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

Dunlops 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.

Dunlops 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 ofBeyond contract, innovative

contract definedways
rules,contract

3 Conflict Institutionalised De-emphasised is patholoigical

4 Union legitimacy Unions are acceptable Not considered desirable

Nurturing.

5. Managerial task inMonitoring Nurturing

relation to labour

6 Key relation Labour-management Customer

7 Pay Standardised, based on jobPerformance related

evaluation

8 Basis of labour-mgtCollective bargainingIndividual contract

relations contract

9 Job design Division of labour Team work

10 Conflict handling Reach temporary truce,Managing climate and culture-

reactive proactive

11 Key people PM/IR Line specialists

12 Focus of attention Personnel procedures Various culture and structure-

related personnel strategies.
 Unitarist-

Authoritarian

HR Management

Approaches to IR

Unitary approach

Industrial relations is grounded in mutual cooperation, individual treatment, teamwork

and the sharing
of common objectives.

The underlying assumption is that it is to the benefit of all to focus on common interests
and promote harmony.

Conflict is regarded as destructive.

Assumptions about workplace relations

- management and employees share common interest

- one source of legitimate authority (management)

Assumptions about workplace conflict

- inevitable, aberration, destructive, to be avoided

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

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, countrys socio-economic
and political environment, nations 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 19 th 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)

______________________________________________________________________

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 employers '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 cant be at work for any reason (for
example, your employers 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 managements 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 nations 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.

Managements 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

Managements 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 educations 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 managements 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 managements 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 companys processes is subjected to intense and regular scrutiny for ways
to improve it.

Quality in the job of the QC Personnel.

Meet the customers 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 governments 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

Section2
Definitions

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

it does not include an apprentice

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

MEANING OF GRATUITY

THE TERM GRATUITY WAS CONSIDERED AS AN AMOUNT GIVEN FREELY AND COULD
NOT BE DEMANDED AS A MATTER OF RIGHT BY THE EMPLOYEES. IN MANY CASES
GRATUITY WAS GIVEN AS A MATTER OF FAVOUR.
 EMPLOYERS USED TO PAY GRATUITY AS A REWARD FOR LONG,CONTINOUS &
MERITRORIOUS SERVICE.

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

EMPLOYEES ,THE CENTRALGOVERNMENT ENACTED THETHE PAYMENT OF GRATUITY
ACT,1972.

Section: 4
Gratuity when payable ?

Gratuity shall be payable to an employee

Who has rendered continuous service for not less than 05 years

on the termination of his employment -

on his superannuation, or

on his retirement or

resignation, or

on his death or disablement due to accident or disease:

Note:-

The completion of continuous service of five years shall not be necessary where the
termination of the employment of any employee is due to death or disablement:

How to calculate the Amount of Gratuity

Monthly rated employee :

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

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

26

piece-rated employee, daily wages :

On the average of the total wages received by him for a period of three months
immediately preceding the termination of his employment excluding overtime wages

seasonal establishment

At the rate of seven days wages for each season.

Maximum Limit Rs.3,50,000/-

Higher benefits can be paid if the employer so desires.

Can Gratuity be withheld by the employer ?

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

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

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

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

Section: 6
Nomination

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

In his nomination, an employee may, distribute the amount of gratuity payable to him amongst
more than one nominee.

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

Fresh nomination in favour of one or more members of his family is required where he has not
family at the time of making nomination..

If a nominee predeceases the employee, the interest of the nominee shall revert to the
employee who can make a fresh nomination.

Every nomination, fresh nomination or alteration of nomination, as the case may be, shall be
sent by the employee to his employer, who shall keep the same in his safe custody.

Section: 7
Determination of the amount of gratuity

A person who is eligible for payment of gratuity shall send a written application to the
employer.

The employer shall determine the amount of gratuity and give notice in writing to the person
to whom the gratuity is payable and also to the controlling authority specifying the amount
gratuity so determined as soon as gratuity becomes payable and whether or not an application
has been made by the concerned employee.
The employer shall arrange to pay the amount of gratuity within 30 days from the date it
becomes payable.

Section: 9
Penalties

Knowingly making false statement/ false representation to avoid to make payment

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 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 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 evolve
suitable norms.

Eligibility

Every employee shall be entitled to be paid by his employer in an accounting year,

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

Disqualification for bonus

Notwithstanding anything contained in this Act, an employee shall be disqualified from

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

(a) fraud; or
 (b) riotous or violent behavior while on the premises of

the establishment; or

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

Payment of minimum bonus

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

Payment of maximum bonus

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

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

Computation of number of working days

An employee shall be deemed to have worked in an establishment in any accounting

year also on the days on which
(a) he has been laid off under an agreement or as
permitted by standing orders under the Industrial
Employment (Standing Orders) Act, 1946

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

he has been absent due to temporary

disablement caused by accident arising out of
and in the course of his employment; and

(d) the employee has been on maternity leave

with salary or wage, during the accounting
year

Set on and set off allocable surplus

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

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

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

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

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

Provided further that any such application may be entertained after the expiry of the
said period of one year, if the appropriate Government is satisfied that the applicant
had sufficient cause for not making the application within the said period.

set on--first we calculate allocable surplus and out of that surplus we pay bonus and
after paying max bonus i.e 20% ,if some amount left balance is called set on and this
amount is kept in reserve for future .

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

EMPLOYERS LIABILITY FOR COMPENSATION (ACCIDENTS)

The employer of any establishment covered under this Act, is required to compensate
an employee:
a. Who has suffered an accident arising out of and in the course of his employment,
resulting into (i) death, (ii) permanent total disablement, (iii) permanent partial
disablement, or (iv) temporary disablement whether total or partial, or
b. Who has contracted an occupational disease.

