UNIT III

Labour Welfare refers to anything that is done for the comfort and improvement of employees and is provided over and above the wages. Why is labour Welfare important in a company ??? Welfare helps in keeping the morale and motivation of the employees high so as to retain

the employees for longer duration. Labour Welfare…need not be in monetary terms only. It may be in any kind/forms also. Employee welfare includes: monitoring of working conditions. creation of industrial harmony through infrastructure for health. insurance against disease, accident and unemployment for the workers and their families. What are the OBJECTIVES of Labour Welfare ??? 1. better life and health to the workers 2. make the workers happy and satisfied 3. relieve workers from industrial fatigue. 4. improve intellectual, cultural and material conditions of living of the workers. Features of labor welfare measures : 1. includes various facilities, services and amenities provided to workers for improving their health, efficiency, economic betterment and social status. 2. Welfare measures are in addition to regular wages and other economic benefits available to workers due to legal provisions and collective bargaining. 3. Labor welfare schemes are flexible and ever-changing. New welfare measures are added to the existing ones from time to time. 4. Welfare measures may be introduced by the a) Employers (Voluntary) b) Government (Statutory) c) Employees d) Social or charitable agency. 5. The purpose of providing such facilities is to make their work life better and also to raise their standard of living. Important Benefits of welfare measures: To Employees: Facilities like housing schemes, medical benefits, education and recreation facilities for workers’ families help in raising their standards of living. Provides better physical and mental health to workers and thus promote a healthy work

environment· This makes workers to pay more attention towards work and thus increases their

productivity. To Employer: Stable labor force by providing welfare facilities. Workers take active interest in their jobs and work with a feeling of involvement and participation. To Organization:

a) Employee welfare measures increase the productivity of organization b) promote healthy industrial relations c) Helps to maintain maintaining industrial peace. The social evils prevalent among

the labors such as substance abuse, etc. are reduced to a greater extent by the welfare policies.

Classification of Labour Welfare Activities Types of Employee Welfare Intramural: - These are provided within the organization like: - 1. Canteen, 2. Rest rooms, 3. Crèches, 4. Uniform etc. Extramural: - These are provided outside the organization, like: - 1. Housing, 2. Education, 3. Child welfare, 4. Leave travel facilities, 5. Interest free loans, 6. Workers cooperative stores, 7. Vocational guidance etc. Types of Employee Welfare Statutory welfare work - comprising the legal provisions in various pieces of labor legislation. Voluntary welfare work - includes those activities which are undertaken by employers for their voluntary work. Different ways of Social Security Provision in India 1. Social Insurance- common fund is established with periodical contribution from workers out of which all benefits in terms of cash or kind are paid.The employers & state prove major portion of finances.Benifits shuch as PF, Group Insurance etc are offered. 2. Social Assistance- Benefits are offered to persons of small means by govt out of its general revenues. Eg- Old age pension Social Security Employee Welfare Medical care - Sickness benefit in cash

- Old age pension or retirement benefit - Invalidity pension - Maternity benefit - Accident benefit - Survivor’s benefit Art 41 0f Indian constitution says that “ the state shall within the limits of its economic capacity & develeopment, make effective provision for security , the right to work, to education & to public assistance in cases of unemployment, oldage, sickness & disablement & in other cases of undeserved want” Philosophy of Employee Welfare The philosophy of labour welfare activities is based on the theory that success of industrial development depends upon harmonious relations and co-operation between labour and management (employer ). The labour has a fund of knowledge and experience at his jobs. If rightly directed and fully used, it would make a good contribution to the prosperity of the organization this can be achieved only through the satisfaction of the labour. Theories of Employee Welfare The Police Theory: This is based on the contention that a minimum standard of welfare is necessary for labourers. Here the assumption is that without policing, that is, without compulsion, employers do not provide even the minimum facilities for workers The Religious Theory: This is based on the concept that man is essentially "a religious animal." The Philanthropic Theory: This theory is based on man's love for mankind. Philanthropy means "Loving mankind. Trusteeship Theory - This is also called the Paternalistic Theory of Labour Welfare. According to this the industrialist or employer holds the total industrial estate,properties, and profits accruing from them in a trust. Role of Management in Employee Welfare

•Organizations provide welfare facilities to their employees to keep their motivation levels high. The employee welfare schemes can be classified into two categories viz. statutory and non-statutory welfare schemes.

•The statutory schemes are those schemes that are compulsory to provide by an organization as compliance to the laws governing employee health and safety. These include provisions provided in industrial acts like Factories Act 1948, Dock Workers Act (safety, health and welfare) 1986, Mines Act 1962.

•The non statutory schemes differ from organization to organization and from industry to industry Employee Welfare STATUTORY WELFARE SCHEMES 1. The statutory welfare schemes include the following provisions: 2. Drinking Water 3. Facilities for sitting 4. First aid appliances 5. Latrines and Urinals 6. Canteen facilities 7. Spittoons

8. Lighting

NON STATUTORY SCHEMES Personal Health Care (Regular medical check-ups): Some of the companies provide the facility for extensive health check-up

•Flexi-time: The main objective of the flextime policy is to provide opportunity to employees to work with flexible working schedules

•Employee Assistance Programs: Various assistant programs are arranged like external counseling service so that employees or members of their immediate family can get counseling on various matters. Impact of Welfare on Productivity

•The welfare measures aim at integrating the socio-psychological needs of employees, the unique requirements of a particular technology, the structure and processes of the organization and the existing socio-cultural environment.

•It creates a culture of work commitment in organizations and society which ensure higher productivity and greater job satisfaction to the employees.

•Due to the welfare measures, the employees feel that the management is interested in taking care of the employees that result in the sincerity, commitment and loyalty of the employees towards the organization.

•The employees work with full enthusiasm and energetic behavior which results in the increase in production and ultimately the increased profit I L O & Employee Welfare ILO was setup in 1919 as a part of League of Nations for the promotion of universal peace through social justice. Important areas of ILO activities & field operations - Manpower orgn & vocational training - Migrant workers- need to promote equality of migrant workers in all social & labour matters. -Women workers- protection - Child workers- against exploitation - Social Security -Conditions of work -Health , safety & welfar I L O’s Employee Welfare ILO has suggested welfare funds on a collective basis to finance activities in small undertakings. It has adopted a number of convections & recommendations regarding industrial accidents

& occupational health. New dimension to welfare activities has been provided by ILO’s contribution to family welfare & population education prog among industrial workers in organised sector in India It has rendered exemplary service to all 3 elements composing it –govt, employees & workers.

•It has greatly influenced labour legislation, labour welfare , trade unionism & Industrial Relations in India Statutory Schemes The statutory schemes are those schemes that are compulsory to be provided by an organization as compliance to the laws governing from time to time. It is the product of coercive power of government. STATUTORY WELFARE SCHEMES

•The statutory welfare schemes include the following provisions: 1. Drinking Water: At all the working places safe hygienic drinking water should be provided. 2. Facilities for sitting: In every organization, especially factories, suitable seating arrangements are to be provided. 3. First aid appliance: First aid appliances are to be provided and should be readily assessable so that in case of any minor accident initial medication can be provided to the needed employee. 4. Latrines and Urinals: A sufficient number of latrines and urinals are to be provided in the office and factory premises and are also to be maintained in a neat and clean condition. 5. Canteen facilities: Cafeteria or canteens are to be provided by the employer so as to provide hygienic and nutritious food to the employees. 6. Spittoons: In every work place, such as ware houses, store places, in the dock area and office premises spittoons are to be provided in convenient places and same are to be maintained in a hygienic condition. 7. Lighting: Proper and sufficient lights are to be provided for employees so that they can work safely during the night shifts. (eg TCS) 8. Washing places: Adequate washing places such as bathrooms, wash basins with tap and tap on the stand pipe are provided in the port area in the vicinity of the work places. 9. Changing rooms: Adequate changing rooms are to be provided for workers to change their cloth in the factory area and office premises. Adequate lockers are also provided to the workers to keep their clothes and belongings. 10. Rest rooms: Adequate numbers of restrooms are provided to the workers with provisions of water supply, wash basins, toilets, bathrooms, etc.

NON STATUTORY WELFARE SCHEMES These are provided ‘Voluntarily’ or by ‘Agreeing Mutually’ with the workers. The non statutory schemes differ from organization to organization and from industry to industry. Non statutory welfare schemes include the following schemes: 1. Personal Health Care (Regular medical check-ups): Some of the companies provide the facility for extensive health check-up. 2. Flexi-time: The main objective of the flextime policy is to provide opportunity to employees to work with flexible working schedules. Flexible work schedules are initiated by employees and approved by management to meet business commitments while supporting employee personal life needs. 3. Maternity & Adoption Leave – Employees can avail maternity or adoption leaves. Paternity leave policies have also been introduced by various companies. 4. Employee Assistance Programs: Various assistant programs are arranged like external counseling service so that employees or members of their immediate family can get counseling on various matters. (Eg. SCL-Talk to ME) 5. Harassment Policy: To protect an employee from harassments of any kind, guidelines are provided for proper action and also for protecting the aggrieved employee. (E.g.: SCL- awareness posters) 6. Medi-claim Insurance Scheme: This insurance scheme provides adequate insurance coverage of employees for expenses related to hospitalization due to illness, disease or injury or pregnancy. 7. Employee Referral Scheme: In several companies employee referral scheme is implemented to encourage employees to refer friends and relatives for employment in the organization. WELFARE PROGRAMMES FOR ORGANIZED SECTORS

SSaanniittaarryy aanndd HHyyggiieennee::

••IInncclluuddeess ttooiilleettss aanndd wwaatteerr ffoorr ddrriinnkkiinngg aanndd wwaasshhiinngg..

••TThhee ffaaccttoorriieess AAcctt rreeqquuiirreess tthhaatt eevveerryy ffaaccttoorryy mmuusstt bbee kkeepptt cclleeaann aanndd ffrreeee ffrroomm ddiirrtt..

••SSeeppaarraattee llaattrriinnee aanndd uurriinnaallss ffoorr mmaallee aanndd ffeemmaallee wwoorrkkeerrss mmuusstt bbee pprroovviiddeedd

••SSppiittttoooonnss mmuusstt bbee kkeepptt iinn ccoonnvveenniieenntt ppllaacceess iinn cclleeaann aanndd hhyyggiieenniicc ccoonnddiittiioonnss

RReesstt FFaacciilliittiieess::

••TThhee ffaaccttoorriieess AAcctt pprroovviiddeess tthhaatt,, ffoorr tthhee ppuurrppoossee ooff rreesstt,, ssuuiittaabbllee ssiittttiinngg aarrrraannggeemmeennttss hhaavvee

ttoo bbee mmaaddee aanndd mmaaiinnttaaiinneedd ffoorr aallll wwoorrkkeerrss wwhhoo aarree oobblliiggeedd ttoo wwoorrkk ssttaannddiinngg aanndd rreesstt rroooommss

aanndd lluunncchh rroooommss iinn aa ffaaccttoorryy wwiitthh mmoorree tthhaann 115500 wwoorrkkeerrss.. Canteen:

•The construction of canteens is compulsory as per the Factories Act (1948), the Mines Act (1952), Motor Transport Workers Act (1961) and the Plantation Labour Act (1951).

•MMeessss rroooommss aarree aann eelleemmeennttaarryy ffeeeeddiinngg ffaacciilliittyy wwiitthh aa ssuuffffiicciieenntt cchhaaiirrss ttaabblleess wwhheerree

wwoorrkkeerrss ccaann ssiitt aanndd eeaatt iinn ccoommffoorrtt.. Health Care:

•This includes health and medical facilities inside and outside the workers place of work, intra-mural health and medical amenities cover first aid, ambulance rooms, industrial hygiene, occupational health, and emergency medical care in case of accidents or sudden illness inside factory premises. Occupation and Health Services:

•These services include carrying out of periodical medical checks of certain categories of workers to detect early signs of ill-health and prevent the outbreak of serious health complaints.

•The Factories Act lays down that in any factory with more than 30 women workers, a crèche should be provided. Housing:

•Housing is an integral part of worker’s welfare.

•Recommendation of the ILO states that housing should be a national policy. Both the Industrial Commission (1918) and the Royal Commission (1i913) realized the importance and necessity of improving housing conditions of industrial workers and made recommendations for the purpose. (Eg- Reliance , Bharuch; SCL – Porbandar) Transport:

•Transport facilities to and from the place of work are given to workers as one of the desirable welfare amenities. (Eg – SCL :Bus service is provided)

•This facility is gaining in popularity because of growing urbanization, location of industries, transport loads and traffic congestion.

