LABOUR LAWS

Submitted by
Sampriti Madhukulya
Personnel Officer, Policy

TABLE OF CONTENTS
PARTICULARS

PAGE NO.

INTRODUCTION

LABOUR POLICY OF INDIA

Classification of LABOUR LAWS in India

4-6

LABOUR LAW REFORMS

7-11

THE FACTORIES AMENDMENT BILL 2014

THE APPRENTICES AMENDMENT BILL 2014
The Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by
Certain Establishments) Amendment Bill, 2011

CHECKLIST OF IMPORTANT LABOUR LAWS

12-50

WORKMENS COMPENSATION ACT, 1923

12-14

PAYMENT OF WAGES ACT, 1936

15-16

PAYMENT OF GRATUITY ACT, 1972

16-17

PAYMENT OF BONUS ACT, 1965

18-20

EMPLOYEES STATE INSURANCE ACT, 1948

21-23

EMPLOYEES PROVIDENT FUNDS & MISC. PROVISIONS ACT, 1952

& THE SCHEMES

23-24

EMPLOYMENT EXCHANGES (COMPULSORY NOTIFICATION OF VACANCIES) ACT, 1959

25-28

FACTORIES ACT, 1948

28-31

CONTRACT LABOUR(REGULARATION & ABOLITION) ACT,1970 & THE RULES

31-34

APPRENTICES ACT, 1961

34-38

TRADE UNIONS ACT, 1926

38-40

INDUSTRIAL DISPUTES ACT, 1947

41-45

INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1946

45-46

MATERNITY BENEFIT ACT, 1961

47-48

MINIMUM WAGES ACT, 1948

49-50

The Labour Laws(Exemption from Furnishing Returns and Maintaining Register by

Central Establishments) Act, 1988
Equal Remuneration Act, 1976

51-52

Employers' Liability Act, 1938

54-55

Child Labour (Prohibition & Regulation) Act, 1986

55-57

53

1. INTRODUCTION
Labour law also known as employment law is the body of laws, administrative rulings, and
precedents which address the legal rights of, and restrictions on, working people and their
organizations. As such, it mediates many aspects of the relationship between trade unions,
employers and employees. In other words, Labour law defines the rights and obligations as
workers, union members and employers in the workplace. Generally, labour law covers:
Industrial relations certification of unions, labour-management relations, collective
bargaining and unfair labour practices;

Workplace health and safety;

Employment standards, including general holidays, annual leave, working hours, unfair
dismissals, minimum wage, layoff procedures and severance pay.

Constitutional provisions with regard to labour laws

The relevance of the dignity of human labour and the need for protecting and safeguarding the
interest of labour as human beings has been enshrined in :
Chapter-III (Fundamental Rights) of the Constitution of India

Article 16: Equality of opportunity in matters of public employment. ,

Article19: Protection of certain rights regarding freedom of speech, etc.

Article 23: Prohibition of traffic in human beings and forced labour

Article 24: Prohibition of employment of children in factories, etc.

Chapter IV (Directive Principles of State Policy)

Article 39: Certain principles of policy to be followed by the State,

Article 41: Right to work, to education and to public assistance in certain cases.

Article 42: Provision for just and humane conditions of work and maternity

Article 43: Living wage, etc., for workers ,

Article 43A : Participation of workers in management of industries

Labour is a concurrent subject in the Constitution of India implying that both the Union and the
state governments are competent to legislate on labour matters and administer the same. The
bulk of important legislative acts have been enacted by the Parliament.
CONSTITUTIONAL STATUS
UNION LIST
Entry No. 55
Entry No. 61
Entry No. 65

CONCURRENCE LIST

Regulation of labour & Safety in

mines and oil fields
Industrial disputes concerning
union employees
Union agencies and agencies for
vocational training

Entry No. 22
Entry No. 23
Entry No. 24

Trade union; Industrial and labour

disputes
Social security and insurance,
employment & unemployment
Welfare of labour including
conditions of work, provident
funds, employers Invalidity and
old age pension and maternity
benefit

LABOUR POLICY OF INDIA

Labour policy in India has been evolving in response to specific needs of the situation to suit
requirements of planned economic development and social justice and has two fold objectives,
namely maintaining industrial peace and promoting the welfare of labour.
Labour Policy Highlights

Creative measures to attract public and private investment.

Creating new jobs

New Social security schemes for workers in the unorganized sector.

Unified and beneficial management of funds of Welfare Boards.

Reprioritization of allocation of funds to benefit vulnerable workers.

Model employee-employer relationships.

Long term settlements based on productivity.

Vital industries and establishments declared as `public utilities`.

Special conciliation mechanism for projects with investments of Rs.150 crores or more.

Industrial Relations committees in more sectors.

Labour Law reforms in tune with the times. Empowered body of experts to suggest
required changes.

Statutory amendments for expediting and streamlining the mechanism of Labour

Judiciary.

Amendments to Industrial Disputes Act in tune with the times.

Efficient functioning of Labour Department.

More labour sectors under Minimum Wages Act.

Child labour act to be aggressively enforced.

Modern medical facilities for workers.

Rehabilitation packages for displaced workers.

Restructuring in functioning of employment exchanges. Computerization and updating of

data base.

Revamping of curriculum and course content in industrial training.

Joint cell of labour department and industries department to study changes in laws and
rules.

Classification of LABOUR LAWS in India

I.

Laws related to Industrial Relations such as:

ACTS

LATEST AMENDMENTS

1.

Trade Unions Act, 1926

The Trade Unions (Amendments) Act, 2001

2.

The Industrial Employment Standing Order

Act, 1946
The Industrial Disputes Act, 1947

The Industrial Employment Standing

Order(Amendments) Act 1982
The Industrial Disputes (Amendments) Act, 2010

3.

4.
The Plantation Labour Act, 1951
The Plantations Labour (amendment) act, 2010
II. Laws related to industrial safety & health such as:
1.
The Dock Workers (Safety, Health &
Welfare) Act, 1986
2.
The Factories act, 1948
The Factories Amendment act 1987
3.

The Mines act, 1952

III. Laws related to Child & Women labour such as:

1.
The child labour (prohibition and
regulation) act, 1986
2.
The Equal remuneration act, 1976
The Equal remuneration (amendment)act, 1987
IV. Laws related to Social Security such as:
1.

The Employees Compensation Act, 1923

The Employees Compensation (Amendment) Act, 2009

2.

The Employees State Insurance Act, 1948

3.

The Employees Provident Fund &

Miscellaneous Provisions Act, 1952

The Employees State Insurance (Amendment) Act,

2010
The Employees Provident Fund & Miscellaneous
Provisions (Amendment) Act, 1996

4.
5.
6.

The Payment of Gratuity Act, 1972

The Employers liability Act, 1938
The Maternity Benefit Act, 1961

The Payment of Gratuity (Amendment) Act, 2010

The Employers liability (Amendment) Act, 1970
The Maternity Benefit (Amendment) Act, 2008

7.

The Personal Injuries (Compensation

Insurance) Act 1963
The Personal Injuries (Compensation
Insurance) Act 1962
Laws related to labour welfare

8.
V.
1.
2.
3.
4.
5.
6.
7.

The Mica Mines Labour Welfare Fund Act, 1946

The Limestone & Dolomite Mines Labour Welfare Fund
Act, 1972
The Beedi Workers Welfare Fund Act, 1976
The Beedi Workers Welfare Cess Act, 1976
The Iron Ore Mines, Manganese Ore Mines & Chrome Ore
Mines Labour Welfare Fund Act, 1976
The Iron Ore Mines, Manganese Ore Mines & Chrome Ore
Mines Labour Welfare Cess Act, 1976
The Cine Workers Welfare Fund Act, 1981

8.

The Cine Workers Welfare Cess Act, 1981

9.

The Employment of Manual Scavengers and Construction

of dry latrines prohibition Act, 1993

10.

The Beedi & Cigar Workers (Conditions of Employment)

Act, 1966

11.

The Building & other Construction Workers (Regulation

of Employment & Conditions of Service) Act, 1996

12.

The Contract Labour (Regulation & Abolition) Act, 1979

13.

The Inter-State Migrant Workmen (Regulation of

Employment and conditions of Service) Act, 1979

14.

The Cine Workers and Cinema Theatre Workers

(Regulation of Employment) Act, 1981

15.

The Cine Workers Welfare fund Act, 1981

16.

The Bonded Labour System (Abolition) Act, 1976

17.

The Unorganized Workers Social Security Act, 2008

VI.

Laws related to Employment & Training such as:

1.

The Employment Exchanges (Compulsory Notification of

Vacancies) Act, 1959

2.

The Apprentices Act, 1961

The Contract Labour (Regulation &

Abolition) Amendment Act, 2004

The Apprentices amendment act

2007

VII.
Laws related to payment of Wages such as:
1.
The Payment of Wages Act, 1936
2.

The Minimum Wages Act, 1948

3.

The Working Journalist (Fixation of Rates of Wages) Act,

1958

4.

The Payment of Bonus Act, 1965

5.

Working Journalist (Conditions of service) and

Miscellaneous Provisions Act, 1955

6.

Payment of Bonus Act Notification

7.

Majitha Wage Board Notification

The Payment of Wages

(Amendment) act 2012
The Minimum Wages Amendment
Act, 2005

The Payment of Bonus Amendment

Act, 2007

OTHER LAWS
1.

The Fatal Accidents Act, 1855

2.

The Weekly Holiday Act, 1942

3.

The War Injuries (Compensation Insurance) Act, 1943

4.

The Sales Promotion Employees (Conditions of Service)

Act, 1976

5.

The Merchant Shipping Act, 1958

6.

The Coal Mines (Conservation and Development) Act, 1974

7.

The Coal Mines (Conservation and Development) Act, 1974

8.

The Labour Laws (Exemption from Furnishing Returns and

Maintaining Register by Certain Establishments) Act, 1988

9.

The Public Liability Insurance Act, 1991

10.

The Dock Workers (Regulation of Employment) Act, 1948

11.

The Motor Transport Workers Act, 1961

12.

The Working Journalist and other Newspaper Employees

(Conditions of Service and Misc. Provisions) Act, 1955

13.

The Dock Workers (Regulation of Employment)

(inapplicability to Major Ports) Act, 1997

LABOUR LAW REFORMS

The much awaited labour reforms necessary for mass manufacturing in India were initiated by Prime
Minister Narendra Modi on October 15, 2014. The efforts to rationalise labour rules, around 250 of them
at the Central and State levels, is a welcome step for industry.
The two key areas of reform are unified labour and industrial portal and labour inspection scheme.
Introduction of the labour identification number (LIN) and putting inspection on a unified portal will help
bring transparency in the use of labour rules.
The Prime Minister has also decided to raise the minimum wage ceiling from 6,500 to 15,000 and to
ensure EPF and the pension scheme for vulnerable groups.
Reforms initiatives
To undo the malady in Indias labour market, some changes have recently been initiated in the three acts
that largely govern Indias labour market:

The Factories Act (1948)

The Labour Laws Act (1988) and
The Apprenticeship Act (1961).

Amendments to some restrictive provisions of all these acts have been cleared by the Cabinet and are set
to be tabled in Parliament. Key changes proposed include dropping the punitive clause that calls for the
imprisonment of company directors who fail to implement the Apprenticeship Act of 1961.
In order to provide flexibility to managers and employers, the amendment to the Factories Act includes
doubling the provision of overtime from 50 hours a quarter to 100 hours in some cases and from 75 hours
to 125 hours in others involving work of public interest. This is seen by some as being anti-labour as it
imposes greater working hours without ensuring their security and welfare.
However, the penalty for violating the Act has been increased so as to deter exploitation. Increasing the
working hours might also have to do with low worker productivity in India.
However, even as productivity issues should be addressed in part by bringing in quality FDI, it is important
that maximum-hour protection is strictly enforced so as to prevent worker exploitation.
The norms for the employment of women in certain industry segments have been relaxed. The number of
days that an employee needs to work to be eligible for benefits like leave with pay has been reduced to 90
from 240.
The amendments to Labour Laws Act, 1988 meanwhile, will allow companies to hire more people without
having to fulfil weighty labour law requirements as it is proposed that companies with 10-40 employees will
be exempt from having to furnish and file returns on various aspects. This will help avoid procedural delays,
a feature of doing business in India.

THE FACTORIES (AMENDMENT) BILL, 2014

The Factories (Amendment) Bill, 2014 was introduced in Lok Sabha on August 7, 2014. It
proposes to amend the Factories Act, 1948.

The Act aims to ensure adequate safety measures and promote the health and welfare
of the workers employed in factories. The Statement of Objects and Reasons states that the
amendments proposed in the Bill are based on the changes in the manufacturing practices and
technologies, ratification of ILO conventions, judicial decisions, recommendations of various
Committees and decisions taken in the conferences of Chief Inspectors of Factories.

Definitions: The Act defines a factory as any premises (with certain exceptions) where
manufacturing was undertaken with aid of power and at least 10 people were employed during
the last 12 months (20 or more people if no power was used). The Bill specifies that the state
government may raise the minimum number of workers employed in the definition to 20 (if
power is used) and 40 (if power is not used).

The Bill also amends the definitions of: (i) hazardous process, (ii) manufacturing process, (iii)
occupier, and (iv) prescribed. It adds the definitions of: (i) hazardous substance, and (ii) disability

Power to make Rules: The Act allows the state government to make Rules regarding various
matters. The Bill grants the central government power to make Rules regarding some of these
matters.

The Act permits the state government to make Rules regarding any matter which: (i) is covered by
the Act or may be prescribed, or (ii) is appropriate to give effect to the purposes of the Act. The
Bill states that the state government's power to make Rules will be restricted to matters where
the central government does not have such powers. The central government may frame Rules in
consultation with state governments, to bring uniformity in the areas of occupational safety,
health or any other matter.

Compounding of offences: The Bill seeks to permit the central or state government to prescribe
the authorised officers and the amount, for compounding of the certain offences before
commencement of the prosecution. The central or state governments may amend the list of
compoundable offences.

Employment of women and persons with disability: The Act prohibits women from working: (i)
on certain machines in motion, (ii) near cotton-openers, and (iii) between 7:00 PM and 6:00 AM.
The Bill seeks to remove the first two restrictions. It proposes to empower the state government
to allow women to work during night hours in a factory or group of factories if: (i) there are
adequate safeguards for safety, health and comfort of women (including night crches, ladies
toilets and transportation from the factory to their residence), and (ii) it has held due
consultations with and obtained the consent of the women workers, the employer and the
representative organisations of the employers and workers.

The Bill seeks to impose restrictions on employment of pregnant women and persons with
disability in certain works or processes.

Manufacturer's liability to ensure safety: The Act places the liability of ensuring that an article to
be used in a factory is safe on the designer, importer, supplier or manufacturer. The Bill extends
such liability to the designer, importer, supplier or manufacturer of any substance used in a
factory.

