,03/, ,03/,

S hours
W Wages under Ll M
AcL 1932
W Lmployee under Lhe AcL
W AuLhorlLles under Lhe AcL
W key P8 lssues
W Case SLudles
ompensat|on
8enef|ts
Sess|on 1hree
Wages under var|ous
Labour Acts
W Sec 2(b) wh|ch def|nes bas|c wages |s to be read w|th Sec 6 of the Act
W Wages |nc|ude
1 All emolumenLs earned by an employee whlle on duLy as per Lerms of
employmenL 1he scope lncludes
W llxed Commlsslon
W (usha Sales LLd v 8lC 1980 LlC 346 (uel PC u8)
W aymenL for exLra work done Wl1Pln duLy hours
W (Amol k ChaLak v 8lC 1980 ll LLn 33 (Cal PC)
W 8eward pald for good work ln lleu of overLlme allowance
W (uCM Shrlram ConsolldaLed LLd v 8lC 2004 lll LL! 396 (8a[ PC u8)
W Lumpsum amounL pald under a seLLlemenL
W (onnl Sugar Chemlcals LLd v Cauvery Sugar Chemlcals LLd Crs 2001 ll LL! 1201 (Mad
PC u8)
W Wages pald for lllegal layoff under an award
W (v !oseph v Cfflclal LlquldaLor Crs 2001 ll LL! 1217 (ker PC))
1he Lmp|oyeesrov|dent Iunds M|sce||aneous rov|s|ons Act 19S2
W 1he scope |nc|udes ontd
W Speclal Allowance noL pald on adhoc basls buL deflnlLely for exLra work hours due Lo change
worklng days from 3 Lo 6 days a week
W(Cordon Woodroffe LLd v 8eglonal Commlssloner Ll 2002 ll LL! 633 (Mad PC))
W lnLerlm Advance pald Lo all employees when Lo agreed Lo be pald as baslc wages or Lowards
lncrease ln baslc wages
W(ualmla CemenL 8haraL LLd 1hlruchlrapalll v 8lC 2002 lll LL! 333 (Mad PC))
W Speclal Allowance pald under a seLLlemenL whlch ls noL a producLlon bonus
W (Mangalore Canesh 8eedl Works v AssL 8lC Mangalore 2002 lll LL! 484 (Cu[ PC))
W All allowances such as medlcal lunch CA excepL P8A
W (Cu[araL CypromeL LLd v AssL 8lC 2003 l LL! 484 (Cu[ PC))
1he LI M Act 19S2
W 1he scope |nc|udes ontd
W When producLlon bonus ls noL llnked wlLh producLlvlLy lL wlll be deemed as 'baslc wages'
W(ually arLap v 8lC un Par P u1 of Chd Al8 1999 SC 2013)
W Wages pald as per revlsed pay scale reLrospecLlvely ln Lerms of an award slnce Lhe orlglnal
wages earned by Lhe employee were 8aslc wages
W (ranLlya vMM lederaLlon eLc v 8a[asLhan SLaLe LlecLrlclLy 8oard Crs eLc 1993 l LL! 222 (SC 2!))
W Layoff compensaLlon
W (!oseph v Cfflclal LlquldaLor 2001 LL8 1143 (ker PC))
1he LI M Act 19S2
W Wages |nc|ude
2 Wages pald for leave as per Lerms of conLracL of employmenL
3 Wages pald for holldays as per Lerms of conLracL of employmenL
1he LI M Act 19S2
W Wages exc|ude
W U]s 2(b)(|) Cash value of any food concesslon
W Also excludes canLeen subsldy (Wlpro LLd kancheepuram v resldlng Cfflcer Ll AppellaLe
1rlbunal new uelhl 2007 LL8 624 (Mad PC))
U]s 2(b)(||) uA llnked Lo cosL of llvlng || P8A || C1 allowance || Commlsslon ||
8onus || Any oLher slmllar allowance as descrlbed above
W -1L 1he clause above on 8onus covers
a Inam wh|ch |s |n nature of |ncent|ve or product|on bonus (Creysham Co v 8lC
1978 ll LL! 93 (uel PC))
b Incent|ve payment wh|ch |s |n nature of bonus for extra work done (1l Cycles of
lndla v Mk Curumanl 2001 ll LL! 1068 (SC 2!))