•The main purpose of this amenity is to enable workers reach their place of work without undue delay or fatigue, reduces absenteeism. Recreation:

•Recreation is a leisure time activity which is a healthy diversion and a spare-time occupation.

• It refreshes an individual mentally. (eg – TCS: den rooms with coffee machine,

newspapers, computer) Education: a) Education improves the quality of the labour force, provides opportunities for a proper

training for the acquisition of skills and techniques which are essential for workers in an industry and enable them to adjust themselves to their particular way of life,

b) Yet, there is no statutory obligation with regard to education for worker’s children in any industry except in plantations. (Eg – SCL – school for girls in Porbandar)

Co-operative and Saving:

a) The co-operative credit societies help the worker to save for unforeseen domestic crises. By means of this service, workers are able to receive advice and counsel on some of the personnel and sometimes also on the personal problems inside and outside their place of work. A trained social worker is usually appointed for this purpose.

b) There are many non statutory welfare amenities available to industrial workers. For eg. Ex-gratia payment, cash benefits paid in case of death, injury, sickness, marriage or as a felicitation grant.

SOCIAL SECURITY IN INDIA a) Workmen’s Compensation Act 1923 b) Employee State Insurance Act, 1948 c) Employee Provident Funds and Miscellaneous Provisions Act, 1952 d) Payment of Gratuity Act, 1972 e) Industrial Disputes Act, 1947 f) Maternity Benefit Act, 1961 g) The Seaman’s Provident Fund Act, 1966 : Under this, worker’s contribution of 12

percent with an equal contribution from the employers are entitled to a full refund on retirement or after 15 years of membership.

h) The Plantation Labour Act, 1951: The benefits statutorily provided under this Act include the provision of drinking water and its conservancy, medical facilities, canteen in the case of 150 or more workers, crèches in case of 50 or more women workers, recreational facilities, umbrellas, blanket and rain coats. Cash benefits in the case of sickness and maternity.

CONCLUSION a) Labour welfare services is an important personnel function in a business. b) Effective utilization of other factors of production depends on the efficiency of human

factor. c) The worker spends more than a quarter of his life in his working place. Therefore, the

worker has every right to demand that the condition under which he works should be reasonable and provides proper safeguards for life and health.

d) The amount of dedication, quality of work, commitment to the organization, morale etc. are all determined by the type and amount of welfare a worker receives.

FACTORIES ACT

The object of the Factories Act is to regulate the conditions of work in manufacturing

establishments coming within the definition of the term "factory" as used in the Act.

The first Act, in India, relating to the subject was passed in 1881. This was followed by new Acts in

1891, 1911, 1922, 1934 and 1948. The Act of 1948 is more comprehensive than the previous Acts.

It contains detailed provisions regarding the health, safety and welfare

of workers inside factories, the hours of work, the minimum age 6f, workers, leave with pay etc. The

Act has been amended several times.

The Act is based on the .provisions of the Factories Act of Great

Britain passed in 1937.

In 1976 the Act was amended extensively. The provisions of the Amendment have been quoted and

summarised at the appropriate .places in this chapter.

APPLICATION OF THE ACT

The Factories Act of 1948 came into force on 1st April 1949; It applies to factories, as defined in.

the Act, all over India, including the State of Jammu and Kashmir.

Unless 'otherwise provided, the Factories Act applies to factories belonging to the Central or any

State Government.--Sec. 116.

DEFINITIONS UNDER THE FACTORIES ACT

.Factory. The term Factory is defined in Section 2 (m) of the Act as follows: "Factory means any

premises including the precincts thereof- .

(i). whereon ten or more workers are working, or were working on any day of the preceding twelve

months, and in

any part of which a manufacturing process is being carried on with the aid of power or is ordinarily

so

carried on, or

(ii) whereon twenty or more workers are working, or were working on any day of the preceding

twelve months, and in any part of which a manufacturing process is being carried on without the

aid of power, or is ordinarily so carried on,___

but does not include a mine subject to the operation of the Indian Mines Act, 1952 (Act XXXV of

1952), or a mobile unit belonging to the armed forces of the Union, a railway running shed or a

hotel, restaurant or eating place.

Explanation.-For computing the number of workers for the purposes of this clause all the workers in

different relays in a day shall. be taken into account.

[Clause 2(m) as amended in 1976.]

Under Section 85, the State Government is empowered to declare any establishment

carrying on a manufacturing process to be a factory for the purposes of the Act even though it

employs less than the prescribed minimum number of workers, provided that the manufacturing

process is not being carried on by the owner only with the aid of his family.

Summary: From Sec. 2(m) of the Act it follows that m establishment comes within the definition

of a Factory if the conditions stated below are satisfied :

1. It is a place where a "manufacturing process" is carried on.

2. It employs the prescribed minimum number of "workers"

viz., ten if "'power" is used, and twenty if no "power" is used. It is sufficient if the prescribed

number of workers were employed on any day of the preceding twelve months.

3. . It is not a mine coming within the purview of the Indian Mines Act of 1952, a railway running

shed, mobile unit belonging to the armed forces of the Union, a hotel, restaurant or eating place.

Manufacturing Process. This term is defined in Section 2(k) in a very wide sense. It iIicludes :

(i) making, altering, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adopting any article or substance with a view to its use, sale, transport, delivery or disposal; or

(ii) pumping oil, water, sewage or any other substance; or (Hi) generating, transforming or

transmitting power; or

(iii) (iv) composing types for printing, printing by letter press, lithography, photogravure or

other similar processes or book binding ; or

(v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels ; or

(vi) preserving or storing any article in cold storage.

For the corresponding section of the English Act, it was held that the different processes

enumerated in the clauses are merely illustrative so that laundries, ,carpet beating, or bottle

washing works come within the Act, if mechanical power is used. Patterson v. Hune

The following undertakings have been held to be manufacturing processes-bidi-making;

conversion of raw-films into finished products; the preparation of eatables in the kitchen of a

restaurant ; use of a refrigerator for adapting any article with a view to its sale.

The scraping out of salt and grading them, even though done by, manual labour, is a

manufacturing process.

Worker. "Worker means a person employed, directly or by or through any agency (including a

contractor) with or without the knowledge of the principal employer, whether for remuneration

or not in any manufacturing process, or in cleaning any part of the machinery or premises used

for a manufacturing process, or in any other kind of work incidental to, or connected 'with, the

manufacturing process" or the subject of the manufacturing process but does not include any

member of the armed forces of the Union."-Sec. 2(1), as amended in 1976.

Explanation: Worker means any person engaged in any work connected with or incidental to a

manufacturing .process. Thus the definition is wide. The term includes persons engaged directly

and, also those who are engaged through an agency (including a contractor with or without the

knowledge of the principal employer). The term includes clerical workers and persons paid by

piece rates in a factory.

The term 'worker' does not include any member of the armed forces of Union. . , ,

In case of a factory worker there must be a relationship between

the employer and the employed. " Apprentices, whether remunerated or not, are workers within the meaning of the Act. Power. "Power means electrical energy, or any other form of energy which is mechanically transmitted and is not generated by human or animal agency."--Sec. 2(g).

Prime mover. "Prime mover means any engine, motor or other appliance which generates or

otherwise provides power."--Sec. 2(h).

Transmission machinery. "Transmission machinery means any shaft, wheel, drum pulley, system

of pulleys, coupling, clutch,'driving belt or other appliance or device by which the motion of a prime

mover is transmitted to or received by any machinery or appliance".--Sec. 2(i).

Machinery. "Machinery includes prime movers, transmission machinery and all other appliances

whereby power is generated, transformed, transmitted or applied."--Sec. 2(j).

Adult. "Adult means a person who has completed his eighteenth year of age".--Sec. 2(a). °

Adolescent. "Adolescent means a person who ha$ completed his fifteenth year of age °but has not

completed his eighteenth year."Sec. 2(b).

Child. ''Child means a person who has net completed his fifteenth year of age." --Sec. 2 ( c) .

Young Person. "Young Person means a person who is either a child or an adolescent."--Sec. 2(d).

Calendar Year. "Calendar Year means the period of twelve months beginning with the first day of

January in any year."

Sec. 2(dd). °

Day. "Day means a period of twenty four hours beginning at midnight." --Sec. 2 ( e) .

References to the time of the day in the ° Act are to the Indian Standard Time. In areas where the

I.S.T. is not observed, the State Government can by rules define the local mean time.--Sec. 3.

Week. "Week means a period of seven days beginning 'at midnight on Saturday night or such other

night as may be approved in writing Jar a particular area by the Chief Inspector of Factories." --Sec.

2(f).

Shift and Relay. Where work of the same kind is carried out by two or more sets of workers

working during different periods of the day, each of such sets is called a "relay" and each of such

periods is called a "shift."-Sec. 2(r).

Occupier. "Occupier" of a factory means the person who has ultimate control over the affairs of the

factory, and where the said affairs are entrusted to a managing agent, such agent shall be deemed to

be the occupier of the factory.--Sec. 2(n).

In case of a ship, which is being repaired or on maintenance work is being carried out in dry dock

which is available for hire, the following persons for certain section of the Act will be deemed to be

occupier (i) the owner of the dock, and (ii) the owner of the ship or his agent or master or other

officers-in-charge in the ship or any person who contracts with such owner, agent or master or other

officers-in-charge to carry out the repair or maintenance work.-Sec. 2(n) added by The Factories

(Amendment) Act, 1976.

The Act imposes several duties and responsibilities on the occupier of the factory. (See

below).

An occupier of factory may be an owner, a lessee or a mere licensee but he must have the right to

occupy the property. He should also control the management.

APPROVAL, LICENCING AND REGISTRATION

It is necessary to obtain a" licence before a factory is started. Section 6 provides that the State

Government may make rules requiring, for the purposes of this Act, the submission of. plans or any

class or description of factories to the Chief Inspector or the State Government, and the plans and

specifications of a factory and its location.

The Amendment of 1976 provides that any replacement and addition to the factory will not be

allowed if it does not reduce the I minimum clear space required for safe working around the plant or

machinery or adversely affect the environmental conditions from the evolution or emission of steam,

heat or dust or fumes injurious to health.

Notice by occupier. Section 7 provides that the occupier of a factory must, at least 15 days before he

begins to occupy or use any premises as a factory; send to the Chief Inspector of Factories a written

notice containing the following particulars:

( 1 ) the name and situation of factory ;

(2) the name and address of the occupier ;

(3) the name and address of the owner of the premises or building (including the precincts thereof)

;

( 4) the address to which communications relating to factory may be sent ;

(5) the nature of the manufacturing process to be carried on in the factory during the next twelve

months ;

( 6) the total rated horse power installed or to be installed in the factory, which shall not include the

rated – horse power or any separate stand-by plant;

(7) the name of the manager of the factory for the purposes of this Act ;

(8) the number of workers likely to be employed in the factory ;

(9) such other particulars as may be prescribed.

The rules stated above are enforced . because the plans and specifications of the factory must insure

proper measures of health, safety and welfare of the . workers.

THE INSPECTI0N STAFF

The Factories Act empowers the State Government to appoint Inspectors, Chief Inspectors of

Factories, Additional Chief Inspectors, Joint Chief Inspectors and Deputy Chief Inspectors. Every

District

Magistrate is an Inspector for his district. No person can act as an Inspector if .he is or becomes

directly or indirectly interested in a factory or in any process or business carried on therein or in any

patent or machinery connected therewith. .

Powers of Inspectors. Section 9 provides that subject to any rules made in this behalf, an

Inspector may exercise the following powers within the local limits for which he is appointed :

(a) enter, with such assistants, being persons in the service of the Government or any local or

other public authority, as

he thinks fit, and place which is used, or which he has reason to believe is used, as a. factory ;

(b) make examination of the premises, plant and machinery;

(c) require the production of any prescribed register and any other document relating to the factory,

and take on the spot or otherwise statements of any person which he may consider necessary for

carrying out the purposes of the Act; and .(d) exercise such other powers as may be prescribed

for carry ing out the purposes of this Act.

No person shall be compelled under this section to answer any question or give any

evidence tending to incriminate himself.

Under Section 91, an Inspector may take a sample of any substance, used or intended to be

used in a factory, for the purpose of finding out whether the substance is injurious and if the factory

is violating any of the provisions of the Act.

Obstructing an Inspector. Whoever wilfully obstructs an Inspector in the exercise of any power

conferred on him by or under this Act, or fails to produce on demand by an Inspector any registers

Of other documents in his custody kept in pursuance of this Act or of any ru.!es made thereunder, or

conceals or prevents any worker in a factory from appearing before, or being examined by, an

Inspector, shall be punishable ~with imprisonment for a term which may extend to three months or

with fine which may extend to Rs. 300 or with both.-Sec. 95. .

