from the books of accounts:-
a) Name and address of the Contractor / Immediate Employer and Code Number (If any)
b) Nature of Work
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c) Head of A/c under which payment booked
d) Payment made
w.e.f. 1/8/2007, employees, who are in receipt of daily wages up to and inclusive of Rs.
100/- will not be required to pay employees share of contribution. However,
employer‘s share of contribution would continue to be paid.
The Benefits are Revised w.e.f 01st July 2011 are as follows:-
1) In rule 2, i) For clause (1A), the following clause shall be substituted, namely (1A) *average daily
wages during a contribution period, in respect of an employee, means the aggregate
amount of wages payable to him during that period divided by the number for which
such wages were payable.
ii) For clause (7A), the following clause shall be substituted namely:-
‗(7A) ―stan dard benefi t rate‖ means average daily wages obtained by dividing the
total wages paid during the contribution period by the number of days for which
these wages were paid.
2) In rule 52, for the words ―rupees sev enty ‖, the words ―rupee o ne hundred‖
shall be
substituted;
3) In rule 55, for sub-rule (2), the following sub-rule shall be substituted namely:-
*(2) The daily rate of sickness benefit in respect of a person during any benefit period shall be Seventy Percent, of the standard benefit rate of that person during the
corresponding contribution period rounded to the next higher rupee, 4) In rule 56, for sub-rule (5), the following sub-rule shall be substituted namely:-
*(5) The daily rate of Maternity Benefit payable in respect of confinement occurring or
expected to occur during any benefit period shall be equal to the Standard Benefit Rate
in respect of the insured woman during the corresponding contribution period,
rounded to the next higher rupee, or rupees twenty – five, whichever is higher.
5) In rule 57, for sub-rule (3), the following sub-rule shall be substituted namely:-
*(3) The daily rate of disablement benefit shall be ninety percent of the standard benefit
rate in the contribution period corresponding to the benefit period in which the
employment injury occurs, rounded to the next higher rupee.
Provided that where an employment injury occurs before commencement of the first
benefit period in respect of a person, the daily rate of disablement benefit shall be: -
i) Where a person sustains employment injury after the expiry of the first wage period in
the contribution period in which the injury occurs, ninety percent, of his average daily
wages in that wage period, rounded to the next higher rupee;
ii) Where a person sustains employment injury before the expiry of the first wage period
in the contribution period in which the injury occurs, ninety percent of his wages
actually earned or which would have been earned, had he worked for al full day on the
date of accident, rounded to the next higher rupee.
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Explanation:- The disablement benefit calculated as aforesaid shall be called the
―Full Rate‖
6) In rule 58, for sub-rule (2) the following sub-rule shall be substituted namely:-
*(2) The daily rate of dependants benefit shall be ninety percent of the standard
benefit rate in the contribution period corresponding to the benefit period in which the
employment injury occurs.
Provided that where an employment injury occurs before the commencement of the
first benefit period in respect of a person, the daily rate of dependants‘ benefit shall be:-
(i) Where a person sustains employment injury after the expiry of the first wage period in
the contribution period in which the injury occurs, ninety percent of his average daily
wages during that wage period rounded to the next higher rupee.
(ii) Where a person sustains employment injury before the expiry of the first wage period
in the contribution period in which the injury occurs, ninety percent of wages actually
earned or which would have been earned had he worked for a full day on the date of
accident, rounded to the next higher rupee.
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BENEFITS AT A GLANCE
BENEFITS
CONTRIBUTORY
CONDITIONS
DURATION
RATE TO
WHOM
PAYABLE
a) SICKNESS
BENEFIT
Extended sickness
benefit for specified
long term diseases
like TB Leprosy
ETC.
Enhanced sickness
Benefit (for
undergoing
sterilization
operation for family
Planning)
I.P. Should work
for wages for 78
no. of days in the
corresponding
C.P. (w.e.f.
19.9.1998)
In Insurable
employment for
at least two years
should pay
contribution for
minimum of 156
days in the
preceding 4 C.p‘s Same as for
sickness benefit
at (a) above
91 Days Cash
Benefits within Two
Benefits Periods
309 days duration
has been extended
beyond 400 days (91
days S.B. plus 309
days E.S.B.) to two
years in deserving
cases.
7 days for vasectomy
& 14days for
tubectomy extended
in cases of post-
operative
complications etc
70% of S.B.R.
80% more than
the S.B.R
S.B.R.
Only to
the
insured
person.
Only to
the
insured
person
Only to
the
Insured
Person
Disablement benefit
(employment injury
)
No Condition In case of temp
disablement: as long
as incapacity lasts &
in case of permanent
disablement: for life
time.
(a) for
Temporary
Disablement,
90% of S.B.R.
Only to
insured
person.
(b) For permanent Total
Disablement specific in Part 1 to
2 schedule at the 90% of S.B.R.
(c) For permanent partial
disablement resulting from an
injury specific in Part-II of the
2nd Schedule at such %age of the
Full Rate as specific in the said
schedule as being the %age of the
loss of earning capacity caused
by the injury.
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Explanation: - Where more injuries than one are caused by the
same accident, the rate of benefit payable under clauses (c) &
(d) shall be aggregated but not so in any case as to exceed the
FULL RATE and in cases of disablement not covered by clauses
(a), (b), (c) & (d) at such rate, not exceeding the FULL RATE, as
may be provided in the regulations.
) For permanent partial
disablement resulting from an
injury not specified in part –II
of the 2nd schedule at such
%age of the Full Rate payable in
the case of Permanent Total
Disablement as in Proportionate
to the loss of earning capacity
permanently caused by the
injury.
Dependent‘s Benefit i
(employment injury)
ons 1. To the widow/s
during life time until
remarriage.
2. To the widowed
Mother
To the legitimate or
adopted SON/S until
he attains the age of
25yrs. (w.e.f. 1st June
2010)
To the legitimate or
adopted unmarried
daughter/s until she
attains the age of 25yrs.
(w.e.f. 1st June 2010) or
until marriage,
whichever is earlier.
(in case the deceased
person does not leave a
widow or legitimate or
adopted child. D.B.
shall be payable to …..
a) parent or
grandparent, for a life.
b) Any other male
dependent, until he
attains the age of 18
yrs.
c) Any other female
dependent, until she
attains the age of 18
yrs. or until marriage
whichever is earlier.
3/5th of FULL RATE, if there
are 2 or more widows, the
amount payable to the
widow shall be divided
equally between the widows.
2/5th of the FULL RATE, if
there are 2 or more sons, the
amount payable to the son
shall be divided equally
between the sons.
Subject to min. of Rs. 14/-.
---------------do---------------
3/10th of the FULL RATE.
2/10th of the FULL RATE
----------------do----------------
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An insured person whose PERMANENT DISABLEMENT has been assessed as final and who
has been awarded permanent disablement benefit at a rate not exceeding Rs. 5/- per day may
apply for a lump- sum payment and such amount shall be determined by multiplying the daily
rate of permanent disablement benefit by the figure indicated in Col. 2 of the schedule III of the
Regulations.
Maternity Benefit Payment of
contribution for
70 days in one or
two consecutive
periods
12 weeks of which
not more than the 6
weeks can precede
the expected date of
confinement.
6 weeks for
miscarriage or for
medical termination
of pregnancy.
Additional payment
for one month for
complications (pre or
post) arising out of
pregnancy.
100% of average
daily wages;
subject to min of
Rs. 25/-p.day.
Medical bonus of
Rs. 5,000/- per
confinement w.e.f
01/10/2013where
ESI hospital
facility is not
availed for child
delivery.
Only to
the
Insured
Person.
To insured
woman or
in r/o wife
of I.P
Medical Benefit No Condition From the date of
entry of an employee
into an insurable
employment as long
as he remains
insurable
employment and
thereafter for certain
additional period.
Full Medical
care including
hospitalization
Person as
well as
his/ her
family
Members
as defined
u/s 2(11)
of the Act.
Funeral Expenses No conditions
(i.e. merely by
virtue of being
an insured
person)
One time lump-sum
payment
Not more than
Rs. 10,000/-
(w.e.f.
01/04/2011 )
To the
eldest
surviving
member of
the family
of the
deceased
I.P or to the
person who
actually
incurs the
expenditur
e on the
funeral of
an I.P.
18
Rehabilitation Allowance
No Condition For each day of which I.P. remains admitted in Artificial Limb Centre for fixation repair or replacement of artificial limb.
Double the standard sickness benefit rate but not less than full wages.
Only to the I.P
Medical benefit to insured persons who ceases insurable employment on account of permanent disablement
No conditions but an I.P has to pay Rs. 10/- pm in Lump-sum for one year in advance every year i.e. Rs. 120/-
Till the date on which an I.P would have attained the age of superannuation
-----
Medical Benefit to IP and spouse
Medical Benefit to retired insured Period (Old Age Medical Care)
1)Insurable employment for a period of 5 years & 2) In case of permanent physical disablement during the course of insurable employment. 3) payment of Contribution @ Rs. 10/- pm in Lump Sum for one year in advance, each year. Rs. 120/-
Till the time yearly contribution is paid to the concerned office of the corporation
-----
Insured person and his spouse
OTHER BENEFITS
Now it has added the benefit for workers for the accidents happening while commuting to
the place of work and vice versa; (w.e.f. 1st June 2010)
Unemployment Allowance (Rajiv Gandhi Shramik Kalyan Yojana):- Unemployment Allowance is payable to those workers facing involuntary unemployment due to closure of factory/ establishment; retrenchment or permanent invalidity arising out of non- employment injury. The daily rate of unemployment allowance is at par with the standard sickness benefits rate. Which is just above 50% of the average daily wages. This allowance is payable for a maximum period of 12 months either in one spell or in different spells of not less
than one month‘s duration the insured persons eligibility condition has now been relaxed to three years from earlier five years, for being able to avail the unemployment allowance. Medical Care also provided during this period. To avail this benefit the insured person should have been entitled for sickness benefit during the last four contribution periods immediately preceding the date of unemployment Supply of special aids.: Insured persons and members of their families are provided artificial limbs, hearing aids, artificial dentures, spectacles (for insured person only)& artificial appliances like spinal supports, cervical collars, walking callipers, crutches, wheel chairs and cardiac pace makers, dialysis/ dialysis with kidney transplant etc. as part of medical care under the ESI scheme.
19
CONTRIBUTION PERIOD(C.P) BENEFIT PERIOD (B.P) DATE OF SUBMISSION OF
RETURN
1ST April to 30th September 1st January to 30th June 11th November 1st October to 31st March 1st July to 31st December 12th May
ESI – IMPORTANT CHANGES AT A GLANCE 1. Contribution Repealing of Chapter V A and
consequent discontinuance of Employers Special Contribution
2. Rate of Contribution Employees Share Employers Share ) 2.00%of wages 5%of TWB = 7% ) 2.25%of wages 5%of TWB = 7.25% ) 1.50%of wages 4%of TWB = 5.50% ) 1.75%of wages 4.75%of TWB = 6.50%
w.e.f. 01-07-1973
07-07-89 to 26-01-85 27-01-85 to 31-3-92 01-04-92 to 31-12-96
From 01-01-1997 3. Ceiling Limit for coverage Total Wages* Date from which applicable
u/s 2(9)
4. Ad hoc Calculation of Contribution
Coverage of employees
Rs. 400/- Rs. 500/- Rs. 1000/- Rs. 1600/- Rs. 3000/- Rs. 6500/- Rs. 7500/- Rs. 10000/- Rs. 15000/- Rs. 25000/- for Physically Handicapped
Assumed wages per month Rs. 350/- Rs. 440/- Rs. 550/- Rs. 880/- Rs. 1650/- Rs. 3575/- Rs. 4125/- Rs. 5500/- Rs. 8250/-
Up to 30-6-73 Form 01-07-73 From 3011-75 From 27-01-85 From 01-04-92 From 01-01-97 From 01-04-04 From 01-10-06 From 01-05-10 From 01-04- 2011
From 01-06-1976 From 07-09-1980 From 01-04-1983 From 27-01-1985 From 01-04-1992 From 01-01-1997 From 01-04-2004 From 01-10-2006 From 01-05-2010
*excluding 1) over time 2) washing allowance where uniform supplied for employees
5 working in H.O/B.O/S.O etc
u/s 2(9) w.e.f. 28-01-1968
6. Extension of coverage to Commercial sectors in Mumbai Region
u/s 1(5) of the Act. Sectors Covered: Hotels & Restaurants Cinema Theatres including Preview Theatres Shops Newspapers Establishments Road Motor Transport
w.e.f. 12-11-1978 --------do--------
--------do-------- --------do-------- w.e.f. 13-03-1989
7 Rate of Interest Rate
6% 12% 15% 12%
Period from which applicable Up to 19-10-1989 From 20-10-1989 From 01-09-1994 From 01-10-2005
20
8 Rate of damages (by way of penalty)
19% 13%
Slab System ----------------------�
Below 2 months 5% 2months & above, But below 4 months 10% 4 months & above, But below 6 month 15% 6 months & above 25% (subject to max 100%)
From 09-75 up to 19-10-89 From 20-10-89 up to 31-12-91 From 01-01-1992
LIST OF DISEASES FOR WHICH EXTENDED SICKNESS BENEFIT IS
ADMISSIBLE
1. Tuberculosis
2. Leprosy
3. Chronic Emphysema
4. Brocnhiatesis
5. Intersistial Lung Diseases
6. HIV/ AIDS
7. Malignant Diseases
8. Diabetes Mellitus with
proliferative
retinopathy/ diabetic
foot/ nephropathy.
9. Monoplegia
10. Hemiplegic
11. Paraplegias
12. Hemiparesis
13. Intracranial space
occupying lesion
14. Spinal Cord
Compression
15. Parkinson‘s disease
16. Myasthenia Gravis/
Neuromuscular
Dystrophies
17. Immature cataract with
vision 6/60 or less.
18. Detachment of Retina
19. Glaucoma
20. Coronary Artery
Diseases
a) Unstable Angina
b) Myocardial Infraction
with ejection less than
455.
21. Congestive Heart Failure
Left/ Right.
22. Cardiac Valvular
Diseases with failure
complications.
23. Cardimyopathies
24. Heart Disease with
surgical Intervention
along with
complications.
25. Chronic Obstructive
Lung Disease (COPD)
with congestive heart
failure (Cor Pulmonale)
26. Cirrhosis of liver with
ascitie / chronic active
hepatitis
27. Dislocation of vertebra /
prolapsed of
intervertebral disc.
28. Non union or delayed
union of facture
29. Post Traumatic Surgical
amputation of lower
extremity.
30. Compound Fracture with
chronic ostemyelities
31. Psychosis – the following
sub groups:-
a) Schizophrenia
b) Endogenous depression
c) Manic depression
Psychosis (MDP)
d) Dementia
32. More than 20% burns
with infection/
complication.
33. Chronic Renal Failure
34. Reynaud‘s diseases/
Burger‘s disease.
Restrictions:- When a person is entitled to any of the benefits provided under the Act, he shall not be entitled to receive any similar benefit under any other enactment. An insured person will not be entitled to receive for the same period:
1) Both sickness benefit and maternity benefit; or 2) Both sickness benefit and disablement benefit for temporary disablement; or 3) Both maternity benefit and disablement benefit for temporary disablement.
22
When a person is entitled to more than one of the benefits, he has an option to select any one of them.
Protection:- The employer cannot dismiss, discharge or otherwise punish an employee during the period he/she is in receipt of sickness benefit or maternity benefit, or of disablement benefit, or is under medical treatment for sickness, or is absent from work as a result of illness which arises out of pregnancy or confinement. Any notice of dismissal, discharge or reduction during the period specified above is invalid and inoperative:
An employer can discharge or punish an employee on due notice if:
1) He/she has received temporary disablement benefit and remained absent for six months or more continuously;
2) He/she is under medical treatment for sickness, otherwise than T.B. or a disease arising out of pregnancy, and has remained absent continuously for six months or more; and
3) He/she is under medical treatment for T.B or a malignant disease and has remained absent continuously for 18 months or more.
23
Offences and Penalties:-
Offences Penalties Whoever, knowingly makes any false statement or representation for the purpose of (a) claiming or increasing any benefit or payment allowable to him, or (b) avoiding any payment payable by him
Imprisonment upto 6 months or fine upto Rs. 2,000 or both
a) Failure to pay employees‘ contributions deducted from their wages
Imprisonment upto 3 years (minimum one year) and fine of Rs. 10,000/-
Failure to pay contributions Imprisonment upto 3 years (minimum 6 months) and fine of Rs. 5000/-
Deduction of any sum from or reduces wages of an employee on account, of employers contribution
Imprisonment upto one year or fine upto Rs. 4000/- or both
Reduction of the wages or any privilege or benefits admissible to an employee in contravention of section 72
Same as above
Dismissal / discharge of an employee in contravention of section 73
Same as above
Failure to submit any return or submission of false return
Same as above
Obstruction of any inspector in allowing him to discharge his duties
Same as above
Contravention of any other provision of the act, rules or regulations
Same as above
On every subsequent offence committed after conviction for the same offence being so mentioned at 2(a) or (b) above
Imprisonment upto 5 years (minimum 2 years) and fine of Rs. 25000
On every subsequent offence committed after conviction for the same offence being any other offence
Imprisonment upto 2 years and fine of Rs. 5000/-
Penalties:- Different punishment have been prescribed for different types of offences in terms of Section 85: (I) (Six months imprisonment and fine), and 85-A: (five years imprisonment and not less than 2 years) and 85 C (2) of the ESI Act, which are self explanatory. Besides these provisions, action also can be taken under section 406 of the IPC in cases where an employer deducts contributions from the wages of his employees but does not pay the same to the corporation which amounts to criminal breach of trust.
Provision for non-payment: For employees‘ contribution : Imprisonment for 1yrs. to max. 3yrs. and/ or fine of Rs. 10,000/-
For employers‘ contribution : Imprisonment for 6 months to max 3rs. And/or fine of Rs. 5,000/-
24
Employees Insurance Court:-
A dispute arising under the Act shall be decided by the Employees‘ Insurance Court and
not by a civil court. The Employees‘ Insurance court shall be constituted by the State Government for such local areas as may be specified and consisting of such number of judges as the Government may think fit.
Conditions for Admission of Certain Disputes:- No matter which is in dispute between an employee and the ESI Corporation in respect of any contribution or any other dues shall be admitted unless the employer deposits with the court @ 50% of the amounts due from him as claimed by the Corporation. The court may, however waive or reduce the amount to be deposited for reasons to be recorded in writing.
Appeal:- An appeal shall made to the High Court against an order of an Employees‘ Insurance Court, if it involves a substantial questions of law. The appeal should be preferred within 60 days.
Miscellaneous:- Cash benefits payable under the Employees‘ State Insurance act are not liable to attachment or sale in execution of any court decree or order. Also, the right to receive any benefit is not transferable or assignable.
Where a dispute arises under the provisions of the Act, that matter has to be decided by
the Employees‘ Insurance Court and not by civil court. An appeal will lie to the high court
from an order of the Employees‘ Insurance Court if it involves a substantial question of law. The period of limitation for appeal is 60days. The delay can be condoned for sufficient reasons.
• Any arrears payment for past period paid to employees on that amount ESIC Contribution is not payable For example: - In month of April 2012 a particular employee is earning salary / wages Rs. 14000/- per month; but management has decided to increase the salary of that employee from Rs. 14000/- per month of Rs. 16000/- in month of August 2012 w.e.f. 01st April 2012, so in this case the company will pay arrears dues for the month of April, May, June, July, i.e. Rs. 2000/- per month for 4 months i.e. Rs 8000/- on this arrears amount ESIC contribution is not payable, but in month of August 2012 Salary / Wages Rs. 16000/- on that amount ESIC Contribution is payable till completion of Contribution period i.e. till September 2012
25
46 Dindhori Nasik 47 Dushkheda Jalgaon 48 Ekrahare Nasik 49 Gokul Shirgaon Kolhapur 50 Hatkanagale Kolhapur 51 Jaisingpur Kolhapur 52 Jejuri Pune 53 Kanhe - Phata Vadgeon 54 Karad Satara 55 Karmala Solapur 56 Khandala Satara 57 Khandari Shivar Bhusawal 58 Khed Ratnagiri 59 Kirloskarwadi Sangli 60 Kudal Sindhudurg 61 Kumbhari Solapur 62 Lonawala(Peripheral)
63 Mirzol Ratnagiri 64 Nandurbar Jalgaon 65 Ogalewadi Satara 66 Pachora Jalgaon 67 Palus Sangli 68 Phursungi Hadapasar 69 Phopali Satara 70 Pirangut Pune 71 Ranjangaon Pune 72 Ratnagiri Ratnagiri 73 Sahada Dhule 74 Saswad Pune 75 Sajani Kohlapur 76 Sanaswadi Pune 77 Shiroli Kolhapur 78 Shrirampur Ahmednagar 79 Shindekhed Dhule 80 Shivanewadi Kolhapur 81 Shirwad Kolhapur 82 Sinnar & Malegaon Nasik 83 Talegaon(Peripheral)
84 Vengurla Sindhu Durg 85 Wai Satara 86 Walchandnagar Pune 87 Walsang Solapur
Non-implemented area in Maharashtra
Sr. No
Area District
1 Alibaug Riagad Thane 2 Asangaon & Shahpur Thane 3 Dronagare Thane 4 Khopoli Kolaba 5 Mahad Raigad 6 Murbad Thane 7 Nagothane Raigad 8 Patalganga Kolaba 9 Panvel Kolaba 10 Pen Raigad 11 Roha Raigad 12 Rasayani Kolaba 13 Uran Raigad 14 Dhanu Road Thane 15 Palghar Thane 16 Tarapur (Brisor) Thane 17 Anchalpur ` Amravati 18 Bhugaon Wardha 19 Durgapur Chandrapur 20 Gondia Bhandara 21 Gadegaon Bhandara 22 Jalna Jalna 23 Jam Wardha 24 Kalmeshwar Nagpur 25 Khamgaon Buldhana 26 Koradi Nagpur 27 Latur Latur 28 Madgi (Tamsar) Bhandara 29 Mouda Nagpur 30 Paithan Aurangabad 31 Wahegaon (MIDC) Aurangabad 32 Wardha Wardha 33 Warthi Bhandara 34 Warora Chandrapur 35 Yeotmal Yeotmal 36 Ahmednagar Ahmednagar 37 Baramati Pune 38 Bavdhan BK & Khurd Pune 39 Bhor Pune 40 Bhusawal Jalgaon 41 Chakan Pune 42 Chincholi Solapur 43 Chiplun Pune
44 Daund Pune 45 Deepanagar Shivar Jalgaon
List of Various Forms used under ESI:-
FORM NO.
SUBJECT
RELEVANT
REGULATION
TO BE USED BY
FORM-01 Employer's Registration Form 10 B Employer
FORM-01(A) Form of annual information on
factory/establishment covered under ESI Act
10 C Employer
FORM-1 Declaration Form 11 & 12 Employer
FORM-1(A) Family Declaration Form 15-A Employer
FORM-2 Addition/Deletion in Family Declaration Form 15-B Employer
FORM-3 Return of Declaration Form 14 Employer
FORM-5 Return of Contribution 26 Employer
FORM-5(A) Advance payment of contribution 31 Employer
FORM-5 Return of Contribution 31 Employer
FORM-6 Register of Employees 32 Employer
FORM-9 Claim for Sickness/ Temporary Disablement
Benefit/Maternity Benefit
63 & 89(B) IP/Beneficiary
FORM-11 Accident Book 66 Employer
FORM-12 Accident Report from Employer 68 Employer
FORM-14 Claim for Permanent Disablement Benefit 76(a) IP/Beneficiary
FORM-15 Claim for Dependent Benefit 80 IP/Beneficiary
FORM-16 Claim for periodical payment of Dependent Benefits 83(A) IP/Beneficiary
FORM-19 Claim for Maternity Benefit and notice of work 88, 89 & 91 IP/Beneficiary
FORM-20 Claim for Maternity Benefit after the death of an
Insured Women leaving behind the child
89(A) IP/Beneficiary
FORM-22 Funeral Expenses Claim 95(E) Beneficiary
FORM-23 Life Certificate for Permanent Disablement Benefit 107 IP/Beneficiary
FORM-24 Declaration and Certificate for Dependents Benefit 107(A) IP/Beneficiary
ESIC-32 Wage/Contributory record for disablement benefit Employer
ESIC-37 Certificate of re-employment/continuous
employment
Employer
ESIC-53 Application for change in particulars of Insured
Persons regarding change of Branch
Office/Dispensary
IP/Beneficiary
ESIC-63 Declaration form regarding payment to the legal
heir/representative of the deceased IP
IP/Beneficiary
ESIC-71 Particulars of contribution in case Return of
Contribution in respect of an IP not sent
Employer
ESIC-72 Application for duplicate Identity Card IP/Beneficiary
ESIC-86 Certificate of Employment Employer
ESIC-105 Certificate of Entitlement Employer
ESIC-126 Certificate of continuous employment for Extended
Medical and Sickness Benefit
Employer
ESIC-142 Claim for conveyance allowance and/or
compensation for loss of wages for an IP appeared
before the medical board
IP/Beneficiary
27
New Amendment passed by parliament on 24th May 2010 (Gazette Notification published by Ministry of Law & Justice on 1st June 2010)
FOLLOWING AMENDMENTS WILL BE EFFECTIVE FROM 1ST JUNE 2010
• The age limit of the dependants has been enhanced from 18 to 25 for the purpose of dependants‘
benefit. It will benefit large number of workers.
