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”.

• 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

• 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 relations Pluralist Unitarist

2 Contract Emphasis on terms of contract defined rules,contract

Beyond contract, innovative ways

3 Conflict Institutionalised De-emphasised is patholoigical

4 Union legitimacy Unions are acceptable Not considered desirable Nurturing.

5. Managerial task in relation to labour

Monitoring Nurturing

6 Key relation Labour-management Customer

7 Pay Standardised, based on job evaluation

Performance related

8 Basis of labour-mgt relations

Collective bargaining contract

Individual contract

9 Job design Division of labour Team work

10 Conflict handling Reach temporary truce, reactive

Managing climate and culture-proactive

11 Key people PM/IR Line specialists

12 Focus of attention Personnel procedures Various culture and structure-related personnel strategies.

Approaches to IR

Unitary approach

• Industrial relations is grounded in mutual cooperation, individual treatment, teamwork and the sharingof 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

Unitarist-

HR Management

Authoritarian

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

•  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

•  - 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.

• 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.

• 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, 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

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 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.

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 19th 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 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 strkes as far as possible in industries of essential services;

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 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.

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)

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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.

*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.”

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

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.

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 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 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.

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;

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:

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.

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.

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 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

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.

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.

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.

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

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

Section2Definitions

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: 4Gratuity 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:

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: 6Nomination

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: 7Determination 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: 9Penalties

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.

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 evolvesuitable 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

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 aspermitted by standing orders under the IndustrialEmployment (Standing Orders) Act, 1946

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

he has been absent due to temporarydisablement caused by accident arising out ofand in the course of his employment; and

(d) the employee has been on maternity leavewith salary or wage, during the accountingyear

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

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 soon 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 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

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, orb. Who has contracted an occupational disease.

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, orii. 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, oriii. 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; orv. 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; and3. 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

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 anything contained in the Indian Contract Act, or any other law for the time being in force.EFFECT OF FAILURE TO REGISTER AGREEMENTWhen 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 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

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.

• 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

• 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

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.

• 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.

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.

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

F 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

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

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

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

F No charge to her disadvantage in any of the conditions of her employment while on maternity leave.

Leave for Miscarriage & Tubectomy Operation

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;

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?

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 forsecuring and preserving amity and good relations between the employerand workmen and, to that end, to comment upon matters of their commoninterest or concern and endeavour to compose any material difference ofopinion 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.

(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.

(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

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.

Licensing of ContractorEngaging 20 or more than

20 workers and on deposit of required fee in Form IV.

Valid for specified period.Sec.12, Rule 21

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

ApplicabilityEvery establishment in which 20 or

more workmen are employed or were employed on any day of the preceding 12 months as contract labor.

Every contractor who employs or who employed on any day of the preceding twelve months 20 or more workmen.

Sec. 1

Object of the ActTo regulate the employment of

contract labor in certain establishments and to provide for its abolition in certain

circumstances and for matters connected

therewith. Prohibition of Employment of Contract Labour

Only by the appropriate Government through issue of notification after consultation with the Board (and not Courts) can order the prohibition of employment of contract labor. Sec. 10

Registers of ContractorsPrincipal employerTo maintain a register of contractor in respect of every establishment in Form XII.Contractor

Rule 74To maintain register of workers for each registered establishment in Form XIII.To issue an employment card to each worker in Form XIV.To issue service certificate to every workman on his termination in Form XV. Rules 75, 76 and 77

Muster Roll, Wages Register, Deduction Register and Overtime Register by Contractor

Every contractor shallMaintain Muster Roll and a Register of Wages in Form XVI and Form XVII

respectively when combined.Register or wage-cum-Muster Roll in Form XVII where the wage period is a

fortnight or less.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.Maintain a Register of Overtime in Form XXIII.To issue wage slips in Form XIX, to the workmen at least a day prior to the

disbursement of wages.Obtain the signature or thumb impression of the worker concerned against the

entries relating to him on the Register of wages or Muster Roll-Cum-Wages Register.

When covered by Payment of Wages Act, register and records to be maintained under the rules

Muster Roll, Register of wages, Register of Deductions, Register of Overtime, Register of Fines, Register of Advances, Wage slip.

