LABOUR AND INDUSTRIAL RELATIONS NOTES

DIPLOMA IN BM MOD III

INDUSTRIAL RELATIONS AND LABOUR WELFARE

Meaning of IR

Industrial relations encompasses ‘the processes of regulation and control

over workplace relations, the organisation of tasks, and the relations
between employers and their representatives, and employees and their
representatives, and is the sum of economic, social and political interactions
in workplaces where employees provide manual and mental labour in
exchange for rewards allotted by employers, as well as the institutions
established for the purpose of governing workplace relations’

Objectives of IR

 Understand the key strategic issues in industrial relations.

 Explain the unitary, pluralist and radical approaches to industrial

relations.

 Appreciate the role of employers, trade unions and governments in

industrial relations.

 Understand individual and collective bargaining, conciliation and

arbitration

Theories of IR

• Dunlop’s System Theory (1958) The credit for applying the systems
concept to industrial relations goes to Dunlop.

• “He analyses industrial relations systems as a sub-system of society.

“An industrial relations system at any one point time in its
development is regarded as comprised of certain actors, contexts,
ideology which binds the industrial relations system together and a
body of rules created to govern the actors at the workplace and work
community”.

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• Dunlop’s System model

• IR=f(a,t,m,P,I)

• A= actors-Labour, Employers Govt.

• T=Technological Context

• M=Market Context

• P=Power Context

• I=Ideological context that helps to bind together

• The IR system as a web of rules formed by the interaction of the

government, business and labour, influenced by the existing and
emerging economic, socio-political and technological factors.

• The Structural Contradictions Theory of Hyman, 1971

• Marxian analysis of industrial relations and trade unionism has also

taken several forms broadly categorical into pessimistic and optimistic
approaches.

• The pessimistic school talks of limitations of trade union

consciousness and feels that unless the working class joins hands with
intellectuals, it is not possible, to bring in a new social order.

• Optimist school, however, sees the role of working classes as not only
maintenance and enhancement of wage level, but also to carry class
struggle against capitalist class in thrust towards creating a classless
society.

• The pluralist Theory of Flanders(1970)/ Oxford Model

• According to him, Conflict is inherent in an industrial system. Hence,

collective bargaining is required a s formal system to settle conflicts.
Collective bargaining central to the industrial relations system.

• It can be expressed in the form of an equation

R=f(b) or r =f (c )

Where r = the rules governing industrial relations

b = collective bargaining

c = conflict resolved through collective bargaining

• Human Relations theory

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 • The main proponent of this theory is Keith Davis. According to him,
human relations are “the integration of people into a work-situation
that motivates them to work together productively, cooperatively and
with economic, psychological and social satisfactions.

• The goals of human relations are

• 1. to get people to produce

• 2. to co-operate through mutuality of interest and

• 3. to gain satisfaction from their relationships. The human relations

approach highlights certain policies and techniques to improve
employee morale, efficiency and job satisfaction.

• 4. Focussed on to remove labour-management relations.

• The Trusteeship theory of Mahatma Gandhi

• Gandhi had immense faith in the goodness of man and he believed

that many of the evils of the modern world have been brought about
by wrong systems and not by wrong individuals. He insisted on
recognising each individual worker as a human being. He believed in
non-violent communism, going so far as to say that “if communism
comes without any violence, it would be welcome”. He laid down
certain conditions for a successful strike.

• They were:

• a. the cause of the strike must be just and there should be no strike
without a grievances;

• b. there should be no violence; and

• C. non-strikers or “blacklegs” should never be molested.

Difference between IR and HRM

S.No Dimension TIR EER/HRM

1. Nature of Pluralist Unitarist

relations

2 Contract Emphasis on terms Beyond contract,

of contract defined innovative ways
rules,contract

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3 Conflict Institutionalised De-emphasised is
patholoigical

4 Union legitimacy Unions are Not considered

acceptable desirable Nurturing.

5. Managerial task Monitoring Nurturing

in relation to
labour

6 Key relation Labour-management Customer

7 Pay Standardised, based Performance related

on job evaluation

8 Basis of labour- Collective bargaining Individual contract

mgt relations contract

9 Job design Division of labour Team work

10 Conflict handling Reach temporary Managing climate and

truce, reactive culture-proactive

11 Key people PM/IR Line specialists

12 Focus of Personnel Various culture and

attention procedures structure-related
personnel strategies.

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 Unitarist-

Authoritarian

HR Management

Approaches to IR

Unitary approach

• Industrial relations is grounded in mutual cooperation, individual

treatment, teamwork and the sharing
of common objectives.

• The underlying assumption is that it is to the benefit of all to focus

on common interests and promote harmony.

• Conflict is regarded as destructive.

• Assumptions about workplace relations

• - management and employees share common interest

• - one source of legitimate authority (management)

• Assumptions about workplace conflict

• - inevitable, aberration, destructive, to be avoided

• - caused by poor management, dissidents, agitators or poor

communication
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 • Assumptions about trade unions

• - a competing and illegitimate source of authority

• - an unwarranted intrusion in the workplace

• - create conflict where none would otherwise exist

• Assumptions about collective bargaining

• - creates and institutionalizes unnecessary divisions of interest

• - serves to generate workplace conflict rather than resolve it

• PLURALIST APPROACH

Regards conflict as inevitable because employers and employees

have conflicting interests.

• Trade unions are seen as legitimate representatives of employee

interests.

• Sees stability in industrial relations as the product of concessions

and compromises between management

and unions.

• Assumptions about workplace relations

• - managers and employees have different objectives

• - multiple sources of legitimate authority

• Assumptions about workplace conflict

• - inevitable, caused by different opinions and values, benefit to an

organization

• - avoid by accepting trade unions, include in decision-making

• Assumptions about the workplace role of trade unions

• - not the cause of conflict

• - are expression of diverse workplace interests that always exist

• - a legitimate part of workplace relations

• Assumptions about the role of collective bargaining

• - deals with problems on a collective basis

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• - most efficient means for institutionalising employment rules

• - fairer outcomes by balancing employee and management power

• RADICALOR MARXIST APPROACH

• Marxists, like the pluralists, regard conflict between management

and employees as inevitable.

• Sees industrial conflict as an aspect of class conflict.

• The solution to worker alienation and exploitation is the overthrow

of the capitalist system.

• Assumptions about workplace relations

• - reflects a wider class conflict between capital and labour

• - reflects coercion of working class into dominant capitalist values

• Assumptions about workplace conflict

• - inevitable: capital seeks to reduce costs, workers seek fairer price

for labour

• - will only cease by revolutionary change in distribution of property

and wealth

• Assumptions about trade unions

• - should raise revolutionary consciousness of workers

• - should not limit action to improving material lot of workers

• - union leaders who accommodate management betray the workers

• Assumptions about collective bargaining

• - merely offers temporary accommodations

• - leaves important managerial powers in tact

History of IR

• The relations between labour and management in the industry form

the subject matter of industrial relations.

• The first labour legislation was in the form of the Factories Act.

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• Industrial revolution in England acted as a landmark event in
transforming the industrial situation all over

the world.

• This was followed by World war I, labour unrest and a mass awakening
of a labour. This was followed by various legislations by the
Government- Indian Industrial Commission, Indian Industrial
Commission, Indian Factories Act, Trade Disputes Act etc.

• The Government also appointed the Royal commission on labour to

enquire into and report on the existing conditions of workers in the
country.

• The Second World War brought in unprecedented expansion of Indian

industry with emphasis on maintenance of harmonious and peaceful
relations between workers and management. Strikes and industrial
disputes were brought under the compulsory arbitration of
Government.

• In the post-independence phase the labour scenario underwent major

change. The constitution of India provided for freedom of association
to all citizens which gave rise to trade unions. ID Act was enacted in
1947 which regulated worker-employer relations. Other acts like ESI
Act and Minimum Wages Act were enacted for workers welfare.

• The first five year plan emphasises setting up a tripartite body for
sorting out matters of conflict with a mutually agreed grievance
procedure.

• The Second plan also dealt with code of discipline and in building a
strong trade union movement.

• The third five year \plan envisaged setting up tribunals for resolution
of industrial disputes.

• IR in the Fourth plan continued to be regulated by legislative

measures. National conference of labour was set up.

• The fifth plan envisaged improvements in worker participation,

communication systems and incentive systems in addition to setting
up of shop councils.

• The sixth plan promoted professional management in the industrial

harmony, employee welfare and a cooperative attitude.

• Essential Service Maintenance Act was also promoted.

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 • Events like liberalisation and globalisation are continuously influencing
the IR scene even today leading to increased recognition and
importance being given to the human resources.

Understanding of IR

 IR do not emerge in vaccum, they are born out of employment

relationship in an industrial setting. Without the existence of two parties,
i.e., labour and management, this relationship cannot exist.

 IR are characterized by both conflict and co-operation.

 As the labour and management do not operate in isolation but are

part of a larger system which includes environmental issues technology of
the workplace, country’s socio-economic and political environment, nation’s
labour policy, attitude of trade unions, workers and employers and impact of
the new wave of global markets, global supply demand and economy.

 It also involve the study of conditions conducive to the labour,

management co-operation as well as the practices and procedures required
to elicit the desired co-operation from both the parties.

 IR also study the laws, rules, regulations, agreements, awards of

court, customs and traditions, as well as policy framework laid down by the
government for eliciting co-operation between labour and management and
defining rights obligation of both the parties.

Importance of IR

Prior to the IR, the problem of IR was literally non-existent as the owners
were themselves producers or the production was carried out by the family
members themselves. As with emergence of factories, the cottage
industries were thrown in back gear, which compelled a large number of
workers to leave the farms and become wage earners in factories with
meager wages under tiring working conditions. Gradually two groups, the
haves, the status dominated and aspiring class and other haves not, both
having different interests and ideologies developed their own unions to give
a tough fight to other.

The government came on the scene for regulating the working conditions of
employees’ production, work methods, supply of better skilled workers etc.
changed the complexion of industrial relations considerably. Further
changes in the techniques and methods of production, work methods,
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supply of better skilled workers etc. changed the complexion of IR
considerably.

IR patterns, Organized sector and their impact on unorganized.

The pattern of IR in the organized sector of economy has a definite impact

on labor management relations in unorganized sector. The trends and
pattern established in the organized sector spills over or influences the
practices of even the most unorganized industries.

Unions are important force in the important force in the Indian political
system: The impact of Indian trade unions on the political system is much
wider than on industry. In addition, the unions sponsored by the ruling party
do influence the legislative process through the intense lobbying activities.

Varying patterns of IR

In India, the patterns of industrial relations are not only in sharp

contrast both in unorganized and organized sector, but also within the
latter, they exhibit a considerable variation. In the unorganized sector
due to non-unionization of the workers, the grievances are usually
redressed by the threat of dismissal, thus the problem of IR.

Status difference in the workers of public and private sector: The

workers in the public sector were considered to be government
employees and accordingly, were givea fair deal. In contrast to it, the
workers in the private sector had to suffer on many counts, Though
situation started changing due to liberalization.

Scope and aspects of IR

The IR are therefore, part and parcel of industrial life, such they
include

i Labor relations i.e., relations between union and management

ii Employer-employee relations i.e., relations between management and

employees
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iii Group relations,i.e., relations between various groups of workmen;
and

iv Community or public relations, i.e., relations between industry and

society.

The main aspect of IR:

i Promotion and development of healthy labor-management relations

ii Maintenance of industrial peace and avoidance of industrial strife

iii Development of industrial democracy.

The existence of strong, well organized, democratic and responsible trade

unions and associations of employers. These organizations enhance the job
security of employees help in increased workers’ participation in
management.

Collective bargaining recognizes equality of status between two conflicting

groups and prepares the ground in an atmosphere of trust and goodwill.

Welfare work, whether statutory or non-statutory, provided by the state,

trade unions and employers create, maintain and improve labor
management relations and thereby contribute to industrial peace.

The industrial peace can be largely nurtured through the following means:

Machinery should be set up for the prevention and settlement of industrial

disputes: It can be brought about by developing various legislative and
administrative enactments like Trade Unions Acts, Industrial Disputes act,
etc.

The Government should have the power to refer disputes to adjudication

when the situation tends to get out of hand and industry is faced with
economic collapse due to continued stoppage of production on account of
long strikes/lockouts.

The Government enjoys the power to maintain the status quo: This power is
exercised when the government, after referring the dispute to arbitration,
finds that either party is continuing the strike or lockout.

The provision of the bipartite and tripartite forums for the settlement of
disputes. These forums act on the basis of the Code of discipline in
industry, the code of conduct, the code of efficiency and welfare, model

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standing orders.
Development of Industrial democracy:

Establishment of the shop councils and joint management councils at the

floor and plant level, which endeavor to improve the working and living
conditions of employee, to improve productivity, encourage suggestions
from employees to assist in the administration of laws and agreements,
serve as a channel between management and employees.

Recognition of Human Rights in Industry: This implies that lab our is not a
commodity of commerce which can be purchased and disposed. The
workers are required to be treated as human beings whose sense of self-
respect is to be fostered.

Increase in lab our productivity: The factors which contribute to higher

productivity are: improvement in the level of efforts and skills of workers;
improvement in production, process, materials, equipment, layout, work
methods etc.

The availability of proper work environment is necessary so that he worker

can effectively carry out his assignment , as it is this environment which
stimulates or depresses, improves or destroys the relations between labor
and management.

Components of IR system

An industrial relations system is made up of certain institutions, which are

popularly known as ‘three actors” of the system.

1 Workers and their Organization: When the bulk of workforce is

employed in the production of goods and services, the relations between t
hem impersonal and dehumanized. Further, if they are forced to work in an
alienated, monotonous, unhygienic work environment where t heir activities
are closely regulated and controlled by the managerial personnel, their
dissatisfaction with system forces them to revolt against it, so workers form
their unions.

2 .The Management: The employer/management is the key actor in

the system of IR around which the whole process revolves. As they not only
provide jobs to workers but also lay down the terms and conditions of their
employment, administer various social security and labor welfare
programme over and above managing various aspects of industries that
directly or indirectly influence the total system. Leadership styles that are
commonly practiced by the managers to manage people at work.

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 They are an exploitative and authoritative system, benevolent
authoritative system, with further growth of lab our legislation and the
development of trade unions.

