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COMPAY PROFILE

Two decades ago, Mahindra and Mahindra Financial Services Limited (MMFSL) commenced its
journey in the rural non-banking finance industry. And with that was born a vision to transform
rural and semi-urban India into a self-reliant, flourishing landscape. Since then, we have come a
long way, empowering millions of ambitious individuals with personalized finance for a wide
range of vehicles, home development requirements and many other diverse endeavors all to
help them live their dreams and Rise in life.
At Mahindra Finance, we are guided by a firm belief in people, their dreams, and their potential
to achieve those dreams. Hence, our socially inclusive business model facilitates loans to
customers based not on their current financial status, but their future earning capacity. This
philosophy has instilled a sense of confidence in the minds of rural and semi-urban India a
confidence that allows them to believe that no dream is too big. Today, as one of the leading nonbanking finance companies, we are proud to have touched over 3 million lives.

Our Vision
To be a leading financial services provider in semi-urban and rural India.

History
The history of Mahindra Finance has been one of continuous ascent where our effort to empower
our customers has been a constant element. A strong set of values, an evolved lineage and a
group of highly motivated individuals is what we started with.
What followed was a series of events that helped us grow from strength to strength. And two
decades that witnessed many dreams across the nation see the light of day. Come, walk with us

through the journey of time and take a glimpse of how Mahindra Finance grew with all those
who believed in it.

Milestones

On 30th September 2015 Mahindra and Mahindra Financial Services Ltd was successfully
appraised and rated at Maturity Level 3 of the People Capability Maturity Model (PeopleCMM). People CMM is a framework for organizational change through streamlined people
management. At maturity Level 3 of the People CMM, MMFSL has implemented robust HR
processes and aligned itself to a competency framework.

India Ratings and Brickworks Ratings upgraded Company's long term debt rating to "AAA".
CARE Ratings also assigned "AAA" rating to Company's long term debt.

MIBL declared 'Broker of the Year' at 18th Asia Insurance Industry Awards

Mahindra Finance wins ABP Award for Most Admired Company in Financial Service Sector.

We crossed the benchmark of financing more than 4 million customers through more than
1200 branches.

We cross the benchmark of financing more than 4 million customers through more than 1200
branches

Maintenance of an 18% Capital Adequacy, complying with the minimum requirement of


15% set by the RBI

CRISIL reaffirms 'CRISIL AA+/ Stable' rating to our long-term debt instruments and bank
facilities

Mahindra Finance wins the inaugural Porter Prize in the category of Creating Distinctive
Value

MRHFL selected as the winner of the Golden Peacock Innovation Management Award

MIBL announces a strategic partnership with LeapFrog investments

We're ranked 9th in the prestigious Dun & Bradstreet's India's Top 500 Companies 2011
(released on 1st June, 2012), based on the total income in the FIs/ NBFCs/ Financial Services
Sector

Introduction of finance for Commercial Vehicles and Construction Equipments

We enter the home loan business through our subsidiary, Mahindra Rural Housing Finance
Limited (MRHFL)

Mahindra Finance was issued certificate by the RBI under section 45-IA of the Reserve Bank
of India Act, 1934 classifying it as an Asset Finance Company Deposit Taking

Issued our IPO

Collaboration with Maruti Udyog Limited

Listing of non-convertible debentures on BSE on the wholesale debt market segment

We get into financing of non-M&M vehicles

International Finance Corporation grants us Tier II debt

A decade of good work results in our total assets crossing the 10 billion mark

We introduce tractor retail financing in rural and semi-urban areas

The Mahindra Group focuses on enabling people to rise through solutions that power
mobility, drive rural prosperity, enhance urban lifestyles and increase business efficiency.
A USD 16.5 billion multinational group based in Mumbai, India, Mahindra provides
employment opportunities to over 200,000 people in over 100 countries. Mahindra operates
in the key industries that drive economic growth, enjoying a leadership position in
tractors, utility vehicles, information technology, financial services,and vacation ownership.
In addition, Mahindra enjoys a strong presence in the agribusiness, aerospace, components,
consulting services, defence, energy, industrial equipment, logistics, real estate, retail,
steel, commercial vehicles and two wheeler industries.

In 2014, Mahindra featured on the Forbes Global 2000, a comprehensive listing of the
world's largest, most powerful public companies, as measured by revenue, profit, assets and
market value. The Mahindra Group also received the Financial Times 'Boldness in Business'
Award in the 'Emerging Markets' category in 2013.

The Mahindra Group focuses on enabling people to rise through solutions that power mobility,
drive rural prosperity, enhance urban lifestyles and increase business efficiency.
A USD 16.5 billion multinational group based in Mumbai, India, Mahindra provides
employment opportunities to over 200,000 people in over 100 countries. Mahindra operates in
the key industries that drive economic growth, enjoying a leadership position in tractors, utility
vehicles, information technology, financial services ,and vacation ownership. In addition,
Mahindra enjoys a strong presence in the agribusiness, aerospace, components, consulting
services, defense, energy, industrial equipment, logistics, real estate, retail, steel, commercial
vehicles and two wheeler industries.
In 2014, Mahindra featured on the Forbes Global 2000, a comprehensive listing of the world's
largest, most powerful public companies, as measured by revenue, profit, assets and market
value. The Mahindra Group also received the Financial Times 'Boldness in Business' Award in
the 'Emerging Markets' category in 2013.
At Mahindra Finance, our vision has always been to make a positive difference to as many lives
as possible. It is what inspires us to expand our family and deliver more value to our customers
through superior services and expertise. Here's a bit about two such successful ventures
Mahindra Insurance Brokers Ltd. and Mahindra Rural Housing Finance Ltd., whom we are
proud to have as a part of our ever-growing family.
We live in a day and age where staying protected against the uncertainties of tomorrow is of
paramount importance. Understanding this very requirement, Mahindra Insurance Brokers Ltd.
(MIBL), our subsidiary, provides 360o insurance solutions, tailor-made for the diverse needs and
risk profiles of our varied consumer base. While providing direct insurance broking for the retail
customer base of around 1.3 million and catering to a large number of corporate customers, the
company also offers a range of plans for the Life as well as Non-life insurance segments.
MIBL is committed to provide value to its customers by understanding their insurance needs and
risk profile in a highly detailed and systematic manner. This helps in chalking out more

innovative, cost-effective and customized insurance solutions. And its uncompromising


adherence to the highest standards of quality is evident from the fact that it is one of the few
insurance broking companies in India to have been awarded the prestigious ISO 9001:2008
CORPORATE SOCIAL RESPONSIBILITY
As a socially responsible citizen, the Company has undertaken Corporate Social Responsibility
(CSR) activities since 2006. Through our activities we constantly touch the lives of the
underprivileged communities across the country, in and around our areas of operation. We
believe in contributing to the society and all employees across all the regions participate in the
organizations

CSR

activities

with

full

rigour

and

passion.

The Board of Directors at its Meeting held on 19th March, 2014 has approved the revised CSR
Policy to align it in accordance with the provisions of Companies Act, 2013 and the Rules
framed there under.

At Mahindra Finance, we feel a strong sense of responsibility towards the


environment in which we thrive. Hence, the very essence of our business
model is based on a vision to enable and augment Sustainable Development.
With an active sustainability council comprising the senior
FORWARD FOCUS TO TRANSFORM LIFE

How do we make a sustainable tomorrow possible at Mahindra Finance? A prudent answer


would be by intelligently using human expertise and resources to drive maximum good for
people and the planet.
Our commitment is encapsulated in two simple words: 'Transforming lives'. This is what we
strive towards achieving every day for a wide cross-section of customers across semi-urban and
rural India. Acting as a powerful agent of change in their lives.