Rule 79To 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 by appropriate authority

Rule 80To display notices showing rates of wages, hours of work, wage period, dates of

payment, names and addresses of the inspector and to send copy to the inspector and any change forwithwith Rule 81

Registration of Establishment

Principal employer employing 20 or more workers through the contractor or the contractor(s) on deposit of required fee in Form 1

Sec. 7Revocation of Registration

When obtained byMisrepresentation or suppressionOf material facts etc. after opportunity to the principal Employer

Sec. 9Revocation or Suspension &

Amendment of LicencesWhen obtained by misrepresentation or

suppression of material facts.Failure of the contractor to comply with

the conditions or contravention of Act or the Rules. Sec. 14

Welfare measures to be taken by the ContractorContract labor either one hundred or more employed by a

contractor for one or more canteens shall be provided and maintained.

First Aid facilities.Number of rest-rooms as required under the Act.Drinking water, latrines and washing facilities. Sec. 16 & 17

Laws, Agreement or standing orders inconsistent with the

Act-Not PermissibleUnless the privileges in the contract between the parties or more favorable than the prescribed in the Act, such contract will be invalid and the workers will continue to get more favorable benefits.

Sec. 20

Liability of Principal EmployerTo ensure provision for canteen, restrooms, sufficient supply of

drinking water, latrines and urinals, washing facilities.Principal employer entitled to recover from the contractor for

providing such amenities or to make deductions from amount payable. Sec. 20

EMPLOYEES’ PROVIDENT FUNDS & MISC. PROVISIONS ACT, 1952& THE SCHEMESCHECKLIST

PENALTIESSec. Offence PunishmentSec. 22 Obstructions For obstructing the inspector or failing to produce registers etc.

- 3 months’ imprisonment or fine upto Rs.500, or both.

Sec.23 Violation For violation of the provisions of Act or the Rules,

Applicability Every establishment which is factory engaged in any industry

specified in Schedule 1 and in which 20 or more persons are employed.

Any other establishment employing 20 or more persons which Central Government may, by notification, specify in this behalf.

Any establishment employing even less than 20 persons can be covered voluntarily u/s 1(4) of the Act.

EligibilityAny person who is employed for work of an establishment

or employed through contractor in or in connection

with the work of an establishment.

Clarification about Contribution

After revision in wage ceiling from Rs.5000 to Rs.6500 w.e.f. 1.6.2001 per month, the government will continue to contribute 1.16% upto the actual wage of maximum Rs.6500 per month towards Employees’ Pension Scheme. The employer’s share in the Pension Scheme will be Rs.541 w.e.f. 1.6.2001.

Under Employees’ Deposit-Linked Insurance Scheme the contribution @ 0.50% is required to be paid upto a maximum limit of Rs.6500.

The employer also will pay administrative charges @ 0.01% on maximum limit of Rs.6500 whereas an exempted establishment will pay inspection charges @ 0.005% on the total wages paid.

Notes:

The above clarification is given by taking wages upto a maximum of Rs.6500 towards wage (basic+DA).Since an excluded employee i.e. drawing wages more than Rs.6500

BenefitsEmployees covered enjoy a benefit of Social Security in the form of an unattachable and unwithdrawable (except in severely restricted circumstances like buying house, marriage/education, etc.) financial nest egg to which employees and employers contribute equally throughout the covered persons’ employment.This sum is payable normally on retirement or death. Other Benefits include Employees’ Pension Scheme and Employees’ Deposit Linked Insurance Scheme.

Payment of Contribution The employer shall pay the

contribution payable to the EPF, DLI and Employees’ Pension Fund in respect of the member of the Employees’ Pension Fund employed by him directly by or through a contractor.

It shall be the responsibility of the principal employer to pay the contributions payable to the EPF, DLI and Employees’ Pension Fund by himself in respect of the employees directly employed by him and also in respect of the employees directly employed by him and also in respect of the employees employed by or

Rates of ContributionSCHEME EMPLOYEE’S EMPLOYER’S CENTRAL

GOVT’S

Provident Fund Scheme 12%

Amount > 8.33% (in case where contribution is 12% of 10%)10% (in case of certain Establishments as per details given earlier)

NIL

Insurance Scheme NIL 0.5 NIL

Damages

Less than 2 months ….@ 17% per

annum

Two months and above but less than upto four months

….@22% per annum

EMPLOYEES’ STATE INSURANCEACT, 1948 & the SCHEMECHECK LIST

Penal ProvisionLiable to be arrested without warrants being a cognizable offence.

Defaults by employer in paying contributions or

inspection/administrative charges attract imprisonment upto 3 years

and fines upto Rs.10, 000 (S.14). For any retrospective application, all

dues have to be paid by employer with damages upto 100% of

arrears.

