UNIT 5 : Legislative Acts

Introduction to Industrial Acts

The relationship between employer and employees is very important for the development and
survival of any organization. Industrial Acts, initially called as labour legislation, provide a
protective framework dealing with wages, working conditions, social interests, industrial
peace, etc. It promotes the legal relationship between employer and employees.

Advantages of Industrial Acts

1. It gives a legal platform and support to employees.

2. It creates industrial peace and improves labour-management relations.
3. It provides solutions to quarrels in industry (भ ांडन).
4. It removes autocracy of management and extortion of workers.
5. Employees get compensation in case of accidents.
6. It reduces the gap between employer and employee due to workers' participation in
management.
7. It guarantees the welfare of employees.

Factory Act (1948)

1) Licence & Registration

The Act specifies that before a factory can be started, prior permission for the site of factory
construction has to be obtained from the Chief Inspector. Then, the factory has to be
registered, and the licence fees have to be paid. The State Government appoints a Chief
Inspector to supervise conditions in factories and to ensure compliance with provisions of the
Act. A medical officer is also appointed to examine employees for any processes or actions
harmful to health of workers.

2) Facts

1. Modifications in the 1934 Factory Act.

2. Passed in 1948.
3. Last major amendment in 1976.

3) Objectives / Aims of the Act

 • To ensure adequate safety measures.
• To promote the health and welfare of the workers employed in factories.
• To prevent hazardous growth of factories.
• To commend laws for regulating labour in factories in India.

The objective of the Act is to protect human beings from long hours of bodily strain. It
provides that employees should work in healthy and sanitary conditions to avoid accidents.

4) Terminologies in the Act

• Adult: A person who has completed the age of 18 years.

• Adolescent: A person between the ages of 15 to 18 years.
• Child: A person under the age of 15 years.
• Calendar Year: A period from 1st January to 31st December (12 months).
• Day: A period between two midnights (i.e., 24 hours).
• Week: A period between two Saturdays (i.e., 7 days).
• Factory:
o A premises where a minimum of 10 workers work (if power is used).
o A premises where a minimum of 20 workers work (if power is not used, e.g.,
handicraft business).
• Power: Any form of energy other than animal or human energy (e.g., electrical,
pneumatic, etc.).
• Prime Mover: Any device which generates or provides power (e.g., motor, engine,
etc.).
• Transmission Machinery: Any shaft, wheel, drums, coupling, clutch, driving belt,
etc., by which the motion of the prime mover is transmitted or received by any other
machinery or appliances.

5) Main Provisions of the Act

1. Provisions for:
o Health & Safety
o Welfare & Development
o Duration of work
o Young workers & women workers
o Leave structure
o Penalties, etc.
2. Appointment of labour welfare officers in factories with a minimum of 500 workers.
The rights of this officer are given by the State Government.
3. Working Duration:
o Adult: 48 hours per week.
o Child: 45 hours per week.

Women and children are prohibited from working during the night (i.e., 7 PM to 6 AM) But
amendment is possible in the last fact.

Health provisions in the Act:

Cleanliness:

a) Daily Sweeping or cleaning of floors, benches, passages & staircases.

b) Cleaning of workrooms by washing, using disinfectant at least once in a

week.

कीटकन शक

c) Effective means of drainage shall be provided & maintained.

d) All inside walls, partitions, ceilings of rooms & passages shall be painted or
varnished at least once in every 5 years. Also, they shall be whitewashed or
color-washed once in every 14 months.

Ventilation & Temperature:

a) Circulation of fresh air.

b) Exhaust fans & air conditioners at proper places.

c) Use of devices to keep balance of temperature, i.e., hot parts of machinery

shall be insulated properly.

Artificial Humidification:

Use of prescribed methods to have artificial humidification. Use of clean water

for humidification process (i.e., use purified/drinking water).

Overcrowding:

No room in the factory shall be overcrowded. For this, at least 350 cubic feet
(9.9m³) of space for every worker is necessary. No passage, room, or
workplace shall be overcrowded.