• It extended social security benefits to those apprentices who are covered by Standing Orders and
also to those trainees whose training is extended to misuse exemption granted to apprentice from
provisions of the ESI Act.
• The definition of *Factory, under Section 2(12) has been amended to facilitate coverage of smaller
factories and cover all factories which employ 10 or more persons whether these are run by power
or without power.
• DG-ESIC is being made Chairman of Medical Benefit Council to improve quality of medical
benefits.
• It has added the benefit for workers for the accidents happening while commuting to the place of
work and vice versa;
• The exemptions shall be granted only prospectively as the ESIC already has made provision of
infrastructure to provide service to the IPs for the past period
• The procedure for determination of contribution has been streamlined to avoid harassment of
employers as the Inspectors now no more to inspect the books of accounts of the establishment
beyond five years as under present system of unlimited period.
• It extended medical treatment to those who retire under Voluntary Retirement Scheme or take
premature retirement
• U/s. 45AA of ESI Act:-
After section 45A of the principal Act, the following section shall be inserted namely;
A) 45AA. If an employer is not satisfied with the order referred to ain section 45A, he may prefer an
appeal to an appellate authority as may be provided by regulation, within sixty days of the date of
such order after depositing twenty – five percent, of the contribution so ordered or the
contribution as per his own calculation, whichever is higher, with the Corporation
B) Provided that if the employer finally succeeds in the appeal, the Corporation shall refund such
deposit to the employer together with such interest as may be specified in the regulation.
Project Pehchan (Biometric Cards)
• All Insured Persons will be issued with two magnetic cards, one for the Insured persons & the
other for family members
• Central database will be created with demographic and biometric details of Insured persons and
their families.
• Insured Persons and their family members can avail treatment in any ESI Hospital or dispensary
across India.
• Biometric details (finger prints) to verify and authenticate Insured Persons and their families
through card swipe.
28
• Employers can submit their Return of Contribution online
• Employers can collect information on employees‘ benefit availed by respective employees online.
• One time registration. Employees will carry forward with same set of cards every time they
change employment.
• Duplication of enrolment can be avoided
• ESI Corporation has tied up with several Private Hospital in various state/Region for Super
Speciality treatment
• 10 digit Insurance Number should be shown in RC form No 5.
• 17 Digit New ESI Code Number should be shown in all the correspondence as well as in Forms
and returns.
29
Source: ESI ANNUAL REPORT 2011-2012
30
System Generated Challans As you may be aware that the IT Roll Out is going to be implemented in all the regions as well as hospitals in a short-while for which communication will be issued by ESI department. Collection of contribution from employers and their accounting will undergo a vast change once the system is fully computerized. All payments and contributions into the ESIC account will be through challans generated through system.
The existing system, whereby challans are filled in by the employers/payers and presented before the bank along with the payments will become a thing of the past.
The employer intending to make the payments are required to generate a challan form through ESI portal/module from the data base after entering the requisite details of additions and deductions. Due amount will be calculated by the system itself and after entering the amount to be paid, a print out shall be taken.
ESI will designate just one or two SBI branches in each region/SROs which alone will accept the payments through conventional challans and all other branches will accept payments through system generated challans. this is being allowed to avoid any inconvenience to the employers as it may be difficult for the employers to suddenly switch over to the new system and at the same time it will give little amount of pressure to the employers to adhere to the new system.
For system generated challans, the following data are required to be filled in the format (available on ESI website) and after filling the required information a challan can be generated through system which is required to deposit the contributions with SBI Branch.
User ID and Password has already been circulated by ESI dept. to individual employers separately. [If you have not received the same, you are requested to prepare authority letter, to collect the same from branch office of ESI).
The requisite data format is enclosed herewith for your reference and records.
Important
No challan will be generated unless and until the data which are required for generation of challan is complete in all respects. (w.e.f. 1st April 2011)
Filling of declaration forms/monthly returns / temporary insurance card / biometric card etc.
As mentioned above about system generated challans and payments, similarly the personal details of employees have to be done through ESI portal/module only. The requisite data format is enclosed herewith for your reference and records. In order to obviate duplication of insurance number, please ensure to collect details of the previous employment of candidate and his insurance number also. (Please ask for any documentary proof for insurance number)
Please note that it is in the interest of employee to give previous details of insurance number; if you generate data for new number and at a later stage if it is found to be at variance at the time of bio metric card procedure then the employees and family members may not be able to get benefits from the ESI scheme.
31
The requisite data format which is enclosed herewith has to be filled in by the employee concerned on the very first day / date of his/her working so as to register the concerned employee with the esi dept. from the day one only. Presently through online feeding of details of employee concerned, the system will automatically
generate tic (temporary insurance card) which should affix employer‘s address and signatory and signed by authorized person of the employer and employee concerned and after that employee concerned and his/her family members has to do the bio metric card procedure on or before the date which is printed on his/her temporary insurance card.
Advantages for computerized scenario of ESI to employee:- Once the ESI department fully upload the system at hospitals/dispensaries/doctors/ESI branches/ private hospitals/ call centre etc the insured person/insured woman is no more required to visit the ESI office for any things, such as the cash payments/ maternity benefits / accident benefits / reimbursement etc will be directly credited into the bank account of employee concerned. Employee/family of employee can avail through his bio metric card medical benefits all over India with ESI Hospitals/Dispensaries/Pvt. Hospitals (with whom ESI has and may tied up)
Advantages for computerized scenario of ESI to employer:-
1) Day to day information about the ESI on computer. 2) No need to send employee at ESI branch for any clerical work. 3) No need to file six monthly returns. 4) No need to maintain 32-Register / accident register and any other register which are presently
generated.
You will find data after putting user id and password in the insured person details which is incomplete or some employees‘ data may not be available, in such cases the employer is
requested to check and correct the same before going for monthly payment option.
Lastly and most important for doing all the system generated things it is necessary to have a computer/laptop with internet connection and printer.
Recent Court Judgement:-
1) Order of attachment of property of Director of company for ESI contribution was held without
jurisdiction:-
The petitioner was formerly a director of the company known as Kiran Fashions Pvt. Ltd of which
her husband was yet another director. There was one more company known as Kiran Creations
Pvt. Ltd. of which the petitioner‘s husband was one of the Directors. The respondent passed an
order under sec. 45-A of the ESI Act against both the companies for payment of certain amounts
towards ESI contributions. The said orders became final since they were not challenged by the
respective companies. Subsequently recovery certificates were also issued in order to recover the
said amount. Pursuant to the recovery certificate, the seconds respondent passed the impugned
order of attachment of the property of the petitioner. Feeling aggrieved thereby the petitioner
challenged the same by filling a writ petition in the High Court.
32
The only question before the High court was whether recovery of dues from the company, the
property of directors, both past and present, could be attached? The high court observed that if the
contributions have not been paid the same can be recovered from the assets of the company and
not from the personal assets of the directors by making them personally liable. Directors cannot be
treated ipso facto as owners. It was therefore held that the impugned order was without
jurisdiction. Hence it was quashed and set aside.
- H.C.Mad, LLJ III 201 P. 647, Rani K. Lulla v. Employees‘ State Insurance corpn. Chennai.
2) When the death of the employee was due to tuberculosis of lungs, it was held to be occupational disease, the dependents are entitled to get the dependency benefit under the ESI Act, 1948.
The deceased was working in Subhlaxmi Mills and he died on 17-08-1991 due to chest disease in a hospital. The appellants are the legal heirs of the deceased and they filed an application in the ESI court for getting the dependency benefit. But it was dismissed by the ESI court. Hence they filed an appeal in the High court. It was contended on behalf of the appellants that it was proved beyond reasonable doubt before the ESI court that tuberculosis was sustained by the deceased workman as the cotton and dust went into the lungs of the deceased while filling up bobbins during the course of employment in Subhlaxmi Mills. It was further pointed out that the room in which the deceased workman was working did not have a window but only a door and in view of the unhygienic working condition prevailed at that place of employment. The deceased workman became a patient of tuberculosis.
The high court referred to the evidence of the doctor who deposed that if a person working in a room where dust and cotton are spread, there are chances of tuberculosis of lungs beings suffered by the person and due to infection of the same cardiac failure can also occur. It appears that doctor further stated that the deceased workman was suffering from lung tuberculosis but the disease
shown in the schedule III part – C Sl. No. 3 was different. The High court referred to the said schedule which read;
Sr. No. bronchopulmonary diseases caused by cotton, flax hemp and sisal (Byssinosis) All work involving exposure to the risk concerned.
The high court held that the injury caused to the deceased workman would fall at sr. No.3 of part – c of III schedule of the act and merely because the doctor said that the said provision was not applicable in the present case, it cannot be said that it was not applicable. The High court held that there was miscarriage of justice. Consequently the high court allowed the appeal and set aside the order of the ESI court. It was held that the appellants were entitled to get compensation as per the provisions of the ESI act with interest at the rate of 9% from the date of the application till realization.
- H.C. Guj. CLR I 2011 P. 845, Radhaben Gopalbhai & Ors. V. ESIC
Summary:-
The Employees‘ State Insurance Act applies to all power using factories employing 10 or more
persons and to all non-power using factories employing 20 or more persons. Persons whose
remuneration (including overtime) does not exceed Rs. 15000/- a month are covered under the
Act. The employees‘ State Insurance Scheme provides for sickness and extended sickness benefit,
maternity benefit, disablement benefit, dependants‘ benefit, medical benefit, funeral benefit, and
so on. The scheme is administered by a corporate body called the Employees‘ State Insurance
33
Corporation. The chief executive officer of the corporation is its Director General, who is also an
ex-officio member of the corporation and its standing committee. The ESIC has set-up a network
of regional and local offices all over the country for implementation of the scheme.
34
ESI Dispensaries in Maharashtra
Sr. No
Name of Dispensary
Address
Phone No.
1. Andheri Med. Offr. Incharge, E. S. I. Dispensary, ESI Hospital,
Central Road, Andheri, Mumbai – 400 093
28367206
2. Chembur Med. Offr. Incharge, E. S. I. Dispensary, Dr. Joshi Hospital Bldg, Plot No. 70, Opp. Ambedkar Udyan, Chembur,
Mumbai – 400 071
25583906
3. J. J. Hospital Med. Offr. Incharge, E. S. I. Dispensary, J. J. Hospital Compound, Byculla, Mumabi – 400 008
23716450
4. Kalyan Med. Offr. Incharge, E. S. I. Dispensary, Rukuminibai Muncipal, Kalyan, Near Kalyan Rly. Stn,
0251-316388
5. Kandivali Med. Offr. Incharge, E. S. I. Dispensary, ESIS Hospital, Charkop Industrial Estate, Charkop, Kandivali (W), Mum- 67
2887764/65
6. Mahindra Industrial
Med. Offr. Incharge, E. S. I. Dispensary, 109, Mahindra Ind. Estate, Road No. 29, Opp Nehru Garden, Sion (E), Mum- 22
24074873
7. Mulund Med. Offr, Incharge, ESI Dispensary, E. S. I. Hospital, Lal Bahadur Shashtri Marg, Mulund (W),
Mumbai – 400 080
25645520-24
8. Malad Med. Offr, Incharge, ESI Dispensary, S. K. Patil Arogyadham,
Datari Road, Malad (E), Mumbai – 400 064 26894381
9. Parel Med. Offr. Incharge, E. S. I. Dispensary, M. G. M. Hospital, Parel, Mumbai- 400 012
24132575
10. Ulhasnagar Med. Offr. Incharge, E. S. I. Dispensary, ESI Hospital, Near Central Hospital, Camp No.3, Ulhasnagar.
0251-2546733
11. Vashi Med. Offr. Incharge, E. S. I. Dispensary, ESI Hospital,
Vashi, Sector No. 5, Navi Mumbai – 400 703
27821405
12. Vile Parel Med. Offr. Incharge, E. S. I. Dispensary, S. V. Road, Behind Nanavati Hospital, Sarojini Naidu Road, Vileparle (W), Mumbai.
26126593
13. Wagle Estate Med. Offr. Incharge, E. S. I. Dispensary, ESI Hospital,
Wagle Estate, Thane – 400 607
25823551
14 Worli Med. Offr. Incharge, E. S. I. Dispensary, ESI Hospital, Dr.
Anne Besant Road, Worli, Mumbai – 400 018
24933142/3, 24932390/2428
15 Rabale Med. Offr. Incharge, E. S. I. Dispensary, Canteen Building, Ex. Sharad Kelkar Samuhik Suvidha Camp, MIDC, Rabale, New Mumbai
27693765
16 Kandivali Med. Offr. Incharge, E. S. I. Dispensary, ESI Hospital,
Akruli Road, Kandivali (E), Mumbai – 400 101
28877501
17 Akola-I Medical Officer Incharge, ESI Dispensary, Bahel Building, Ramdaspeth, Akola 444001
2433729
18 Akola - II Medical Officer Incharge, ESI Dispensary, Shri Lalpande Building, Bhagirath Wadi, Harihar Peth, Akola
2435742
19 Akola - III Medical Officer Incharge, ESI Dispensary, Vinayak P. Kutaskan House, Akola
2414574
20 Amravati Medical Officer Incharge, ESI Dispensary, Masjid Road, Near Khaparse Garden, Amravati 444601
0721-2673655
21 Aurangabad No. I
Medical Officer Incharge, ESI Dispensary, Osmanpura, Mahaveer Nagar, Peer Bazar Road, Aurangabad 444601
2331686
35
22 Aurangabad No.I
Medical Officer Incharge, Esi Dispensary, Khadekeshwar, Near Mule Pathology, Vyavhare Building, Aurangabad 431005
2321240
23 Aurangabad No. III
Medical Officer Incharge, ESI Dispensary, Plot No. 10 N-11, Near Mayuri Hotel, HUDCO, Asurangabad- 431 003
2485820
24 Aurangabad No. IV
Medical Officer Incharge, ESI Dispensary, Chikalthana, Opp. MSRTC Workshop, MIDC Chikalthana, Aurangabad 431 210
2482444
25 Bajeriya Medical Officer Incharge, ESI Dispensary, Bhankheda, B/H Ice Factory,Bajeriya, NAGPUR
2728411
26 Chandrapur Medical Officer Incharge, ESI Dispensary, C/O Smt. Malinibai Building, Ramnagar, Civil Line, Chandrapur
07172-254403
27 Hinganghat Medical Officer Incharge, ESI Dispensary, H.No. 160, Chandrachhaya, Yeshwant Nagar, Gandhi Ward, Hinganghat 442301
07153-244071
28 Gandhi Nagar
Medical Officer Incharge, ESI Dispensary, C/O Smt C.C. Ghavghave's Building, Plot No. 354, Gandhi Nagar, Nagpur
29 Ganeshpeth Medical Officer Incharge, ESI Dispensary, Near Vidarbha Co. Operative Marketing Society, Ganeshpeth, Nagpur-440018
2726197
30 Industrial Area
Medical Officer Incharge, ESI Dispensary, MIDC Common Services, Centre Building, Industrial Area, Hingana Road, Nagpur
07104-237396
31 Kukade Layout
Medical Officer Incharge, ESI Dispensary, Wanjari Nagar, Near Empress Mills Qtrs, Nagpur
2749197
32 Kamptee Medical Officer Incharge, ESI Dispensary, Kamptee Distt. Nagpur
288597
33 Mahal Medical Officer Incharge, ESI Dispensary, Dakshnimurthi Chowk, Mahal, Nagpur
2724359
34 Nandawan Medical Officer Incharge, ESI Dispensary, Nandawan Layout, Nagpur
2746432
35 New Mount Road,
Medical Officer Incharge, ESI Dispensary, Shri More's Building, Nagpur
2746184
36 New Subhedar Layout
Medical Officer Incharge, ESI Dispensary, C/O Abdul Rahim Khan, Dattatraya Nagar, Nagpur
2746184
37 Nachangaon Road,
Medical Officer Incharge, ESI Dispensary, Khurana Building, Nachangaon Road, Pulgaon Distt. Wardha
07158-282042
38 Old Bagadganj
Medical Officer Incharge, ESI Dispensary, Kapase Chowk, Bagadganj, Nagpur
2764311
39 Pachpaoli Medical Officer Incharge, ESI Dispensary, Near Kamal Talkies Chowk, Pachpaoli, Nagpur
2640271
40 Rambagh Medical Officer Incharge, ESI Dispensary, Near Medical College Square, Rambagh, Nagpur
2744785
41 Somwaripeth Medical Officer Incharge, ESI Dispensary, Nurses Hostel, Somwaripeth, Nagpur
2744785
36
42 Somesh Colony
Medical Officer Incharge, ESI Dispensary, Laxmi Niwas Channwar Building, Behind Kala Mandir, Nanded
242427
43 Tarasingh Market
Medical Officer Incharge, ESI Dispensary, Tarasingh Market NO. 1, Smt. Awasti's Building,Nanded
240308
44 Wadi Nagpur
Medical Officer Incharge, ESI Dispensary, Khadgaon Road, Wadi, Nagpur
07104-223283
45 Ambad Medical Officer Incharge, ESI Dispensary, Ambad 0253-2383470 46 Amalner Medical Officer Incharge, ESI Dispensary, Amalner 02587-223528 47 Bhosari Medical Officer Incharge, ESI Dispensary, Bhosari 020-27121036 48 Barshi Medical Officer Incharge, ESI Dispensary, Bhagwant Road,
Near Ram Mandir, Barshi, DISTT. Solapur
49 Chalisgaon Medical Officer Incharge, ESI Dispensary, Laxmi Nagar, Chalisgaon
02589-222229
50 Chinchwad Medical Officer Incharge, ESI Dispensary, Panchdeep Bhawan,Chinchwad,
020-27470020
51 CIDCO Medical Officer Incharge, ESI Dispensary, Saptashringi Chowk, CIDCO, Nasik
0253-2392601
52 Dhule I Medical Officer Incharge, ESI Dispensary, Station Road, Near Post Office, Dhule
02562-2211219
53 Gharpure Ghat
Medical Officer Incharge, ESI Dispensary, Near Bhagwan Prasad Ashram, Gharpure Ghat,Nasik
0253-2575960
54 Hadapsar Medical Officer Incharge,ESI Dispensary, Hadapsar, Pune 020-26999178 55 Ichalkaranji Medical Officer Incharge, ESI
Dispensary, Ichalkaranji Distt. Kolhapur
0230-2437302
56 Jalgaon Medical Officer Incharge, ESI Dispensary, Jalgaon 0257-2229283 57 Jalgaon Ii Medical Officer Incharge, ESI Dispensary,
Old Mehrun Road, MIDC, Jalgaon 0257-2211219
58 Kupwad Medical Officer Incharge, ESI Dispensary, Kupwad Sangli
0233-2346728
59 Miraj Medical Officer Incharge, ESI Dispensary, Miraj 0233-2222604 60 Mpm
Solapur
Medical Officer Incharge, ESI Dispensary, Solapur 0217-2722899
61 Nagla Park Medical Officer Incharge, ESI Dispensary, Nagla Park Kolhapur
0231-2653197
62 Nasik Road Medical Officer Incharge, ESI Dispensary, Nasik 0253-2463710 63 Rajaram Puri Medical Officer Incharge, ESI Dispensary, Rajaram Puri,
Kolhapur
0231-269266
64 Sangli Medical Officer Incharge, ESI Dispensary, Sangli 0233-2377636 65 Satara Medical Officer Incharge, ESI Dispensary, Satara 02162-239533
66 Satpur Medical Officer Incharge, ESI Dispensary, Satpur 0253-2363906 67 Samaj
Kalyan Kendra
Medical Officer Incharge, ESI Dispensary, Samaj Kalyan Kendra, Solapur
0217-2722435
68 Tarabai Road Medical Officer Incharge, ESI Dispensary, Tarabai Road, Kolhapur
0231-2622406
37
ESI Hospitals in Maharashtra
Sr. No
Name of Hospital Address Phone No.
1. Andheri Med. Supdt. E. S. I. Hospital, Central Road, Near Marol Bus Depot, Andheri (E), Mumbai – 400 093
28203266(D), / 28367206 (PBX)
2. Kandivali Med. Supdt. E. S. I. Hospital, Arkuli Road,
Kandivali (E), Mumbai – 400 101
2877501 (D), / 28877764 (PBX)
3. Mahatma Gandhi Memorial Hospital
Med. Supdt. E. S. I. Hospital, Mahatma Gandhi Memorial Hospital, Dr. S. S. Rao Road, Parel, Mumbai – 400 012
24132575 (PBX) / 24132581 /82 (PBX) / 24130035 (D)
4. Mulund Med. Supdt. E. S. I. Hospital, Lal Bahadur
shashtri Marg, Mulund (W), Mum – 400080
25645520-24 (PBX) / 25600696 (D)
5. Thane Med. Supdt. E. S. I. Hospital, Wagle Estate,
Road No. 33, Thane – 400 604
25823551 (D) / 25323434 (PBX)
6. Ulhasnagar Med. Offr. Incharge, E. S. I. Dispensary, ESI Hospital, Near Central Hospital, Camp No.3, Ulhasnagar, Dist: Thane
0251-2546733 (PBX) / 2701222 (D)
7. Vashi Med. Offr. Incharge, E. S. I. Dispensary, ESI Hospital, Vashi, Sector No. 5,
Navi Mumbai – 400 703
27821405 (D) / 27821432 (ADM)
8. Worli Med. Offr. Incharge, E. S. I. Dispensary, ESI Hospital, Dr. Anne Besant Road, Worli,
Mumbai – 400 018
24933142/364, (D) 24932390/2428 (PBX)
9. Pune (Aundh Camp)
Medical Supdt ESI Hospital Aundh Camp Pune- 411 007.
020- 27280985/27282223 27283104
10. Nasik Medical Supdt, ESI Hospital, Trimbak Road, Satpur, Nasik- 422 007
0253-2351945/2351045
11. Solapur Medical Supdt, ESI Hospital, Solapur- 413 003 0217-2601747/2600560 12. Chinchwad
(Pune)
Medical Supdt, ESI Hospital cum ODC, Block D-3,Survey S.No. 130, Plot No. 9,10,11 Mohan Nagar, Chinchwad, Pune 411 019
020-7462514 020-7462486
13 Somwaripeth Nagpur
Medical Supdt, ESI Hospital, Opp. Nurses Hostel, Manewada Road, Somwaripeth, Nagpur - 440009.
2744767
14 Aurangabad Medical Supdt, ESI Hospital, P-1, CIDCO, Naregaon Road, Aurangabad - 431 003.
2480465 2480466
38
Super Specialty Hospitals tide-up in Mumbai
Sr. No
Name of Hospital Location
1. Balaji Hospital Byculla
2. Zynova Heart Hospital Ghatkopar 3 K. E. M. Hospital Parel
4 Fortis Hospital Mulund
5 Joy Hospital Chembur
6 Suvarna Sethia Hospital Chembur
7 Suvarna Hospital Malad 8 Kohinoor Hospital Kurla 9 Hiranandani Hospital Vashi, Navi Mumbai
10 Life Line Hospital Panvel 11 Terna Sahyadri Hospital Nerul Navi Mumbai 12 Suraj Hospital Sanpada, Navi Mumbai 13 Sushrusha Heart Care Nerul, Navi Mumbai
14 Thunga Hospital Mira Road 15 Magnum Diganostic Centre Sion
There are more than 255 super speciality hospitals tide up all over India, complete list of which
can be seen at ESI Website:- www.esic.nic.in
To avail Super Speciality Treatment minimum conditions required:-
1) For IP :- 3 months Employment with Minimum 39 days Contribution payable.
2) For Family members:- 6 months Employment with Minimum 78 days Contribution payable
39
Centre, surgery, Or thopacdic-Joi;
Tank Road, nex[ to
Tower. !'lear orlem Churc
( \V) ivl umba i-6'-l.
h :l.alad I .
Rephtcemcnt,
Neurosurgery.
surgery.
Neurology &
Nephrology
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·a me of Hospilal
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' Victoria Road , C ross l .anc III.
nBrcul(East) Mt _nbai-400 027
rc I :V1umb<ll
Pt·occdurc
Abasaheb Uttamrao 1:3edse
Charitable Trust ·
Lifeli ne I J ospital & Research
Cen tre.Shi vaji Road , S.T.Stand,
Pan vel
J>anvcl. Di s\. Ra igad-41 0206.
3. Z) nova lleart I lospita l
Trimurt i Arcade,
l\ear Sarvodaya Hospital , L.B.S.Ma rg, G hatkopar (West)
\·lu mbai-4 00086.
Mumbai
..j _ vtagnum Diagnost ic Ce ntre
178!2. C handrcslnvar Llllavan.
Main Road, Sian (\Vest)
---- ..:\.1.:u..m:.b:ai -400022. 5.. Fonis Hospital Ltd .,
Mulund Goregaon Link Road.