Workers safety: The Bill introduces provisions for: (i) supply of protective equipment and
clothing to workers exposed to hazards, and (ii) rules regarding hazardous processes. It modifies
the provisions regarding: (i) precautions against dangerous fumes and gases, (ii) explosive or
inflammable dust or gas, and (iii) dangerous operations.

Facilities for workers: The Act mandates a factory employing more than 150 people to provide
shelters or restrooms. The Bill states that a factory with more than 75 workers should provide
separate shelters or restrooms for male and female workers.

Overtime and paid leave: The Bill increases the maximum number of overtime hours allowed to
a worker and relaxes the provisions regarding entitlement of workers to paid leave.

THE APPRENTICES (AMENDMENT) BILL, 2014(PASSED BY LOK SHABHA)

The Apprentices (Amendment) Bill, 2014 was introduced in Lok Sabha on August 7, 2014. It
proposes to amend the Apprentices Act, 1961.

The Act regulates the training of apprentices in the industry. An Inter Ministerial Group
(IMG) had recommended various changes to the Act to make apprenticeship more
responsive to youth and industry. The Statement of Objects and Reasons states that the
amendments proposed in the Bill are based on IMGs recommendations.

Definitions: The Bill amends the definition of appropriate government to include an

establishment operating in four or more states to be regulated by the central government.
It also amends the definitions of: (i) designated trade, (ii) graduate or technician apprentice,
(iii) trade apprentice, (iv) industry and (v) worker. The Bill adds two definitions: (i) optional
trade, and (ii) portal-site.

Minimum age for an apprentice: The Act sets the minimum age for being engaged as an
apprentice at 14 years. The Bill adds that the minimum age for apprenticeship in designated
trades related to hazardous industries shall be 18 years.

Number of apprentices: The Act says that the central government, after consulting the
Central Apprenticeship Council (CAC) established under the Act shall determine the ratio of
trade apprentices to workers (except unskilled workers) for each designated trade. The Bill
states that the central government shall prescribe the number of apprentices to be engaged

10

by an employer for designated trade and optional trade.

Cooperation between employers for training: The Bill permits multiple employers to come
together, either themselves or through an approved agency (vs. only themselves as per the
Act), to provide apprenticeship training (vs. practical training as per the Act) to apprentices
under them.

Practical training to apprentices: The Act states that every employer shall make suitable
arrangements in his workshop for imparting practical training to apprentices, as per the
programme approved by the Adviser. The Bill removes the requirement for Advisers
approval.

Basic training to apprentices: The Act states that trade apprentices who have not received
prior institutional training shall be imparted basic training before admission in the workshop
for practical training. The Bill specifies that such training can be provided in any institute
with adequate facilities.

Syllabus and equipment for practical training: The Act states that the syllabus and
equipment for practical training shall be as approved by the central government (with CAC
consultation). The Bill limits the provision for training in a designated trade only.

Grant of certificate: The Act specifies that every trade apprentice should appear for a
proficiency test conducted by the National Council for Vocational Training (NCVT), on
completion of his training. On passing the test, NCVT shall grant him a certificate of
proficiency. The Bill adds that such tests may be conducted and certificates may be granted
by other authorised agencies as well.

Hours of work, overtime, leave and holidays: The Act states that the weekly and daily
hours of work and leave entitlements of an apprentice shall be as prescribed by Rules. The
Bill states that the hours of work and leave will be as per the discretion or policy of the
employer.

Offences and penalties: The Act specifies certain offences which are punishable with
imprisonment up to six months or with a fine (quantum unspecified) or both. The Bill
specifies the amount/maximum amount of the fine and removes the provision for
imprisonment for such offences.

Power to make Rules: The Act permits the central government (after consulting with the
CAC) to make Rules for implementing the Act. The Bill states that these powers shall include
the power to make Rules retrospectively with effect from a date on or after the President
grants his assent to the Bill. No Rule shall have a retrospective effect if it prejudicially affects
the interests of any person to whom such Rule may be applicable.

Penalties: The Act specifies the penalties for various offences. The Bill raises the penalties for 12
of these offences (including contraventions by the occupier or manager, a worker, or a designer,
importer, supplier or manufacturer of an article or substance).

11

The Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain
Establishments) Amendment Bill, 2011

The Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain
Establishments) Amendment and Miscellaneous Provisions Bill, 2011 was introduced in the Rajya
Sabha on March 23, 2011. The Bill was referred to the Standing Committee on Labour (Shri
Hemanand Biswal), which submitted its report on April 1, 2011.

The Bill amends the Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by

Certain Establishments) Amendment and Miscellaneous Provisions Act, 1988 (Principal Act).

The Principal Act defines small establishments as any place which employs between 10 and 19
people on any day of the preceding 12 months. A very small establishment is a place that employs
nine or less people.

Under the Principal Act, these establishments are exempted from furnishing returns and maintaining
registers under certain labour laws. Small establishments are also exempted from furnishing returns
and maintaining registers under certain laws such as the Payment of Wages Act, 1936; the Weekly
Holidays Act, 1942; Minimum Wages Act, 1948; the Factories Act, 1948; and the Plantations Labour
Act, 1951. Instead, they are required to furnish returns and maintain registers in a specified format.

The Bill seeks to widen the ambit of the Act to more establishments and adds more laws from which
these establishments are to be exempted.

The Bill amends the definition of small establishment to cover establishments that employ
between 10 and 40 people.

The Principal Act states that an employer has to file returns and maintain registers at the work spot
in the specified format. The employer also has to issue wage slips, amount of work done slips and
file returns related to accidents. The Bill adds that the employer may maintain the returns filed and
the registers on a computer, computer disk or other electronic media. Printouts of these records
shall have to be made available to the Inspector on demand. The information may also be furnished
to the Inspector by electronic mail.

The Bill amends the list of Acts which exempts small establishments from maintaining registers and
filing returns. It adds seven Acts to the list. They are: the Motor Transport Workers Act, 1961; the
Payment of Bonus Act, 1965; the Beedi and Cigar Workers (Conditions of Employment) Act, 1966; the
Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979; the
Dock Workers (Safety, Health and Welfare) Act, 1986; the Child Labour (Prohibition and Regulation)
Act, 1986; and the Building and Other Construction Workers (Regulation of Employment and
Conditions of Service) Act, 1996. Only the common forms of returns or registers specified in the Bill
have to be maintained and furnished.

12

THE WORKMEN'S COMPENSATION ACT, 1923(amended in 2009)

The Objective:
To provide for the payment of compensation to the workmen for injury or accident. This Act is one of the
earliest Acts having come into force from 1st July, 1924. It extends to whole of India.
The salient features the Act in brief are as under.
Employer's Liability for Compensation:
a) A workman is entitled to get compensation from his employer if he is injured while on duty and
during the course of his employment with his employer.
b) If a workman dies due to the accident while of duty and during the course of his employment with
his employer, his dependents are entitled to receive the amount of compensation from his
employer
Occupational diseases:
If a workman contacts occupational diseases enlisted in Schedule III of this Act, while on duty and during
the course of his employment with his employer, the said disease shall be deemed to be an injury by
accident. The workman or if dead, his dependents are entitled to receive the amount of compensation
from his employer.
d) Amount of Compensation:
(1) Temporary Disablement:
Where the disablement is temporary i.e. workman not being able to attend to duty for more than 3 days on
account of injury is entitle to get compensation at the rate of a half monthly payment of the sum equivalent
to twenty five percent of monthly wages of the workman. E.G. if workman's wages are Rs.500/- per month
he will receive Rs.125/- for a fortnight i.e. 15 days or Rs. 8.33 p. per day and so on depending on his wages.
If the disablement continues for more than 28 days therefrom days to be counted from the date of injury.
(2) Permanent total disablement:
The permanent total disablement is listed in Schedule I of the Act. Where the disablement is permanent
and total the amount of compensation will be equivalent of fifty percent of the monthly wages of the
injured workman multiplied by the relevant factor or an amount of twenty four thousand rupees
(Rs. 24,000/-) whichever is more.
(3) Death:
Where death results from an injury an amount equal to forty percent of the monthly wages of the
deceased workman multiplied by the relevant factor or an amount of twenty thousand rupees
(Rs. 20,000/-) whichever is more.

13

NOTE:
1) For purpose of sub clause (2) & (3) above 'relevant factor' in relation to workman mean the factor
specified in schedule IV of the Act against the age of the workman.
2) Where the monthly wages of a workman exceed Rs.1,000/- his monthly wages for the purpose of
clause (2) & (3) shall be deemed to be Rs. 1,000/- only.
e)

If Permanent partial disablement results from the injury :- such percentage of the
compensation which would have been payable in the case of permanent total disablement after
determining the loss of earning capacity caused by that injury

Recovery of Compensation:
1. If the employer fails to pay the compensation to a workman of fails to deposit the amount of
compensation with the commissioner for Workmen's Compensation, or the Labour Court concerned, them
the injured workman, either himself or through his representative, should send a notice of his claim or his
employer mentioning therein the time, date, place and nature of accident, wage rate of the workman and
the amount of compensation. In case of death of a workman , any of his dependents or his/her
representative can send such notice with detailed information. A copy of the same should be sent to the
Commissioner for Workmen's Compensation or the Labour Court concerned.
2. If the employer fails to settle the claim, the workman himself or any of the dependents of the deceased
workman should file the application before the concerned court having jurisdiction to entertain the claim.
This has to be done in form 'F' by the injured workman and in form 'G' by the dependent of the daceased
workman.
3. The court fee is @ Rs.1/- per every Rs. 500/- or less amount of claim and paise 50 for claim of half
monthly wages for temporary disablement.
4. Amount payable under this Act cannot be assigned or charged or be liable to attachment or be passed to
any person other than the workman by operation of law nor shall any claim be set-off against the same.
Only the amount which is paid towards half monthly wages during the period of disablement can be
deducted from the amount of final settlement of claim.
5. The Court has power to award interest on the amount of compensation, cost and penalty.
6. If the employer fails to pay or deposit the amount of compensation awarded by the Court or admitted
by the employer, them on application by the workman to the concerned court for recovery of the same, the
court shall write to the collector and the same will be recovered as arrears of Land Revenue.
Contracting:
1) Where any person (referred to as the principal) in the course of or for the purpose of his trade or
business, contracts with any other person (referred to as the contractor) for execution by or under the
contractor of the whole or any part of any work which is ordinarily part of the trade or business of the

14

principal, the principal shall be liable to pay to any workman employed in the execution of the work the
compensation which he would have been liable to pay if that workman had been immediately employed by
him. And where compensation is claimed from the principal, this Act shall apply as if references to the
principal were substituted for references to the employer except that the amount of compensation shall be
calculated with reference to the wages of the workman under the employer by whom he is immediately
employed.
2) The workman is at liberty to recover compensation either from the contractor or the principal.
Transfer of Assets:
The Act specifies that compensation is the first charge on assets transferred by employer.
Limitation for Filing Claim:
The application for recovery of claim should be filed within two years from the date of accident. However,
the Court has power to condone the delay in filing an application.
Commissioners:
Commissioners under the Act are appointed by the Government. They carry certain powers relating to
recording of evidence, registering of agreements etc.
Appeals:
Workman's appeal against the order of the Commissioner for Workmen's Compensation or by the Presiding
Officer of the Labour Court concerned lies to the High Court.
Where an employer makes an appeal, the Commissioner may and if so desired by the High Court, shall,
pending the decision of the appeal, withhold payment of any sum in deposit with him.
The Commissioner may recover as arrears of land revenue, any amount payable by any person under this
Act, whether under an agreement for the payment of compensation or otherwise, and the Commissioner
shall be deemed to be a public officer within the meaning of the Revenue Recovery Act, 1980.
Schedule I
List of injuries deemed to result in Permanent Total disablement.
Schedule II
List of persons who subject to the provisions of section 2(1) (h), are included in the definition of ' workman
Schedule III
List of occupational diseases.
Schedule IV
Amount of compensation payable in certain cases.
SCHEDULE IV
Factors for working out lump sum equivalent of compensation amount in case of permanent
disablement and death.

15

PAYMENT OF WAGES ACT, 1936(amended in 2012)

Objectives

To ensure regular and prompt payment of wages and to prevent the exploitation of a wage earner
by prohibiting arbitrary fines and deductions from his wages.
Applicability of the Act

Application for payment of wages to persons employed in any factory.

Not applicable to wages which average Rs 6,500 per month or more.

Wages include all remuneration, bonus, or sums payable for termination of service, but do not
include house rent reimbursement, light vehicle charges, medical expenses, TA, etc.
Important provisions of the Act

Responsibility of the employer for payment of wages and fixing the wage period.

Procedures and time period in wage payment.

Payment of wages to discharged workers.

Permissible deductions from wages.

Nominations to be made by employees.

Penalties for contravention of the Act.

Equal remuneration for men and women.

Obligations and rights of employers.

Obligations and rights of employees.

The Act is to regulate payment of wages to certain class of employed persons. The main purpose of this Act
is to ensure regular and timely payment of wages to the employed persons, to prevent unauthorized
deductions being made from wages and arbitrary fines being imposed on the employed persons. The Act
extends to the whole of India.
Application of the Act:
The Act applies to payment of wages to persons employed in factory or railways. It also applies to any
industrial or other establishment specified in Section 2(ii). *Section 1(4)+. Factory means factory as
defined in Section 2(m) of Factories Act. - - Industrial or other establishment specified in Section 2(ii) are - *
Tramway or motor transport services * Air transport services * Dock wharf or jetty * Inland vessels * Mines,
quarry or oil-field * Plantation * Workshop in which articles are produces, adopted or manufactured. - - The
Act can be extended to other establishment by State/Central Government.
Presently, the Act applies to employees drawing wages upto Rs 6,500. [Section 1(6)]. Every employer is
responsible for payment to persons employed by him on wages. [Section 3].
HOW WAGES SHOULD BE PAID - Wages can be paid on daily, weekly, fortnightly or monthly basis, but
wage period cannot be more than a month. [Section 4]. Wages should paid on a working day. Wages are
payable on or before 7th day after the wage period. In case of factories employing more than 1,000
workers, wages can be paid on or before 10th day after wage period is over. *Section 5(1)+. *Normally,
wage period is a month. Thus, normally, wages should be paid by 7th of following month and by 10th if
the number of employees are 1,000 or more]. - - Wages should be paid in coins and currency notes.
However, with authorisation from employee, it can be paid by cheque or by crediting in his bank account.
[Section 6].

16

DEDUCTIONS PERMISSIBLE - Deduction on account of absence of duty, fines, house accommodation if

provided, recovery of advance, loans given, income tax, provident fund, ESI contribution, LIC premium,
amenities provided, deduction by order of Court etc. is permitted. Maximum deduction can be 50%.
However, maximum deduction upto 75% is permissible if deduction is partly made for payment to
cooperative society. [Section 7].
FINES Specific notice specifying acts and omissions for which fine can be imposed should be exhibited on
notice board etc. Such notice can be issued only after obtaining specific approval from State Government.
Fine can be imposed only after giving employee a personal hearing. Fine can be maximum 3% of wages in a
month. Fine cannot be recovered in installments. [Section 8].