The onus is on the prosecution to show that a person has obstructed an inspector.

Duties of Inspector. It is the duty of factory inspectors to enforce the provisions of the Factories Act

and other industrial laws. For this purpose they inspect factories periodically. If any rule is violated

they take steps like prosecuting the guilty persons etc.

CERTIFYING SURGEONS

Section 10 provides that the State Government may appoint qualified medical practitioners to .be

certifying surgeons for the purposes of the Act for specified local areas or for specified factories or

class of factories.

No person can be a certifying surgeon for a factory or industry in which he is interested .directly or

indirectly.-Sec. 10(3).

The State Government may by order in writing and subject to specified conditions, exempt any

person or class of persons from the provisions of this sub-section in respect of any factory or class or

description of factories.

Duties. The certifying surgeon has the following duties under the Act and the rules framed under it.

1. The examination and certification .of young persons.

2. The examination of persons engaged in factories in dangerous

occupations or processes. .

3. Medical supervision of factories in cases where such supervision had been prescribed owing to the

dangerous nature of the work carried on or for any other reason, viz.,

(i) cases of illness have occurred which it is reasonable to believe are due to the nature of the

manufacturing process carried on,. or other conditions of work prevailing therein;

(ii) by reason of any change in the manufacturing process carried on or in the substances used

therein there is a likelihood of injury to the health of workers employed in that manufacturing

process ;

(iii) young persons are, or about to be employed in any work which is likely to cause injury to

their health.

(iv)

PROVISIONS REGARDING THE HEALTH OF WORKERS

Sections 11 to 20 of the Act contain certain provisions intended to ensure that the conditions under

.which work is carried on in factories do not affect the health of the workers injuriously. The

summary of the provisions are explained below :

Summary of the provisions of the Factories Act. relating -to the health of workers are stated below.

1. Cleanliness. Every factory shall be kept clean and free from dirt, and the outflow of drains etc.

The floors must be cleaned. Drainage shall be provided. Inside walls, partitions and ceilings must

be repainted at least once in five years. When washable water paint is used they must be painted

once every three years and washed at least every period of six months.-Sec. 11,' as amended in

1976.

2. Disposal of wastes and effluents. The waste materials produced from the manufacturing

process must be effectively disposed off-Sec. 12.

3. Ventilation 'and Temperature. There must be provision for adequate ventilation by the

circulation of fresh air: The temperature

must be kept at a comfortable level. Hot parts of machines must be

'separated and insulated.-Sec. 13.

4. Dust and Fume. If the .manufacturing process used. gives off injurious or offensive dust and

fume steps must be taken so that they are not inhaled or accumulated. The exhaust fumes of

internal combustion engines must be conducted outside the factory.--Sec. 14.

5. Artificial humidification. The water used for this purpose must be pure. It must be. taken from

some source of drinking water supply. The State Government can frame rules .regarding the process

of humidification etc.-8ec. 15. .

6. OverCrowding. There must be no overcrowding in a factory. In factories existing before the

commencement of the Act there must be at least 350 c.ft. (~r 55 cubic metres) of space per

worker. For factories built afterwards, there must be at least 500 c.ft. (or 75 cubic metres) of

space. In calculating the space, an account is to be taken of space above 14 ft. (or 5 metres) from

the floor.-Sec. 16.

7. Lighting. Factories must be well lighted. Effective measures must be adopted to prevent glare

or formation of shadows which might cause eyestrain.-sec. 17.

8. Drinking water. Arrangements must be made to provide a sufficient supply of wholesome

drinking water. All supply' points of such water must be marked "drinking water". No such points

shall be within 20 ft. (or 7.5 metres) of any latrine, washing place etc. Factories employing more

than 250 workers must cool the water during the hot weather.-Sec. 18. .

9. Latrines and Urinals. Every factory must provide' sufficient number of latrines and urinals.

There must be separate provision for male and female workers. Latrine and urinals must be kept

in a clean and sanitary condition. In factories. employing more than 250 workers, they shall be of

prescribed sanitary types.--sec. 19.

PROVISIONS REGARDING THE SAFETY OF WORKERS

Sections 21 to 40A, 40B and 41 of the Act lay down rules for the purpose of securing the safety of

workers. Summary of the provisions of the Factories Act regarding the safety of the workers are

stated below: (Sections 2l to 41) .

1. Fencing ot machinery. All dangerous machinery must be securely fenced e.g., moving .parts- of

prime movers and flywheels connected to every prime mover. electric generators. etc.-Sec. 2l.

2. Work on or near machinery in motion. Work on or near machinery in motion must be carried out

only by specially trained adult male workers wearing tightly fitting c1othes.-Sec. 22.

3. Employment of young persons on dangerous machines. No young person shall work at any

danger()us machine' unless he has been specially instructed as to the dangers and the precautions to

be observed. has received sufficient training about th~ work. and is under the supervision of some

person having thorough knowledge and experience of the machine.-Sec. 23.

4. Striking gear and devices for cutting off power. In every factory suitable devices for cutting off

power in emergencies from running machinery shall be provided and maintained in every work-

room.~. 24.

5. Self-acting machines. Moving parts of a self-acting machine must not be allowed to come

within 45 cms. of any fixed structure which is not part of the machine.-Sec. 25.

6. Casing of new machinery. In all machinery installed after the commencement of the Act. certain

parts must be sunk, encased or otherwise effectively guarded e.g.. set screw. bolt. toothed gearing

etc. -sec. 26.

7. Women and children near cotton Openers. Women and children must not be allowed to

work near cot/On openers, except In certain cases.-Sec. 27

8. Hoists, lifts, chains etc, Every hoist and lift must be so constructed as to be safe. There are

detailed rules as to how such safety is to be secured. There are similar provisions regarding lifting

machines. chains, ropes and lifting tackle .Sec. 28. 29.

9. .Revolving machinery. Where grinding is . carried on the maximum safe working speed of every

revolving machinery connected therewith must be notified. Steps must be taken to see that the safe

speed is not exceeded.-Sec. 30.

10. Pressure plant. Where any operation is carried on at a pressure higher than the atmospheric

pressure, steps must be taken to ensure that the safe working pressure is not exceed~cL-.sec. 31.

. 11. Floors, stairs and means of access. All floors, steps, stairs, passage and gangways shall be of

sound construction and properly maintained. Handrails shall be provided where necessary. Safe

means of access shall be provided to the place where the worker will carry on any work.-Sec. 32.

12. Pits, sumps. openings in floors etc. Pits. sumps. openings in floors etc. must be securely

covered or fenced.-Sec. 33.

13. Excessive weights. No worker shall be made to carry a load so heavy as to cause him

injury.-8ec. 34.

14. Protection of eyes. Effective screen or suitable goggles shall be provided to protect the eyes of

the worker from fragments thrown off in course of any manufacturing process and from excessive

light if any.-Sec. 35.

15. Precautions against dangerous fumes. No person shall be allowed to enter any chamber. tank

etc. where dangerous fumes are likely to ,be present. unless it is equipped with a manhole or other

means of going out. In such space no portable electric light of more than 24 ,volts shall be used.

Only a lamp or light of flame proof construction can be used in such space. For people entering such

space suitable breathing apparatus, reviving apparatus etc. shall be provided. Such places shall be

cooled by ventilation before any person is allowed to enter.-8ecs. 36 and 36A.

16. Explosive or inflammable gas etc. where a manufacturing process produces

inflammable gas. dust. fume. etc. steps must be taken to enclose the machine concerned, prevent

the accumulation of substances and exclude all possible sources of ignition. Extra precautionary

measures are to be taken where such substances are worked at greater than the atmospheric.

pressure.-Sec. 37.

17. Precaution in case of fire. Fire escapes shall be provided. Windows and doors shall be

constructed to open outwards. The means of exit in case of the fire shall be clearly marked in red

letters. Arrangements must be made to give warning in case or fire -sec. 38

18. Specifications of defectives etc. and safety of buildings and machinery. If any building

or machine is in a defective or dangerous condition, the inspector of factories can ask fer the holding

of tests to determine how they can be made safe. He can also direct the adoption of the measure

necessary to make them safe. In case of immediate danger, the use of the building or machine can be

prohibited.-Secs. 39. 40.

19. Maintenance of Buildings. If the Inspector of Factories thinks that any building in a factory, or

any. part of it. is in such a state of disrepair that it is likely to affect the health and welfare of the

workers. he may serve on the occupier or manager or both in writing specifying the measures to be

done before the specified date. Sec. 4OA.

20. Safety Officers. The State Government may notify to the occupier to employ a number of Safety

Officers in a factory (i) wherein one thousand or more workers are ordinarily employed. or (ii)

wherein any manufacturing process or operation which involves the risk of bodily injury, poisoning.

disease or any other hazard to health of the persons employed in the factory .-Sec. 40B.

21. Rules. The State Government may make rules providing for the use of such further devices

for safety as may be necessary. Sec. 41.

PROVISIONS REGARDING THE WELFARE OF WORKERS

Summary of the provisions of the Factories Act regarding the welfare of workers are stated below :

1.. Washing. In every factory adequate and suitable facilities for washing shall be provided and

maintained. They shatI be conveniently accessible and shall be kept clean. There must be separate

provisions for male and female workers.-Sec. 42.

2. Storing and drying. The State Government may make rules requiring the provision of suitable

facilities for storing and drying clothing.-Sec. 43.

3. Sitting. Sitting facilities must be provided for workers who have to work in a standing

position. so that they may take rest when possible. When work can be done in a sitting position

efficiently the Chief Inspector may direct the provision of sitting arrangements. Sec. 44.

4. First aid. Every factory must provide first aid boxes or cupboard. They must contain the

prescribed materials and they must be in charge of persons trained in first aid treatment. Factories

employing more than 500 persons must maintain an ambulance roam containing the prescribed

equipment and in charge of the prescribed medical and nursing staff-Sec. 45.

5. Canteens. Where more than 250 workers are employed. the state Government may require the

opening of canteen or canteens for workers. Rules may be framed regarding the food served. its

management etc.,..-Sec. 46.

6. Shelters. In every factory where more than 150 workers are employed there must be provided

adequate and suitable shelters or rest. rooms and a lunch room (with drinking water supply) where

workers may eat meals brought by them. Such rooms must be sufficiently lighted and ventilated

and must be maintained in a cool and clean condition~. The standards may be fixed by the State

Government. -Sec. 47,

7. Creches. In every factory where more than 30 women a employed, a room shall be provided

for the use of the children (below 6 years) of such women. The room shall be adequate size. well

lighted and ventilated, maintained in a clean and sanitary condition and shall be in charge of a

woman trained in the care of children and infants. The standards shall be laid down by the State

Government.Sec. 48.

8. Welfare officers. Welfare officers must be appointed in every factory where 500 or more

workers are employed. The State Government may prescribe the duties, qualifications etc. of such

officers. Sec. 49.

9.. Rules. The State Government may make rules regarding the welfare of workers.-Sec. 50.

THE WORKING HOURS OF ADULTS

Weekly Hours. No adult worker shall .be required or allowed . to-work in a factory for more than

forty-eight hours in any week. Sec. 51.

Daily Hours. No adult worker shall be required or allowed to work in a factory for more than nine

hours in any working day. The daily maximum may be exceeded with the previous approval of the

Chief Inspector, to facilitate change of shifts.-Sec. 54.

Intervals for Rest. The periods of work of adult workers in a factory each day shall

be so fixed that no period shall exceed five hours arid that no worker shall work for more than five

hours before he has had an interval for rest of at least half an hour. The State Government or the

Chief Inspector may, by order in writing, and for reasons stated therein, increase the work period to

six.-Sec. 55.

Spreadover. The periods of work of an adult worker in a factory shall be arranged that inclusive of

his intervals for rest under section 55, they shall not spread-over more than ten and half hours in any

day. The Chief Inspector may for specified reasons increase the spreadover up to twelve hours.-Sec.

56.

RULES REGARDING EMPLOYMENT OF ADULTS

Night Shifts. Where a worker in a factory works on a. shift which extends beyond midnight, (a)

his weekly holiday and compensatory holiday means a period of holiday for 24 consecutive hours

beginning when his shift ends, and (b) the following day for him shall be deemed to be the period. of

24 hours beginning when such shift ends and the hours he has worked after midnight shall be

counted in he previous day.-sec. 57

Overlapping Shifts. Work shall not be carried on in any factory by means of a system of shifts so

arranged. that more than one relay of workers is engaged in work of the same kind at the same

time. The State Government or the Chief Inspector may grant exemption from this rule.-See. 58.

Double Employment. No adult worker shall be required or allowed to work in any factory on any

day on which he has already been working in any other factory, save In such circumstances as may

be prescribed.-Sec. 60.