3. The Government: In the system of industrial relations,

government acts as a regulator and judge. Till 19 th century, the
Government almost everywhere including India, adopted a policy of
laissez faire, i.e. it did not bother to intervene between the employer
and workers’ problems . As such, parties were left free to settle the
score the way they liked to combine for a common cause-for protest
against the inhuman conditions. Government attitude changed in the
end of the 19th century, The Government was constrained to bring in
some type of protective legislation relating to conditions of work etc.
In the early forties of the present century and after independence, the
Government laid emphasis on the need for consultation between the
representatives of labour, management and the Government in
tripartite and bipartite forums.

These three actors in the system interact with each other to yield the
basic output. Which si the set of rules that govern working conditions
and the terms of employment.

Approaches/Perspectives of IR

The IR can be viewed from the various angles which may range from
the economic and soical, political to the legal, psychological and
managerial.

An economist tries to interpret the problem of IR in terms of

interpersonal forces of the laws of demand and supply. To a politician,
the dynamics of IR, conflict revolves round the problem of class war,
for a psychologist, IR can be best studied in terms of work behavior
and attitude of labour and management and the like. A few
approaches to IR are discussed.

a . Psychological Approach to IR: The psychologists are of the view

that the problem of IR are deeply rooted in the perception and the attitude
of focal participants. For ex. A photograph of an ordinary middle aged
person served as input, which both groups were expected to rate. It is
interesting to note that both the groups rated the photograph in different
manner, i.e., the Union leaders referred the person in the photograph as “
Manager” where the group of Executives saw Union leaders referred the

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person in the photograph as “Manager” where the group of Executives” saw
“Union leader” in the photograph.

b This variance in perception of parties is largely because of their

individual perception. The conflict between labor and management occurs
because every group negatively views/percieves the behavior of other i.e.
even the honest intention of a party is looked with suspicion.

b. Sociological Approach to IR: The industry is a social world made up of

groups with differing personalites, educational background, family breeding,
emotions, likes and dislikes and host of other personal factors such as
attitudes and behaviour. Since ages, the problems of IR have been looked
upon as one basically concerned with wages, employment, conditions and
labour welfare. But in fact sociological aspects of the problem are more
importatn than others. This largely includes various sociological factors like
value system, customs, norms, symbols and attitude and perception of both
labour and management that affect the IR in varied ways.

c. Human relations Approach to IR

Management of people at work is an exclusive prerogative of HR specialists,

the various HR policies including those relating to leadership and motivation
have profound influence on their work behaviour. For instance, a manager,
using an autocratic style, designs, a close supervision system and feels that
display of atuhority would drives people to work. But this style leads to
dissatisfaction and hatred among people whereas in a democratic style, it is
held that a desired organisational behaviour can be cultivated if employees
needs and wants are properly satisfied. The manager working with such a
style positively motivates people. Infact, no style is good or bad is every
situation demands a specific leadership behavour on the part of HR
specialist.

4. Gandhian Approach to IR

Gandhiji advocated that for resolving disputes the following rules to be

observed.

a. The workers should seek redressal of reasonalbe demands only thorugh

collective action.

b. If they have to organise a strike, trade unions should seek by ballot

authority from all workers to do so, remain peaceful and use non-violent
methods.

c. The workers should avoid strikes as far as possible in industries of

essential services;
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d.The workers should avoid formation of unions in philanthropic
organisation.

e. The strikes should be resorted to only as a last resort after all other
legitimate measures have failed.

THE TRADE UNIONS’ ACT, 1926

I OBJECT: To provide for the registration of trade unions and to

define law relating to registered trade unions.

II APPLICABILITY: It extends to the whole of India.

III TRADE UNIONS:

means any combination whether temporary or permanent formed

primarily for the purpose of regulating the relations between workmen
and employers for imposing restrictive conditions on the conduct of
any trade or business, and includes any federation of two or more
trade unions.

IV MODE OF REGISTRATION:

Any seven or more members of a trade union may apply for

registration of a trade union in Form - A to the Registrar appointed for
the area.

Along with byelaw, Seven ordinary members of the union to make an

application for registration of the union, and a treasury chalan of
Rs.100/- remitted as registration fee. (Section 4 and 5 read with
Regulation: 3 & 5)

V REGISTRATION CERTIFICATE:

On receipt of the application for registration, the Registrar, after

making reasonable enquiry issue a Registration Certificate in Form - B
(Section 8 & read with Regulation 6)

VI CANCELLATION OF REGISTRATION :

A certificate of Registration may be withdrawn or cancelled by the

Registrar:

1. On an application of a Trade Union in Form-H, or

2. If the Registrar is satisfied that the certificate is obtained by fraud of

mistake or that the trade union had ceased to exist or willfully and after
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 notice from the Registrar contra vent any provisions of the Act or rules
etc. (Section 10 read with Regulations 8 to 12)

VII APPEAL :

Any person aggrieved by any order of the Registrar may appeal within
two months to the Civil Court not inferior to the court of an Additional
or Assistant Principal Civil Court.

(Section 11 read with Regulation 13)

VIII CHANGE OF NAME

Any registered trade union may with the consent of not less than 2/3
of its total members may make application in Form-L, for the change
of its name (Section - 23 read with Regulation – 16-72)

XI ANNUAL RETURNS

Every trade union shall send annual returns to the Registrar on or

before the 1st day of May of the year succeeding the calendar year in
Form-E in the case of individual trade unions and in Form-F in the case
of federation of trade unions (Section 28 read with Regulation 21)

XII PENALTIES

Offences punishable for the failure to submit returns may extend to

Rs.5/- and in the case of continuing default with an additional fine
which may extend to Rs.5/- for each week and shall not exceed
Rs.50.00. Any person who willfully makes, or causes to be made any
false entry or any omission from the general statement required by
Section 28 etc. shall be punishable which may extend to Rs.500/-.
Registered trade unions, furnishing false informations, shall be
punishable with fine which may extend to Rs.200/- (Section 31)

XIII WHO CAN FILE PROSECUTIONS:

1. Registrar

2. Persons with the previous sanction of the Registrar.

3. Aggrieved person under Section 32.

The complaint shall be filed within six months of the date on which the
offence is alleged to have been committed.

No court inferior to that of a Presidency Magistrate or a Magistrate of

First Class shall try any offence under the Act.

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 XIV AUTHORITIES UNDER THE ACT:

1. Registrar of Trade Unions (under Section - 3)

Labour Commissioner

2. Additional Registrar of Trade Unions

Additional Labour Commissioner

3. Deputy Registrar of Trade Unions

Joint Labour Commissioner

IX AMALGAMATION OF TRADE UNIONS

IX AMALGAMATION OF TRADE UNIONS: Any two or more registered trade

unions may become amalgamated together as one trade union provided the
votes of at least one half of the members of each or every such trade union
entitled to vote and at least 60% of the votes recorded are in favor of the
proposal. Notice of the amalgamation shall be sent to the Registrar Form-R
(Section 24 to 26 read with Regulation 18)

X DISSOLUTION

X DISSOLUTION: When a registered trade union is dissolved the notice of

dissolution shall be sent to the Registrar in Form - Q, within 14 days of the
dissolution along with the registration certificate (Section 27 read with
Regulation 19)

______________________________________________________________________

Employee rights

*be paid the right wage for the job you do

*protection from unfair dismissal (subject to statutory exclusion periods)

general protections of your ‘workplace rights’

*protection from unlawful discrimination

*sick leave, annual leave, public holidays, family leave and long service
leave

*freedom to belong to or not belong to a union.

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*receive your wages without unlawful deduction (lawful deductions include
tax or any deduction you authorize in writing).

Obligations

arrive at work on time

dress suitably for the job (including wearing appropriate safety equipment if
required)

work to the best of your ability

respect your employer, colleagues and customers

take care of your employer's property

follow your employer’s 'reasonable and lawful' instructions (that is,

instructions that are not illegal, don't threaten your health and safety and
you are capable of doing)

obey safety rules

ask for help if you need it

know what the employer expects you to do if you can’t be at work for any
reason (for example, your employer’s policy on what to do if you need to
advise you are sick)

not discriminate or harass others in the workplace

not act in a way that puts you – or others – at risk of injury in the workplace

 Collective Bargaining

 According to Dale Yoder, “Collective bargaining is the term used to

describe a situation in which the essential conditions of employment
are determined by bargaining process undertaken by representatives
of a group of workers on the one hand and of one or more employers
on the other.”

 In the words of Flippo, “Collective bargaining is a process in which

the representatives of a labour organisation and the representatives
of business organisation meet and attempt to negotiate a contract or
agreement, which specifies the nature of employee-employer-union
relationship.”
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  Features of Collective Bargaining

 I. It is a collective process. The representatives of both workers and

management participate in bargaining.

 II. It is a continuous process. It establishes regular and stable

relationship between the parties involved. It involves not only the
negotiation of the contract, but also the administration of the contract.

 III. It is a flexible and dynamic process. The parties have to adopt a

flexible attitude through the process of bargaining.

 IV. It is a method of partnership of workers in management

 Subject Matter of collective bargaining

The Indian Institute of Personnel Management suggested the following

subject matter of collective bargaining:

I. Purpose of agreement, its scope, and the definition of important terms

II. Rights and responsibilities of the management and of the trade union

III. Wages, bonus, production norms, leave, retirement benefits, and terms
and conditions of service

IV. Grievance redressal procedure

V. Methods and machinery for the settlement of possible future disputes

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20
 Importance of Collective Bargaining

Importance to employees

 Collective bargaining develops a sense of self respect and

responsibility among the employees.

 It increases the strength of the workforce, thereby, increasing their

bargaining capacity as a group.

 Collective bargaining increases the morale and productivity of

employees.

 It restricts management’s freedom for arbitrary action against the

employees. Moreover, unilateral actions by the employer are also
discouraged.

 Effective collective bargaining machinery strengthens the trade

unions movement.

 The workers feel motivated as they can approach the management on

various matters and bargain for higher benefits.

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  It helps in securing a prompt and fair settlement of grievances. It
provides a flexible means for the adjustment of wages and
employment conditions to economic and technological changes in the
industry, as a result of which the chances for conflicts are reduced.

 Importance of Collective Bargaining

Importance to employers

 It becomes easier for the management to resolve issues at the

bargaining level rather than taking up complaints of individual
workers.

 Collective bargaining tends to promote a sense of job security among

employees and thereby tends to reduce the cost of labor turnover to
management.

 Collective bargaining opens up the channel of communication

between the workers and the management and increases worker
participation in decision making.

 Collective bargaining plays a vital role in settling and preventing

industrial disputes.

 Importance of Collective Bargaining

Importance to society

 Collective bargaining leads to industrial peace in the country

 It results in establishment of a harmonious industrial climate which

supports which helps the pace of a nation’s efforts towards economic
and social development since the obstacles to such a development
can be reduced considerably.

 The discrimination and exploitation of workers is constantly being

checked.

 It provides a method or the regulation of the conditions of

employment of those who are directly concerned about them.

 Pre-requisites for collective bargaining:

Effective negotiations and enforcement requires a systematic preparation of

the base or ground for bargaining which involves the following three steps:

 Recognition of the Bargaining Agent. The management should

give recognition to the trade union for participating in the collective

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 bargaining process. In case there is more than one union, selection
could be done through verification of membership by a government
agency giving representation to all the major unions through joint
consultations. Thus, the bargaining agent of the workers should be
properly identified before initiating any action.

 Deciding the Level of Bargaining. Whether the dealings are

confined to enterprise level, industry level, regional or national level
should be decided as the contents, scope and enforcement agencies
differ in each case.

 Determining the Scope and Coverage of Bargaining. It would be

better to have a clear understanding of what are the issues to be
covered under bargaining. Many a time, bargaining is restricted to
wage and working conditions related issues but it would be
advantageous for both the management and union to cover as many
issues as possible to prevent further friction and disputes. Therefore,
all the important and interrelated issues are to be taken for
consideration.

 Problems of Collective Bargaining

 I. Due to the dominance of outsiders in trade unionism in the country,

there is multiplicity of unions which are weak and unstable, and do
not represent majority of the employees. Moreover, there are inter-
union rivalries, which further hinder the process of collective
bargaining between the labour and the management.

 II. Since most of the trade unions are having political affiliations, they
continue to be dominated by politicians, who use the unions and
their members to meet their political ends.

 III. There is a lack of definite procedure to determine which union

is to be recognised to serve as a bargaining agent on behalf of the
workers

 IV. In India, the law provides an easy access to adjudication. Under

the Industrial Disputes Act, the parties to the dispute may request the
Government to refer the matter to adjudication and the Government
will constitute the adjudication machinery, i.e., labour court or
industrial tribunal. Thus, the faith in the collective bargaining process
is discouraged.

 V. There has been very close association between the trade

unions and political parties. As a result, trade union movement

23
 has leaned towards political orientations rather than collective
bargaining.

General advantages and disadvantages of collective

bargaining

 Pros

 Can lead to high-performance workplace where labor and

management jointly engage in problem solving, addressing issues on
an equal standing.

 Provides legally based bilateral relationship.

 Management’s rights are clearly spelled out.

 Employers’ and employees’ rights protected by binding collective

bargaining agreement.

 Multi-year contracts may provide budgetary predictability on salary

and other compensation issues.

 Unions may become strong allies in protecting higher education from

the effects of an economic slowdown.

Promotes fairness and consistency in employment policies and personnel

decisions within and across institutions.

 Employees may choose whether they want union representation.

 A strong labor management partnership may enable the workforce

development needed for engaging the technology revolution.

Cons

 Management’s authority and freedom are much more restricted by

negotiated rules.

 Creates significant potential for polarization between employees and

managers.

 Disproportionate effect of relatively few active employees on the

many in the bargaining unit. This is particularly the case when
collective bargaining involves a system-wide structure of elections.

 Increases bureaucratization and requires longer time needed for

decision making.
24
  Increases participation by external entities (e.g., arbitrators, State
Labor Relations Board) in higher education’s decision making.

 More difficult for employees at smaller campuses to have their voices

heard.

 Protects the status quo, thereby inhibiting innovation and change.

This is particularly the case when the change involves privatizations.

 Higher management costs associated with negotiating and

administering the agreements.

 Eliminates ability of management to make unilateral changes in

wages, hours, and other terms and conditions of employment.

 Restricts management’s ability to deal directly with individual

employees.

 Increased dependence on the private sector for certain services,

particularly those requiring technological competence, may be
compromised.

 Contract administration is a very difficult process to manage and

significantly changes the skill set required of managers and
supervisors.

 Workers participation in Management(WPM)

 WPM is the participation resulting from the practices which increase

the scope for employees’ share of influence in decision-making at
different tiers of organizational hierarch with associated assumption of
responsibility.