Mumhai
Cardiol ogy & Carcliothoracic
surgery, orthoped ic. Dialysis. CT
Mu lund (W . Mu mha i- 40.0.:....0:::..7.:....8.:..:·..__-1----
Scan, MRl, Mammography
6. Jo) Hospi tal Pvt. Ltd.
-123 AB, I 0'11
R.oad,
(hembur. Mumbai 400 071.
Mumbai ] Gl Surge r y. Cardiology &J Cardiothoracic Vascular 'urger). U rol ogy & U rosu rgcry. Rcconst.
Surger y, Kidney Transplant & 1
Di alysis and All joint rcplacemen1
surgeri es. 7. Sur_a_na_ -Se-t:h-i:a Hos pital and-:-f1--::um-b: a..i,...- -1-a.;Critol:...:.l=o.:::..:.gy__ &
Card i othoracic
Research Cent re, C hem bur surgery, Ort hopaeuic- Joint
Suman Nagar. Si on To m bay Road. Rcplacetm:nt, Neurology & Chembur. Mumbai-71. Ne uro surgery. Nc:phrol og
surger y, Stem Cell Replaceme nt
jiurgeries, Di alysis, CT Scan.
H- ospital and Rcsearc_h,_M_ u_m_b_a_i --+Card_io_lo_g_y- -&:,---=c=a- r-d:::i-ot-:h-oraci-;;-j
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40
41
Address of ESIC Regional Offices:-
1. The Director General,
ESI Corporation, C. I. G. Road, New Delhi – 110 002, Ph: 011 – 23234092.
2. The Regional Director,
ESI Corporation, Panchdeep Bhavan, N. M. Joshi Marg, Lower Parel, Mumbai – 400 013.
Ph: 022 –61209777 Fax: 022 – 24921701 (Fax)
Email : [email protected]
3. The Jt. Director,
Regional Office – Marol, ESI Corporation, Panchdeep Bhavan, Plot No. 9, Road no. 7, M.I.D.C, Andheri – (E),
Mumbai – 93. Ph: 022 28225568 / 69, Fax: 022 28303542. [email protected],
4. The Regional Director,
ESI Corporation, ESI Hospital Wagle Estate, Thane – 400 607. Ph:- 25806133 / 34, 25805222, Fax: 25806131. [email protected],
5. The Regional Director
Sub Regional Office, ESI Corporation, Panchdeep Bhavan, 689/690 Bibwewadi,
Pune – 411 037; Tel:- OFF:- 020-24218710 Fax:-020-24215153 Dir:- 4218710; Email:- [email protected]
6. The Regional Director
Sub Regional Office, ESI Corporation, Panchdeep Bhavan, Ganesh Peth, Nagpur- 440018
Tel:- 0712-2722987; 2729353; Email:- [email protected]; [email protected]
7. The Regional Director
Sub Regional Office, ESI Corporation, Panchdeep Bhavan, Aurangabad,
Tel:- 0240-2483144(T/F), 024-2485949; Email:- [email protected]
8. Director Public Grievances,
ESI Corporation Panchdeep Bhavan,
Kotla Road, New Delhi.
Fax:- 011 – 23235481
� For any complaint / Grievance/ Suggestion related to ESIC
ESI Corporation, Panchdeep Bhawan,
Room No. 108, C.I.G Marg, New Delhi – 110 002.
Phone Number:- 011 – 23237964; Fax:- 011 – 23234537
ESI TOLL FREE NUMBER:- 1800112526 FOR ANY DETAILS / INFORMATION ON ESI.
ESIC website: - www.esic.nic.in; www.esic.in
42
Frequently Asked Question on ESI Scheme 1) What is ESI Scheme? A. It is a comprehensive Social Security Scheme designed to accomplish the task of socially protecting
the ‗employees‘ in the organized sector against the events of sickness, maternity, disablement and death due to employment injury and to provide medical care to the insured employees and their families.
2) How far and deep is ESIC‘s reach?
A. The ESI Act applies to factories employing 10 and more persons. The provisions of the Act are
being brought into force area – wise in the States. The ESI Act contains an enabling provision
under which the *appropriate government, is empowered to extend the provisions of the Act to other classes of establishments.
3) How does the scheme help the employees? A. The scheme provides full medical care to the employee registered under the scheme during the
period of his incapacity for restoration of his health and working capacity. It provided financial assistance to compensate the loss of his / her wages during the period of his abstention from work due to sickness, maternity and employment injury. The scheme provides medical care to his / her family members also.
4) How the scheme is funded? A. The ESI Scheme is a self financing scheme. The ESI Funds are primarily built out of contribution
from employers and employees payable monthly at a fixed percentage of wages paid. The State Government also contribute 1/8th share of the cost of Medical Benefit.
5) What is code number? A. It is a 17 digit identification number allotted to factory / establishment by the Regional officer on
receipt of Form – 01 or survey report from the Social Security Officer. 6) Who are the persons to be counted for coverage of an establishment? A. The words ‗premises‘ and ‗precincts‘ used in the definition of factory have not been used in the
notifications issued by the State Governments, while extending the provisions of the Act to the establishments u/s. 1(5) of the Act. So long as the establishment employs a minimum prescribed number of 20 coverable employees for wages, it will stand covered under the Act whether these employees are employed at one place or at places away from each other, as they are engaged in the organised activity of the same establishment. Thus, all the coverable employees including those working in branches, regd. Office, sales office etc. Whether situated in implemented area or not.
7) Can a factory or establishment once covered go out of coverage if the number of persons
employed therein goes down to the minimum limit prescribed? A. Once a factory or an establishment is covered under the act, it continues to be covered
notwithstanding the fact that the number of persons / coverable employees employed therein at any time falls below the required limit or the manufacturing process therein ceases to be carried on (section 1 (6) of the act)
43
8) How wages are computed for payment of contribution? A. The following items are taken into account for computation of wages for payment of contribution:- a) Basic Pay , wages, salary; b) D.A / HRA/CCA/overtime/officiating allowance/night shift allowance/ efficiency
allowance/heat, gas, dust allowance/education allowance/food & tea allowance / conveyance allowance;
c) Wages / salary / pay for weekly off and public holidays; d) Commission paid to sales staff; e) Subsistence allowance paid to an employee during the period of suspension; f) Attendance bonus or incentive or ex-gratia in lieu of attendance bonus or production incentive. g) Regular honorarium or salary or remuneration paid to a director; h) Collection bhatta paid to running staff. i) Actual payments made toward leave salary, lay off compensation, or wages for strike period. j) Any other remuneration paid or payable in cash to an employee if the terms of contract of
employment, expressed or implied were fulfilled.
9) If the wages of an employee exceeds Rs. 15000 in a month, can he be treated as not covered and
deduction of contribution from his wages is stopped? A. If the wages of an employee (excluding remuneration for overtime work) exceeds the wage limit
prescribed by the Central Government after start of contribution period, he continues to be an employee till the end of that contribution period and contribution is to be deducted and paid on the total wages earned by him.
10) What is the effect of increase in wages from a retrospective date? A. In case the wages of an employee is increased from a retrospective date resulting in crossing the
wage limit prescribed, its effect on coverage of that employee is only after expiry of the Contribution period during the currency of which such increase is announced or declared. The contribution on enhanced wages is also payable from the month in which such increase is announced. There is no need to pay the contribution on the arrears for the period prior to the month of declaration / announcement / agreement.
11) Why contribution should be paid on the total wages beyond the wage ceiling limit when an
employee crosses the wage limit prescribed by the Central Government? A. An employee who crosses the prescribed ceiling limit in any month at any time after
commencement of the contribution period, continues to be an employee till the end of that contribution period. Through there is a wage ceiling limit for coverage of an employee, there is no ceiling limit in the definition of wages for payment of contribution. Hence, contribution is payable on the total wages without any ceiling limit.
12) Why over-time is to be excluded for wage ceiling limit for coverage of an employee? A. Overtime is not a regular and continuous payment, but it is of an occasional nature, if overtime is
also taken for wage limit for coverage of an employee, he may be going out of coverage for some time and again coming within the orbit of the scheme, when overtime is not there. This frequent interruption from the scheme deprives him of the benefits admissible under the scheme even after making payment of contribution for a part of contribution period. To ensure continued security and protection, overtime is excluded for determining the wage ceiling for coverage of an employee. However, it is included for payment of contribution to cover the risk during the period he was on overtime work, and to enable him to draw cash benefits at an enhanced rate, as by
44
adding overtime wages to his average daily wages, he is fitted in to the next higher slab in the Standard Benefit table in Rule 54 for claiming cash benefits.
13) How a temporary or casual employee who works for 3 or 4 days and leaves the employment is
entitled to the medical care? A. If he leaves the employment before his registration process is completed, the employer may
provide him with a certificate of employment consisting of his date of employment, date of
leaving, family particulars etc. In form ESIC – 86. Based on this certificate that person and his family can avail medical benefit for a period of 3 months.
14) If the insured person‘s family is residing in another place in the same state or another state,
how the family can avail the medical benefit? A. If the family is residing in any other place either in the same state or different state, based on the
declaration of the insured person and certified by the employer, the family is provided with a family identity card for receiving medical benefit from ESI Dispensary in the area in which it is residing. After IT rollout, the Family is issued a separate smart card. By producing this smart card, the family can avail the medical benefit from any ESI Dispensary / Hospital either at their place of residence or in any other part of the country.
15) What is Extended Sickness Benefits? A. This is an additional sickness benefit provided by the Corporation in exercise of its powers under
section 99 of the Act. An insured person who has completed two years of insurable employment and contributed for not less than 156 days during this period is entitled to extended sickness benefit for a period of 309 days for the 34 specified long term diseases. This period can be extended up to 730 days or till the insured person attains the age of 60 years whichever is earlier. The benefit is payable @ 140% of the standard benefit rate which works out to 70% of his wages. The insured person and his family are also entitled to Medical Benefit during this extended period.
16) What is Enhanced Sickness Benefit? A. To promote the norms of small family, this cash benefit is paid to the insured person for
undergoing vasectomy / tubectomy operation. This is paid at double the standard benefit rate i.e. full wages, for a period of 7 days for vasectomy operation and for 14 days for tubectomy operation. This period can be extended in case of any post operative complications.
17) What is Medical Bonus? A. Medical Bonus is Lump sum payment made to an insured woman or an insured person in respect
of his wife for each confinement to meet the confinement expenses, if the confinement occurs at a place where necessary facilities under the ESI Scheme are not available. At present the confinement expenses paid is Rs. 5000/- per confinement w.e.f. 01/10/2013
18) What is benefit admissible after retirement of an employee? A. An insured person who leaves the insurable employment on attainment of the age of
superannuation or retires under a voluntary retirement scheme or takes premature retirement, after being an insured person for not less than 5 years, shall be eligible to receive medical benefit for himself and his spouse subject to production of proof thereof, and payment of a nominal contribution of rupees one hundred and twenty for one year. In case the insured person expires, his spouse is entitled to the medical benefit for the remaining period for which the contribution was made, and she can continue to receive the medical benefit on payment of the contribution @ 120/-p.a. for further period.
45
19) Benefit for Permanent Disablement caused due to Employment Injury? A. This Medical benefit is also admissible to an insured person who ceases to be in employment on
account of permanent disablement caused due to employment injury for himself and his spouse on payment of similar contribution till the date on which he would have vacated the employment on attaining the age of superannuation, had not sustained such permanent disablement.
20) Important Information for the Employers:- a. Employer should get factory / establishment registered Online, immediately on applicability of
ESI Act to his unit. b. Employer should get his employee including the employee employed through the contractors
registered online and T.I.C generated immediately after taking him in insurable employment. c. The Employer should direct and pursue his employees to get photographed for Pehchan card. d. The Employer should not re-register a new employee, if he / she was already registered with ESIC
while working with another employer. e. The Employer should immediately inform the RO/SRO about the permanent closure or transfer of
factory / establishment within 21 days of such closure / transfer. f. No claim needs to be submitted for PDB / DB payment. g. PDB/DB claims to be settled within one month from date of termination of TDB and from date of
submission proper accident report. 21) Who are persons not to be counted for coverage of ESIC under a Factory? A. Following are the persons are not to be counted:- � A proprietor or a partner whether drawing salary or not. � A Contractor lending the services of his employee. � An apprentice engaged for the first time under the Apprentice Act, 1961 � Persons employed on contract for service, e.g. legal technical, tax consultants; � Persons employed in branch / sales offices etc. away from the factory premises are not be counted
for the purpose of covered as employee under Sec 2 (9), if their wages does not exceed the ceiling limit prescribed.
22) Can an establishment get itself covered under the ESI Act voluntarily? A. There is no provisions for voluntary coverage under ESI Act.
23) Are the casuals employees to be covered under the ESI Act? A. Casual or temporary employees will be liable to be covered under the act from the date of their
joining the services.
24) What is the procedure for availing sickness benefit under the ESI act? A. The employee is issued medical certificate from ESI dispensary / hospital. The medical certificate,
issued by the dispensary, is deposited with the local office of the ESI corporation from where the employees gets the payment.
25) If an employee will cease to be the member of ESI in the month of May, 2012. Will Estb.
required to pay his contribution till October, 2012 or that it will discontinue? Also, what will be the position with regard to medical benefit available to the employee?
A. Since the employee was coverable at the beginning of contribution period i.e. 1st April and will cease to be covered in the middle of contribution period, he will have to be covered till 30th Sept i.e. till the end of contribution period and he is entitled to all the medical benefits.
46
26) After serving an establishment for 10 years with the membership of ESI, if that employee will retire at end of the year, then will he be get benefits under ESI Act?
A. If the employee is attaining the age of superannuation or under voluntary retirement scheme or taking pre-mature retirement and in insurable employment for a minimum of 3 years then that particular employee can avail the Medical Benefits by paying Rs. 120/- per year in advance to the ESI Corporation, Medical benefits are available to the insured person and his/her spouse only.
27) What is procedure to availing sick leave? A. For availing sick leave, the sick insured person has to visit the ESI dispensary/ hospital and obtain
medical certificate for the sickness which has to be produced in the branch office of ESI Corporation to avail cash benefits for the period of sickness.
28) If any office is renovated through a contractor, is ESI contribution payable on that expenditure & if yes then on what amount?
A. Yes ESIC is payable if office is covered under ESI Act, and since the contract awarded is with material as such 25% of the amount will be considered as wage and on this amount of wage both employer and employees share of contribution is required to be paid which at present is 6.5% (4.75% + 1.75%)
29) Its is correct that now a member of the ESI can avail treatment in any dispensary all over India?
However, in case a dispensary is not available nearby, can such a member avail the treatment from a private hospital/nursing home and will charges be reimbursed?
A. ESI Corporation is issuing smart cards, on the basis of which an insured person can avail medical benefits in any ESI hospital/ dispensary. In case no ESI Hospital / dispensary is available, the insured person can got to nearest Govt. Hospital / Dispensary. However, in emergency the treatment can be obtained from nearest private clinic / hospital and charges can be reimbursed. This facility is available only in emergencies only and the earliest opportunity thereafter, he/she must report to ESI Hospital / dispensary or Govt. Hospital / dispensary.
30) How long an employer is required to maintain records under ESI Act? A. As per latest amendments in the ESI Act (Section 45-A), ESI Corporation cannot determine
contribution beyond a period of five years from the date on which the contribution shall become payable. It means you have to maintain the records for a period of five years from the date on which the contribution was payable.
31) If loading and unloading done through outside labour contractors and if they don‘t have their own PF & ESI Code Numbers. Then if principal employer, pays PF & ESI Contribution under his code number. Apprehensions are that such employees can claim that they are the employee of principal employer, how far it is justified?
A. Merely that a principal employer has deposited the provident fund contribution on its Code Number for the workers of the contractor, it cannot entitled them for seeking their regularization. In one case, the Madras High Court has clarified that the principal employer has discharged its obligation in paying the provident fund contributions of the workers of the contractor, it cannot be a ground for regularization of workers of the contractor since the principal employer can recover the amount, as paid, from the contractor. Hindustan Petroleum Corporation was paying contributions to the employees provident fund and that the employee were entitled to the provident fund, cannot also help the workers in any manner. The liability to pay the employees
provident fund is mandatory irrespective‘ of the nature of the employment. Under section 2(f) of the Employees‘ Provident Fund Act, 1952, which defines the expression *employee,, includes any
47
employee by or through a contractor in connection with the work of the establishment. Therefore, the liability to pay the provident fund would arise even in respect of an employee under a contractor. Under section 3A(sic), the amount of contribution paid or payable by the employer may be recovered by the employer from the contractor either by deduction of any amount payable under the contract or as a debt payable by the contractor. It is, thus, clear that the liability to pay the provident fund is mainly on the principal employer and thereafter it is open to the employer to recover from the contractor. Therefore, the fact that the employees are covered by the provident fund scheme, is not relevant for deciding the status of the petitioners. It would be desirable that a representation to taken from the contractor that for want of Code Number, his employees be enrolled as member of Provident Fund and ESI and he will be responsible for deduction and payment of contributions and that no relationship of employer and employee will come into existence between his employees and the principal employer.
Petroleum Workers Union V. Hindustan Petroleum Corpn. Ltd. 2004 (2)LLN451(Mad;HC)
32) In order to make renovations, painters who are paid over Rs. 700/- per day , what will be the
position with regard to their coverage under the ESI Act? Ans:- For Computing wages of daily-rated employees for the purpose of coverage under section 2(9) of the ESI Act, it has to be decided on the basis of notional wages arrived at by multiplying the daily wage earned by employee with 26. If the total wage, so computed is Rs. 15,000/- or less, the employee will be coverable.
33) If contractor carry on certain activities who also pays ESI contribution. but the same contractor
do not deposit ESI contributions for their workers although they receive the same from the principal employer through their regular bill. How can we ensure that the contractor is depositing the ESI contributions regularly? Ans:- when you engage the contractor who is independently covered, ask him to give his code number. Also obtain the attendance record and copy of the challan through which he has deposited the contributions. Being a principal employer, you should have all the record and also you can get monthly ESI contribution details by getting history of ESI Payment.
34) ESI Authority is claiming contributions for the contractors employees from us as a principal
employer. The said contractor has its own Code Number. My plea is that why should we be liable when the ESI authority has allotted an independent code number to the contractor on completion of all formalities? Ans:- Being principal employer, it is your responsibility that both the employee‘s and employers. Contributions is paid. Is such case where the contractors are engaged and the contracts is independently covered having separate code number, ask the contractors to pay the contributions under his code number and you should obtain a copy of the challan from the contractor along with attendance register and salary sheet.
35) If employee‘s wife is expecting her delivery af ter about six months. Since he is a member of
ESI, whether she will be entitled to get maternity benefit. Is there any procedure for prior permission from ESI for availing maternity benefit? Ans:- That employee‘s wife is entitled for all the medical benefits including Pre-Natal, Delivery and Post Natal benefits but not cash benefits.
48
ESI- PROBLEMS AND THEIR SOLUTIONS
Q. Ours is a printing press and not
covered under the Factories Act. We are
employing total 12 employees. Is printing
press liable to be covered under the ESI
Act? Thro Fax
A. Since you are employing more than I 0
employees, your printing press is coverable under
the provisions of ESI Act.
Q. Some of the employees of our factory
are paid incentive and overtime and their
total emolumrnt comes to more than
Rs.15,000. Are we under obligation to pay
contribution on Rs.18,000 or Rs.25,000 per
month? Thro Fax
A. You have to pay contribution on the salary
of the employee and also on the incentive and
overtime paid to the employee.
Q. Our Company has Head Office and
Marketing Office at Mumbai whereas the
factory is at Baddi (Himachal Pradesh). We
have one Code Number at Mumbai where
code number of employees working at Baddi factory.
Q. The Management of our
establishment, employing over 15
employees is having a separate hospital
where the employees and their families are
getting free medical facility. Will it be
obligatory for the Management to cover the
employees of the establishment? Thro Fax
A. ESI Scheme is a mandatory scheme.
Merely providing medical facilities to your
employees does mean that you are exempted
from the coverage. ESI Scheme not only provides
medical cover but also other benefits which you
are not providing. My advice is that you should
immediately cover your employees under the ESI
Scheme.
Q. Since we are employing more than
1,000 employees, we are having an
ambulance through the contractor who is not
covered under the ESI. Are the workers
the workers, around 50 working at Baddi working on the ambulance liable to be
are also covered under the same Code covered under ESI? K.L. Hinduja, Delhi
Number. The Authorities in Himachal A. Yes, the workers working on the
Pradesh are insisting that we are under legal ambulance are liable to be covered if the
obligation to take separate Code Number ambulance is attached with your company.
for factory at Baddi. What is the legal However, in case the ambulance is called only
position? E-Mail when required but remains with the contractor in
A. My advice is that you should take a such event the workers working on the
separate code number for the factory at Baddi ambulance are not to be covered.
{HP). However, you can cover your workers Q. What is meant by sub-code number
from Bombay Office also, but you have to send under the ESI Act? Thro Fax
a copy of RC (return of contribution) to the , · A. When you are having more than one
branch office of ESIC at Baddi and also keep a places of business at different places in the same
copy of your office in Baddi. You are also state or in different states, a code number is
supposed to keep the wage record, attendance allotted to each such unit and it is known as sub-
record etc.at Baddi. It is better to have a separate code number.
49
Q. We have some persons working in
our establishment who are provided
boarding and lodging. What will be the
position with regard to their coverage? If
the answer is affirmative, what will be the
quantum of their wages?
L.K. Dua, Gurgaon
A. The workers who are provided boarding
and lodging are coverable under the Scheme.
Quantum of wage will depend on the salary paid
by you plus the cost of boarding and lodging
depending on the quality ofboarding and lodging.
Q. Sometime back an accident bas
occurred in our factory which could not be
reported in time to the ESI Authorities. My
query is as to what consequences will follow
since we have intimated after two weeks
because all of us were disturbed.
R.A., Faridabad
A. If you have reported, it is alright. You
can explain the delay, if required by the ESI
Authorities, but in future please report such
instances to the ESIC Authorities as it involves
the benefits requ11ed to be paid to the workers.
Q.(a) Our factory is covered under ESI.
Some employees, who remain away on
medical ground, produce .ESI slip. How far
we are bound by ESI Act to grant them
leave?
(b) One of our employees has met with
an accident and after recovery, he has been
advised to do lighter work but we do not
have any lighter work. What should be done
under such situation? Can we dispense with
the services of the employee who bas
received sufficient compensation from ESI
Authorities? Thro Fax
A(a) You are bound to honour the certified
medical leave by ESI doctors.
(b) ESI doctors wi ll either recommend leave
on medical grounds or declare a worker fit to
resume duty. ESI doctor cannot recommend light
or heavy work. It is for you to provide light work
or not. In case worker has produced any
document wherein l igh t work has been
recommend by ESI hospital/dispensary doctor,
you refer the matter to higher authorities ofESIC.
Q. We also pay some amount for good
work. Will such intermittent payment attract
ESI contribution? Hari Kishan, Vadodara
A. Yes, the good work amount paid to
workers will attract ESI contributions unless the
amount paid interval is more than two months.
Q. In our establishment, we have to get
the computers repaired and some parts
thereof are to be replaced. The payment is
made by the Company. What is the legal
position for such payment, whether it will
be treated as wages? M.S. Murthy, Chennai
A. You have not made it clear, as to whether
the computers are repaired by your own staff/
mechanic or the repair and maintenance is under
service contract with outside agency. In case
you are having service contract with outside
agency, you are not required to pay any
contribution on the amount paid to the agency.
Even if the computers are repaired by your staff/
mechanics, no contribution is payable on the cost
of parts replaced.
50
Q. Our factory is employing over 150
employees but ESI Act is not applicable
since it is in the non-notified area. Our office
at Delhi is employing 7 employees. ESI
Authorities are insisting that we should
cover the Delhi office. What is the legal
position? Are we liable to cover the Delhi
Office when the factory is not covered?
Hari Om, Kanpur
A. In case your factory is situated in a non-
implemented area and your office in notified area
is employing less than 10 employees, your office/
staff is not coverable under the Scheme
Q. We are depositing ESI contribution
on service charges as levied in our invoices
for the eatables as ordered and bought from
our restaurants. We have been advised that
the service charges do not attract the ESI
contributions. Am I right?
Atul Kulkarni, Kanpur
A. Yes. No contribution is payable on
service charges.
Q, Due to unavoidable circumstances,
we have not been able to deposit in time
the ESI contributions. We have been
threatened with levy of damages for late
deposit. Whom should we approach for
reduction and/or waiver of the damages?
Thro. Fax
A. You have to pay the interest and damages
for the late deposit of contribution. Damages
can neither be waived nor reduced.
Q. I understand that the conveyance
allowance and charges attract ESI
contributions. In most of the case we simply
reimburse the conveyance expenses as
incurred by an employee. What will be the
position with regard to such payment?
Sudesh Mukherjee, Kolkata
A. No contribution is payable on the re-
imbursement of conveyance charges to the
employees.
Q. Our establishment is covered by ESI
Act. We are dealing in new tyres. As and
when any consignments comes, the loaders
and unloaders who are sitting in the market
and working for others as freelancers also
are called and paid for their work. Whether
such payment would attract ESI
contributions? Ashutosh Rana, Rewari
A. In case such persons are engaged on
daily wages, the contribution is payable. But, in
case they are casually employed for a short
period, no contribution is payable on the labour
charged paid to them.