Notice of Periods of Work. There must be displayed in every factory a notice showing periods

of work of adults, classification of workers in groups according to nature of their work, shifts and

relays etc. Change made in the system of work must be notified to the Inspector before change. The

manager of every factory must maintain a Register of Adult Workers showing the name of each

worker, the nature of his work, the group in which he is included, the relay in which he is allotted

etc. The hours of work of an adult worker- must correspond with the notice referred to above and the

Register.- Sections 61, 62, 63.

No adult worker shall be required or allowed to work in any factory unless his name and other

particulars have been entered' in the register of adult workers.-Sec. 62 (1A) added by the Factories

(Amendment) Act, 1976.

Exemptions. By sections 64 and 65, the State Government has been given power to exempt for

limited periods certain factories from compliance with some of the provisions relating to hours of

work and employment.

Such exemptions are necessary in

special cases, for example in the case of workers engaged in urgent repairs or in preparatory and

complementary work. In some industries work if of an intermittent character and the enforcement of

all the rules stated above will create hardship. The nature of the work in certain industries requires

exceptional treatment, e.g., workers. engaged in engine rooms and boilers or in the printing of

newspapers. The State Government may exempt persons holding positions of supervision and

management or in confidential positions in a factory from the operation of the rules regarding

working hours (except the rule against the employment of women at night). .

Confidential Position. The State Government may empower the Chief Inspector to declare a person

other than any person defined by such rules, as a person holding position of supervision or

management or employed in .a. confidential position in a factory, if, -the Chief Inspector is of

opinion that he can be employed.

If any such person does not get more than Rs. 750 p.m. as wages. he will be entitled to extra wages

for overtime work.-Sec. 64(1). add~d by The Factories (Amendment) Act, 1976.

Hours and Spreadover. Any exemption granted under Sec. 65 (2)

shall be subject to the following conditions, namely :

(i) the total Lumber of hours of work in any day shall not exceed twelve ;

(ii) the spread over. inclusive of intervals for rest, shall not exceed thirteen hours in any one day ;

(iii) the total number of hours of work in any week. including overtime, shall not exceed sixty ;

(iv) no worker shall be allowed to work overtime, for more than seven days at a stretch and the total

number of hours of overtime work in any quarter shall not exceed seventy five-Sec. 65(3), Factories

(Amendment) Act, 1976.

Quarter. This is a period of three consecutive months beginning on the 1st January, the 1st of

April, the 1st of July or the 1st of October.-Sec. 64.

RESTRICTIONS ON THE EMPLOYMENT OF WOMEN

By section 66 the following restrictions have been imposed to

women workers :

(a) Maximum daily work is 9 hours: No exemption from the provisions of Section 54 (which lays

down that the maximum daily hours of work shall be nine hours) can be granted in respect of any

women.

(b) prohibition of night work: No women shall be required or allowed to work in any factory except

between the hours of 6 a.m. and 7 p.m. The State Government may by notification in the official

Gazette vary the limits for any factory or group or class or description of factories. But such

variation must not authorise the employ -ment of women between the hours 10 p.m. and 5 a.m. .

(c) Change of shift only after holiday:There shall be no change of shifts for women except

after a weekly holiday or any other holiday.

Exception: There is an exceptional case. The State Government may make rules providing for the

exemption from the afore~aid restrictions (wholly or partially or conditionally) of women working

in fish-curing or fish-canning factories. In factories, mentioned above, the employment of women

beyond the hours specified is necessary to prevent damage to or deterioration in any raw material.

But such rules shall remain in force for not more than three years at a time.

Other restrictions: There are other restrictions on the employ ment of women workers :

1. Work on or near machinery in motion. No woman or young person shall be allowed to clean,

lubricate or adjust any part of the machinery while the prime mover or transmission machinery is in

motion or to work between moving parts, or between fixed and moving parts of any machinery

which is in motion.-Sec. 22(2}. (See p. 16.)

2. Cotton openers. No woman or child shall be employed in any part of a factory for pressing cotton in which a cotton opener is at work. If the feed-end of a cotton opener is in a room separated from the delivery-end by a partition extending to the roof or to such height as the Inspector may in a particular case specify in writing , women and children may be employed on the side of the partition where the feed-end is situated.-Sec. 27. (See p. 18.) 3. Excessive weights. The State Government may make rules prescribing the maximum weights .which may be lifted, carried. or moved by adult men, adult women, adolescents and children employed in factories or in any class or description of factories or in carrying on any specified process.-Sec. 34. (See p. 21.) 4. Creches. In every factory wherein more than thirty women workers are ordinarily employed there shall be provided and main tained a suitable room or rooms for the use of children under the age of six years of such women.-Sec. 48. (See p. 30.) 5. Dangerous operations. The State Government is empowered to make special rules for the purpose of controlling and regulating factories which carry on operations exposing women, young persons and other workers to a serious risk of bodily injury, poisoning or disease.-Sec. 87 (b). (See p. 43.) EMPLOYMENT OF YOUNG PERSONS

Employment of ChiIdren . No child who has not completed his fourteenth year shall be required or allowed to work in any factory.--sec. 67.

Certificate of Fitness and Token. A child who has completed his fourteenth year or an adolescent shall not be required or allowed to work in any factory unless (a) he has been granted a certificate of fitness. which is. in the custody of the manager, and (b) such child or adolescent carries a token giving a reference to such certificate-Sec. 68.

The Certificate of Fitness is a certificate granted to a child or adolescent by a Certifying

Surgeon after. examination: The certificate is. given to a child if the surgeon is satisfied that

he has completed his fourteenth year and has attained the prescribed physical standards. The

certificate is granted to an adolescent if the surgeon is satisfied that he has completed his

fifteenth year and is fit for a full day's we in a factory. The certifying surgeon must have

personal knowledge of the intended place of work and of the manufacturing process involved.

The certificate is valid only for a period of 12 months. It may be granted subject to conditions

(e.g., that of periodical re-examination). The

certificate may be renewed and, if necessary, revoked. Any fee pa: able for the certificate must

be paid by the occupier of the factory all must not be recovered from the young person or his

parents c guardian.-Sec. 69.

An adolescent who has been granted a certificate of fitness ant who carries a token is

deemed to be an adult for the purposes of Chs. VI and VIII of the Act. (Ch. VI deals with the hours

of work of an adult and Ch. VIII deals with "annual leave). But no adolescent who has not attained

the age of seventeen years shall be employed or permitted to work in any factory during night.

"Night" means a period of at least 12 consecutive hours which shall include an interval of at least

seven consecutive hours falling between 10 p.m. and 7 a.m. An adolescent who has not been granted

a certificate of fitness, shall be deemed to be a child ~or the purposes of the Act,-Sec. 70.

Working hours for Children. The law regarding working hours for children are stated

below.-Sec. 71 :

1. No child shall be employed or. permitted to work in any factory- '

(a) for more than four and a half hours in any day;

(b) during the night, .

Explanation: For the purpose of this sub-section "night" shall mean a period of at least twelve

consecutive hours which shall include the interval between 10 p.m. and 6 a.m.

2. The period of work of all children employed in a factory shall be limited to two shifts which shall

not overlap or spread-over more than five hours each, and each child shall be. employed in only one

of the relays which shall not, except with the previous permission in writing of the Chief Inspector,

be changed more frequently than once in a period of thirty days.

3. The provisions of section 52 shaIl apply also to child workers, and in respect of any child. (Sec.

52 relates to weekly holidays. See next ' Section).

4. No child shall be required or allowed to work in any factory on any day on which he has already

been working in another factory.

Notice and Register. A notice must be displayed showing clearly the periods of work of

children.-,-Sec. 72.

The manager of every factory must maintain a Register of child workers showing the name of.

each child worker, the nature of his work. the group (if any) in which he is included. the relay to

which he is allotted and the number of his certificate of fitness.-Sec. 73.

No child worker shall be required or allowed to work in any factory unless his name and other

particulars have been entered in the register of child workers.-Sec. 73 (IA). Factories (Amendment)

Act, 1976.

The hours of work of a child must correspond with the Notice and the Register.-Sec. 74.

Medical Examination. Where an Inspector is of opinion that a person working as an adult is

a young person, or that a young person is not fit to work, he may direct the manager of the factory to.

have the person medically examined by a certifying surgeon.--Sec. 75.

Other rules regarding the employment of young persons. No young person shall work at any

dangerous machine unless he has been fully instructed as to. the dangers arising in connection with

the machine and the precautions to be observed, and (a) has received sufficient training in work at

the machine or (b) is under adequate supervision by a person who has a thorough knowledge and

experience of the machine. The State Government is to. prescribe what machines are dangerous far

the purpose of this section.-5ec. 23.

Certain restrictions an adolescents and children are stated in Sections 22(2), 27, 34 and' 87 (b). (See

pp. 34-5).

The State Government may make rules regarding the farms of the Certificate of Fitness, the

procedure relating to. their issue, and the physical standards to. be attained by children and

adolescents. Sec. 76.

The provisions relating to. the employment of young persons shall be in addition to and not in

derogation of, the provisions of the Children Act of 193~., 1960 and 1978.-Sec. 77.

CHILD-LABOUR

Rules regarding child-Iabour are contained in the Factories Act, Mines Act etc. There are also. two.

general Acts an the subject. The Children (Pledging of Labour) Act (Act 11 of 1933) prohibits the

making of agreements to. pledge the labour of children and the employment of children whose

labour has been pledged. The Children Act of 1938, 1960 and 1978 prohibit the employment of a

child who. has not completed his fifteenth year of age in any occupation connected with the

transport of passengers, goods or mails by railway or con -nected with a part authority Within the

limits of any part. The Act also prohibits the employment of a child, who. has not completed his

fourteenth year of age, in the processes set forth in the schedule to the Act. Children between 15 and

17 can be employed subject to certain restrictions as regards their periods of rest etc

HOLIDAYS AND LEAVE

The Factories Act provides for the following holidays, viz.,Weekly holidays, Compensatory

holidays and Annual leave with wages according to certain rules. The provisions are explained

below.

Weekly Holidays. Section 52 provides that an adult workers shall have a holiday on the first day

of the week. But the manager of the factory may fix the holiday on any other day which is with

three days before or after the first day of the week in case of such substitution, notice must be

given to the Inspector of Factories an displayed in the factory. No substitution can be made which

will result in any worker working for more than ten days consecutively without a holiday for a

whole day. The State Government may make rules providing for exemption from the above

section in certain cases, e.g., for urgent repairs.

The Weekly Holidays Act (Act XVIII of 1942) provides for the grant of weekly holidays to persons

employed in shops, restaurants and theatres. The Act ,can be applied to a State by notification of

the State Government.

Compensatory Holidays. Where as a result of the exemption of factory from the operation of the

role regarding weekly holidays, a worker is deprived from any weekly holiday he shall be allowed

within the month in which the holidays were due, or within two months immediately following that

month, compensatory holidays of equal number to the holidays lost.--Sec. 53.

Annual Leave with Wages. Sections 78 to 84 provide for the grant of a certain period of leave with

wages to workmen.

Every worker who has worked for a period of 240 days or more in a factory during a calendar

year shall be allowed during the subsequent calendar year, leave with wages for a number of days

calculated at the rate of

(i) if an adult, one day for every twenty days of work performed by him during the

previous calendar year;

(ii) if a child, one day for every fifteen days of work performed by him during the

previous calendar year.

Rules. Rules regarding the Annual Leave are summarised below :

1. When counting the number of days of work performed by a worker, the following are to be

included: (a) days of lay-oft, (b) maternity leave to a female worker, not exceeding twelve weeks,

and (c) the leave earned in the previous year. But the worker shall not earn leave for. these days.

2. The leave admissible under the aforesaid rule shall be exclusive of all holidays whether

occurring during or at either end of the period of leave.

3. A worker whose service commences otherwise than on the first day of January shall be entitled to

leave ,with wages at the rate laid down above if he has worked for two-thirds of the total number of

days in the remainder ?f the calendar year.

4, If a worker is discharged or dismissed from service of quits his employment or is superannuated

or dies while in service, during the course of the calendar year, he or his heir or nominee, as the case

may be, shall be entitled, to wages in lieu of the quantum of leave to which he was entitled

Immediately before his discharge, dismissal,quitting of employment, ,superannuation or death

calculated at therates specified in sub-section (1)even If he had not. worked for the entire period

specified In sub-section (J) or sub-section (2) making him eligible to avail of such leave. Such

payment shall be made

(i) where the worker is discharged or dismissed or quits

employment-before the expiry of the second working day from the date of such discharge, dismiss~l

or quitting; and

(ii) where the worker is superannuated or dies while in service -before the expiry of two months

from the date of such superannuation or death. (Amended by the Act of 1976).