PAYMENT OF GRATUITY ACT, 1972(amended in 2010)

Applicability of the Act
The Act provides for a scheme for the payment of gratuity to employees engaged in factories, mines,
oilfields, plantations, ports, railway companies, shops or other establishments. The Act enforces the
payment of 'gratuity', a reward for long service, as a statutory retiral benefit. Every employee irrespective
of his wages is entitled to receive gratuity if he has rendered continuous service of 5 years or more than 5
years. It is not paid to an employee gratuitously or merely as a matter of boon. It is paid for the service
rendered by him to the employer (Delhi Cloth and General Mills Co; Ltd Vs the Workmen).
Gratuity is payable to an employee on termination of his employment after he has rendered continuous
service for not less than five years:
on his superannuation
on his resignation
on his death or disablement due to employment injury or disease
The Working Journalists and Other Newspaper Employees (Conditions of service) and Miscellaneous
Provisions Act, 1955, provides for payment of gratuity. As such, three years of continuous service is
required for eligibility for Gratuity.
The payment of gratuity shall be forfeited:
to the extent of the damage or loss caused by the employee to the property of the employer
where the service of the employee is terminated due to misconduct
According to Sec.2(e) "employee" means any person (other than an apprentice) employed on wages, in any
establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semiskilled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment
are express or implied.
According to Sec.2A (1) an employee shall be said to be in continuous service for a period if he has, for
that period, been in uninterrupted service, including service which may be interrupted on account of
sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order
treating the absence as break in service has been passed in accordance with the standing order, rules or
regulations governing the employees of the establishment), lay off, strike or a lock-out or cessation of work
not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered
before or after the commencement of the Act. (2) where an employee (not being an employee employed in

17

a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of
one year or six months, he shall be deemed to be in continuous service under the employer a. for the said period of one year, if the employee during the period of twelve calendar months preceding
the date with reference to which calculation is to be made, has actually worked under the employer
for not less than (i) one hundred and ninety days, in the case of an employee employed below the ground in a
mine or in an establishment which works for less than six days in a week; and
(ii) two hundred and forty days, in any other case
b. for the said period of six months, if the employee during the period of six calendar months preceding
the date with reference to which the calculation is to be made, has actually worked under the
employer for not less than i.
ninety-five days, in the case of an employee employed below the ground in a mine or in an
establishment which works for less than six days in a week; and
ii. one hundred and twenty days, in any other case;
Rate of gratuity
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.
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.
In the case of an employee who is employed in a seasonal establishment and who is not so employed
throughout the year, the employer shall pay the gratuity at the rate of seven days wages for each season.
In the case of a monthly rated employee, the fifteen days wages shall be calculated by dividing the monthly
rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.
The amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand rupees.
Responsibility of the Employer:
Every employer, other than an employer or an establishment belonging to, or under the control of, the
Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain an
insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from
the Life Insurance Corporation of India established under the Life Insurance
Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer:
The appropriate Government may, subject to such conditions as may be prescribed, exempt every
employer who had already established an approved gratuity fund in respect of his employees and who
desires to continue such arrangement and every employer employing five hundred or more persons who
establishes an approved gratuity fund in the manner prescribed.
Where an employer fails to make any payment by way of premium to the insurance or by way of
'contribution to all approved gratuity fund, he shall be liable to pay the amount of gratuity due under this
Act (including interest, if any, for delayed payments) forthwith to the controlling authority.
Whoever contravenes the provision above shall be punishable with fine which may extend to Rs 10,000/and in the case of a continuing offence with a further fine which may extend to Rs 1000/- for each day
during which the offence continues.

18

THE PAYMENT OF BONUS ACT, 1965(amended in 2007)

The payment of Bonus Act provides for payment of bonus to persons employed in certain establishments of
the basis of profits or on the basis of production or productivity and for matters connected therewith.
It extends to the whole of India and is applicable to every factory and to every other establishment where
20 or more workmen are employed on any day during an accounting year.
Eligibility for Bonus
Every employee receiving salary or wages upto Rs. 10,000 p.m. and engaged in any kind of work whether
skilled, unskilled, managerial, supervisory etc. is entitled to bonus for every accounting year if he has
worked for at least 30 working days in that year.
Where an employee has not worked for all the working days in an accounting year, the minimum bonus of
one hundred rupees or, as the case may be, of sixty rupees, if such bonus is higher than
8.33 per cent, of his salary or wage for the days he has worked in that accounting year, shall be
proportionately reduced.
However employees of L.I.C., Universities and Educational institutions, Hospitals, Chamber of
Commerce, R.B.I., IFCI, U.T.I., IDBI, NABARD, SIDBI, Social Welfare institutions are not entitled to bonus
under this Act.
Calculation for Working Days in An Accounting Year
An employee shall be deemed to have worked in an establishment in any accounting year also on the days
on which-a. he has been laid off under an agreement or as permitted by standing orders under the Industrial
Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14
of 1947), or under any other law applicable to the establishment;
b. he has been on leave with salary or wage;
c. he has been absent due to temporary disablement caused by accident arising out of and in the
course of his employment; and
d. the employee has been on maternity leave with salary or wage, during the accounting year.
Disqualification for Bonus
Notwithstanding anything contained in the act, an employee shall be disqualified from receiving bonus, if
he is dismissed from service for fraud or riotous or violent behaviour while in the premises of the
establishment or theft, misappropriation or sabotage of any property of the establishment.
Minimum and Maximum Bonus Payable
Minimum Bonus
The minimum bonus which an employer is required to pay even if he suffers losses during the
accounting year or there is no allocable surplus is 8.33 % of the salary or wages during the
accounting year, or
Rs. 100 in case of employees above 15 years and Rs 60 in case of employees below 15 years, at the
beginning of the accounting year, whichever is higher

19

Maximum Bonus
If in an accounting year, the allocable surplus, calculated after taking into account the amount set on or
the amount set of exceeds the minimum bonus, the employer should pay bonus in proportion to the
salary or wages earned by the employee in that accounting year subject to a maximum of 20% of such
salary or wages.
Time Limit for Payment
The bonus should be paid in cash within 8 months from the close of the accounting year or within one
month from the date of enforcement of the award or coming into operation of a settlement following an
industrial dispute regarding payment of bonus. However if there is sufficient cause extension may be
applied for.
Calculation of Bonus
The method for calculation of annual bonus is as follow:
1) Calculate the gross profit in the manner specified in
a) First Schedule, in case of a banking company, or
b) Second Schedule, in any other case.
2) Calculate the Available Surplus.
Available Surplus = A+B, where A = Gross Profit Depreciation admissible u/s 32 of the Income tax Act Development allowance - Direct taxes payable for the accounting year (calculated as per Sec.7) Sums
specified in the Third Schedule.
B = Direct Taxes (calculated as per Sec. 7) in respect of gross profits for the immediately preceding
accounting year Direct Taxes in respect of such gross profits as reduced by the amount of bonus, for the
immediately preceding accounting year.
3) Calculate Allocable Surplus
Allocable Surplus = 60% of Available Surplus, 67% in case of foreign companies.
4) Make adjustment for Set-on and Set-off. For calculating the amount of bonus in respect of an
accounting year, allocable surplus is computed after considering the amount of set on and set off
from the previous years, as illustrated in Fourth Schedule.
5) The allocable surplus so computed is distributed amongst the employees in proportion to salary or
wages received by them during the relevant accounting year.
In case of an employee receiving salary or wages above Rs. 3,500 the bonus payable is to be
calculated as if the salary or wages were Rs. 3,500 p.m. only.
Duties / Rights of Employer
Duties
To calculate and pay the annual bonus as required under the Act
To submit an annual return of bonus paid to employees during the year, in Form D, to the
Inspector, within 30 days of the expiry of the time limit specified for payment of bonus.
To co-operate with the Inspector, produce before him the registers/records maintained, and such
other information as may be required by them.
To get his account audited as per the directions of a Labour Court/Tribunal or of any such other
authority.

20

Rights
An employer has the following rights:
Right to forfeit bonus of an employee, who has been dismissed from service for fraud, riotous or
violent behaviour, or theft, misappropriation or sabotage of any property of the establishment.
Right to make permissible deductions from the bonus payable to an employee, such as,
festival/interim bonus paid and financial loss caused by misconduct of the employee.
Right to refer any disputes relating to application or interpretation of any provision of the
Act, to the Labour Court or Labour Tribunal.
Rights of Employees
Right to claim bonus payable under the Act and to make an application to the Government, for the
recovery of bonus due and unpaid, within one year of its becoming due.
Right to refer any dispute to the Labour Court/Tribunal Employees, to whom the Payment of Bonus
Act does not apply, cannot raise a dispute regarding bonus under the Industrial Disputes Act.
Right to seek clarification and obtain information, on any item in the accounts of the
establishment.
Recovery of Bonus Due
Where any bonus is due to an employee by way of bonus, employee or any other person
authorised by him can make an application to the appropriate government for recovery of the
money due.
If the government is satisfied that money is due to an employee by way of bonus, it shall issue a
certificate for that amount to the collector who then recovers the money.
Such application shall be made within one year from the date on which the money became due to
the employee.
However the application may be entertained after a year if the applicant shows that there was
sufficient cause for not making the application within time.
Offences and Penalties
For contravention of the provisions of the Act or rules the penalty is imprisonment upto 6 months
or fine up to Rs.1000, or both.
For failure to comply with the directions or requisitions made the penalty is imprisonment upto 6
months or fine up to Rs.1000, or both.
In case of offences by companies, firms, body corporate or association of individuals, its director,
partner or a principal officer responsible for the conduct of its business, as the case may be, shall
be deemed to be guilty of that offence and punished accordingly, unless the person concerned
proves that the offence was committed without his knowledge or that he exercised all due
diligence.

21

THE EMPLOYEES STATE INSURANCE ACT (ESI ACT), 1948(amended in 2010)

The ESI Act has been passed to provide for certain benefits to employees in case of sickness, maternity and
employment injury and to make provisions for related matters. As the name suggests, it is basically an
insurance scheme i.e. employee gets benefits if he is sick or disabled.
ESIC - Employees State Insurance Corporation (ESIC) has been formed to supervise the scheme under
Section 3 of the Act. The Corporation supervises and controls the ESI scheme.
No Dismissal or Punishment During Period of Sickness - Section 73 of the Act provides that no employer
shall dismiss, discharge or reduce or otherwise punish an employee during the period employee is in
receipt of sickness benefit or maternity benefit. He also cannot dismiss, discharge or otherwise punish
employee when he is in receipt of disablement benefit or is under medical treatment or is absent from
work due to sickness.
This gives protection to employee when he is in receipt of sickness benefit or maternity benefit. Employer
cannot take disciplinary action against employee in such cases. This provision is grossly misused by
employees.
Applicability of ESI Scheme - The scheme is applicable to all factories. [Section 1(4)]. The Appropriate
Government can also make it applicable to any other industrial, commercial, agricultural or other
establishments, by issuing notification and giving 6 month notice. [Section 1(5)].
Thus, ESI Act can be made applicable to shops also. However, since Government has to provide for
hospitals and medical facilities, the Act can be made applicable to different parts of State at different dates.
Thus, if a factory is at a place where ESIC is unable to provide medical facilities, ESI Act may not be made
applicable to that area. Government can exempt a factory or establishment or persons or class of persons
from provisions of ESI Act, if the employees are getting better medical facilities/ [e.g. if Government is
convinced that the factory itself is providing very good medical facilities e.g. like TISCO]
Definition of factory as per ESI Act - The Factory means any premises where manufacturing process is
carried out. If manufacture is without aid of power, the Act is applicable if persons employed are at least
20. If manufacture is with aid of power, the Act applies if persons employed are at least 10. [Section 2(12)].
- - However, mines have been excluded. - - Manufacturing process has same meaning as defined under
Factories Act. [Section 2(14AA)].
Employer under ESI Act Principal Employer means * owner or occupier of factory * Head of department
in case of Government department and * Person responsible for supervision and control, in case of any
other establishment. [Section 2(17)]. - - Employees working though contractor are also covered.
Contractor is termed as Immediate Employer. Immediate employer means a person who has
undertaken the execution, on the premises of factory or establishment to which this Act applies. He may do
on his own or under the supervision of Principal Employer. The work should be part of work of factory or
establishment of principal employer or is preliminary or incidental to the work of factory or establishment.
[Section 2(13)]. Primary liability of ESI contribution is of Principal Employer. [Section 40(1)]. He can recover
the contribution paid by him from the immediate employer i.e. contractor. [Section 41].

22

Employee under ESI Act - Employee means any person employed for wages in or in connection with work
of a factory or establishment to which the ESI Act applies. Earlier employees drawing wages upto Rs. 6,500
per month were covered under the ESI Act scheme. [Section 2(9)]. However, w.e.f 1 st April 2004, this wage
ceiling has been increased to Rs. 7,500 per month.
Employees include * persons employed through contractor * Apprentices other than those covered under
Apprentices Act * Persons employed in administration office, department or branch for purchase or sale
of products. * Casual workers engaged in work incidental to or connected with work of factory or
establishment * Employees working at head office when factory is located at different place * Canteen
staff, watch and ward staff are employees * Staff in hospital attached to factory are employees. - Members of Indian Naval, Military or Air Forces are excluded.
Contribution to ESIC Fund - Both employee and employer have to make contribution to ESIC. The employer
has to deduct contribution from wages of employee and pay to ESIC both the employers contribution as
well as employees contribution. *Section 39(1)+.
The contribution is payable for wage period i.e. the period in respect of which wages are payable to
employee. *Section 39(2)+. Normally, wage period is a month. The employees contribution is 1.75% of
wages. It should be rounded off to next 5 paise. Employees contribution is not payable when daily wages
are below Rs 15/-.
Employers contribution is 4.75% of total wage bill of all employees in respect of every wage period. Thus,
it is not necessary to calculate employer's contribution separately for each employee. 4.75% of gross wages
should be calculated and rounded off to next 5 paise. Employees drawing wages lower than Rs 25 per day
do not have to pay employee's share. The contribution has to be paid within 21 days from close of the
month. It is payable by a challan in authorised bank. - - If the contribution is not paid in time, interest @
12% is payable. [Section 39(5)(a)].
In addition, ESIC authorities can impose damages varying between 5% to 25% of arrears of contribution
u/s 85B.
Employer cannot deduct employers contribution from the salary of employee. *Section 40(3)+.
Wage for purpose of ESI Act - Wages means all remuneration paid or payable in cash to employee
according to terms of contract of employment and includes any payment made to an employee in respect
of period of authorised leave, lock-out, lay-off, strike which is not illegal and other additional remuneration
paid at interval not exceeding two months. It does not include * contribution paid by employer to any
pension fund or provident fund * Travelling allowance * Reimbursement of expenses made by nature of
employment of the employee * gratuity. [Section 2(22)].
Thus, wages include basic pay, dearness allowance, city compensatory allowance, payment of day of rest,
overtime wages, house rent allowance, incentive allowance, attendance bonus, meal allowance and
incentive bonus. However, wages do not include annual bonus, unilateral rewards scheme (inam), ex gratia
payments made every quarter or every year travelling allowance, retrenchment compensation,
encashment of leave and gratuity.