HOWEVER THE EMPLOYER SHALL NOT BE LIABLE

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

WHAT IS DISABLEMENT

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

ACCIDENT ARISING OUT OF AND IN THE COURSE OF EMPLOYMENT

An accident arising out of employment implies a casual connection between the injury
and the accident and the work done in the course of employment. Employment should
be the distinctive and the proximate cause of the injury. The three tests for determining
whether an accident arose out of employment are:
1. At the time of injury workman must have been engaged in the business of the
employer and must not be doing something for his personal benefit;
2. That accident occurred at the place where he as performing his duties; and
3. Injury must have resulted from some risk incidental to the duties of the service, or
inherent in the nature condition of employment.

The general principles that are evolved are:

There must be a casual connection between the injury and the accident and the work
done in the course of employment;

It is not necessary that the workman must be actually working at the time of his death
or that death must occur while he was working or had just ceased to work;

COMPENSATION IN CASE OF OCCUPATIONAL DISEASES

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

b. When a workman contracts any disease specified in Part C, while he has been in
continuous service for a specified period, whether under one or more employers.

CALCULATION OF COMPENSATION

The amount of compensation payable by the employer shall be calculated as follows:

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

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

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

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
employers 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 AGREEMENT
When a memorandum of any agreement is not sent to the Commissioner for
registration, the employer shall be liable to pay the full amount of compensation, which
he is liable to pay under the provisions of this Act.

FILING OF CLAIMS

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

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

a. in case of death of workman resulting from an accident which occurred on the

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

LIMITATION

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

(ii) the claimant-employee must present himself for medical examination if so required
by the employer.

DUTIES OF EMPLOYERS / EMPLOYEES

To pay compensation for an accident suffered by an employee, in accordance with the

Act.
To submit a statement to the Commissioner (within 30 days of receiving the notice) in
the prescribed form, giving the circumstances attending the death of a workman as
result of an accident and 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 EMPLOYEES 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 IPs 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 3/5 th 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--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 for

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

Conciliation officer

The appropriate Government may, by notification in the Official Gazette, appoint such
number of persons as it thinks fit, to be conciliation officers, charged with the duty of
mediating in and promoting the settlement of industrial disputes.
 A conciliation officer may be appointed for a specified area or for specified industries in
a specified area or for one or more specified industries and either permanently or for a
limited period.

Board of conciliation

Provided that, if any party fails to make a recommendation as aforesaid within the
prescribed time, the appropriate Government shall appoint such persons as it thinks fit
to represent that party.

(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.
CONTRACT LABOUR (REGULARATION & ABOLITION) ACT, 1970 & THE RULES
CHECKLIST
Applicability Registration
Registration of
of
Every establishment in which 20 or more Establishment
Establishment
Object of the Act
workmen are employed or were Principal
Principal employer
employer employing
employing
To regulate the
employed on any day of the preceding 20
20 or
or more
more workers
workers through
through the
the
employment of contract
12 months as contract labor. contractor
contractor or
or the
the contractor(s)
contractor(s)
labor in certain
Every contractor who employs or who on
on deposit
deposit of
of required
required fee
fee inin
establishments and to
employed on any day of the preceding Form
Form 11
provide for its abolition in
twelve months 20 or more workmen. Sec.
Sec. 7 7
certain circumstances and
for matters connected
Sec. 1
therewith. Revocation of Registration Licensing of Contractor
Prohibition of Employment of Contract When obtained by Engaging 20 or more than 20
Labour Misrepresentation or workers and on deposit of
Only by the appropriate Government through suppression required fee in Form IV.
issue of notification after consultation with Of material facts etc. after Valid for specified
the Board (and not Courts) can order the opportunity to the principal period.Sec.12, Rule 21
prohibition of employment of contract labor. Employer
Sec. 10 Sec. 9
Welfare measures to be taken by the Contractor
Revocation or Suspension & Contract labor either one hundred or more employed by a contractor for
Amendment of Licences one or more canteens shall be provided and maintained.
When obtained by misrepresentation or First Aid facilities.
suppression of material facts. Number of rest-rooms as required under the Act.
Failure of the contractor to comply with the Drinking water, latrines and washing facilities. Sec. 16 & 17
conditions or contravention of Act or the
Rules.
Laws, Agreement or standingSec. 14 Liability of Principal Employer
orders inconsistent with the Act- To ensure provision for canteen, restrooms, sufficient supply of drinking water,
Not Permissible latrines and urinals, washing facilities.
Unless the privileges in the contract Principal employer entitled to recover from the contractor for providing such
between the parties or more favorable than amenities or to make deductions from amount payable. Sec. 20
the prescribed in the Act, such contract will Muster Roll, Wages Register, Deduction Register and Overtime Register by
be invalid and the workers will continue to Contractor
get more favorable benefits. Every contractor shall
Sec. 20 Maintain Muster Roll and a Register of Wages in Form XVI and Form XVII respectively when
Registers of Contractors combined.
Principal employer Register or wage-cum-Muster Roll in Form XVII where the wage period is a fortnight or less.
To maintain a register of contractor in Maintain a Register of Deductions for damage or loss, Register or Fines and Register of
respect of every establishment in Form XII. Avances in Form XX, from XXI and Form XXII respectively.
Maintain a Register of Overtime in Form XXIII.
Contractor Rule 74
To issue wage slips in Form XIX, to the workmen at least a day prior to the disbursement of
To maintain register of workers for each wages.
registered establishment in Form XIII. Obtain the signature or thumb impression of the worker concerned against the entries
To issue an employment card to each relating to him on the Register of wages or Muster Roll-Cum-Wages Register.
worker in Form XIV. When covered by Payment of Wages Act, register and records to be maintained under the
To issue service certificate to every rules
workman on his termination in Form XV. Muster Roll, Register of wages, Register of Deductions, Register of Overtime, Register of
Rules 75, 76 and 77 Fines, Register of Advances, Wage slip. Rule
79
To display an abstract of the act and Rules in English and Hindi and in the language spoken
by the Majority of workers in such forms as may be approved by appropriate authority
PENALTIES Rule 80
To display notices showing rates of wages, hours of work, wage period, dates of payment,
Sec. Offence Punishment
names and addresses of the inspector and to send copy to the inspector and any change
Sec. 22 Obstructions For obstructing the inspector or failing to produce registers
forwithwith Ruleetc.
81