Lighting:

"Sufficient and suitable lighting, whether natural or artificial or both, shall be

maintained at the workplace. All windows should be glazed and kept clean on
both the inner and outer surfaces. Forms of shadow should be prevented to
avoid eyestrain or risk of accident."
Drinking Water:

Drinking water should be made available to workers at all working hours and
should be provided & maintained at suitable points. All such points shall be
marked "drinking water" in a language understood by the majority of workers.
Such points shall not be situated within 20 ft. of any washing place, urinal, or
toilet. In every factory employing more than 250 workers, provision shall be
made for cooling drinking water during hot weather. The water should be
clean & germ-free.

Latrines & Urinals:

a) Sufficient number of prescribed types, separate enclosed accommodations

for male & female workers shall be provided. The accommodations shall be
adequately lighted & ventilated and maintained in clean & sanitary conditions
at all times.

b) In factories with more than 250 workers, all the latrines & urinals shall be
of prescribed sanitary types, and the floors & internal walls up to a height of 3
feet (0.9m) shall be glazed.

c) One latrine shall be provided for every 20 female workers and one latrine
shall be provided for every 20 to 100 male workers, and thereafter one
additional for every 50 male workers.

d) There shall be one urinal for every 50 workers up to 500 workers, and
thereafter for every 100 workers.

e) The latrines & urinals should be cleaned twice a day using disinfectants to
maintain hygienic conditions for employees' health.

Spittoons:

Sufficient number of spittoons shall be provided at convenient places. They

shall be washed regularly & kept clean.

Safety Provisions Under the Factory Act:

Fencing of Machinery:
a) Every moving part of a prime-mover, flywheel, shaft, belt, etc., shall be
fenced.

b) Head/tail race of every water turbine.

c) Every part of a generator, motor, rotary converter, conveyor, etc., shall be

fenced.

Work on Machinery in Motion:

The work on or near moving machinery shall be done by a specially trained

adult male worker who wears tight-fitting clothing. No child or young person
shall be allowed to clean, lubricate, or adjust any part when it's in motion.

Casing of Machinery:

All machines driven by power and installed in any factory, such as revolving
shafts, spindles, wheels, cylinders, shall be encased or guarded effectively to
prevent danger. They shall be completely encased.

Hoists & Lifts:

Every hoist & lift shall be of good mechanical construction and adequate
strength. They shall be properly maintained and thoroughly examined
regularly. It shall be marked with maximum safe working load. Every hoist &
lift shall be sufficiently protected by enclosures fitted with gates.

Lifting Machines, Chains, Ropes, & Cranes:

All parts, including the working gears, lifting machines, chains, ropes, and
cranes, shall be of good construction and adequate strength. They shall be
properly maintained and examined at least once a year.

Revolving Machinery:

A notice shall be affixed to every machine indicating the maximum safe

working speed of every grindstone. The speed shouldn't exceed the instructed
and predetermined speed.
 Excessive Weights:

No person shall be employed in any factory to lift, carry, or move loads so

heavy as to likely cause injury. (State government may make rules for
maximum weight which may be lifted or carried by adult men, adult women,
adolescents, and children.)

Protection of Eyes:

Goggles shall be provided to workers engaged in processes such as:

a) Welding or cutting metals with electric or oxy-acetylene flame.

b) Any other manufacturing process where there is a risk of injury to the eyes
from particles thrown off in the course of the process.

Precautions Against Dangerous Fumes, Gases, etc.:

In any factory, no person shall enter or be permitted to enter any chamber,

tank, pit, pipe, or space where dangerous fumes are likely to be present to such
an extent as to involve risk to persons. Portable electric light above 24 volts
shall not be permitted in such confined spaces. Entry into such confined
spaces shall be allowed only after measures have been taken and the worker is
equipped with suitable breathing apparatus and a securely attached rope, the
free end of which is held by a person standing outside the confined space.