23

Contribution period and Benefit period - Contribution period is (a) 1st September to 31st March (b) 1st
April to 30th September. The corresponding benefit period is (a) following 1st July to 31st December (b)
following 1st January to 30th June. Thus, benefit period starts three months after the contribution period
is over. The relevance of this definition is that sickness benefit and maternity benefit is available only during
benefit period. Thus, an employee gets these benefits only after 9 months after joining employment and
paying contribution. However, other benefits are available during contribution period also.
Benefits to employees covered under ESI Act - An employee is entitled to get benefits which are medical
benefits as well as cash benefits. He also can get disablement benefit.

EMPLOYEES PROVIDENT FUND AND MISC. PROVISIONS ACT, 1952(amended in 1996)

An Act to provide for the institution of provident funds, pension funds and deposit linked insurance fund
for the employees in the factories and other establishments. The Act extends to the whole of India except
the State of Jammu and Kashmir.
Applicability
All factories and establishments in which 20 or more are employed
Schemes under the Act
Three beneficial schemes1. Employees Provident Fund Scheme 1952
2. Employees Pension Scheme 1995
3. Employees Deposit Linked Insurance 1976
Membership
An employee at the time of joining the employment and getting wages up to Rs.6500/- is required
to become a member.
An employee is eligible for membership of fund from the very first date of joining a covered
establishment.
Contribution to EPF
Employees share : 12% of the Basic + DA
Employers contribution : 12% to be deposited as :
8.33% to be deposited in Pension Fund A/C No 10 and
the balance, ie, 3.67% to be deposited in Provident Fund A/C No 01 along with Employees share of
12%
Administration charges @ 1.1% of the total wages/salary disbursed by deposit to A/C No 02,
Employees Deposit Linked Insurance @ 0.5% of the total wages/salary by deposit to A/C No. 21 and
Administration of EDLI @ 0.01% of the wages/ salary by deposit to A/C. No. 22.

24

Duties of employer
Employer to furnish information about:
a) Ownership and names of responsible persons of the establishment.
b) Declaration and nomination.
c) Joining and leaving of service by the members in form 5 and form 10 respectively
d) Form 12A with monthly challans of deposit.
e) Form 9 for details of employees.
f) Form 3A/6A at the end of the financial year.
g) Any other information as may be required under Para 76 of the scheme
Benefits to employees
1. Provident Fund Benefits
Employer also contributes to Members PF @ 3.67% (1.67% in case of sick industry - eg: beedi)
EPFO guarantees the Employer contribution and Govt. gives a decent interest to PF accumulations
Member can withdraw from this accumulations to cater financial exigencies in life - No need to
refund unless misuse
On resignation, the member can settle the account. i.e., the member gets his PF contribution,
Employer Contribution and Interest
2. Pension Benefits
Pension to Member
Pension to Family (on death of member)
Scheme Certificate
3. Death Benefits
Provident Fund Amount to Family (or to Nominee)
Pension to Family (or to Parent / Nominee)
Capital Return of Pension
Insurance (EDLI) amount to Family (or to Nominee)
No amount is taken from Member for this facility. Employer contributes for this.
Nominee is basically determined as per the information submitted by the member through FORM-2

25

The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959

The main purpose of the Act is to provide for the compulsory notification of vacancies to employment
exchanges. The employer is required on a compulsory basis, to notify to the Employment Exchanges all
vacancies other than vacancies in unskilled categories, temporary vacancies and vacancies proposed to be
filled through promotion and tender to the Employment Exchanges, return relating to the staff strengths at
regular intervals.
The Act extends to the whole of India.
Scheme of the Act
There are only 10 Sections in total and some of the important Sections are:
Section 2

Definitions

Section 3

Act not to apply in relation to certain Vacancies

Section 4

Notification of Vacancies to Employment Exchanges

Section 5

Employers to furnish information and returns in prescribed form

Section 6

Right of access to records or documents

Section 7

Penalties

Section 8

Cognizance of Offences

Section 9

Protection of Action taken in good faith

Application of the Act:

The Act covers the employers in establishments both in public and private sectors. The Act is applicable to
establishments which are engaged in non-agricultural activities and employing 25 or more workers. The
enforcement of the Act is the responsibility of States and Union Territories. Most of the States/Union
Territories have set up special enforcement machinery for this purpose.
Act not to apply in relation to certain vacancies:
The Act shall apply to the following category of vacancies:
1) In any employment in agriculture (including horticulture) in establishment in private sector other
than employment as agricultural or farm machinery operatives;
2) In any employment in domestic service;
3) In any employment the total duration of which is less than 3 months;
4) In any employment which requires unskilled office work;
5) In any employment related to the staff of Parliament.

26

In addition, the Act shall not apply to the following vacancies unless the Central Government otherwise
directs through notification in its Official Gazette:
1) Vacancies which are proposed to be filled through promotion
2) Vacancies which are proposed to filled through absorption of surplus staff of any branch or
department of the same establishment
3) Vacancies which are proposed to be filled through the result of any examination conducted or
interview held by, or on recommendation of, any independent agency such as Union or State Public
Service Commission and the like.
4) Vacancies in an employment which carries a remuneration of less than sixty rupees in a month.
(Section 3).
Notification of vacancies to Employment Exchanges:
Section 4 of the Act provides for notification of vacancies to employment exchange. The employer in every
establishment in public sector is required to notify any vacancy before filling it up, to the prescribed
employment exchanges.
The Section further requires an employer in every establishment tin private sector or every establishment
pertaining to any class or category of establishments in private sector to notify to the prescribed
employment exchanges from such date as may be specified in the notification issued by the appropriate
Government in the Official Gazette.
Section 4(3) provides that the manner of notification of vacancies and the particulars of employments
having such vacancies should be such as may be prescribed.
Section 4(4) says that the employers obligation is only to notify the vacancy to the employment exchange.
The Act does not impose any obligation on an employer to recruit any person through employment
exchange to fill the vacancy merely because the vacancy has been notified as required by this Act.
Employment Exchanges to which vacancies are to be notified:
Rule 3 of The Employment Exchanges (Compulsory Notification of Vacancies) Rules, 1960, says that the
vacancies are to be notified either to the Central Employment Exchange or Local Employment Exchange, as
the case may be.
The Central Employment Exchange means the Employment Exchange established by the Government of
India, Ministry of Labour and Employment and to which the following vacancies shall be notified:
Vacancies in posts of a technical and scientific nature carrying a basic pay of Rs. 1,400 or more per
month occurring in establishments in respect of which the Central Government is the appropriate
Government under the Acct; and
Vacancies which an employer may desire to be circulated to the employment exchanges outside the
State or Union Territory to which the establishment is situated.

27

The Local Employment Exchange means the employment exchange (the Central Employment Exchange)
notified in the Official Gazette by the State Government or the Administration or Union Territory as having
jurisdiction over the area in which the establishment concerned is situated or over specified classes or
categories of establishments of vacancies.
Vacancies of all types other than those which are required to be notified to Central Employment Exchange,
shall be notified to these local employment exchanges.
Furnishing of Information or Returns:
Section 5 requires an employer in every establishment in public sector to furnish, such information or
return as may be prescribed in relation to vacancies that have occurred or are about to occur in the
establishment to such employment exchanges as may be prescribed. In the case of private sector or every
establishment pertaining to any class or category of establishments in private sector, the appropriate
Government, by notification in the Official Gazette, may require that from such date as may be prescribed
in relation to vacancies that have occurred or are about to occur in that establishment to such employment
exchanges as may be prescribed and the employer shall thereupon, comply with such requisition.
The above return shall be furnished to the Director or other authorized officer of the Directorate
administering employment exchanges in a State or Union Territory.
Right of Access to Records or Documents:
Such officer of the Government as may be prescribed in this behalf, or nay person authorized by him in
writing, shall have access to any relevant record or document in the possession of any employer required to
furnish any information or returns under Section 5 of this Act. Such officer is also empowered to enter at
any reasonable time, any premises where he believes that such record or document to be and inspect and
take copies of relevant records or documents or ask any question necessary for obtaining information
required under that Section (Section 6).
Penalties (Section 7)
(1) If any employer fails to notify to the employment exchanges prescribed for the purpose any vacancy in
contravention of sub-Section (1) or sub-Section (2) of Section 4, he shall be punishable for the first offence
with fine which may extend to five hundred rupees and for every subsequent offence with fine which may
extend to one thousand rupees.
(2) If any person - (a) required to furnish any information or return - (i) refuses or neglects to furnish such
information or return, or
(ii) furnishes or causes to be furnished any information or return which he knows to be false, or
(iii) refuses to answer, or gives a false answer to, any question necessary for obtaining any information
required to be furnished under Section 5; or

28

(b) impedes the right of access to relevant records or documents or the right of entry conferred by Section
6, he shall be punishable for the first offence with fine which may extend to two hundred and fifty rupees
and for every subsequent offence with fine which may extend to five hundred rupees.
Cognizance of Offences - No prosecution for an offence under this Act shall be instituted except by, or with
the sanction of, such officer of Government as may be prescribed in this behalf or any person authorised by
that officer in writing (Section 8).
Protection of action taken in good faith - No suit, prosecution or other legal proceedings shall lie against
any person for anything which is in good faith done or intended to be done under this Act (Section 9).

FACTORIES ACT, 1948(amended in 1987)

Objectives
1. To ensure adequate safety measures and to promote the health and welfare of the workers
employed in factories.
2. To prevent haphazard growth of factories through the provisions related to the approval of plans
before the creation of a factory.
Applicability of the Act
1. Applicable to the whole of India including Jammu & Kashmir.
2. Covers all manufacturing processes and establishments falling within the definition of factory.
3. Applicable to all factories using power and employing 10 or more workers, and if not using power,
employing 20 or more workers on any day of the preceding 12 months.
Scheme of the Act
1. The Act consists of 120 Sections and 3 Schedules.
2. Schedule 1 contains list of industries involving hazardous processes
3. Schedule 2 is about permissible level of certain chemical substances in work environment.
4. Schedule 3 consists of list of notifiable diseases.
Important provisions the Act
Facilities and Conveniences - The factory should be kept clean. [Section 11]. There should be arrangement
to dispose of wastes and effluents. [Section 12]. Ventilation should be adequate. Reasonable temperature
for comfort of employees should be maintained. [Section 13]. Dust and fumes should be controlled below
permissible limits. [Section 14]. Artificial humidification should be at prescribed standard level. [Section 15].
Overcrowding should be avoided. [Section 16]. Adequate lighting, drinking water, latrines, urinals and
spittoons should be provided. [Sections 17 to 19]. Adequate spittoons should be provided. [Section 20].
Welfare - Adequate facilities for washing, sitting, storing cloths when not worn during working hours.
[Section 42]. If a worker has to work in standing position, sitting arrangement to take short rests should be
provided. [Section 44]. Adequate First aid boxes shall be provided and maintained [Section 45].
Facilities in case of large factories - Following facilities are required to be provided by large factories - *
Ambulance room if 500 or more workers are employed * Canteen if 250 or more workers are employed. It

29

should be sufficiently lighted and ventilated and suitably located. [Section 46]. * Rest rooms / shelters with
drinking water when 150 or more workmen are employed [Section 47] * Crches if 30 or more women
workers are employed. [Section 48] * Full time Welfare Officer if factory employs 500 or more workers
[Section 49] * Safety Officer if 1,000 or more workmen are employed.
Safety - All machinery should be properly fenced to protect workers when machinery is in motion. [Section
21 to 27]. Hoists and lifts should be in good condition and tested periodically. [Section 28 and 29]. Pressure
plants should be checked as per rules. [Section 31]. Floor, stairs and means of access should be of sound
construction and free form obstructions. [Section 32]. Safety appliances for eyes, dangerous dusts, gas,
fumes should be provided. [Sections 35 and 36]. Worker is also under obligation to use the safety
appliances. He should not misuse any appliance, convenience or other things provided. [Section 111]. In
case of hazardous substances, additional safety measures have been prescribed. [Sections 41A to 41H]. - Adequate fire fighting equipment should be available. [Section 38]. - - Safety Officer should be appointed if
number of workers in factory are 1,000 or more. [Section 40B].
Working Hours - A worker cannot be employed for more than 48 hours in a week. [Section 51]. Weekly
holiday is compulsory. If he is asked to work on weekly holiday, he should have full holiday on one of three
days immediately or after the normal day of holiday. [Section 52(1)]. He cannot be employed for more than
9 hours in a day. [Section 54]. At least half an hour rest should be provided after 5 hours. [Section 55]. Total
period of work inclusive of rest interval cannot be more than 10.5 hours. [Section 56]. A worker should be
given a weekly holiday. Overlapping of shifts is not permitted. [Section 58]. Notice of period of work should
be displayed. [Section 61].
Overtime Wages - If a worker works beyond 9 hours a day or 48 hours a week, overtime wages are double
the rate of wages are payable. [Section 59(1)]. A workman cannot work in two factories. There is restriction
on double employment. [Section 60]. However, overtime wages are not payable when the worker is on
tour. Total working hours including overtime should not exceed 60 in a week and total overtime hours in a
quarter should not exceed 50. Register of overtime should be maintained. - - An employee working outside
the factory premises like field workers etc. on tour outside headquarters are not entitled to overtime. R
Ananthan v. Avery India 1972(42) FJR 304 (Mad HC) * Director of Stores v. P S Dube 1978 Lab IC 390 = 52
FJR 299 = 1978 I LLN 464 = 36 FLR 420.
Employment of Women - A woman worker cannot be employed beyond the hours 6 a.m. to 7.00 pm. State
Government can grant exemption to any factory or group or class of factories, but no woman can be
permitted to work during 10 PM to 5 AM. Shift change can be only after weekly or other holiday and not in
between. [Section 66].
Night Shift for women:
Factories Act is proposed to be amended to allow night shift for women workers. The Government has
decided to amend Section 66 of the Factories Act, 1948 to allow employment of women workers between
7.00 pm and 6.00 am. The demand of womens organisations and in tune with the present economic
globalization, the Government has decided to bring in then required changes in the Act. This flexibility
would be available to all manufacturing units including the apparel sector. This decision has been taken
after meetings with the representatives of the employers and the trade unions. The proposed Bill will