1he LI M Act 19S2
W Wages exc|ude ontd
W U]s 2(b)(||) followlng paymenLs are covered under Lhls secLlon
a LxgraLla or speclal allowance pald purely ouL of Lhe managemenL's wlll (8 8amanaLhan
CheLLalr !ewellers v 8eglonal Commlssloner Ll 1998 ll LL! 943 (Mad PC))
b lnLerlm rellef whlch ls LreaLed as speclal allowance as per Lerms of seLLlemenL
(SouLhern Alloy loundrles LLd v 8lC 1979 ll LLn 261 (Mad PC))
c Adhoc allowance under an agreemenL whlch sLlpulaLes lL Lo be noL a wage (ACC LLd v
8M Candhl 8lC Cu[araL 1993 ll LL! 368 (Cu[ PC u8))
WU]s 2(b)(|||) any presenLs made by Lhe employer lL covers
a Adhoc allowance whlch ls ln naLure of nongraLulLlous presenL by Lhe employer
(8urmah Shell Cll SLorage ulsLrlbuLlng Coof lndla LLd v 8lC uelhl Crs 1981 ll LL! 86 (uel PC
u8))
1he LI M Act 19S2
W Wages exc|ude followlng paymenLs are also excluded slnce Lhey do noL fall lnLo Lhe
naLure of emolumenLs earned by an employee wh||e on duty
a ayments made |n ||eu of not|ce of term|nat|on (unlLed lndla Mllls LLd v 8lC 1939 ll LL!
733 (8om PC))
b ayment of onemonths wages u]s 33(2)(b) of IDA 1947 (ulnesh khare v lndusLrlal
1rlbunal Crs 1982 ll LL! 17 (8a[ PC))
c 8ack wages under an award (SwasLlk 1exLlle Lnglneers LLd v vlr[lbhal Mav[lbhal 8aLhod
Anr 2008 ll LL! 333 (Cu[ PC))
d Leaveencashment (Manlpal Academy of Plgher LducaLlon v rovldenL lund Commlssloner
2008 l LL8 1017 (SC 2!))
Interest|ng|y ln case of nloJsotoo level mployees uoloo v kllc 1995 llk 279 416 lL was held
LhaL encashmenL of leaves musL be lncluded ln baslc wages and ls llable for l deducLlons
LLASL -1L Madras Plgh CourL summarlly held LhaL 8aslc Wagefor Ll wlll lnclude
uA and nothinq e/se (1hlru Aroonam Sugars LLd llve CLhers v AssL l Commlssloner LlC 1rlchlrapalll
2007 LL8 1234 (Mad PC))
1he LI M Act 19S2
W Def|n|t|on of Lmp|oyee
W under AcL Lmployeehas been glven a wlder meanlng for coverage (uS
Chazlabad v LnforcemenL Cfflcer u Ll Chazlabad 2007 LL8 1082 (All PC))
W 1he deflnlLlon of employee under AcL ls an lndependenL and
comprehenslve enough and cannoL be borrowed from Lhe oLher enacLmenLs
(CrlenL aper Mllls v 8lC 2006 LL8 177 (M PC))
W AcL does noL dlfferenLlaLes beLween regular employee or casual or Lhose
engaged Lhrough a conLracLor (!aggl Co v resldlng Cfflcer Ll AppellaLe 1rlbunal 2008 LL8
126 (uel PC))
1he LI M Act 19S2
W Lmp|oyee |nc|udes ontd
W 1he unloaders as slLLlng lnslde Lhe Lruck brlnglng Lhe bamboos for manufacLure of paper
(CrlenL aper Case Supra)
W ersons engaged as apprenLlces buL requlred Lo do work of regular employees (nLC 1exLlle
LLd v AssL lC ColmbaLore 2007 LL8 333 (Mad PC))
W Pomeworkersas covered under 8eedl Clgar Workers (CondlLlons of LmploymenL) AcL
(8agl 8eedl lacLory v 1he AppellaLe AuLhorlLy 1998 LL8 23 (kar PC))
W Lmployee engaged Lhrough conLracLor (uCM LLd v 8lC 1998 LL8 332 (8a[ PC))
W Weavers/ArLlsans worklng aL home (adlyar Sarvodaya Sangh v uCl 1990 LL8 331 (Mad PC))
1he LI M Act 19S2
W Lmp|oyee Inc|udes ontd
hang|ng Stands on D|rectors of a ompany
W A Mu or ulrecLor of a Company cannot be an employee (SanaLan Chosh v 8lC 1990 LL8 742 (Cal
PC))
Later
W ulrecLors of a company worklng on parLLlme basls dlscharglng exLra duLles aparL from dlrecLor
(1ln rlnLer LLd v 8lC 2000 LL8 1309 (kar PC))
W Salarled Mu Lhe ulrecLors (Speed Sales LLd v uCl 2009 LL8 1007 (Cau PC))