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

Sec.23 Violation For violation of the provisions of Act or the Rules, imprisonment of 3
EMPLOYEES PROVIDENT FUNDS & MISC. PROVISIONS ACT, 1952
& THE SCHEMES
CHECKLIST
Eligibility Applicability
Any person who is employed for Every establishment which is factory engaged in any industry specified in
work of an establishment or Schedule 1 and in which 20 or more persons are employed.
employed through contractor in or Any other establishment employing 20 or more persons which Central
in connection with the work of an Government may, by notification, specify in this behalf.
establishment. Any establishment employing even less than 20 persons can be covered
Payment of Contribution voluntarily u/s 1(4) of the Act.
The employer shall pay the
contribution payable to the EPF, Benefits
DLI and Employees Pension Fund Employees covered enjoy a benefit of Social Security in the form of an
in respect of the member of the unattachable and unwithdrawable (except in severely restricted circumstances
Employees Pension Fund employed like buying house, marriage/education, etc.) financial nest egg to which
by him directly by or through a employees and employers contribute equally throughout the covered persons
contractor. employment.
It shall be the responsibility of the This sum is payable normally on retirement or death. Other Benefits include
principal employer to pay the Employees Pension Scheme and Employees Deposit Linked Insurance Scheme.
contributions payable to the EPF,
DLI and Employees Pension Fund Rates of Contribution
by himself in respect of the
employees directly employed by SCHEME EMPLOYEES EMPLOYERS CENTRAL GOVTS
him and also in respect of the
employees directly employed by Amount > 8.33%
(in case
him and also in respect of the
employees employed by or through where
Clarification contribution
a contractor. about Contribution
After revision in wage ceiling from is 12% of
Rs.5000 to Rs.6500 w.e.f. 1.6.2001 per Provident Fund 10%) NIL
12% 10% (in case of
month, the government will continue to Scheme
contribute 1.16% upto the actual wage certain
of maximum Rs.6500 per month Establishments as
towards Employees Pension Scheme. per details given
The employers share in the Pension earlier)
Scheme will be Rs.541 w.e.f. 1.6.2001.
Insurance NIL
DamagesScheme NIL 0.5
Under Employees Deposit-Linked
Insurance Scheme the contribution @ Less than 2 months .@ 17% per annum
0.50% is required to be paid upto a
maximum limit of Rs.6500. Two months and above but less than upto four months .@22% per annum

The employer also will pay Four months and above but less than upto six months .@ 27% per annum
administrative charges @ 0.01% on
Six months and above
maximum limit of Rs.6500 whereas an
exempted establishment will pay Penal Provision
inspection charges @ 0.005% on the Liable to be arrested without warrants being a cognizable offence.
total wages paid.

Notes: Defaults by employer in paying contributions or inspection/administrative

EMPLOYEES STATE INSURANCE
ACT, 1948
The above & theis SCHEME
clarification given by taking charges attract imprisonment upto 3 years and fines upto Rs.10, 000 (S.14).
CHECK
wages uptoLISTa maximum of Rs.6500
towards wage (basic+DA). For any retrospective application, all dues have to be paid by employer with
Since an excluded employee i.e. drawing
wages more than Rs.6500 can also damages upto 100% of arrears.
become member of the Fund and the
Schemes on joint request and if, for
instance, such an employee is getting
Rs.10, 000 per month, his share towards
 Coverage Rate of
Applicability of Contribution of the
THE ESI SCHEME TODAY
the Act & Of employees wages
No. of implemented Centres 677
Scheme

Is extended in area- No. of Employers covered 2.38

wise to factories lacs
Drawing wages Employers 4.75%
using power and
employing 10 or No. of Insured Persons 85 lacs
more persons and to Upto
non-power using No. of Beneficiaries 330 lacs
manufacturing units
and establish-ments No. of Regional Offices/SROs 26
employing 20 or
Manner and Time Limit
more person upto No. of ESI Hospitals/Annexes 183
Rs.7500/- per month For making Payment of contribution Benefits
w.e.f. 1.4.2004. It No. of ESI Dispensaries 1453
has also been To the employees under the Act
extend-ed upon No. of Panel Clinics 2950
shops, hotels, The total amount of contribution (employees
restaurants, roads share and employers share) is to be deposited
Employees 1.75%
motor transport with the authorized bank through a challan in Medical, sickness, extended sickness
undertakings, equip- the prescribed form in quadruplicate on ore for certain diseases, enhanced
ment maintenance sickness, dependents maternity,
before 21st of month following the calendar
staff in the hospitals. besides funeral expenses, rehabilitation
month in which the wages fall due.
allowance, medical benefit to insured
WAGES FOR ESI CONTRIBUTIONS person and his or
Contribution her spouse.
Contribution
Rs.10000/- per
month
period period
Registers/files to be maintained by the employers
To be deemed as wages NOT to be deemed as
Engaged either wages
directly or thru
If the person joined
Basic pay contractor
insurance employment for
Dearness allowance Contribution paid by kthe 1st April to 30th the first time, say on 5th
House rent allowance employer to any September. January, his first
pension/provident fund or
City compensatory under ESI Act. contribution period will be
allowance from 5th January to 31st
Sum paid to defray special
Overtime wages (but not expenses entailed by the March and his corresponding
to be taken into account nature of employment Penalties
first benefit will be from 5th
for determining the Daily allowance paid for October to 31st December.
coverage of an employee) 1st October to 31st
the period spent on tour. March
Payment for day of rest Gratuity payable on Different punishment have been prescribed for different
Production incentive discharge. types of offences in terms of Section 85: (I) (six
Bonus other than Pay in lieu of notice of
statutory bonus months imprisonment and fine Rs.5000), (ii) (one year
retrenchment
Night shift allowance compensation imprisonment and fine), and 85-A: (five years
Heat, Gas & Dust Benefits paid under the imprisonment and not less to 2 years) and 85-C (2) of
allowance ESI Scheme.
the ESI Act, which are self explanatory. Besides these
Payment for unsubstituted Encashment of leave
holidays Payment of Inam which provisions, action also can be taken under section 406
Meal/food allowance does not form part of the of the IPC in cases where an employer deducts
terms of employment.
Suspension allowance contributions from the wages of his employees but does
Washing allowance for
FACTORIES ACT, 1948 livery
Lay off compensation not pay the same to the corporation which amounts to
CHECK
Children LIST education
Conveyance Amount criminal breach of trust.
allowance (not being
towards reimbursement
reimbursement for actual
for duty related journey
tuition fee)
 Employer to ensure health of Registration &
Applicability of the Act workers pertaining to Renewal of Factories