30

empower the State Governments for allowing the necessary flexibility in employment of women during
night shift in factories.
The proposed amendment would inter-alia provide that the employer has to ensure occupational safety
and adequate protection to the women workers. However, the State Government or any person
authorised by it would be allowing employment of women during night only after consulting the workers or
their representative organisations and concerned employers or their representatives. The State
Governments are also empowered to frame their own rules for allowing such permissions.
Record of Workmen - A register (muster roll) of all workers should be maintained. No worker should be
permitted to work unless his name is in the register. Record of overtime is also required to be maintained.
[Section 62].
Leave - A worker is entitled in every calendar year annual leave with wages at the rate of one day for every
20 days of work performed in the previous calendar year, provided that he had worked for 240 days or
more in the previous calendar year. Child worker is entitled to one day per every 15 days. While calculating
240 days, earned leave, maternity leave upto 12 weeks and lay off days will be considered, but leave shall
not be earned on those days. [Section 79]. Leave can be accumulated upto 30 days in case of adult and 40
days in case of child. Leave admissible is exclusive of holidays occurring during or at either end of the leave
period. Wage for period must be paid before leave begins, if leave is for 4 or more days. [Section 81]. Leave
cannot be taken for more than three times in a year. Application for leave should not normally be refused.
[These are minimum benefits. Employer can, of course, give additional or higher benefits].
Wages for OT and Leave Salary - 'Wages' for leave encashment and overtime will include dearness
allowance and cash equivalent of any benefit. However, it will not include bonus or overtime.
Child Employment - Child below age of 14 cannot be employed. [Section 67]. Child above 14 but below 15
years of age can be employed only for 4.5 hours per day or during the night. [Section 71]. He should be
certified fit by a certifying surgeon. [Section 68]. He cannot be employed during night between 10 pm to 6
am. [Section 71]. A person over 15 but below 18 years of age is termed as adolescent. He can be employed
as an adult if he has a certificate of fitness for a full day's work from certifying surgeon. An adolescent is not
permitted to work between 7 pm and 6 am. [Section 70]. There are more restrictions on employment of
female adolescent. - - Register of child workers should be maintained. [Section 73].
Display on Notice Board - A notice containing abstract of the Factories Act and the rules made thereunder,
in English and local language should be displayed. Name and address of Factories Inspector and the
certifying surgeon should also be displayed on notice board. [Section 108(1)].
Notice of Accidents, Diseases Etc. - Notice of any accident causing disablement of more than 48 hours,
dangerous occurrences and any worker contacting occupational disease should be informed to Factories
Inspector. [Section 88]. Notice of dangerous occurrences and specified diseases should be given. [Sections
88A and 89].
Obligation regarding Hazardous Processes / Substances - Information about hazardous substances /
processes should be given. Workers and general public in vicinity should be informed about dangers and

31

health hazards. Safety measures and emergency plan should be ready. Safety Committee should be
appointed.
CONTRACT LABOUR (REGULATION & ABOLITION) ACT, 1970 (AMENDED IN 2004)
1.0 Objective:
The Act aims at regulating employment of contract labour so as to place it at par with working conditions.
The Act empowers the Govt. to prohibit employment of contract labour in any process, operation or other
work in any establishment if the working conditions and benefits provided to them are discriminatory.
2.0 Scope & Coverage:
Sec. 1:
The Act extends to the whole of India. It applied to:(a) Every establishment in which 20 or more workmen are employed or were employed on any day of the
preceding 12 months as contract labour, and
(b) Every contractor who employs or who employed on any day of the preceding 12 months, 20 or more
workmen.
(c) The Act, however, does not apply to any establishment working casually or intermittently. Work
performed in an establishment shall not be deemed to be of an intermittent nature:(i) If it was performed for more than 120 days in the preceding 12 months, or
(ii) If it is of seasonal character and is performed for more than 60 days in a year

3.0 Employees Entitled:

The Act covers every workman employed in or in connection with any of the establishment, by or through a
contractor, with or without the knowledge of the principal employer [Sec. 2(1) (b)] but excludes:
(i)

persons employed in managerial or administrative capacity,

(ii)

persons employed as supervisors and receiving wages exceeding Rs.500/- per Mensem (Month),
and

(iii)

out workers to whom materials are given for manufacturing or processing at his own
premises [Sec. 2(1) (i)].

4.0 Administrative Authority:

The act is administered by the Central and the State Governments in their respective jurisdiction. The
central/ state Govts. have set up advisory Boards constituted by representatives of industry,
contractor, workers and government nominees [Secs 2(1) (a), 3 and 4].

32

 The Govt. also appoints registration offices, Licensing officer and inspectors for carrying out the
provisions of the Act [Secs. 6, 11 and 28]. The Central and the State govts. shall make their rules for
enforcement of the Act [Sec. 35].

5.0 Prohibition on Employment of Contract Labour:

The appropriate Govt. can prohibit employment of contract labour in any process, operation or other work
in any establishment after considering theconditions of work and benefits provided for the contract labour
in that establishment and other relevant factors [Sec. 10].
Employment of contract labour may not be permitted for any process operation and other work if:
(a) It is incidental to, or necessary for the industry, trade business, manufacture or occupation that is
carried on in the establishment;
(b) It is of perennial or perpetual nature of sufficient duration;
(c) It is done ordinarily through regular workmen in that establishment or an establishment similar thereto;
and
(d) It is sufficient to employ considerable of whole time workmen.
6.0 Obligations of Principal Employers/Contractors
The obligations of the Principal Employer of an establishment and /or the contractor are as under:6.1 Registration of Establishment (Principal Employer):
The principal employer should apply for registration of his establishment with the registering officer,
in the prescribed form I along with the prescribed fee. On being satisfied with the application the
registering officer shall issue a registration certificate [Sec. 7].The certificate is liable to be cancelled
if it has been obtained by misrepresentative of facts or if it has become useless [Sec. 8].
An establishment cannot employ contract labour if it does not hold a certificate of registration or if
its certificate has been revoked [Sec.9].
Failure to obtain registration by the principal employer entails penal provisions of Sec. 23 but does
not give a right to the workers engaged by the contractor to claim employment from the principal
employer
6.2 Licensing of Contractors:
A contractor should apply for license for employing contractor labout, to the LICENSING OFFICER,
in the prescribed from containing particulars such as location of the establishment, operation of
work, nature of process, particulars of contract labour, etc. On being satisfied with the application
and after making necessary investigation the licensing officer grant the license on payment of the
prescribed fee and security deposit. A copy of the license has to be displayed prominently at the
premises where the contract work is being carried out.
A contractor cannot undertake or execute any work through contract labour if it does not hold a
valid license or its license has been revoked [Sec.12]. Failure to obtain a license by a contractor,
entails penal provisions, but in no case shall the contract labour be deemed as workman of the
Principal Employer

33

 No contractor can engage contract labour without obtaining a license or whose license has been
revoked or in contradiction with the terms and conditions specified in the license [Sec.14]. No
license can be revoked unless the licensing authority gives a fair hearing.
6.3 Welfare & Health Amenities for Contract Labour:
The following amenities are required to be provided by the contractor for contract labour;
(i) One or more canteens where the number of contract labour ordinarily employed is 100 or more [Sec.
16].
(ii) Sufficiently lighted, well ventilated, clean and comfortable rest rooms, where contract labours are
required to halt at night in connection with their work [Sec. 17].
(iii) Supply of wholesome drinking water at convenient places, provisions for latrines, urinals and working
facilities [Sec. 18]; and
(iv) Fully equipped First-Aid Boxes readily accessible during all working hours [Sec.19]
6.4 Payment of Wages:
The contractor is liable to make regular and timely payment of wages to the contract labour, in
presence of an authorized representative of the principle employer.
If however, the contractor fails to make the payment in time or makes short payment, the Principal
Employer should make payment of wages in full or the unpaid balance due to the contract labour,
and recover the same from the contactor. [Sec. 21].
However, gratuity and bonus will not be payable by the Principal Employer since these do not come
within the definition of wages.

6.5 Registers, Returns & Notice

The principal employer and the contractor should maintain such registers and records containing
particulars of contract labour, nature of work performed rates of wages paid and other prescribed
particulars.
The employer and contractor should also send the prescribed returns to the registering officer or
licensing officer.

The employer and the contractor should exhibit in the premises of the establishment, notices
containing hours of work, wage period, nature of duty and other prescribed particulars [Sec. 29].

7.0 Coverage Of Contractor`s Employees Under EPF Act & ESI Act:
Contractors employees are eligible for Provident Fund benefits. If the establishment is covered under ESI,
the employees engaged by a contractor have to be enrolled as members of ESI.
8.0 Direct Absorption of Contract Labour:
Persons who get displaced, on the expiry of the contract/license period, do not get any statutory right for
absorption in regular service under the employer.
9.0 Rights of Employers/Contractor:
Te principal employers and the contractors have the following rights:

34

(i) Right to appeal against an order of the registering officer or the Licensing officer refusing or revoking
registration or license. The appeal should be filed to the appellate officer on the prescribed manner, within
30 days from the date on which the order is communicated to him [Sec. 15].
(ii) Right to be represented on the Central and State advisory Boards [Sec. 4].
10.0 Rights of Contract Labour:
The obligations of the contractor and the principal employer are, practically, the rights of the contract
labour. Besides, the contract workmen have also the right to be represented on the Central and State
Advisory Boards.
11.0 Offence & Penalties:

APPRENTICES ACT, 1961(amended in 2007)

The main purpose of the Act is to provide practical training to technically qualified persons in various
trades. The objective is promotion of new skilled manpower. The scheme is also extended to engineers and
diploma holders.
The Act applies to areas and industries as notified by Central government. [Section 1(4)].
Scheme of the Act
There are 38 Sections in total and 1 Schedule. This Schedule is about modifications in the Workmens
Compensation Act, 1923 w.r.t its application to apprentices under the Apprentices Act, 1961.
Obligation of Employer
Every employer is under obligation to provide the apprentice with the training in his trade in accordance
with the provisions of this Act and the rules made there under.
If the employer is not himself qualified in the trade, he has to ensure that a person who possesses the
prescribed qualification is placed in charge of the training of the apprentice.

35

 Every employer has to provide adequate instructional staff, possessing such qualifications as may be
prescribed for imparting practical and theoretical training and facilities for trade test of apprentices;
and
Every employer is under obligation to take apprentices in prescribed ratio of the skilled workers in his
employment in different trades. [Section 11].
In every trade, there will be reserved places for scheduled castes and schedules tribes. [Section 3A].
Ratio of trade apprentices to workers shall be determined by Central Government.
Employer can engage more number of apprentices than prescribed minimum. [Section 8(1)].
The employer has to make arrangements for practical training of apprentice [Section 9(1)].
Employer will pay stipends to apprentices at prescribed rates. If the employees are less than 250,
50% of cost is shared by Government. If employer is employing more than 250 workers, he has to
bear full cost of training.
Obligations of Apprentices:
Every trade apprentice undergoing apprenticeship training shall have the following obligations, namely:
To learn his trade conscientiously and diligently and endeavour to qualify himself as a skilled
craftsman before the expiry of the period of training;
To attend practical and instructional classes regularly;
To carry out all lawful orders of his employer and superiors in the establishments; and
To carry out his obligations under the contract of apprenticeship.
In case of graduate or technician apprentice or technician (vocational) apprentice, apart from the
aforestated obligations, the Act imposes further obligation to learn his subject in Engineering or Technology
or Vocational Course. (Section 12)
Who can be an Apprentice - Apprentice should be of minimum age of 14 years and he should satisfy the
standard of education and physical fitness as prescribed. [Section 3].
Reservation of training places for scheduled castes:
Section 3A provides that in every designated trade, training places shall be reserved by the employer for
the Scheduled Castes and Scheduled Tribes (as defined in clauses (24) and (25) of Article 366 of the
Constitution) and where there is more than one designated trade in an establishment, such training places
shall be reserved on the basis on the total number of apprentices in all the designated trades in such
establishment. The reservation shall be such as may be prescribed having regard to the population of the
Scheduled Castes and Scheduled Tribes in the State concerned.
Duration of Training - Duration of training period and ratio of apprentices to skilled workers for different
trades has been prescribed in Apprenticeship Rules, 1991. Duration of Apprenticeship may be from 6
months to 4 years depending on the trade, as prescribed in Rules. Period of training is determined by
National Council for training in Vocational Trades (established by Government of India)-(Section 6).
Contract with Apprentice Apprentice appointed has to execute a contract of apprenticeship with
employer. The contract has to be registered with Apprenticeship Adviser. If apprentice is minor, agreement

36

should be signed by his guardian. [Section 4(1)] Apprentice is entitled to casual leave of 12 days, medical
leave of 15 days and extraordinary leave of 10 days in a year.
Date of commencement of apprenticeship training:The apprenticeship training shall be deemed to have
commenced on the date on which the contract of apprenticeship has been entered into.
Registration:
The employer shall send the contract to the Apprenticeship adviser for registration within three months of
the date on which it was signed (Rule 6).
The contract shall be registered by the Apprenticeship Adviser on being satisfied that the person described
as an apprentice in the said contract is qualified under this Act.
Registration of contract of apprenticeship under Section 4(4) is not a necessary ingredient of definition of
apprentice.
Terms and conditions of contract:
The contract may contain such terms and conditions as may be agreed to by the parties to the contract. In
case, the Central Government after consulting the Central Apprenticeship Council makes any rule varying
the terms and conditions of apprenticeship training of any category of apprentices undergoing such training
then the terms and conditions of every contract relating to that category of apprentices and subsisting
immediately before the making of such rule shall be deemed to have been modified accordingly.
Novation of contract of apprenticeship:
Where an employer is for any reason unable to fulfill his obligations under the contract and with approval
of the Apprenticeship Adviser it is agreed between the employer, the apprentice or his guardian and any
other employer that the apprentice shall be engaged as an apprentice under the other employer for the
unexpired portion of the period of apprenticeship training, the agreement, on registration with the
Apprenticeship Adviser shall be deemed to be the contract of apprenticeship between the apprentice or his
guardian and other employer. Such contract on and from the date of such registration shall be terminated
with the first employer and no obligation under that contract shall be enforceable (Section 5).
Payment to apprentices:
This is a contractual as well as statutory obligation imposed under Section 13 of the Act that an employer
pays to every apprentice during the period of training such stipend at a rate not less than the prescribed
minimum rate and this rate will be specified in the contract. An employer shall pay such stipend at such
intervals and subject to such conditions as may be prescribed. However, an apprentice shall not be paid on
the basis of piece-work nor he shall take part in any output bonus or other incentive scheme.
Termination of contract:
The contract of apprenticeship training shall terminate on the expiry of the period of apprenticeship
training. Either party can make application for termination of contract to the Apprenticeship Adviser and
thereafter send a copy of the same to the other party, who on being satisfied that the parties have failed to