1he LI M Act 19S2
W Lmp|oyee Lxc|udes
W arLners of an esLabllshmenL recelvlng salarles (Cm 8oller llour Mllls v uCl 2002 LL8 683 (Cal PC))
W arLners of a flrm havlng a sLaLus of beneflclary (rakash u Shah v uCl 2004 LL8 218 (8om PC))
W Cnly Lhose casual workers engaged due Lo abnormal conLlngency (AuLocraL 1ours v 8lC 2004
LL8 780 (uel PC))
W ersons employed due Lo exlgencles of work for a very shorL perlod ( Crand Chemlcal Works v
resldlng Cfflcer Ll AppellaLe 1rlbunal 2009 LL8 1082 (uel PC))
W 1he Lralnees ln an esLabllshmenL covered under lndusLrlal LmploymenL (SC) AcL (8lC
Mangalore v M/s CenLral AercanuL Coca MarkeLlng rocesslng Coop LLd Mangalore 2006 LL8 263 (SC))
1he LI M Act 19S2
W Lmp|oyee Lxc|udes
W Lmployees of newspaper lndusLry have always been LreaLed as class aparL and such as noL
LreaLlng Lhem as 'excluded employees' under Ll AcL and Lhe Scheme by a noLlflcaLlon
lssued ln 1936 wlll noL be unconsLlLuLlonal (Lxpress ubllcaLlons (Madural) v uCl 2004 LL8 479
(SC))
1he LI M Act 19S2
W ey po|nts for nk rofess|ona|s
W 1hls AcL ls a welfare leglslaLlon (Andhra unlverslLy v 8lC Crs 1986 l LL! 133 (SC 3!))
W Sec 2(b) Lo read wlLh Sec 6 of Lhe AcL
W CompuLaLlon of l aymenL of boLh conLrlbuLlons employer employee AcL flxes Lhe
llablllLy on employer
W ConLrlbuLlon Lo be compuLed on basls of wages as explalned u/s 6
W P8 rofesslonal needs Lo know whaL consLlLuLe wages from Lhe employer's llablllLy vlew Lo pay
l conLrlbuLlon
1he LI M Act 19S2
W ey po|nts for nk rofess|ona|s
WlL shall be Lhe responslblllLy of Lhe prlnclpal employer Lo ensure l conLrlbuLlons for Lhe
employees employed Lhrough a conLracLor (CenLral l Commlssloner v Modern 1ransporLaLlon CCL
2009 LL8 324 (Sn) (Cal PC))
WueflnlLlon of facLoryunder Ll M AcL ls enLlrely dlfferenL from LSl AcL (LA eeran Sahlb
Sons eLc Lrode v !olnL 8eglonal ulrecLor uu SSC LSlC ColmbaLore 2010 LL8 131 (Mad PC))
WAn employer cannoL reduce wages of Lhe employees for Lhe purpose of paymenL of
conLrlbuLlons under Lhe AcL (8lC 8angalore v Parlhar olyflbres 1992ll LL! 761 (kar PC))
WAn employer cannoL wlLhhold l for renL dues recoverable from an employee (MoLllal Sharma v
unlverslLy of 8a[asLhan 1998 ll LL! 1021 (8a[ PC))
1he LI M Act 19S2
W ey po|nts for nk rofess|ona|s
W 8ecovery of l conLrlbuLlons wlll have prlorlLy over oLher debLs (Allahabad 8ank v Sk
8haLLacharya 1999 LL8 686 (Cal PC))
W Ad[usLmenL of any amounL ls noL permlsslble agalnsL Lhe l of an employee (un[ab Slnd
8ank v Ashok k Aggarwal 1999 LL8 939 (uel PC))
W l amounL of an employee cannoL be aLLached under any decree order ln respecL of debL
(8lC v uLLamma 1999 LL8 316 (kar PC))
W nondeposlL of Ll conLrlbuLlons afLer deducLlon wlll amounL Lo crlmlnal breach of LrusL
(Annlruddha kumar uhoLe v SLaLe of MaharashLra 2002 LL8 914 (8om PC))
1he LI M Act 19S2
W ey po|nts for nk rofess|ona|s
W 8ecovery of arrears of l can be made from Managlng ulrecLor/arLner who was ln conLrol
of Lhe affalrs of Lhe flrm/Company (Mohan Lal v 8lC Ludhlana 2002 LL8 1208 (P PC))
W 1he employer ls personally llable for paylng Lhe l arrears only ln Lhe evenL of Lhe
properLles of Lhe esLabllshmenL belng lnsufflclenL (u8 venkaLesh v 8lC 2004 LL8 1148 (A
PC))
1he LI M Act 19S2
W ey po|nts for nk rofess|ona|s I on 8as|c k MW?