Any premises whereon 10 or Cleanliness Disposal of wastes and

more persons with the aid of effluents
power or 20 or more workers Ventilation and temperature dust To be granted by Chief
are/were without aid of power and fume Inspector of Factories on
working on any dyad preceding Overcrowding Artificial submission of prescribed
12 months, wherein humidification Lighting
Manufacturing process is being form, fee and plan.
Drinking water Spittons.
carried on. Secs. 11 to 20
Sec.2(ii) Secs. 6

Safety Measures Self-acting machines.

Casing of new machinery. Welfare Measures
Prohibition of employment of
Facing of machinery women and children near
cotton-openers. Washing facilities
Work on near machinery in motion.
Hoists and lifts. Facilities for storing and drying
Employment prohibition of young persons on
clothing
dangerous machines.
Facilities for sitting
Striking gear and devices for cutting off
power. Working Hours, Spread Over & Overtime of Adults First-aid appliances one first aid
box not less than one for every
Weekly hours not more than 48. 150 workers.
Daily hours, not more than 9 hours. Canteens when there are 250 or
more workers.
Intervals for rest at least hour on working for 5 hours. Shelters, rest rooms and lunch
rooms when there are 150 or more
Spreadover not more than 10 hours. workers.
Creches when there are 30 or
Overlapping shifts prohibited. more women workers.
Welfare office when there are 500
Employment of Young Persons Annual Leave with Wages
or more workers.

Prohibition of employment of young children e.g. 14 years. A worker having worked for 240 days @
Non-adult workers to carry tokens e.g. certificate of fitnekss. one day for every 20 days and for a
Working hours for children not more than 4 hrs. And not permitted to child one day for working of 15 days.
work during night shift.

OFFENCE PENALTIES
Sec.92 to
For contravention of the Provisions of the Imprisonment upto 2 years or fine upto
Act or Rules Rs.1,00,000 or both
On Continuation of contravention Rs.1000 per day
On contravention of Chapter IV pertaining to Not less than Rs.25000 in case of death.
safety or dangerous operations. Not less than Rs.5000 in case of serious
injuries.
Subsequent contravention of some Imprisonment upto 3 years or fine not less
provisions 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 Imprisonment upto 6 months or fine upto
 results of analysis. Rs.10, 000 or both.
For contravention of the provisions of Imprisonment upto 7 years with fine upto
Sec.41B, 41C and 41H pertaining to Rs.2, 00,000 and on continuation fine @
compulsory disclosure of information by Rs.5, 000 per day.
occupier, specific responsibility of occupier Imprisonment of 10 years when
or right of workers to work imminent contravention continues for one year.
danger.

INDUSTRIAL DISPUTES ACT, 1947

Object
Object of
of the
the Act
Act
Provisions
Provisions for
for investigation
investigation and
and settlement
settlement of
of industrial
industrial disputes
disputes and
and for
for certain
certain other
other purposes.
purposes.
Important Clarifications Power of Labour Court to give Right of a Workman during Pendency of
Industry has attained wider meaning than defined Appropriate Relief Proceedings in High Court
except for domestic employment, covers from Labour Court/Industrial Tribunal can Employer to pay last drawn wages to
barber shops to big steel companies. Modify the punishment of dismissal or reinstated workman when proceedings
Sec.2 (I) discharge of workmen and give appropriate challenging the award of his
Works CommitteeJoint Committee with equal number of relief including reinstatement. Sec.11A reinstatement are pending in the
employers and employees representatives for discussion of higher Courts. Sec.17B
Persons Bound by Settlement
certain common problems. Sec.3 When in the course of conciliation Period of Operation of
proceedings etc., all persons working Settlements and
Conciliationis an attempt by a third party in helping to or joining subsequently. Awards
settle the disputes Sec.4 Otherwise than in course of settlement A settlement for a period as
upon the parties to the settlement. agreed by the parties, or
Lay off & Payment of Compensation Period of six months on signing
Conditions for Laying off Sec.18
of settlement.
Failure, refusal or inability of an employer to provide An award for one year after its
work due to Notice of Change enforcement. Sec.19
21 days by an employer to workmen Prior Permission for Lay off
Shortage of coal, power or raw material. about changing the conditions of service When there are more than 100
Accumulation of stocks. as provided in Ivth Schedule. Sec.9A workmen during proceeding 12
Breakdown of machinery. months. Sec.25-M