Since inception, Mahindra Finance has singularly focused on elevating the quality of lives of
people with a deep sensitivity towards local cultures and people's desire for a better live.
Our forward focus to transform lives continues to gather momentum, despite an evolving socioeconomic landscape. Our sustainability goal is a wide framework for consistent business growth,
while taking into consideration the aspirations of all stakeholders.

HISTORY OF SOCIAL SECURITY SCHEME IN INDIA


Indias social security system is composed of a number of schemes and programs spread
throughout a variety of laws and regulations. Keep in mind, however, that the governmentcontrolled social security system in India applies to only a small portion of the population.
Furthermore, the generally accepted concept of the social security system includes not just an
insurance payment of premiums into government funds (like in China), but also lump sum
employer obligations.
Generally, Indias social security schemes cover the following types of social insurances:

Pension

Health Insurance and Medical

Maternity

Gratuity

Disability

While a great deal of the Indian population is in the unorganized sector and does not have an
opportunity to participate in each of these schemes, Indian citizens in the organized sector (which
include those employed by foreign investors) and their employers are entitled to coverage under
the above schemes.
The applicability of mandatory contributions to social insurances is varied. Some of the social
insurances require employer contributions from all companies, some from companies with ten or
more employees, and some from companies with twenty or more employees.
In this article, well discuss each of these social insurances, along with their coverage,
contribution rates, and the laws and regulations behind them.
Pension
The Employees Provident Fund Organization, under the Ministry of Labor and Employment,
ensures superannuation pension and family pension in case of death during service. Presently
only about 35 million out of a labor force of 400 million have access to formal social security in
the form of old-age income protection. Out of these 35 million, 26 million workers are members
of the Employees Provident Fund Organization, which comprises private sector workers, civil
servants, military personnel and employees of State Public Sector Undertakings.
The schemes under the Employees Provident Fund Organization apply to businesses with at
least 20 employees. Contributions to the Employees Provident Fund Scheme are obligatory for
both the employer and the employee when the employee is earning up to INR 6,500 (US$120)
per month, and voluntary when the employee earns more than this amount. If the pay of any
employee exceeds this amount, the contribution payable by the employer will be limited to the

amount payable on the first INR 6,500 (US$120) only. Contributions should be made to the
Employees Provident Fund Organization on an annual basis.
The Employees Provident Fund Organization includes three schemes:

The Employees Provident Fund Scheme, 1952

The Employees Pension Scheme, 1995

The Employees Deposit Linked Insurance Scheme, 1976

The Employees Provident Fund Scheme is contributed to by the employer (1.67-3.67 percent)
and the employee (10-12 percent).
The Employee Pension Scheme is contributed to by the employer (8.33 percent) and the
government (1.16 percent), but not the employee.
Finally, the Employees Deposit Linked Insurance Scheme is contributed to by the employer (0.5
percent) only.
Four main types of pension (all monthly) are offered:

Pension upon superannuation or disability;

Widows pension for death while in service;

Childrens pension; and

Orphans pension.

In addition, there are separate pension funds for civil servants, workers employed in coal mines
and tea plantations in the State of Assam, and for seamen.
Health Insurance and Medical

India has a national health service, but this does not include free medical care for the whole
population. The Employees State Insurance Act creates a fund to provide medical care to the
employees and their families, as well as cash benefits during sickness and maternity, and
monthly payments in case of death or disablement for those working in factories and
establishments with 10 or more employees.
In case of sick leave, the employer will pay half salary to the employees covered under the
Employees State Insurance Act.
Disability
The Workmens Compensation Act requires the employer to pay compensation to employees or
their families in cases of employment related injuries resulting in death or disability.
In addition, 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 defined in the Workmen Compensation Act in parts A, B and C
of Schedule III.
Compensation calculation depends on the situation of occupational disability:
(a)Death 50% of the monthly wage multiplied by the relevant factor (age) or an amount of INR
80,000 (US$1,474), whichever is more.
(b) Total permanent disablement60% of the monthly wage multiplied by the relevant factor (age)
or an amount of INR90,000 (US$1,667), whichever is more.
The Compensation Act also includes stipulations for partial permanent disablement and
temporary disablement (total or partial).

Maternity

The Maternity Benefit Act requires an employer to offer 12 weeks wages during maternity as
well as paid leave in certain other connected contingencies.
Every woman shall be entitled to, and her employer shall be liable for, the payment of maternity
benefit at the rate of the average daily wage (the average of the womans wages payable to her
for the days on which she has worked during the period of three calendar months immediately
preceding the date from which she is absent on account of maternity), including the day of her
delivery and for the six weeks immediately following that day.
The maximum period for which any woman shall be entitled to maternity benefit shall be 12
weeks, six weeks up to and including the day of her delivery, and six weeks immediately
following that day.
During the one month proceeding the period of six weeks before her expected delivery or any
period during that six week period for which she does not take a leave of absence, no pregnant
woman shall be required by her employer to do any work that is arduous, involves long hours of
standing or is in any way likely to interfere with her pregnancy or the normal development of the
fetus, or is likely to cause her miscarriage or otherwise adversely affect her health.
Any woman working in an organization and allowed to maternity benefit may give written notice
to her employer stating that her maternity benefit and any other benefits to which she may be
entitled may be paid to her or to anyone she nominates in the notice, and that she will not work
in any establishment during the period for which she receives maternity benefit.
On receipt of the notice, the company shall authorize the employee to absent herself from the
company until the end of six week period following the day of her delivery.
The maternity benefit for the period preceding the date of her expected delivery shall be paid in
advance by the company to the employee after having confirmed that she is pregnant. The
amount due for the subsequent period shall be paid by the employer to the employee within 48
hours of the childs birth.
In addition to the above, the act states that no company shall deliberately employ a woman in any
organization during the six weeks immediately following the day of her delivery or her
miscarriage. No company shall compel its female employees to do tasks of a laborious nature or

tasks that involve long hours of standing or which in any way are likely to interfere with her
pregnancy or the normal development of the fetus, or are likely to cause her miscarriage or
otherwise adversely affect her health.
Gratuity
For establishments with ten or more employees, the Payment of Gratuity Act requires the
payment of 15 days of additional wages for each year of service to employees who have worked
at a company for five years or more.
This article was originally published in the India Briefing Magazine, titled Payroll Processing
in India. In this issue, we aim to help expatriate managers and business owners grasp the
overall picture of how payroll works in India. We also discuss how outsourcing payroll can
benefit all types of companies, particularly those of small and medium-size.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate
establishment, business advisory, tax advisory and compliance, accounting, payroll, due
diligence and financial review services to multinationals investing in emerging Asia. Since its
establishment in 1992, the firm has grown into one of Asias most versatile full-service
consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam
as well as liaison offices in Italy and the United States.

BENFIT OF SOCIAL SECURITY SCHEME

The following briefly describes the different types of beneficiaries paid by Social Security. The
descriptions are not meant to be definitive. Check with a local Social Security office if you
believe you may be eligible for benefits. We pay benefits to the following types of beneficiaries.