Precautions Against Fire:

Every factory shall be provided with means of escape in case of fire. Doors
affording exit from any room should not be locked and should be easily and
immediately opened. Exit routes shall be marked in a language understood by
the majority of workers. Effective means of giving warning in case of fire
shall be provided.

Welfare Provisions of the Act

1) Washing Facilities:

• Adequate & suitable facilities for washing shall be provided separately for male &
female workers & maintained for their use.
• Suitable place for keeping clothing not worn during working hours, & for the drying
of wet clothing should be marked.
2) Sitting Facilities:

• Suitable arrangements for sitting shall be provided & maintained for all workers, who
work in standing positions.

3) First Aid Appliances:

• First-aid boxes or cupboards equipped with the prescribed contents shall be provided
& maintained so as to be readily accessible during working hours.
• There should be 1 such box provided for every 150 workers.
• In every factory employing more than 500 workers, an ambulance room of prescribed
size with proper equipment under the charge of medical & nursing staff should be
provided.

4) Canteens:

• A canteen shall be provided in every factory where more than 250 workers are
employed.
• The canteen should be hygienic in nature, & the cost of food should be reasonable for
employees.

5) Shelter, Rest Room, Lunch Room:

• In every factory where more than 150 workers are employed, adequate & suitable
shelter, rest rooms, & lunch rooms with provision of drinking water should be
provided.
• Proper ventilation & lighting should be ensured with proper fan arrangements in the
rest room.

6) Creches:

• Every factory employing more than 30 female workers shall provide & maintain a
suitable room or rooms for the use of children under the age of 6 years of such
women.
• Such rooms should have adequate accommodation & proper lighting & ventilation.
They shall be maintained in a clean & sanitary condition.
• Suitable provisions must be made for washing & changing the clothes of children &
free supply of milk or refreshments or both. Such rooms shall be under the charge of a
trained woman.

7) Welfare Officers:

• One welfare officer should be appointed in a factory employing more than 500
workers.
• The main duty of the officer is to check whether the above provisions in the factory
act are provided to workers or not.
• The State Government may prescribe the duties, qualifications, & conditions of
service of such officers.
Employees State Insurance Act (ESI):

Introduction:

• In a fast-developing industrial environment where machines & instruments are

increasingly used, the risk of accidents is also becoming greater. The safety of
employees is a very important aspect for any industry.
• The ESI Act, 1948, is a pioneering measure in the field of social insurance in our
country. The following are the main objectives of the Act:
1. To provide certain cash benefits to employees in case of sickness, maternity
injury, accident, or permanent disablement.
2. To provide dependents' benefits by means of timely help to the eligible
dependents of an insured employee who dies as a result of an accident or
occupational disease arising out of the course of employment.
3. To provide funeral & medical benefits to employees.
4. To provide a sense of identity & loyalty to employers due to several
provisions given to them.
• This Act covers a wider spectrum than the Factories Act. It was passed in 1948, with
the last major amendment in 1983.

Registration of Act:

• The registration of a factory with the Employees' State Insurance Act is the
responsibility of the employer.
• The owner to whom the Act applies for the first time is liable to apply to the
appropriate regional office within 15 days after the Act becomes applicable.
• The regional office will examine the coverage & allot a code number to the employer.

Statutory Registers to Be Maintained:

1. Employee register.
2. Accident book, where every accident to employees during the course of employment
is recorded.
3. Inspection book.

Benefits of the Act:

1. Sickness Benefits:
o Periodical payments to a person in case of sickness duly certified for not more
than 56 days in any continuous period of 365 days.
2. Maternity Benefits:
o Periodical payments to an insured woman will be made in case of maternity,
duly certified in the manner specified in the Act. Leave is given before & after
delivery.
3. Disablement Benefits:
o Provided to insured workers for disablement from injuries received during
employment.
o For temporary disablement within 7 days, the amount of benefit payment is
about half the average wages for the period of disablement.
 oFor permanent disablement, the persons are entitled to a pension for life in
accordance with the proportionate loss in their earning capacities.
4. Dependent's Benefits:
o In case an insured person dies as a result of an employment injury, his
dependents will be paid an amount not exceeding one-half (1/2) of the amount
payable to the deceased person in case of permanent total disablement.
5. Medical Benefits:
o Medical care & treatment is provided free of charge to insured workers during
sickness or in case of accidental injury while in employment.
o Medicines are also given free. From 1st January 1962, this benefit is extended
to the families of insured persons.
6. Funeral Benefits:
o Payment not exceeding Rs. 1,500 shall be made to the eldest surviving
member of the family of an insured person who has just died.
o If the insured person was living alone at the time of death, the payment is
made to the person who actually incurred the expenditure on the funeral.