Q. We have given the contract for
maintenance of our computer to an individual
who is paid Rs. 7500 per month. He is not
our employee and under no obligation to
mark his attendance. He will come for work
but only occasionally as and when be is
called. Whether such a vendor would attract
ESI contributions. Thro. E-Mail
A. Such persons are part time workers and
coverable. But in case he is having a shop or
establishment and visits as and when required
and paid according then nocontribution is payable.
But in the instant case, a fixed amount is paid
whether he is called or not hence, he is coverable
under the Scheme.
51
Q. I understand that an employee, even
after his superannuation, can avail ESI
benefits by depositing a small amount. My
query is that now I am 55 years but no longer
interested to work for another five years
which is the retirement age, can I avail
benefits of ESI? Lahori Ram, Faridabad
A. As per provision under the rulesolte can
avail medical benefits after the age of
superannuation only. So, as per rules you will
not be eligible for medical benefits.
Q. We have made a settlement with the
union whereby arrears are paid to the
workers who are also covered under the
ESI. What will be the position of payment
of contributions on arrears of wages? Thr. E-Mail
A. No contribution is payable on the arrears.
Q. We have been paying medical
allowance and giving sickness leave to the
workers. Now ESI is being made
applicable. I understand that we will be
within our rights to withdraw medical
allowance and the sick leave to the
employee.
a) Are we within our rights?
b) What will be the procedure to avail
sick leave by the employees and upto what
extent (quantum)?
As far as availingof sick leave in concerned,
the employees has to go to the ESl dispensary,
where he will be examined by the doctor and if
found sick, the leave will be granted to him.
Q. We provide vehicle for travelling of
our employees. Unfortunately an accident
bas occurred. The employees can claim
compensation for injuries under the Motor
Vehicle Act and ESI Act. My queries are as
under:-
(a) Are we liable to pay compensation
in the capacity of employer?
(b) Will it not be the liability of ESI to
make payment of compensation?
(c) Whether the employees can claim
compensation from ESI and also under
Motor Vehicle Act? Thr. Fax
A.(a)&(b) If he is covered under ESI
Scheme, he will be paid by ESI authorities
provided the accident occurs while travellingfrom
residence to factor and vice-versa. You need
not pay any compensation.
(c) The employees can't claim compensation
both from ESIC and under Motor Vehicles Act.
Q. Our establishment is covered under
ESI. Fortunately no accident has occurred
for last 20 years. We are apprehensive that
in case it happens what formalities are to be
obsenred to intimate the ESI authorities also
S.K. Bhardwaj, Gurgaon to whom and within how much period?
A. If the medical allowance is paid under
any contract with the union,you can't withdraw,
otherwise you can withdraw. Sick leave can be
withdrawn in respect of those employees who
are coverable under ESI Scheme.
Mukesh Bhai, Vadodara
A. You have to intimate toDivisional Office/
Local Office. Rest of the infonnation in detail
may be gathered from Local Office/Divisional
Office/Regional Office.
52
Q. What is the percentage of wages
when an employee is availing sick-leave as
recommended by the ESI Authorities?
ThroE-Mail
A. During sick leave it is 70% of the standard benefit rate of that particular person.
Q. I belong to Patna and working in
Gurgaon (Haryana). I am covered under the
ESI Act and so is my wife. My wife is
expecting a baby but she is in Patna;.- My
query is whether she can avail maternity
benefits at Patna? Ram Kumar Yadav, Gurgaon
A. If your wife is also covered as a worker
in ESIScheme, she will be entitled to cash benefits
also otherwise cash benefits are not allowed.
However, she can avail all medical benefits. If
the delivery takes place at any private clinic or
through Dai etc. you will be entitled to claim
RsJ'->01- as confmement expenses.
Q. I, being a member of ESI Scheme, understand that my dependents are entitled to the sickness/medical benefits. If so, upto what age? What will be the position for availing medical benefits when they are independent and earning their own livelihood? Ganga Ram, Noida
A. Your children are entitled to medical
benefits, not sickness benefit, upto the age of2_;
years. But once the child starts earning, he/she
· is no more dependent and will not be eligible for medical benefits.
Q. In our premises I am manufacturing
auto parts employing 7 employees. My son
has also started his business to manufacture
amplifiers. He is employing 6 employees.
Whether the ESI will be applicable? I am
also anxious to know as to what are the
criteria for clubbing more than one
establishment under the ESI Act?
R.K. Suri, Mumbai
A. If both businesses i.e. run by you and
your son have absolute separate entities, in such
event both the units are not coverable as the
number of employees are 7 and 6 respectively.
In case both the units are clubbed, it will be
coverable as the number of employees will be
more than 9 (10 or more employees coverable).
As far as criteria for coverage is conceruw,.ere
are seven criterias :-
a) Unity of ownership (i.e. Management &
Control)
b) Unity of Labour (i.e. transferability of employees)
c) Geographical proximity(vicinity, bona fides in
keeping units apart)
d) Source of fmance
e) Supervision & control (persons managing)
f) Functional integrity(integrated whole, part &
parcel of main unit, kprimary & dominant
... a\,;tivity,subsidiary, minor, incidental)
g) Unity of purpose (production and business,
inter-related business, similarity ofbusiness-
design or even parallel or co-ordinate activity
intended to achieve a common object)
There are two other criterias which can also assume importance i.e.
(i) Service conditions of workmen (Rules applicable, employment contract if any etc.)
(ii) General (Books of account, similarity of
nomenclature, common documents, letter
heads, telephone numbers etc.)
All the factors are not necessarily to be considered. Relevance of each factor has to be examined.
53
Recent Court Judgement:-
1) Section 45 – A – (Order of attachment of property of Director of company for ESI contribution due by company was held without jurisdiction)
The petitioner was formerly a Director of the company known as Kiran Fashions Pvt Ltd. Of which her husband was yet another Director. There was one more company known as Kiran
creations Pvt Ltd. Of which the petitioner‘s husband was one of the Directors. The respondent passed an order under Sec. 45 – a of the ESI Act against both the companies for payment of certain amounts towards ESI Contributions. The said orders became final since they were not challenged by the respective companies. Subsequently recovery certificates were also issued in order to recover the said amount. Pursuant to the recovery certificate, the second respondent passed the impugned order of attachment of the property of the petitioner. Feeling aggrieved thereby the petitioner challenged the same by filing a writ petition in the High Court.
The Only question before the High Court was whether for recovery of dues from the company, the property of Directors, both past and present, could be attached? The High Court observed that if the contributions have not been paid the same can be recovered from the assets of the company and not from the personal assets of the Directors by making them personally liable. Directors cannot be treated ipso facto as owners. It was therefore held that the impugned order was without jurisdiction. Hence it was quashed and set aside.
-H.C. Mad, LLJ III 2011 P. 647, Rani K. Lulla v. Employees‘ State Insurance Corpn., Chennai.
2) Section 52-A- Schedule III Part – C, SL.No.3 – (When the death of the employee was due to tuberculosis of lungs, it was held to be occupational diseases, the dependents are entitled to get the dependency benefit under the ESIC Act, 1948.)
The deceased was working in Subhlaxmi Mills and he died on 17-08-1991 due to chest disease in a hospital. The appellants are the legal heirs of the deceased and they filed an application in the ESI court for getting the dependency benefits. But it was dismissed by the ESI court. Hence they filed an appeal in the High Court. It was contended on behalf of the appellants that it was proved beyond reasonable doubt before the ESI court that tuberculosis was sustained by the deceased workman as the cotton and dust went into the lungs of the deceased while filling up bobbins during the course of employment in Subhlaxmi Mills. It was further pointed out that the room in which the deceased workman was working did not have a window but only a door and in view of the unhygienic working conditions prevailed at that place of employment, the deceased workman became a patient of tuberculosis.
The High Court referred to the evidence of the doctor who deposed that if a person working in a room where dust and cotton are spread, there are chances of tuberculosis of lings being suffered by the person and due to infection of the same cardiac failure can also occur, it appears that the doctor further stated that the deceased workman was suffering from lung tuberculosis but the
disease shown in the Schedule III Part – C Sl. No. 3 was different. The High Court referred to the said scheduled which reads:-
54
Sr. No. 3. Bronchopulmonary diseases caused by cotton, flax hemp and sisal (Byssinosis) All working involving exposure to the risk concerned.
The High Court held that the injury caused to the deceased workman would fall at Sr.No.3 of Part –C of III schedule of the act and merely because the doctor said that the said provision was not applicable in the present case, it cannot be said that it was not applicable. The High Court held that there was miscarriage of justice. Consequently the High Court allowed the appeal and set aside the order of ESI court. It was held that the appellants were entitled to get compensation as per the provisions of the ESI Act with the interest at the rate of 9% from the date of the application till realization. H.C.Guj. CLR 2011 P. 845, Radhaben Gopalbhai & Ors. V. ESIC.
Discu ss ion o n the iss ue of ―Autho rized Representative‖ s pecia ll y appearing bef o re the E.S.I.C Authorities and Provident Fund Authorities. (By: S. K. Gupta, Advocate, Supreme Court)
Either Assistant Director or Dy. Director or Regional Director, who have been conducting inquiry against the establishments or employers under sec. 45 – A of the Employees‘ State Insurance Act,
1948 for determination of amount of contribution payable in respect of the employees of that factory or establishment. The same way, the Assistant Provident Fund Commissioner or Regional Provident Fund Commissioner, who have been doing inquiry against the establishments or
employers under sec. 7A of the Employees‘ Provident Fund and Misc. Provisions Act, 1952. There is no dispute at any stage that the proceedings which are conducted by them are called *quasi- judicial proceedings, and the authorities, who have been conducting the proceedings, are called *quasi-judicial authorities, and therefore, these authorizes had to follow principles of natural justice. When the establishment / employer received summon or so called notice from the ESIC or the EPFO, then most of the time, the language written by the ESIC or EPFO in the notice or summon
that *you are hereby summoned to appear before me either in person or through an authorized
representative on the day at AM/PM,.
Not only in the ESIC or the EPFO, in the Income Tax authorities or Sales Tax authorities or any
other quasi – judicial authorities, the many authorized representative, who are not advocate, have
been appearing before the quasi – judicial authorities during quasi – judicial proceedings.
So, dictionary meaning of *Authorized Representative, means a person, who represent any other person, on payment of any fee or remuneration before any tribunal or authority constituted or appointed by or under any law for time being in force. Since, the Employees‘ Provident Fund and Misc, Act, 1952 or the Employees‘ State Insurance Act, 1948 have no such provision like Industrial Dispute Act, 1947 i.e. section 36 Representation of parties were discussed recently by the Bombay High Court in the matter of Maharashtra
Employees‘ Union Vs. M.K. Metal Industrial and others 2010 LLR 936 in reference of the Industrial Dispute Act, 1947.
If any Assistant Provident Fund Commissioner or Regional Provident Fund Commissioner or Assistant Director or Dy. Director or Regional Director refuses to record the appearance of any authorised representative during 7A proceedings or 45A proceedings or any recovery proceedings it shall be treated violation of principles of natural justices.
To my mind, I suggest that the learned consultants should file the *authority letter or powers of attorney, before the quasi – judicial authorities and once, the quasi judicial authority takes the so-
55
called *authority letter, on record or in the proceedings, then subsequently, the authority cannot dis-allow to appear in the proceedings and if at any stage, it occurs, then it is violation of principles of natural justice. There is no law or provisions under the Act, 1952 or Act 1948, that being a PF Consultants or Labour Laws Consultants or ESIC Consultants, are not entitled to be represented in the
proceedings as *authorised representative,. In brief, no bar, for the sake of convenience, proposed draft of the authority letter is as under:-
56
NAME OF THE AUTHORITY AND THEIR DESIGNATION AND ADDRESS
PF Code No: (Name of the Establishment and Address)
ESIC Code No: (Name of the Establishment and Address)
AUTHORITY LETTER
I,
S/o.
working in the establishment as do
hereby appoint Mr. (Name of Authorised Person) to my/our authorised representative in the
above noted quasi – judicial proceedings whose signature and acceptance thereof are given here
under. I/ we hereby authorised him/them as under:-
1) To act, appear and plead
2) To sign, file and verify the day to day proceedings.
3) To file and take back documents
4) To admit and/or deny the documents of the opposite party.
5) To cross examine the Enforcement Officer.
6) To ask the Enquiry Report or any other documents during proceedings or thereafter.
In witness whereof; I do hereby set my hand to above contents of which have
been understood by me on the day of .
Accepted subject to the terms of fees.
Name of Authorised Representative. Address of Office:- Date: / /20 Place:-
Signature of Employer (Seal)
57
Inspection Scheme for Employees' State
Insurance Corporation
Objective:TheInspectionScheme aims to achieve the objective of simplifying business regulationsandbring in transparency and accountability in labour inspections.It
envisages objectixe criteria for selection of units for inspection.
Criteria o1Inspections
lllndatory Inspections:·
1. In the following cases, the inspections will be mandatory for allunits:-
i) Allnewcovered/registered units
iO Units which have been defautters for six months
iii) Units for which closure request has been received
iv) Units wherenoinspection was carriedout in last
OptionalInspections:·
3. In following cases, the inspections would be
generated through computer usingpre-decidednumber tables takingInto account the following factors:.
1) Dropincontribution by 30%andabovecompared to previous contribution period (over a period of six months)[30%]
2) Drop innumber of covered employees by 30% and above compared toprevious contribution period (over aperiod of six months)[30%]
3) Security/rnanpc7Ner agenciesemployingmore than 250 employees[30%]
4) Any other not falling in above categories [10%] .
4 Methodology:
1. Employers to feed master data and periodical returns.
2. Inspectors to feed detailedinspectionreport.
3. Inspectors to feed accident returns.
4.Computer programme tobeprovidedby NIC taking into account the cr eria.
5.Computerizedgeneration of inspectionprogramma andcommunicationto theinspectingstaff keepingin view theconfidentiality aspects.
5General lnstJuctJa1s:
3 years (as ESIC has time bar of 5 years for claiming 1. The inspecting officer has tomaintainregisters of dues) the establishments.
2. ESIC would set up a Central Analysis and
IntelligenceUnit (CAIU) for collectingand analysing field level data for a transparent and accountable labour inspection system.The cases forwarded throughCentral Analysis & Intelligence Unit (CAIU) of ESICwill be based on data and evidence. ESIC will formulate an objective methodology for selectioncriteria of thecases by the CAlU keeping in view its priorities and the provisions of ILO C· 81.
2.He has to record the statement of workerspresent at the time of inspection.
3. In case of contradiction in the statements of er's,worker andentries intherecord, the inspecting
officer willseize therelevant records.
4. Inspection report should always be prepared on the work-spot by the inspecting officer himself and handover to the employer's representative.
5. The inspection should be carried out during the normalworking hours.
6. The inspectionreport is being simplifiedand under review/revision.
7. The inspection report shouldbeuploaded wtthin3 days by the inspector.
8.1ncase of violations by the inspecting staff,entries are recOI'ded InAPAR.
(Ajay Malik) Under Secretary to theGovt of India
New Delhi, Dated the 21st June,2014
58
59
60
61
62
63
Notifications issued by different State / UT Governments Under
Section 1(5) of ESI Act, 1948 reducing threshold of coverage to
10 persons in their respective States / UTs.
CONTENTS
Sr. No. Name of State
Govt. / UT
Gazette Notification No. & Date
Remarks
1 Andhra Pradesh 178, Part-1, Extraordinary dated 21/04/2011
2
Tripura No.F.21 (71) – LAB / ENF / ESI / 08 / 5740-43 dated 20/07/2011
3 Bihar No. ACS-01 / Ni-73 / 2010-65 dated 19/01/2011
4
Chhattisgarh
No.12, F-10-28/2010/16 dated 4/3/2011* Except Medical Institutions
5 Gujarat
Vol. LIII, Extraordinary No. GHR – 2012-04-ESI -18-2011688529-M(3) dated 3/1/2012
Except Medical & Educational Institutions.
6 Haryana No. 10 / 162 / 2010. 5lab dated 6/9/2011
7 Jammu & Kashmir SRO 80 dated 5/3/2012
8
Jharkhand 133 Extraordinary No. 1653 dated 11/2/2011
9 Karnataka No. LD 323 LSI 2010 dated 16/3/2011
10 Kerala Vol. LVI SRO No.425/2011 dated 28/6/2011
11
New Delhi 501, Extraordinary Part-II – Section-3-sub- section (ii) S.O.616 (E) dated 23/3/2011
12 Orissa No. SS-II-SC-42/2011/7752/LE dated 24/8/2011
13
Pondicherry
25 No. 7237 / Lab / K / 2010 dated 2/6/2011 Except Medical institutions.
14
Punjab Extraordinary No. 8/50/10-4HB4 / 2192 dated 14/7/2011.
15 Rajasthan Extraordinary, S.O. 546 dated 7/1/2011
16
Uttrakhand Part-12, No.31, 641. VII /11-479 (ESI)/2003 dated 7/6/2011
17
West Bengal Extraordinary, 10/2/2011, No.131-SS/2H-6/05 dated 1/2/2011.
18
Chhattisgarh
F 10-4/2011 / 16 dated 25/5/2011 Medical
Institutions 19
Madhya Pradesh
F No. 9-1-2004 – B-XVI dated 19/5/2011
Educational & Medical
Institutions
20 Goa No. Dated 5.09.2012 Expect education and Medical institutions
21 Tamilnadu No.II(2)/LE/52/2013 Dated: 2nd January, 2013 Expect education and Medical institutions
22 ASSAM,H.P.,U.P., & Maharashtra.
Awaited.
64
65
66
Morrt SIJNI K lll
DO 8 11·19T'
213S5,Gali No.g P&'ll1J<n>l Wts\Pale N1911
11UDI1hi·1100ill
• fSIC is issuingtmoovh·tech cards.Onefor theinsured personandanotlorhisfamilymembers.
• In future,our whole fami l y can avail fSICs complete medical facilities an1rwhere, an ime with
fSIC Pehchan Card.
IIn theabove camp,our and your lami's biometric details viz. finger Print Photograph etc. will
be taen in order to ensure biometric securi. So ensure, no one from your family i s leh out,
eve body comes to thecamp.
Advantage ESICs New Pehchan Card
t The facility to avai l treatment in any of the ESI Dispensaries I Hospitals across the country t
Pehchan Card valid for life, as per rules t No need of getting Pehchan Card again on
change of employment or cha nge of place of wor ng t More convenience for
Insured Persons • Hassle free amendment in your and your faMily members description t
In f uture, Insured Person's Medical Histoto be available online, with eve' ESIC imtitution
t faIdentif ication of lnsJred person and fam1ly members
mRr Gftarr
For further details, please contact
your employer or the nearestE IC office
• Employees'tate Insurance Corporation Paoc1oeepBllm c..G.M!], ew lleh.' tu002
\VilisWNN.e ;Jic.i·
67
68
PAYMENT OF WAGES ACT, 1936
The payment of wages act, 1936, is one of the old enactments dealing with employer-employee
relationship. But as the name of the Act indicates, it deals with a very limited aspect of that
relationship inasmuch as it regulates only the payment of wages to certain persons employed in
industry. The limited purpose of the Act is to ensure prompt and full payment of wages to persons
employed in industry.
Objective:-
The main objective of the Act is to avoid unnecessary delay in the payment of wages and to
prevent unauthorised deduction from the wages.
To regulates the payment of wages to certain classes of employed persons.
Applicability:-
1. Every person employed in any factory, upon any railway or through sub-contractor in a railway
and a person employed in an industrial or other establishment whose wages are upto Rs. 18,000/-
per month are covered or protected by the Act w.e.f. 08/08/2007
2. The State Government may by notification extend the provisions to any class of person employed
in any establishments or class of establishments.
Deductions:-
The Total deductions in any wage period shall not exceed 75% of wages in case of deductions
made to payment to co-operative societies and in all other cases 50 %.
Permissible Deductions:-
The Employer should not make any deduction from wages other than the following:-
1) Deductions from absence from duty.
2) Fines in respect of an act or omissions which has been approved by the Government and notified
at the factory or establishment. No fine should be imposed on an employee, unless he has been
given an opportunity of showing cause against the fine.
3) Deductions for damage or loss of goods or money, expressly entrusted to the employee‘s custody,
not exceeding the amount of actual damage or loss caused due to his neglect or default.
4) Deduction for house accommodation and other amenities or services as notified by the
Government, provided by the employer. The housing accommodation, amenity or service should
have been accepted by the employee as a term of employment or otherwise. The amount of
deduction should not exceed the value of the accommodation, amenity or service provided.
5) Deduction for recovery of advances and interest thereon shall be made in accordance with section
12 and the rules made by the state govt.
6) Deduction for recovery of loans made from any labour welfare fund, and housing loans, along
with interest thereon, shall be made in accordance with section 12A and the rules made by the
State Govt.
7) Deduction for income-tax payable by the employee
8) Deduction required to be made by order of a court or other competent from provident fund
69
9) Deduction for payment to co-operative societies approved by the Government, or an insurance
scheme of post office
10) Deductions can be made, with the written authorisation of the employee, for payment of any life
insurance premium, purchase of the government securities, etc.
11) Deductions with return authorisation to Prime Ministers National Relief Fund or such other
Notified Funds.
Limit of Deductions:-
The total amount of permissible deductions in any wage period should not exceed:-
a) In case where deductions are wholly or partly made for payment to co-operatives societies, 75%
of wages and
b) In any other case, 50 % of wages.
Claims for nonpayment of wages shall be filed before the Chief Judicial Magistrate (CJM):-
1) By employee himself in Form – A 2) On behalf of employee by any other person – in Form – B
3) By group of employees – in Form – C.
The claim should be field in duplicate within 12 months from due date before CJM (claim
authority). Penalties are provided in the act for violation. Appeal can be made against the orders
of CJM to the court of small causes and district courts.
Eligibility:-
The wages must be paid on a working day and not on a holiday.
In an employment which employs less
than 1000 persons
Before expiry of seventh day.
In any other case Before the expiry of tenth day after the last day of
the wages period.
In case of termination of
employment
Before the expiry of the second working day, after
the day of his termination.
Methods of Payment of Wages:-
Wages must be paid in current coin or currency notes or in both and not in kind. It is however,
permissible for an employer to pay wages by cheque or by crediting them in the bank account if so
authorised in writing by an employed person.
Benefits: - The Act prescribes for;
1. The regular and timely payment of wages (on or before 7th day or 10th day after last day of the
wage period in respect of which the wages are payable)
2. Preventing unauthorised deductions being made from wages and arbitrary fines.
70
Overtime Wages not to be taken into account:-
Wages means contractual wages and not overtime wages. They are not to be taken into account for
deciding the applicability of the act in the context of Sec.1(6) of the Act.
Recovery of Advances:-
1) An advance of wages shall not exceed four months wages
2) The advance may be recovered in installments by deductions from wages spread over not more
than 18 months
3) No installment shall exceed one-third of the wages for the month
4) The rate of interest charged for advances shall not exceed 6 ¼% per annum.
Registers to be maintained:-
1) Register of wage - Rule 5
2) Register of fine in Form 1 (Rule 3)
3) Display of notice of dates of payment not less than 2 months in advance
4) A Register of advances and recoveries in Form III (Rule 19)
Recent Court Judgment:-
1) Annual Increment:-
For some employees there are grades and scales of pay in the establishment and those who are in
supervisory cadre get consolidated salary. The employer ordinarily gives annual increment to the
workers in their scale of pay. But some year they go not get increment. The supervisors do not get
increment most of the times.
Are not all the employees entitled to annual increment regularly?
Where there is grade and scale of pay normally the increment will have to be given regularly.
There are various steps in the scale of pay and in each step the amount mentioned will have to be
given as annual increment by the employer. Annual increment means the increase in the wage
every year for the efficient way of performing work and recognition towards experience.
Whatever is the grade and scale of pay, the employer cannot deny the annual increment and it has
to be regularly given. The increment is protential wage increase. It cannot be withheld. But the
employee is appointed on a consolidated salary and the employee is no fitted in any scale of pay,
the employee cannot claim annual increment by way of his privilege or right. When the salary is
consolidated it is the discretion of the employer to give further raise or not. Depending upon the
efficiency and usefulness of the employee in the performance of work, ordinarily the employer
does not deny increment in salary unless the organisation has become economically weak.
2003 – IILN – 93 – RD Rajendran V/s. KTM abdul Khadar & Ors.
71
Non Payment of wages:-
1) Due to tough and aggressive competition, if a company / Establishment is not in position to pay
wages to workers. Can the Establishment withhold the wages of employees / workers?
A. No. The Supreme Court has held that a right to carry on business is subject to compliance of
constitutional obligations and, as such, financial stringencies may not be a ground for non –
payment of wages to the employees.