Retired workerbeneficiary who worked in covered employment long enough to


be insured and who is at least 62 years old (benefits equal to the "primary insurance
amount" are payable at the normal retirement age; maximum benefits are payable at age
70)

Spouse of retired workermust either (1) have a child under age 16 or a disabled child in
his or her care,or (2) be at least 62 years old; applies also to divorced spouse if the
marriage lasted at least 10 years

Child of retired workersee 3 types of child benefits below

Child of deceased workersee 3 types of child benefits below

Aged widow(er)must be at least 60 years old

Young widow(er)must have a child under age 16 or a disabled child in his or her care

Disabled widow(er)must be disabled and be at least 50 years old (converted to aged


widow(er) upon attainment of age 65)

Parent of deceased workermust have been dependent on worker and be at least 62


years old

Disabled workerbeneficiary who worked in covered employment long enough to be


insured and who had been working recently in covered employment prior to disability
onset

Spouse of disabled workermust either (1) have a child under age 16 or a disabled child
in his or her care, or (2) be at least 62 years old; applies also to divorced spouse if the
marriage lasted at least 10 years

Child of disabled workersee 3 types of child benefits below

Types of children:

Minor child (under age 18)

Adult disabled before the age of 22

High school student under age 19

Monthly Social Security benefits are payable from the Old-Age and Survivors Insurance(OASI)
Trust Fund and the Disability Insurance (DI) Trust Funds. Such benefits are paid to
several types of beneficiaries.
Supplemental Security Income (SSI) benefits are paid from the general fund of the Treasury.
Social Security beneficiary data in table format

Number of Social Security beneficiaries at end of calendar years

Annual benefits paid from the trust funds by type of beneficiary:


o OASI benefit amounts
o DI benefit amounts

Other statistical tables


How benefits are computed

Retirement benefit examples

Benefit formula

Benefit data, available for certain types of beneficiaries or "families," are collected on a monthly
basis. Such data provide the number of beneficiaries and their average payment amounts.
Available data bases are shown below.

Currently-paid beneficiaries, grouped by


o beneficiary type or
o family type,

Currently-paid beneficiaries, distributed by


o age or
o benefit level
for a selected beneficiary type

Benefits awarded (new beneficiaries and changes in benefit type)


Available graphs:

Growth in number of beneficiaries

Number of retired or disabled workers by age and sex

Awards to retired or disabled workers

The Social Security Trust Funds are the Old-Age and Survivors Insurance (OASI) Trust Fund
and the Disability Insurance (DI) Trust Fund. The OASI Trust Fund began in 1937; the DI Trust
Fund in 1957. These trust funds are managed by the Department of the Treasury.
Trust fund tables

Calendar year data

o OASI Trust Fund, 1937 and later


o DI Trust Fund, 1957 and later
o OASI and DI Trust Funds, combined, 1957 and later

Fiscal year data, OASI and DI Trust Funds, combined


Investment data

Investment transactions

Investment holdings

Interest rates on trust fund investments

EMPLOYEE STATE INSURANCE ACT


The promulgation of Employees' State Insurance Act, 1948(ESI Act), by the Parliament was the
first major legislation on social Security for workers in independent India. It was a time when the
industry was still in a nascent stage and the country was heavily dependent on an assortment of
imported goods from the developed or fast developing countries. The deployment of manpower

in manufacturing processes was limited to a few select industries such as jute, textile, chemicals
etc. The legislation on creation and development of a fool proof multi-dimensional Social
Security system, when the country's economy was in a very fledgling state was obviously a
remarkable gesture towards the socio economic amelioration of a workface though limited in
number and geographic distribution. India, notwithstanding, thus, took the lead in providing
organized social protection to the working class through statutory provisions.
The ESI Act 1948, encompasses certain health related eventualities that the workers are generally
exposed to; such as sickness, maternity, temporary or permanent disablement, Occupational
disease or death due to employment injury, resulting in loss of wages or earning capacity-total or
partial. Social security provision made in the Act to counterbalance or negate the resulting
physical or financial distress in such contingencies, are thus, aimed at upholding human dignity
in times of crises through protection from deprivation, destitution and social degradation while
enabling the society the retention and continuity of a socially useful and productive manpower.
The scheme was simultaneously launched at Delhi as well and the initial coverage for both the
centres was 1,20,000 employees. Our first prime Minister was the first honorary insured person
of the Scheme and the declaration form bearing his signature is a prized possession of the
Corporation.
It is important to mention here that it blossomed as the first social security scheme in 1944, when
the Govt. of the day was still British.The first document on social insurance was "Report on
Health Insurance" submitted to the Tripartite Labour Conference, headed by Prof. B.P.Adarkar,
an eminent scholar and visionary. The Report was acclaimed as a worthy document and
forerunner of the social security scheme in India and Prof. Adarkar was acknowledged as
"Chhota Beveridge" by none other than Sardar Vallabhbhai Patel. Sir, William Beveridge, as all
know, was one of the high priests of social insurance. The report was accepted and Prof. Adarkar
continued to be actively associated with it till 1946. On his disassociation he strongly advocated
management of the Scheme by an expert from ILO. In 1948 Dr. C.L.Katial, an eminent Indian
doctor from London took over as the 1st Director General of ESIC and he steered the affairs of
the fledgling Scheme till 1953.

Since the red letter day of 24th February in the annals of social security in India , there has been
no looking back. A lighted lamp which is the logo of ESIC truly symbolises the spirit of the
Scheme, lighting up lives of innumerable families of workers by replacing despair with hope and
providing

help

in

times

of

distress,

both

physical

and

financial.

During the 61 years of its existence, ESIC has grown from strength to strength and the
Corporation owes it, most of all, to the commitment, dedication and perseverance of persons like
Prof. Adarkar and Dr. Katial

WORKMENT COMPENSATION ACT

A developed India, by 2020 or even earlier is not a dream. It need not even be a mere aspiration
in the minds of many Indians. It is a mission we can all take up-and accomplish. Ignited young
minds, we feel, are a powerful resource. This resource is mightier than any resource on the earth,
in the sky and under the sea1. We must all work together to transform our developing India into
a developed India, and the revolution required for this effort must start in our minds.
The whole concept of transformation of developing India to developed India is based on
capitalizing on huge human resource of India. The framework for vision 2020 can be seen as;
Human resources Massive workforce Industrial growth Economic growth Developed
India.
According to Census of India 20012 report the work participation rate (percentage of workers to
total population) is 39.1% with total number of workers being 402,234,724. Males outnumber
female in the working population. There are 127,220,248 numbers of female workers in
comparison to 257,014,476 male workers. Within this workforce there are 89,229,741 marginal
workers (who had worked for less than 6 months in the preceding year are termed as marginal
workers), rest 313,004,983 are main workers (who had worked for more than 6 months in the
preceding year are termed as main workers).