5, In calculating the leave period, fraction of leave for half a day or more shall be treated as one day

and fractions of less amount shall be omitted.

6. Leave earned, but not taken, can be carried forward to a succeeding year subject to a limit of thirty

days in the case of an adult and forty days in the case of a child. But earned leave not allowed

because of any. scheme for leave in operation, can be carried forward without limit.

7. Application for leave must be submitted to the manager not less than 15 days before the date of

commencement of leave. In the case of public utility service it must be made not less than 30 days

before such date. If a worker becomes ill and wants to avail himself of the annual leave during the

period of illness, he shall be granted leave even though the application is not made before the

period specified above.

8. The application for leave may be for the whole of the leave due or part of it. But earned leave

cannot be taken more than three times during the same year. .

9. For the purpose of ensuring the continuity of work, the occupier or manager of the factory may

draw up a Scheme for regulating the grant of leave. The Scheme must be agreed to by the 'Works

Committee, if any, or the representatives 6f workers. It must be lodged with the Chief Inspector and

displayed in the factory. .

10. An application for leave submitted in proper time shall not

Be refused unless the refusal is in accordance with any leave scheme in operation.

11. The un availed leave of a worker shall not be taken into consideration in computing the period

of any notice required to be given before discharge or dismissal

12. The State Government may exempt a factory from the operation of the above rules if it is

satisfied that its own leave rules provide benefits (the totality - of benefits) which are not less

favourable to the workers than the statutory leave rules.

13. Where by virtue of any award, agreement (including settlement) or contract of service the

worker is entitled to a longer period of leave than that provided by the aforesaid rules, he will be

entitled such longer leave.

14. The rules contained in these sections do not apply to railway Factory administered by the

Government which are governed by leave rules approved by the Central Government. 15. If an award, agreement (including settlement) or contract of Service provides for a longer annual leave with wages than provided in this chapter, the quantum of leave, which the worker shall be enti-tled to, shall be in accordance with such award, agreement or contract of service, but in relation to matters not provided for in such .award, agreement or contract of service or matters which are provided for less favourably therein, the provisions of sections 79 to 82, so far , as may be, shall apply. (Added by the Amendment of 1976).t

Wages during Leave Period. For the period of leave allowed to a worker according to rules, he

shall be paid at a rate equal to the daily average of his total full-time earnings for the days on

which he actually worked during the month immediately preceding his leave~The average rate is

to be calculated, exclusive of any overtime and bonus, but inclusive of dearness allowance and

the cash equivalent of the advantage accruing through the concessional sale to the worker of

food-grains and other articles. The cash equivalent, referred to above, is to be computed

according to the method used when calculating the extra wages payable -for overtime work. (See.

post)-Sec. 80.

lf the employment of a worker who is entitled to leave is terminated by the occupier of the factory

before he has taken the entire leave to which he is entitled, he must be paid wages for the leave

period not taken and such wages must be paid before the expiry of the second working day after

such termination. Similarly, if the worker quits his service after having applied for and obtained

leave, he must be paid wages (or the leave period and such wages must be paid on or before the

next pay day. '!be amount of wages payable is to be calculated according to the provisions of

Section 80.-Sec. 79(11) .

A worker who has been. allowed leave for not less than four days in the case of an adult and five

days in the case of a child, shall before his leave begins, be paid the wages due for the period of

leave allowed.-Sec. 81.

Wages -for the leave period, if not paid by an employer, shall be recoverable as delayed wages

under the provisions oo the Payment of Wages .Act, 1936.-Sec. 82.

EXTRA WAGES FOR OVERTIME

( 1 ) Where a worker works in a factory for more than nine hours in any day or for more than 48 hours in any week, he shall in respect of overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.-Sec 59(1)

(2) For the purpose of sub-section (1), "ordinary rate of wages means the basic wages plus such

allowances, including the cash equivalent of the advantage accruing through the concessional sale to

workers of foodgrains and other articles, as the worker is for the time being entitled to, but does not

include a bonus and wages for overtime work.-Sec. 59(2).

(3) Where any workers in factory are paid on a piece rate basis, the time rate of their work will

include the following rules:

(i) if the workers bad been paid on the same or identical job during a month immediately preceding a

month during which overtime work was done, the time rate shall be deemed to be equivalent to the

daily average of their fulltime earnings for the days of the overtime work. Also such time rates shall

be deemed to be the ordinary rates of wages of those workers.

(ii) In the case of a worker who had not worked in the immediately preceding calendar month on the

same or identical job, the time rate shall be deemed to be equivalent to the daily average of the

earning of the worker for the days on which he actually worked in the week in which the overtime

work was done.

Explanation.-For the purposes of this sub-section in computing the earnings for the days on which

the workers actually worked, the allowance include the cash equivalent in order to buy food grains

and other articles through concessional sale as the worker is for the time being entitled to.

Exception.-But any bonus or wages for overtime work payable in relation to the. period with

reference. to which the earnings are being computed shall not be included.-Sec. 59(3).

[Clauses (2) and (3) were substituted from the old Act by the Amendment of 1976]. '.

(4 )The cash equivalent of the advantage accruing through the concessional sale to a worker of

foodgrains and other articles shall be computed as often as may be prescribed on the basis of the

maxi mum quantity of foodgrains and other articles admissible to a standard family.

Explanation 1.-"Standard family" means a family consisting of the worker, his or her spouse and

two children below the age of fourteen years requiring in all three adult consumption units.

Explanation 2.- "Adult consumption unit" means the consumption unit of a male above the age of

fourteen years; and the consumption unit of a female above the age of fourteen years and that or a

child below the age of fourteen years shall be calculated at the rates of 0.8 and 0.6 respectively of

one adult consumption unit. Sec. 59(4).

(5) The State Government may make rules prescribing

(a) the manner in which the cash equivalent of the advantage accruing through the concessional sale

to a worker of food grains and other articles shall be computed; and

(b) the register~ that shall be maintained in a factory for the purpose of securing compliance with

the provisions of this section.-Sec. 59(5).

WAGES AND SALARY

Both these terms are used to denote payment made for service. In Stroud's ludicial Dictionary, the

following comments are made; "Where the engagement is for a period, is permanent or substantially

permanent in character, and is for other than. manual or relative unskilled labour, the remuneration

is generally called a salary." "... in general, the. word 'salary' 'is used for payment of services of a

higher class,and 'wages' is confined to the earnings of labourers and artisans.

The High Court of Madras was of opinion that if the remuneration is to be paid daily or weekly it

can be called Wages; but where there is monthly payment and is fairly high, considering the general

standard of payment, it is to be called Salary. According to the Payment of Wages Act any amount

over Rs. 200 (now Rs. 1000) may be considered as Salary for the purposes of Factories Act. Re

Gemini Studio.1 (See ch. 7).

"Conceptually there is no difference between salary -and wages both being a recompense for work

done or services rendered, though ordinarily the former expression is used in connection with

services of non-manual type while the latter is used in connection with manual services." Gestetner

Duplicators Pvt Ltd. v. The Commissioner of Income Tax W B . In this judgment the following

cases were cited and approved, MohmeddIli v. Union of India; Gordon v. Jennings.

In the cases mentioned above, and .also in Stroud's dictionary, iwas held that there is no basic

difference between salary and wages.

OBLIGATIONS OF WORKERS

Section 111 lays down that no worker in a factory

(a) shall wilfully interfere with or misuse any appliance, convenience or other things provided in a

factory for the purpose of securing the health, safety or welfare of the workers therein,

(b) shall wilfully and without reasonable cause do anything likely to endanger himself or

others; and

(c) shall wilfully neglect to make use of any appliance or other thing provided in the factory for

the purposes of securing the health or .safety of the workers therein.

If any worker contravenes any of the previsions of this section or of any rule or order made there

under he shall be punishable with imprisonment which may extend to 3 mcnths or with fine which

may extend to Rs. 100 or 'with both.

OTHER PROVISIONS OF THE FACTORIES ACT

A brief summary is given below of the other provisions of the

Factories Act.

Departments as Factories. The State Government may, upon application, declare that for the

purposes of the Act, different departments or branches of a factory shall be treated as separate

factories or that two or more factories of the occupier shall be treated as the same factory.--Sec. 4. .

Exemption during Public Emergency. Factories or any class of factories may be exempted from

the operation of any of the provisions of the Act during a public emergency (except that of Sec. 67,

employment of children) for such periods and subject to such conditions as the Government may

think fit. The exemption is to. be made by notification in the official Gazette for a period not

exceeding three months at a time.-Sec. 5.

Explanation.-For the purposes of this section ~'public emergency'" means a grave emergency

whereby the security of India or of any part

of the territory thereof is threatened, whether by war or external aggression or internal disturbance.-

Amendment of 1976.

Exemption of Public Institutions. The State Government may exempt subject to such conditions

as it may consider necessary, any workshop or workplace where a manufacturing process is carried

on and which. is attached to a public institution maintained for the purposes of education, training,

research or reformation from all or any of the provisions of the Act.. But no exemption is to be

granted from the provisions relating to hours of work and holidays unless there is a scheme relating

to such matters containing rules not less favourable to the workers than the provisions of the Act.-

Sec. 86.

Dangerous Operations. The State Government is empowered to make special rules for the

purpose of controlling and regulating factories which carry on manufacturing process or operation

exposing workers to a serious risk of bodily injury, poisoning or disease. Sec. 87. Rules have

be,en made providing for medical examination, protection of workers; restricting' and controlling

the use of particular materials and processes ; payment of fees for medical examination by the

occupier ; welfare amenities ; sanitary amenities ; measures to avoid imminent danger of poisons

or toxicity.

Notifiable Accidents. (1) The manager of a factory must send a notice to the authorities whenever

an accident occurs which causes death or which causes bodily injury preventing the worker from

working for a Period of 48 or more hours or other types of injury which may be specified by rules.

(2) Where a notice given under sub-section (1) relates to an accident causing death, the authority to

whom the notice is sent shall make an inquiry into the occurrence within one month of the receipt

of the notice or, if such authority is not the Inspector, cause the

Inspector to make an inquiry within the said period. .

(3) The State Government may make rules for regulating the procedure at inquiries under this

section.--Sec. 88.

[Paras 2 and 3 had been added by the Amendment of 1976].

Notice of certain dangerous occurrences. Where in a factory any dangerous occurrence of such

nature as may be pr€scribed occurs, whether causing any -bodily injury or disability or not, the

manager of the factory shall send notice thereof to such authorities, and in such form and within such

time, as may be prescribed.--Sec. 88A, Factories (Amendment) Act, 1976.

Notifiable Diseases. The manager of a factory must send notice to the authorities _ whenever a

worker contacts any -of the diseases mentioned in the Schedule to the Act. (These are known as

Occupational Diseases. Examples: poisoning by lead, mercury, phosphorus etc.; anthrax; silicosis;

cancer of the skin; toxic anaemia or jaundice; etc.). The medical practitioner attending the person, if

any, shall without delay send a report to the Chief Inspector in writing, stating "the name of the

person affected and other particulars.--Sec. 89.

Enquiry into Accidents and Diseases. The State Government may appoint a competent person to

enquire into the causes of any 'accident occurring in a factory or of a notifiable disease, and may also

appoint one or more persons possessing legal or special knowledge to. act as assessors in such

enquiry. The person appointed to enquire can call witnesses like a Civil Court and exercise any of

the powers of an Inspector. He must submit a report to the State Government, together with his

observations. The report or extracts therefrom may be published.-Sec. 90.

Safety and Occupational Health Survey. The State Government or the Director General of Factory

Advice Service and Labour Institutes etc., can employ the Chief Inspector and certain other persons

to undertake safety and occupational health surveys. The occupier and manager and all other persons

shall afford all facilities for such survey, including examination, testing of plant and machinery,

collection of samples, other data, medical examination of persons calculation of wages and extra

wages for overtime work.-Sec. 91A, added by The Factories (Amendment) Act, 1976.

Penalties and Procedures. Sections 92 to 1.06 lay down the rules regarding penalties for offences

against the Act.

Owner: The owner of any premises, let out for use as different factories, is responsible for the

provision and maintenance of common facilities and 'Services, e.g., approach roads, drainage, water

supply, latrines etc.

Occupier : In most cases the occupier of the factory is responsible for offences committed against

the Act. But the occupier is exempted from liability if he can show that he has used due diligence to

enforce the execution of the Act and that some other person committed the offence without his

knowledge, consent or connivance.