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. Sec.25-C
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-Nof unfair labour practice
Prohibition
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
Closure of an Undertaking
60 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-O
Prohibition of Strikes & Lock Outs
Without giving to the employer notice of strike, as During the pendency of proceedings before a Labour Court,
hereinafter provided, within six weeks before striking. Tribunal or National
Within fourteen days of giving such notice. Tribunal and two months, after the conclusion of such
Before the expiry of the date of strike specified in any such proceedings.
notice as aforesaid. During the pendency of arbitration proceedings before an
During the pendency of any conciliation proceedings before a arbitrator and two months after the conclusion of such
conciliation officer and seven days after the conclusion of proceedings, where a notification has been issued under Sub-
such proceedings. Section(3A) of section 10A
During the pendency of conciliation proceedings before a During any period in which a settlement or award is in operation,
Board and seven days after the conclusion of such in respect of any of the matters covered by the settlement or
proceedings. award. Secs.22&23
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 months wages on dismissal, discharge
or punish a protected workman connected with the dispute.
To seek approval of the authority by paying one months wages before altering condition of service, dismissing
or discharging or punishing a workman. Sec.33
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 months 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 months wages on dismissal, discharge or punish a
protected workman connected with the dispute.
To seek approval of the authority by paying one months wages before altering condition of service, dismissing or discharging
or punishing a workman. Sec.33
PENALTIES Offence <Punishment
Committing unfair labour practices
Sec.25-U Imprisonment of upto 6 months or with fine upto Rs.3, 000.
Illegal strike and lock-ourts
26 Imprisonment upto one month or with fine upto Rs.50 (Rs.1000 for lock-out) or
Instigation etc. for illegal strike or lock-outs. with both.
27 MATERNITY
Imprisonment upto 6 months or with fine upto Rs.1, 000
28 BENEFIT ACT, 1961
Giving financial aid to illegal strikes and lock-outs.

CHECK LIST Breach of settlement or award Imprisonment for 6 months or with fine upto Rs.1, 000
29
Coverage Imprisonment
of the Act upto 6 months or with fine.On
Conditions foroffence
continuity of eligibility of
fine uptoRs.200
Object of the Act
30 Upon all women employees either employed benefits
To protect the dignity of
directly or through contractor except domestic
motherhood and the
women employees employed in mines, factories, Women indulging temporary of
dignity of a new persons unmarried are eligible for
plantations and also in other establishments if the
birth by providing for the maternity benefit when she is
State Government so decides. Therefore, if the
full and healthy expecting a child and has
State Government decides to apply this Act to
maintenance of the worked for her employer for at
women employees in shops and commercial
woman and her child at least 80 days in the 12 months
establishments, they also will get the benefit of immediately proceeding the
this important time when
this Act. Bihar, Punjab Haryana, West Bengal, date of her expected delivery
she is not working.
U.P., Orissa and Andhra have done so. Sec. 5.

Cash Benefits Conditions for eligibility of

Leave with average pay for six weeks before the delivery. benefits
Leave with average pay for six weeks after the delivery.
A medical bonus of Rs.25 if the employer does not provide free medical care to the woman.
An additional leave with pay up to one month if the woman shows proof of illness due to the
Ten weeks before the date of her
pregnancy, delivery, miscarriage, or premature birth. expected delivery, she may ask
In case of miscarriage, six weeks leave with average pay from the date of miscarriage. the employer to give her light
Non Cash Benefits/Privilege work for a month. At that time
Light work for ten weeks (six weeks plus one month) before the date of her expected delivery, if she she should produce a certificate
asks for it. that she is pregnant.
Two nursing breaks in the course of her daily work until the child is 15 months old. She should give written notice to
No discharge or dismissal while she is on maternity leave. the employer about seven weeks
before the date of her delivery
No change to her disadvantage in any of the conditions of her employment while on maternity
that she will be absent for six
leave. weeks before and after her
Pregnant women discharged or dismissed may still claim maternity benefit from the employer. delivery. She should also name
Exception: Women dismissed for gross misconduct lose their right under the Act for Maternity the person to whom payment will
be made in case she can not take
Benefit it herself.
She should take the payment for
the first six weeks before she
Leave for Miscarriage Leave for illness arising out of goes on leave.
& Tubectomy Operation pregnancy etc. etc. She will get payment for the six
weeks after child-birth within 48
Leave with wages at the rate of maternity A woman suffering from illness arising hours of giving proof that she
benefit, for a period of six weeks has had a child.
our of pregnancy, delivery, premature She will be entitled to two nursing
immediately following the day of her
birth of child (Miscarriage, medical breaks of fifteen minutes each in
miscarriage or her medical termination the course of her daily work till
of pregnancy. termination of pregnancy or tubectomy
her child is fifteen months old.
Entitled to leave with wages at the rate of operation) be entitled, in addition to
Her employer cannot discharge her
maternity benefit for a period of two the period of absence allowed to her or change her conditions of
weeks immediately following the day of leave with wages at the rate of service while she is on maternity
her tubectomy operation. maternity benefit for a maximum leave.
Prohibition of dismissal during absence of pregnancy Sec. 5.
Discharge or dismissal of a woman employed during or on account period of one
of such month.
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. Sec. 10
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.
 Failure to Display Forfeiture of maternity benefit
Extract of Act If permitted by her employer to absent herself under the provisions of section 6 for any period
Imprisonment may during such authorized absence, she shall forfeit her claim to the maternity benefit for such
extend to one year or WAGESperiod.
MINIMUM ACT, 1948
fine.
For discharging or dismissing such a woman during or on account of her absence from work,
CHECK LIST the employer shall be punishable with imprisonment which shall not be less than 3 months, but
it will extend to one year and will find, but not exceeding Rs.5, 000. Sec. 18
Object of the Act Fixation of Minimum Rates of Wages
To provide for fixing The appropriate government to fix minimum rates of wages. The employees
minimum rates of wages employed in para 1 or B of Schedule either at 2 or either part of notification u/s 27.
in certain employments To make review at such intervals not exceeding five years the minimum rates or so
fixed and revised the minimum rates.
Minimum Rates of Government can also fix Minimum Wages for
Wages 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
Such as Basic rates of work or time rate workers. Sec. 3
wages etc. Variable DA
and Value of other
Procedure for fixing and Composition of Payment of
revising Minimum Rates of Committee Minimum Rates
Wages Representation of of Wages
Fixing Hours for
employer and employee Employer to pay to every
Normal Working employee engated in
Appointing Committee issue of in schedule employer in schedule employment at a
Overtime equal number and rate not less than
independent persons not minimum rates of wages
as fixed by Notification by
Shall constitute a normal To be fixed by the hour, by the exceeding 1/3rd or its
not making deduction
working day inclusive of day or by such a longer wage- total number one such other than prescribed.
one or more specified period works on any day in person to be appointed Sec.12
intervals.
excess of the number of hours by the Chairman.
Wages of workers who works for less than normal
To provide for a day of
rest in every period of constituting normal working day. working days
seven days with
remuneration. Payment for every hour or for Save as otherwise hereinafter provided, be entitled to
To provide for payment part of an hour so worked in receive wages in respect of work done by him on that day
for work on a day of rest excess at the overtime rate as if he had worked for a full normal working day.
at a rate not less than double of the ordinary rate of
theWages for rate..
two class
Sec.of work Maintenance of registers and records
overtime
Where an employee does two or(1 moretimes or Register
for agriculture
of Fines Form I Rule 21(4)
classes of work to each of which a different Annual Returns Form III Rule 21 (4-A)
minimum rate of wages is applicable, wages Register for Overtime Form IV Rule 25
at not less than the minimum rate in Register of WagesForm X, Wages slipForm XI, Muster RollForm V Rule 26
Representation of register for three year Rule 26-A Sec. 18
respect of each such class. Sec. 16
Minimum time rate wages for piece work Claims by employees
Not less than minimum rates wages as To be filed by before authority constituted under the Act within 6 months.
fixed . Sec. 17 Compensation upto 10 times on under or non-payment of wages Sec. 16