Terminologies (Definitions):

1. Premium:
o Refers to the insurance premium, a sum of money payable as a contribution to
the corporation by the employer in respect of an employee.
2. Corporation:
o Refers to the Employees' State Insurance Corporation set up under this Act.
3. Dependent:
o Any of the following relatives of an insured person:
▪ Widow, wholly dependent legitimate or adopted son, unmarried
legitimate or adopted daughter, or widowed mother.
▪ Parent other than a widowed mother.
▪ Minor brother, unmarried sister, or widowed sister if a minor.
▪ Widowed daughter-in-law.
▪ Minor child of a pre-deceased son.
4. sickness" is the physical inability to be present on duty without medical help.

Workmen's Compensation Act (1923)

Introduction
It's an act to provide for payment by certain classes of employees to their workmen of
compensation for injury by accident. Thus, this act protects the workers as far as possible
from hardship arising from accidents. This act was passed in 1923, and the last major
amendment was in 1984. It compensates employees against accidents occurring on industry
premises.

1. Terminologies of the Act (Definitions):

 1. Accident:
Any mishappening that causes injury to a person.
2. Workman:
Any person employed in an organization working according to the rules of this act,
except those who work on a casual basis.
3. Minor:
Any person of age not more than 18 years.
4. Partial Disablement:
Disablement that reduces the earning capacity of a workman.
5. Total Disablement:
Disablement that reduces the capacity of a workman for total work, leaving him
unable to earn at all in his life.

2. Main Provisions of the Act:

1. Provisions related to entitlement, rates, coverage of dependents, and distribution of

compensation.
2. Compensation does not extend to:
o Casual workers.
o Those employed in armed forces.
o Workers covered under the ESI Act, 1948.
3. Rates of Compensation:
o Vary based on whether the injury results in death, permanent, or partial
disablement.
o The maximum payable ranges from ₹80,000/- in case of death to one-half of
the monthly wages of the workman, to be paid in accordance with the relevant
provision.
4. Employer is not liable for compensation in the following cases:
a. If the injury disables the workman for a period of less than three days.
b. If the workman was under the influence of drink or drugs.
c. If there was willful disobedience by the worker to an order issued for securing
worker safety.
d. If the worker willfully removed or disregarded any safety guard.
However, if the worker dies by an accident due to these reasons, the employer must
pay compensation.

3. Administration of the Act:

The Act is administered by the state government. Specific Commissioners may be appointed
to execute the Act.

Industrial Disputes Act (1947)

Introduction:
In the era of rapid industrialization, interpersonal relationships between employers and
employees have undergone changes. Direct contact often collapses, leading to disputes and
differences of opinion.

The Industrial Disputes Act, 1947, aims to regulate industrial relations in India, ensuring
progress of the industry through harmony and cordial relations between employers and
employees. When people come together, it is obvious that there will be:

• Differences of opinion.
• Dissatisfaction on certain issues.
• Injustice in some cases.