Summary:-
The main purpose of the Payment of Wages Act is to ensure regular and prompt payment of
wages and prevent exploitation of the wage earner by prohibiting unauthorised deductions from
wages. Persons drawing less than Rs. 18,000/- per month, in respect of a wage period, are covered
under the Act. The act applies to factories, railways, the construction industry, civil air transport
services, motor transport services, mines, plantations, oilfields, docks, and wharfs or jetties. The
act stipulates that wages must be paid within seven days from the date of expiry of the wage
period in establishments employing less than one thousand persons and within ten days in
establishments employing more than one thousands persons. The act lays down a list of
authorised or permissible deductions and specified conditions for their imposition. It has laid
down machinery for enforcement of different provisions of the act and also penalties for
contravention of its provisions.
72
FORM IV
Abstract of the Payment of Wages Act, 1936, and the Rules made there under
Whom the Act affects:
1. The Act applies to the payment of wages to persons in this factory receiving less than Rs.1600 a month 2. No employed person can give up by contract or agreement his rights under the Act. 3. *Wages, means all remuneration payable to an employed person on the fulfilment of his contract of
employment. − It includes bonus and any sum payable for want of a proper notice of discharge.
− It excludes – a) The value of house-accommodation, supply of light, water, medical attendance, or other amenity or of
any service excluded by the Central Government; b) The employer‘s contribution to a pension or provident fund; c) Travelling allowance or concession or other special expenses entailed by the employment; d) Any gratuity payable on discharge.
Responsibility for and Method of Payment:
4. The manager of the factory is responsible for the payment under the Act of wages to persons employed
under him and any contractor employing persons is responsible for payment to the persons he employs. 5. Wage-periods shall be fixed for the payment of wages at intervals not exceeding one month. 6. Wages shall be paid on a working day within 7 days of the end of the wage-period (or within 10 days if
1,000 or more persons are employed). The wages of a person discharged shall be paid not later than the second working day after his discharge.
7. Payments in kind are prohibited.
Fines and Deductions:
8. No deduction shall be made from wages except those authorized under the Act (see Paragraphs 9-15
below). 9. (1) Fines can be imposed only for such acts and omissions as the employer may, with the previous
approval of the Supervisor, specify by a notice displayed at or near the main entrance of the factory and after giving the employed person an opportunity for explanation.
(2) Fines – a) Shall not exceed three per cent of the wages payable to him in respect of that wage period in which fine
imposed. b) Shall not be recovered by installments, or later than sixty days of the date of imposition. c) Shall be recorded in a register and applied to such purposes beneficial to the employed persons
approved by the Supervisor.
10. (a) Deduction for absence from duty can be made only on account of the employed person at times when
he should be working and such deductions must not exceed an amount which is in the same proportion to his wages for the wage-period at the time he was absent in that period is to the total time he should have been at work.
(b) If ten or more employed persons, acting in concert, absent themselves without reasonable cause and
without due notice, the deduction for absence can include wages for eight days in lieu of notice, but –
73
(1) No deduction for breaking a contract can be made from a person under 15 or a woman; (2) There must be a provision in writing which forms part of the contract of employment, requiring that a
specific period of notice of intention to cease work not exceeding 15 days or the period of notice which the employer has to give to discharge a worker, must be given to the employer and that wages may be deducted in lieu of such notice;
(3) The above provision must be displayed at or near the main entrance of the factory; (4) No deduction of this nature can be made until a notice that this deduction which is to be made has been
posted at or near the main entrance of the factory; (5) No deduction must exceed the wages of the employed person for the period by which the notice he
gives of leaving employment, is less than the notice he should given under his contract.
11. Deductions can be made for damage to or loss of goods expressly entrusted to an employed person or
for loss of money for which he is required to account, where such damage or loss is due to his neglect or default. Such deduction cannot exceed the amount of the damage or loss caused and can be made only after giving the employed person an opportunity for explanation.
12. Deductions can be made, equivalent to the value thereof, for house-accommodation, amenities or
services (other than tools and raw material) supplied by the employer provided these are accepted by the employed person as a part of the terms of his employment and have in the case of amenities and services been authorized by order of the Central Government.
13. (a) Deductions can be made for the recovery of advances or for adjustment of over-payment of
wages. (b) Advances made before the employment began can only be recovered from the first payment or wages
for a complete wage-period but no recovery can be made of advances given for travelling expenses before employment began.
(c) Advances of unearned wages can be made at the paymaster‘s discretion during employment.
14. Deductions can be made for subscription to and for repayment advances from any recognized provident fund.
15. Deductions can be made for payments to cooperative societies approved by the Central Government or
to the postal insurance, subject to any conditions imposed by the Central Government.
Inspections: 16. An Inspector can enter in any premises, and can exercise powers of inspection (including examination of
documents and taking of evidence) as he may deem necessary for carrying out the purposes of the Act.
Complaints of Deductions or Delays: 17. (a) Where irregular deductions are made from wages or delays in payment take place, an employed
person can make an application in the prescribed form within 6 months to the Authority appointed by the local Government for the purpose. An application delayed beyond this period may be rejected unless sufficient cause for the delay is shown.
(b) Any legal practitioner, official of a registered trade union, Inspector under the Act, or other person acting with the permission of the Authority can make the complaint on behalf of an employed person.
(c) A single application may be presented by or on behalf of number of persons belonging to the same factory, the payment of whose wages has been delayed.
Action by the Authority: 18. The Authority may award compensation to the employed person in addition to ordering the payment of
delayed wages or the refund of illegal deductions. If a malicious or vexatious complaint is made, the Authority may impose a penalty not exceeding Rs.50 on the applicant and order that it be paid to the employer.
74
Appeal against the Authority: 19. An appeal in the prescribed form against a direction made by the Authority may be preferred within 39
days in Madras, Bombay, Calcutta, to the Court of Small Causes and elsewhere to the District Court – a. By the paymaster if the total amount directed to be paid exceeds Rs.300; b. By an employed person, if the total amount of wages withheld from him or his co-workers exceeds
Rs.50; c. By a person directed to pay a penalty for a malicious or vexatious application. (A) Payment of undisbursed wages:- (1) If all amounts payable to an employed person as wages could not or cannot be paid on account of his
death before payment or on account of his whereabouts not being known, shall be paid to the person nominated by him in this behalf.
(2) Where wages remain undisbursed because no nomination had been made by the employed person or for any reason such amounts could not be paid to the nominee of the employed person until the expiry of three years from the date the same had become payable all amounts of such undisbursed wages shall be transferred by the accounts officer to the Staff Benefit Fund before the expiry of the fifteenth day after the last day of the said period of three years.
(B) Manner of dealing with deposited amounts – The amounts of undisbursed wages deposited with the Chairman Staff Benefit Fund shall be applied by him to meet the expenditure for the purpose prescribed for the Staff Benefit Fund.
20. Anyone delaying the payment of wages beyond the due date, or making any unauthorized deduction
from wages is liable to a fine up to Rs.500 only if prosecuted with the sanction of the Authority or the Appellate Court.
21. The paymaster who – a. Does not fix a wage-period, or b. makes payment in kind, or c. fails to display at or near the main entrance of the factory this abstract in English and the language of the
majority of the employed persons, or d. breaks certain rules made under the Act, is liable to a fine not exceeding Rs.200. A complaint to this effect can be made only by the Inspector or with
his sanction.
75
DEFINITION OF WAGES UNDER VARIOUS ACT
Act Inclusion Exclusion
Employees‘ State Insurance Act, 1948
Basic + D. A. / Special Allowances & All other Allowances = Gross Salary
Except Washing Allowances (where Cloth & Stitching are provided)
Payment of Wages Act, 1936
Basic + D. A. / Special Allowances & All other Allowances = Gross Salary
The Minimum Wages Act, 1948
Basic + D. A. / Special Allowances & All other Allowances = Gross Salary
The Payment of Bonus Act, 1965
Basic + D.A.
All other Allowances.
Payment of Gratuity act, 1972
Basic + D.A.
All other Allowances.
The Employees Provident Funds & Miscellaneous Provision Act, 1952
Basic + D.A.
All other Allowances.
Factories Act, 1948
Basic + D. A. / Special Allowances & All other Allowances = Gross Salary
The Bombay Shops & Establishment Act, 1948
Basic + D. A. / Special Allowances & All other Allowances = Gross Salary
The Mumbai Labour Welfare Fund Act, 1953
Basic + D. A. / Special Allowances & All other Allowances = Gross Salary
Maharashtra Worker‘s Minimum H.R.A. Act, 1983
5%, on Basic + D. A.
All other Allowances.
Maharashtra Profession Tax Act, 1975
Basic + D. A. / Special Allowances & All other Allowances = Gross Salary
The Contract Labour Act, 1970 Basic + D. A. / Special Allowances & All other Allowances = Gross Salary
The Maternity Benefit Act, 1961 Basic + D. A. / Special Allowances & All other Allowances = Gross Salary
76
Notice for absent from duty after completion of sanction leave or remaining absent from work without any permission / sanction from the employer.
To: FIRST NOTICE
BY REGD. A.D.
Date:
It is reported that you are absenting yourself with effect from without obtaining prior sanction of leave. You are directed to report for duty alongwith an explanation for your absence within three days on receipt of the notice, failing which we will draw a presumption that you are no longer interested in the employment.
Signature & stamp of Employer
To: .
SECOND NOTICE
BY REGD. A.D.
Date:
This is in continuation to our notice-dated 29/11/2001, where in you were called upon to report for duty along with an explanation within three days. However, deposited receipt of the notice, you have failed to make compliance. It is therefore obvious that you are not interested in the employment. Before we draw a presumption to this effect, we give you this final resumption of duty within three days, failing which we will be within our rights to draw an irresistible presumption that you are no longer interested in the employment.
The above notice is without prejudice to our rights for taking disciplinary action for your
willful absence & when you report to us.
Signature & Stamp of Employer
77
To: .
THIRD NOTICE
BY REGD. A.D.
Date:
This is in continuation of our notice dated 29/11/2001 &24/12/2001. We regretted to point out that you have failed to make the compliance i.e. neither you have reported for duty nor submitted any explanation. We have clearly notified to you that in case you will not make the compliance, we will draw a presumption that you are no longer interested in the employment. Accordingly, you are deemed to have abandoned the employment of your own accord W.E.F. & you are advised to settle your account & handover the charge on any working day.
Signature & Stamp of Employer
78
Maharashtra State New Minimum Wages Chari
for the period from 01/07/2014 to 31/12/2014
(Basic+ Special Allowance) (FOR SELECTED INDUSTRIES)
(1. Respective Special Allowance (D.A.) given after Industry at the top.
2. The Rates are·Per Month')
FROM 1.7.2014 TO 31.12.2014
ADVOCATE OR ATTORNEYS Rs.1876.00 Special Allowance
Zone Skilled Semi-Sk Un-Skilled
I 9776.00 9076.00 8576.00
fl 9376.00 8676.00 8176.00
AUTOMOBILE REPAIRING Rs.2800.00 Special Allowance
Catego_ry Zone I Zone II Zone 111
Skilled 8300.00 8000.00 7700.00
S-5killed 7900.00 7600.00 7300.00
Un-Skilled 7600.00 7300.00 7000.00
BAKERIES Rs.2913.75 Special Allowance
Category Zone I Zone II Zone Ill
Skilled 8113.75 7913.75 7713.75
5-Skilled 7613.75 7413.75 7213.75
Un-Skilled 7113.75 6913.75 6713.75
CANTEEN & CLUBS Rs.1652.00 Special Allowance
Zone Skilled 5-Skilled Un-Skilled
I 9352.00 8652.00 8152.00
II 9052.00 8352.00 7852.00
Ill 8852.00 8152.00 7652.00
CARD BOARD BOXES Rs.2376.00 Special Allowance
Zone I II Ill
Skilled 7026.00 6776.00 6526.00
Semi-Skilled 6776.00 6526.00 6276.00
Un-Skilled 6526.00 6276.00 6026.00
CEMENT & CEMENT Rs.3398.40 Special Allowance
Zone II Ill
Skilled
Semi-Skilled
Un-Skilled
79
CHEMICAL FERTILIZERS Rs.2640.00 Special Allowance
Zone Skilled Semi-Sk Un-Skilled
I 8240.00 7740.00 7240.00
II 8040.00 7540.00 7040.00
Ill 7840.00 7340.00 6840.00
CINEMA EXHIBITION Rs.2742.95 Special Allowance
Class of Employees Multiplex Zone I Zone II Touring talkies
Skilled 8242.95 7742.95 7242.95 6742.95
Semi-Skilled 7742.95 7242.95 6742.95 6242.95
Un-Skilled 7242.95 6742.95 6242.95 5742.95
CLOTH DYEING & PRINTING Rs.2913.75 Special Allowance
Zone Skilled Semi-Sk. Un-Skilled
I 7813.75 7313.75 7013.75
II 7513.75 7013.75 6713.75
CONSTRUCTION OF ROADS/BUILDINGS Rs.2094.50 Special Allowance
Zone Skilled Semi-Sk Un-Skilled
I 12194.50 11494.50 10994.50
II 11794.50 11094.50 10594.50
Ill 11394.50 10694.50 10194.50
COTTON GINNING OR COTION PRESSING Rs.2625.00 Special Allowance
Class of Employees Zone I Zone II Zone Ill
Skilled 7825.00 7625.00 7425.00
Semi-Sk 7325.00 7125.00 6925.00
Un-Skilled 6825.00 6625.00 6425.00
CYCLE MECHANIC Rs.2520.00 Special Allowance
Zone Skilled Semi-Sk Un-Skilled
Zone I 8020.00 7520.00 7020.00
Zone II 7520.00 7020.00 6520.00
DAIRY Rs.2750.00 Special Allowance
Zone Skilled S-Skilled Un-Skilled
I 8250.00 7750.00 7250.00
II 8000.00 7500.00 7000.00
Ill 7750.00 7250.00 6750.00
DISPENSARY Rs.2923.30 Special Allowance
Zone Skilled Semi-Sk Un-Skilled
I 7583.30 7483.30 7383.30
II 7183.30 7083.30 6983.30
Ill 6683.30 6583.30 6483.30
80
DRUGS & PHARMACEUTICALS Rs.1652.00 Special Allowance
Zone Skilled Semi-
Skilled
Un-Skilled
I 9352.00 8652.00 8152.00
II 9052.00 8352.00 7852.00
Ill 8852.00 8152.00 7652.00
DYES & CHEMICALS Rs.2921.45 Special Allowance
Zone Skilled Semi-Sk Un-Skilled
I 7721.45 7421.45 7121.45
II 7321.45 7021.45 6721.45
Ill 6721.45 6421.45 6121.45
ENGINEERING Rs.1652.00 Special Allowance
Zone Zone I Zone II Zone Ill
Skilled 9452.00 9252.00 8852.00
Semi-Skilled 8752.00 8552.00 8152.00
Un-Skilled 8252.00 8052.00 7652.00
EXERCISE BOOKS Rs.2923.30 Special Allowance
Zone I Zone II Zone Ill
Skilled 6003.30 5803.30 5603.30
Semi-Skilled 5903.30 5703.30 5503.30
Un-Skilled 5803.30 5603.30 5403.30
FOUNTAIN PENS Rs.3116.50 Special Allowance
Zone Skilled Semi-Sk Un-
Skilled
I 8416.50 8166.50 7916.50
II 8216.50 7966.50 7716.50
FACTORIES UNDER F.A. Rs. 2520.00 Special Allowance
Zone Skilled Semi-Sk Un-Sk.
I 8020.00 7520.00 7020.00
II 7720.00 7220.00 6720.00
Ill 7420.00 6920.00 6420.00
FILM PRODUCTION Rs. 2880.00 Special Allowance
Zone Skilled Semi-Sk Un-Sk.
I 8580.00 8080.00 7580.00
II 8380.00 7880.00 7380 00
81
FOREST ANC FORESTRY Rs.2255.00 Special Allowance
Skilled Semi-Sk Un·Skllled
Highly Remote Areas 8255.00 7855.00 7455.00
Other Areas 7755.00 7355.00 6955.00
GLASS BULB Rs.1662.00 Special Allowance
Zone Skilled Semi-Sk Un-Skilled
I 9452.00 8752.00 8252.00
II 9252.00 8552.00 8052.00
Ill 8852.00 8152.00 7652.00
GL.ASS INDUSTRY Rs.1652.00 Special Allowance
Zone Skilled Seml-sk Un-skilled
I 9352.00 8652.00 8152.00
II 9052.00 8352.00 7852.00
Ill 8852.00 8152.00 7652.00
HAIR CUTTING SALOON Rs.1652.00 Special Allowance
Zone Skilled Semi-Sk Un-skilled
I 9352.00 8652.00 8152.00
II 9052.00 8352.00 7852.00
Ill 8552.00 7852.00 7352.00
HANDLOOM Rs.2125.00 Special Allowance
Zone Skilled S-Skilled Un-Skilled
I Upto 50 looms 6125.00 5625.00 5125.00
II 51 to 100 looms 6625.00 6125.00 5625.00
Ill Above 100 looms 7125.00 6625.00 6125.00
HOSPITAl. Rs.2398.50 Special Allowance
Zone Skilled Semi-Sk Un-Skilled
I 8598.50 8098.50 7698.50
II 8398.50 7898.50 7498.50
Ill 8198.50 7698.50 7298.50
HOTEL & RESTAURANTS Rs.1652.00 Special Allowance
Zone Skilled Semi-Sk Un-Skilled
I 9352.00 8652.00 8152.00
II 9052.00 8352.00 7852.00
Ill 8852.00 8152.00 7652.00
82
ICE & COLD DRINKS Rs.2014.20 Special Allowance
Zone Skilled Semi-Sk Un-Skilled
I 8014.20 7514.20 7014.20
II 7714.20 7214.20 6714.20
LAUNDRY Rs.1652.00 Special Allowance
Zone Skilled Semi-Sk Un-Skilled
I 9352.00 8652.00 8152.00
II 9052.00 8352.00 7852.00
Ill 8852.00 8152.00 7652.00
LIQUOR INDUSTRIES Rs.2923.30 Special Allowance
Zone I II Ill
Skilled 7033.30 6733.30 6433.30
Semi-Sk 6933.30 6633.30 6333.30
Un-Skilled 6833.30 6533.30 6233.30
OIL MILLS Rs.2913.75 Special Allowance
Category Zone I Zone II
Skilled 8213.75 7913.75
S-Skilled 7713.75 7413.75
Un-Skilled 7213.75 6913.75
OPTICAL FRAMES Rs.2592.00 Special Allowance
Zone Skilled Semi-Sk Un-Skilled
I 8192.00 7692.00 7192.00
II 7992.00 7492.00 6992.00
Ill 7792.00 7292.00 6792.00
PAINTS & VARNISHES Rs.2923.30 Special Allowance
Zone Skilled Semi-Sk Un-Skilled
I 6863.30 6763.30 6663.30
II 6663.30 6563.30 6463.30
Ill 6463.30 6363.30 6263.30
PAPER AND PAPER BOARD Rs.2357.50 Special Allowance
Zone Skilled Semi-Sk Un-Skilled
I 8457.50 7957.50 7457.50
II 8257.50 7757.50 7257.50
Ill 8057.50 7557.50 7057.50
83
PLASTICS Rs. 2520.00 Special Allowance
Zone Skilled Semi-Sk Un-Skilled
I 7820.00 7320.00 6820.00
II 7670.00 7170.00 6670.00
Ill 7520.00 7020.00 6520.00
POHA,KURMURA Rs. 2913.75 Special Allowance
Zone Skilled Semi-Skilled Un-Skilled
I 7313.75 7163.75 6713.75
II 7113.75 6963.75 6513.75
POTTERIES (MATICHI BHANDI) Rs.2200.00 Special Allowance
Zone I Zone II Zone Ill
Skilled 6100.00 5950.00 5800.00
Semi-Skilled 5900.00 5750.00 5600.00
Un-Skilled 5700.00 5550.00 5400.00
POWERLOOMS (Employees) Above 184/- Rs.6433.00 Special Allowance
Zone Skilled-A Skilled-B Semi-Sk Un-Skilled Manager Accountant Clerk
I 6733.00 6703.00 6673.00 6663.00 6783.00 6733.00 6683.00
II 6683.00 6653.00 6623.00 6613.00 6733.00 6683.00 6633.00
Ill 6633.00 6603.00 6573.00 6563.00 6683.00 6633.00 6583.00
POWERLOOMS (Employees) below 184/- Rs.4503.10 Special Allowance
Zone Skilled-A Skilled-B Semi-Sk Un-Sk. Manager Accountant Clerk
I 4803.10 4773.10 4743.10 4733.10 4853.10 4803.10 4753.10
II 4753.10 4723.10 4693.10 4683.10 4803.10 4753.10 4703.10
Ill 4703.10 4673.10 4643.10 4633.10 4753.10 4703.10 4653.10
PREMISES WHEREIN BUFFALOES OR COWS ARE KEPT Rs.3137.20 Special Allowance
Zone Skilled Semi-Sk. Un-Sk.
I 7037.20 6737.20 6437.20
II 6687.20 6412.20 6137.20
Ill 6337.20 6087.20 5837.20
PRINTING PRESS Rs.2923.30 Special Allowance
Zone Skilled Semi-Sk Un-Sk.
I 7523.30 7423.30 7323.30
II 7223.30 7123.30 7023.30
Ill 6623.30 6523.30 6423.30
84
PUBLIC MOTOR TRANSPORT Rs.2913.75 Special Allowance
Zone Skilled-A Skilled-8 Skilled-C Semi-Sk Un-Skilled
I 8613.75 8413.75 8213.75 7513.75 7113.75
II 8413.75 8213.75 8013.75 7313.75 6913.75
READYMADE GARMENTS Rs.2923.30 Special Allowance
Zone Skilled Semi-Sk Un-Skilled
I 7083.30 6983.30 6883.30
II 6983.30 6883.30 6783.30
Ill 6683.30 6583.30 6483.30
RICE FLOUR & DAL MILLS Rs.2913.75 Special Allowance
Zone Skilled Semi-Sk. Un-Skilled
I 7513.75 7013.75 6713.75
II 7313.75 6813.75 6513.75
RUBBER INDUSTRIES Rs.1652.00 Special Allowance
Zone Skilled Semi-Sk Un-Skill
I 9352.00 8652.00 8152.00
II 9052.00 8352.00 7852.00
Ill 8852.00 8152.00 7652.00
RUBBER BALLOON Rs.2913.75 Special Allowance
Zone I Zone II Zone Ill
Skilled 7213.75 7113.75 7013.75
Semi-Sk 7013.75 6813.75 6713.75
Un-Skilled 6713.75 6613.75 6513.75
SALT PAN INDUSTRY Rs.2520.00 Special Allowance
Highly-skilled 7520.00
Skilled 7120.00
Semi-Skilled 6820.00
Un-Skilled 6520.00
SAW MILLS Rs.2520.00 Special Allowance
Zone I Zone II Zone Ill
Skilled 7920.00 7720.00 7520.00
Semi-Sk 7420.00 7220.00 7020.00
Un-Sk. 6920.00 6720.00 6520.00
85
Zone I Zone II Zone Ill
Skilled 8014.00 7714.00 7414.00
Semi-Skilled 7614.00 7314.00 7014.00
Un-Skilled 7214.00 6914.00 6614.00
Zone Skilled Semi-Sk Un-Sk.
I 8140.00 7640.00 7140.00
II 7840.00 7440.00 6940.00
Zone Skilled Semi-Sk Un-Sk.
I 9352.00 8652.00 8152.00
II 9052.00 8352.00 7852.00
Ill 8752.00 8052.00 7552.00
Zone
Skilled
Semi-Sk.
Un-Sk.
I
6763.30 6663.30 6563.30
II 6563.30 6463.30 6363.30
Ill 6363.30 6263.30 6163.30
Zone Skilled Semi-Sk. Un-Sk.
I 7595.50 7095.50 6795.50
II 7395.50 6895.50 6595.50
SEEPZ Rs.2466.20 Special Allowance
Zone I
Skilled 8766.20
Semi-Sk 8266.20
Un-Sk. 7766.20
SHOPS & COMMERCIAL ESTB. Rs.2214.00
SILVER ARTICLES OR ORNAMENTS INDUSTRY Rs.2640.00
SOAPS & COSMETICS Rs.1652.00
STEEL FURNITURE Rs.2923.30
STONE BREAKING Rs. 2845.50
SWEEPERS OR SCAVENGERS Rs.2625.00
Special Allowance
Special Allowance
Special Allowance
Special Allowance
Special Allowance
Special Allowance
Category
Zone I
Zone II
Zone Ill
Full time
7225.00
7075.00
6925.00
86
Zone
Skilled
Semi-Sk.
Un-Sk.
I 7423.30 7323.30 7223.30
II
7323.30 7223.30 7123.30
Ill
7023.30 6923.30 6823.30
Zone Skilled Semi-Sk. Un-Sk.
I 8575.00 7875.00 7375.00
II 8375.00 7675.00 7175.00
Ill 7775.00 7075.00 6575.00
Zone Skilled Semi-Sk. Un-Sk.
I 8413.75 8013.75 7713.75
II 8113.75 7713.75 7413.75
Ill 7813.75 7413.75 7113.75
Zone Skilled Semi-Sk. Un-Sk.
I 9352.00 8652.00 8152.00
II 9052.00 8352.00 7852.00
Ill 8852.00 8152.00 7652.00
TANNERIES & LEATHER Rs.2923.30 Special Allowance
Zone Skilled Semi-Sk. Un-Sk.