PENALITIES Offence Punishment

For paying less than Imprisonment upto 6

minimum rates of wages months or with fine upto
Rs.500/-
Sec. 20 For contravention of any Imprisonment upto 6
provisions pertaining to fixing months or with fine upto
hours for normal working day Rs.500/-
etc.
 TRADE UNIONS ACT, 1926
CHECKLIST

Object of the Act

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

Any 77 oror more

Any Prescribed
Prescribedform
formwith
withfollowing
followingdetails.
more members
members ofof aa trade
trade union
union may,
may, by
by subscribing
subscribing details.
their names to the rules of the trade union and its compliance. Names,
their names to the rules of the trade union and its compliance. Names, occupations
occupations and
and address
address of
of the
the members
members
place
placeof
ofwork.
There
There should
should be least 10%,
be atat least 10%, oror 100
100 ofof the
the work-men,
work-men, work.
whichever
whichever is less, engaged or employed in the establishmentoror
is less, engaged or employed in the establishment Address
Addressofofits
itshead
headoffice;
office;and
and
industry
industrywith
withwhich
whichititisisconnected.
connected. Names,
Names, ages,
ages, addresses
addresses and
and occupations
occupations of
of its
its
than77persons
ItIthas office
officebearers.
hason onthe
thedate
dateofofmaking
makingapplication
applicationnot notless
lessthan persons bearers.
as
asits
itsmembers,
members,whowhoare
areworkmen
workmenengaged
engagedororemployed
employedininthe
the Sec.
Sec.55
establishment
Minimum
establishment ororindustry
requirements
industrywith
for
withwhich
whichititisisconnected.
connected.
Cancellation
Cancellationof Criminal
Minimum requirements for
membership of trade union
of Criminalconspiracy
conspiracyin
intrade
trade
membership of trade union Registration
Registration disputes
disputes

than10%
10%, ,oror100
Not IfIfthe
thecertificate
certificatehas
hasbeen
Notless
lessthan 100ofof obtained
been No
Nooffice
officebearer
bearerorormember
memberofofaaregistered
registered
the obtainedby byfraud
fraudorormistake
mistakeoror
the workmen, whichever isless,
workmen, whichever is less, itithas
trade
trade union shall be liable
union shall be liable toto punishment
punishment
has ceased to exist orhas
ceased to exist or has under
willfully
willfullycontravened
contravenedany any undersub subsection
section(2)
(2)ofofconspiracy
conspiracyu/s u/s120B
120B
Subject minimumofof77, ,
Subjecttotoaaminimum provision
provisionofofthis
thisAct.
Act.
ofof IPC
IPC in respect of any agreement made
in respect of any agreement made
IfIfititceases
ceases to havethe
to have therequisite
requisite between
between the the members
members for for the
the purpose
purpose ofof
engaged
engagedororemployed
employedininan number of members. furthering
an number of members. furthering any such object of the Trade
any such object of the Trade
Disqualification of office bearers ofSec.
Sec.10
bearers 10of Union.
Disqualification of office Union.Returns
Returns
Establishments
Establishmentsetc.
etc.
Trade Union
Trade Union Sec.
Sec.17
17
Sec.
Sec.9A
9A
Annually
Annually toto the
the Registrar,
Registrar, on
on oror before
before such
such date
date as
as may
may bebe
prescribed, a general statement, audited in the prescribed
IfIfone
onehas
hasnot
notattained
attainedthe ageofof18
theage 18years.
years. prescribed, a general statement, audited in the prescribed
manner,
manner, ofof allall receipts
receipts and
and expenditure
expenditure ofof every
every registered
registered
the31
31stDecember.
st
Conviction
Convictionfor
foran
anoffence
offenceinvolving
involvingmoral
moralturpitude.
turpitude. Trade
TradeUnion
Unionduring
duringthe
theyear
yearending
endingon
onthe December.
Sec.
Sec.28
Not
Notapplicable when55years
applicablewhen yearshave
haveelapsed.
elapsed. 28

Sec.
Sec.21-A
21-A
Penalties Offence Punishment

For making false entry in or any Fine upto Rs.500. On continuing

omission in general statement
required for sending returns.
U/s 31
For making false entry in the
form.
default, additional fault, Rs.5 for
each week (not exceeding Rs.50).
Fine upto Rs.500.