 Workers’ participation may be viewed as:

 An instrument for increasing the efficiency of enterprises and

establishing harmonious relations;

o A device for developing social education for promoting solidarity among

workers and for tapping human talents;

o A means for achieving industrial peace and harmony which leads to higher
productivity and increased production;

o A humanitarian act, elevating the status of a worker in the society;

25
o An ideological way of developing self-management and promoting
industrial democracy.

Other objectives of WPM can be cited as:

o To improve the quality of working life (QWL) by allowing the workers

greater influence and involvement in work and satisfaction obtained from
work; and

 To secure the mutual co-operation of employees and employers in

achieving industrial peace; greater efficiency and productivity in the
interest of the enterprise, the workers, the consumers and the nation.

 The main implications of workers’ participation in management as

summarized by ILO:
o Workers have ideas which can be useful;
o Workers may work more intelligently if they are informed about the
reasons for and the intention of decisions that are taken in a
participative atmosphere.

 Importance of WPM

 Unique motivational power and a great psychological value.

 Peace and harmony between workers and management.

 Workers get to see how their actions would contribute to the overall
growth of the company.

 They tend to view the decisions as `their own’ and are more
enthusiastic in their implementation.

 Participation makes them more responsible.

 They become more willing to take initiative and come out with cost-
saving suggestions and growth-oriented ideas.

 Scope and ways of participation:

 One view is that workers or the trade unions should, as equal

partners, sit with the management and make joint managerial
decisions. The other view is that workers should only be given an
opportunity, through their representatives, to influence managerial
decisions at various levels. In practice, the participation of workers
can take place by one or all the methods listed below:

26
 
Participation at the Board level:

 This would be the highest form of industrial democracy.

 The workers’ representative on the Board can play a useful role in

safeguarding the interests of workers.

 He or she can serve as a guide and a control element.

 He or she can prevail upon top management not to take measures

that would be unpopular with the employees.

 He or she can guide the Board members on matters of investment in

employee benefit schemes like housing, and so forth.

The Government of India took the initiative and appointed workers’

representatives on the Board of Hindustan Antibiotics (Pune), HMT
(Bangalore), and even nationalized banks.
The Tatas, DCM, and a few others have adopted this practice.

 Participation through ownership:

 This involves making the workers’ shareholders of the company by

inducing them to buy equity shares.
o In many cases, advances and financial assistance in the form of
easy repayment options are extended to enable employees to buy
equity shares.

Examples of this method are available in the manufacturing as well as the

service sector.

Advantage:

o Makes the workers committed to the job and to the organization.

Drawback:
o Effect on participation is limited because ownership and management are
two different things.

 Participation through complete control:

 Workers acquire complete control of the management through elected

boards.

27
  The system of self-management in Yugoslavia is based on this
concept.

 Self-management gives complete control to workers to manage

directly all aspects of industries through their representatives.

 Advantages:

o Ensures identification of the workers with their organization.

o Industrial disputes disappear when workers develop loyalty to the
organization.
o Trade unions welcome this type of participation.

Conclusion: Complete control by workers is not an answer to the problem

of participation because the workers do not evince interest in management
decisions.

 Participation through Staff and Works Councils:

 Staff councils or works councils are bodies on which the

representation is entirely of the employees.

 There may be one council for the entire organization or a hierarchy of

councils.

 The employees of the respective sections elect the members of the

councils.

Such councils play a varied role.

 Their role ranges from seeking information on the management’s

intentions to a full share in decision-making.

 Such councils have not enjoyed too much of success because trade
union leaders fear the erosion of their power and prestige if such
workers’ bodies were to prevail.

 Participation through Joint Councils and Committees:

 Joint councils are bodies comprising representatives of employers and

employees.

 This method sees a very loose form of participation, as these councils

are mostly consultative bodies.

28
  Work committees are a legal requirement in industrial establishments
employing 100 or more workers.

 Such committees discuss a wide range of topics connected to labour

welfare.

 Examples of such committees are welfare committee, safety

committee, etc.

 Such committees have not proven to be too effective in promoting

industrial democracy, increasing productivity and reducing labour
unrest.

 Participation through Collective Bargaining:

 Through the process of CB, management and workers may reach

collective agreement regarding rules for the formulation and
termination of the contract of employment, as well as conditions of
service in an establishment.

 Even though these agreements are not legally binding, they do have
some force.

 For CB to work, the workers’ and the employers’ representatives need

to bargain in the right spirit. But in practice, while bargaining, each
party tries to take advantage of the other.

 This process of CB cannot be called WPM in its strongest sense as in

reality; CB is based on the crude concept of exercising power for the
benefit of one party.

 WPM, on the other hand, brings both the parties together and
develops appropriate mutual understanding and brings about a
mature responsible relationship.

 Participation through Job Enlargement and Job Enrichment:

Excessive job specialization that is seen as a by-product of mass production

in industries, leads to boredom and associated problems in employees. Two
methods of job designing – job enlargement and job enrichment– are seen
as methods of addressing the problems. Job enlargement means expanding
the job content – adding task elements horizontally. Job enrichment means
adding `motivators’ to the job to make it more rewarding.

This is WPM in that it offers freedom and scope to the workers to use their
judgment. But this form of participation is very basic as it provides only
29
limited freedom to a worker concerning the method of performing his/her
job. The worker has no say in other vital issues of concern to him – issues
such as job and income security, welfare schemes and other policy
decisions.

 Participation through Suggestion Schemes:

 Employees’ views are invited and reward is given for the best
suggestion.

 With this scheme, the employees’ interest in the problems of the

organization is aroused and maintained.

 Progressive managements increasingly use the suggestion schemes.

 Suggestions can come from various levels.

The ideas could range from changes in inspection procedures to
design changes, process simplification, paper-work reduction and the
like.

 Out of various suggestions, those accepted could provide marginal to

substantial benefits to the company.
The rewards given to the employees are in line with the benefits
derived from the suggestions.

 Participation through Quality Circles:

 Concept originated in Japan in the early 1960s and has now spread all
over the world.

 A QC consists of seven to ten people from the same work area who
meet regularly to define, analyze, and solve quality and related
problems in their area.

 Training in problem-solving techniques is provided to the members.

QCs are said to provide quick, concrete, and impressive results when
correctly implemented.

 Advantages:
o Employees become involved in decision-making, acquire
communication and analytical skills and improve efficiency of the work
place.
o Organization gets to enjoy higher savings-to-cost ratios.
o Chances of QC members to get promotions are enhanced.

 The Indian Scenario:QC

30
 Tried by BHEL, Mahindra and Mahindra, Godrej and Boyce among
others.

 Workers got to get out of their daily routine and do something

challenging.

 These circles require a lot of time and commitment on the part of

members for regular meetings, analysis, brainstorming, etc.

 Most QCs have a definite life cycle – one to three years.

 Few circles survive beyond this limit either because they loose steam
or they face simple problems.

 QCs can be an excellent bridge between participative and non-

participative approaches.

 For QCs to succeed in the long run, the management needs to show
its commitment by implementing some of the suggestions of the
groups and providing feedback on the disposition of all suggestions.

 Empowered Teams:

 Empowerment occurs when authority and responsibility are passed on

to the employees who then experience a sense of ownership and
control over their jobs.

 Employees may feel more responsible, may take initiative in their

work, may get more work done, and may enjoy the work more.

 For empowerment to occur, the following approach needs to be

followed as compared to the traditional approach:

 Features of empowered or self-directed teams:

 Empowered to share various management and leadership functions.

 Plan, control and improve their work.

 Often create their schedules and review their performance as a

group.

 May prepare their own budgets and co-ordinate their work with other
departments.

 Usually order materials, keep inventories and deal with suppliers.

 Frequently responsible for acquiring any new training they might

need.
31
  May hire their own replacement to assume responsibility for the
quality of their products or services.

 Total Quality Management:

 TQM refers to the deep commitment, almost obsession, of an

organization to quality.

 Every step in company’s processes is subjected to intense and

regular scrutiny for ways to improve it.

Quality in the job of the QC Personnel.

 Meet the customer’s requirement on time, the first time, and 100% of
the time.

 Strive to do error-free work.

 Manage by prevention, not correction.

 Measure the cost of quality.

 TQM is called participative because it is a formal programme

involving every employee in the organization; making each one
responsible for improving quality everyday.

 Financial Participation:

 This method involves less consultations or even joint decisions.

Performance of the organization is linked to the performance of the
employee.

 The logic behind this is that if an employee has a financial stake in

the organization, he/she is likely to be more positively motivated and
involved.

 Some schemes of financial participation:

Profit-linkedpay
Profit sharing and Employees’ Stock Option schemes.
Pension-fund participation.

 Advantages

 Technology and organizations today are so complex that specialized

work-roles are required.

 This means employees will not be able to participate effectively in

matters beyond their particular environment.
32
 Everybody need not want participation.

 The role of trade unions in promoting participative management has

been far from satisfactory.

 Employers are unwilling to share power with the workers’

representatives.
Managers consider participative management a fraud.

 Evolution of WPM in India:

 The beginning towards WPM was made with the Industrial Disputes
Act, 1947, which made Works Committees mandatory in industrial
establishments employing 100 or more workers.

 The Industrial Policy Resolution adopted by the government in 1956

stated that there should be some joint consultation to ensure
industrial peace, and improve employer-employee relations.

 The functions of both these joint bodies were to be consultative and

were not binding on themanagement.
The response to these schemes was encouraging to begin with, but
gradually waned.

 A study team was appointed in 1962 to report on the working of joint

councils and committees.

 The team identified some reasons for their failure. No concrete steps
were taken to remove the difficulties, or change the pattern of
participative management.

 During the emergency of 1975-77, the interest in these schemes was

revived by the then Prime Minister by including Workers’ Participation
in industry in the government’s 20-point programme.

 The government started persuading large enterprises to set up joint

consultative committees and councils at different levels.

 The Janata Government who came to power in 1977 carried on this

initiative.

 In was again emphasized by the Congress government who came

back n 1979.
This continued in a “non-statutory vein” till the late 1980s, and the
response from the employers and employees stayed luke-warm.
o Then, the 42nd Amendment to the Constitution was made.

33
  Article 43-A reads: The State shall take steps, by suitable legislation,
or in any other way, to secure the participation of workers in the
management of undertakings, establishments or other organizations
engaged in any industry.

 Thus, participative management is a constitutional commitment in

India.
And then, on May 30,1990; the government introduced the
Participation of Workers in Management Bill in the Rajya Sabha.

 The bill requires every industrial enterprise to constitute one or more

`Shop-Floor Councils’ at the shop floor level, and`Establishment
Council’ at the establishment level.

 These councils will have equal representation of employers and

employees.

 Shop-Floor councils enjoy powers over a wide range of functions from

production, wastage control to safety hazards.

 The Establishment Council enjoys similar powers. The bill provides for
the constitution of a Board of Management of every corporate body
owning an industrial establishment.

 The bill also provides for penalties on individuals who contravene any
provision of the bill.

 In spite of all these efforts, only the government and the

academicians have been interested in participative management.
But participative management is staging a comeback.

 The compulsions of emerging competitive environment have made

employee involvement more relevant than ever before.

 Managers and the managed are forced to forget their known stands,
break barriers, and work in unison.

 Managers and workers are partners in the progress of business.

Gratuity Act 1972

Section 1
Extent and Application

It extends to the whole of India

34
Applicable to:

every factory, mine, oilfield, plantation, port and railway company;

every shop or establishment in which 10 or more persons are employed, or

were employed, on any day of the preceding twelve months

Section2
Definitions

S.2 (e) "employee" means any person employed to do any skilled, semi-
skilled, or unskilled, manual, supervisory, technical or clerical work

it does not include an apprentice

S.2 (s) "wages" includes dearness allowance but does not include any
bonus, commission, house rent allowance, overtime wages and any other
allowance.

MEANING OF GRATUITY

THE TERM “GRATUITY” WAS CONSIDERED AS AN AMOUNT GIVEN

FREELY AND COULD NOT BE DEMANDED AS A MATTER OF RIGHT BY
THE EMPLOYEES. IN MANY CASES GRATUITY WAS GIVEN AS A MATTER
OF FAVOUR.

EMPLOYERS USED TO PAY GRATUITY AS A REWARD FOR

LONG,CONTINOUS & MERITRORIOUS SERVICE.

WITH A VIEW TO ENSURE A UNIFORM PATTERN OF THE PAYMENT OF

GRATUITY TO THE EMPLOYEES ,THE “CENTRALGOVERNMENT
ENACTED THE”THE PAYMENT OF GRATUITY ACT,1972”.

Section: 4
Gratuity when payable ?

Gratuity shall be payable to an employee

Who has rendered continuous service for not less than 05 years

on the termination of his employment -

on his superannuation, or

on his retirement or

resignation, or

on his death or disablement due to accident or disease:

35
Note:-

The completion of continuous service of five years shall not be necessary

where the termination of the employment of any employee is due to death
or disablement:

How to calculate the Amount of Gratuity

Monthly rated employee :

At the rate of 15 days wages based on the rate of wages last drawn by
the employee concerned:

Formula:-last drawn wages X 15 days X No. of completed year of service

26

piece-rated employee, daily wages :

On the average of the total wages received by him for a period of

three months immediately preceding the termination of his employment
excluding overtime wages

seasonal establishment

At the rate of seven days wages for each season.

Maximum Limit Rs.3,50,000/-

Higher benefits can be paid if the employer so desires.

Can Gratuity be withheld by the employer ?

The gratuity of an employee, whose services have been terminated for any
act, wilful omission or negligence causing any damage or loss to, or
destruction of, property belonging to the employer, shall be forfeited to the
extent of the damage or loss so caused.

The gratuity payable to an employee may be wholly or partially forfeited

If the services of such employee have been terminated for his riotous or
disorderly conduct or any other act of violence on his part, or

If the services of such employee have been terminated for any act which
constitutes an offence involving moral turpitude, provided that such offence
is committed by him in the course of his employment.

Section: 6
Nomination

36
Each employee, who has completed one year of service, shall make
nomination for to receive the amount of gratuity.

In his nomination, an employee may, distribute the amount of gratuity

payable to him amongst more than one nominee.

If at the time of making nomination he has already family, he can not make
nomination in favour of a person who is not a member of his family. If he
does so it shall be void.

Fresh nomination in favour of one or more members of his family is required

where he has not family at the time of making nomination..

If a nominee predeceases the employee, the interest of the nominee shall

revert to the employee who can make a fresh nomination.