Applicability of the Act & Scheme

Is extended in area-wise to factories using power and employing 10 or more persons and to non-power using manufacturing units and establish-ments employing 20 or more person upto Rs.7500/- per month w.e.f. 1.4.2004. It has also been extend-ed upon shops, hotels, restaurants, roads motor transport undertakings, equip-ment maintenance staff in the hospitals.

Coverage

Of employees

Drawing wages

Upto

Rs.10000/- per month

Engaged either directly or thru’

contractor

Rate of Contribution of

the wages

Employers’ 4.75%

Employees’ 1.75%

THE ESI SCHEME TODAYNo. of implemented Centres 677

No. of Employers covered 2.38 lacs

No. of Insured Persons 85 lacs

No. of Beneficiaries 330 lacs

No. of Regional Offices/SRO’s26

No. of ESI Hospitals/Annexes183

No. of ESI Dispensaries 1453

No. of Panel Clinics 2950

Manner and Time Limit For making Payment of contribution

The total amount of contribution (employee’s share and employer’s share) is to be deposited with the authorized bank through a challan in the prescribed form in quadruplicate on ore before 21st of month following the calendar month in which the wages fall due.

BenefitsTo the employees under the Act

Medical, sickness, extended sickness for certain diseases, enhanced sickness, dependents maternity, besides funeral expenses, rehabilitation allowance, medical benefit to insured person and his or her spouse.

WAGES FOR ESI CONTRIBUTIONSRegisters/files to be maintained by the employers

To be deemed as wages

Basic pay Dearness allowance House rent allowance City compensatory

allowance Overtime wages (but

not to be taken into account for determining the coverage of an employee)

Payment for day of rest

Production incentive Bonus other than

statutory bonus Night shift allowance Heat, Gas & Dust

allowance Payment for

unsubstituted holidays Meal/food allowance Suspension allowance Lay off compensation Children education

NOT to be deemed as wages

Contribution paid by kthe employer to any pension/provident fund or under ESI Act.

Sum paid to defray special expenses entailed by the nature of employment – Daily allowance paid for the period spent on tour.

Gratuity payable on discharge.

Pay in lieu of notice of retrenchment compensation

Benefits paid under the ESI Scheme.

Encashment of leave Payment of Inam which

does not form part of the terms of employment.

Washing allowance for livery

Conveyance Amount towards reimbursement for

Contribution period

1st April to 30th September.

1st October to 31st March

Contribution period

If the person joined insurance employment for the first time, say on 5th January, his first contribution period will be from 5th January to 31st March and his corresponding first benefit will be from 5th October to 31st December.

Penalties

Different punishment have been prescribed for different types of offences in terms of Section 85: (I) (six months imprisonment and fine Rs.5000), (ii) (one year imprisonment and fine), and 85-A: (five years imprisonment and not less to 2 years) and 85-C (2) of the ESI Act, which are self explanatory. Besides these provisions, action also can be taken under section 406 of the IPC in cases where an employer deducts contributions from the wages of his employees but does not pay the same to the corporation which amounts to criminal breach of trust.

FACTORIES ACT, 1948CHECK LIST

OFFENCE PENALTIES Sec.92 to

For contravention of the Provisions of the Act or Rules

Imprisonment upto 2 years or fine upto Rs.1,00,000 or both

On Continuation of contravention Rs.1000 per day On contravention of Chapter IV

pertaining to safety or dangerous Not less than Rs.25000 in case of

death.

Applicability of the Act

Any premises whereon 10 or more persons with the aid of power or 20 or more workers are/were without aid of power working on any dyad preceding 12 months, wherein Manufacturing process is being carried on.

Sec.2(ii)

Employer to ensure health of workers pertaining to

Cleanliness Disposal of wastes and effluents

Ventilation and temperature dust and fume

Overcrowding Artificial humidification Lighting

Drinking water Spittons. Secs. 11 to 20

Safety Measures

Facing of machinery Work on near machinery in motion. Employment prohibition of young

persons on dangerous machines. Striking gear and devices for cutting

off power.

Welfare Measures

Washing facilities Facilities for storing and

drying clothing Facilities for sitting First-aid appliances – one first

aid box not less than one for every 150 workers.

Canteens when there are 250 or more workers.

Shelters, rest rooms and lunch rooms when there are 150 or more workers.

Creches when there are 30 or more women workers.

Welfare office when there are 500 or more workers.