Workers are exposed to certain degree of injuries, physical illness and mental conditions together
termed as occupational diseases. The profile of occupational diseases also has changed over the
period of time as a result of modernization, market liberalization and globalization which now
encompasses minor allergy and injuries, systemic infections and diseases to life threatening
leukemia and cancers3. For industrial growth in turn economic growth health of the workers is
utmost important. Best practices of Occupational health and safety can yield better and safe
working environment.
However, apart from medical measures engineering measures and legislative measure are
important in promoting health at workplace. Simple engineering measure like design of the
building, good housekeeping, general ventilation, mechanization, protective devices add value to
the working environment. Society has an obligation to protect the health of the worker engaged
in diverse conditions. Republic of India is committed towards health of the workers by having
suitable statutory or legislative measures. To protect workers health and provide social security
several legislative measure are in place. The most notable among them are 4, The Workmens
Compensation Act, 1923; The Factories Act, 1948; The Employees State Insurance (ESI) Act,
1948;The Minimum Wages Act, 1948; the mines Act, 1952; The Contract Labour (Abolition &
Regulation) Act, 1970; The Dangerous (Regulation) Act, 1983; etc. The oldest legislative
measure in place is The Workmens Compensation Act, 1923. Low awareness among the client
and refusal by management is responsible its under-utilization5,6.
The salient points about The Workmens Compensation Act are as follows;
WORKMENS COMPENSATION ACT, 19237;
The Workmens Compensation Act is the only legislative measure providing social security to
workers from pre-independence days (1923). This legislative measure was enacted in 5th March
1923 and came in to effect in whole of India on First day of July 1924. The act got amended
twice since then, 1984 and 2000. The present version in place is The Workmens Compensation
Act, 1923 (Amended in 2000). The act is spelt out in four chapters and supplemented with four
schedules. Low

BENEFICIARIES:
Workman means any person (other than a person whose employment is of a casual nature and
who is employed otherwise than for the purposes of the employers trade or business). The Act
applies to railway servants and persons employed in any such capacity as is specified in
Schedule II of the Act. The schedule II includes persons employed in factories, mines,
plantations, mechanically propelled vehicles, construction works and certain other hazardous
occupations. Total disablement means such disablement, whether of a temporary or permanent
nature, as incapacitates a workman for all work which he was capable of performing at the time
of the accident resulting in such disablement. Partial disablement means, where the
disablement is of a temporary nature, such disablement as reduces the earning capacity of a
workman in any employment in which he was engaged at the time of the accident resulting in the
disablement, and, where the disablement is of a permanent nature, such disablement as reduces
his earning capacity in every employment which he was capable of undertaking at that time.
Compensation is provided to the employer as per the act, however in case of death the
dependants are eligible for the same; who are defined as
i.

A widow, a minor legitimate son, and unmarried legitimate daughter, or a widowed


mother; and

ii.

if wholly dependent on the earnings of the workman at the time of his death, a son or a
daughter who has attained the age of 18 years and who is infirm;

iii.

If wholly or in part dependent on the earnings of the workman at the time of his death,
a.

A widower.

b.

A parent other than a widowed mother,

c.

A minor illegitimate son, an unmarried illegitimate daughter or a daughter


legitimate or illegitimate if married and legitimate or illegitimate if married and a
minor or if widowed and a minor,

d.

A minor brother or a unmarried sister or a widowed sister if a minor,

e.

A widowed daughter-in-law,

f.

A minor child of a pre-deceased son,

g.

A minor child of a pre-deceased daughter where no parent of the child is alive, or

h.

A paternal grandparent if no parent of the workman is alive

WORKMENS COMPENSATION:
Employer shall be liable to pay compensation, if personal injury is caused to a workman by
accident arising out of and in the course of his employment. However the employer is not
responsible for in the following conditions;
1) In respect of any injury which does not result in the total or partial disablement of the
workman for a period exceeding 3 days;
2) In respect of any injury, not resulting in death, caused by an accident which is directly
attributable to:
A. The workman having been at the time thereof under the influence of drink or drugs, or
B. The willful disobedience of the workman to an order expressly given, or to a rule
expressly framed, for the purpose of securing the safety of workmen, or
C. The willful removal or disregard by the workman of any safety guard or other device
which he knew to have been provided for the purpose of securing the safety of workmen.
D. Contract of an occupational disease in any employment wherein the total duration of
employment is less than 6 months.
AMOUNT OF COMPENSATION:
Amount of compensation is spelt out in the act as per the nature of injury and a multiplication
factor.

A. In case of death: An amount equal to Forty percent (40%) of the monthly wage of the
deceased workman, multiplied by the relevant factor or Rs. 20,000 whichever is more.
B. In case of total permanent disablement: An amount equal to fifty percent (50%) of the
monthly wage, multiplied by the relevant factor or Rs. 24,000 whichever is higher.
C. In case of partial permanent disablement: the compensation is a percentage of that
payable in case of total permanent disablement. The earning capacity is determined by a
registered medical practitioner.
D. In case of temporary (total or partial) disablement; A sum equivalent to twenty-five
percent (25%) of the monthly wage paid half monthly for the period of disablement or 5
years, whichever is shorter.
LEGAL FRAMEWORK:
The state government appoints Commissioners vested with the powers of a civil court to
investigate and to solve every case of workmens compensation.
In case of any delay in payment of workmens compensation for a period of one month after the
due date, a simple interest at the rate of 6% per annum can be recovered from the employer. Any
appeal against the orders of the appointed Commissioner can be made in the respective High
Court within 60 days.

MATURITY BENEFIT ACT


The Maternity Benefits Act, 1961 aims at regulating employment of women employees all over
the country. The act provides 12 weeks as the maximum period for which any working woman
shall be entitled to maternity benefit. She can avail this benefit as 6 weeks up to and including
the day of her delivery and 6 weeks immediately following the day of her delivery. (Section 4)

Applicability of the Act


The Act applies to:
Every factory, mine or plantation (including those belonging to Government),
An establishment engaged in the exhibition of equestrian, acrobatic and other performances,
irrespective

of

the

number

of

employees,

and

Every shop or establishment wherein 10 or more persons are employed or were employed on
any day of the preceding 12 months.

Eligibility & Conditions for Claiming Benefits


The Act lays down that any women employed, whether directly or through any agency, for wages
in any establishment is eligible to claim maternity benefits if 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.

(Section

5)

A woman looking forward to maternity benefits could ask the employer to give her light work for
a month. Such request should be made atleast 10 weeks before the date of her expected delivery.
At that time she needs to produce a certificate confirming her pregnancy. (Section 5)
Also she needs to give a written notice to the employer about 7 weeks before the date of her
delivery regarding her absence period pre and post delivery. (Section 5).

Cash Benefits
Leave with average pay for 6 weeks before and 6 weeks after the delivery.
Medical bonus of at least Rs. 1000 extending to Rs. 20000 if the employer is unable to provide
free medical care to the women employee.(Section 8) (Amended on 15-04-2008) [2]
Additional leave with pay for upto 1 month on production of proof, revealing illness due to

pregnancy,

delivery,

miscarriage,

or

premature

birth.

(Section

10)

In case of miscarriage, 6 weeks leave with average pay from the date of miscarriage. (Section
9)

Non Cash Benefits/Privilege


Light work for 10 weeks before the date of expected pregnancy if she asks for it.
Two nursing breaks in the course of her daily work until the child attain age of 15 months.
(Section

11)

In case of tubectomy operation leave with wages for 2 weeks. (Section 9A)

No

discharge

or

dismissal

while

being

on

maternity

leave.

(Section

12)

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

(Section

12)

Pregnant woman discharged or dismissed may still claim maternity benefit from the employer.
(Section

12)

* Women employee who is dismissed on grounds of gross misconduct loses her rights under the
Act for Maternity Benefit.