Every nomination, fresh nomination or alteration of nomination, as the case

may be, shall be sent by the employee to his employer, who shall keep the
same in his safe custody.

Section: 7
Determination of the amount of gratuity

A person who is eligible for payment of gratuity shall send a written

application to the employer.

The employer shall determine the amount of gratuity and give notice in
writing to the person to whom the gratuity is payable and also to the
controlling authority specifying the amount gratuity so determined as soon
as gratuity becomes payable and whether or not an application has been
made by the concerned employee.

The employer shall arrange to pay the amount of gratuity within 30 days
from the date it becomes payable.

Section: 9
Penalties

Knowingly making false statement/ false representation to avoid to make

payment à imprisonment up to 06 months, or with fine which may extend
to Rs.10,000/- or with both.

Breach, or makes default in complying with any of the provisions of this Act
à imprisonment for 03 months to 01 year, or with fine which shall not be
less than Rs.10,000/- but which may extend to Rs.20,000/- or with both:

Non-payment of any gratuity à imprisonment 6 months to 02 years + a

fine.
37
 Payment of Bonus Act

 The practice of paying bonus in India appears to have originated

during First World War when certain textile mills granted 10% of
wages as war bonus to their workers 1917.

 In certain of industrial disputes demand for payment of bonus cases

was also included. In 1950, the Full Bench of the Labour Appellate
evolved a formula for determination of bonus.

 A plea was made to raise that formula in 1959. At the second and
third meetings of the Eighteenth Session of Standing Labour
Committee (G.O.I.) held in New Delhi in March/April 1960, it was
agreed that a Commission beappointed to go into the question of
bonus and evolve
suitable norms.

 Eligibility

 Every employee shall be entitled to be paid by his employer in an

accounting year, bonus, in accordance with the provisions of this Act,
provided he has worked in the establishment for not less than thirty
working days in that year

 Disqualification for bonus

 Notwithstanding anything contained in this Act, an employee shall be

disqualified from receiving bonus under this Act, if he is dismissed
from service for –

 (a) fraud; or

 (b) riotous or violent behavior while on the premises of

 the establishment; or

 (c) theft, misappropriation or sabotage of any property of the

establishment

 Payment of minimum bonus

38
 Every employer shall be bound to pay to every employee a minimum
bonus which shall be 8.33 percent of the salary or wage earned by the
employee during the accounting year .

 Payment of maximum bonus

 If the allocable surplus exceeds the amount of minimum bonus

payable to the employees under that section, the employer shall, in
lieu of such minimum bonus, be bound to pay to every employee in
respect of that accounting; year bonus which shall be an amount in
proportion to the salary or wage earned by the employee during the
accounting year subject to a maximum of twenty per cent, of such
salary or wage.

 In computing the allocable surplus under this section, the amount set
on or the amount set off under the provisions shall be taken into
account in accordance with the provisions of that section

 Computation of number of working days

 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

 (b) he has been on leave with salary or wage;

 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

 Set on and set off allocable surplus

 Where for any accounting year, the allocable surplus exceeds the
amount of maximum bonus payable to the employees in the
establishment, then, the excess shall, subject to a limit of twenty per
cent. of the total salary or wage of the employees employed in the
establishment in that accounting year, be carried forward for being set
on in the succeeding accounting year and so on

39
 Where for any accounting year, there is no available surplus or the
allocable surplus in respect of that year falls short of the amount of
minimum bonus payable to the employees in the establishment and
there is no amount of sufficient amount carried forward and set on
which could be utilized for the purpose of payment of the minimum
bonus, then, such minimum amount or the deficiency, as the case
may be, shall be carried forward for being set off in the succeeding
accounting year and so
on up to and inclusive of the fourth accounting year in the manner

 Where in any accounting year any amount has been carried forward
and set on or set off under this section, then, in calculating bonus for
the succeeding accounting year, the amount of set on or set off
carried forward from the earliest accounting year shall first betaken
into account

 Where any money is due to an employee by way of bonus from his

employer under a settlement or an
award or agreement, the employee himself or any other person
authorized by him in writing in this behalf, or in the case of the death
of the employee, his assignee or heirs may, without prejudice to any
other mode of recovery, make an application to the appropriate
Government or such authority as the appropriate Government may
specify in this behalf is satisfied that any money is so due, it shall
issue a certificate for that amount to the Collector who shall proceed
to recover the same in the same manner as an arrears of land
revenue

 Provided that every such application shall be made within one year
from the date on which the money became due to the employee from
the employer

 Provided further that any such application may be entertained after

the expiry of the said period of one year, if the appropriate
Government is satisfied that the applicant had sufficient cause for not
making the application within the said period.

 set on--first we calculate allocable surplus and out of that surplus we

pay bonus and after paying max bonus i.e 20% ,if some amount left
balance is called set on and this amount is kept in reserve for future .

set off-if in any accounting year you do not have sufficient surplus and
even you are not able to pay minimum bonus of 8.33% than legally
you have to pay 8.33%,so balance amount which you do not have in

40
 surplus will be shown as set off for future and you have to take care of
set off/on in future before deciding rate of bonus.

 PF ACT 1952

PF act was came into force in 1952 in order to secure the life of an
employee for rendering his services to organization, this is a statutory
liability of employer to give PF amt to an employee.

This amount is paid after the retirement from the services.

Applicability of the act

 PF is applicable in any organization where 20 or more persons are

employed

 PF is applicable in every state except J & k.

 Benefits of the act

 To provide Monetary benefits to survive after retirement.

 To minimize risk against health, sickness, disablement of the

employee and his dependents.

 Old age Pension benefits.

 Widow pension.

 To maintain dignity & Social status.

 PF Contribution

PF is deducted on basic salary. If employee's basic is less than or equals to

Rs.6500 he will be covered in pf.

12 % Employee side

3.67%(epf part)+ 8.33 % (Pension part)

13.61% Employer side

3.67 (EPF)+8.33 (Pension)+ 1.1(Admin charge) + 0.5(EDLI) +

0.01(Inspection charge /admin on edli)

Employees Deposit linked insurance scheme.

Challans & Returns

41
 PF challans are submitted on 15th of every month, 5 days grace period
is given to submit challans.

PF Returns are submitted twice a year-

PF RETURNS

Form 5 is used to submit pf monthly return in which new employee

details is mentioned.

Form 10 is used to submit pf monthly return in which left employee

details is mentioned.

Form 12A that is used for the same purpose which contains
consolidated details of that particular month-new joinees, left employees &
employees/employer pf contribution.

Form 3A is used for pf annual return.

 Workmen Compensation Act

 The Workmen’s Compensation Act, aims to provide workmen and/or

their dependents some relief in case of accidents arising out of and in
the course of employment and causing either death or disablement of
workmen.

 It provides for payment by certain classes of employers to their

workmen compensation for injury by accident.

 EMPLOYEES ENTITLED TO COMPENSATION

 Every employee (including those employed through a contractor but

excluding casual employees), who is engaged for the purposes of
employer’s business and who suffers an injury in any accident arising
out of and in the course of his employment, shall be entitled for
compensation under the Act.

 EMPLOYER’S LIABILITY FOR COMPENSATION (ACCIDENTS)

 The employer of any establishment covered under this Act, is required

to compensate an employee:
a. Who has suffered an accident arising out of and in the course of his
employment, resulting into (i) death, (ii) permanent total disablement,
(iii) permanent partial disablement, or (iv) temporary disablement
whether total or partial, or
b. Who has contracted an occupational disease.
42
 HOWEVER THE EMPLOYER SHALL NOT BE LIABLE

 a. In respect of any injury which does not result in the total or partial
disablement of the workmen for a period exceeding three days;
b. In respect of any injury not resulting in death, caused by an
accident which is directly attributable to-
i. the workmen having been at the time thereof under the influence or
drugs, or
ii. the willful disobedience of the workman to an order expressly given,
or to a rule expressly framed, for the purpose of securing the safety of
workmen, or
iii. The willful removal or disregard by the workmen of any safeguard
or other device which he knew to have been provided for the purpose
of securing the safety of workmen.
The burden of proving intentional disobedience on the part of the
employee shall lie upon the employer.
iv. when the employee has contacted a disease which is not directly
attributable to a specific injury caused by the accident or to the
occupation; or
v. When the employee has filed a suit for damages against the
employer or any other person, in a Civil Court.

 WHAT IS DISABLEMENT

 Disablement is the loss of the earning capacity resulting from injury

caused to a workman by an accident.
· Disablement’s can be classified as (a) Total, and (b) Partial. It can
further be classified into (i) Permanent, and (ii) Temporary,
Disablement, whether permanent or temporary is said to be total
when it incapacitates a worker for all work he was capable of doing at
the time of the accident resulting in such disablement.

 ACCIDENT ARISING OUT OF AND IN THE COURSE OF EMPLOYMENT

 An accident arising out of employment implies a casual connection

between the injury and the accident and the work done in the course
of employment. Employment should be the distinctive and the
proximate cause of the injury. The three tests for determining whether
an accident arose out of employment are:
1. At the time of injury workman must have been engaged in the
business of the employer and must not be doing something for his
personal benefit;
2. That accident occurred at the place where he as performing his
duties; and

43
 3. Injury must have resulted from some risk incidental to the duties of
the service, or inherent in the nature condition of employment.

 The general principles that are evolved are:

 · There must be a casual connection between the injury and the

accident and the work done in the course of employment;

· It is not necessary that the workman must be actually working at the

time of his death or that death must occur while he was working or
had just ceased to work;

 COMPENSATION IN CASE OF OCCUPATIONAL DISEASES

 Workers employed in certain types of occupations are exposed to the

risk of contracting certain diseases, which are peculiar and inherent to
those occupations. A worker contracting an occupational disease is
deemed to have suffered an accident out of and in the course of
employment and the employer is liable to pay compensation for the
same.
Occupational diseases have been categorized in Parts A, B and C of
Schedule III. The employer is liable to pay compensation:
a. When a workman contracts any disease specified in Part B, while in
service for a continuous period of 6 months under one employer.

 b. When a workman contracts any disease specified in Part C, while he

has been in continuous service for a specified period, whether under
one or more employers.

 CALCULATION OF COMPENSATION

 The amount of compensation payable by the employer shall be

calculated as follows:
(a) In case of death. - 50% of the monthly wages X Relevant Factor or
Rs. 50,000, whichever is more and Rs.1000 for funeral expenses.
(b) In case of total permanent disablement Specified under -60% of
the monthly wages X Relevant Factor or Rs. 60,000, whichever is
more.

 (d) In case of partial permanent disablement .-Such percentage of the

compensation payable in case (b) above, as is proportionate to the
loss of earning Capacity (as assessed by a qualified medical
practitioner).
(e) In case of temporary disablement (whether total or partial). - A
half-monthly installment equal to 25% of the monthly wages, for the
period of disablement or 5 years, whichever is shorter
44
  WHEN COMPENSATION TO BE DEPOSITED WITH COMMISSIONER ?

 The amount of compensation is not payable to the workman directly.

It is generally deposited along with the prescribed statement, with the
Commissioner who will then pay it to the workman. Any payment
made to the workman or his dependents, directly, in the following
cases will not be deemed to be a payment of compensation:

i. in case of death of the employee;

ii. in case of lump sum compensation payable to a or a minor or a person of
unsound mind or whose entitlement to the compensation is in dispute or a
person under a legal disability.
The receipt of deposit with the Commissioner shall be a sufficient proof of
discharge of the employer’s liability.

 AMOUNTS PERMISSIBLE TO BE PAID TO THE WORKMAN/ DEPENDENTS

DIRECTLY

Following amounts may be paid directly to the workman or his

dependents:
a. In case of death of the workman, any advance on account of
compensation up to [an amount equal to three months’ wages of such
workman] may be paid to any dependent.
b. In case of lump sum compensation payable to an adult male worker
not suffering from any legal disability.
In case of half-monthly payments payable to any workman.

 REGISTRATION OF AGREEMENTS OF COMPENSATION

1. Where the amount payable as compensation has been settled by

agreement a memorandum thereof shall be sent by the employer to
the Commissioner, who shall, on being satisfied about its
genuineness, record the memorandum in a registered manner.

2. However where it appears to the Commissioner that the agreement

ought not to be registered by reason of the inadequacy of the sum or
amount, or by reason that the agreement has been obtained by fraud
or undue influence or other improper means he may refuse to record
the agreement and may make such order including an order as to any
sum already paid under the agreement as he thinks just in the
circumstances.

3. An agreement for payment of compensation which has been

registered shall be enforceable under this act notwithstanding
45
 anything contained in the Indian Contract Act, or any other law for the
time being in force.
EFFECT OF FAILURE TO REGISTER AGREEMENT
When a memorandum of any agreement is not sent to the
Commissioner for registration, the employer shall be liable to pay the
full amount of compensation, which he is liable to pay under the
provisions of this Act.

FILING OF CLAIMS

 A claim for the compensation shall be made before the Commissioner.

No claim for compensation shall be entertained by the Commissioner
unless the notice of accident has been given by the workman in the
prescribed manner, except in the following circumstances:


a. in case of death of workman resulting from an accident which
occurred on the premises of the employer, or at any place where the
workman at the time of the accident was working died on such
premises or such place or in the vicinity of such premises or place;
b. in case the employer has knowledge of the accident from any other
source, at or about the time of its occurrence;
c. in case the failure to give notice or prefer the claim, was due to
sufficient cause.

LIMITATION


Workman, to the Commissioner, may file the claim for accident
compensation in the prescribed form, within 2 years from the
occurrence of the accident or from the date of death. The claim must
be preceded by
(i) a notice of accident, and

(ii) the claimant-employee must present himself for medical

examination if so required by the employer.

DUTIES OF EMPLOYERS / EMPLOYEES

 · To pay compensation for an accident suffered by an employee, in

accordance with the Act.
· To submit a statement to the Commissioner (within 30 days of
receiving the notice) in the prescribed form, giving the circumstances
attending the death of a workman as result of an accident and

46
 indicating whether he is liable to deposit any compensation for the
same.
· To submit accident report to the Commissioner in the prescribed
form within 7 days of the accident, which results in death of a
workman or a serious bodily injury to a workman.
· To maintain a notice book in the prescribed from at a place where it
is readily accessible to the workman.
· To submit an annual return of accidents specifying the number of
injuries for which compensation has been paid during the year, the
amount of such compensation and other prescribed particulars.