U/s 32
Supplying false information Fine upto Rs.200.
regarding Trade Union
PAYMENT OF BONUS ACT, 1965 & THE RULES
CHECKLIST
Applicability of Act Establishment
Every factory where in 10 or more persons are employed with
the aid of power or
Establishment includes

An establishment in which 20 or more persons are employed Departments, undertakings

without the aid of power on any day during an accounting year Separate establishment

Computation of available surplus Components of Bonus

If profit and loss accounts are
prepared and maintained in
Income taxes and direct taxes as payable. Salary or wages includes respect of any such
dearness allowance but no department or undertaking or
Depreciation as per section 32 of Income other allowances e.g. branch, then such department
Tax Act. over-time, house rent, or undertaking or branch is
incentive or commission. treated as a separate
Development rebate, investment or& Deduction of Bonus
Disqualification establishment.
Computation of gross Sec.3
profit
On dismissal of an employee for For banking company, as per
First Schedule.
Fraud; or
riotous or violent behavior while on the premises of the establishment;
or Others, as per
theft, misappropriation or sabotage of any property of the establishment Eligible Employees
or
Misconduct of causing financial loss to the Employer to the extent that
Eligibility of Bonus Payment of Minimum Bonus Employees drawing wages
8.33% of the salary or Rs.100 upto Rs.3500 per month or
less.
(on completion of 5 years after 1st
An employee will be entitled
Accounting year even if there is no
only when he has worked for For calculation purposes
profit) Rs.2500 per month
30 working days in that year. maximum will be
Time Limit for Set-off and taken even if an
Payment of Bonus Set-on employee is drawing
Within 8 months from the close of As per Schedule IV. upto Rs.3500 per
month.
accounting y ear. Sec. 19
Sec.12
Maintenance of Registers and Records etc. Note: The proposal to
enhance the existing ceiling of

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

A register showing the details of the amount of bonus due to each of the employees, the deductions under

PENALT Fortocontravention
Act not applicable certain employees of anyGeneral
of LIC, provision of DockYards,
Insurance, Upto 6 Red months or with& Educational
Cross, Universities fine upto
Y
Institutions, the Act or the Rule
Chambers of Commerce, Social Welfare Institutions, Rs.1000.
Building Contractors, Sec.28
etc. etc. Sec.32.
 PAYMENT OF
Sec. Sec.
GRATUITY
1ACT, 1972 & THE RULES
Applicability 2(s)
Wages
Applicability Wages for
for
Calculation
Calculation
CHECKLIST
Every
Everyfactory,
factory,
mine, @@ 15
15 days
days wages
mine,oil oilfield,
field, wages
plantation, for
for every
plantation,port,port, Sec.
every
railways, completed
completed year year as
railways,company,
company, as
shop, ifif the month
the month
shop, 2(e)
establishment comprises
comprises of of 26
establishmentor or Employee
Employee Qualifying
Qualifyingperiod
period 26
educational days
days at the last
at the last
educational Sec.
institutions drawn
drawn wages.
wages.
institutions
employing
employing10 101or
or All
Allemployees
employees On
Onrendering
renderingof of55 Rule 4
Calculation
more employees Calculation
more employees
Calculation Calculation irrespective
irrespectiveof
of years
yearsservice,
service,
Piece-rated
Piece-rated Seasonal
Seasonal status
statusororsalary
salary either
eithertermination,
termination,
employee
employee employee
employee Display
Display of
of Notice
Notice
resignation
resignationor or
retirement.
retirement.