In any industry, situations of disputes often arise. These are disputes and quarrels among:

1. Employer & Employee.

2. Employee & Employee.
3. Business organizations & Government.
4. Industry & Society.
5. Labour Unions & Management.

etc

Causes of Industrial Disputes:

1. Insufficient wages and salaries.

2. Heavy work assignments for workers.
3. Bad working conditions.
4. Exploitation of workers and inadequate allowances for overtime.
5. Improper bonus structure.
6. Irregular payment of wages.
7. Lack of facilities like canteens and transportation.
8. Personal issues.
9. Rivalries and related disputes
10. Disciplinary issues.
11. Harassment and torture of employees.
12. Accidents and related compensations.

etc

Facts About the Act:

1. It is a modification of the Trade Disputes Act, 1929 (old act).

2. The Industrial Disputes Act was passed in 1947.
3. The last major amendment was in 1984.
Objectives of the Industrial Disputes Act

1. To create industrial peace through voluntary negotiations and compulsory

adjudication (अधिकृत धनर्णय).
2. To prohibit illegal strikes and lockouts.
3. To maintain a positive environment for growth and development without injustice or
dissatisfaction.
4. To solve quarrels and disputes between employers and employees.
5. To ensure the payment of compensation to workers in the event of layoffs and
retrenchment (क ढू न ट कर्े, क म वरून कमी करर्े).

Terminology/Definitions

1. Award:
o It is the final decision in an industrial dispute by Labour Court, Industrial
Tribunal, etc. (न्य य धि).
2. Average Pay:
o The average payment of wages payable to workmen.
3. Layoff:
o A temporary phase where the employer-employee relationship is suspended
due to failure, refusal, or inability of an employer.
o Reasons include a shortage of coal, power, raw materials, machinery
breakdown, market slowdown, recession, financial losses, etc.
4. Settlement:
o It is a mutual agreement between workers and employers at the end of a
conflict.
o This can be achieved by government intervention or through the Labour Court.

Main Provisions of the Act

There are four main authorities used for the settlement of industrial disputes:

1. Works Committees (क यणक री मांडळ):

o The government must form works committees in every firm with 100 or more
workers.
o These committees aim to preserve good relations between employers and
employees.
o They address matters of common interest.
o Committees consist of equal representatives of workers and employers.
2. Conciliation & Courts of Enquiry:
o The government appoints conciliation officers for specific industries or areas.
o Courts of enquiry are set up to resolve disputes.
o Disputes related to public utilities must be compulsorily conciliated by the
government.
o Settlement by the court is binding on both parties.
 o If there is no settlement, the conciliation officer submits a failure report to the
appropriate government authority, which decides whether the dispute should
go for adjudication.
3. Adjudication:
o The act provides a three-tier system of tribunals:
1. Labour Tribunals (Day-to-day matters).
2. Industrial Tribunals (Handles matters under Labour Court
jurisdiction and other matters in the act).
3. National Tribunals (Deals with disputes of national importance).
4. Arbitration:
o Parties to a dispute can refer it to arbitration through a written agreement
before it goes for adjudication.

Strikes & Lockouts

1. Strikes:
o A strike is declared by employees when workers collectively refuse to
continue work.
o Notice must be given to the employer by employee representatives before
initiating a strike.
o Authorities are authorized to prohibit the continuation of strikes if disputes
escalate significantly.
o Strikes disrupt productivity in the industry.
2. Lockouts:
o A lockout refers to the closing of a place of employment, suspension of work,
or refusal by an employer to employ workers.
o It indicates the closure of a workplace but not the closure of the business itself.
o Lockouts are used by employers as a tool to press employees to accept their
proposals, while strikes are the workers’ tool to compel employers to meet
their demands.

Layoff

• It is the inability of an employer to provide employment to workers due to

circumstances beyond their control, such as:
o Shortage of resources (e.g., power cuts, coal shortages).
o Machinery breakdown.
o Recession.
o Natural disasters.
o Financial issues.
• Layoffs are not considered termination of services.
• Employees can claim layoff compensation as a right if they have completed one year
of continuous service.
Retrenchment

1. Retrenchment refers to the termination of service for reasons as punishment,

indiscipline, misbehavior, or disobedience towards management.
• This is not involve retirement of workers,
o Disciplinary action.
o Retirement of workers.
o Termination of a contract.
o Illness.

Retrenchment compensation is payable as:

▪ Fifteen days' wages for every completed year of service.

▪ One-month notice to the employee.