DUTIES OF EMPLOYEES

· To send a notice of the accident in the prescribed form, to the

Commissioner and the employer, within such time as soon as it is
practicable for him. The notice is precondition for the admission of the
claim for compensation.
· To present himself for medical examination, if required by the
employer.

THE EMPLOYEE’S STATE INSURANCE ACT 1948

• ESI Scheme …

• ESI Scheme for India is an integrated social security scheme tailored

to provide Social Production to workers and their dependents, in the
organised sector, in contingencies, such as Sickness, Maternity and
Death or Disablement due to an employment injury or Occupational
hazard

1. Employees’ Contribution – 1.75% of the Wages

2. Employers’ Contribution – 4.75% of the Wages

TOTAL - 6.5 % of the Wages

• Benefits to Employees …

• ESI Scheme Major Social Security Benefits in Cash and Kind include …

1. Medical Benefit – for self & Family

2. Sickness Benefit – for self

47
 3. Maternity Benefit - for self

4. Disablement Benefit

a). Temporary Disablement Benefit – for self

b). Permanent Disablement Benefit – for self

5. Dependents’ Benefit – for dependents in case of death due to

employment injury

• Benefits to Employees …

• In addition, the Scheme also provides some other need based benefits
to insured workers. These are:

i). Funeral Expenses – to a person who

performs the last rites of IP

ii). Rehabilitation allowances – for self

iii). Vocational Rehabilitation - for self

iv). Old age Medicare – for self and spouse

v). Medical Bonus – for insured women and IP’s wife

• Medical Benefit …

• Medical Benefit means Medical care of IPs and their families, wherever
covered for medical benefit.

• The Standard medical care consists of out-door treatment, in-patient

treatment, all necessary drugs and dressing, pathological and
radiological specialist consultation and care, ante-natal and post natal
care, emergency treatment etc.,

• Out-door medical care is provided at the state Insurance Dispensaries

or Mobile Dispensaries manned by full-time doctors (service’ system)
or at the private clinics of Insurance Medical Practitioners (Panel
System)

• Medical Benefit …

• Insured worker and members of his family are eligible for medical care
from the very first day of the worker coming under ESI Scheme.

48
• A worker who is covered under the scheme for first time is eligible for
medical care for the period of three months. If he/she contributes at
least for 78 days in a contribution period the eligibility is there up to
the end of the corresponding benefit period.

• A worker is also eligible for extended sickness benefit when he/she is

suffering from any one of the long term 34 diseases listed in the Act.
This is admissible after the worker has been under ESI these
conditions are satisfied medical benefit is admissible for a maximum
period of 730 days for the IP and his/ her family.

• Sickness Benefit …

• Sickness signifies a state of health necessitating Medical treatment

and attendance and abstention from work on Medical grounds.
Financial support extended by the corporation is such a contingency
is called sickness Benefit

• Sickness Benefit represents periodical payments made to an Insured

Person for the period of certified sickness after completing 9 Months in
insurable employment.

• Benefits to Employees …

• To qualify for this benefit, contributions should have been payable for
atleast 78 days in the relevant contribution period.

• The Maximum duration for availing sickness Benefit is 91 days in two

consecutive benefit periods

• Standard benefit rate – this rate corresponds to the average daily

wage of an Insured person during the corresponding contribution
period and is roughly half of the daily wage rate.

• Extended Sickness Benefit …

• Extended Sickness Benefit is a Cash Benefit paid for prolonged illness

(Tuberculosis / Leprosy, Mental and Malignant diseases) due to any of
the 34 Specified diseases

• The IP should have been in continuous employment for a period of 2

years and should have contributed for atleast 156 days in 4 preceding
contribution periods

• Extended Sickness Benefit …

• The daily rate of Extended Sickness Benefit is 40% more than the
standard Sickness Benefit rate admissible
49
 • After exhausting sickness Benefit Payable for 91 days the Extended
Sickness Benefit is payable upto further period of 124 / 309 days that
can be extended upto 2 years in special circumstances

• Enhanced Sickness Benefit …

• Is Cash Benefit for IP undergoing sterilisation operation of vasectomy /

tuberctomy for family planning.

• The contributory conditions are the dame as for claiming sickness

benefits

• The daily rate of this benefit is double the standard benefit rate. Say,
not less than the daily wage.

• The benefit rate of this benefit is double the standard benefit rate.
Say, not less than the daily wage.

• The benefit is available upto 7 days for vasectomy and upto 14 days
for tubectomy operations.

• Maternity Benefit…

• Maternity Benefit is cash payable to an Insured women for the

specified period of abstention from work for confinement or mis-
carriage or for sickness arising out of pregnancy, “confinement”
“premature birth of child or miscarriage” “confinement” connotes
labour after 26 weeks of pregnancy whether the result issue is alive or
dead,

• “Miscarriage” means expulsion of the contents of a pregnant uterus at

any period prior to or during 26th week of pregnancy.

• Maternity Benefit…

• Criminal abortion or miscarriage does not, however, entitle to benefit.

• The contribution condition is the same as for Sickness Benefit.

• The daily benefit rate is double the sickness Benefit rate and is thus
roughly equivalent to the full wages. Benefits is paid for Sundays also.

• Maternity Benefit…

• The Benefit is paid as follows (Duration)

a). For Confinement

50
 For a total period 12 Weeks beginning not more than 6 weeks before the
expected date of child birth, if the insured women dies during confinement
or with in 6 weeks thereafter, leaving behind the living child, the benefit
continues to be payable for the whole of the period. But the child also die
during that period, the benefit will be paid upto and including the day of the
death of the child.

• Maternity Benefit…

b). For Miscarriage

For the period of 6 weeks following the

date of miscarriage

c). For sickness arising out of pregnancy,

confinement, Premature birth of child or

miscarriage :

For an additional period or upto four weeks.

In all the cases, the benefit is paid only if the insured women does not
work for remuneration during the period for which benefit is claimed. There
is no waiting period.

• Maternity Benefit…

• Medical Bonus

Medical Bonus is lump sum payment made to an Insured woman or the

wife of an insures person in case she does not avail medical facility from an
ESI hospital at the time of delivery of a child. This bonus of Rs. 250/- has
been increased to Rs. 1000/- from 1st April 2003

• Disablement Benefit …

a). Temporary disablement benefit :

• In case of temporary disability arising out of an employment injury or

occupational disease.,

• Disablement benefit is admissible to insured person for the entire

period so certified by an Insurance Medical officer / Practitioner for
which IP does not work for wages.

• The benefit is not subject to any contributory condition and is payable

at a rate which is not less than 70% of daily average wages.
51
 • However, not payable if the incapacity lasts for less than 3 days
excluding the date of accident.

• Permanent disablement benefit …

• In case an employment injury or occupational disease results in

permanent, partial or total loss of earning capacity,

• Periodical payments are made to the IP for life at a rate depending on

the actual loss of earning capacity as may be determined and certified
by a duly-constituted Medical Board.

• The rates of Disablement Benefits are determined in accordance with

the provisions of Rule 57 of ESI (Central) Rules, 1991.

• In order to product erosion in real value of the periodical payments of

Permanent Disablement benefits, against rise in the cost of living
index, periodical increases are granted, based on actuarial calculation

• Permanent disablement benefit …

• Commutation of periodical payments into lump sum (one time

payment) is permissible where the permanent disablement stands
assessed as final.

• Commutation of Permanent Disablement Benefit into lump sum

payment is also allowed in case the total commuted value does not
exceed Rs.10000/- (The ceiling is now being raised to Rs.30000/-).

• Dependants’ Benefit …

• Dependents Benefit is a monthly pension payable to the eligible

dependents of an insured person who dies as a result of an
Employment Injury or occupational disease

• Beneficiaries and Duration of benefit

a). Widow / widows during life or until remarriage

b). Legitimate or adopted son until age 18 or if legitimate son is infirm, till
infirmity lasts.

c). Legitimate or adopted unmarried daughter until age 18 or until

marriage, whichever is earlier, or if infirm, till infirmity lasts and she
continues to be unmarried.

52
 In the absence of any widow or legitimate child, the benefit is payable to
a parent or grandparent for life, to any other male dependent until age 18 or
to an unmarried or widowed female dependent until age 18.

How much …

• The total divisible benefit is equivalent to the temporary disablement

benefit rate (roughly 70% of the wage rate). The widow / widows
share 3/5th of the benefit and the legitimate or adopted son and
daughter 2/5th each of the benefit. If the total benefit so divided
exceeds the full rate, there is a proportionate reduction in the
respective shares of the beneficiaries.

• The amount of pension paid to the dependents of a deceased insured

person is reviewed vis-à-vis the cost of living index and increases are
granted from time to time to compensate for erosion in its real value.

Maternity Benefit Act 1961

 F Object of the Act

{ To protect the dignity of motherhood and the dignity of a new person’

birth by providing for the full and healthy maintenance of the woman and
her child at this important time when she is not working

 F Coverage of the Act

Upon all women employees either employed directly or through contractor

except domestic women employed in mines, factories, plantations and also
in other establishments if the State Government so decides. Therefore, if
the State Government decides to apply this Act to women employees in
shops and commercial establishments, they also will get the benefit of this
Act. Sec.3

 Conditionsforeligibilityof benefits

 Women indulging temporary or unmarried are eligible for maternity

benefit when she is expecting a child and has worked for her
employer for at least 80 days in the 12 months immediately preceding
the date of her expected delivery.

Sec. 5

GCONDITIONS FOR CLAIMING BENEFITS

 Ten weeks before the date of her expected delivery, she may ask the
employer to give her light work for a month. At that time she should
produce a certificate that she is pregnant.
53
  She should give written notice to the employer about seven weeks
before the date of her delivery that she will be absent for six weeks
before and after her delivery. She should also name the person to who
payment will be made in case she cannot take it herself.

 She should take the payment for the first six weeks before she goes
on leave.

 She will get payment for the six weeks after child-birth within 48 hours
of giving proof that she has had child. She will be entitled to 2 nursing
breaks of 15 minutes each in the course of her daily work till her child
is 15 months.

 Her employer cannot discharge her or change her conditions of

service while she is on maternity leave.

Sec.5

 Cash Benefits

 Leave with average pay for six weeks before the delivery

 Leave with average pay for six weeks after the delivery

 A medical bonus of Rs. 1000, if the employer does not provide free
medical care to the woman.

 An additional leave with pay up to one month if the woman shows

proof of illness due to the pregnancy, delivery, miscarriage, or
premature birth.

 In case of miscarriage, six weeks leave with average pay from the
date of miscarriage.

 Non Cash Benefits & Privilege

 Light work for 10 weeks (6 weeks plus 1 month) before the date of her
expected delivery, if she asks for it.

 2 Nursing breaks in the course of her daily work until the child 15
months old.

 No discharge or dismissal while she is on maternity leave.

 No charge to her disadvantage in any of the conditions of her

employment while on maternity leave.

 Leave for Miscarriage & Tubectomy Operation

54
  Leave with wages at the rate of maternity benefit, for a period of 6
weeks immediately following the day of her miscarriage or her
medical termination of pregnancy.

 Entitled to leave with wages at the rate of maternity benefit for a

period of 2 weeks immediately following the day of her tubectomy
operation.

 Leave for illness arising out of pregnancy etc.,

 Forfeiture of maternity benefit

o If permitted by her employer to absent herself under the provisions of

sec.6 for any period during such authorised absence, she shall forfeit
her claim to the maternity benefit for such period.

o For discharging or dismissing such a woman during or on account of

her absence from work, the employer shall be punishable with
imprisonment which shall not be less than 3 months, but it will extend
to one year and will find, but not exceeding Rs. 5000/-

Industrial Disputes Act

 What are Industrial Disputes?

 Industrial Dispute means any dispute or differences 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 of employment or with
the conditions of labour of any person

 What are the different categories of Industrial Disputes?

The Second Schedule of the I.D. Act deals with matters within the
jurisdiction of Labour Courts which fall under the category of Rights
Disputes.

 The propriety or legality of an order passed by an employer under the

standing orders;

 The application and interpretation of standing orders which regulate

conditions of employment.

 Discharge or dismissal of workmen including reinstatement of, or

grant of relief to workmen wrongfully dismissed;
55
  Withdrawal of any customary concession or privilege;

 Illegality or otherwise of a strike or lock-out;

The Third Schedule of the I.D. Act deals with matters within the jurisdiction
of Industrial Tribunals which could be classified as Interest Disputes.

 These are :

 Wages, including the 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 otherwise than in accordance with standing orders;

 Classification by grades;

 Rules of discipline;

 Rationalization;

 Retrenchment of workmen and closure of establishment; and

 Any other matter that may be prescribed.

 Who can raise an Industrial Dispute?

 Any person who is a workman employed in an industry can raise an

industrial dispute.

 A workman includes any person (including an apprentice) employed in

an industry to do manual, unskilled, skilled, technical, operational,
clerical or supervisory work for hire or reward.

 It excludes those employed in managerial or administrative capacity.

 Industry means any business, trade, undertaking, manufacture and

includes any service, employment, handicraft, or industrial occupation
or avocation of workmen.

 How to raise an Industrial Dispute?

56
 A workman can raise a dispute directly before a Conciliation Officer in
the case of discharge, dismissal, retrenchment or any form of
termination of service. In all other cases listed at 2 above, the dispute
has to be raised by a Union / Management.


Purpose of the Act

 SETTLEMENT MACHINERIES

 CONCILITAION

 ARBITRATION

 COURT OF INQUIRY

-INDUSTRIAL TRIBUNAL

NATIONAL TRIBUNAL

 Works Committee

 It shall be the duty of the Works Committee to promote measures for

securing and preserving amity and good relations between the
employer
and workmen and, to that end, to comment upon matters of their
common
interest or concern and endeavour to compose any material difference
of
opinion in respect of such matters

 Conciliation officer

 The appropriate Government may, by notification in the Official

Gazette, appoint such number of persons as it thinks fit, to be
conciliation officers, charged with the duty of mediating in and
promoting the settlement of industrial disputes.

 A conciliation officer may be appointed for a specified area or for

specified industries in a specified area or for one or more specified
industries and either permanently or for a limited period.

 Board of conciliation

 Provided that, if any party fails to make a recommendation as

aforesaid within the prescribed time, the appropriate Government
shall appoint such persons as it thinks fit to represent that party.