37

carry out the terms and conditions of the contract and it is desirable in the interests of the parties or any of
them to terminate the contract, shall register the same. However, the employer shall pay the prescribed
amount of compensation to the apprentice where the contract is terminated for failure on the part of the
employer to honour the contract. Where the contract is terminated for failure on the part of the
apprentice, he or his guardian shall refund the cost of the training to the employer. (Section 7)
Legal Position of Apprentices - An apprentice is not a workman during apprentice training. [Section 18]
Provisions of labour law like Bonus, PF, ESI.
Act, gratuity, Industrial Disputes Act etc. are not applicable to him. However, provisions of Factories Act
regarding health, safety and welfare will apply to him. Apprentice is also entitled to get compensation from
employer for employment injury. [Section 16].
Stipend payable- The minimum rate of stipend payable per month is as follows - (a) Engineering graduates
- Rs 3,560 p.m. for post-institutional training (b) Sandwich course students for degree examination - Rs
2,530 p.m. (c) diploma holders - Rs 2,530 p.m. for post-institutional training (d) Sandwich course students
for degree examination - Rs 2,070 p.m. (e) Vocational certificate holder - Rs 1,970 p.m. [w.e.f. March 2011]
Test and Proficiency certificate - On completion of training, every trade apprentice has to appear for a test
conducted by National Council. If he passes, he gets a certificate of proficiency.
Apprenticeship Adviser - Government is empowered to appoint Apprenticeship Adviser, Dy Apprenticeship
Adviser etc. to supervise the scheme. Various powers have been conferred on them under the Act.
Disputes under contract and settlement thereof:
Section 20 of the Act provides that if out of the terms and conditions of the contract any dispute arises, it
will be referred to Apprenticeship Adviser for decision. An appeal can be preferred by the aggrieved party
within 30 days of the communication of the Advisers decision to the Apprenticeship Council and such
appeal shall be heard and determined by the Committee of that Council appointed for the purpose, and
such decision of the Committee shall be final.
Holding of Test and Grant of Certificate and Conclusion of Training (Section 21)
1) Every trade apprentice who has completed the period of training shall appear for a test to be
conducted by the National Council to determine his proficiency in the designated trade in which he
has undergone his apprenticeship training.
2) Every trade apprentice who passes the test referred to in sub-Section (1) shall be granted a
certificate of proficiency in the trade by the National Council.
3) The progress in apprenticeship training of every graduate or technician apprentice, technician
(vocational) apprentice shall be assessed by the employer from time to time.
4) Every graduate or technician apprentice or technician (vocational) apprentice, who completes his
apprenticeship training to the satisfaction of the concerned Regional Board, shall be granted a
certificate of proficiency by that Board.

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Offences And Penalties (Section 30)

1) If any employer
a) engages as an apprentice a person who is not qualified for being so engaged, or
b) fails to carry out the terms and conditions of a contract of apprenticeship, or
c) contravenes the provisions of this Act relating to the number of apprentices which he is required to
engage under those provisions, he shall be punishable with imprisonment for a term which may extend
to six months or with fine or with both.
2) If any employer or any other person
a. required to furnish any information or return
i.
refuses or neglects to furnish such information or return, or
ii.
furnishes or causes to be furnished any information or return which is false and which he either
knows or believes to be false or does not believe to be true, or
iii.
refuses to answer, or gives a false answer to any question necessary for obtaining any information
required to be furnished by him, or
b. refuses or willfully neglects to afford the Central or the State Apprenticeship Adviser or such other
person, not below the rank of an Assistant Apprenticeship Adviser, as may be authorised by the Central
or the State Apprenticeship Adviser in writing in this behalf any reasonable facility for making any entry,
inspection, examination or inquiry authorised by or under this Act, or
c. requires an apprentice to work overtime without the approval of the Apprenticeship Adviser, or
d. employs an apprentice on any work which is not connected with his training, or
e. makes payment to an apprentice on the basis of piecework, or
f. requires an apprentice to take part in any output bonus or incentive scheme, he shall be punishable
with imprisonment for a term which may extend to six months or with fine or with both.
Penalty where no specific penalty is specified (Section 31) - If any employer or any other person
contravenes any provision of this Act for which no punishment is provided in Section 30, he shall be
punishable with fine which shall not be less than one thousand rupees but may extend to three thousand
rupees.

THE TRADE UNIONS ACT, 1926(amended in 2001)

The Trade Unions Act, 1926 provides for registration of trade unions with a view to render lawful
organisation of labour to enable collective bargaining. It also confers on a registered trade union certain
protection and privileges.
The Act extends to the whole of India and applies to all kinds of unions of workers and associations of
employers, which aim at regularising labour management relations. A Trade Union is a combination
whether temporary or permanent, formed for regulating the relations not only between workmen and
employers but also between workmen and workmen or between employers and employers.
Registration
Registration of a trade union is not compulsory but is desirable since a registered trade union enjoys certain
rights and privileges under the Act. Minimum seven workers of an establishment (or seven employers) can
form a trade union and apply to the Registrar for it registration.

39

The application for registration should be in the prescribed form and accompanied by the
prescribed fee, a copy of the rules of the union signed by at least 7 members, and a statement
containing
a) the names, addresses and occupations of the members making the application,
b) the name of the trade union and the addresses of its head office, and
c) the titles, names, ages, addresses and occupations of its office bearers.
If the union has been in existence for more than a year, then a statement of its assets and liabilities
in the prescribed form should be submitted along with the application.
The registrar may call for further information for satisfying himself that the application is complete
and is in accordance with the provisions, and that the proposed name does not resemble
On being satisfied with all the requirements, the registrar shall register the trade union and issue a
certificate of registration, which shall be conclusive evidence of its registration.

Legal Status of a Registered Trade Union

A registered trade union is a body corporate with perpetual succession and a common seal.
It can acquire, hold sell or transfer any movable or immovable property and can be a party to
contracts.
It can sue and be sued in its own name
No civil suit or other legal proceeding can be initiated against a registered trade union in respect of
any act done in furtherance of a trade dispute under certain conditions.
No agreement between the members of a registered trade union shall be void or voidable merely
on the ground that any of its objects is in restraint of trade.
Appointment of Office Bearers
At least 50% of the office bearers of a union should be actually engaged or employed in the industry with
which the trade union is concerned, and the remaining 50% or less can be outsiders such as Lawyers,
politicians, social workers etc.
To be appointed as an office bearer or executive of a registered trade union, a person must have
a) attained the age of 18 years; and
b) not been convicted of any affiance involving moral turpitude and sentenced to imprisonment, or a
period of at least 5 years has elapsed since his release.
Change of Name & Registered Office
A registered trade union may change its name with the consent of at least 2/3rds of the total
numbers of its members.
Notice of change of name in writing, signed by the secretary and 7 members of the union, should
be sent to the registrar.
the Registrar shall register the change in name if he is satisfied that the proposed name is not
identical with the name of any other existing union and the requirements with respect to change of
name have been complied with.
The change of name shall not affect any rights and obligations of the trade union or render any
legal proceeding by or against the trade union as defective.

40

Change of Registered Office

Notice of change in registered office address should be given to the Registrar in writing within 14 days of
such change.
Dissolution of a Trade Union
A registered trade union can be dissolved in accordance with the rules of the union. A notice of dissolution
signed by any seven members and the secretary of the union should be sent to the registrar within 14 days
of the dissolution. On being satisfied the registrar shall register the notice and the union shall stand
dissolved from the date. The funds of the union shall be divided by the
Amalgamation of Trade Unions
Any registered trade union may amalgamate with any other union(s), provided that at least 50% of the
members of each such union record their votes and at least 60% of the votes so recorded are in favour of
amalgamation. A notice of amalgamation signed by the secretary and at least 7 members of each
amalgamating union, should be sent to the registrar, and the amalgamation shall be in operation after the
Registrar registers the notice.
Obligations of Registered Trade Unions
1. The general funds of a registered trade union should be spent only for the objects specified such as,
payment of salaries, allowances and expenses of its office bearers, its administrative and audit
expenses, prosecution or defence of any legal proceeding for securing or protecting its rights,
conduct of trade disputes, compensation for loss arising out of trade disputes, compensation for loss
arising out of trade disputes, provision of educational, social or religious benefits and allowances on
account of death, old age, sickness, accident or unemployment to its members, publication of labour
journals etc. The account books and membership register of the union should be kept open for
inspection by any of its office-bearers.
2. A copy of every alteration made in the rules of the union should be sent to the Registrar within 15
days of making the alteration.
3. An annual statement of receipts and expenditure and assets and liabilities of the union for the year
ending on the 31st December, prepared in the prescribed forms and duly audited should be sent to
the Registrar within the prescribed time. This statement should be accompanied by a statement
showing changes in office bearers during the year and a copy of the rules as amended upto date.
Offence Penalty

41

INDUSTRIAL DISPUTES ACT 1926(amended in 2010)

Objective of the act :
The object of the Act is to make provisions for investigation and settlement of industrial disputes. However,
it makes other provisions in respect of lay off, retrenchment, closure etc. The purpose is to bring the
conflicts between employer and employees to an amicable settlement. [The Act is achieving exactly
opposite]. The Act provides machinery for settlement of disputes, if dispute cannot be solved through
collective bargaining.
Industry under Industrial Disputes Act The definition of industry is as follows Industry means any
business, trade, undertaking, manufacture or calling of employers and includes any calling, service,
employment, handicraft or industrial occupation or avocation of workmen. [section 2(j)]. Thus, the
definition is very wide. - - The scope is much wider than what is generally understood by the term
industry.
Industry Dispute and Workman The definition of industrial dispute and workman is as follows Industrial Dispute
Industrial dispute means any dispute or difference between employers and employers, or between
employers and workmen, or between workmen and workmen, which is connected with the employment or
non-employment or the terms and conditions of employment or with the conditions of labour, of any
person. [section 2(k)]. - - Section 2A provides that dismissal, discharge, retrenchment of even a single
workman will be industrial dispute even if no other workman or any union is a party to the dispute.
Workman :
Workman means any person (including apprentice) employed in any industry to do any manual, clerical or
supervisory work for hire or reward. It includes dismissed, discharged or retrenched person also. However,
it does not include (i) Armed Forces i.e. those subject to Air Force Act, Army Act or Navy Act (ii) Police or
employees of prison (iii) Employed in mainly managerial or administrative capacity or (iv) person in
supervisory capacity drawing wages exceeding Rs 1,600 per month or functions are is mainly of managerial
nature. [section 2(x)].
Adjudication of disputes The Act provides for Works Committee in factories employing 100 or more
workers. [section 3]. The committee will consist of equal number of representatives of employer and
employees. Representatives of employees will be selected in consultation with Registered Trade Union. The
Works Committee will first try to settle disputes. If dispute is not solved, it will be referred to Conciliation
Officer.
Conciliation Officer. He is appointed by Government. *section 4+. The matter may also be referred to
Board of Conciliation.
Board of Conciliation. *section 4+. He will try to arrive at fair and amicable settlement acceptable to both
parties. If he is unable to do so, he will send report to appropriate Government. [section 12(4)]. The

42

Government may then refer the industrial dispute to Board of conciliation, Labour Court or Industrial
Tribunal. [section 12(5)].
Employer and employees can voluntarily refer the matter to arbitration. [section 10A]. [This provision is
very rarely used by employer and workmen. Generally, they prefer the Court route].
If no settlement is arrived at, there is three tier system of adjudication Labour Court, Industrial Tribunal
and National Tribunal. The order made by them is award.

Labour Court :
Labour Courts are constituted by State Governments u/s 7. It will be presided over by Presiding Officer.
The Labour Court has powers in respect of * Interpretation of Standing Orders * Violation of Standing
Orders * Discharge or dismissal of a workman * Withdrawal of any customary concession or privilege *
Illegality or otherwise of a strike or lock-out * Other matters which are not under Industrial Tribunal.
[Second Schedule to the Act]
Industrial tribunal :
Industrial Tribunal is constituted by State Government u/s 7A. The tribunal will be presided over by
Presiding Officer. The Industrial Tribunal has powers in respect of
* Wages, including period and mode of payment
* Compensatory and other allowances
* Hours of work and rest intervals
* Leave with wages and holidays
* Bonus, profit sharing, provident fund and gratuity
* Shift working changes
* Classification by grades
* Rules of discipline
* Ratinlanisation and retrenchment of workmen. [Third Schedule to Act].

National Tribunal :
National Tribunal is formed by Central Government for adjudication of industrial disputes of national
importance or where industrial establishments situated in more than one States are involved. [section 7B].

Court/Tribunal can reduce punishment and order reinstatement :

As per section 11A, the Labour Court and Tribunal have wide powers. They can reappraise evidence. They
can also see whether the punishment is disproportionate to the gravity of the misconduct proved. If the
Court or Tribunal is of the view that the punishment is disproportionate, it can impose lesser punishment or
even set aside the termination and order reinstatement. - - If Court orders reinstatement and employer
files appeal in Higher Court, the employer is required to pay full wages to the employee during the period

43

of pendency of proceedings with High Court or Supreme Court. However, if the workman was gainfully
employed elsewhere, Court can order that payment of such wages is not to be made. [section 17B].

Settlement :
Settlement means a settlement arrived at in the course of conciliation proceedings. It includes a written
agreement between employer and workmen arrived at otherwise than in course of conciliation
proceedings (i.e. outside the conciliation proceedings). - - The difference is that settlement arrived at in
course of conciliation or an arbitration award or award of labour court or Tribunal binds all parties to
industrial dispute including present and future workmen and all parties who were summoned to appear in
the proceedings. [section 18(3)]. If settlement is arrived at by mutual agreement, it binds only those who
were actually party to agreement. [section 18(1)]. - - The settlement is binding during the period it is in
force. Even after that period is over, it continues to be binding, unless a 2 month notice of termination is
given by one party to another. [section 19(2]. - - If no period has been specified, settlement is valid for 6
months and an award is valid for one year.

Jurisdiction of civil court qua industrial dispute :

Termination of a workman constitutes an Industrial Dispute. Relief sought can be given by forum under
Industrial Disputes Act and hence, jurisdiction of civil court is impliedly barred.
Lay off, retrenchment and closure Lay off means failure, refusal or inability of employer on account of
shortage of coal, power or raw materials or accumulation of stock or break down of machinery or natural
calamity; to give employment to a workman on muster roll. - - Lay off means not giving employment
within two hours after reporting to work. - - Lay off can be for half day also. In such case, worker can be
asked to come in second half of the shift. [section 2(kkk)].
A factory employing 50 or more but less than 100 employees on an average per working day can lay off the
workmen, who have completed one year of service, by paying compensation equal to 50% of salary (basic
plus DA) (section 25C of IDA). - - Employer can offer him alternate employment, if the alternate
employment does not call for any special skill or previous experience, and lay off compensation will not be
payable if employee refuses to accept the alternate employment (section 25E).
Above provisions of compensation for lay off do not apply to (a) Industrial establishments employing less
than 50 workmen (b) seasonal industry (c) Establishments employing 100 or more workmen, as in their
case, prior approval of Appropriate Government is necessary u/s 25M(1).