WMadras Plgh CourL summarlly held LhaL 8aslc Wage for Ll wlll lnclude uA and nothinq e/se
(1hlru Aroonam Sugars LLd llve CLhers v AssL l Commlssloner LlC 1rlchlrapalll 2007 LL8 1234 (Mad PC))
WPowever Lhe Commlssloner can go lnLo Lhe quesLlon as Lo wheLher Lhe wages belng pald Lo Lhe
employees have been spllLLed under varlous heads llkes baslc wages P8A and oLher allowance has
been wlLh an ulLerlor moLlve as a subLerfuge Lo avold Ll conLrlbuLlons by Lhe employer (Croup 4
SecurlLles Cuardlng LLd v 8lC 2004 ll LL! 1142 (kar PC))
WLl LeglslaLlon beneflclal leglslaLlon soclal welfare leglslaLlon Pence whlle lnLerpreLlng Lhe
provlslons where a secLlon ls capable of Lwo consLrucLlons Lhe one whlch ls more beneflclal Lo Lhe
employees Lhe CourLs should glve preference Lo LhaL secLlon (oompuhar Shlpplng Corp LLd 1uLlcorln v
8lC Madural 2004 1 LL! 663 (Mad PC))
1he LI M Act 19S2
W ey po|nts for nk rofess|ona|s I on 8as|c k MW?
WLl LeglslaLlon beneflclal leglslaLlon soclal welfare leglslaLlon Pence CourL wlll noL monlLor
lmplemenLaLlon of such pollcy unless Lhe same ls dlscrlmlnaLory or arblLrary (CLls LlevaLor Lmployees
unlon S 8eg v uCl 2004 LL8 63 (SC))
WLmployees AccepLance Lo lower l and hlgher cash ln hand cannoL be a plea Whlle decldlng
anoLher maLLer on l Lhe kerela PC held LhaL lf employer and employee agree Lo avold paymenL of l
conLrlbuLlon Lhe resulL would be dlsasLrous (8lC v 1he AdmlnlsLraLor CosmopollLan PosplLal 2009 LL8 1272
(ker PC))
1he LI M Act 19S2
W I omm|ss|oners
1U]s 7A for deLermlnaLlon of money due from employer
1he CenLral l Commlssloner
Any uepuLy l Commlssloner
Any 8eglonal l Commlssloner or
Any AsslsLanL l Commlssloner
may dec|de d|sputes ||ke
lAppllcablllLy of Lhls AcL
llueLermlne amounL due under Lhls AcL Scheme enslon or lnsurance Scheme
2U]s 7A An Crder under Lhls secLlon can be revlewed II no appeal agalnsL such order
u/s 78 on followlng grounds
lulscovery of new evldence
llMlsLake
lllLrror apparenL of Lhe face of records eLc
1he LI M Act 19S2
W IkA to dec|de D|sputes
aAppeal agalnsL Lhe orders passed by AuLhorlLles under Lhe AcL
| 1r|buna|s can hear appeals agalnsL noLlflcaLlon or orders passed by Lhe AuLhorlLles under
Lhe AcL
u/s 7l any person aggrleved
by noLlflcaLlon of CenLral CovernmenL or any order passed by CenLral CovernmenL or any
AuLhorlLy u/s 7A 78 (excepL an order of re[ecLlng a revlew appllcaLlon) or u/s 7C or u/s 148
may prefer an appeal Lo 1rlbunal
bAppeal u/s 7l k 8evlew u/s 78 Lmployer can choose elLher