57
 (4) A Board, having the prescribed quorum, may act notwithstanding
the absence of the Chairman or any of its members or any vacancy in
its number:

 Provided that if the appropriate Government notifies the Board that

the services of the Chairman or of any other member have ceased to
be available, the Board shall not act until a new chairman or member,
as the case may be, has been appointed

 Courts of inquiry

 Labour courts

 (3) A person shall not be qualified for appointment as the Presiding

Officer of a Labour Court, unless -
(a) he is, or has been, a Judge of a High Court; or
(b) he has, for a period of not less than three years, been a District
Judge or

 an Additional District Judge; or]

(c) he has held any judicial office in India for not less than seven years
; or
(d) he has been the Presiding Officer of a Labour Court constituted
under

 any Provincial Act or State Act for not less than five years

 Industrial tribunals

 The appropriate Government may, by notification in the Official

Gazette, constitute one or more Industrial Tribunals for the
adjudication of industrial disputes relating to any matter and for
performing such other functions as may be assigned to them under
this Act.

 (2) A Tribunal shall consist of one person only to be appointed by the

 appropriate Government.

 (3) A person shall not be qualified for appointment as the presiding

officer of a

 Tribunal unless:

 (a) he is, or has been, a Judge of a High Court; or

 (b) he has, for a period of not less than three years, been a District
Judge or an Additional District Judge.
58
 (4) The appropriate Government may, if it so thinks fit, appoint two
person as assessor, to advise the tribunal

 National tribunals

 The Central Government may, by notification in the Official Gazette,

 constitute one or more National Industrial Tribunals for the

adjudication of industrial disputes which, in the opinion of the Central
Government, involve questions of national importance or are of such a
nature that industrial establishments situated in more than one State
are likely to be interested in, or affected by, such disputes.

 (2) A National Tribunal shall consist of one-person only to be

appointed by the Central Government.

 (3) A person shall not be qualified for appointment as the presiding

officer of a

 National Tribunal unless he is, or has been, a Judge of a High Court.

 (4) The Central Government may, if it so thinks fit, appoint two

persons as assessors to advise the National Tribunal in the proceeding
before it

 Strike

1. By workmen

2. Refusal to work/ accept employment

 Lockout

 By employee

 Temporary closure

 Refusal to continue to employ the persons employed

 Illegal strikes

 Without giving 14 days notice

 Commenced after 42 days of notice

 Prior to the date indicated in the notice

 In non PUs

 During the pendency of proceedings

59
 Strike/lock out will be illegal if Govt bans.

 Lay off

 Temporary suspension or permanent termination of employees.

 Where in 50 or more workers are employed, shall be laid off by prior

permission of the appropriate government.

 Lay off compensation

 50% of Basic + DA

 Alternative employment within 5 miles not eligible for compensation.

 Retrenchment

 It is a way of downsizing, cutting costs.

 One month notice /pay for small Co.

 3 months notice /pay in larger establishments.

 Retrenchment Compensation

 15 days wages for every completed year.

 Closure

 Permanent closure of place of employment.

 No permission is required in case of smaller establishments

 For larger establishments, 90 days prior in advance to get permission

from the government.

60
CONTRACT LABOUR (REGULARATION & ABOLITION) ACT, 1970 & THE RULES
CHECKLIST
Applicability Registration
Registration of
of
Every establishment in which 20 or Establishment
Establishment
Object of the Act more workmen are employed or Principal
Principal employer
employer
To regulate the were employed on any day of the employing
employing 20 20 or or more
more
employment of preceding 12 months as contract workers
workers through
through the
the
contract labor in labor. contractor
contractor or
or the
the
certain establishments Every contractor who employs or who contractor(s)
contractor(s) on on deposit
deposit ofof
and to provide for its employed on any day of the required
required fee
fee in
in Form
Form 1 1
abolition in certain preceding twelve months 20 or
circumstances and for more workmen. Sec.
Sec. 77
matters connected Revocation ofSec. 1 Licensing of Contractor
Prohibition
therewith.of Employment of Registration Engaging 20 or more than
Contract Labour When obtained by 20 workers and on
Only by the appropriate Government Misrepresentation or deposit of required fee
through issue of notification after suppression in Form IV.
consultation with the Board (and not Of material facts etc. after Valid for specified
Courts) can order the prohibition of opportunity to the period.Sec.12, Rule 21
employment of contract labor. principal
Sec. 10 Employer
Welfare measures Sec. to9be taken by the Contractor
Revocation or Suspension & Contract labor either one hundred or more employed by a
Amendment of Licences contractor for one or more canteens shall be provided and
When obtained by misrepresentation or maintained.
suppression of material facts. First Aid facilities.
Failure of the contractor to comply with Number of rest-rooms as required under the Act.
the conditions or contravention of Act Drinking water, latrines and washing facilities. Sec. 16 & 17
or theAgreement
Laws, Rules. or standing Sec. Liability of Principal Employer
14
orders inconsistent with the To ensure provision for canteen, restrooms, sufficient supply of
Act-Not Permissible drinking water, latrines and urinals, washing facilities.
Unless the privileges in the contract Principal employer entitled to recover from the contractor for
between the parties or more favorable providing such amenities or to make deductions from amount
than the prescribed in the Act, such payable. Sec. 20
Muster Roll, Wages Register, Deduction Register and Overtime Register
contract will be invalid and the by Contractor
workers will continue to get more Every contractor shall
favorable benefits. Maintain Muster Roll and a Register of Wages in Form XVI and Form XVII
Registers of Contractors Sec. 20 respectively when combined.
Principal employer Register or wage-cum-Muster Roll in Form XVII where the wage period is a
To maintain a register of contractor in fortnight or less.
respect of every establishment in Maintain a Register of Deductions for damage or loss, Register or Fines and
Register of Avances in Form XX, from XXI and Form XXII respectively.
Form XII.
Maintain a Register of Overtime in Form XXIII.
Contractor To issue wage slips in Form XIX, to the workmen at least a day prior to the
Rule 74 disbursement of wages.
To maintain register of workers for Obtain the signature or thumb impression of the worker concerned against the
each registered establishment in Form entries relating to him on the Register of wages or Muster Roll-Cum-Wages
XIII. Register.
To issue an employment card to each When covered by Payment of Wages Act, register and records to be maintained
worker in Form XIV. under the rules
To issue service certificate to every Muster Roll, Register of wages, Register of Deductions, Register of Overtime,
Register of Fines, Register of Advances, Wage slip.
workman on his termination in Form Rule 79
XV.
PENALTIES Rules 75, 76 and 77 To display an abstract of the act and Rules in English and Hindi and in the
language spoken by the Majority of workers in such forms as may be approved
Sec. Offence by
Punishmentauthority
appropriate
Sec. 22 Obstructions For obstructing
Rule 80 the inspector or failing to produce registers etc.
To display notices showing rates of wages, hours of work, wage period, dates of
-3 months’
payment, imprisonment
names or fine
and addresses upto
of the Rs.500,
inspector andor
to both.
send copy to the
inspector and any change forwithwith
Sec.23 Violation Rule
For 81
violation of the provisions of Act or the Rules,

61
EMPLOYEES’ PROVIDENT FUNDS & MISC. PROVISIONS ACT, 1952
& THE SCHEMES
CHECKLIST
Eligibility Applicability
Any person who is employed  Every establishment which is factory engaged in any industry
for work of an establishment specified in Schedule 1 and in which 20 or more persons are
or employed through employed.
contractor in or in connection  Any other establishment employing 20 or more persons which
with the work of an Central Government may, by notification, specify in this behalf.
establishment.
Payment of Contribution  Any establishment employing even less than 20 persons can be
 The employer shall pay the covered voluntarily u/s 1(4) of the Act.
contribution payable to the Benefits
EPF, DLI and Employees’ Employees covered enjoy a benefit of Social Security in the form of an
Pension Fund in respect of the unattachable and unwithdrawable (except in severely restricted
member of the Employees’ circumstances like buying house, marriage/education, etc.) financial
Pension Fund employed by him nest egg to which employees and employers contribute equally
directly by or through a throughout the covered persons’ employment.
contractor. This sum is payable normally on retirement or death. Other Benefits
 It shall be the responsibility of include Employees’ Pension Scheme and Employees’ Deposit Linked
the principal employer to pay Insurance Scheme.
the contributions payable to Rates of Contribution
the EPF, DLI and Employees’
Pension Fund by himself in SCHEME EMPLOYEE’S EMPLOYER’S CENTRAL
respect of the employees GOVT’S
directly employed by him and
also in respect of the Amount > 8.33%
employees directly employed (in case where
Clarification
by him and also in about
respect of contribution is
Contribution
the employees employed by or 12% of 10%)
After revision in wage ceiling from 10% (in case of
Provident Fund NIL
Rs.5000 to Rs.6500 w.e.f. 1.6.2001 12% certain
Scheme
per month, the government will Establishments
continue to contribute 1.16% upto as per details
the actual wage of maximum given earlier)
Rs.6500 per month towards
Employees’ Pension Scheme. The Insurance NIL
NIL 0.5
employer’s share in the Pension Scheme
Damages
Scheme will be Rs.541 w.e.f.
1.6.2001.  Less than 2 months ….@ 17% per

Under Employees’ Deposit-Linked annum

Insurance Scheme the contribution
@ 0.50% is required to be paid  Two months and above but less than upto four months
upto a maximum limit of Rs.6500.
….@22% per annum
The employer also will pay Penal Provision
administrative charges @ 0.01% Liable to be arrested without warrants being a cognizable offence.
on maximum limit of Rs.6500
whereas an exempted
Defaults by employer in paying contributions or
EMPLOYEES’
establishment willSTATE INSURANCE
pay inspection
charges @ 0.005% on the total
ACT, 1948 & the SCHEME inspection/administrative charges attract imprisonment upto 3 years
wages paid.
CHECK LIST
and fines upto Rs.10, 000 (S.14). For any retrospective application, all
Notes:
dues have to be paid by employer with damages upto 100% of
The above clarification is given by
taking wages upto a maximum of arrears.
Rs.6500 towards wage (basic+DA).
Since an excluded employee i.e.
drawing wages more than Rs.6500 62
 Coverage Rate of
Applicability of Contribution of THE ESI SCHEME TODAY
the Act & Of employees the wages No. of implemented Centres 677
Scheme
No. of Employers covered 2.38
Is extended in
area-wise to lacs
Drawing wages Employers’
factories using
power and
4.75% No. of Insured Persons 85 lacs
employing 10 or Upto
more persons and No. of Beneficiaries 330
to non-power lacs
using
manufacturing Manner and Time Limit No. of Regional Offices/SRO’s
units and 26
For making Payment of contribution Benefits
establish-ments
employing 20 or No. of ESI Hospitals/Annexes 183
more person upto To the employees under the Act
Rs.7500/- per No. of ESI Dispensaries 1453
month w.e.f. The total amount of contribution
1.4.2004. It has (employee’s share and employer’s share)
is to be deposited with the authorized No. of Panel Clinics 2950
also been extend- Medical, sickness, extended
Employees’
ed upon shops, bank through a challan in the prescribed sickness for certain diseases,
hotels, form in quadruplicate on ore 1.75%
before 21st of enhanced sickness, dependents
restaurants, roads month following the calendar month in maternity, besides funeral
motor transport expenses, rehabilitation
which the wages fall due.
WAGES FOR ESI CONTRIBUTIONS
undertakings, Contributioallowance, Contribution
medical benefit to
equip-ment insured person and his or her
maintenance staff
Rs.10000/- per n periodspouse. period
Registers/files to be maintained by the employers
month
in the hospitals.
To be deemed as NOT to be deemed as
wages wages
Engaged either
directly or thru’ If the person joined
 Basic pay contractor insurance employment
 Contribution paid by 1st April to 30th
 Dearness allowance for the first time, say on
kthe employer to any
September. 5th January, his first
 House rent allowance pension/provident fund
or under ESI Act. contribution period will
 City compensatory
 Sum paid to defray be from 5th January to
allowance
special expenses 31st March and his
 Overtime wages (but
entailed by the nature Penalties
corresponding first
not to be taken into
of employment – Daily benefit will be from 5th
account for 1st October to
allowance paid for the October to 31st
determining the 31 st
Marchpunishment have
period spent on tour. Different been prescribed for
coverage of an December.
employee)  Gratuity payable on different types of offences in terms of Section
discharge.
 Payment for day of 85: (I) (six months imprisonment and fine
rest  Pay in lieu of notice of
retrenchment Rs.5000), (ii) (one year imprisonment and fine),
 Production incentive
compensation
 Bonus other than and 85-A: (five years imprisonment and not less
 Benefits paid under the
statutory bonus to 2 years) and 85-C (2) of the ESI Act, which are
ESI Scheme.
 Night shift allowance self explanatory. Besides these provisions,
 Encashment of leave
 Heat, Gas & Dust
 Payment of Inam which action also can be taken under section 406 of
allowance
does not form part of
 Payment for the terms of the IPC in cases where an employer deducts
FACTORIES ACT, 1948employment.
unsubstituted holidays contributions from the wages of his employees
CHECK
Meal/foodLIST
allowance  Washing allowance for but does not pay the same to the corporation
 Suspension allowance livery
63 which amounts to criminal breach of trust.
 Lay off compensation  Conveyance Amount
 Children education towards
reimbursement for
 Employer to ensure health of Registration &
Applicability of the Act workers pertaining to Renewal of
Factories
Any premises whereon 10 or  Cleanliness Disposal of wastes
more persons with the aid of and effluents
power or 20 or more workers  Ventilation and temperature
are/were without aid of dust and fume To be granted by Chief
power working on any dyad  Overcrowding Artificial Inspector of Factories
preceding 12 months, humidification Lighting
on submission of
wherein Manufacturing  Drinking water Spittons.
process is being carried on. Secs. 11 to 20 prescribed form, fee
Sec.2(ii) and plan.

Safety Measures  Self-acting machines. Welfare Measures

 Casing of new machinery.
 Prohibition of employment
 Facing of machinery of women and children
 Washing facilities
 Work on near machinery in motion. near cotton-openers.
 Facilities for storing and
 Employment prohibition of young  Hoists and lifts.
drying clothing
persons on dangerous machines.  Facilities for sitting
 Striking gear and devices for cutting  First-aid appliances – one first
off power.
Working Hours, Spread Over & Overtime of Adults aid box not less than one for
Weekly hours not more than 48. every 150 workers.
Daily hours, not more than 9 hours.  Canteens when there are 250
or more workers.
Intervals for rest at least ½ hour on working for 5 hours.  Shelters, rest rooms and lunch
rooms when there are 150 or
Spreadover not more than 10½ hours. more workers.
 Creches when there are 30 or
Overlapping shifts prohibited. more women workers.
 Welfare office when there are
Employment of Young Persons Annual Leave with Wages
500 or more workers.