Penalties: The penalties for some of the offences are mentioned below

Offences Imprisonment Fine

Obstructing Inspector Up to 3 months and/or Up to Rs 500/-

Wrongfully disclosing result

of analysis of sample --do

Contravention of any duty

or liability by a worker nil Rs 20/-

Using false certificate of

fitness Up to 1 month. Rs 50/-

Permitting double

em -ployment of child nil -do-

Cases not otherwise provided for .. Up to 3 months " " Rs. 2000

Second offence for above" 6 months . " " Rs. 5000

Where contravention of any of the provisions of Chapter IV or any rule made thereunder or under

Section 87 has resulted in an accident causing death or serious bodily injury, the fine shall not be

less than one thousand rupees in the case of an accident causing death, and five hundred rupees in

the case of an accident causing serious bodily injury.

Explanation.-In this section and in section 94 "Serious bodily injury" means an injury which

involves, or in all probability will involve, the permanent loss of the use of, or permanent injury to,

any limb or the permanent loss of, or injury to sight or hearing, or the fracture of any bone, but shall

not include, the fracture of bone or joint (not being fracture of more than one bone or joint) of any

phalanges. of the hand or foot.-Sec. 92 added in the Amendment of 1976.

Cognizance: No court can take cognizance of an offence under the Act except on a complaint. by or

with the previous sanction of an Inspector in writing. Only a Presidency Magistrate or a Magistrate

of the first class can try offences under the Act. The. complaint must be filed within 3 months of the

date when the commission of the offence came to the knowledge of an Inspector. For disobeying a

written order of an Inspector, complaint may be filed within 6 months of the date when the offence

was committed.

Presumption: A person found in the factory when the factory . is going on or the machinery is in

motion, except during the time of meal or rest, is presumed to be employed in the factory until the

contrary is proved.

When in the opinion of the' Court a person is prima facie underage, the burden shall be on the

accused to show that such person is not under-age.

Appeals. The manager or the occupier of a factory on whom an order in writing has been served by

an Inspector can appeal against it to the prescribed 'authority within thirty days.-Sec. 107.

Notice. In certain cases (prescribed by the rules) abstracts of the Act and the rules are required to

be displayed in the factory. All notices under the Act must be displayed in English and in a

language understood by the majority of the workers employed therein. They must be displayed in

a conspicuous and convenient place at or near the main entrance of the factory and must be

maintained in a clean and legible condition. The Chief Inspector may require the display of

posters relating to the health, safety and welfare of workers. -Sec. 108.

Returns. The owners, managers and occupiers of factories are required by rules to submit various

returns and reports.-Sec. 110.

Power of the Central Government. The Central Government may' give directions to a State

Government as to the carrying into execution of the provisions of the Act.-Sec. 113.

Abolition of Contract Labour. The provisions of this Act shall have effect notwithstanding

anything inconsistent therewith contained in the Contract Labour (Regulation and Abolition) Act,

1970.Sec. 119, added by the Factories (Amendment) Act, 1976.

The Shops and Establishments Act, 1953

Objectives To provide statutory obligation and rights to employees and employers in the unorganized sector of employment, i.e., shops and establishments. Scope and Coverage A state legislation; each state has framed its own rules for the Act. Applicable to all persons employed in an establishment with or without wages, except the members of the employer's family. State government can exempt, either permanently or for a specified period, any establishments from all or any provisions of this Act. Main Provisions

a) Compulsory registration of shop/establishment within thirty days of commencement of work.

b) Communications of closure of the establishment within 15 days from the closing of the establishment.

c) Lays down the hours of work per day and week. d) Lays down guidelines for spread-over, rest interval, opening and closing hours,

closed days, national and religious holidays, overtime work. e) Rules for employment of children, young persons and women f) Rules for annual leave, maternity leave, sickness and casual leave, etc. g) Rules for employment and termination of service. h) Maintenance of registers and records and display of notices. i) Obligations of employers. j) Obligations of employees.

SHOPS AND ESTABLISHMENT In India most States have a legislation (Shop and Establishments Act) in place which regulate aspects such as working hours, leave with pay, overtime etc. Shop and Establishments Act apply to shops, commercial establishments, banks, insurance

companies, hotels, restaurants, software companies and other service providers. However, they do not apply to factories as Factories Act, 1948 governs that conditions. The establishment are required to register in each city under the Act. Some of the salient features is discussed herein of Bombay Shop and Establishment Act, 1948 (“BSA”) which are akin to the enactment of other States. Working hours for 48 hours per week spread over 6 days is permitted. Overtime payment is made at the double normal hourly rate. Employee who has worked minimum 240 days will become eligible for 21 days paid leave and employee is not allowed to accumulate more than 42 days leave. BSA also has provisions regarding toilets, hygiene etc. and makes provisions for maternity benefits etc. Which establishments need to register under the Act: On analysing the definitions of establishment, commercial establishment and shop we see that the act virtually cover all types of business establishment and thus making it necessary for all business establishments in India to register under the Act. This is an important labour state level compliance requirement. The only case where one doesn’t need to register under the Act is when either the establishment is a factory when it will be covered under the Factories Act, 1948 or when it is exempted under the Section 3(1) of the act.

RReeqquuiirreedd DDooccuummeennttss ffoorr rreeggiissttrraattiioonn Memorandum of Articles of Association/Trust deed. Premises purchase Agreement. List of Directors/Managers. 1st Bank Account opening proof/Bank Account No. details. First Income Tax Assessment order/PAN BMC declaration Date of commencement of business A Commercial Establishment including: As per this section following establishments are covered by the Act: • A commercial or trading or banking or insurance establishment, or • An establishment or administrative service in which persons employed or mainly engaged in office work, or • A hotel, restaurant, boarding or eating house, a cafe or any other refreshment house or • A theater, cinema or any other place of public amusement or entertainment. Regulations Under The Act: This act lays down the following rules: • Working hours per day and week. • Guidelines for spread-over, rest interval, opening and closing hours, closed days, national and religious holidays, overtime work. • Rules for employment of children, young persons and women. • Rules for annual leave, maternity leave, sickness and casual leave, etc. • Rules for employment and termination of service. • Maintenance of registers and records and display of notices. • Obligations of employers as well as employees. Records to be maintained for registering under S&E Act: Every business has to maintain the following records under Shops and Establishments act: • Approval from Department of Labor. • Various registers giving details of employment, fines, deductions and advances, salary,

holidays, etc. The names of the register may vary from state to state, and hence, it is a prudent practice to request the exact nature of documents that your state might need from your municipal corporation. Files related to annual holidays, number of employees need to be submitted at the Office of the Municipal Corporation annually. Procedures under this Act: Every shop/establishment is compulsorily required to register itself under this Act within 30 days of commencement of work. Registration Certificate: • The business owner should send to the Inspector (Chief Inspector of Shops or other Inspectors under the Act) of the area concerned, an application form and fees detailing: o Name of the establishment, the employer and the manager, if any; o Postal address of the establishment; o Such other particulars as may be prescribed. • The Inspector, on verifying the statement, shall register the establishment in the register of establishments and issue a registration certificate. This certificate has to be prominently displayed at the establishment and needs to be renewed before it expires. • If there is any change in the initial statement, the same has to be communicated within 15 days to the Inspector and he will make changes in the register of establishments and issue a fresh registration certificate. Closure of Business: And in case of closure, the same has to be communicated to the authorities within 15 days from the closing of the establishment. PS. The rules under this act vary as per the states. When to Consult And Refer At the time of start of an enterprise. When framing personnel policies and rules.

THE CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970 OBJECT OF THE ACT To prevent exploitation of contract labour and also to introduce better conditions of work. Section 1 : Short title, extent, commencement and application 1. This Act may be called the Contract Labour Act,1970. 2. It extends to the whole of India 3. It applies:-

• To every establishment in which twenty or more workmen are employed or were employed on any day of the preceding twelve months as contract labour.

• To every contractor who employees or who employed on any day of the preceding twelve months twenty or more workmen

5. Act does not apply to:-

• Intermittent nature

• Work not perform for more than 120 days

• Seasonal nature Section 2 : Definitions Sec 2 (c) CONTRACTOR "contractor", in relation to an establishment, means a person who undertakes to produce a

given result for the establishment, other than a mere supply of goods or articles of manufacture to such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a sub-contractor.

Sec 2 (i) WORKMEN "workman" means any person employed in or in connection with the work of any

establishment to do any skilled, semi-skilled or un-skilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be express or implied, but does not include any such person.

Principal Employer 1. Head of Department or office 2. Occupier/Owner 3. Owner or agent of Owner 4. Any person responsible for supervision ADVISORY BOARDS Central Advisory Contract Labor Board

1. Chairman (appointed by the Central govt.) 2. Chief Labor commissioner 3. Members > 18 not <11 State Advisory Contract Labor Board 1. Chairman 2. Labor commissioner (or any other person by Govt.) 3. Members>11 not <9 Registration of Establishments Employing Contract Labour Section 6: Appointment of registering officers appoint such persons TO define the limits, within which a registering officer shall exercise the powers conferred on him by or under this Act. Section 7 : Registration of certain establishments Every principal employer of an establishment to which this Act applies shall, make an application to the registering officer in the prescribed manner for registration of the establishment If the application for registration is complete in all respects, the registering officer shall register the establishment and issue to the principal employer of the establishment a certificate of registration containing such particulars as may be prescribed. Section 8: Revocation of registration in certain cases If the registering officer is satisfied that, the registration of any establishment has been obtained by misrepresentation or suppression of any material fact, or that for any other reason the registration has become useless or ineffective Section 9: Effect of non-registration In case an establishment required to be registered under Section 7 is not been registered within the time fixed for the purpose under that section;

In the case of an establishment the registration in respect of which has been revoked under section 8. Section 10: Prohibition of employment of contract labour The appropriate Government may, after consultation with the Central Board or, as the case may be, a State Board, prohibit, by notification in the Official Gazette, employment of contract labour in any process, operation or other work in any establishment. The appropriate Government shall have regard to the conditions of work and benefits provided for the contract labour in that establishment and other relevant factors, such as a) Whether the process, operation or other work is incidental to, or necessary for the

industry, trade, business, manufacture or occupation that is carried on in the establishment

b) Whether it is of perennial nature, that is to say, it is of sufficient duration having regard to the nature of industry, trade, business, manufacture or occupation that is carried on in that establishment

c) Whether it is done ordinarily through regular workmen in that establishment or an establishment similar there off

d) Whether it is sufficient to employ considerable number of whole-time workmen. Licensing of Contractors Section 11: Appointment of licensing officers Appoint such persons define the limits, within which a licensing officer shall exercise the powers conferred on licensing officers by or under this Act. Section 12: Licensing of contractors With effect from such date as the appropriate government shall undertake or execute any work through contract labour except under and in accordance with a licence issued in that behalf by the licensing officer. Provisions of this act may contain such conditions including, 1. Hours of work 2. Fixation of wages 3. Other essential amenities Section 13: Grant of licences Every application for the grant of a licence under sub-section(1) of section 12 shall be made in the prescribed form and shall contain the particulars The licensing officer may make investigation A licence granted shall be valid for the period specified therein and may be renewed from time to time Section 14: Revocation, suspension and amendment of licences If the licensing officer is satisfied, either on a reference made to him in this behalf or otherwise, that- Obtained by misrepresentation or suppression of any material fact Failed to comply with the conditions subject to which the licence has been granted Welfare And Health Section 16: Canteen

1. Appropriate Government may make rules to which this Act applies, 2. Wherein work requiring employment of contract labour is likely to continue for such period as may be prescribed, and wherein contract labour numbering one hundred or more is ordinarily employed by a contractor, one or more canteens shall be provided and maintained by the contractor for the use of such contract labour. Without prejudice to the generality of the foregoing power, such rules may provide for:- (a) The date by which the canteens shall be provided; (b) The number of canteens that shall be provided, and the standards in respect of

construction, accommodation, furniture and other equipment of the canteens; (c) The foodstuffs which may be served therein and the charges which may be made

thereof. Section 17: Rest-rooms 1. In every place wherein contract labour is required to halt at night in connection with the

work of an establishment:- 2. To which this Act applies, and 3. In which work requiring employment of contract labour is likely to continue for such

period as may be prescribed, 2. The rest rooms or the alternative accommodation to be provided under subsection (1) shall be sufficiently lighted and ventilated and shall be maintained in a clean and comfortable condition. Section 18: Other facilities It shall be the duty of every contractor employing contract labour to provide and maintain: 1. A sufficient supply of wholesome drinking water 2. A sufficient number of latrines and urinals situated as to be convenient and accessible

to the contract labour and Washing facilities Section 19: First-aid facilities There shall be provided and maintained by the contractor so as to be readily accessible during all working hours a first-aid box equipped with the prescribed contents at every place where contract labour is employed by him. Section 20: Liability of Principal employer in certain cases If any amenity required to be provided for the benefit of the contract labour employed in an establishment is not provided by the contractor within the time prescribed thereof, such amenity shall be provided by the principal employer within such time as may be prescribed. All expenses incurred by the principal employer in providing the amenity may be recovered by the principal employer from the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the

contractor. Section 21: Responsibility for payment of wages A contractor shall be responsible for Payment of wages to each worker employed by him Shall be paid before the expiry of such period as may be prescribed. 2. Duty of principle employer