Registration & Renewal of Factories

To be granted by Chief Inspector of Factories

on submission of prescribed form, fee

and plan.

Self-acting machines. Casing of new machinery. Prohibition of employment

of women and children near cotton-openers.

Hoists and lifts.

Working Hours, Spread Over & Overtime of AdultsWeekly hours not more than 48.Daily hours, not more than 9 hours.

Intervals for rest at least ½ hour on working for 5 hours.

Spreadover not more than 10½ hours.

Overlapping shifts prohibited.Employment of Young Persons

Prohibition of employment of young children e.g. 14 years. Non-adult workers to carry tokens e.g. certificate of fitnekss. Working hours for children not more than 4 ½ hrs. And not

permitted to work during night shift.

Annual Leave with Wages

A worker having worked for 240 days @ one day for every 20 days and for a child one day for working of 15 days.

operations. Not less than Rs.5000 in case of serious injuries.

Subsequent contravention of some provisions

Imprisonment upto 3 years or fine not less than Rs.10, 000 which may extend to Rs.2, 00,000.

Obstructing Inspectors Imprisonment upto 6 months or fine upto Rs.10, 000 or both.

Wrongful disclosing result pertaining to results of analysis.

Imprisonment upto 6 months or fine upto Rs.10, 000 or both.

For contravention of the provisions of Sec.41B, 41C and 41H pertaining to compulsory disclosure of information by occupier, specific responsibility of occupier or right of workers to work imminent danger.

Imprisonment upto 7 years with fine upto Rs.2, 00,000 and on continuation fine @ Rs.5, 000 per day.

Imprisonment of 10 years when contravention continues for one year.

INDUSTRIAL DISPUTES ACT, 1947

Prohibition of Strikes & Lock Outs During the pendency of proceedings before a Labour

Court, Tribunal or National Tribunal and two months, after the conclusion of such

proceedings. During the pendency of arbitration proceedings

before an arbitrator and two months after the conclusion of such proceedings, where a notification has been issued under Sub-Section(3A) of section 10A

During any period in which a settlement or award is in operation, in respect of any of the matters covered by the settlement or award. Secs.22&23

Object of the ActProvisions for investigation and settlement of industrial disputes and for certain other purposes.Important Clarifications

Industry – has attained wider meaning than defined except for domestic employment, covers from barber shops to big steel companies. Sec.2 (I)Works Committee–Joint Committee with equal number of employers and employees’ representatives for discussion of certain common problems. Sec.3

Conciliation–is an attempt by a third party in helping to settle the disputes Sec.4

Power of Labour Court to give Appropriate Relief

Labour Court/Industrial Tribunal canModify the punishment of dismissal or discharge of workmen and give appropriate relief including reinstatement. Sec.11A

Right of a Workman during Pendency of Proceedings in High

CourtEmployer to pay last drawn wages to reinstated workman when proceedings challenging the award of his reinstatement are pending in the higher Courts. Persons Bound by

Settlement When in the course of conciliation

proceedings etc., all persons working or joining subsequently.

Otherwise than in course of settlement upon the parties to the settlement. Sec.18

Period of Operation of Settlements and Awards

A settlement for a period as agreed by the parties, or

Period of six months on signing of settlement.

An award for one year after its enforcement. Sec.19

Lay off & Payment of Compensation – Conditions for Laying off

Failure, refusal or inability of an employer to provide work due to

Shortage of coal, power or raw material. Accumulation of stocks. Breakdown of machinery. Natural calamity. Sec.25-C

Notice of Change 21 days by an employer to workmen

about changing the conditions of service as provided in Ivth Schedule.

Sec.9A

Without giving to the employer notice of strike, as hereinafter provided, within six weeks before striking.

Within fourteen days of giving such notice. Before the expiry of the date of strike specified

in any such notice as aforesaid. During the pendency of any conciliation

proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

During the pendency of conciliation proceedings before a Board and seven days after the conclusion of such proceedings.

Lay off Compensation Payment of wages except for intervening weekly holiday compensation 50% of total or basic wages and DA for a period of lay off upto maximum 45 days in a year.

Prior Permission for Lay off When there are more than 100 workmen during proceeding 12 months. Sec.25-M

Prior Permission by the Government for Retrenchment When there are more than 100

(in UP 300 or more) workmen during preceding 12 months.

Three months’ notice or wages thereto.