Miscarriage and Tubectomy Operations


Leave with wages at the rate of maternity benefit, for a period of 6 weeks for miscarriage and 2
weeks for tubectomy operation. (Section 9 & 13)

Illness Arising Out of Pregnancy

A woman suffering from illness on account of miscarriage, medical termination of pregnancy,


delivery, premature birth is entitled for further leave for 1 month in addition to the leave with
wages at the rate of maternity benefit. (Section 10)

Prohibition on Employment during Certain Periods


The Act prohibits an employer from knowingly employing a woman, or any women from
working, 6 weeks immediately following the day of her delivery or miscarriage. (Section 4)

Discharge from Employment


The Act prohibits dismissal or discharge or variation in conditions of service to the disadvantage
of any pregnant women, while she is absent due to reason under the Act. (Section 12)
She can claim maternity benefit or medical bonus, even if discharged or dismissed during
pregnancy. This shall not be applicable in case of dismissal for gross misconduct. (Section 12)

Benefits in Case of Death of a Pregnant Employee


In such case, the maternity benefit shall be paid only for the days up to and including the day of
death.

(Section

7)

The employer should pay such benefit or amount to the person nominated by the woman and in
case there is no such nominee, then her legal representative. (Section 7)

PAYMENT GRATUITY ACT

Gratuity is one of the most misunderstood and misconstrued components of a persons salary. In
simple terms, it is a retirement benefit paid as gratitude to the employees who have rendered a
continuous service for at least five years to incentivize them so that they continue working
efficiently. It is an amount paid to an employee based on the duration of his total service but an
employee becomes eligible only after he has completed 5 years of his service. Gratuity is paid to
an employee when he either retires or his employment is terminated or he resigns or upon his
death. Gratuity is given the force of law by the Payment of Gratuity Act 1972, which is further
administered and enforced by the Central Government and the designated establishments under
its control.
APPLICABILTY OF THE ACT
The Payment of Gratuity Act, 1972 is applicable to every factory, mine, oilfield, plantation, port
and railway company; every shop or establishment within the meaning of any law in which ten
or more persons are employed, or were employed, on any day of the preceding twelve
months; such other establishments or class of establishments, in which ten or more employees
are employed, or were employed, on any day of the preceding twelve months, as the Central
Government may, by notification, specify in this behalf. Once the Act becomes applicable to an
organization i.e. once an establishment hires more than 10 employees, the Act would continue to
apply to the same even after the number of employees gets reduced below the minimum
requirement. The Act extends to the whole of India excluding the State of Jammu and Kashmir.
ELIGIBILITY FOR GRATUITY
An employee who has rendered at least five years of service becomes entitled to the said benefit.
The pre-requisite of 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 to the extent
that the person is literally unable to provide the required services. In the case of death of the
employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been
made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor,
shall be deposited with the controlling authority who shall invest the same for the benefit of such

minor in such bank or other financial institution, as may be prescribed, until such minor attains
majority.
HOW DOES IT WORK?
An employer may offer gratuity out of the establishments funds or may approach an insurance
company in order to purchase a group gratuity plan. In case the employer chooses a life insurer,
he has to pay annual contributions as decided by the insurer. The employee is also free to make
contributions to his gratuity fund.
MEANING OF CONTINUOUS SERVICE
According to the Act, gratuity shall be payable to an employee on the termination of his
employment after he has provided continuous service for not less than five years. The question
that arises is, what is the meaning of continuous service? An employee shall be said to be in
continuous service for a period if he has, for that period, been in uninterrupted service and
includes service which may be interrupted on account of sickness, accident, leave, absence from
duty without leave, lay off, strike or a lock-out or cessation of work not due to any fault of the
employee, whether such uninterrupted or interrupted service was rendered before or after the
commencement of this Act.
CALCULATION OF AMOUNT OF GRATUITY
GRATUITY = LAST DRAWN SALARY 15/26 NO. OF YEARS OF SERVICE
The ratio 15/26 represents 15 days out of the 26 working days in a month
Last drawn salary = Basic Salary + Dearness Allowance
Years of Service are rounded down to the nearest full year.
For example, if the employee has a total service of 20 years, 10 months and 25 days, only 20
years will be factored into the calculation.

1.

In the case of a piece-rated employee or a person who works on commission, daily wages
shall be computed.

2.

For the purpose of computing the gratuity payable to an employee who is employed, after
his disablement, on reduced wages, his wages for the period preceding his disablement shall be
taken to be the wages received by him during that period, and his wages for the period
subsequent to his disablement shall be taken to be the wages as so reduced.
PAYMENT OF GRATUITY
The employer shall arrange to pay the amount of gratuity within 30 days from the date it
becomes active i.e. from the day the person retires or his employment is terminated, to the person
to whom the gratuity is awarded. If the amount of gratuity payable under the section is not paid
by the employer within the period specified, he will have to pay simple interest on it from the
date on which the gratuity becomes payable at the rate in coherence with the guidelines laid
down by the by the Central Government. Gratuity can be paid in cash, demand draft or bank
cheque to the employee via his preferred mode of payment.
FORFEITURE OF GRATUITY
The employer can withhold or forfeit gratuity wholly or partially even if employee has
completed 5 years if the employment of the said employee has been terminated for disorderly
conduct or any other misdemeanour or an act tantamount to violence provided that such offense
is committed by him in the course of his employment. It may be noted that above act should have
been committed by employee during his employment.
EXEMPTION FROM TAX
Taxability of gratuity depends on the recipients job. In case of government employees there is
no tax on the gratuity. In case of private sector employees, the gratuity is exempt from tax
subject to a maximum of Rs 10 lakhs or 15 days salary for each completed year of service
If a person has received gratuity before and if any exemption was allowed for the same, then the
exemption to be allowed during the retirement year gets reduced to the extent of exemption
already allowed, subject to the overall limit of Rs 10 lakhs.

TIME LIMIT FOR MAKING PAYMENT OF GRATUITY AMOUNT


1.

A person can himself, or via his authorized person send an application to the employer for
payment of the desired gratuity.

2.

As soon as gratuity becomes payable, it is calculated by the employer. Furthermore, the


employer gives a notice in writing to the eligible person and also to the controlling authority
specifying the amount determined.

3.

The employer must pay the amount of gratuity within thirty days from the date it
becomes payable to the person to whom the gratuity is payable.
FAILURE TO PAY GRATUITY AMOUNT
Payment of gratuity is a statutory requirement. In case an employer fails to pay gratuity amount
to an employee, he shall be liable for punishment. Where the employer fails to make payment of
any gratuity payable to the employee, he shall be punishable with imprisonment for a term which
shall not be less than six months but which may extend to two years. Any employer who
contravenes or makes default in complying with any of the provisions of the Act or any rule or
order made there under shall be punishable with imprisonment for a term which shall not be less
than three months but which may extend to one year or with fine which shall not be less than ten
thousand rupees but which may extend to twenty thousand rupees, or with both. If an employer
makes any false statement or false representation in order to avoid any payment to be made by
himself under the Act or of enabling any other person to avoid such payment shall be punishable
with imprisonment for a term which may extend to six months or with fine which may extend to
ten thousand rupees or with both.
PROTECTION OF GRATUITY
The gratuity amount payable shall not be twisted in a serpentine manner in execution of any
decree or order of any civil, revenue or criminal court.
REMEDY IN CASE THE EMPLOYER DOES NOT PAY GRATUITY
If the amount of gratuity is not paid by the employer within the prescribed time to the said
person, he/she has the right to file a complaint to the Controlling Authority under the Payment of
Gratuity Act within the area where the employers establishment is situated or where the

employee was working at the time of termination. Moreover, the aggrieved person can also
approach Labour Courts to get relief and justice.
DIFFERENCE BETWEEN GRATUITY AND SEVERANCE
Severance is paid when an employee is declared redundant. Gratuity is a lump sum amount that
an employer pays an employee if he/she retires or resigns from employment. An employee does
not contribute any portion of her salary towards this amount. Gratuity is only paid out at the time
of retirement or resignation, and in the event of death or being rendered disabled because of an
accident or illness. On the other hand, severance is offered to an employee upon being laid off
from a company. The receipt of a severance package is contingent upon signing a severance
agreement.