 Prohibition of employment of young children e.g. 14 years. A worker having worked for 240
 Non-adult workers to carry tokens e.g. certificate of fitnekss. days @ one day for every 20 days
 Working hours for children not more than 4 ½ hrs. And not and for a child one day for working
permitted to work during night shift.
of 15 days.
OFFENCE PENALTIES
Sec.92 to
 For contravention of the Provisions of  Imprisonment
upto 2 years or fine upto
the Act or Rules Rs.1,00,000 or both
 On Continuation of contravention  Rs.1000 per day
 On contravention of Chapter IV  Not less than Rs.25000 in case of
pertaining to safety or dangerous death.
operations.  Not less than Rs.5000 in case of
serious injuries.
 Subsequent contravention of some Imprisonment upto 3 years or fine not

provisions less than Rs.10, 000 which may extend
to Rs.2, 00,000.
 Obstructing Inspectors  Imprisonment upto 6 months or fine

64
 upto Rs.10, 000 or both.
 Wrongful disclosing result pertaining to  Imprisonment upto 6 months or fine
results of analysis. upto Rs.10, 000 or both.
 For contravention of the provisions of  Imprisonment upto 7 years with fine
Sec.41B, 41C and 41H pertaining to upto Rs.2, 00,000 and on continuation
compulsory disclosure of information fine @ Rs.5, 000 per day.
by occupier, specific responsibility of  Imprisonment of 10 years when
occupier or right of workers to work contravention continues for one year.
imminent danger.

INDUSTRIAL DISPUTES ACT, 1947

Object
Object of
of the
the Act
Act
Provisions
Provisions for
for investigation
investigation and
and settlement
settlement of
of industrial
industrial disputes
disputes and
and for
for certain
certain other
other purposes.
purposes.
Important Clarifications Power of Labour Court to give Right of a Workman during
Industry – has attained wider meaning than defined Appropriate Relief Pendency of Proceedings in High
except for domestic employment, covers from Labour Court/Industrial Tribunal can Court
barber shops to big steel companies. Modify the punishment of dismissal or Employer to pay last drawn wages
Sec.2 (I) discharge of workmen and give to reinstated workman when
Works Committee–Joint Committee with equal appropriate relief including proceedings challenging the
number of employers and employees’ award of his reinstatement are
Persons
reinstatement. Bound by
Sec.11A
representatives for discussion of certain common Period
pending in ofthe
Operation of
higher Courts.
Settlement
problems. Sec.3 Settlements and Awards
 When in the course of conciliation
 A settlement for a period as
proceedings etc., all persons
agreed by the parties, or
Conciliation–is an attempt by a third party in working or joining subsequently.
 Period of six months on
helping
Lay to
offsettle the disputes
& Payment Sec.4 –
of Compensation  Otherwise than in course of
signing of settlement.
Conditions for Laying off settlement upon the parties to the
 An award for one year after
Failure, refusal or inability of an employer to settlement. Sec.18
its enforcement. Sec.19
provide work due to Notice of Change
21 days by an employer to workmen Prior Permission for Lay off
 Shortage of coal, power or raw material. about changing the conditions of When there are more than 100
 Accumulation of stocks. service as provided in Ivth Schedule. workmen during proceeding 12
 Breakdown of machinery. Sec.9A months. Sec.25-M
 Natural calamity. Sec.25-C

Lay off Compensation

Payment of wages except for Prohibition of Strikes & Lock Outs
intervening weekly holiday  Without giving to the employer notice of strike,  During the pendency of proceedings before a Labour
compensation 50% of total or as hereinafter provided, within six weeks before Court, Tribunal or National
striking.  Tribunal and two months, after the conclusion of such
basic wages and DA for a  Within fourteen days of giving such notice. proceedings.
period of lay off upto  Before the expiry of the date of strike specified  During the pendency of arbitration proceedings
maximum 45 days in a year. in any such notice as aforesaid. before an arbitrator and two months after the
 During the pendency of any conciliation conclusion of such proceedings, where a notification
Prior Permission by the proceedings before a conciliation officer and has been issued under Sub-Section(3A) of section
Government for Retrenchment seven days after the conclusion of such 10A
 When there are more than 100 proceedings.  During any period in which a settlement or award is
(in UP 300 or more) workmen  During the pendency of conciliation proceedings in operation, in respect of any of the matters covered
during preceding 12 months. Conditions
before a of service
Board andetc. to remain
seven days unchanged
after the under certain
by the circumstances
settlement or award. during pendency of
Secs.22&23
 Three months’ notice or wages conclusion of such proceedings. proceedings
thereto.  Not to alter to the prejudice of workmen concerned the condition of service.
 Form QA  To seek Express permission of the concerned authority by paying one month’s wages on
 Compensation @ 15 days’ dismissal, discharge or punish a protected workman connected with the dispute.
wages. Sec. 25-N  To seek approval of the authority by paying one month’s wages before altering condition of
Prohibition of unfair labour service, dismissing or discharging or punishing a workman. Sec.33
practice either by employer or
workman or a trade union as Retrenchment of Workmen Compensation & Conditions
stipulated in fifth schedule  Workman must have worked for 240 days.
Both the employer and the Union  Retrenchment compensation @ 15 days’ wages for every completed year to be calculated at last
drawn wages
can be punished. Sec.25-T
 One month’s notice or wages in lieu thereof.
 Reasons for retrenchment
Closure of an Undertaking  Complying with principle of ‘last come first go’.
60 days’ notice to the labour  Sending Form P to Labour Authorities.
authorities for intended closure in Form
QA. Sec.25FFA Conditions of service etc. to remain unchanged under certain circumstances during pendency of
65 proceedings
Prior permission atleast 90 days before  Not to alter to the prejudice of workmen concerned the condition of service.
in Form O by the Government when  To seek Express permission of the concerned authority by paying one month’s wages on dismissal,
there are 100 ore more workmen discharge or punish a protected workman connected with the dispute.
during preceding 12 months (in UP 300  To seek approval of the authority by paying one month’s wages before altering condition of service, dismissing
or more workmen) Sec.25-O or discharging or punishing a workman. Sec.33
PENALTIES <Punishment
Offence
Sec.25-U Committing unfair labour practices Imprisonment of upto 6 months or with fine upto Rs.3, 000.

26 Illegal strike and lock-ourts Imprisonment upto one month or with fine upto Rs.50 (Rs.1000 for
lock-out) or with both.
27 MATERNITY Instigation etc. for illegal strike or lock-outs.
BENEFIT ACT, 1961 Imprisonment upto 6 months or with fine upto Rs.1, 000
28
CHECK LIST
Giving financial aid to illegal strikes and lock-outs.
Imprisonment for 6 months or with fine upto Rs.1, 000
29 Breach of settlement or Coverage
award of the Act
Object of the Act Conditions for eligibility
Upon all women employees either employed
To protect the dignity of benefits
directly or through contractor except
of motherhood and domestic women employees employed in Women indulging temporary
the dignity of a new mines, factories, plantations and also in of unmarried are eligible for
person’s birth by other establishments if the State maternity benefit when she
providing for the full Government so decides. Therefore, if the is expecting a child and has
and healthy State Government decides to apply this Act worked for her employer for
maintenance of the at least 80 days in the 12
to women employees in shops and
woman and her child months immediately
commercial establishments, they also will proceeding the date of her
at this important time get the benefit of this Act. Bihar, Punjab expected delivery Sec. 5.
when she is not Haryana, West Bengal, U.P., Orissa and
working. Cash Andhra
Benefits
have done so. Conditions for eligibility of
Leave with average pay for six weeks before the delivery. benefits
Leave with average pay for six weeks after the delivery.
A medical bonus of Rs.25 if the employer does not provide free medical care to the
woman.
An additional leave with pay up to one month if the woman shows proof of illness due to Ten weeks before the date of
her expected delivery, she
the pregnancy, delivery, miscarriage, or premature birth. may ask the employer to
In case of miscarriage, six weeks leave with average pay from the date of miscarriage. give her light work for a
Non Cash Benefits/Privilege month. At that time she
Light work for ten weeks (six weeks plus one month) before the date of her expected should produce a certificate
delivery, if she asks for it. that she is pregnant.
Two nursing breaks in the course of her daily work until the child is 15 months old. She should give written notice
No discharge or dismissal while she is on maternity leave. to the employer about seven
No change to her disadvantage in any of the conditions of her employment while on weeks before the date of her
delivery that she will be
maternity leave.
absent for six weeks before
Pregnant women discharged or dismissed may still claim maternity benefit from the and after her delivery. She
employer. should also name the person
Exception: Women dismissed for gross misconduct lose their right under the Act for to whom payment will be
Maternity made in case she can not
take it herself.
Leave for Miscarriage Leave for illness arising out of She should take the payment
Benefit& Tubectomy Operation pregnancy etc. etc. for the first six weeks before
she goes on leave.
Leave with wages at the rate of A woman suffering from illness She will get payment for the six
maternity benefit, for a period of weeks after child-birth within
arising our of pregnancy, delivery, 48 hours of giving proof that
six weeks immediately following
the day of her miscarriage or her premature birth of child she has had a child.
(Miscarriage, medical termination She will be entitled to two
medical termination of pregnancy.
of pregnancy or tubectomy nursing breaks of fifteen
Entitled to leave with wages at the minutes each in the course
rate of maternity benefit for a operation) be entitled, in addition of her daily work till her child
period of two weeks immediately to the period of absence allowed is fifteen months old.
following the day of her tubectomy to her leave with wages at the Her employer cannot discharge
operation. Prohibition of dismissal during absence of pregnancy her or change her conditions
Discharge or dismissal of a woman employed during or rate of maternity
on account benefit
of such absence fornotice
or to give a or discharge or dismissal
of service whileon she
such is
a day
on
that the notice will expire during such absence or to very her disadvantage.
maximum period of one month. maternity leave.
Discharge or dismissal during or on account of such absence or to give notice of discharge or dismissal on such a day that the notice Sec.will
5.
Sec. 10
expire during such absence, or to vary to her disadvantage any of the conditions of her service.
At the time during her pregnancy, if the woman but for such discharge or dismissal would have been entitled to maternity benefit or medical
bonus, etc.
Not barred in case of dismissal for cross misconduct. 66 Sec.
 Failure to Display Forfeiture of maternity benefit
Extract of Act If permitted by her employer to absent herself under the provisions of section 6 for
Imprisonment may any period during such authorized absence, she shall forfeit her claim to the
extend to one year WAGES
MINIMUM ACT, benefit
maternity 1948for such period.
or fine.
For discharging or dismissing such a woman during or on account of her absence
CHECK LIST from work, the employer shall be punishable with imprisonment which shall not be
less than 3 months, but it will extend to one year and will find, but not exceeding
Rs.5, 000. Sec. 18
Object of the Act Fixation of Minimum Rates of Wages
To provide for fixing  The appropriate government to fix minimum rates of wages. The
minimum rates of employees employed in para 1 or B of Schedule either at 2 or either part of
wages in certain notification u/s 27.
 To make review at such intervals not exceeding five years the minimum
employments
Minimum Rates of rates or so fixed and revised the minimum rates.
Wages Government can also fix Minimum Wages for
 Time work  Piece work at piece rate  Piece work for the purpose of
Such as Basic rates of securing to such employees on a time work basis  Overtime work done by
employees for piece work or time rate workers.
wages etc. Variable DA
and Value of other
Procedure for fixing Composition of Payment of
and revising Minimum Committee Minimum Rates of
Rates of Wages Representation of Wages
Fixing Hours for
employer and Employer to pay to
Normal Working every employee
Appointing Committee employee in schedule engated in schedule
issue of Notification etc.
Overtime employer in equal employment at a rate
number and not less than minimum
rates of wages as fixed
 Shall constitute a To be fixed by the hour, by independent persons
by Notification by not
normal working day the day or by such a longer not exceeding 1/3rd or making deduction
inclusive of one or wage-period works on any its total number one other than prescribed.
more specified such person to bewho works for less Sec.12
day in excess of the number Wages of workers than
intervals.
of hours constituting normal appointed by theworking days
normal
 To provide for a day
of rest in every working day.
period of seven days Save as otherwise hereinafter provided, be
with remuneration. Payment for every hour or for entitled to receive wages in respect of work done
 To provide for part of an hour so worked in by him on that day as if he had worked for a full
payment for work on excess at the overtime rate normal working day. and records
Wages for two class of work Maintenance of registers
a day of rest at a rate
Where an employee does two ordouble more of the ordinary
Register rate of – Form I Rule 21(4)
of Fines
not less than the
classes of work to each of which a  Annual Returns – Form III Rule 21 (4-A)
different minimum rate of wages is  Register for Overtime – Form IV Rule 25
 Register of Wages–Form X, Wages slip–Form XI, Muster Roll–Form V
applicable, wages at not less than the
Rule 26
minimum rate in respect of each such  Representation of register – for three year Rule 26-A
class.
Minimum time Sec. rate
16 wages for piece Claims by employees
work  To be filed by before authority constituted under the Act within 6
Not less than minimum rates wages months.
as fixed .  Compensation upto 10 times on under or non-payment of wages

PENALITIES Offence Punishment

Sec. 20 For paying less than Imprisonment upto 6

minimum rates of wages months or with fine
upto Rs.500/-

67
 For contravention of any Imprisonment upto 6
provisions pertaining to months or with fine
fixing hours for normal upto Rs.500/-
working day etc.