(8alu llre Clay Mlnes v uCl 2003 ll LL! 672 (!har PC)
1he LI M Act 19S2
W IkA to dec|de D|sputes
cn|gh ourt can enLerLaln wrlLs lnsplLe of remedy of Appeal under Lhe AcL
(Cu[araL SLaLe Clvll Supplles CorporaLlon LLd v 8lC 1999 ll LL! 844 (Cu[ PC))
(SLandard CharLered 8ank v uCl 2002 ll LL! 734 (Cal PC)) lf Lhe maLLer ralses quesLlon of law Lo be
applled Lo Lhe facLs of case wrlLs wlll be enLerLalned ln maLLer ralslng quesLlons of law
dourt under onsumer rotect|on Act can enLerLaln appllcaLlons agalnsL deflclency of
servlce of commlssloner
(8lC v Shlvkumar !oshl 2000 Al8 (SC) 331) Lhe double bench held LhaL LhaL fallure of
Commlssloner Lo seLLle clalm of an employee wlLhln 20 days ls a deflclency of servlce u/s 2(1)(o) of
Consumer roLecLlon AcL 1986 lL also declded LhaL members of fund are consumers
1hls vlew was laLer raLlfled ln anoLher [udgmenL by Supreme CourL where lL held LhaL Ll
Scheme comes wlLhln Lhe purvlew of Consumer roLecLlon AcL (8lC v 8havanl 2008 LL8 661 (SC))
1he LI M Act 19S2
W ln a cemenL manufacLurlng unlL an employee was suspended for Lhe
mlsconducL of allowlng cemenL bags Lo be LransporLed ouL of facLory wlLhouL any
auLhorlzaLlon Pe ls belng pald subslsLence allowance Pe makes an appllcaLlon
LhaL l conLrlbuLlon shall be deducLed from Lhe subslsLence allowance payable Lo
hlm
W ;uest|on to nk rofess|ona|
W ls subslsLence allowance a wage maklng lL llable for l deducLlon?
ase StudyI
W ommon|y he|d subslsLence allowance ls noL a wage as pald for subslsLence
and noL any work
W nowever p|ease note
W Suspenslon does noL end employeremployee relaLlonshlp
W Suspended employee Lo be LreaLed aL par wlLh regular employee
W Pence subslsLence allowance pald ls parL of wages and ranks for LSlC
deducLlons
W Slnce l AcL ls also a beneflclal leglslaLlon llke LSlC same prlnclpal applled
Lo Ll conLrlbuLlon also
(8eglonal ulrecLor LSlC v opular AuLomoblles 1998 l LL! 621 (SC))
ase StudyI So|ut|ons
W ln a manufacLurlng company some managers who own cars engaged drlvers ln
Lhelr lndlvldual capaclLy and pay Lhem salary by Lhemselves 1he drlvers
normal duLy ls Lo drlve Lhe offlcers from home Lo workplace and back as well as
Lhelr famlly on personal Lrlps 1hey occaslonally drlve Lhe offlcers as and when
requlred Lo dlfferenL places whlle on duLy
W ;uest|on to nk rofess|ona|
W Can Lhey be LreaLed as employees of Lhe company and lf so wheLher l
conLrlbuLlon ls payable by company for Lhem?
ase StudyII
W 8as|c 1est WheLher drlvers are ln employeremployee relaLlonshlp wlLh
company?