Shall nominate a representative to be present at the time of disbursement of wages Shall be the duty of such representative to certify the amounts paid as wages in such manner 3. It shall be the duty of the contractor to ensure the disbursement of wages in the presence

of the authorized representative of the principal employer. 4. In case the contractor fails to make payment of wages within the prescribed period or

makes short payment, Then the principal employer shall be liable to make payment of wages in full or the unpaid

balance due, Recover the amount so paid from the contractor either by deduction from any amount

payable to the contractor under any contract or as a debt payable by the contractor. INSPECTING STAFF The appropriate Government may, by notification in the Official Gazette, appoint such persons as it thinks fit to be inspectors for the purposes of this Act, and define the local limits within which they shall exercise their powers under this Act. (2) Subject to any rules made in this behalf, an inspector may, within the local limits for which he is appointed— (a) enter, at all reasonable hours, with such assistance (if any), being persons in the service of the Government or any local or other public authority as he thinks fit, any premises or place where contract labour is employed, for the purpose of examining any register or record or notices required to be kept or exhibited by or under this Act or rules made thereunder, and require the production thereof for inspection; (b) examine any person whom he finds in any such premises or place and who, he has reasonable cause to believe, is a workman employed therein; (c) require any person giving out work and any workman, to give any information, which is in his power to give with respect to the names and addresses of the persons to, for and from whom the work is given out or received, and with respect to the payments to be made for the work; (d) seize or take copies of such register, record of wages or notices or portions thereof as he may consider relevant in respect of an offence under this Act which he has reason to believe has been committed by the principal employer or contractor; and (e) exercise such other powers as may be prescribed.

UNIT V MINIMUM WAGES ACT, 1948 OBJECT AND SCOPE OF THE ACT The main aim of the enactment is to make provisions for statutory fixation of minimum rates of wages in scheduled employment wherein labour is not organised and sweated labour is most prevalent. An underdeveloped country like India faces the problem of unemployment in a very large scale. Workers may offer to work even on starvation wages. Employers may be ready to offer them the work at starvation wages. What the Act purports to achieve is to prevent the exploitation of labour and for that purpose, authorises the appropriate Government to take steps to prescribe the minimum rates of wages in certain employment. For this purpose, the capacity of employer shall not be considered.

The State assumes that every employer must pay the minimum wages to the labour engaged by him. The Act contemplates the minimum wage rates must ensure not merely the mere physical needs of a worker which would keep them just above starvation level, but must ensure for him not only his and his family’s subsistence, but also to preserve his efficiency as a worker. It should therefore provide something above the bare subsistence level. Minimum wage is fixed on ethical ground and not on economic ground. It does not consider either the value of work done by a worker or the capacity of the employer to pay. It is a bedrock minimum which must be paid to a worker in any case, and if a particular industry is unable to pay even the minimum wage, it has no right to run, it must shut down. The act gives statutory recognition to the notion that an employee must get at least a minimum wage in certain employment where labour is unorganized and is likely to be exploited. It is a clear direction against the exploitation of the ignorant members of the society by the capitalist class

Definitions Wages [sec 2(h)] Wages means all remuneration capable of being expressed in terms of money, which would, if terms of contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment and includes house rent allowance

But wages does not include the following: (i) the value of: (a) any house accommodation, supply of light, water, medical attendance, or (b) any other amenity or any service excluded by general or special order of the appropriate government; (ii) any contribution paid by the employer to any Pension Fund or Provident Fund or any scheme of social insurance;

(iii) any traveling allowance or the value of any traveling concession; (iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or (v) any gratuity payable on discharge. The term wages includes payment of remuneration in respect of days of rest. It also includes bonus paid not ex-gratia payment. The term' employee', does not include any member of the Armed Forces of the union. The following have been held to be included in employee as used in the Act- (a) An out~worker who prepare goods at his residence and then supplies to the employer. (b) Chowkidar who guards the factory and an accountant who is concerned with accounts

and a compounder working in a tea plantation. (c) A dismissed employee for the purpose of claiming relief under the Act. Fixation & Revision of Minimum Wages Sec. 3 (1 – A) - The appropriate govt may refrain from fixing the minimum rates of wages fixed by it, in respect of any scheduled employment in which these are, in the whole state, less than one thousand employees engaged in such employment. Minimum Rates [Sec. 3 (2)] The appropriate govt may fix :

A min rate of wages for time work (referred to as ‘min time rate’) A min rate of wages for Piece work (referred to as ‘min piece rate’) A min rate of remuneration to apply in the case of such employees employed on piece work for the purpose of securing to such employees a min rate of wages on a time work basis ( referred to as ‘guaranteed time rate’) d) A min rate ( whether a time rate r a piece rate) to apply in substitution for the min rate which would otherwise be applicable, in respect of overtime work done by employers (referred to as ‘overtime rate’) Different Minimum Rates (Sec 3(3)) In fixing or revising min rates of wages; Diff min rates of wages may be fixed for- Diff scheduled employment; Diff classes of work in the same scheduled employment; Adults, adolescents, children and apprentices; Diff Localities b) Min rates of wages may be fixed for any one or more of the following wage periods namely- By the hour By the day By the month By such other larger wage periods as may be prescribed Minimum Rates of Wages composition [Sec. 4] Any min rate of wages fixed or revised by the appropriate govt in respect of scheduled employments under sec-3 may consist of – A basic rate of wages and a special allowance at a rate to be adjusted, at such intervals and in such manner as the appropriate govt may direct, to accord nearly as practicable with the variation in the cost of living index number applicable to such workers( hereinafter referred to as the ‘cost of living allowance’); or ii) A basic rate of wages with or without the cost of living allowance , and the cash value of the concessions in respect of suppliers of essential commodities at concession rates, where so authorized; or iii) An all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions, if any. 2) The cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities at concession rate shall be computed by the competent authority at such intervals and directions specified or given by the appropriate govt. In clause (i) above, the words 'the rate of cost of living allowance to be adjusted’ means only upwards and not downwards. Procedure for fixing & revising minimum wages (Sec 5) In fixing min rates of wages in respect of any scheduled employment for the first time or in revising minimum rates of wages so fixed the appropriate govt. shall follow either of the 2 following modes; a) It shall appoint as many committees and sub-committees 'as it considers necessary to hold enquiries and advice it in respect of such fixation or revision, as the case may be; of fixation

or revision of minimum rates of wages; or It shall, by notification in the official Gazette publish its proposal for the information of persons likely to be affected thereby and specify a date not less than two months from the date of the notification on which the proposals will be taken into consideration [Sec. 5(1)]. SAFEGUARD ON PAYMENT OF MINIMUM WAGES 1. Wages in Kind [See. II]_ The minimum wages payable under this Act shall be paid as cash except in the following circumstances- Where it has been the custom to pay wages wholly or partly in kind and the appropriate Government is of the opinion that it is necessary in the circumstances of the case, may by notification in the official Gazette, authorise the payment of wages either wholly or partly in kind. If the appropriate Government is of the opinion that the provision should be made for the supply of essential commodities at concessions rates, it may, by notification in the official Gazette, authorise the provision of such supply at concessional rates 2. Payment of Minimum Rates of Wages (Sec. 12]. Where minimum wages have been in force in any Scheduled employment, the employer shall pay wages to every employee engaged in such employment at a rate not less than the minimum rate of wages fixed under section 5 for that class of employees in that employment. The wages of an employed person shall be paid to him without deduction of any kind except as may be authorised within such time and subject to such conditions as may be prescribed. This section shall not effect the provisions of Payment of Wages Act, 1936. Penalty [Sec. 22]. Any employer who pays to any employee less than the minimum rates of wages fixed for that class of work or less than the amount due to him under this Act shall be punishable with imprisonment which may extend to six months or with fine which may extend to Rs. 500 or both. Rates of overtime [Sec. 14]. Where an employee whose minimum rates of wages is fixed under the Act by the hour, by the day or by any such longer period or may be prescribed, works on any day in excess of the number of hours constituting a normal working day, the employer shall pay him for every hour or part of it so worked in excess at the overtime rates fixed under this Act or under any law of the appropriate Government for the time being in force. Sec. 59 of the factories Act 1948, provides that where a worker works for more than 9 hours on any day or 48 hours in a week, he shall, in respect of overtime work, be paid wages at the rate of twice the ordinary rates of wages. 5. Wages of Worker who works for less than normal working day [Sec 15]. Where the minimum rates of wages of an employee has been fixed under this Act by the day and the employee, on any working day, works for a period less than the requisite number of hours constituting a normal working day, save as otherwise provided, he shall be entitled to receive wages in respect of work done by him on that day as if he had worked for a full normal working day. However, in the following cases, he shall not be entitled to receive the wages for a full normal working day- (i) where the failure to work is caused by his unwillingness to work and not by the omission of the employer to provide him with work; or (ii) in such other cases and circumstances as may be prescribed. 6. Wages for two or more classes of work [Sec. 16]. Where an employee does two or more than two classes of work for each one of

which a different rate of minimum wages is fixed, the employees, in such a case, shall be entitled to receive wages from his employer in respect of time respectively occupied in each such class of work, at not less than the minimum rate in force in respect of each of such class. 7. Minimum Time Rate Wage for Piece Rate Work [Sec. 17]. Where an employee is employed on piece work but for such work minimum time rate and not the minimum piece rate has been fixed under the Act, the employee shall be entitled to receive wages at not less than the minimum time rate. Amount of Compensation [Sec. 20(3)]. Where an application has been admitted by the Authority, the Authority shall hear the applicant and the employer or give them an opportunity of being heard and after such further inquiry as it considers necessary may direct- (i) in the case of claims arising out of payment of less than the minimum rates of wages, the payment to the employee the difference between the minimum wages payable to him and the wages actually paid, together, with the payment of such compensation as the Authority may think fit but not exceeding 10 times the amount of difference. (ii) in any other case, the payment of the amount due to the employee, together with the payment of compensation as it may think fit, not exceeding Rs. 10. The Authority may direct payment of such compensation in cases where the excess or the amount due is paid by the employer to the employee before the disposal of the application.

Malicious or Vexatious Application (See 20(4)] If the Authority hearing an application is satisfied that it was malicious or vexatious, it may direct that a penalty not exceeding Rs. 50 be paid to the employer by the person presenting the application.

Equal Remuneration Act 1976

INTODUCTION

The principle of equal work to men and women worker has been gaining increasing acceptance all over the world. In many countries, law have been passed prohibiting discrimination between men and women in matters relating to payment of wages for similar work. The State Policy article 39 of the Constitution envisages that the State shall direct its policy, among other things, towards securing that there is equal pay for equal work for both men and women. The International Women’s Year, President of India promulgated the Equal Remuneration Ordinance, 1975 on 26th September, 1975 to provide for the payment of equal remuneration to men and women workers

Cont.. Article 39(a) states that the citizens, men and women, equally, have the right to an adequate means of livelihood. Article 39(d) “that there is equal pay for equal work for both men and women”. Article 16(2) makes a specific mention that “no citizen shall on ground only of ….sex …be ineligible for or discrimination against in respect of any employment or office under state.”

(a) “Appropriate Government” means – (i) in relation to any employment carried on by or under the authority of the Central Government or a railway administration, or in relation to a banking company, a mine, oilfield or major port or any corporation established by or under a Central Act, the Central Government, and (ii) In relation to any other employment, the State Government; (b) “Commencement of this Act” means, in relation to an establishment or employment, the date on which this Act comes into force in respect of that establishment or employment; (c) “Employer” has the meaning assigned to it in clause (f) of Section 2 of the Payment of Gratuity Act, 1972 (39 of 1972); (d) “Man” and “woman” mean male and female human beings, respectively, of any Age; (e) “Notification” means a notification published in the Official Gazette; (f) “Prescribed” means prescribed by rules made under this Act; g) “Remuneration” means the basic wage or salary, and any additional emoluments whatsoever payable, either in cash or in kind, to a person employed in respect of employment or work done in such employment, if the terms of the contract of employment, express or implied, were fulfilled; (h) “Same work or work of a similar nature” means work in respect of which the skill, effort and responsibility required are the same, when performed under similar working conditions, by a man or a woman and the differences, if any, between the skill, effort and responsibility required of a man and those required of a woman are not of practical importance in relation to the terms and conditions of employment (i) “Worker” means a worker in any establishment or employment in respect of which this

Act has come into force; (j) Words and expressions used in this Act and not defined but defined in the Industrial Disputes Act, 1947 (14 of 1947), shall have the meaning respectively assigned to them that act. “An act to provide for the payment of equal remuneration to men and women workers and for the prevention of discrimination, on the ground of sex, against women in the matter of employment and for matters connected therewith or incidental thereto. “ Duty of employer to pay equal remuneration (sec.2(h)) “Same work or work for similar nature” The act define “work in respect of which the skill, effort and responsibility required are the same, when performed under similar working conditions, by a man or a women and the difference, if any between the skill, effort and responsibility required of man and those required of a women are not of practical importance in relation to the terms and condition of employment .”