Form QA Compensation @ 15 days’

wages. Sec. 25-N

Conditions of service etc. to remain unchanged under certain circumstances during pendency of proceedings

Not to alter to the prejudice of workmen concerned the condition of service. To seek Express permission of the concerned authority by paying one month’s wages on

dismissal, discharge or punish a protected workman connected with the dispute. To seek approval of the authority by paying one month’s wages before altering condition of

service, dismissing or discharging or punishing a workman. Sec.33Prohibition of unfair labour practice either by employer or workman or a trade union as stipulated in fifth schedule

Both the employer and the Union can be punished. Sec.25-T

MATERNITYBENEFIT ACT, 1961CHECK LIST

Retrenchment of Workmen Compensation & Conditions Workman must have worked for 240 days. Retrenchment compensation @ 15 days’ wages for every completed year to be calculated at last

drawn wages One month’s notice or wages in lieu thereof. Reasons for retrenchment Complying with principle of ‘last come first go’. Sending Form P to Labour Authorities.

Conditions of service etc. to remain unchanged under certain circumstances during pendency of proceedings

Not to alter to the prejudice of workmen concerned the condition of service. To seek Express permission of the concerned authority by paying one month’s wages on dismissal,

discharge or punish a protected workman connected with the dispute. To seek approval of the authority by paying one month’s wages before altering condition of service, dismissing

or discharging or punishing a workman. Sec.33

Closure of an Undertaking60 days’ notice to the labour authorities for intended closure in Form QA. Sec.25FFA

Prior permission atleast 90 days before in Form O by the Government when there are 100 ore more workmen during preceding 12 months (in UP 300 or more workmen) Sec.25-OPENALTIES Offence

Committing unfair labour practices

Illegal strike and lock-ourts

Instigation etc. for illegal strike or lock-outs.

Giving financial aid to illegal strikes and lock-outs.

Breach of settlement or award

<Punishment

Imprisonment of upto 6 months or with fine upto Rs.3, 000.

Imprisonment upto one month or with fine upto Rs.50 (Rs.1000 for lock-out) or with both.

Imprisonment upto 6 months or with fine upto Rs.1, 000

Imprisonment for 6 months or with fine upto Rs.1, 000

Object of the ActTo protect the dignity of motherhood and the dignity of a new

person’s birth by providing for the full

and healthy maintenance of the

woman and her child at this important time

when she is not working.

Coverage of the ActUpon all women employees either employed directly or through contractor except domestic women employees 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. Bihar, Punjab Haryana, West Bengal, U.P., Orissa and Andhra have done so.

Conditions for eligibility of benefits

Women indulging temporary of 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 proceeding the date of her expected delivery Sec. 5.

Cash BenefitsLeave with average pay for six weeks before the delivery.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

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/PrivilegeLight work for ten weeks (six weeks plus one month) before the date of her expected

delivery, if she asks for it.Two nursing breaks in the course of her daily work until the child is 15 months old.No discharge or dismissal while she is on maternity leave.No change to her disadvantage in any of the conditions of her employment while on

maternity leave.Pregnant women discharged or dismissed may still claim maternity benefit from the

employer.Exception: Women dismissed for gross misconduct lose their right under the Act for Maternity

Benefit

Conditions for eligibility of 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.

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 whom payment will be made in case she can not 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 a child.

She will be entitled to two nursing breaks of fifteen minutes each in the course of her daily work till her child is fifteen months old.

Her employer cannot discharge her or change her conditions of service while she is on maternity leave.

Sec. 5.

Leave for Miscarriage& Tubectomy Operation

Leave with wages at the rate of maternity benefit, for a period of six 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 two weeks immediately following the day of her tubectomy operation.

Leave for illness arising out of pregnancy etc. etc.

A woman suffering from illness arising our of pregnancy, delivery, premature birth of child (Miscarriage, medical termination of pregnancy or tubectomy operation) be entitled, in addition to the period of absence allowed to her leave with wages at the rate of maternity benefit for a maximum period of one month. Sec. 10

Prohibition of dismissal during absence of pregnancyDischarge or dismissal of a woman employed during or on account of such absence or to give notice or discharge or dismissal on such a day

that the notice will expire during such absence or to very her disadvantage.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 will

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. Sec.

Sec.25-U

26

27

28

29

MINIMUM WAGES ACT, 1948

CHECK LIST

PENALITIES Offence Punishment

Sec. 20 For paying less than minimum rates of wages

Imprisonment upto 6 months or with fine upto Rs.500/-

Failure to Display Extract of Act

Imprisonment may extend to one year or fine.