EMPLOYEE PROVIDENT FUND 1923


The Employee's Compensation Act, 1923
THE

EMPLOYEE'S

COMPENSATION

ACT,

19231

1 Short title, extent and commencement.


(1) This Act may be called the 1 [Employee's] Compensation Act, 1923.
2

[(2) It extends to the whole of India 3 [***]].

(3) It shall come into force on the first day of July, 1924.
2 Definitions.
(1) In this Act, unless there is anything repugnant in the subject or context, 4 [***]
(d) a person recruited for work abroad by a company, and who is employed outside India in any
such capacity as is specified in Schedule II and the ship, aircraft or motor vehicle, or company, as
the case may be, is registered in India; or
(iii) employed in any such capacity as is specified in Schedule II, whether the contract of
employment was made before or after the passing of this Act and whether such contract is
expressed or implied, oral or in writing; but does not include any person working in the capacity

of a member of the Armed Forces of the Union; and any reference to any employee who has been
injured shall, where the employee is dead, include a reference to his dependants or any of them;]
(e) employer includes any body of persons whether incorporated or not and any managing
agent of an employer and the legal representative of a deceased employer, and, when the services
of 5 [an employee] are temporarily lent or let on hire to another person by the person with whom
the 6 [employee] has entered into a contract of service or apprenticeship, means such other person
while the 6 [employee] is working for him;
(f) managing agent means any person appointed or acting as the representative of another
person for the purpose of carrying on such other person's trade or business, but does not include
an individual manager subordinate to an employer;
State Amendment West Bengal. in section 2, in sub-section (1), after clause (f), insert the
following clause, namely: (ff) "medical reference" means a qualified medical practitioner
appointed under section 24A as a medical reference for the purposes of this Act'. [ Vide Bengal
Act 6 of 1942, sec. 3 (w.e.f. 19-11-1942).]
(ff) minor means a person who has not attained the age of eighteen years;]
(g) partial disablement means, where the disablement is of a temporary nature, such
disablement as reduces the earning capacity of a 6 [employee] in any employment in which he
was engaged at the time of the accident resulting in the disablement, and, where the disablement
is of a permanent nature, such disablement as reduces his earning capacity in every employment
which he was capable of undertaking at that time: provided that every injury specified 8 [in Part II
of Schedule I] shall be deemed to result in permanent partial disablement;
(h) prescribed means prescribed by rules made under this Act;
(i) qualified medical practitioner means any person registered 9 [***] under any 10 [Central
Act, Provincial Act, or an Act of the Legislature of a 11 [State]] providing for the maintenance of a
register of medical practitioners, or, in any area where no such last-mentioned Act is in force, any
person declared by the State Government, by notification in the Official Gazette, to be a qualified
medical practitioner for the purposes of this Act; 12 [***]
(k) seaman means any person forming part of the crew of any 13 [***] ship, but does not
include the master of 14 [the] ship;
(l) total disablement means such disablement, whether of a temporary or permanent nature,
as incapacitates 15 [an employee] for all work which he was capable of performing at the time of

the accident resulting in such disablement: 16 [Provided that permanent total disablement shall be
deemed to result from every injury specified in Part I of Schedule I or from any combination of
injuries specified in Part II thereof where the aggregate percentage of the loss of earning
capacity, as specified in the said Part II against those injuries, amounts to one hundred per cent.
or more;]
(m) wages, includes any privilege or benefit which is capable of being estimated in money,
other than a travelling allowance or the value of any travelling concession or a contribution paid
by the employer of 15 [an employee] towards any pension or provident fund or a sum paid to 15 [an
employee] to cover any special expenses entailed on him by the nature of his
employment; 17 [***]
(2) The exercise and performance of the powers and duties of a local authority or of any
department 18 [acting on behalf of the Government] shall, for the purposes of this Act, unless a
contrary intention appears, be deemed to be the trade or business of such authority or
department.
19

[(3) The Central Government or the State Government, by notification in the Official Gazette,

after giving not less than three months' notice of its intention so to do, may, by a like notification,
add to Schedule II any class of persons employed in any occupation which it is satisfied is a
hazardous occupation, and the provisions of this Act shall thereupon apply, in case of a
notification by the Central Government, within the territories to which the Act extends, or, in the
case of a notification by the State Government, within the State, to such classes of persons:
Provided that in making addition, the Central Government or the State Government, as the case
may be, may direct that the provisions of this Act shall apply to such classes of persons in respect
of specified injuries only.] (n) workman means any person who is
(i) a railway servant as defined in clause (34) of section 2 of the Railways Act, 1989 (24 of
1989), not permanently employed in any administrative, district or sub-divisional office of a
railway and not employed in any such capacity as is specified in Schedule II, or
(ia) (a) a master, seaman or other member of the crew of a ship,
(b) a captain or other member of the crew of an aircraft,
(c) a person recruited as driver, helper, mechanic, cleaner or in any other capacity in connection
with a motor vehicle, (d) a person recruited for work abroad by a company, and who is employed

outside India in any such capacity as is specified in Schedule II and the ship, aircraft or motor
vehicle, or company, as the case may be, is registered in India, or;
(ii) employed in any such capacity as is specified in Schedule II, whether the contract of
employment was made before or after the passing of this Act and whether such contract is
expressed or implied, oral or in writing; but does not include any person working in the capacity
of a member of the Armed Forces of the Union; and any reference to a workman who has been
injured shall, where the workman is dead, include a reference to his dependants or any of them.
3 Employer's liability for compensation.
(1) If personal injury is caused to 20 [an employee] by accident arising out of and in the course of
his employment, his employer shall be liable to pay compensation in accordance with the
provisions of this Chapter: Provided that the employer shall not be so liable
(a) in respect of any injury which does not result in the total or partial disablement of
the 21[employee] for a period exceeding 22 [three] days;
(b) in respect of any 23 [injury, not resulting in death 24 [or permanent total disablement] caused
by] an accident which is directly attributable to
(i) the 21 [employee] having been at the time thereof under the influence of drink or drugs, or
(ii) the wilful disobedience of the 21 [employee] to an order expressly given, or to a rule expressly
framed, for the purpose of securing the safety of 25 [employees], or
(iii) the wilful removal or disregard by the 21 [employee] of any safety guard or other device
which he knew to have been provided for the purpose of securing the safety
of 21[employee], 26 [***]. 27 [***]
28