TRADE UNIONS ACT, 1926

CHECKLIST

Object of the Act

Object of the Act
To provide for the registration of Trade Union and in certain respects
To provide for the registration of Trade Union and in certain respects
To define the law relating to registered Trade Unions
To define the law relating to registered Trade Unions
Registration
Registrationof
oftrade
tradeUnion
Union Registration
Registrationof
oftrade
tradeUnion
Union

Any 77 or
Any Prescribed
Prescribedform
formwith
withfollowing
followingdetails.
or more
more members
members ofof aa trade
trade union
union may,
may, by
by details.
subscribing
subscribingtheir
theirnames
namesto
tothe
therules
rulesof
ofthe
thetrade
tradeunion
union Names,
and Names, occupations and address of
occupations and address of the
the
andits
itscompliance.
compliance. members’ place of work.
members’ place of work.
There
Thereshould
shouldbe
beat least10%,
atleast 10%,oror100
100ofofthe thework-men,
work-men, Address
Addressof ofits
itshead
headoffice;
office;and
and
whichever
whichever isis less,
less, engaged
engaged oror employed
employed inin the the
establishment Names,
Names, ages, addresses and occupations
ages, addresses and occupations of
establishmentororindustry
industrywith
withwhich
whichititisisconnected.
connected. its office bearers.
of
its office bearers.
ItIthas
hasononthe
thedate
dateofofmaking
makingapplication
applicationnot
notless than 77
lessthan Sec.
persons as its members, who are workmen engaged Sec.55
Minimum
persons requirements for engagedor Criminal
Minimum
employed
as
in
membership
its members,
requirements
the
who are workmen
for
establishment
of trade or industry
Cancellation
Cancellation
with which
or of
itit of Criminalconspiracy
conspiracyin
intrade
trade
employed in the establishment or industry Registration
with which disputes
isismembership
connected.
union
connected.
of trade Registration disputes
union

IfIfthe
thecertificate
certificatehas
hasbeen No
been No office
office bearer
bearer oror member
member of of aa
than10%
10%, ,oror100
Not obtained
obtained by fraudor
by fraud
Notless
lessthan 100 mistake
or registered
registered trade union shall be liableto
trade union shall be liable to
of mistakeororitithas
hasceased
ceasedto to
of the workmen, whicheverisis
the workmen, whichever
exist or has willfully punishment
punishment under
under sub
sub section
section (2)
(2) of
of
less, exist or has willfully
less, contravened any provision conspiracy
conspiracy u/s
u/s120B
120B of
ofIPC
IPCininrespect
respect of
of
contravened any provision
ofofthis
thisAct.
Act. any
any agreement
agreement made made between
between the the
Subject to a minimum of
Subject to a minimum of 7, 7 , If it ceases to have the
If it ceases to have the members
members for the purposeof
for the purpose offurthering
furthering
requisite
requisitenumber
numberof any
Disqualification
Disqualification of
of office
office bearers
bearers
members.
of anysuch object
Returns
such objectof
Returns ofthe
theTrade
TradeUnion.
Union.
engaged or employed in an members.
of
engaged or employed Trade in anUnion
of Trade Union Sec. Sec.10 10 Sec.
Sec.17 17
Establishments etc.
Establishments etc. Annually to the Registrar, on or before such date
Annually to the Registrar, on or before such date as may as may
Sec.
If one9A
has not attained the age of 18 years. be
be prescribed,
prescribed, aa general
general statement,
statement, audited
audited inin thethe
Sec.
If has not attained the age of 18 years.
one9A prescribed
prescribed manner, of all receipts and expenditure of
manner, of all receipts and expenditure of
Conviction for an offence involving moral every
every registered
registered Trade
Trade Union
Union during
during the
the year
year ending
ending onon
Conviction for an offence involving moral
the3131stDecember.
st
turpitude. the December.
turpitude.
Penalties Offence Punishment
Sec.
Sec.28
Not
Notapplicable when55years
applicablewhen yearshave
haveelapsed.
elapsed. 28
 For making false entry in or  Fine upto Rs.500. On
Sec.
Sec.21-A
21-A any omission in general continuing default, additional
statement required for fault, Rs.5 for each week (not
sending returns. exceeding Rs.50).
U/s 31
 For making false entry in the  Fine upto Rs.500.
68
form.

U/s 32
 Supplying false information  Fine upto Rs.200.
regarding Trade Union
PAYMENT OF BONUS ACT, 1965 & THE RULES
CHECKLIST
Applicability of Act Establishment
Every factory where in 10 or more persons are
employed with the aid of power or
Establishment includes
An establishment in which 20 or more persons are Departments,
employed without the aid of power on any day during Separate establishment

Computation of available surplus Components of

Bonus If profit and loss accounts
are prepared and
Income taxes and direct taxes as maintained in respect of
payable. Salary or wages any such department or
includes dearness undertaking or branch,
Depreciation as per section 32 of allowance but no other then such department or
Income Tax Act. allowances e.g. over- undertaking or branch is
Disqualification & Deduction of Bonus
time, house rent, treated as a separate
Computation of gross
establishment.
profit
On dismissal of an employee for For banking company, as
per First Schedule.
 Fraud; or
 riotous or violent behavior while on the premises of the
establishment; or
 theft, misappropriation or sabotage of any property of the Others, as per
Eligible Employees
establishment or
 Misconduct of causing financial loss to the Employer to the
extent that bonus
Eligibility can be deducted
of Bonus for that year.
Payment of Minimum Bonus Employees drawing wages
8.33% of the salary or upto Rs.3500 per month or
Rs.100 (on completion of 5 less.
An employee will be entitled
years after 1st Accounting year
only when he has worked For calculation
even if there is no profit)
purposes Rs.2500 per
for 30 working days in that
month maximum will be
year. taken even if an
Time Limit for Set-off and
Payment of Bonus Set-on employee is drawing
Within 8 months from the As per Schedule IV. upto Rs.3500 per
close of accounting y ear. month.
Sec. 15 Sec.12
Maintenance of Registers and Records etc. Note: The proposal to
enhance the existing
 A register showing the computation of the allocable surplus referred to in clause (4) of section 2, in
form A.

 A register showing the set-on and set-off of the allocable surplus, under section 15, in form B
69
 PENAL For to certain
Act not applicable contravention ofGeneral
employees of LIC, any UptoDockYards,
Insurance, 6 months orCross,
Red withUniversities
fine upto
TY
& Educationalprovision
Institutions,of the Actofor
Chambers the Rule
Commerce, Rs.1000.
Social Welfare Institutions,Sec.28
Building Contractors,

PAYMENT OF
Sec. Sec.
GRATUITY
1ACT, 1972 & THE RULES
Applicability 2(s)
Wages
Applicability Wages for
for
Calculation
Calculation
CHECKLIST
Every
Everyfactory,
factory,
mine, @
@ 15 15 days’
mine,oiloilfield,
field, days’
plantation, wages
wages for for every
plantation,port,port, Sec.
every
railways, completed
completed year year
railways,
company, as
as ifif the
the month
company,shop, shop, 2(e) month
establishment comprises
comprises of of 26
establishmentor or Employee
Employee Qualifying
Qualifying 26
educational period
period days
days at the last
at the last
educationalSec.
institutions drawn
drawn wages.
wages.
institutions
employing All
Allemployees Rule
employing10 101or
or employees
Calculation
Calculation Calculation irrespective
irrespectiveof On
Onrendering
renderingof of 4
more employees Calculation
moreemployees of
Piece-
Piece- Seasonal
Seasonal status
statusoror 55years’
years’service,
service,
rated
rated employee
employee either Display
Display of
of
salary
salary either
employee
employee Notice
Notice
termination,
termination,
resignation
resignationoror
@@77days’
days’ retirement.
retirement. On
@@1515days
days wages
wagesforfor Entitlement
Entitlement On conspicuous
conspicuous
wages
wagesforfor every place
place at
at the
the main
main
every
every On entrance
entrance in
every completed
completed Oncompletion
completion in
completed of English
English language
completed year
yearofof offive
fiveyears’
years’ language
year
yearon
onan Sec.
service or
or the
the language
an service.
service. serviceexcept
except language
average
averageof of33 4(3)in understood
understood by
incase
caseofof Rule
by
months’
months’ death or majority
majority ofof
Sec.6 death
Maximum or 9
Maximum employees
wages
wages disablement
disablement
Ceiling employees of of the
the
Rule 6 Ceiling factory, etc.
Mode
Modeof
of factory, etc.
Rule
Nomination
Nomination payment
payment 9
Penalties
Penalties
Rs.3,
Rs.3,
50,000
50,000
To
Tobebeobtained
obtained Cash
Cashor,
or,ififso
so
Imprisonment
Imprisonment for for
by
byemployer
employer desired,
desired,by by 66 months
months oror fine
fine
after
afterexpiry
expiryofof Bank
BankDraft
Draftor or upto
upto Rs.10,
Rs.10, 000
000
one
oneyear’s Cheque
Cheque for
year’s Sec. for avoiding
avoiding to to
service,
service,ininForm
Form make
make payment
payment
Sec.8‘F’ 4(6) Sec. by
by making
making false
false
‘F’
Rule 8 Forfeiture
Forfeitureof
ofGratuity
Gratuity 13 state-ment
state-ment or
or
representa -tion.
representa -tion.
Recovery
Recoveryofof Protection
Protectionofof
Gratuity
Gratuity Gratuity
Gratuity
On
On termination
termination of of anan
employee Imprisonment
Imprisonment not not
employee for for moral
moral
turpitude less
less than
than 33
turpitude or or riotous
riotous oror
Can’t months
months and
and upto
To
Toapply
applywithin
within disorderly
disorderlybehavior.
behavior. Can’tbe
be upto
Wholly one
one year
year with
with
30
30days
daysinin Wholly or or partially
partially for
for attached
attachedinin
willfully fine
fine on
on default
default in
in
Form
FormI Iwhen
when willfully causing
causing loss,
loss, execution
executionofof
destruction comply-ing
comply-ing with
with
not
notpaid
paidwithin
within destruction of of property
property any
anydecree
decree
etc. the
the provisions
provisions of
of
30 days etc. 70 Act
30 days Act or
or Rules.
Rules.
PAYMENT OF WAGES ACT, 1936
CHECKLIST
Applicability of Act Object
Objectofofthe
theAct
Act Wages to be paid in
 Factory industrial To
Toregulate
regulatethe
thepayment
paymentofofwages
wagesof
of current coins or
Establishment certain currency notes
certainclasses
classesof
ofemployed
employedpersons
persons
 Tramway service or motor Time of payment of wages All wages shall be paid
transport service engaged in The wages of every person employed in current coins or
carrying passengers or good is paid. currency notes or in
or both by road for hire or When less than 1000 persons are both.
reward.  Air transport
employed shall be paid before the
service Dock, Wharf or Jetty
expiry of the 7th day of the following After obtaining the
 Inland vessel, mechanically
propelled month. authorization, either by
 Mine, quarry or oil-field Cheque or by crediting
Plantation When more than 1000 workers, before the wages in employees
 WorkshopoforEmployees
Coverage other the Deduction
expiry of made
the 10 th
from day of the
wages Deduction for
Drawing
establishment
averageetc.
wage upto Deductions such as, fine, deduction for absence from duties
Rs.6500 pm as amended w.e.f. amenities and services supplied by the for unauthorized
Fines as prescribed by
6.9.05.
Not to imposed unless the employer, advances paid, over absence
employer is given an payment of wages, loan, granted for
opportunity to show cause house-building or other purposes,
income tax payable, in pursuance of Absence for whole or
To record in the register the order of the Court, PF any part of the day –
contributions, cooperative societies,
premium for Life Insurance, If ten or more persons
Deduction
contribution to for
any damage or loss by
fund constituted absent without
Deductions for service
rendered reasonable cause,
When accommodation amenity deduction of wages upto
On
or contravention
service has beenof S.5 (except sub-sec.4),
accepted S.7, S.8 or Fine
For default not less than
negligence of Rs.1000,
an 8which
days. may extend to
(except Ss.8), S.9, S.10 (except Ss.2) employee
by the employee. and Secs.11resulting
to Rs.5000. On subsequent
into loss. Show conviction fine not less
13. than Rs.5000, may extend to Rs.10, 000. On
Sec.11 contravention S.4, S.5 (4), S6, S.8 (8), S.10 (2) or
S.25 fine not less than Rs.1000. – may extend to
Rs.5000. On subsequent On conviction fine not
less.

 For failing to maintain registers or records; or

 Willfully refusing or without lawful excuse
neglecting to furnish information or return; or  Fine which shall not be less than Rs.1000 but may
 Willfully furnishing or causing to be furnished any extend to Rs.5000 – On record conviction fine not
information or return which he knows to be false less than Rs.5000, may extend to Rs.10, 000.
or  For second or subsequent conviction, fine not less
 Refusing to answer or willfully giving a false than Rs.5000 but may extend to Rs.10,000
answer to any question necessary for obtaining
any information required to be furnished under
this Act.
 Willfully obstructing an Inspector in the discharge
of his duties under this Act; or
 Refusing or willfully neglecting to afford an
Inspector any reasonable facility for making any71
entry, inspection etc. Fine not less than Rs.1000 extendable
 Willfully refusing to produce on the demand of an
inspector any register or other document kept in Upto Rs.5000 – On subsequent conviction fine
pursuance of this Act; or preventing any person for
WORKMEN’S COMPENSATION
ACT, 1923
CHECKLIST

Coverage of Workmen Employer’s liability to pay

Applicabilit All workers irrespective of their compensation to a workman
y status or salaries either directly or On death or personal injury resulting
through contractor or a person into total or partial disablement or
recruited to work abroad. Sec.1 (3) occupational disease caused to a
All over India workman arising out of and during
Amount of compensation
Sec.1of a workman results from the injury the course of employment.
 Where death
 An amount equal to fifty per cent of the monthly When an employee is not liable
wages of the deceased workman multiplied by the for compensation
relevant factor on an amount of eighty thousand rupees,
whichever is more.
 Where permanent total disablement results from the
 In respect of any injury which does
injury.
result in the total or partial
 An amount equal to sixty per cent of the monthly
disablement of the workman for a
wagesWages
of the injured workman multiplied by the relevant
Notice period exceeding three days.
factor or an amount of Accident ninety thousand rupees,
 In respect of any injury, not
whichever is more
resulting in death or permanent
Procedure for calculation
When the monthly wages total disablement caused by an
accident which is directly
are more than the
Higher Rs.4000 – Lower As
age per thesoon as
compensation
Practicable attributable to-
 Relevant
month factor
it will bespecified
deemed in second column of Schedule IV  The workman having been at the
giving slabs depending upon the age of the concerned
Report of accident time
Barthereof
upon under the influence
contracting out of
workman.
drink or drugs, or
 Example: In case ofRule 11 Form EE
death.
 Willful disobedience of the
 Wages Rs.3000 PM ● Age 23 years workman to an order expressly
Any workman
given, or torelinquishing his right
a rule expressly
Report of fatal Accident and Serious Injury within 7 days to forframed,
personal injury
for the not permissible.
purpose of
the Commissioner (not application when ESI Act applies). securing the safety of workmen, or
 Willful removal or disregard by the
PENALTY workman of any safety guard or
other device which he knew to
have been provided for the
 In case of default by employer  50% of the compensation amount + interest to be paid to the
 Deposit of Compensation workman or his dependents as the case may be.
 Within one month with the Compensation Commissioner
Sec.4A

72