Forfeiture of maternity benefitIf permitted by her employer to absent herself under the provisions of section 6 for any period during such authorized absence, she shall forfeit her claim to the maternity benefit for such period.

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.5, 000. Sec. 18Object of the Act

To provide for fixing minimum rates of wages in certain

employments

Fixation of Minimum Rates of Wages The appropriate government to fix minimum rates of wages. The

employees employed in para 1 or B of Schedule either at 2 or either part of notification u/s 27.

To make review at such intervals not exceeding five years the minimum rates or so fixed and revised the minimum rates.

Government can also fix Minimum Wages for Time work Piece work at piece rate Piece work for the purpose of

securing to such employees on a time work basis Overtime work done by employees for piece work or time rate workers.

Minimum Rates of Wages

Such as Basic rates of wages etc. Variable DA and Value of other

Procedure for fixing and revising Minimum

Rates of Wages

Appointing Committee issue of Notification etc.

Fixing Hours for Normal Working

Shall constitute a normal working day inclusive of one or more specified intervals.

To provide for a day of rest in every period of seven days with remuneration.

To provide for payment for work on a day of rest at a rate not less than the

Overtime

To be fixed by the hour, by the day or by such a longer wage-period works on any day in excess of the number of hours constituting normal working day.

Payment for every hour or for part of an hour so worked in excess at the overtime rate double of the ordinary rate of

Composition of Committee

Representation of employer and employee in schedule employer in equal number and independent persons not exceeding 1/3rd or its total number one such person to be appointed by the

Payment of Minimum Rates of

WagesEmployer to pay to every employee engated in schedule employment at a rate not less than minimum rates of wages as fixed by Notification by not making deduction other than prescribed.

Sec.12Wages of workers who works for less than normal working days

Save as otherwise hereinafter provided, be entitled to receive wages in respect of work done by him on that day as if he had worked for a full normal working day. Wages for two class of work

Where an employee does two or more classes of work to each of which a different minimum rate of wages is applicable, wages at not less than the minimum rate in respect of each such class. Sec. 16

Maintenance of registers and records Register of Fines – Form I Rule 21(4) Annual Returns – Form III Rule 21 (4-A) Register for Overtime – Form IV Rule 25 Register of Wages–Form X, Wages slip–Form XI, Muster Roll–Form V

Rule 26 Representation of register – for three year Rule 26-A

Minimum time rate wages for piece work

Not less than minimum rates wages as fixed .

Claims by employees To be filed by before authority constituted under the Act within 6

months. Compensation upto 10 times on under or non-payment of wages

For contravention of any provisions pertaining to fixing hours for normal working day etc.

Imprisonment upto 6 months or with fine upto Rs.500/-

TRADE UNIONS ACT, 1926 CHECKLIST

Object of the ActTo provide for the registration of Trade Union and in certain respects

To define the law relating to registered Trade UnionsRegistration of trade Union

Any 7 or more members of a trade union may, by subscribing their names to the rules of the trade union and its compliance.

There should be at least 10%, or 100 of the work-men, whichever is less, engaged or employed in the establishment or industry with which it is connected.

It has on the date of making application not less than 7 persons as its members, who are workmen engaged or employed in the establishment or industry with which it is connected.

Registration of trade Union

Prescribed form with following details.Names, occupations and address of the

members’ place of work.Address of its head office; andNames, ages, addresses and occupations of

its office bearers.Sec. 5

Minimum requirements for membership of trade

union

Not less than 10%, or 100 of the workmen, whichever is less,

Subject to a minimum of 7,

engaged or employed in an

Establishments etc.

Sec. 9A

Cancellation of Registration

If the certificate has been obtained by fraud or mistake or it has ceased to exist or has willfully contravened any provision of this Act.

If it ceases to have the requisite number of members.

Sec. 10

Criminal conspiracy in trade disputes

No office bearer or member of a registered trade union shall be liable to punishment under sub section (2) of conspiracy u/s 120B of IPC in respect of any agreement made between the members for the purpose of furthering any such object of the Trade Union.

Sec. 17

Disqualification of office bearers of Trade Union

If one has not attained the age of 18 years.

Conviction for an offence involving moral turpitude.

Not applicable when 5 years have elapsed.

Sec. 21-A

Returns

Annually to the Registrar, on or before such date as may be prescribed, a general statement, audited in the prescribed manner, of all receipts and expenditure of every registered Trade Union during the year ending on the 31st December.