[(2) If 20 [an employee] employed in any employment specified in Part A of Schedule III

contracts any disease specified therein as an occupational disease peculiar to that employment, or
if 20 [an employee], whilst in the service of an employer in whose service he has been employed
for a continuous period of not less than six months (which period shall not include a period of
service under any other employer in the same kind of employment) in any employment specified
in Part B of Schedule III, contracts any disease specified therein as an occupational disease
peculiar to that employment, or if 20 [an employee] whilst in the service of one or more
employers in any employment specified in Part C of Schedule III for such continuous period as
the Central Government may specify in respect of each such employment, contracts any disease
specified therein as an occupational disease peculiar to that employment, the contracting of the

disease shall be deemed to be an injury by accident within the meaning of this section and, unless
the contrary is proved, the accident shall be deemed to have arisen out of, and in the course of,
the employment: 29 [Provided that if it is proved,
(a) that 30 [an employee] whilst in the service of one or more employers in any employment
specified in Part C of Schedule III has contracted a disease specified therein as an occupational
disease peculiar to that employment during a continuous period which is less than the period
specified under this sub-section for that employment; and
(b) that the disease has arisen out of and in the course of the employment,
the contracting of such disease shall be deemed to be an injury by accident within the meaning of
this section: Provided further that if it is proved that 30 [an employee] who having served under
any employer in any employment specified in Part B of Schedule III or who having served under
one or more employers in any employment specified in Part C of that Schedule, for a continuous
period specified under this sub-section for that employment and he has after the cessation of such
service contracted any disease specified in the said Part B or the said Part C, as the case may be,
as an occupational disease peculiar to the employment and that such disease arose out of the
employment, the contracting of the disease shall be deemed to be an injury by accident within
the meaning of this section.]]
31

[(2A) If 30 [an employee] employed in any employment specified in Part C of Schedule III

contracts any occupational disease peculiar to that employment, the contracting whereof is
deemed to be an injury by accident within the meaning of this section, and such employment was
under more than one employer, all such employers shall be liable for the payment of the
compensation in such proportion as the Commissioner may, in the circumstances, deem just.]
32

[(3) ] 33 [The Central Government or the State Government], after giving, by notification in the

Official Gazette, not less than three months' notice of its intention so to do, may, by a like
notification, add any description of employment to the employments specified in Schedule III
and shall specify in the case of employments so added the diseases which shall be deemed for the
purposes of this section to be occupational diseases peculiar to those employments respectively,
and thereupon the provisions of sub-section (2) shall apply 34 [, in the case of a notification by the
Central Government, within the territories to which this Act extends or, in case of a notification
by the State Government, within the State] 35 [***] as if such diseases had been declared by this
Act to be occupational diseases peculiar to those employments.]

(4) Save as provided by 36 [sub-sections (2), (2A)] and (3) no compensation shall be payable
to 37[an employee] in respect of any disease unless the disease is 38 [***] directly attributable to a
specific injury by accident arising out of and in the course of his employment.
(5) Nothing herein contained shall be deemed to confer any right to compensation on 37 [an
employee] in respect of any injury if he has instituted in a Civil Court a suit for damages in
respect of the injury against the employer or any other person; and no suit for damages shall be
maintainable by 3 [an employee] in any Court of law in respect of any injury
(a) if he has instituted a claim to compensation in respect of the injury before a Commissioner; or
(b) if an agreement has been come to between the 39 [employee] and his employer providing for
the payment of compensation in respect of the injury in accordance with the provisions of this
Act.
40

[ 4A Compensation to be paid when due and penalty for default.

(1) Compensation under section 4 shall be paid as soon as it falls due.


(2) In cases where the employer does not accept the liability for compensation to the extent
claimed, he shall be bound to make provisional payment based on the extent of liability which he
accepts, and, such payment shall be deposited with the Commissioner or made to
the 41[employee], as the case may be, without prejudice to the right of the 41 [employee] to make
any further claim.
42

[(3) Where any employer is in default in paying the compensation due under this Act within

one month from the date it fell due, the Commissioner shall
(a) direct that the employer shall, in addition to the amount of the arrears, pay simple interest
thereon at the rate of twelve per cent. per annum or at such higher rate not exceeding the
maximum of the lending rates of any scheduled bank as may be specified by the Central
Government, by notification in the Official Gazette, on the amount due; and
(b) if, in his opinion, there is no justification for the delay, direct that the employer shall, in
addition to the amount of the arrears and interest thereon, pay a further sum not exceeding fifty
per cent. of such amount by way of penalty: Provided that an order for the payment of penalty
shall not be passed under clause (b) without giving a reasonable opportunity to the employer to
show cause why it should not be passed. Explanation. For the purposes of this sub-section,
scheduled bank means a bank for the time being included in the Second Schedule to the
Reserve Bank of India Act, 1934 (2 of 1934).

43

[(3A) The interest and the penalty payable under sub-section (3) shall be paid to

the 44[employee] or his dependant, as the case may be.]]


5 Method of calculating wages. 45 [***] 46 [In this Act and for the purposes thereof the
expression monthly wages means the amount of wages deemed to be payable for a month's
service (whether the wages are payable by the month or by whatever other period or at piece
rates), and calculated] as follows, namely:
(a) where the 47 [employee] has, during a continuous period of not less than twelve months
immediately preceding the accident, been in the service of the employer who is liable to pay
compensation, the monthly wages of the 47 [employee] shall be one-twelfth of the total wages
which have fallen due for payment to him by the employer in the last twelve months of that
period;
48

[(b) where the whole of the continuous period of service immediately preceding the accident

during which the 47 [employee] was in the service of the employer who is liable to pay the
compensation was less than one month, the monthly wages of the 47 [employee] shall be 49 [***]
the average monthly amount which, during the twelve months immediately preceding the
accident, was being earned by 50 [an employee] employed on the same work by the same
employer, or, if there was no [employee] so employed, by a workman employed on similar work
in the same locality;]
51

[(c) ] [in other cases [including cases in which it is not possible for want of necessary

information to calculate the monthly wages under clause (b)]], the monthly wages shall be thirty
times the total wages earned in respect of the last continuous period of service immediately
preceding the accident from the employer who is liable to pay compensation, divided by the
number of days comprising such period.

Explanation. A period of service shall, for the

purposes of be deemed to be continuous which has not been interrupted by a period of absence
from work exceeding fourteen days.
6 Review .
(1) Any half-monthly payment payable under this Act, either under an agreement between the
parties or under the order of a Commissioner, may be reviewed by the Commissioner, on the
application either of the employer or of the 57 [employee] accompanied by the certificate of a
qualified medical practitioner that there has been a change in the condition of the [employee] or,
subject to rules made under this Act, on application made without such certificate.

(2) Any half-monthly payment may, on review under this section, subject to the provisions of
this Act, be continued, increased, decreased or ended, or if the accident is found to have resulted
in permanent disablement, be converted to the lump sum to which the 1 [employee] is entitled
less any amount which he has already received by way of half-monthly payments.
7 Commutation of half-monthly payments .Any right to receive half-monthly payments may,
by agreement between the parties or, if the parties cannot agree and the payments have been
continued for not less than six months, on the application of either party to the Commissioner, be
redeemed by the payment of a lump sum of such amount as may be agreed to by the parties or
determined by the Commissioner, as the case may be.
8 Distribution of compensation.
(1) No payment of compensation in respect of [an employee] whose injury has resulted in death,
and no payment of a lump sum as compensation to [an employee] or a person under a legal
disability, shall be made otherwise than by deposit with the Commissioner, and no such payment
made directly by an employer shall be deemed to be a payment of compensation: [Provided that,
in the case of a deceased [employee], an employer may make to any dependant advances on
account of compensation [of an amount equal to three months' wages of such 59[employee] and
so much of such amount] as does not exceed the compensation payable to that dependant shall be
deducted by the Commissioner from such compensation and repaid to the employer.]
(2) Any other sum amounting to not less than ten rupees which is payable as compensation may
be deposited with the Commissioner on behalf of the person entitled thereto.
(3) The receipt of the Commissioner shall be a sufficient discharge in respect of any
compensation deposited with him.]
(4) On the deposit of any money under sub-section (1), 62 [as compensation in respect of a
deceased 59 [employee]] the Commissioner 63 [***] shall, if he thinks necessary, cause notice to
be published or to be served on each dependant in such manner as he thinks fit, calling upon the
dependants to appear before him on such date as he may fix for determining the distribution of
the compensation. If the Commissioner is satisfied after any inquiry which he may deem
necessary, that no dependant exists, he shall repay the balance of the money to the employer by
whom it was paid. The Commissioner shall, on application by the employer, furnish a statement
showing in detail all disbursements made.