I 6323.30 6223.30 6123.30
II 6123.30 6023.30 5923.30
Ill 5923.30 5823.30 5723.30
UTENSILS Rs.2923.30
VILLAGE PANCHAYAT Rs.1475.00
WATCH STRAPS Rs.2913.75
WOODEN PHOTO FRAMES Rs.1652.00
WOODEN FURNITURE Rs.1652.00
Special Allowance
Special Allowance
Special Allowance
Special Allowance
Special Allowance
Zone Skilled Semi-Sk. Un-Sk.
I 9252.00 8552.00 8052.00
II 9052.00 8352.00 7852.00
Ill 8852.00 8152.00 7652.00
87
No. Rs. Ps Rs. Ps Rs. Ps Rs. Ps
1. Advocate and Attorney · P.M. 1876.00 1876.00 1876.00
2. Automobile Repairing P.M. 2800.00 2800.00 2800.00
3. Bakeries P.M. .·. 2913.75 2913.75 2913.75
4. Bricks or Roof Tiles P.M. 1890.00 1890.00
5. Canteen & Clubs P.M.· 1652.00 1652.00 1652.00
6. Card'Ho.ard Boxes P..
..
J
2376.00 2376.00 2376.00
7. Cashew Processi g P/M. 2205.00 (Whole St ate of Maharashtra)
8. Cement & Cement Based Industry .M. \
3398.40 3398.40 3398.40
9. Chemical Fertilizers f. · 2640.00 2640.00 2640.00
10. Cinema Exhibition .....
'tl.k1. 2742.95 2742.95 2742.95 2742.95
11. Cloth Dyeing & Printing P.M. 2913.75 2913.75
12. Construction of Roads/Buildings P.M. 2094.50 2094.50 2094.50
13. Cotton Ginning & Pressing P.M. 2625.00 2625.00 2625.00
14. Cycle Mechanic Work Shops P.M. 2520.00 2520.00
15. Dairy P.M. 2750.00 2750.00 2750.00
16. Dispensary P.M. 2923.30 2923.30 2923.30
17. Drugs & Pharmaceuticals P.M. 1652.00 1652.00 1652.00
18. Dyes & Chemical s P.M. 2921.45 2921.45 2921.45
19. Eatable Tobacco P.M. 2497.50 (Whole State of Maharashtra)
20. Engineering Industry P.M. 1652.00 1652.00 1652.00
21. Exercise Books P.M. 2923.30 2923.30 2923.30
22. Factories under Factories Act
(Residuary) P.M. 2520.00 2520.00 2520.00
23. Film Production Studio P.M. 2880.00 2880.00 ----------
24. Forest & Forestry P.M. 2255.00 2255.00
---------
Highly Other
Remote Areas
Area
Special Allowance in Maharashtra State
The rate of Special Allowance f9r the period from
1.7.2014 to 31.12.2014
Special Allowance for Zone
Sr. Name of the Scheduled Employment Period II III IV
•
..
88
--··----·
2214.00 2214.00 --------..
Special Allowance for Zone
Sr. Name ot the Scheduled Employment Period II Ill IV
No. Rs.Ps Rs. Ps Rs.Ps Rs. Ps
25. l'ountain Pen & Hall Pen P.M. 3116.50 3116.50 3116.50 ............ .
26 (ill ' l-3'11b P.M. 1652.00 1652.00 1652.00 ----------
28. Hair Cutting. Saloon P.M. 1652.00 1652.00 1652.00 .................
29. I landloo•n P.M. 2125.00 2125.00 2125.00 ---- -------
30. Hospital P.M. 2398.50 2398.50 2398.50 ...................
31. I !ole) & Restaurants P.M. 1652.00 1652.00 1652.00 .....................
32 Jc..- 8: Cold Drinb P.M. 2014.20 2014.20 ---------- ---------
33 :t !!hh P.M. 1652.00 1652.00 1652.00 ··-------
34. t :,,u\l' Industrie" P.M. 2923.30 2923.30 2923.30 ---------
35 OJ 1\ l!'l P.M. 2913.75 2913.75 ---------- ---------
36. Opt i<.:al Fram :-; P.M. 2592.00 2592.00 2592.00 -------·-
37. Paints and Varn ishes P.M. 2923.30 2923.30 2923.30 ---------
38. Paper and Paper Board P.M. 2357.50 2357.50 2357.50 ----···-·
39. Plast1c P.M . 2520.00 2520.00 2520.00 ---------
40. Pol a. t-.urmura P.M. 2913.75 2913.75 ---------- ---------
41. Potteries (Matichi Bhand i) P.M. 2200.00 2200.00 2200.00 -----···-
42. Powerlooms (Employees who arc paid P.M. 6433.00 6433.00 6433.00 ---------
Rs.l84/- above basic wages)
Pt'''·-:rlooms (Empl oyees who arc paid P.M. 4503.10 4503.10 4503.10 ---------
k .-: than Rs.l84/- a:-. basic wages)
43. 1\ ·lflis .·for Buffaloes or CO\VS P.M. 3137.20 3137.20 3137.20 ·······---
44. J>r rtlfH' Pn.:-;·.; P.M. 2923.30 2923.30 2923.30 -----·---
45 P·JI,Ii · \ lnl\):· f'ranspon P.M. 2913 .75 2913.75 ---------- -------- .. ...
ym<-.t6d.e C iarm!\ e.·nadts P.M. 2923.30 2923.30 2923.30
47. l ic. Flour or Dal Mi l l P.M. 2913.75 2913.75 ---------- ---------
48. Rubber Bal loon P.M. 2913.75 291 3.75 2913.75 --------·
49. Ruhber I nd ustry P.M. 1652.00 1652.00 1652.00 ---------
50. Salt Pan I ndustry P.M. 2520.00 --------- ---------
51. S,t'.l 1\lills P.M. 2520.00 2520.00 2520.00 ---------
52. \..:l·pz P.M. 2466.20
53. Shops & Com mercial Establish ments P.M. 2214.00
89
90
91
THE PAYMENT OF BONUS ACT, 1965
� General :-
The payment of Bonus Act, 1965 gives to the employees a statutory right to a share in the
profits of his employer. Prior to the enactment of the Act some employees used to get
bonus but that was so if their employers were pleased to pay the same.
� Object :-
The object of the Act is to maintain peace and harmony between labour and capital (i.e.
employees & employers) by allowing the employees to share the prosperity of the
establishment reflected by the profits earned by the contributions made by capital,
management and labour.
� Applicability :-
The Act is applicable to
a) Every factory
b) Every other establishment employing 20 (Twenty) or more persons.
c) The Government of Maharashtra by notification dt:- 11th April 1984 has made
applicability of Bonus Act where 10 or more persons employed in any establishment or
Factory.
• The Government can, however, apply the Act to any establishment employing less than 20
but not less than 10 persons.
• Once the Act applies it shall continuously remain in force irrespective of number of
employees fall in number i.e. once covered always covered.
� What about Public Sector?
Public sector establishment which sells any goods produced or manufactured by it or
renders any services in competition with private sector and earns income from such sell or
services shall be covered by the Act.
� Eligibility :-
Every employee who is drawing a salary or wages up to Rs.10, 000/- per month and has
worked for a minimum period of 30 days in a particular year is entitled to get Bonus. As
per above ceiling all employees drawing wages up to Rs.10,000/- per month shall be
eligible for Bonus irrespective of his grade/ designation i.e. manager / part-time / casual /
seasonal employee etc.(w.e.f. 01/04/2006)
� On what Salary / Wages Bonus is payable :-
For the purpose of calculation of Bonus Salary or Wages includes Basic Salary, Dearness
Allowance / Special Allowance only, but does not include other allowances such as
Overtime, House Rent Allowance, Conveyance, Travelling Allowance, Monthly Bonus,
Contribution to Provident Fund, Retrenchment compensation, Gratuity or commission.
92
� Calculation of Bonus :-
1. The employee who is drawing salary or wages not exceeding Rs.3,500/- per month is
entitled to get bonus on entire salary or wages.
2. The employee who is drawing salary or wages between Rs.3,501/- per month and
Rs.10000/- per month, the Bonus payable to him is to be calculated as, if his salary or
wages were Rs.3,500/- per month. An employee getting a salary or wage exceeding
Rs.10000/- per month is not at all entitled to get Bonus as per payment of Bonus Act.
� Minimum & Maximum Bonus :-
1) The employer is bound to pay his employees every year a minimum Bonus of @ 8.33%
of the yearly salary or wage or Rs.100/- which, ever is higher, whether he has allocable
surplus or not. If any year the allocable surplus exceeds the amount of Minimum Bonus
payable to the employees, the maximum Bonus payable by the employer to his
employee in that particular year is @ 20% of the yearly salary or wages.
2) Hence, Bonus is payable to the employee between 8.33% & 20% as per availability of
allocable surplus.
3) An employer is disabled from paying bonus in excess of 20% even if bonus is linked
with production or productivity.
1. Available Surplus & Allocable Surplus :-
The Bonus payable under the Act is linked with profits of the company. The employer has
to calculate *Gross Profit, of his establishment in the manner specified in section 4. Than
from Gross Profit so calculated he has to deduct the sums referred to in section 6 as prior
charges. The balance amount is called available surplus i.e. a percentage of available
surplus calculated in accordance with the provisions of sub-section (4) of section 2 is called
allocable surplus.
Where, allocable surplus exceeds the amount of minimum Bonus payable to the employee,
the Employer must pay to every employee in respect of that year Bonus in proportion to the
salary or wages earned by the employee during the year subject to maximum of 20% of
such salary or wage.
2. What is Set On & Set Off of Allocable Surplus :-
Set On:-
Where for any year the allocable surplus exceeds the amount of maximum Bonus payable
to the employees, than the excess shall (subject to limit of 20% Bonus of total salary /
wages) be carried forward for being set on in the succeeding year and so on to be utilized
for the purpose of Bonus.
Set Off:-
Where for any year there is no surplus in respect of that year falls short of the amount of
minimum Bonus payable i.e. 8.33% to the employees and there is no amount or sufficient
amount carried forward and Set On which could be utilized for the purpose of minimum
93
Bonus, than such minimum amount or the deficiency as the case may be shall be carried
forward for being Set Off in succeeding year and so on.
3. Deductions from Bonus :-
1. In any year the employer has paid any amount to an employee as customary / pooja bonus than
he can deduct such amount from Bonus payable to the employee for that year
2. If any employee is found guilty or misconduct causing financial loss to the employer can
deduct the amount of loss from the amount of Bonus payable to the employee for the
year in which he was found guilty of misconduct.
4. Time limit for payment of Bonus :-
1. Bonus must be paid within a period of 8 months from the close of accounting year as per
Income Tax Act i.e. April to March.
2. If any dispute about the payment of Bonus pending before any authority than Bonus
must be paid within one month from the date of Awards.
5. Remedy for recovery of Bonus :-
If any employer fails to pay Bonus to the employee, he can make the application for his
recovery of Bonus to the competent Authority & Authority issues a certificate to the
collector to recover the same as an arrears of land revenue i.e. Attachment of Property &
Assets. However, the time limit for application to the Authority is within one year from the
date on which Bonus amount became due.
6. Productivity Bonus :-
Bonus paid on production or productivity or under a formula different from that under the
Act can be allowed but subject to the Provisions of the Act in respect of the payment of
minimum or maximum Bonus. However, Attendance Bonus or any other allowances are
outside the purview of payment of Bonus Act.
If a Management has a number of departments, under takings or branches, should they
be treated as separate establishments or as one composite establishment?
If an establishment consist of different departments or undertaking or has branches,
whether situated in the same place or in different places, unless a separate balance-sheet
and profit and loss account are prepared and maintained in respect of them, all such
departments or undertaking or branches should be treated as parts of the same
establishments for the purpose of computation of bonus, and once they are treated as parts
of the same establishment, they should be continued to be treated as such.
7. Contractors Employees Bonus Payable???
Section 32 provides that the Act shall not apply to certain classes of employees clause (vi) of
the said section refers to *employees employed through contractors on building operation,.
This clause is deleted by the Payment of Bonus Amendment Ordinance, 2007 with
retrospective effect from 1 April 2006. The said class of employees is therefore, entitled to
get bonus with retrospective effect from 1st April 2006
94
8. Excluded categories :-
Following categories are excluded from application of the Bonus Act:
1. L.I.C. of India
2. Reserve Bank of India
3. Unit Trust of India
4. Universities & other Educational Institutions
5. Any other establishments permitted by Government for a specified period and
subject to specified conditions.
9. Newly set-up establishment :-
The newly set-up establishment is exempted from paying Bonus to its employees in the first
5 (Five) years, if it does not make any profit. If however, employer derives profit in any of
the first five years, it loses the exemption under the Act and he has to pay Bonus for that
year. The provisions of Set-On & Set-Off are not applicable in such cases.
10. Disqualifications for receiving Bonus :-
Employee is disqualified from receiving Bonus if he is dismissed from the service for (A)
Fraud (B) Riotous or Violent behavior while on the premises of the establishment (C)
Theft, misappropriation or sabotage of any property of Establishment.
11. Agreement or Settlement of Bonus:-
Employees can enter into an agreement or a settlement with their employer for granting
them bonus under a formula different from that under the Act, i.e. bonus linked with
production or productivity; but subject to the provisions of the Act in respect of payment of
minimum and maximum bonus.
12. Attendance Bonus:-
As attendance bonus which was being paid by the establishment was outside the purview
of the Payment of Bonus Act, 1965, workmen of the establishment can claim the bonus
payable under the act over and above the attendance bonus
13. Is Seasonal Worker entitled to get Bonus?
Section 8, relates to the eligibility for Bonus. The Only requirement of that section is that the
employee should have worked in an establishment for not less than thirty working days in
an accounting year. Therefore, if a seasonal worker has worked in an establishment for
more than thirty working days, he shall be entitled to get bonus.
14. Records to be maintained :-
1. A register in *Form No. A, showing Computation of Allocable Surplus.
2. A register in *Form No. B, showing Set-On & Set-Off of the allocable surplus.
3. A register in *Form No. C, showing details of the Bonus due to each of the employee
& deductions under Section 17 & 18 and the amount actually disbursed.
95
4. Annual Return:-
Purpose When to Submit Form/
Return
By Whom To Whom Relevant
Section / Rule
1 2 3 4 5 6
Submission of
Annual Return
Within 30 days
after the expiry of
time limit specified
under the act
Form – D Every
employer
Labour
Officer of the
concerned
area
Section 26 read
with rules 5.
Offences / Punishments:- If any persons contravenes the provision of the Act or any rule made there under or fails to comply with any directions given to him he would be punished with imprisonment up to six (6) months or with fine up to Rs.1,000/- or both.
Recent Court Judgement:-
1) Religious Institute & Trading
The institute is a religious institute and it has a temple. Over 20 persons are employed but the
establishment has halls which are given for seminars, marriage purpose etc. It is not even
registered under the Shops and Estb. Act. The rent earned from hiring out the hall is quite huge
and the employees are not being paid any bonus although the salaries are paid regularly
Are not the employees entitled for Bonus?
The Institute appears to be an establishment not covered under the Shops & Estb. Act and it is
not at all a factory or commercial establishment. The Bonus Act applies to every factory and
other establishments in which more than 20 persons are employed. Being a religious
institutions one cannot call it a commercial establishment. But at the same time the commercial
outlook and approach of the institution cannot be ignored if the money earned from letting out
of the hall for marriages and other culture functions it is required to be examined whether the
trust is making profits out of the annual income. The institution may have developed the hall
and designed with profit out of the annual income. The institution may have developed the
hall and designed with profit motive although it may or may not make profit. If the temple is
not earning profits and whatever income which is derived is spent for development of
religious and renaissance of religious, culture activities you cannot treat it as a commercial
venture. The fact that it is attached to a ashram or a temple, it cannot be treated as an integral
of the religious institutions, it all depends on the merit of each case. If the letting out of the hall
is with a commercial outlook certainly the employees employed therein are entitled for bonus.
1980 – AIR (S.C) – 604 – Workmen of Tirumala Tirupati Devasthanam v. Management & Ors.
2011 – I CLR – 919 – Shri Vatavrikasha Swami Maharaj Devasthan, Akkalkot v. State of Maharashtra
through its Secretary to the Ministry of Industry, Labour & welfare, Mantralaya & Ors.
Summary:-
The Payment of Bonus Act applies to all factories and establishments employing 20 or more
persons on any day during an accounting year. The term *employee, includes any person (other
than an apprentice) employed on a salary or wage not exceeding Rs. 10,000 per month in any
industry doing any skilled, unskilled, manual, supervisory, managerial, administrative, technical,
or clerical work or hire or reward.
96
THE MAHARASHTRA LABOUR WELFARE FUND
ACT, 1953
Applicability:-
Applicable to the whole of Maharashtra
Establishments:-
Means a Shops, Commercial Establishments, Residential Hotel, Restaurant, Eating House, Theatre,
or other places of public amusements or entertainment to which this Act applies or such other
establishments to which the Act applies by Notification, in which more than 5 employees work on
any day during the preceding 12 months including exempt establishment u/s. 4
Employee:-
1. Includes: - Person employed for hire or reward in any kind to work, manual, clerical,
supervisory or technical in an establishment.
2. Excludes: - (1) Person in Managerial Capacity, (2) Person in Supervisory Capacity whose
wages excess Rs. 3500/- or (3) Apprentices engaged under the Apprentices Act.
Unpaid Accumulation:-
Payment due to the employee not made to them within 3 years which includes wages and gratuity
payable but does not includes the Provident Fund Contribution.
Welfare Fund: -
Fund consists of
(a) Fines from the Employees.
(b) Unpaid Accumulations transferred to the Fund (bb) Penal Interest paid u/s. 6B (bbb) any
contribution paid u/s. 6BB.
(c) Voluntary Donations.
(d) Fund Transferred u/s. 5 of Sec. 7
(e) Sum Borrowed u/s. 8.
(f) Loan, grant in aid or subsidy by State Govt.
Contribution:-
1. Payable in respect of employees by the employer, employee and State Govt. to the board
which Forms part of the Fund.
2. Contribution is payable every Six months in respect of employee and employer at the rate of:-
a) In respect of employees whose names stand on register of establishment as on 30th June
and on every 31st Dec. and thereafter.
i) If drawing wages up to and inclusive of Rs. 3000/- per mensum Rs. 6/-
97
ii) If drawing more than Rs. 3000/- per mensum Rs. 12/-
b) In respect of employer for employees mentioned above is thrice the amount of
contribution payable by the employees.
Provision: -
State Govt. May increase the rate of employee‘s contribution once in every 3yrs. which shall not exceed 30% of rate of contribution.
3. Employer to pay both his employees contribution before 15th day of July and 15th day of
January.
4. No Deduction of employer‘s contribution by employer from the wages of employees.
5. Payment of the board by cheque, money order or in cash.
Interest on unpaid accumulation or fine after notice of demand:-
Notice shall be sent by the welfare commissioner on failure of employer to pay the unpaid
accumulation or fine realised by the employee or amount of contribution u/s. 6BB.
On employer failure to pay within the time i.e. not less than 30 days from the date of notice is
liable to pay simple interest:-
1) In case of Failure to pay unpaid accumulation and fine &
2) In case of Failure to pay Contribution amount
The Rate of interest will be 1 ½ % applicable for the first 3 months. & 2% of the amount for each
completed month for the continuous default in the payment.
Application of Fund:-
The money in the Fund may be utilized by the Board to defray expenditure on the following:-
a) Community & Social education centers including reading rooms & libraries;
b) Community necessities;
c) Games & Sports;
d) Excursions, tours & holiday homes,
e) Entertainment and other forms of recreations;
f) Home industries and subsidiary occupations for women and unemployed persons,
g) Corporate activities of a social nature;
h) Cost of administering the Act (includes the salaries, allowances, pensions, provident fund
and gratuity and other fringe benefits of the staff) appointed for the purpose of the Act; and
i) Such other objects as would in the opinion of the State Government improve the standard of
living and ameliorate the social conditions of labour.
Penalty: -
Person wilfully obstructing the inspector from discharging his duty or exercising the power under
the Act or fails to produce the records or registers or other documents on demand for inspections
shall on conviction be punished.
98
a) For the first offence with imprisonment for a team which may extend to 3 months or fine which
may extend to 500/- or both.
b) For subsequent offences imprisonment for a term which may extend to 6 months or fine which
extends to 1000/- or both.
Submission:-
The Form A-1-Cum-Return along with cheque to be submitted at….
The Welfare Commissioner,
Maharashtra Labour Welfare Board,
Hutatma Babu Genu Mumbai Gimi Kamgar Krida Bhavan,
Senapati Bapat Marg, Elphinstone Road,
Mumbai- 400 013.
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LABOUR WELFARE FUND (PAN INDIA)
s. State Employee Employer Total Period -1 Period -2 Return Remarks Cheque to be drawn Status No. Contribution Contribution submission date in favour
1 Andhra Pradesh 2 5 7 Jan-Dec - By Jan 30th Yearly Welfare Comm1ssioner Confirmed by Bipln on A.P.Labour Welfare 20th July - Mail. Only DO Rruw1
2 Delhi 0.75 2.25 3 Jan-June July-Dec 15th July Half DelhiLabour Welfare Confirmed by Rajinion
& 15th Jan Yearly Fuoo 20th July • Mall Only DO
3 Gu1arat 3 6 9 Jan-June July-Dec 15th July Half Gujarat Labour Welfare Confirmedby Gopalon
I & 15th Jan IYearlv Fund Board '21st Julv - Ma1l
4 Karnataka 3 6 9 Jan-Dec - By Jan15th Yearly Welfare Commissioner, Confirmed by Chandra on Karnataka Labour Welfare 20th July - Mall Board. Banoalore.
5 Kerala 4 8 12 Jan-June July-Dec 15th July Half The Labour Welfare Fund Confirmedby Vimlon
& 15th Jan Yearlv Commissioner 19th Ju!v_• Mail 6 Maharashtra 12 36 48 Jan-June July-Dec 15th July Half Maharashtra Labour Welfare
& 15th Jan Yearlv Fuoo
7 Goa 5 15 20 Jan-June July-Dec 15th July Monthly Goa Labour Welfare Fund
8 Madhya Pradesh 6 18 24 Jan..June July-Dec 15th July Half Welfare Commissioner,Labour Confirmed by Reena on & 15th Jan Yeartv Welfare Board Bhopal(MPl 21st Julv • Mail
9 Chhat1sgarh 1 3 4 Jan-June July-Dec 15th July Half WelfareCommissioner.Labour Confirmed by Reena on I & 15th Jan lvearlv Welfare R""ni R iour(CG) 21st Julv- Mall
10 Orissa NA NA NA NA NA NA NA Confirmed by N.C.Nhapatra • IQ4.-:t7nn1
11 Punjab 1 2 3 Aprii..Sep Oct-Mar By 15th Oct Half Confirmed by RCOM l.consul & 15th Aor Yearlv Mr.Pramieet Singh
12 Haryana 10 20 30 Monthly Monthly Every Month Monthly Welfare Commissioner Confirmed by Rajinion
.... Vi
8
. 13 H1machalPradesh NA NA NA NA NA NA NA
14 Rajasthan NA NA NA NA NA NA NA
(Govt Of Haryana) 20th July - Mail Only DO
Pa11_able at Chandiaarh
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15 Tam1INadu • 5 10 15 Jan-Dec - By Jan 30th Yearly Secretary TN labour A&N Island Welfare Board
16 Uttar Pradesh NA NA NA NA NA NA NA Not Applicable Confirmed by · Sinah on 20th Julv - Mail
17 West Bengal 3 6 9 Jan-June July-Dec 15th July Half Welfare Commissioner, W.B Confirmed by Suvradip on
& 15th Jan Yearlv 22nd JulY • Mall Onlv DO. 18 Bihar NA M NA NA M NA NA 19 Jharkhand NA NA NA NA NA NA NA
20 Chandigarh (UT) 1 2 3 Aprii-Sep Oct- ar By 15th Oct Half Applicable from 28.05.09 Confirmed by RCOM l. consul & 15th Apr Yearly MrPramieet Smah
21 Uttaranchal NA NA NA NA NA NA NA 22 Jammu & Kashmir NA NA NA NA NA NA NA Confirmed by ACOM L. consul.
Mr.Pramjeet Singh --- -- -- --
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THE PAYMENT OF GRATUITY ACT, 1972
An employee expects and deserves, as a matter of right, some reward when he retires after a long
meritorious service. The enactment of the payment of gratuity act, 1972 has fulfilled this
expectation of an employee. This act has came into existence since 16th Sept 1972.
What is Gratuity?
Gratuity is a short of an award which an employer pays out of his Gratitude, to an employee for
his long and meritorious services, at the time of his retirement, or termination of his services.
Payment of Gratuity is however, compulsory for employers subject to Eligibility. (stated as below)
Under the act an employee become, entitle to earn gratuity after putting in service of minimum
five years. When an employee dies while in service his nominee or heirs are entitle to get gratuity
even if the employee had put in less than 5 yrs. service. The rate of gratuity is 15 days salary
every year of service but the total amount of gratuity cannot exceed Rs. 350000/- ; recently from
24th May 2010, Central Govt. by Gazette Notification enhance the limit upto Rs. 10,00,000/-
(Rupees Ten Lac)
Object:-
The payment of gratuity act, 1972 has been passed with the object of providing a uniform scheme
for payment of gratuity to industrial workers throughout the country.