Sec. 28 Penalties Offence Punishment

U/s 31

For making false entry in or any omission in general statement required for sending returns.

For making false entry in the form.

Fine upto Rs.500. On continuing default, additional fault, Rs.5 for each week (not exceeding Rs.50).

Fine upto Rs.500.

U/s 32 Supplying false information

regarding Trade Union Fine upto Rs.200.

PAYMENT OF BONUS ACT, 1965 & THE RULESCHECKLIST

Applicability of ActEvery factory where in 10 or more persons are employed with the aid of power or

An establishment in which 20 or more persons are employed without the aid of power on any day during

Establishment

Establishment includes

Departments, Separate establishment

If profit and loss accounts are prepared and maintained in respect of any such department or undertaking or branch, then such department or undertaking or branch is treated as a separate establishment.Computation of gross

profitFor banking company, as

per First Schedule.

Others, as perEligible Employees

Employees drawing wages upto Rs.3500 per month or

less.

For calculation purposes Rs.2500 per month maximum will be taken even if an employee is drawing upto Rs.3500 per month.

Sec.12Note: The proposal to enhance the existing

Computation of available surplus

Income taxes and direct taxes as payable.

Depreciation as per section 32 of Income Tax Act.

Components of Bonus

Salary or wages includes dearness allowance but no other allowances e.g. over-time, house rent, Disqualification & Deduction of Bonus

On dismissal of an employee for

Fraud; or riotous or violent behavior while on the premises of the

establishment; or theft, misappropriation or sabotage of any property of the

establishment or Misconduct of causing financial loss to the Employer to the

extent that bonus can be deducted for that year.Eligibility of Bonus

An employee will be entitled only when he has worked for 30 working days in that year.

Payment of Minimum Bonus8.33% of the salary or Rs.100 (on completion of 5 years after 1st Accounting year even if there is no profit)

Time Limit for Payment of Bonus

Within 8 months from the close of accounting y ear.

Set-off and Set-on

As per Schedule IV.

Sec. 15Maintenance of Registers and Records etc.

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

Act not applicable to certain employees of LIC, General Insurance, DockYards, Red Cross, Universities & Educational Institutions, Chambers of Commerce, Social Welfare Institutions, Building Contractors,

PENALTY

For contravention of any provision of the Act or the Rule

Upto 6 months or with fine upto Rs.1000. Sec.28

PAYMENT OFGRATUITYACT, 1972 & THE RULES

CHECKLIST

Calculation Seasonal employee

@ 7 days’ wages for

every completed

year of service.

Sec.

1Applicability

Every factory, mine, oil field,

plantation, port, railways,

company, shop, establishment or

educational institutions

employing 10 or more employees

Sec.

2(s)Wages for Calculation

@ 15 days’ wages for every completed year as if the month comprises of 26 days at the last drawn wages.Sec.

1Calculation

Piece-rated

employee

@ 15 days wages for

every completed year on an

average of 3 months’ wages

Qualifying period

On rendering of 5 years’ service,

either termination,

resignation or retirement.

Sec.

2(e)Employee

All employees irrespective of

status or salary

Entitlement

On completion of five years’

service except in case of death or

disablement

Rule 4

Display of Notice

On conspicuous place at the main

entrance in English language or the language understood by

majority of employees of the

factory, etc.Sec.6 Rule 6

Nomination

To be obtained by employer

after expiry of one year’s

service, in Form ‘F’

Sec. 4(3)

Maximum Ceiling

Rs.3, 50,000

Rule 9

Mode of payment

Cash or, if so desired, by

Bank Draft or Cheque

Rule 9

Penalties

Imprisonment for 6 months or fine upto Rs.10, 000 for avoiding to make payment by making false state-ment or representa -tion.

Imprisonment not less than 3 months and upto one year with fine on default in comply-ing with the provisions of Act or Rules.

Sec.8 Rule 8

Recovery of Gratuity

To apply within 30 days in

Form I when not paid within

30 days

Sec.

4(6)Forfeiture of Gratuity

On termination of an employee for moral turpitude or riotous or disorderly behavior.

Wholly or partially for willfully causing loss, destruction of property etc.

