Legal Frame Work for Small Business

8/6/2019 Legal Frame Work for Small Business

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SMALL SIZE BUSINESS IS GOVERNED BY

PROVISION OF FOLLOWING ACTS

FACTORIES ACT OF 1948:

The main object of this act is to ensure

health and safe working conditions for workers. The main provision of this Act are

as follows.

1. Definition of factory: the act has define

factory as any premises including its

precincts. 1



2. Health of workers:

The act directs to undertakes following

measure to protect health of workers.

a) cleaning b) lighting c) latrines,

Urines

d) ventilation and temperature e)drinking water etc.

3. Safety of workers:

The act prescribes various safety

measure to be undertaken to protect life

and limbs ( arm and legs of the persons)

of workers.

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Examples (a) Appointment of safety

officers.

(b) fencing or Casing (coveringto protect something) of machinery.

(c) prohibition of young, women

and children on dangerous machine.(d) Protection against

dangerous fumes(gas)etc.

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4. Welfare of workers:

The act provides for various facilities to

the workers like proper facilities of shelters, canteen rest room, first aid, etc.

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4. OBLIGATION OF EMPLOYER:a. To obtain license, approval , permission

before starting construction or productionactivities.

b. Implementation of all provision of the act.

c. Display notice.

d. Maintain register and records as prescribed

by the act.

e. Report to the appropriate authorities in any

injuries or accidents in the factory.

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THE EMPLOYEE STATE INSURANCE ACT

1948The main object of this act is to provide

financial support to the employee or his

family during sickness or death of anemployee.

1. APPLICATION : this act is applicable to

all category of workers, whose monthly

salary does not exceed Rs 3000.

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1. BENEFITS AVAILABLE :a) Employee and his dependent is

provided free medical treatment at ESI (employee State Insurance ) hospitals.

b) sickness benefit: payment during

sickness when the employee is unable toattend the duty.

c) Maternity benefit: periodicalpayment and other benefits when the

women is on maternity leave.

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d) Disablement benefit: periodical

payment to the employee, if he is disabled

due to injury during employment.

e) Dependent benefit: dependent of

insured employee, who dies due to

employment Injury are entitled to

periodical payment.

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3) CONTRIBUTION : both employer and

employee must make contribution

towards insurance as per the act.

4) OBLIGATION OF EMPLOYER:a) To provide insurance cover under the

act to all workers.

b) deposit of premium contribution of

employees share.

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c) To report to the ESI hospital the death or

injury to any workers and for necessary

facilities.

d) to maintain registers and records asrequired by the act etc«

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PAYMENT OF WAGES ACT 1936

The main object of this act is to ensureregular and timely payment of wages inlegal tender money and withoutunauthorized deduction. The act does not

apply to workers drawing wages in excessof Rs 1600 / per month.

1. Fixation of wages period : wages canbe paid daily weekly, fortnightly andmonthly, but it cannot exceed one month.

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2. Time of payment : payment shall be made

on a working day. Wages should be paid

before the expiry of the tenth day after thelast day of wages period .

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3. MEDIUM OF PAYMENT: the wages

will be paid in currencies and coin. With the permission of the workers it

may also be paid through banks.

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5. RULES FOR FINE:�fines can be imposed for mistake or

omission in duty.

�

The list of such activities and amount of fine for such act must be displayed in

factory.

�Before imposing fine employee should be

given show cause notice.

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3. AUTHORIZED DEDUCTION: the act

allows only following deduction fromthe wages of an employee.

a. fines

b. Absence from the duty

c. Damage / loss of goods or money entrusted toemployee.

d. Housing accommodation and other amenities

provided by the employer.

e. Income tax etc«

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�Total amount of fine shall not exceed 3%

of such wages payable to employee of

that wage period.

�No fine shall be imposed on a personbelow the age of 15 years.

� All fines charged must be recorded in a

register.

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6. OBLIGATION OF THE EMPLOYER:

Employer has to ensure thata. Wages are paid on time.

b. No unauthorized deduction are made.

c. Maintain proper wages register etc«.

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Legal Frame Work for Small Business