Applicability:-
1. Every factory (as defined in Factories Act), mine, oilfield, plantation, port and Railway Company.
2. Every shop or establishment to which Shops & Establishment Act of a state applies in which 10 or
more persons are employed at any time during the year and
3. Any establishment employing 10 or more persons as may be notified by the Central Government.
4. Once act applies, it continues to apply even if employment strength falls below 10.
5. The Act also has been made applicable to :-
a) Motor Transport undertaking, b) Clubs, c)Inland Water Transport Establishments
d) Local Bodies and e) Solicitors Officers.
Eligibility:-
1. Any employee has to render minimum five years‘ of service.
2. At the time of retirement or resignation or on superannuation, an employee should have rendered
continuous service of not less than five yrs.
3. In case of death or disablement, the gratuity is payable, even if he has not completed 5 yrs of
service.
Notice of Opening, Change or closure of An Establishment:-
An employer has to send a notice in Form A to the Controlling Authority of the area within 30
days of the Rules as becoming applicable. In addition to that, Form B is to be submitted within 30
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days of any change in the name, address, employer or nature of business whereas an employer has
to send From C intending to close down the business atleast 60 days before intended closure.
It is permissible Opt for Better Gratuity Scheme:-
An employee can, no doubt opt for scheme other than the payment of Gratuity Act, if it appears to
be better, but on adoption of that, he has to abide by the Scheme in to. The supreme court has held
that sub-section (5) of section 4 of the payment of gratuity act does not contemplate that the
employee would be at liberty to opt for better terms of the contract, by keeping option open in
respect of a part of the statute. While reserving his right to opt for beneficial provisions of the
statute, he has to opt for either of them and not the best of the terms of the statute as well as those
of the contacts. He cannot have both, such a constructions would defeat the purpose for which
sub-section (5) of section 4 has been enacted. Impugned judgement cannot sustain and is set aside.
What is Continuous Service ???
The term ‗completer year of service‘ means continues service for one year.
An employee is said to have rendered continuous service, if:-
a) He has been in uninterrupted service, including service interrupted by sickness, accident, absents
from duty with or without leave, lay-off, strike, or lock-out or cessation of work not due to the
employee‘s fault. Note:- if an employee having been superannuated is a re-employed by the employer without any
break in service, he will be eligible for payment of service.
b) In case of mine or non seasonal establishment working for less than 6 days in week, he has actually
worked for atleast 190 days (in Mine) during the period of 12 months or 95 days, during the
preceding 6 months, he shall be deemed to have rendered continuous service for a period of one
year or 6 months, respectively.
c) In case of any other non-seasonal establishment he has actually worked for atleast 240 days during
the preceding 12 months or 120 days during the preceding 6 months, he shall be deemed to be
have rendered continuous service for a period of 1 year or 6 months, respectively.
d) In case of seasonal establishment, he has actually worked for at least 75% of the days on which the
establishment was is operation.
Notes:- for this purpose an employee shall be deemed to have actually worked on a day on which
:-
a) He has been laid off under an agreement or in accordance with standing orders;
b) He has been on leave with full wages, earned in the previous year;
c) He has been absent due to temporary, disablement cause by accident arising out of, and in the
course of, his employment, and
d) In the case of female, she has been on maternity leave not exceeding 12 weeks
Retrenched Employee entitled to get Gratuity:-
Retrenchment means termination of service and termination of service is covered by the definition
of retirement under the Act. Retrenchment of an employee falls within the scope of section 4(1) (b)
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of the act under which gratuity is payable to an employee on his retirement. Therefore the
employee is entitled to get gratuity.
Benefits:-
1. Gratuity is payable on the basis of all emoluments earned by the employee, i.e. basic wages plus
Dearness Allowances / Special Allowances.
2. The quantum of gratuity is to be computed at the rate of 15days a wages (7days wages in case of
seasonal establishments) based on rate of wages last drawn by the employee concerned for every
completed year of service or a part thereof exceeding 6 month
3. The total amount of gratuity payable shall not exceed the prescribed limit i.e. Rs.
10,00,000/- (after publication of notification)
4. In case where higher benefit of gratuity is available under any gratuity scheme of the Co. the
employee will entitled to higher benefit.
Calculation of Gratuity:
1. Gratuity = Monthly Salary / Wages Last Drawn x 15days x no. of yrs. of Service
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2. Piece rated employee –
Daily wage is average (total wages drawn
in last 3 months preceding termination) x 15 Days x No. of Years of Service
No. of Days Worked
3. Seasonal employee – based on 7days wages for each season.
4. Max. Gratuity Payable under the Act is Rs. 10,00,000/- (w.e.f. 24th May2010)
Q Since the payment of gratuity is not a regular feature, as such, we face difficulty in
calculation of gratuity. Kindly appraise the method of calculation of gratuity?
A Section 4 of the Payment of Gratuity act, 1972 deals with calculation of gratuity, The Explanation
to the Act Inserted by Act No. 22 of 1987 (w.e.f. 1-2-1987) provides that the completion of
continuous services of five years shall not be necessary where the termination of the employment
of the employee is due to death or disablement.
Example: Mr. Jatin Joined an establishment in January 1985 at Rs. 5,000/- per month. His wages were raised to Rs. 15,000 per month in December, 2005. He retired on 31st December, 2005. The amount of gratuity payable to him shall be calculated as under:
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Mr. Jatin retired on: =31-12-2005 = -------------------------------X 15 X 20 Joined on : 01-01-1985 Total Service : 20 years His last drawn monthly salary was Rs. 15,000.
The gratuity for the period of 20 years = 15 days wages X 20 Monthly wages last drawn comprises of 26 days.
Hence the calculation will result as follows
15000
= --------------------------------- X 15 (days per completed year of service) X 20 yrs. 26
=Rs. 173077.00 will be payable toward Gratuity to Mr. Jatin
Forfeiture of Gratuity:-
1. The employee may wholly or partially forfeit the gratuity payable to him if his services are
terminated on account:-
a) For his riotous or disorderly conduct or any other act of violence on his part or.
b) For any act which constitutes an offence involving moral turpitude.
Note:- If a workman who was dismissed for assaulting another workman, in a factory, is not
entitled to payment of any amount of gratuity.
2. The employee partly forfeits the gratuity payable to him if his services are terminated for any act,
wilful omission or negligence, causing any damage or loss to, or destruction of, property
belonging to the employer, to the extent of damage or loss caused.
Recovery of Gratuity:-
1. On account of his death: - If the employee has a family, he must nominate one or more members
of the family and none other. If the employee has no family, he can nominate any person or
persons of his choice. However, if the employee acquires a family after nominating any person or
persons of his choice, such nomination becomes invalid and the employee has to make a fresh
nomination of one or more members of his family.
2. The employee who is eligible for payment of gratuity and dies than his nominee or legal heir has
to send a written application to the employer in Form J (For Nominee) & Form K (For Legal Heir)
within 30 days from the date gratuity becomes payable.
3. If the employer does not take any action on the application, the employee has to apply to the
Controlling Authority in Form N within 90 days of the occurrence of the cause for the application
for issuing necessary direction to the employer for making payment of gratuity.
4. If gratuity is not paid by the employer Controlling Authority issues certificate to collector who
recovers the amount as arrears of land revenue together with compound interest.
Deduction of Gratuity – Not Permissible
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The Gratuity of an employee can be forfeited or withheld only when he/she is dismissed for the prescribed misconduct like willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer shall be forfeited to the extent of the damage or loss so caused or if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude. In one case, the Calcutta High Court has also held that even if a workman gives an undertaking for making deductions, the gratuity of an employee cannot be withheld.
Time Limit of Payment:- The Employer should pay the gratuity within 30 days from the date it becomes payable or after such date along with simple interest @10% p.a. (or as notified from Govt from time to time) on the
amount of Gratuity, unless the delay is on the part of payee.
Protection:- Gratuity payable under the Act cannot be attached in execution of any decree or order of any civil, revenue or criminal court.
Note: - If the employee is dead then the gratuity becomes payable to the heirs of the employee and the same becomes attachable in the hands of the employer as the employer is legally bound to pay the said gratuity to the legal heirs of the employee.
Liability for payment of gratuity to contact workers – whether principal employer or the contractor
Q. In addition to regular employees, we are engaging contractors also. Some of the contractors‘
employees have completed five years‘ services. My query pertains as to whether the principal employer or the contractor is liable for payment of gratuity to the employees of the contractor?
Ans:- In one case, the Kerala High Court has held that neither the Contract Labour (R&A) Act, 1970 nor the Payment of Gratuity Act, 1972 provided that the principal employer can be held liable to pay the gratuity to the workers engaged through the contract. However, the Madras High Court has held that although liability for payment of gratuity is that of the contractor but by virtue of section 21(4) of the Contract Labour (R&A) Act, the principal employer can be directed to make payment of gratuity to the employees of the contractor and recover the same from the contractor. In another case, the Madras High Court has held that when the contractor, who engaged the workmen, does not pay the amount of gratuity to them , the principal employer is liable to pay all dues including gratuity to such workers as per provision of section 21(4) of Contract Labour (Regulation & Abolition) Act, 1970.
Penal Provision:-
1. If any person, for the purpose of avoiding any payment to be made under the Act, knowingly makes or causes to be made any false statement or false representation he would be punished with imprisonment up to 6 months, or with fine up to Rs. 10000/- or, with both.
2. If any employer contravenes, or makes default in complying with any provisions of the act or any rule or order made there under, he would be punished with imprisonment up to 1 year, or with fine up to Rs. 20000/- or with both.
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Handy tips for Employer:-
1) It is advisable for the employer to obtain nomination from the employee in Form ‗ F‘
2) Form G when employee acquired family later
3) And any change of nomination to be submitted in form H , in duplicate.
As it renders easy for the employer to disburse the gratuity amount. If he neglects to obtain
nomination and employee dies without nomination, it is likely that the family members of the
deceased employee may approach the employer with conflicting claims to the gratuity compelling
the employer to be dilemma and to resort to the legal processes.
Display of Abstract of the Act:-
Every employer must display an abstract of the act and the Rules made there under in English and
in the language understood by the majority of the employees at a conspicuous place at or near the
main entrance of the establishment.
Obligations of Employer:
1) Pay gratuity to the employees as required by the provisions of the Act and the rules framed there
under
2) Determine the gratuity as soon as it becomes payable, and give notice of the same to the employee
concerned and the controlling authority. In case of dispute regarding the amount determined, the
admitted amount of gratuity must be deposited with the Controlling Authority. If the latter
decides that any more gratuity is due to the employees, the same must be deposited with him.
3) Obtain an insurance in the prescribed manner for his liability for payment of gratuity under the
Act, or establish an approved gratuity fund in the prescribed manner.
Obligations of Employee:
1) An employee eligible for payment of gratuity under the Act, or any person authorised in writing
to act on his/her behalf, has to apply to the employer within such time and n such form as may be
prescribed under the rules for payment of gratuity as soon as it becomes due.
2) Every employee, after completing one year of service, has to nominate members of his / her family
who may receive gratuity in case of his / her death.
Recent Court Judgement:-
2) Service of Badli worker during the years in which he did not completed 240 days, held could not
be considered for Gratuity
The petitioner was serving with the respondent from 1979 onwards and he came to be retired from
04.07.2008. he was paid a sum of Rs. 72,074/- towards the amount of gratuity considering 20 years
of service and not considering his service in 1979 to 1983, 1991 and 1992 on the ground that in
those years he was serving as badli worker and did not completed 240 days. The petitioner
therefore approached the controlling authority and it held that the petitioner was entitled to a sum
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of Rs. 94,599/- the amount of Rs. 72,074/-having been already paid, the respondent was held liable
to pay the remaining amount of Rs. 21,750/- with 10% interest.
Being aggrieved by the said decision of the Controlling Authority, the respondent preferred an
appeal to the Appellate authority. The appeal was allowed and it was held that the petitioner‘s
service rendered during the years from 1979 to 1983, 1991 and 1992 cannot be considered for the
purpose of calculating gratuity as in all those years he had not completed 240 days in a year as he
worked only as a Badli worker.
The petitioner challenged this order by filing a writ, petition in the High court contending that
daily wager service and break in service is to be considered for the purpose of calculating the
amount of gratuity. In support of his case, he relied upon the decision of a single judge in the case
of Ahmedabad Municipal Corporation v. Kantibhai 2010 II LLJ 640. But the single judge deciding
the present petition pointed out that the decision in the case of Mafatlal Fine Spg. & Mfg, Co. Ltd.
1997 I LLJ 475 rendered by the Division bench was not pointed out in that case. Hence the decision
in Ahmedabad Municipal Corpn‘s case was per incurium. The petition was therefore dismissed.
- HC. Guj. LLJ II 2011 P. 145, Vasantbhai Bhudarbhai v. Manager, Arvind Intex
3) It is permissible in law to deduct loan amount from retrenchment compensation and gratuity?
The loan given to the employees is not a condition of service. The loan is ordinarily given on
personal relationship. Whereas, compensation payable on retrenchment and gratuity payable on
termination to eligible employees is a mandatory payment. Section 25 F of the act says that
payment of compensation is a condition precedent to retrenchment of workman, in other words
while dispensing with the service of the workman, the employer is bound to pay compensation.
This is a mandatory payment which cannot be adjusted. The fill payment prescribed under law
should be paid. Your attention is invited to section 25f (b), which clearly states that the workman
*has been paid at the time of retrenchment,. Termination letter and the payment should be
simultaneous transaction.
Similarly, as far as gratuity is concerned, under section 4 of the gratuity act it clearly states that the
gratuity shall be payable to the employee. This is a statutory provision. The statutory direction
cannot be adjusted by the employer. He is bound to pay in full. But after payment, he has a right
to recover according to the legal procedure.
- 1991 – II CLR (Orissa) – 941 – Utkal Asbestos Ltd. v/s. T S Rao & Anr. 1964 – AIR (SC) – 1617 –
Bombay Union of journalists v/s. State of Bombay.
4) Payment of Gratuity Act Provided that an employee, after he completes five years, will be entitled for gratuity. If he works for 4 years and 10 months? It is correct that he must complete five years service in order to be eligible for gratuity. However, in one case, the Madras High Court has held that an employee rendering continuous service for a period of 240 days in a year, i.e. the fifth year will be deemed to have continued in service for one year stipulated by section 2A of the Act. Accordingly, an employee who has put in his service for 10 months, 18 days for the fifth year subsequent to first 4 years should be deemed to have completed continuous service of 5 years and is entitled to gratuity. The high court also distinguished the earlier ruling of the Andhra Pradesh high court wherein it was held that an employee who has worked for 4 years and 11 months and 10 days having not completed five years of service will be not be entitled to gratuity.
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Mettur Beardsell Ltd. (represented by uts Personnel Manager), Madras vs. Regional Labour Commissioner (Central Authority under the Payment of Gratuity Act, 1972) Madras, 1998 LLR 1072 (Mad.HC).
5) Section 2(e) & (f), 1(b) (c) & 4 (A clerk working in a temple is entitled to payment of gratuity
since temple comes under the purview of establishment) Respondent no.3 was an employee of the appellant temple. He served the temple as a manager for several years and thereafter tendered his resignation which was accepted by the appellant temple. It appears that respondent no.3 thereafter claimed amount of gratuity but the appellant temple rejected that claim. Hence respondent no.3 raised an industrial dispute which was referred to the Labour Court for adjudication. The Labour Court allowed the claim of the respondent no.3. Hence the aggrieved appellant challenged the same by filing a writ petition in the High Court. But that was dismissed. Hence the appellant filed the present writ appeal contending that a Hindu temple cannot be considered as an establishment in order to grant gratuity payable under the provisions of the Payment of Gratuity Act, 1972. According to the appellant temple is a place of worship and it is neither a commercial nor non-commercial establishment as no trade or business is done by the appellant.
The High court however dismissed the appeal and pointed out that the question whether a retired employee of a Hindu temple is entitled to claim benefit of gratuity on attaining the age of superannuation, is no more res integra in view of the Division Bench decision of the Orissa High Court in the case of Administrator Shri Jagannath Temple, Puri v. Jagannath Padhi and Ors. 1992 (65) FLR 946. The Orissa High Court has ruled that the whole temple would come under the purview of establishment and therefore clerk or manager who was working in a temple is entitled for payment of gratuity. In view of this position the Division Bench dismissed the writ appeal.
-H. C. Karn. CLR III 2012 P.439, Management of Sri Venkatramana Temple & Shri Hale Mariyamma Temple, Kapu v. Dy. Labour Commissioner & Ors.
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Summary:- The Payment of Gratuity Act applies to every factory, mine, oilfield, plantation, port, railway company, and shop or establishment in which ten or more persons are employed. An employee is a person (other than an apprentice) employed for wages in any capacity including administrative and managerial. There is no wage ceiling for its applicability. Gratuity at the rate of 15 days wages for every completed year of service, is payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years. The act authorises the appropriate government to appoint any officer as a controlling authority for the administration of the Act.
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ABSTRACT OF THE PAYMENT OF GRATUITY ACT, 1972 FORM 'U'
1. Extent the Act.---The Act extends to the whole of India:
Provided that in so far as it relates to plantations a ports, it shall not extent to the State of Jammu and Kashmir. Section 1(2).
2. To whom the Act Applies.--- The Act applies to (a) every factory, mine, oilfield, plantation, port
and railway company; (b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or mote persons are employed, or were employed, on any day of the preceding twelve months; and (c) such other establishments a class of establishments, in which, ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf. Section 1(3).
3. Definitions----(a) "Appropriate Government" means (i) in relation to an establishment-- (a) belonging to, or under the control of, the Central Government, (b) having branches in more than one State, (c) of a factory belonging to, or under the control of, the Central Government, (d) of a major port, mine, oilfield or railway company, the Central Government, (ii) in any other case, the State Government. Section 2(a). (b) "Completed year of service" means continuos service for one year. Section 2(b). (c) "Continuos Service" means uninterrupted service and includes service which is interrupted by
sickness, accident, leave, lay-off, strike or a lock-out or cessation of work not due to any fault of the employees concerned, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act. Explanation I.---In the cease of an employee who is not in uninterrupted service for one year, he shall be deemed to be in continuous service if he has been actually employed by an employer during the twelve months immediately preceding the year for not less than--
(i) 190 days, if employed below the ground in a mine, or (ii) 240 days, in any other case, except when he is employed in a seasonal establishment.
Explanation II,---- An employee of a establishment shall be deemed to be in continuos service if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during the year. Section 2(d)· (d) *Controlling authority, means an authority appointed by an appropriate Government under Section 3. Section 2(d). (e) "Family", in relation to an employee, shall be deemed to consist of---
(i) in the case of a male employee, himself, his wife, his children, whether married or unmarried, his dependent parents and the widow and children, of his predeceased son, if any,
(ii) in the case of a female employee, herself, her husband, her children, whether married or unmarried, her dependent parents and the dependent parents of her husband and the widow and children of her predeceased son, if any: Provided that if a female employee, by a notice in writing to the Controlling Authority, expresses to her desire to exclude her husband from her family, the husband and his dependent parents shall no longer be deemed, for the purposes of this Act, to be included in the family of such female employee unless the said notice is subsequently withdrawn by such female employee.
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Explanation:-- Where the personal law of an employee permits the adoption by him of a child, any child lawfully adopted by him shall be deemed to be included in his family, and where a child of an employee has been adopted by another person and such adoption is under the personal law of the person making such adoption, lawful, such child shall be deemed to be excluded from the family of the employee. Section 2(h).
4. Nomination.---(1) Each employee, who has completed one year of service, after the
commencement of the Payment of Gratuity (Central) Rules, 1972 shall make within thirty days of completion of one year of service, a nomination. Section 6(1) read with Rule 86(I1)
(2) If an employee has a family at the time of making a nomination, the nomination shall be made in favour of one or more members of his family and any nomination made by such employee in favour of a person who is not a member of his family shall be void. Section 6(3).
(3) If at the time of making a nomination, the employee has no family, the nomination can be made in favour of any person or persons, but if the employee subsequently acquires a family, such nomination shall forthwith become invalid and the employee shall make within 90 days fresh nomination in favour of one or more members of his family. Section 6(4) read with Rule 6(3).
(4) A nomination or a fresh nomination or a notice of modification of nomination shall be signed by the employee or, if illiterate, shall bear his thumb-impression in the presence of two witnesses, who shall also sign a declaration to that effect in the nomination, fresh nomination or notice of modification of nomination as the case may be. Rule 6(5).
(5) A nomination may, subject to the provisions of sub-sections (3) and (4) of Section 6, be modified by an employee any time after giving to his employer a written notice of his intention to do so. Section 6(5).
(6) A nomination or fresh nomination or notice of modification of nomination shall take effect from the date of receipt of the same by the employer. Rule 6(6).
5. Application for gratuity.---(1) An employee who is eligible for payment of gratuity under the Act,
or any person authorised, in writing, to act on his behalf, shall apply ordinarily within thirty days from the date gratuity becomes payable: Provided that where the date of superannuation or retirement of an employee is known, the employee may apply to such employer before thirty days of the date of superannuation or retirement. Rule 7(1). (2) A nominee of an employee who is eligible for payment of gratuity shall apply, ordinarily within thirty days from the date the gratuity became payable to him, to the employer. Rule 7(2).
(3) A legal heir of an employee who is eligible for payment of gratuity shall apply, ordinarily within one year from the date the gratuity became payable to him, to the employer. Rule 7(3). (4) An application for payment of gratuity filed after the expiry of the periods specified above shall also be entertained by the employer if the applicant adduces a sufficient cause for the delay. Rule 7(5).
6. Payment of gratuity.--(1) Gratuity shall be payable to an employee on the termination of his
employment after he has rendered continuous service for not less than five years-- (a) on his superannuation, or
(b) on his retirement or resignation, or (c) on his death or disablement due to accident or disease: Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement. Disablement means such disablement which incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement. Section 4(1).
112
(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned: Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account: Provided further that in the case of an employee employed in a seasonal establishment, the employer shall pay the gratuity at the rate of seven days' wages for each season. Section 4(2).
(1) The amount of gratuity payable to an employee shall not exceed twenty months wages. Section 4(3).
7. Forfeiture of gratuity.--(1) The gratuity of an employee, whose services have been terminated for
any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused. (2) The gratuity payable to an employee shall wholly be forfeited--
(a) If the services of such employee have been terminated for his riotous or disorder conduct or of any other act of violence on his part, or
(b) If the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment. Section 4(6).
8: Notice of opening, change or closure of the establishment.--(1) A notice shall be submitted by
the employer to the controlling authority of the area within thirty days of any change in the name, address, employer or nature of business. Rule 3(2). (2) Where an employer intends to close down the business he shall submit a notice to the controlling authority of the area at least sixty days before the intended closure. Rule 3(3).
9. Application to Controlling Authority for direction: If an employer--- (i) refuses to accept a nomination or to entertain an application for payment of gratuity, or (ii) issues a notice either specifying an amount of gratuity which is considered by the applicant less
than what is payable or rejecting eligibility to payment of gratuity, or (iii) having received an application for payment of gratuity, fails to issue notice within fifteen days;
the claimant employee, nominee, or legal heir, as the case may be, may within ninety days of the occurrence of the occurrence of the cause for the application, apply to the controlling authority for
issuing a direction under sub-section (4) of Section 7 with as many extra copies as are the opposite party: Provided that the controlling authority may accept any application on sufficient cause being shown by the applicant, after the expiry of the period of ninety days. Rule 10.
10. Appeal:- Any person aggrieved by an order of the controlling authority may, within sixty days
from the date of the receipt of the order, prefer an appeal to the Regional Labour Commissioner (Central) of the area, who has been appointed as the appellate authority by the Central Government: Provided that the appellate authority may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said period of sixty days, extend the said period by a further period of sixty days. Section 7 (7).
11 Machinery for enforcement of the Act or Rules in Central sphere:---All Assistant Labour Commissioners (Central) have been appointed as Controlling Authorities and all the Regional Labour Commissioners (Central) as Appellate Authorities.
113
12. Powers of the Controlling Authority:--- The Controlling Authority for the purpose of conducting an inquiry as to the amount of gratuity payable to an employee or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, shall have the same powers as are vested in a court, under the Code of Civil Procedure, 1908, in respect of the following matters, namely---
(a) Enforcing the attendance of any person or examining him on oath; (b) Requiring the discovery and production of documents; (c) Receiving evidence on affidavits; and (d) Issuing commissions for the examination of witnesses. Section 7(5).
13. Recovery of gratuity.--If the amount of gratuity payable is not paid by the employer, within the
prescribed time to the person entitled thereto, the controlling authority shall, on an application made to it in this behalf by the aggrieved person, issue a certificate for that amount to the Collector, who shall recover the same, together with compound interest thereon at the rate of nine per cent per annum, from the date of expiry of the prescribed time, as arrears of land revenue and pay the same to the person entitled thereto. Section 8.