Sec. 13

Protection of Gratuity

Can’t be attached in execution of any decree

PAYMENT OF WAGES ACT, 1936CHECKLIST

WORKMEN’S COMPENSATIONACT, 1923CHECKLIST

Applicability of Act Factory industrial

Establishment Tramway service or motor

transport service engaged in carrying passengers or good or both by road for hire or reward. Air transport service Dock, Wharf or Jetty Inland vessel, mechanically propelled

Mine, quarry or oil-field Plantation

Workshop or other establishment etc.

Coverage of EmployeesDrawing average wage upto Rs.6500 pm as amended w.e.f. 6.9.05.Fines as prescribed byNot to imposed unless the employer is given an opportunity to show cause

To record in the register

Deductions for service renderedWhen accommodation amenity or service has been accepted by the employee.

Sec.11

On contravention of S.5 (except sub-sec.4), S.7, S.8 (except Ss.8), S.9, S.10 (except Ss.2) and Secs.11 to 13.

Fine not less than Rs.1000, which may extend to Rs.5000. On subsequent conviction fine not less than Rs.5000, may extend to Rs.10, 000. On 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 Willfully furnishing or causing to be furnished any

information or return which he knows to be false or

Refusing to answer or willfully giving a false answer to any question necessary for obtaining any information required to be furnished under this Act.

Fine which shall not be less than Rs.1000 but may extend to Rs.5000 – On record conviction fine not less than Rs.5000, may extend to Rs.10, 000.

For second or subsequent conviction, fine not less than Rs.5000 but may extend to Rs.10,000

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 any entry, inspection etc.

Willfully refusing to produce on the demand of an inspector any register or other document kept in pursuance of this Act; or preventing any person for appearance etc.

Fine not less than Rs.1000 extendable

Upto Rs.5000 – On subsequent conviction fine

not less than Rs.5000 – may extent to Rs.10,000

Object of the ActTo regulate the payment of wages of certain classes of employed persons

Wages to be paid in current coins or currency notes

All wages shall be paid in current coins or currency notes or in both.

After obtaining the authorization, either by Cheque or by crediting the wages in employees

Time of payment of wagesThe wages of every person employed is paid.When less than 1000 persons are employed shall be paid before the expiry of the 7th day of the following month.

When more than 1000 workers, before the expiry of the 10th day of the Deduction made from wagesDeductions such as, fine, deduction for amenities and services supplied by the employer, advances paid, over payment of wages, loan, granted for house-building or other purposes, income tax payable, in pursuance of the order of the Court, PF contributions, cooperative societies, premium for Life Insurance, contribution to any fund constituted by Deduction for damage or loss

For default or negligence of an employee resulting into loss. Show

Deduction for absence from duties

for unauthorized absence

Absence for whole or any part of the day –

If ten or more persons absent without reasonable cause, deduction of wages upto 8 days.

Applicability

All over India

Sec.1

Coverage of WorkmenAll workers irrespective of their

status or salaries either directly or through contractor or a person

recruited to work abroad. Sec.1 (3)

Employer’s liability to pay compensation to a workman

On death or personal injury resulting into total or partial disablement or occupational disease caused to a

workman arising out of and during the course of employment. Amount of compensation

Where death of a workman results from the injury An amount equal to fifty per cent of the monthly

wages of the deceased workman multiplied by the relevant factor on an amount of eighty thousand rupees, whichever is more.

Where permanent total disablement results from the injury. An amount equal to sixty per cent of the monthly

wages of the injured workman multiplied by the relevant factor or an amount of ninety thousand rupees, whichever is more

Procedure for calculation

Higher the age – Lower the compensation Relevant factor specified in second column of Schedule IV

giving slabs depending upon the age of the concerned workman.

Example: In case of death. Wages Rs.3000 PM ● Age 23 years

When an employee is not liable for compensation

In respect of any injury which does result in the total or partial disablement of the workman for a period exceeding three days.

In respect of any injury, not resulting in death or permanent total disablement caused by an accident which is directly attributable to-

The workman having been at the time thereof under the influence of drink or drugs, or

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

Willful removal or disregard by the workman of any safety guard or other device which he knew to have been provided for the

Wages

When the monthly wages are more than Rs.4000 per month it will be deemed

NoticeAccident

As soon asPracticable

Report of accidentRule 11 Form EE

Report of fatal Accident and Serious Injury within 7 days to the Commissioner (not application when ESI Act applies).

Bar upon contracting out

Any workman relinquishing his right for personal injury not permissible.

PENALTY

In case of default by employer Deposit of Compensation

50% of the compensation amount + interest to be paid to the workman or his dependents as the case may be.

Within one month with the Compensation CommissionerSec.4A