@@1515days
days @@77days
days Entitlement
Entitlement On
On conspicuous
conspicuous
wages
wagesforfor wages
wagesforforevery
every place
place at at the
the main
main
every
every completed
completedyear
year On
Oncompletion
completion entrance in English
entrance in English
completed
completed of
ofservice.
service. of
offive
fiveyears
years language
language or or the
the
year
yearon
onanan service
serviceexcept
exceptinin language
language
average
averageofof33 case
caseof
Sec. ofdeath
deathoror understood
understood by by
months
months disablement
4(3)disablement majority
majority ofof
Rule 9 employees
wages
wages employees of of the
the
Sec.6 Maximum
Maximum factory, etc.
factory, etc.
Rule 6 Ceiling
Ceiling
Mode
Modeof
of Rule 9
Nomination
Nomination payment
payment
Rs.3,
Rs.3,50,000
50,000 Penalties
Penalties
To
Tobe
beobtained
obtained Cash
Cashor,
or,ififso
so
by
byemployer
employerafter
after desired,
desired,by by
Bank Imprisonment
Imprisonment for for 66
expiry
expiryof
ofone
one BankDraft
Draftor or
months
months or fine
or fine
years
yearsservice,
service,inin Cheque
Cheque
Sec. upto
upto Rs.10,
Rs.10, 000
000 for
for
Form
FormF
F avoiding
avoiding to to make
make
Sec.8 4(6) Sec. payment by
payment by
Rule 8 Forfeiture
Forfeitureof
ofGratuity
Gratuity 13 making false state-
making false state-
ment
ment oror representa
representa
Recovery
Recoveryofof Protection
Protectionof
of -tion.
Gratuity Gratuity -tion.
Gratuity Gratuity
On
On termination
termination of of an an
employee
employee for
for moral
moral
turpitude
turpitude or or riotous
riotous or or Imprisonment
Imprisonment not
not
To
Toapply
applywithin
within disorderly
disorderlybehavior.
behavior. Cant
Cantbe beattached
attached less
less than
than 33 months
months
30
30days
daysininForm
FormII Wholly
Wholly oror partially
partially for
for willfully
willfully ininexecution
executionof
of and
and upto
upto one
one year
year
causing
causing loss,
loss, destruction
destruction of of any with
with fine on default
fine on default
when
whennot
notpaid
paid anydecree
decree
property
propertyetc.
etc. in
in comply-ing
comply-ing with
with
within
within30
30days
days the
the provisions
provisions of
of
Act
Act or
or Rules.
Rules.
PAYMENT OF WAGES ACT, 1936
CHECKLIST
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 Employees
Drawing average wage upto
Rs.6500 pm as amended w.e.f.
Fines as prescribed by
6.9.05.
Not to imposed unless the
employer is given an opportunity to
show cause
To record in the register
Deductions for service
rendered
When accommodation amenity or
service has been accepted by the
employee.
Object
Objectofofthe
theAct
Act Wages to be paid in
To
To regulate the payment of wagesof
regulate the payment of wages ofcertain
certain current coins or
classes of employed persons currency notes
classes of employed persons
Time of payment of wages All wages shall be paid in
The wages of every person employed is current coins or currency
paid. notes or in both.
When less than 1000 persons are employed
shall be paid before the expiry of the 7 th day After obtaining the
of the following month. authorization, either by
Cheque or by crediting the
When more than 1000 workers, before the wages in employees banks
expiry of the 10th day of the following
month.Deduction made from wages Sec. 5 Deduction for absence
Deductions such as, fine, deduction for from duties for
amenities and services supplied by the unauthorized
employer, advances paid, over payment of absence
wages, loan, granted for house-building or
other purposes, income tax payable, in
pursuance of the order of the Court, PF Absence for whole or any
contributions, cooperative societies, part of the day
premium for Life Insurance, contribution to
any fund constituted by employer or a trade If ten or more persons
union,Deduction
recovery offor damage
losses, ESI or loss
contributions absent without reasonable
cause, deduction of wages
upto 8 days.
For default or negligence of an employee
resulting into loss. Show cause notice has to

Sec.11 Sec. 9

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 Fine which shall not be less than Rs.1000 but may
Willfully furnishing or causing to be furnished any extend to Rs.5000 On record conviction fine not less
information or return which he knows to be false or than Rs.5000, may extend to Rs.10, 000.
Refusing to answer or willfully giving a false answer to For second or subsequent conviction, fine not less than
any question necessary for obtaining any information Rs.5000 but may extend to Rs.10,000
required to be furnished under this Act.
Willfully obstructing an Inspector in the discharge of his
duties under this Act; or
Refusing or willfully neglecting to afford an Inspector any
reasonable facility for making any entry, inspection etc.
Willfully refusing to produce on the demand of an Fine not less than Rs.1000 extendable
inspector any register or other document kept in
pursuance of this Act; or preventing any person for Upto Rs.5000 On subsequent conviction fine
WORKMENS
appearance etc. COMPENSATION
not less than Rs.5000 may extent to Rs.10,000

On conviction for any offence and again guilty of Imprisonment not less than one month extendable upto
ACT, 1923
CHECKLIST

Coverage of Workmen Employers liability to pay

Applicability All workers irrespective of their status or compensation to a workman
salaries either directly or through On death or personal injury resulting into
contractor or a person recruited to work total or partial disablement or
All over India occupational disease caused to a
abroad. Sec.1 (3)
workman arising out of and during the
Sec.1 Amount of compensation course of employment.
Where death of a workman results from the injury
An amount equal to fifty per cent of the monthly wages of When an employee is not liable for
the deceased workman multiplied by the relevant factor on an compensation
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 In respect of any injury which does
the injured workman multiplied by the relevant factor or an result in the total or partial disablement
amount of ninety thousand rupees, whichever is more of the workman for a period exceeding
Wages Procedure for calculation
Notice three days.
Accident In respect of any injury, not resulting in
Higher the age Lower the compensation death or permanent total disablement
Relevant factor specified in second column of Schedule IV giving caused by an accident which is directly
When
slabsthe monthlyupon
depending wagesthe are
age of the concerned workman.
As soon as attributable to-
more than Rs.4000
Example: per
In case of month
death. The workman having been at the time
it will
be Wages
deemedRs.3000
Rs.4000. PM Age 23 Practicable
years thereof under the influence of drink or
Factor as schedule IV Rs.19.95 drugs, or
Report ofRs.329935
Amount of compensation accident Bar upon contracting out
Willful disobedience of the workman to
Rule 11 Form
In case of total disablement EE
Rs.395910. an order expressly given, or to a rule
expressly framed, for the purpose of
Any workman
securing relinquishing
the safety his right
of workmen, or for
Report of fatal Accident and Serious Injury within 7 days to the personal
Willful injury not permissible.
removal or disregard by the
Commissioner (not application when ESI Act applies). workman of any safety guard or other
device which he knew to have been
PENALTY provided for the purpose of securing
the safety of workman.
Sec.3 (a) & (b)
In case of default by employer 50% of the compensation amount + interest to be paid to the
Deposit of Compensation workman or his dependents as the case may be.
Within one month with the Compensation Commissioner
Sec.4A