14. Protection of gratuity: No gratuity payable under the Payment of Gratuity Act and the rules
made thereunder shall be liable to attachment in execution of any decree or order of any civil, revenue or criminal court. Section 13.
15. Penalties for offences.-(1) Whoever, for the purpose of avoiding any payment to be made by
himself or of enabling any other persons to avoid such payment, knowingly makes or causes to be made any false statement or false representation, shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. Section 9(1). (2) An employer who contravenes, or makes default in complying with, any of the provisions of the Act or any rule or order made thereunder shall be punishable with imprisonment for a term which may extend to one year, or with fine which may extend to one thousand rupees, or with both: Provided that if the offence relates to non-payment of any gratuity payable under the Payment of Gratuity Act, the employer shall be punishable with imprisonment for a term which shall not be less than three months unless the court trying the offence for reasons to be recorded by it in
writing, is of opinion that a lesser term of imprisonment or the imposition of a fine would meet the ends of justice. Section 9(2).
16. Display of Notice: The employer shall display conspicuously a notice at or near the main entrance
of the establishment in bold letters in English and in the language understood by the majority of the employees specifying the name of the Officer with designation authorised by the employer to receive on his behalf notices under the Payment of Gratuity Act or the rules made thereunder. Rule 4.
17. Display of Abstract of the Act and Rules: The employer shall display an abstract of the Payment
of Gratuity Act and the rules made thereunder in English and in the language understood by the majority of the employees at a conspicuous place at or near the main entrance of the establishment. Rule 20.
114
FORM ‘A’
[See sub-rule (1) of Rule 3]
Notice of Opening
1. Name and address of the Establishment
2. Name and designation of the Employer
3. Number of Persons employed
4. Maximum number of persons employed on any day during the preceding twelve months with date
5. Number of Employees covered by the Act
6. Nature of Industry
7. Whether Seasonal
8. Date of opening
9. Details of Head office/branches:
(a) Name and address of Head office
(b) Number of employees
(c) Name and address of other branches in India.
1.
2.
3.
I verify that the information furnished above is true to the best of my knowledge and belief.
Place.....
Signature of the Employer
With name and designation.
115
FORM 'F'
See sub-rule (1) of Rule 6
Nomination
To,
(Give here name or description of the establishment with full address)
I, Shri/Shrimati/Kumari
(Name in full here) whose particulars are given in the statement below, hereby nominate the person(s) mentioned below to receive the gratuity payable after my death as also the gratuity standing to my credit in the event of my death before that amount has become payable, or having become payable has not been paid and direct that the said amount of gratuity shall be paid in proportion indicated against the name(s) of the nominee(s).
2. I hereby certify that the person(s) mentioned is/are a member(s) of my family within the meaning of clause
(h) of Section 2 of the Payment of Gratuity Act, 1972.
3. I hereby declare that I have no family within the meaning of clause (h) of Section 2 of the said Act.
4 (a) My father/mother/parents is/are not dependent on me.
(b) My husband's father/mother/parents is/are not dependent on my husband.
5. I have excluded my husband from my family by a notice dated : to the controlling authority in terms of the
proviso to clause (h) of Section 2 of the said Act.
6. Nomination made herein invalidates my previous nomination.
Nominee(s)
Name in full with full
address of nominee(s)
Relationship with
the employee
Age of
nominee
Proportion by which
the gratuity will be
shared
(1)
(2)
(3)
(4)
1.
2.
3.
So
on.
Statement
1. Name of employee in full
2. Sex
3. Religion
4. Whether unmarried/married/widow/widower
5. Department/Branch/Section where employed
6. Post held with Ticket No. or Serial No., if any
7. Date of appointment
116
8. Permanent address:
Village Thana Sub-division
Post Office District State
Place:
Signature/Thumb-impression of the
Employee
Date:
Declaration by Witnesses
Nomination signed/thumb-impressed before me
Name in full and full address of witnesses. Signature of Witnesses.
1. 1.
2. 2.
Place:
Date:
Certificate by the Employer
Certified that the particulars of the above nomination have been verified and recorded in this establishment.
Employer's Reference No., if any Signature of the employer/Officer authorised
Designation
Date: Name and address of the establishment or
rubber stamp thereof.
Acknowledgement by the Employee
Received the duplicate copy of nomination in Form 'F' filed by me and duly certified by the employer.
Date: Signature of the Employee
Note.—Strike out the words/paragraphs not applicable.
117
Maharashtra Profession Tax
Act, 1975
Short title, extent and commencement:-
(1) This Act maybe called the Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975.
(2) It extends to the whole of the State of Maharashtra.
(3) It shall be deemed to have come into force on the 1st day of April 1975.
2. Definitions.—
In this Act, unless the context otherwise requires,--
(a) "Commissioner" means the Commissioner of Profession Tax appointed under section 12, and includes an Additional Commissioner of Profession Tax (if any) appointed under that section;
(b) "Corporation area" means an area within the limits of a municipal corporation constituted under the Bombay Municipal Corporation Act, the Bombay Provincial Municipal Corporations Act, 1949 or the City of Nagpur Corporation Act, 1958;
(ba) "Employee" means a person employed on salary or wages,
and includes--
(i) A Government servant receiving pay from the revenues of the Central Government or any State Government or the Railway Fund.
(ii) A person in the service of a body, whether incorporated or not, which is owned or controlled by the Central Government or any State Government, where the body operates in any part of the State, even though its headquarters may be outside the State;
(iii) A person engaged in any employment of an employer, not covered by items (i) and (ii) above;
(c) "employer" in relation to an employee earning any salary or wages on regular basis under him, means the person or the officer who is responsible for disbursement of such salary or wages and includes the head of the office of any establishment as well as the manager or agent of the employer;
(ca) "engaged", in relation to any profession, trade, calling or employment means occupied fully or otherwise in such profession, trade, calling or employment, whether any pecuniary benefit or benefit of any nature whatsoever, actually accrues or not to a person from such occupation.
(d) "month" means a month reckoned according to the British calendar;
(e) "person" means any person who is engaged actively or otherwise in any profession, trade, calling or employment in the State of Maharashtra, and includes a Hindu undivided family, firm, company corporation or other corporate body, any society, club or association, so engaged, but does not include any person who earns wages on a casual basis;
(f) *Prescribed, means prescribed by the rules made under this Act;
(g) *Profession tax, or *tax, means the tax on professions, trades, callings and employments levied under this Act;
118
(h) "salary" or "wage" includes pay or wages, dearness allowance and all other remunerations received by any person on regular basis, whether payable in cash or kind, and also includes perquisites and profits in lieu of salary, as defined in section 17 of the Income-tax Act, 1961, but does not include bonus in any form, and on any account or gratuity;
(i) "Schedule" means a Schedule appended to this Act;
(j) "Tribunal" means the Maharashtra Sales Tax Tribunal constituted under section 21 of the Bombay Sales Tax Act, 1959, and discharging the functions of the Tribunal assigned to it by or under this Act;
(k) "year" means the financial year.
3. Leavy and Charge of Tax :-
(1) Subject to the provisions of article 276 of the constitution of India and of this Act, there shall be levied and collected a tax on professions, trades, callings and employments for the benefit of the State.
(2) Every person excluding firms (whether registered under the Indian Partnership Act, 1932, or not) and Hindu Undivided family engaged actively or otherwise in any profession, trade callings or employment and falling under one or the other of the classes mentioned in the second column of Schedule I shall be liable to pay to the State Government the tax at the rate mentioned against the class of such persons in the third column of the said Schedule;
Provided that, the tax so payable in respect of any one person shall not exceed five thousand rupees in any year:
Provided also that, a person who is liable to pay tax has remained un-enrolled; then, his liability to pay tax under this section for the periods for which he has remained so un- enrolled shall not exceed eight years from the end of the year immediately preceding the year in which he has obtained the enrolment certificate or the year in which the proceeding for enrolment is initiated against him, whichever is earlier.
4. Employer's liability to deduct and pay tax on behalf of employees:-
The tax payable under this Act, by any person earning a salary or wage, shall be deducted by his employer from the salary or wage payable to such person, before such salary or wage is paid to him, and such employer shall, irrespective of whether such deduction has been made or not, when the salary or wage is paid to such persons, be liable to pay tax on behalf of all such persons:
Provided that, if the employer is an officer of Government the State Government may, notwithstanding anything contained in this. Act; prescribe by rules the manner in which such employer shall discharge the said liability:
Provided further that, where any person earning a salary or wage:-
a. Is also covered by one or more entries other than entry 1 in Schedule I and the rate of tax under any such other entry is more than the rate of tax under entry 1 in that Schedule, or
b. Is simultaneously engaged in employment of more than one employer, and such person furnishes to his employer or employers a certificate in the prescribed form declaring inter alia, that he Shall get enrolled under sub-section (2) of section 5 and pay the tax himself, than the
119
employer or employers of such person shall not deduct the tax from the salary or wage payable to such person and such employer or employers, as the case may be, shall not be liable to pay tax on behalf of such person.
Schedule – I (see Section 3)
Schedule of rates of tax on professions, Trades, Callings & Employments.
With Effect From 01 July 2014
Class of Persons Rate of Tax
Salary and wage earners, such persons whose monthly salaries or
wages are:
From 01-07-2014
Up to Rs. 7500/-
From Rs. 7501/- To Rs. 10000/-
From Rs. 10001/- & Above
*to be paid in following manner:-
a) Rs. 200/- per month except in the month of February.
b) Rs. 300/- for the month of February
Nil
Rs. 175/-pm
Rs. 2,500/-p.a.*
Note: Salary / Wages limit proposed upto Rs. 7500/- pm, on which P.Tax will not be payable
which has been proposed by State Government of Maharshtra (Approval of the same is
awaited)
RETURNS: Liability to file return and payment of tax for employer (From 1-4-2011) onwards
Tax Liability Periodicity Months of salary to be covered Due Date
Less than ` 50,000 in previous year
Annual March of the previous year and April to February of the current year
31st March
` 50,000/- or more in previous year
Monthly Salary of previous month End of the month for which return is filed
In case of first year of registration
Monthly Salary of previous month End of the month for which return is filed
Note: With effect from 1st February, 2011, an assesse whose tax liability during the previous year is ` 20,000 or more is required to upload his return in electronic mode. (Refer Notification No. VAT/AMD-1010/IB/PT/ADM-6 dated 26-11-2010). Such assessee can make payment of tax in Form MTR-6.
Exemptions from Payment of Profession Tax (Sec. 27A)
120
1. The Badli workers in the textile Industry
2. Any person suffering from a permanent physical disability (including blindness) which has the
effect of reducing considerably such individual‘s capacity for normal work or engaging in a gainful employment or occupations.
3. Parents or Guardian of any person who is suffering from mental retardation specified in the rules
made in this behalf, which is certified by a psychiatrist working in a Government Hospital
4. The Person who have completed the age of Sixty Five years.
5. Parents or Guardians of a child suffering from a physical disability as specified in para2.
Payment of Interest for Delay Payment:-
The employer, who has not paid the tax, is liable to pay simple Interest at 1.25% of the amount of
the tax payable for each month for the period for which the tax remains unpaid.
Penalty for non-payment of tax:—
If an enrolled person or a registered employer fails, without reasonable cause, to make payment of any amount of tax, within the required time or date as specified in the notice of demand, the prescribed authority may, after giving him a reasonable opportunity of being heard, impose upon him a penalty equal to ten per cent, of the amount of tax due.
121
122
123
124
125
Professional Tax Slabs of other States in India where
Professional Tax is Applicable:-
Salary Slab P. Tax P. M. Salary Slab P. Tax P. M.
Andhra Pradesh Up to Rs.1 5000/-
. 15001/- to Rs. 20000/-
. 20001/- and Above
Nil.
Rs. 150/-
Rs. 200
Assam Less than Rs.3500/-
Rs. 3500/- to Rs. 4999/-
Rs. 5000/- to Rs. 6999/-
Rs. 7000/- to Rs. 8999/-
Rs. 9000 & Above
Nil
Rs.30/-
Rs.75/-
Rs.110/-
Rs.208/-
Bihar
Up to Rs. 25000/-
Rs. 25001/- to Rs. 41667/-
Rs. 41668/- & Rs. 83333/-
Rs. 83333/- Above
Nil
Rs.83/-
Rs.167/-
Rs.212/-
Gujarat
Up to Rs. 5999/-
Rs. 6000/- to Rs. 8999/-
Rs. 9000/- to Rs. 11999/-
Rs. 12000/- & Above
Nil
Rs. 80/-
Rs. 150/-
Rs. 200/-
Salary Slab P. Tax P. M. Salary Slab P. Tax P. M.
Kerala
Rs. 2000/- to Rs. 2999/-
Rs. 3000/- to Rs. 4999/-
Rs. 5000/- to Rs. 7499/-
Rs. 7500/- to Rs. 9999/-
Rs. 10000/- to Rs. 12499/-
Rs. 12500/- to Rs. 16666/-
Rs. 16667/- to Rs. 20833/-
Rs. 20834/- and above
Rs. 20/-
Rs. 30/-
Rs. 50/-
Rs. 75/-
Rs. 100/-
Rs. 125/-
Rs. 167.67/-
Rs. 208.34/-
Maharashtra
Upto Rs. 5000/-
Rs. 5001 to Rs. 10000/-
Rs. 10001/- & Above
** Rs. 300/- in month of
February
Nil
Rs. 175/-
Rs. 200/-**
Madhya Pradesh
Up to Rs. 12500/-
Rs. 12501/- to Rs. 15000/-
Rs. 15001/- & Above
## up to Feb. Rs. 212/-
Nil
Rs. 125/-
Rs. 208/-##
Meghalaya
Up to Rs. 50000/-
Rs. 50001/- to Rs. 75000/-
Rs. 75001/- to Rs. 100000/-
Rs. 100001/- to Rs. 150000/-
Rs. 150001/- to Rs. 200000/-
Rs. 200001/- to Rs. 250000/-
Rs. 250001/- to Rs. 300000/-
Rs. 300001/- to Rs. 350000/-
Rs. 350001/- to Rs. 400000/-
Rs. 400001/- to Rs. 450000/-
Rs. 450001/- to Rs. 500000/-
Rs. 500001/- & Above.
Nil
Rs. 200/-p.a.
Rs. 300/- p.a.
Rs. 500/- p.a.
Rs. 750/- p.a.
Rs. 1000/- p.a.
Rs. 1250/- p.a.
Rs. 1500/- p.a.
Rs. 1800/- p.a.
Rs. 2100/- p.a.
Rs. 2400/- p.a.
Rs. 2500/- p.a.
126
Orissa
Up to Rs. 13333/-
Rs. 13334/- to Rs. 25000/-
Rs. 25001/- & Above
In Feb Rs.300/-
Nil
Rs. 125/- p.m
Rs. 200/-p.m
Pondicherry
Rs. 50/- to Rs. 99/- Rs.
100/- to Rs. 199/- Rs.
200/- to Rs. 299/- Rs.
300/- to Rs. 499/- Rs.
500/- to Rs. 799/- Rs.
800/- to Rs. 999/- Rs.
1000/- to Rs. 1499/- Rs.
1500/- to Rs. 1999/- Rs.
2000/- to Rs. 2499/- Rs.
2500/- & Above
Rs. 1/-
Rs. 1/-
Rs. 1/-
Rs. 1/-
Rs. 2.00/-
Rs. 5.00/-
Rs. 9.00/-
Rs. 13.00/-
Rs. 17.00/-
Rs. 21.00/-
Tamil Nadu (Chennai City/ Padi)
Up to Rs. 3500/-
Rs. 3501/- to 5000/-
Rs. 5001/- to 7500/-
Rs. 7501/- to Rs. 10000/-
Rs. 10001/- to Rs. 12500/-
Rs. 12501/- & Above
Nil
Rs. 17/-
Rs. 40/-
Rs. 85/-
Rs. 127/-
Rs. 183/-
Tamil Nadu (Salem)
Up to Rs. 3500/-
Rs. 3501/- to 5000/-
Rs. 5001/- to 7500/-
Rs. 7501/- to Rs. 10000/-
Rs. 10001/- to Rs. 12500/-
Rs. 12501/- & Above
Nil
Rs. 17/-
Rs. 40/-
Rs. 85/-
Rs. 127/-
Rs. 169/-
Tamil Nadu (Madurai)
Up to Rs. 3500/-
Rs. 3501/- to 5000/-
Rs. 5001/- to 7500/-
Rs. 7501/- to Rs. 10000/-
Rs. 10001/- to Rs. 12500/-
Rs. 12501/- & Above
Nil
Rs. 17/-
Rs. 41/-
Rs. 82/-
Rs. 123/-
Rs. 163/-
Tripura Up to Rs. 2500/-
Rs. 2501/- to Rs. 3500/-
Rs. 3501/- to Rs. 4500/-
Rs. 4501/- to Rs. 6500/-
Rs. 6501/- to Rs. 10000/-
Rs. 10001/- & Above
Nil
Rs. 55/-
Rs. 85/-
Rs. 100/-
Rs. 140/-
Rs. 180/-
Salary Slab P. Tax P. M. States where P. Tax Not Applicable
West Bengal Up to Rs. 7000/-
Rs. 7001/- to Rs. 8000/-
Rs. 8001/- to Rs. 9000/-
Rs. 9001/- to Rs. 15000/-
Rs. 15001/- to Rs. 25000/-
Rs. 25001/- to Rs. 40000/-
Rs. 40001/- & Above.
Nil
Rs. 50/-
Rs. 90/-
Rs. 110/-
Rs. 130/-
Rs. 150/-
Rs. 200/-
DELHI
GOA
HARYANA
HIMACHAL PRADESH
PUNJAB
RAJASTHAN
UTTARNCHAL
UTTAR PRADESH
JHARKHAND
CHATTISGARH
127
STATUTORY COMPLIANCE: -
VARIOUS RETURNS: A GUIDELINE
In General:- I am in the opinion that a making related compliances under Labour Law and the
Rules Framed there under is a combustion Job for those who are engaged in personal / H. R.
Department.
Followings are the guide lines for them so as to make the accessible for the procedure provided
under the status.
MONTH WISE CHECKLIST FOR
MON
TH & LAST DAT
E
NAME OF THE
STATUTE
FORM
NAME OF RETURN /
COMPLIANCE
TO BE SENT TO
JANUARY
15 THE EMPLOYMENT
EXCHANGE (CNV)
ACT, 1959
ER-I
QUARTERLY RETURN
ASST. EMPLOYMENT OFFICER, CHURCHGATE
15
THE MUMBAI
LABOUR WELFARE
FUND ACT, 1953
A - I
STATEMENT OF
CONTRIBUTION OF DEC. ALONG WITH CHEQUE
WELFARE COMMISSIONER, ELPHINSTONE ROAD,
30 THE PROFESSION TAX
ACT, 1975
FORM
III
MONTHLY RETURN A/W
CHEQUE
ANY SCHEDULE BANK
30
THE CONTACT
LABOUR (R & A) ACT. 1970
XXIV
HALF YEARLY RETURN BY CONTRACTOR
ASST. LABOUR COMMISSIONER
TARDEO
31 THE FACTORIES ACT,
1948
27
ANNUAL RETURN DIRECTORATE OF INDUSTRIAL SAFETY & HEALTH, TARDEO
31 THE MATERNITY
BENEFIT ACT, 1961
11
ANNUAL RETURN
DIRECTORATE OF INDUSTRIAL
31
THE (NATIONAL & FESTIVAL HOLIDAYS)
ACT, 1963
V
ANNUAL RETURN
SAFETY & HEALTH, TARDEO / LABOUR OFFICER, TARDEO
FEBRUARY
1 THE MINIMUM
WAGES ACT, 1948
III
ANNUAL RETURN
LABOUR INSPECTOR, TARDEO
15
THE CONTRACT
LABOUR (R & A) ACT, 1970
XXI
ANNUAL RETURN- BY EMPLOYER
ASST, LABOUR COMMISSIONER, TARDEO
15
THE PAYMENT OF
WAGES ACT, 1936
V
ANNUAL RETURN
DIRECTORATE OF INDUSTRIAL
SAFETY & HEALTH, TARDEO / LABOUR OFFICER, TARDEO
28
THE PROFESSION TAX
ACT, 1975
FORM
III
MONTHLY RETURN A/W
CHEQUE
ANY SCHEDULE BANK
128
MARCH
30 THE PROFESSION TAX
ACT, 1975 FORM
III
MONTHLY RETURN A/W
CHEQUE
ANY SCHEDULE BANK
APRIL
15 THE APPRENTICESHIP
ACT, 1961
APP- 2
HALF YEARLY RETURN
MARCH ENDING
DY. APPRENTICESHIP ADVISOR SION
15
THE EMPLOYMENT
EXCHANGE (CNV)
ACT, 1956
ER- 1
QUARTERLY RETURN
ASST. EMPLOYMENT OFFICER, CHURCHGATE
30 THE PROFESSION TAX
ACT, 1975 FORM
III
MONTHLY RETURN A/W
CHEQUE
ANY SCHEDULE BANK
30
THE EMPLOYEES
PROVIDENT FUND
ACT, 1952
3A & 6A
ANNUAL INDIVIDUAL
RETURNS & RETURN OF CONTRIBUTIONS
REGIONAL PF COMMISSIONER
BANDRA/ MALAD/ THANE
MAY
12
THE EMPLOYEES
STATE INSURANCE
ACT, 1948
6
SUMMARY OF
CONTRIBUTION IN
QUADRUPLICATE A/W
CHALLANS
RESPECTIVE LOCAL OFFICE.
30 THE PROFESSION TAX
ACT, 1975 FORM
III
MONTHLY RETURN A/W
CHEQUE
ANY SCHEDULE BANK
JUNE
30 THE PROFESSION TAX
ACT, 1975 FORM
III
MONTHLY RETURN A/W
CHEQUE
ANY SCHEDULE BANK
JULY
15
THE EMPLOYMENT
EXCHANGE (CNV)
ACT, 1959
ER- I
QUARTERLY RETURN
ASST. EMPLOYMENT OFFICER, CHURCHGATE
15 THE FACTORIES ACT,
1948
28
HALF YEARLY RETURN DIRECTORATE OF INDUSTRIAL SAFETY & HEALTH, TARDEO
15
THE MUMBAI
LABOUR WELFARE
FUND ACT, 1953
A -I
STATEMENT OF
CONTRIBUTION OF JUNE
WELFARE COMMISSIONER, ELPHINSTONE ROAD,
30 THE PROFESSION TAX
ACT, 1975 FORM
III MONTHLY RETURN A/W
CHEQUE
ANY SCHEDULE BANK
30
THE CONTRACT
LABOUR (R & A)
ACT, 1970
XIV
HALF YEARLY RETURN BY
CONTRACTOR
ASST, LABOUR COMMISSIONER, TARDEO
AUGUST
30 THE PROFESSION TAX
ACT, 1975
FORM
III
MONTHLY RETURN A/W
CHEQUE
ANY SCHEDULE BANK
SEPTEMBER
30 THE PROFESSION TAX
ACT, 1975
FORM
III
MONTHLY RETURN A/W
CHEQUE
ANY SCHEDULE BANK
OCTOBER
15
THE APPRENTICESHIP
ACT, 1961
APP- 2
HALF-YEARLY RETURN
SEPT. ENDING
DY. APPRENTICESHIP ADVISOR SION
129
15
THE EMPLOYMENT
EXCHANGE (CNV)
ACT, 1956
ER- 1
QUARTERLY RETURN
ASST. EMPLOYMENT OFFICER, CHURCHGATE
30 THE PROFESSION TAX
ACT, 1975 FORM
III
MONTHLY RETURN A/W
CHEQUE
ANY SCHEDULE BANK
30 THE FACTORIES ACT,
1948
3 APPLICATION FOR
RENEWAL OF LICENCE
DIRECTORATE OF INDUSTRIAL SAFETY & HEALTH, TARDEO
31
THE CONTRACT
LABOUR (R & A)
ACT, 1970
VII
APPLICATION FOR
RENEWAL OF LICENCE
ASST, LABOUR COMMISSIONER, TARDEO
NOVEMBER
12
THE EMPLOYEES
STATE INSURANCE
ACT, 1948
6
SUMMARY OF
CONTRIBUTION IN
QUADRUPLICATE A/W
CHALLANS
RESPECTIVE LOCAL OFFICE.
30 THE PROFESSION TAX
ACT, 1975 FORM
III
MONTHLY RETURN A/W
CHEQUE
ANY SCHEDULE BANK
30
THE (NATIONAL & FESTIVAL HOLIDAYS)
ACT, 1963
I & IV
APPLICATIONS FOR
APPROVAL OF HOLIDAYS
WITH LIST
LABOUR OFFICER, TARDEO
DECEMBER
15
THE BOMBAY SHOPS
& ESTABLISHMENTS
ACT, 1948
B
RENEWAL OF
REGISTRATION CERTIFICATE
RESPECTIVE MUNICIPAL WARD
OFFICE
30 THE PROFESSION TAX
ACT, 1975 FORM
III
MONTHLY RETURN A/W
CHEQUE
ANY SCHEDULE BANK
30 THE PAYMENT OF
BONUS ACT, 1965
D
ANNUAL RETURN ASST, LABOUR COMMISSIONER,
TARDEO
SUBMISSION OF VARIOUS RETURNS
130
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