64

[(5) Compensation deposited in respect of a deceased 59 [employee] shall, subject to any

deduction made under sub-section (4), be apportioned among the dependants of the
deceased 59[employee] or any of them in such proportion as the Commissioner thinks fit, or may,
in the discretion of the Commissioner, be allotted to any one dependant.
(6) Where any compensation deposited with the Commissioner is payable to any person, the
Commissioner shall, if the person to whom the compensation is payable is not a woman or a
person under a legal disability, and may, in other cases, pay the money to the person entitled
thereto.
(7) Where any lump sum deposited with the Commissioner is payable to a woman or a person
under a legal disability, such sum may be invested, applied or otherwise dealt with for the benefit
of the woman, or of such person during his disability, in such manner as the Commissioner may
direct; and where a half-monthly payment is payable to any person under a legal disability, the
Commissioner may, of his own motion or on an application made to him in this behalf, order that
the payment be made during the disability to any dependant of the [employee] or to any other
person, whom the Commissioner thinks best fitted to provide for the welfare of the 65[employee]
66

[(8) ] Where, on application made to him in this behalf or otherwise, the Commissioner is

satisfied that, on account of neglect of children on the part of a parent or on account of the
variation of the circumstances of any dependant or for any other sufficient cause, an order of the
Commissioner as to the distribution of any sum paid as compensation or as to the manner in
which any sum payable to any such dependant is to be invested, applied or otherwise dealt with,
ought to be varied, the Commissioner may make such orders for the variation of the former order
as he thinks just in the circumstances of the case: Provided that no such order prejudicial to any
person shall be made unless such person has been given an opportunity of showing cause why
the order should not be made, or shall be made in any case in which it would involve the
repayment by a dependant of any sum already paid to him.
67

[(9) Where the Commissioner varies any order under sub-section (8) by reason of the fact that

payment of compensation to any person has been obtained by fraud, impersonation or other
improper means, any amount so paid to or on behalf of such person may be recovered in the
manner hereinafter provided in section 31.] STATE AMENDMENTS Andhra Pradesh. In
section 8, to sub-section (4), add the following proviso, namely: Provided that in respect of
a workman belonging to an establishment to which the Andhra Pradesh Labour Welfare Fund

Act, 1987 applies, the Commissioner shall pay the said balance of the money into the fund
constituted under that Act in lieu of repaying to the employer. [ Vide Andhra Pradesh Act 34 of
1987, sec. 40 (w.e.f. 1-5-1988).]
Goa Same as in Andhra Pradesh except the name of the Act is Goa, Daman and Diu Labour
Welfare Fund Act, 1986. [ Vide Goa Act 4 of 1987, sec. 40 (w.e.f. 26-1-1990).]
9 Compensation not to be assigned, attached or charged. Save as provided by this Act no lump
sum or half-monthly payment payable under this Act shall in any way be capable of being
assigned or charged or be liable to attachment or pass to any person other than the 68 [employee]
by operation of law nor shall any claim be set off against the same.
10 Notice and claim.
(1) 69 [No claim for compensation shall be entertained by a Commissioner unless notice of the
accident has been given in the manner hereinafter provided as soon as practicable after the
happening thereof and unless the claim is preferred before him within 70 [two years] of the
occurrence of the accident or in case of death within 70 [two years] from the date of death:]
Provided that where the accident is the contracting of a disease in respect of which the provisions
of sub-section (2) of section 3 are applicable, the accident shall be deemed to have occurred on
the first of the days during which the [employee] was continuously absent from work in
consequence of the disablement caused by the disease: [Provided further that in case of partial
disablement due to the contracting of any such disease and which does not force the [employee]
to absent himself from work, the period of two years shall be counted from the day the
[employee] gives notice of the disablement to his employer: Provided further that if 73 [an
employee] who, having been employed in an employment for a continuous period, specified
under sub-section (2) of section 3 in respect of that employment, ceases to be so employed and
develops symptoms of an occupational disease peculiar to that employment within two years of
the cessation of employment, the accident shall be deemed to have occurred on the day on which
the symptoms were first detected:] [Provided further that the want of or any defect or
irregularity in a notice shall not be a bar to the [entertainment of a claim]
(a) if the claim is [preferred] in respect of the death of a [an employee] resulting from an
accident which occurred on the premises of the employer, or at any place where the 78[employee]
at the time of the accident was working under the control of the employer or of any person
employed by him, and the 78 [employee] died on such premises or at such place, or on any

premises belonging to the employer, or died without having left the vicinity of the premises or
place where the accident occurred, or
(b) if the employer [or any one of several employers or any person responsible to the employer
for the management of any branch of the trade or business in which the injured [employee] was
employed] had knowledge of the accident from any other source at or about the time when it
occurred:] Provided further that the Commissioner may [entertain] and decide any claim to
compensation in any case notwithstanding that the notice has not been given, or the claim has not
been 81 [preferred], in due time as provided in this sub-section, if he is satisfied that the failure so
to give the notice or 82 [prefer] the claim, as the case may be, was due to sufficient cause.
(2) Every such notice shall give the name and address of the person injured and shall state in
ordinary language the cause of the injury and the date on which the accident happened, and shall
be served on the employer or upon 83 [any one of] several employers, or upon any person 84 [***]
responsible to the employer for the management of any branch of the trade or business in which
the injured workman was employed.
85

[(3) The State Government may require that any prescribed class of employers shall maintain

at their premises at which 78 [employees] are employed a notice book, in the prescribed form,
which shall be readily accessible at all reasonable times to any injured 78 [employee] employed
on the premises and to any person acting bona fide on his behalf.
(4) A notice under this section may be served by delivering it at, or sending it by registered post
addressed to, the residence or any office or place of business of the person on whom it is to be
served, or, where a notice-book is maintained, by entry in the notice-book.]
86

[ 10A Power to require from employers statements regarding fatal accidents .

(1) Where a Commissioner receives information from any source that a 87 [an employee] has died
as a result of an accident arising out of and in the course of his employment, he may send by
registered post a notice to the workman's employer requiring him to submit, within thirty days of
the service of the notice, a statement, in the prescribed form, giving the circumstances attending
the death of the 88 [employee], and indicating whether, in the opinion of the employer, he is or is
not liable to deposit compensation on account of the death.
(2) If the employer is of opinion that he is liable to deposit compensation, he shall make the
deposit within thirty days of the service of the notice.

(3) If the employer is of opinion that he is not liable to deposit compensation, he shall in his
statement indicate the grounds on which he disclaims liability.
(4) Where the employer has so disclaimed liability, the Commissioner, after such inquiry as he
may think fit, may inform any of the dependants of the deceased 88 [employee] that it is open to
the dependants to prefer a claim for compensation, and may give them such other further
information as he may think fit.

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