W Slnce drlvers are noL worklng ln or ln connecLlon wlLh Lhe work of Lhe
esLabllshmenL and Lhe conLrol supervlslon of company ls noL on Lhem no l ls
payable
(8aLanlal v 8lC 1977 LlC 1763 (uel PC))
(!yoLl Pome lndusrles v 8lC 1994 l LL! 49 (kar u8))
ase StudyII So|ut|ons
W ln a company drlvers are engaged by Lhe Managers of Lhe Company whose
wages are relmbursed by Company Lhrough Lhe Managers Company provldes for
Lhe unlform fooLwear monsoon equlpmenL wlnLer cloLhlng and overLlme when
Lhelr servlces were requlred by Lhelr Managers beyond Lhelr duLy hours
W ;uest|on to nk rofess|ona|
W Can Lhey be LreaLed as employees of Lhe company and lf so wheLher l
conLrlbuLlon ls payable by company for Lhem?
ase StudyIII
W 8as|c 1est WheLher drlvers are ln employeremployee relaLlonshlp wlLh
company?
W ?es 8easons
Wurlvers are belng pald for by Lhe Company boLh wages and C1 allowances for
worklng ln connecLlon Lo Lhe esLabllshmenL of Lhe Company
W urlvers are belng provlded for Lhe baslc workgear by Lhe Company
(8ASl lndla LLd v M Curuswamy 8lC MaharashLra Coa 2004 LL8 463 (8om PC))
ase StudyIII So|ut|ons
W ln a flnanclal servlces consulLlng company Lhere are 19 employees and 1
reLalner who ls a legal consulLanL on a monLhly remuneraLlon Lo advlse Lhe flrm
on legal aspecLs of LransacLlons 1he l AcL ls appllcable only Lo esLabllshmenLs
employlng 20 or more employees
W ;uest|on to nk rofess|ona|
W WheLher Lhe reLalner Lo be counLed as employee and lf Lhe company ls
requlred Lo deducL Ll conLrlbuLlons from Lhe wages of Lhe employees?
ase StudyIV
W 8as|c 1est u/s 2(f) of l AcL deflnlLlon of employee covers
W any person employed for wages
W Lo do any work ln
W or ln connecLlon wlLh Lhe work of Lhe esLabllshmenL
W Pere Lhe reLalner was employed for remuneraLlon and Lhe work asslgned Lo
hlm ls very much connecLed Lo Lhe work of Lhe esLabllshmenL
W Pence Lhe reLalner fulfllls all requlremenLs of an employee under AcL
W Pence Lhls company has 20 employees as requlred Lo be covered under l AcL
(Caln llnanclal ConsulLanLs LLd 8ombay v 8lC 8ombay Crs 2001 ll LL! 1030 (8om PC))
ase StudyIV So|ut|ons
W ln an englneerlng company an employee was dlsmlssed An lndusLrlal dlspuLe ls
pendlng before Lhe 1rlbunal 1he company makes an appllcaLlon u/s 33(2)(b) of
Lhe luA before Lhe 1rlbunal concerned for approval whlle slmulLaneously paylng
onemonLh wages Lo Lhe employee as requlred u/s 33(2)(b) of Lhe luA
W ;uest|on to nk rofess|ona|
W uoes Lhe Company need Lo pay l conLrlbuLlon on such wages?
ase StudyV
W 1he onemonLh wage requlremenL u/s 33(2)(b) of luA ls noL as per any Lerms
of conLracL of employmenL
W lurLher Lhe wages are requlred Lo be pald Lo Lhe employee for Lhe perlod he
wlll noL be on duLy or on servlce
W Pence such paymenLs cannoL be consLrued Lo be parL of wages enLalllng
deducLlon of l conLrlbuLlon
(ulnesh khare v lndusLrlal 1rlbunal 1982 LlC 317 (8a[ PC))
ase StudyV So|ut|ons
W ln a School whlch ls covered under Ll M AcL Lhere are school buses for
LransporLaLlon of school sLudenLs 1he fees for such LransporLaLlon ls payable by each
sLudenL Lo Lhe school upon avalllng Lhls faclllLy 1he drlvers and conducLors of Lhese buses
are engaged by Lhe LransporL conLracLor who ls provldlng Lhls LransporLaLlon faclllLy Lo
school
W ;uest|on to nk rofess|ona|
W ls Lhe School llable Lo pay l conLrlbuLlons Lo Lhese drlvers and conducLors?
ase StudyVI
ase StudyVI So|ut|on
W -o (Sprlngdales School v 8lC 2006 LL8 177 (uel PC))