Retrenchment :
Retrenchment means termination by the employer of service of a workman for any reason, other than as
a punishment inflicted by a disciplinary action. However, retrenchment does not include voluntary
retirement or retirement on reaching age of superannuation or termination on account of non-renewal of
contract or termination on account of continued ill-health of a workman.

44

Retrenchment means discharge of surplus labour or staff by employer. It is not by way of punishment. The
retrenchment should be on basis of last in first out basis in respect of each category, i.e. junior-most
employee in the category (where there is excess) should be retrenched first. [section 25G]. If employer
wants to re-employer persons, first preference should be given to retrenched workmen. [section 25H].
A worker who has completed one year of service can be retrenched by giving one month notice (or paying
one months salary) plus retrenchment compensation, at the time of retirement, @ 15 days average wages
for every completed year of service (section 25F).
If number of workmen are 100 or more, prior permission of Appropriate Government is necessary u/s
25N(1)].

Prohibition of strike and lock out in public utility service :

In case of public utility, employees have to give at least 14 days notice for strike. The notice is valid only if
strike commences within 6 weeks. Otherwise, fresh notice is required. - - Similarly, an employer cannot
declare lock out without giving 14 days notice. [section 22]. If such notice is received, Government
authority should be informed within five days. - - As per section 2(n), Public Utility Service includes
railways, major port and docks, section of industry on the working of which safety of establishment
depends, postal/telegraph/ telephone services, industry supplying power/ light/ water; system of public
conservancy or sanitation. [section 2(n)]. In addition, Government can declare industry specified in
Schedule I as Public Utility Services. Such declaration can be made for 6 months at a time *section 2(n)(vi)+.
[Industries in first schedule include banking, transport, cement, coal, defence establishments, security
press, hospitals and dispensaries, oil fields, mining of certain specified ores, foodstuff, cotton textiles, iron
and steel etc].

Lock-out :
Lock-out means temporary closing or a place of employment or the suspension of work, or the refusal by
an employer to continue to employ any number of persons employed by him. [section 2(l)]. - - Workers go
on strike, while lock-out is to be declared by employer.
Wages during strike period - Wages during strike period are payable only if the strike is both legal and
justified in
Illegal strike or lock-out :
Strike or lock out in violation of sections 22 or 23 and when it is continuing in violation of order issued by
Government u/s 10(3) (when matter is referred to Conciliation Board or Tribunal) is illegal. [section 24].
Fine upto Rs 50 per day to workman and Rs 1,000 to employer can be imposed. In addition, he can be
imprisoned upto one month. [section 26].

45

Restrictions on employer pending proceedings : If any conciliation proceedings or proceedings are pending
before arbitrator, labour court or Industrial Tribunal, following restrictions are applicable to employer.
No change in conditions of service in matters related to dispute:
Employer shall not make any change in condition of service connected to dispute without permission of
authority before whom proceedings are pending. [section 33(1)(a)]. Change which is not related to dispute
can be made in accordance with standing orders without any permission. [section 33(2)(a)]
Unfair Labour Practices: Section 25T prohibits unfair labour practices by employer or workman or a trade
union. If any person commits unfair labour practice, he is punishable with fine upto Rs 1,000 and
imprisonment upto 6 months. *section 25U+. Fifth schedule to Act gives list of what are Unfair Labour
Practices. Then major are as follows
In case of employer
* Interfering in Trade Union activities
* Threatening workmen to refrain them from trade union activities
* Establish employer sponsored Trade Union
* Discourage trade union activities by various means
* Discharge or dismiss by way of victimization or falsely implicating workman
* Abolish work of regular nature and to give that work to contractors
* Mala fide transfer of workman under guise of management policy
* Employ badli or casuals and continue them for years
* Recruitment workmen during strike which is not illegal
* Acts of force and violence * Not implementing settlement or agreement or award
* Refuse collective bargaining * Continue illegal lock-out
In case of workmen and trade unions
* Support or instigate illegal strike
* Coerce workmen to join or not to join a particular trade union
* Threatening or intimidating workmen who do not join strike
* Refuse collective bargaining in good faith
* Coercive actions including go slow, gherao, squatting on work premises after working hours etc.
* Wilful damage to employers property * Acts of force or violence or intimidation.

INDUSTRIAL EMPLOYMENT STANDING ORDERS ACT 1946(amended in 1982)

Features and applicability of the act :
1) Applies to the whole of india
2) Applies to and industrial establishment employing 100 or more workmen.

46

3) The act enables the appropriate government to apply the act to any industrial employing less than 100
workmen provided 2 months notice has been given to that Industrial undertaking.
4) The act cannot take away better benefits given to employees under previous enactments.
Appellate authority :
There shall be an appellate authority constituted under the act with a specific jurisdiction to whom the
appeals can be filed. Such authority is appointed by the appropriate government by notification in the
official gazette.
Certifying officer :
Any labour commissioner or regional labour commissioner can be appointed as a certifying offficer for the
purpose of this act.
Draft standing orders :
1) any industry to which the act applies shall submit draft standing orders to the certifying officer withing 6
months .
2) 5 copies of such draft standing orders are to be submitted to the certifying officer.
3) Shall contain details of the employees and details of trade unions if any.
4) A group of employers in a similar establishment can submit a joint standing order.
5) Such draft orders can be certified provided they are in conformity with the act, have provided for all the
provisions of the act, its for the certifying officer to judge the fairness of the provisions.
6) The certifying officer shall make an entry in the register and file a copy of the same. Such copy can be
obtained on payment of a fee.
Modification of standing orders :
The standing orders in order to be modified should not have been modified in the last 6 months. And it
shall not be modified again except with the permission of the employer and employee.
Subsistence allowance:
A subsistence allowance is payable @ the rate of 75 % to an employee who is suspended while there is an
inquiry pending against him regarding charges or complaints of misconduct.
Any dispute in this matter shall be referred to a labour court.
If the employee is entitled to a better allowance under any other act then he shall be eligible for the same.
Penalties :
1) For not providing for the act.
2) For contravening the provisions of the act.
3) Failure to submit draft standing orders.
4) For not adhering to the model standing orders.
5) No suit can be instituted without the support of the appropriate government.

47

MATERNITY BENEFIT ACT, 1961(amended in 2008)

SHORT TITLE, EXTENT AND COMMENCEMENT
SECTION-1
1. This Act may be called the Maternity Benefit Act, 1961.
2. It extends to the whole of India.
3. It shall come into force on such date as may be notified in this behalf in the Official Gazette, (a) In relation to mines and to any other establishment wherein persons are employed for the exhibition of
equestrian, acrobatic and other performances, by the Central Government; and
(b) In relation to other establishments in a State, by the State Government.
APPLICATION OF ACT
SECTION-2
1. The Act applies, in the first instance, (a) To every establishment being a factory, mine or plantation including any such establishment belonging
to Government and to every establishment wherein persons are employed for the exhibition of equestrian,
acrobatic and other performances;
(b) To 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 more persons are employed, or were employed, on
any day of the preceding twelve months.
Provided that the State Government may, with the approval of the Central Government, after giving not
less than two months notice of its intention of so doing, by notification in the Official Gazette, declare that
all or any of the provisions of this Act shall apply also to any other establishment or class of establishments,
industrial, commercial, agricultural or otherwise.
2. Save as otherwise provided in sections 5A and 5B nothing contained in this Act shall apply to any factory
or other establishment to which the provisions of the Employees' State Insurance Act, 1948, apply for the
time being.
PROHIBITION OF EMPLOYMENT
SECTION-4: Employment of or work by, women prohibited during certain periods
1. No employer shall knowingly employ a woman in any establishment during the six weeks immediately
following the day of her delivery, miscarriage or medical termination of pregnancy.
2. No women shall work in any establishment during the six weeks immediately following the day of her
delivery, miscarriage or medical termination of pregnancy.
3. Without prejudice to the provisions of section 6, no pregnant women shall, on a request being made by
her in this behalf, be required by her employer to do during the period specified in sub-section (4)
i) any work which is of an arduous nature or;
ii) any work which involves long hours of standing or;
iii) any work which in any way is likely to interfere with her pregnancy or the normal development of the
foetus, or is likely to cause her miscarriage or otherwise to adversely affect her health.
4. The period referred to in sub-section (3) shall be-

48

(a) The period of one month immediately preceding the period of six weeks, before the date of her
expected delivery;
(b) Any period during the said period of six weeks for which the pregnant woman does not avail of leave of
absence under section 6.
MATERNITY BENEFIT
SECTION-5: Right to payment of maternity benefit
1. Subject to the provisions of this Act, every woman shall be entitled to, and her employer shall be liable
for, the payment of maternity benefit at the rate of the average daily wage for the period of her actual
absence, that is to say, the period immediately preceding the day of her delivery, the actual day of her
delivery and any period immediately following that day.
Average Daily Wage: For the purpose of this sub-section, the average daily wage means the average of the
woman's wages payable to her for the days on which she has worked during the period of three calendar
months immediately preceding the date from which she absents herself on account of maternity, the
minimum rate of wage fixed or revised under the Minimum Wages Act, 1948 or ten rupees, whichever is
the highest.
Conditions for payment of Maternity Benefits:
1. Work for not less than 80 days to have been put in: [Sec. 5(2)]: No woman shall be entitled to maternity
benefit unless she has actually worked in an establishment of the employer from whom she claims
maternity benefit, for a period of not less than eighty days in the twelve months immediately preceding the
date of her expected delivery:
The qualifying period of eighty days aforesaid shall not apply to a woman who has immigrated into the
State of Assam and was pregnant at the time of the immigration.
Explanation: For the purpose of calculating under the sub-section the days on which a woman has actually
worked in the establishment, the days for which she has been laid off or was on holidays declared under
any law for the time being in force to be holidays with wages during the period of twelve months
immediately preceding the date of her expected delivery shall be taken into account.
2. Maternity Benefit for a maximum period of 12 weeks: [Sec.5(3)]: The maximum period for which any
woman shall be entitled to maternity benefit shall be twelve weeks of which not more than six weeks shall
precede the date of her expected delivery.
3. Death: [Sec. 5(3)]: Where a woman dies during this period, the maternity benefit shall be payable only
for the days up to and including the day of her death.
Provided further that where a woman, having been delivered of a child, dies during her delivery or during
the period immediately following the date of her delivery for which she is entitled for the maternity
benefit, leaving behind in either case the child, the employer shall be liable for the maternity benefit for
that entire period but if the child also dies during the said period, then, for the days up to and including the
date of the death of the child.

49

MINIMUM WAGES ACT 1948 (amended in 2005)

Objectives:
The Minimum Wages Act was formulated to provide for fixing minimum rates of wages in certain
employments. The Act also governs certain service conditions such as working hours, weekly rest days and
payment of overtime for employees covered under the act.
Applicability:
The Minimum Wages Act extends to whole of India and applies to all establishments employing one or
more persons and engaged in any of scheduled employments. It covers every employee who is engaged in
any scheduled employment, including an out worker to whom materials are given out for manufacturing or
processing at his own premises. There are 45 scheduled employments in the Central phere and 1232 in the
state sphere for which minimum wages have been fixed. To protect the wages against inflation they were
linked to rise in the Consumer Price Index. The variable dearness allowance came into being in 1991 and
the allowance is revised twice a year . At present 22 states /Union Territories have these provisions.
Enforcement:
There is a Labour Commission with subsidiaries till the regional level and which appoints inspectors for
enforcement of the provision of the minimum wages. They are the Labour Enforcement Officers who
conduct crash inspection programmes. They inspect the wage records and see that holidays, overtime and
bonuses as prescribed in the minimum Wages Act are followed. If the regulations are not followed then
the employers can be prosecuted. The nature of violation decides whether the Labour Commission offices
arbitrate or the state courts. The scheduled list of employment is not exhaustive, there are many trades
which are out of it. Most of the times minimum wages are paid not on hourly or daily basis but on piece
rates which are very low.
Main provisions under the Act
1) Fixing of minimum rates of wages
a) The appropriate Government may fix the minimum rates of wages payable to employees
employed in an employment specified in Part - I or Part - II of the Schedule and in an
employment added to the Schedule. The Government may review the minimum rates of
wages and revise the minimum rates at intervals not exceeding five years.
b) The appropriate Government may fix a minimum rate of wages for time and for piece
rate. However different wage rates may be fixed for different scheduled employments,
different classes of work in the same scheduled employment, for adults, adolescents,
children and apprentices and for different localities and for any one or more of the wage
periods, viz., by the hour or by the day or by the month or by such larger period.
2) Minimum rate of wages
Any minimum rate of wages fixed or revised may consist of
(i) a basic rate of wages and a special allowance.
(ii) a basic wage rate with or without cost of living allowances and the cash value of
concessions in respect of supplies of essential commodities at concessional rates.
(iii) an all inclusive rate allowing for the basic rate, the cost of living allowance and the cash
value of concessions.
3) Procedure for fixing and revising minimum wages

50

4)

5)

6)

7)

8)

9)

10)

11)

The appropriate Government may appoint an advisory Board for advising it, generally in the matter
of fixing and revising minimum rates of wages. The Central Government may appoint a Central
Advisory Board for the purpose of advising the Central and State Governments in the matters of
the fixation and revision of minimum rates of wages.
Wages in kind
Minimum wages payable under this Act are to be paid in cash. The payment of minimum wages
can be made wholly or partly in kind by notification in the official Gazette if it is customary to pay
wages wholly or partly in kind.
Payment of minimum rate of wages
The employer is required to pay to every employee engaged in a scheduled employment under him
wages at a rate not less than the minimum rate of wages fixed by the competent authority.
Fixing hours for normal working day
In regard to any scheduled employment minimum rates of wages in respect of which have been
fixed under this Act, the appropriate Government may
(i) fix the number of hours of work which shall constitute a normal working day inclusive of
one or more specified intervals.
(ii) provide for a day of rest in every period of seven days which shall be allowed to all
employees or to any specified class of employees and for the payment of remuneration in
respect of such days of rest.
(iii) provide for payment for work on a day of rest at a rate not less than the overtime rate.
Overtime
If any employee whose minimum rate of wages is fixed under the Act works on any day in excess
of the number of hours constituting normal working day, the employer is required to pay him at
the overtime rate fixed under this Act or under any law of the appropriate Government for the
time being in force whichever is higher.
Maintenance of registers and records
Every employer is required to maintain such registers and records giving particulars of employees,
the work performed by them, the wages paid to them, the receipts given by them and any other
required particulars.
Inspections
The appropriate Government may, by notification in the official Gazette, appoint inspectors for the
purpose of this Act and define the local limits of their functions.
Claims
The appropriate Government may appoint Labour commissioner or any other officer with
experience as a judge of a civil court or as a stipendiary Magistrate to hear and decide for any
specified areas, all claims arising out of the payment of less than the minimum rates of wages as
well as payment for days of rest or for work done.
Penalties for Offences
Any employer who contravenes any provision of this Act shall be punishable with imprisonment
for a term, which may extend to six months or with fine, which may extend to five hundred rupees
or with both.

51

THE LABOUR LAWS (EXEMPTION FROM FURNISHING RETURNS AND MAINTAINING REGISTERS BY
CERTAIN ESTABLISHMENTS) ACT, 1988
PREAMBLE
[Act 51 of 1988]
[24th September, 1988]
THE SCHEDULE An Act to provide for the exemption of employers in relation to establishments
employing a small number of persons from furnishing returns and maintaining registers under
certain labour laws Be it enacted by Parliament in the Thirty-ninth Year of the Republic of India as
follows:
2. EXEMPTION FROM RETURNS AND REGISTERS REQUIRED UNDER CERTAIN LABOUR LAWS
(1) On and from the commencement of this Act it shall not be necessary for an employer in relation
to any small establishment or very small establishment to which a Scheduled Act applies to furnish
the returns or to maintain the registers required to be furnished or maintained under that Scheduled
Act:
Provided that such employer, (a) furnishes, in lieu of such returns, a Core Return in Form A;
(b) maintains, in lieu of such registers, (i) registers in Form B, Form C, and Form D, in the case of small establishments; and
(ii) registers in Form D and Form E, in the case of very small establishments :
Provided further that every such employer shall continue to
(a) issue wages slips in the Form prescribed in the Minimum Wages (Central) Rules, 1950
made under Sections 18 and 30 of the Minimum Wages Act, 1948 (11 of 1948) and slips
relating to measurement of the amount of work done by piece-rated workers required to be
issued under the Payment of Wages (Mines) Rules, 1956 made under Sections 13-A and 26
of the Payment of Wages Act, 1936 (4 of 1936); and
(b) file returns relating to accidents under Sections 88 and 88-A of the Factories Act, 1948
(63 of 1948) and Sections 32-A and 32- B of the Plantations Labour Act, 1951 (69 of 1951).
(2) Save as provided in sub-section (1), all other provisions of a Scheduled Act, including in particular,
the inspection of the registers by, and furnishing of their copies to, the authorities under that Act,
shall apply to the returns and registers required to be furnished or maintained under this Act as they
apply to the returns and registers under that Scheduled Act.
(3) Where an employer in relation to a small establishment or very small establishment to which a
Scheduled Act applies, furnishes returns or maintains the registers as provided in the proviso to subsection (1), nothing contained in that Scheduled Act shall render him liable to any penalty for his
failure to furnish any return or to maintain any register under that Scheduled Act.
3. SAVINGS
The commencement of this Act shall not affect, -

52

(a) the previous operation of any provision of any Scheduled Act or the validity, invalidity, effect or
consequence of anything done or suffered under that provision, before the relevant period;
(b) any right, privilege, obligation or liability already acquired, accrued or incurred under any
Scheduled Act, before the relevant period;
(c) any penalty, forfeiture, or punishment incurred or inflicted in respect of any offence committed
under any Scheduled Act, before the relevant period;
(d) any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation,
liability, penalty, forfeiture or punishment aforesaid; and any such investigation, legal proceeding or
remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment
shall be instituted, continued or disposed of, as the case may be, in accordance with that Scheduled
Act.

4. PENALTY
Any employer who fails to comply with the provisions of this Act, shall, on conviction, be punishable

(a) in the case of the first conviction, with fine which may extend to rupees five thousand;
and
(b) in the case of any second or subsequent conviction, with imprisonment for a period
which shall not be less than one month but which may extend to six months or with fine
which shall not be less than rupees ten thousand but may extend to rupees twenty- five
thousand, or with both.
5. POWER TO AMEND FORM
(1) The Central Government may, if it is of opinion that it is expedient so to do, by notification in the
Official Gazette amend any Form and thereupon such Form shall, subject to the provisions of subsection (2), be deemed to have been amended accordingly.
(2) Any notification issued under sub-section (1) shall be laid before each House of Parliament, if it is
sitting as soon as may be after the issue of the notification, and if it is not sitting, within seven days
of its re-assembly and the Central Government shall seek the approval of Parliament to the
notification by a resolution moved within a period of fifteen days beginning with the day on which
the notification is so laid before the House of the People, and if Parliament makes any modification
in the notification or directs that the notification should cease to have effect, the notification shall
thereafter have effect only in such modified form or be of no effect, as the case may be, but without
prejudice to have validity of anything previously done there under.
6. POWER TO REMOVE DIFFICULTIES
If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by
order, not inconsistent with the provisions of this Act, remove the difficulty:
Provided that no such order shall be made after the expiry of a period of two years from the
date on which this Act receives the assent of the President.

53

Equal Remuneration Act, 1976(amended in 1987)

The Equal Remuneration Act, 1976 aims to provide for the payment of equal remuneration to men
and women workers and for the prevention of discrimination, on the ground of sex, against women
in the matter of employment and for matters connected therewith or incidental thereto. According
to the Act, the term 'remuneration' means "the basic wage or salary and any additional emoluments
whatsoever payable, either in cash or in kind, to a person employed in respect of employment or
work done in such employment, if the terms of the contract of employment, express or implied,
were fulfilled". Nothing in this Act shall apply:- (i) to cases affecting the terms and conditions of a
woman's employment in complying with the requirements of any law giving special treatment to
women; or (ii) to any special treatment accorded to women in connection with the birth or expected
birth of a child, or the terms and conditions relating to retirement, marriage or death or to any
provision made in connection with the retirement, marriage or death.
The Central Industrial Relations Machinery (CIRM) in the Ministry of Labour is responsible for
enforcing this Act. CIRM is an attached office of the Ministry and is also known as the Chief Labour
Commissioner (Central) [CLC(C)] Organisation. The CIRM is headed by the Chief Labour
Commissioner (Central).
The main provisions of the Act are:

No employer shall pay to any worker, employed by him/ her in an establishment, a

remuneration (whether payable in cash or in kind) at rates less favourable than those at
which remuneration is paid by him/ her to the workers of the opposite sex in such
establishment for performing the same work or work of a similar nature. Also, no employer
shall, for the purpose of complying with the provisions of this Act, reduce the rate of
remuneration of any worker.
No employer shall, while making recruitment for the same work or work of a similar nature,
or in any condition of service subsequent to recruitment such as promotions, training or
transfer, make any discrimination against women except where the employment of women
in such work is prohibited or restricted by or under any law for the time being in force.
Every employer shall maintain such registers and other documents in relation to the workers
employed by him/ her in the prescribed manner.
If any employer:- (i) makes any recruitment in contravention of the provisions of this Act; or
(ii) makes any payment of remuneration at unequal rates to men and women workers for
the same work or work of a similar nature; or (iii) makes any discrimination between men
and women workers in contravention of the provisions of this Act; or (iv) omits or fails to
carry out any direction made by the appropriate Government, then he/ she shall be
punishable with fine or with imprisonment or with both.
Where an offence under this Act has been committed by a company, every person who at
the time the offence was committed, was in charge of, and was responsible to the company
for the conduct of the business of the company, as well as the company, shall be deemed, to
be guilty of the offence and shall be liable to be proceeded against and punished
accordingly.

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Employers' Liability Act, 1938(amended in 1970)

(1) Short title and extent.
1. This Act may be called the Employers' Liability Act, 1938.
2. It extends to the whole of India.
(2) Definitions.
In this Act, unless there is anything repugnant in the subject or context,
a) "workman" means any person who has been entered into or works under a contract of, service or
apprenticeship with an employer whether by way of manual labour, clerical work or otherwise,
and whether the contract is expressed or implied, oral or in writing; and
b) "employer" includes any body of persons whether incorporated or not, any managing agent of
man employer, and the legal representatives of a deceased employer, and, where the services of a
workman are temporarily lent or let on hire to another person by the person with whom the
workman has entered into a contract of service or apprenticeship, means such other person while
the workman is working for him.
(3) Defence of common employment barred in certain cases.
Where personal injury is caused to a workman
a) by reason of the omission of the employer to maintain in good and safe condition any way, works,
machinery or plant connected with or used in his trade or business, or by reason of any like
omission on the part of any person in the service of the employer who has been entrusted by the
employer with the duty of seeing that such way, works, machinery or plant are in good and safe
condition; or
b) by reason of the negligence of any person in the service of the employer who has any
superintendence entrusted to him, whilst in the exercise of such superintendence; or
c) by reason of the negligence of any person in the service of the employer to whose orders or
directions the workman at the time of the injury was bound to conform and did conform, where
the injury resulted from his having so conformed; or
d) by reason of the act or omission of any person in the service of the employer done or made
(i) in the normal performance of the duties of that person; or
(ii) in obedience to any rule or bye-law of the employer (not being a rule or bye-law which is required
by or under any law for the time being in force to be approved by any authority and which has
been so approved);
(iii) in obedience to particular instructions given by any other person to whom the employer has
delegated authority in that behalf;] a suit for damages in respect of the injury instituted by the
workman or by any person entitled in case of his death shall not fail by reason only of the fact that
the workman was at the time of the injury a workman of, or in the service of, or engaged in the
work of, the employer.
(4) Contracting out
3A. Any provision contained in a contract of service or apprenticeship, or in an agreement
collateral thereto, shall be void in so far as it would have the effect of excluding or limiting any
liability of the employer in respect of personal injuries caused to the person employed or
apprenticed by the negligence of persons in common employment with him.

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(5) Risk not to be deemed to have been assumed without full knowledge
In any such suit for damages, the workman shall not be deemed to have undertaken any risk attaching
to the employment unless the employer proves that the risk was fully explained to and understood by
the workman and that the workman voluntarily undertook the same.
(6) Saving.
Nothing in this Act shall affect the validity of any decree or order of a Civil Court passed before the
commencement of this Act in any suit for damages.

Child Labour (Prohibition & Regulation) Act, 1986

In India, there are a number of Acts which prohibit the employment of children below 14 years and
15 years in certain specified employments. However, there is no procedure laid down in any law for
deciding in which employments, occupations or processes the employment of children should be
prohibited. There is also no law to regulate the working conditions of children in most of the
employments where they are not banned from working and are working under extremely shady and
questionable conditions.
Objectives of Child Labour (Prohibition & Regulation) Act, 1986
(i)
(ii)
(iii)
(iv)
(v)

Ban the employment of children, i.e. those who have not completed their fourteenth
year, in specified occupations and processes;
Lay down a procedure to decide modifications to the Schedule of banned occupations or
processes;
Regulate the conditions of work of children in employments where they are not
prohibited from working;
Lay down enhanced penalties for employment of children in violation of the provisions
of this Act, and other Acts which forbid the employment of children;
To obtain uniformity in the definition of 'child' in the related laws.

Scheme of the Act The Act consists of 26 Sections and 1 Schedule with 2 Parts.
1. Part A consists of list of occupations where child labour is banned.
2. Part B consists of list of processes where child labour is banned.
Important Provisions of the Act
Who is a child? According to the definition given u/s 2(ii) of the Act, a child means a person who has
not completed his fourteenth year of age.
Where is the child labour prohibited to work? No child is permitted to work in any the occupations
set forth in Part A of the Schedule or any workshop wherein any of the processes set forth in Part B
of the Schedule is carried on. (Section 3)

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Exemption: The above prohibition does not apply to any workshop wherein any process is carried on
by the occupier with the aid of his family or to any school established by, or receiving assistance or
recognition from, Government.
Where child labour is permitted? Except the prohibitory occupations set forth in Part A or processes
set forth in Part B of the Schedule, child labour is permitted to be employed but the conditions of
their work is required to be regulated in accordance with Part III of the Act.
Penalties: For the contravention of Section 3 a person is punishable with not less than three months
imprisonment which may extend to one year or with fine not less than Rs.10,000/- rupees which
may be extended up to Rs. 20,000/- or with both. For other offence, the punishment may be simple
imprisonment up to one month or with fine up to Rs. 10,000/- of both. A conviction u/s 67 of the
Factories Act, 1948 or u/s 21 of the Motor Transport Workers Act, 1961 will attract the penalties
under the Child Labour (Prohibition & Regulation) Act, 1986.
Salient Features of Legislative Provisions Prohibiting and Regulating Employment of Children
1. As per the Child Labour (Prohibition & Regulation) Act, 1986 child means a person who has
not completed is 14th year of age.
2. The Act prohibits employment of children in 13 occupations and 57 processes contained in
Part A & B of the Schedule to the Act (Section 3).
3. Under the Act, a Technical Advisory Committee is constituted to advice for inclusion of
further occupations & processes in the Schedule.
4. The Act regulates the condition of employment in all occupations and processes not
prohibited under the Act (Part III).
5. Any person who employs any child in contravention of the provisions of Section 3 of the Act
is liable for punishment with imprisonment for a term which shall not be less than three
months but which may extend to one year or with fine which shall not be less than Rs 10,000
but which may extend to Rs 20,000 or both (Section 14).
6. The Central and the State Governments enforce the provisions of the Act in their respective
spheres.

Employment of children as domestic servants and in dhabas banned from October 2006:
The government has decided to prohibit employment of children as domestic servants or servants or
in dhabas (roadside eateries), restaurants, hotels, motels, teashops, resorts, spas or in other
recreational centres. The ban has been imposed under the Child Labour (Prohibition & Regulation)
Act, 1986 and will be effective from 10th October 2006. The Ministry of Labour has recently issued a
notification to this effect giving three-month mandatory notice. The Ministry has warned that
anyone employing children in these categories would be liable to prosecution and other panel action
under the Act.
It may be recalled that the government servants have already been prohibited from employing
children as domestic servants. By issuing this notification, the Government has imposed these
restrictions on everyone.

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The decision has been taken on the recommendation of the Technical Advisory Committee on Child
Labour headed by the Director General, ICMR. The Committee considers the occupations mentioned
in the above notification as hazardous for children and has recommended their inclusion in the
occupations which are prohibited for persons below 14 years under the Child Labour (Prohibition &
Regulation) Act, 1986. The Committee while recommending a ban on employing children in these
occupations had said that these children are subjected to physical violence, psychological traumas
and at times even sexual abuse. It said that invariably such incidents go unnoticed and unreported as
they take place in the close confines of the households or dhabas or restaurants. It said that these
children are made to work for long hours and are made to undertake various hazardous activities
severely affecting their health and psyche. The Committee has said that the children employed in
road-side eateries and highway dhabas were the most vulnerable lot and were easy prey to sex and
drug abuse as they came in contact with all kinds of people. The measure is expected to go a long
way in ameliorating the condition of hapless working children. The Labour Ministry is also
contemplating to strengthen and expand its rehabilitative Scheme of National Child Labour Project,
which already covers 250 child labour endemic districts in the country.

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