Prohibition of discrimination in recruitment or other condition of service(sec 5) This Act, no employer shall while making recruitment for the same work or work of a similar nature, or in any condition of service subsequent to recruitment such as promotions, training or transfer, make any discrimination against women except where the employment of women in such work is prohibited or restricted by or under any law for the time being in

force: Provided that the provisions of this section shall not affect any priority or reservation for Scheduled Castes or Scheduled Tribes, ex-servicemen, retrenched employees or any other class or category of persons in the matter of recruitment to the posts in an establishment or employment. Advisory Committee (increasing employment opportunities for women) Every Advisory Committee shall consist of not less than ten persons, to be nominated by the appropriate Government, of which one-half shall be women. The Advisory Committee shall regulate its own procedure. The appropriate Government may, after considering the advice tendered to it by the Advisory Committee and after giving to the persons concerned in the establishment or employment an opportunity to make representations, issue such directions in respect of employment or women workers, as the appropriate Government may think fit. Authorities for hearing and deciding claims and complaints The appropriate Government may, by notification, appoint such officers, not below the rank of a Labour Officer, as it thinks fit to be the authorities for the purpose of hearing and deciding Maintenance of registers (Sec 8) Every employer is required to maintain prescribed registers and documents in relation to workers employed by him

The Employee’s Provident Fund Act 1952 Introduction

•Provident Fund has come into force to give better future to employees on their retirement & his dependants in case of his death during employment

•The Employees Provident Funds Act 1952 is compulsory contributory fund for the future of an employee after retirement or for his dependents in case of his early death

•Act is applicable to all states of India except Jammu and Kashmir Salary consists of two parts i.e. earnings & deductions Provident Fund is one of the statutory deduction done by the employer at the time of salary payment Provident Fund is governed by the Employee’s Provident Fund Act 1952 Application

•Every industry employing 10 or more persons (180 industries are specified in Schedule 1 of the Act)

•Every industry employing 10 or more persons which the Central Govt. may notify

•Any other establishment notified by the Central Government even if employing less than 10 persons Eligibility & Entitlement

•Every employee employed directly / through a contractor who is in receipt of wages are eligible to become a member of the fund (exception - Apprentice under the Apprentices Act and casual laborers)

•Irrespective of permanent / probationary employees, all employees are eligible for joining the PF scheme from the date of joining the service

•Minimum 10% of the basic pay for establishments employed less than 10 persons; sick industries declared by necessary authority; Jute, Beedi , Brick, Coir & Guar Gum Industries / Factories

•Other industries maximum 12% of the basic pay

•A member can contribute voluntarily more than statutorily prescribed rate (upto 100% of basic salary) which will be transferred to his PF A/c Calculation

•12% contribution by the employee is directly transferred to his Provident Fund A/c

•12% is contributed by the employer out of which 8.33% is credited to Employee Pension Fund and the balance 3.67% is transferred to PF A/c of the employee

•1.10% Administration charges on total wages are payable by the employer

•0.50% EDLI calculated on total EDLI slab (Rs. 6500) wages and payable by the employer towards EDLI fund

•0.01% EDLI Administration charges calculated on total EDLI slab wages are payable by the employer Benefits

•Employees can take advances / withdraw the PF in case of retirement, medical care, housing, family obligation, education of children & financing of life Insurance Polices

•Upto 90% of the PF amount can be withdrawn at the age of 54 years or before one year of actual retirement

•PF amount of the deceased member is payable to nominees / legal heirs

•Immediate income tax exemption under Sec 80C of IT Act

•Equal contribution by the employer

•Interest rate is usually higher than the prevailing market rate (present interest rate @ 8.5%)

•PF A/c can be transferred if any member changes from one establishment to other where the PF Scheme is applicable

•Totally tax free returns Interest

•Interest is credited to the members PF A/c on monthly running balance

•Interest rate is fixed by the Central Government in consultation with the Central Board of trustees of EEPF every year during March / April

•The present rate of interest is 8.5% Nomination

•The member can nominate other person / persons to receive the Fund amount in the event of his death

•The nomination details provided by the members are maintained at the Regional Provident Fund Office for use in the event of death of the member Annual Statement of Account

•After the close of each year of contribution, annual statement of account will be sent to each member through establishment where the member was last employed

•The annual statement of fund account will show the opening balance at the beginning of the year, contributions during the year, the amount of interest credited at the end of the period and the closing balance at the end of the year

•If any error is noticed in the annual statement, the member shall bring the same to the notice of the PF Office through employer within 6 months from the date of receipt of the statement Full Settlement

•PF A/c settled immediately under the circumstances;

–Retirement after 58 years

–Retirement on account of permanent incapacity

–Termination of service on retrenchment

–Voluntary Retirement Scheme (VRS)

–Permanent migration from India to settle abroad / taking employment

–For female members leaving service for getting married

•PF A/c settled after two months under the circumstances;

–Resignation from the services Advances / Withdrawals

•Purchase of site for construction of house / construction of House / purchase of flat

•Additions / alterations / improvements to the house

•Repayment of loan

•Hospitalisation for more than a month / major surgical operation / suffering from TB, Leprosy, Paralysis, Cancer, Heart ailment etc

•Marriage of self / son / daughter / sister / brother

•Education of son / daughter

•Abnormal conditions like natural calamities

•Physically handicapped member for purchasing an equipment to minimize the hardship due to handicap Employer Role & Responsibility Monthly Returns

•Filing monthly PF returns with the EPFO within 15 days of the close of each month

•Provide list of new employees joined in the establishment during the preceding month & are qualified to become member in fund (Form-5)

•Provide list of employees leaving service during the preceding month (Form-10)

•Employer should file 'Nil' returns if there is no new employee or no employee leaving the service during the preceding month

•Provide the total no. of members last month, new members joined and existing members resigned in the preceding month & total no. of present subscribers to be fund (Form-12A) Annual Returns

•Employer shall send to the Commissioner within one month of the close of the year, a consolidated Annual Contribution Statement (Form-6A) and individual employee sheet (Form-3A) showing the contributions made by the employees and employer during the year Penalty

•12–37% interest is payable for the delayed period in remitting contributions/ administrative charges depending upon the delayed period Exemption

•Employer can seek exemption from the Scheme if similar / better benefits are provided other than the Scheme by forming a Voluntary PF Trust which will work under the rules & regulations of EPFO Employee Role & Responsibility

•Provide details of self & nominees (Form-2) for PF & Pension Scheme at the time of joining the establishment

•In case of already having PF A/c, apply for transfer of previous A/c to the present A/c

•If willing to increase contribution, inform the same to the employer to deduct the amount from the salary (Voluntary Provident Fund).

•Voluntary PF can be upto 100% of wages

•Understand that the employer is not liable to pay any contribution on voluntary PF

•Periodically verify the details maintained by the employer

•Don't allow employer to deduct his share of contribution/ administrative charges payable by him from the wages

•Understand that Employees' Provident Fund Organization does not have any agent / middlemen The Employees Pension Scheme 1995 Introduction

•To give long term protection / financial security to employee upon retirement and his family in case of his pre-mature death, family pension scheme has come into force by diverting 8.33% contribution made by employer towards PF scheme Application

•Scheme is compulsory for all the existing members who become members of the Employees Provident Fund Scheme Eligible

•Monthly pension to employees on retirement

•Widows on death of the member

•Children of the member below 25 years age

•Monthly pension to members upon permanent total disablement during service The Employees Deposit-Linked Insurance Scheme 1976 (EDLI) The Employees Deposit-Linked Insurance Scheme 1976 (EDLI)

Application

•EDLI scheme is compulsory for all the existing members who become members of the PF Scheme

•Life insurance benefit (death coverage) of the employee is available under this scheme while in service Calculation

•EDLI is calculated on EDLI slab – Rs. 6500/-

•0.50% EDLI calculated on total EDLI slab (Rs. 6500) wages and transferred to EDLI fund

•0.01% Administration charges calculated on total EDLI wages

•EDLI / administration charges are payable by the employer The Employees Deposit-Linked Insurance Scheme 1976 (EDLI) Eligible

•Person who is eligible to receive PF dues of deceased member who died while in service is only eligible to receive EDLI fund Exemption

•Employer can seek exemption from the Scheme if similar / better benefits are provided other than the Scheme with the consent of majority of employees

(Ex: IJM opted LIC as it is giving death coverage of Rs. 1,60,000/- under EDLI instead of Rs. 60,000/- given by EPFO)

PRESENTATION ON THE PAYMENT OF BONUS ACT, 1965 APPLICABILITY The Act applies to- a) every factory; and b) every other establishment in which twenty or more persons are employed on any day during an accounting year. ELIGIBIITY FOR BONUS Every employee receiving salary or wages up to Rs.21,000 p.m. and engaged in any kind of work whether skilled, unskilled, managerial, supervisory etc. is entitled to bonus for every accounting year if he has worked for at least 30 working days in that year. Salary Limit (Ceiling of Bonus) Where the salary or wages of an employee exceeds Rs.21,000 per month, the bonus payable to such employee shall be calculated as if his salary or wages were Rs.21,000 per month. The Payment of Bonus (Amendment) Act, 2015 The Payment of Bonus (Amendment) Act, 2015 envisages enhancement of eligibility limit under section 2(13) from Rs.10,000/- per month to Rs.21,000/- per month and Calculation Ceiling under section 12 from Rs. 3500 to Rs.7000 or the minimum wage for the scheduled employment, as fixed by the appropriate Government, whichever is higher. The Payment of Bonus (Amendment) Act, 2015 also mandates previous publication of draft subordinate legislations, framed under the enabling provisions under the said Act, in the Official Gazette for inviting objections and suggestions before their final notification. 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, or under the Industrial Disputes Act, 1947, or under any other law applicable to the establishment; (b) he has been on leave with salary or wages; (c) 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 wages, during the accounting year. DISQUALIFICATION FOR BONUS An employee shall be disqualified from receiving bonus under this Act, if he is dismissed from service for,- fraud; or riotous or violent behavior while on the premises of the establishment; or theft, misappropriation or sabotage of any property of the establishment. Deduction of certain amounts from bonus payable under the Act Where in any accounting year, an employee is found guilty of misconduct causing

financial loss to the employer, then, it shall be lawful for the employer to deduct the amount of loss from the amount of bonus payable by him to the employee under this Act in respect of that accounting year only and the employee shall be entitled to receive the balance, if any. MINIMUM AND MAXIMUM BONUS PAYABLE MINIMUM BONUS The minimum bonus which an employer is required to pay even if he suffers losses during the accounting year or there is no allocable surplus is 8.33 % of the salary during the accounting year, or Rs. 100 in case of employees above 15 years and Rs 60 in case of employees below 15 years, whichever is higher MAXIMUM BONUS If in an accounting year, the allocable surplus, calculated after taking into account the amount ‘set on’ or the amount ‘set of’ exceeds the minimum bonus, the employer should pay bonus in proportion to the salary or wages earned by the employee in that accounting year subject to a maximum of 20% of such salary or wages. TIME LIMIT FOR PAYMENT

The bonus should be paid in cash within 8 months from the close of the accounting year or within one month from the date of enforcement of the award or coming into operation of a settlement following an industrial dispute regarding payment of bonus.

However if there is sufficient cause extension may be applied for. CALCULATION OF BONUS The method for calculation of annual bonus is as follows: 1) Calculate the Available Surplus. Available Surplus Available Surplus = Gross Profit – ( deduct) the following :

Depreciation admissible u/s 32 of the Income tax Act Development allowance

Available Surplus (Deductions) Direct taxes payable for the accounting year (calculated as per Sec.7) – Sums specified in the Third Schedule. Direct Taxes (calculated as per Sec. 7) in respect of gross profits for the immediately preceding accounting year.

Calculate Allocable Surplus Allocable Surplus = 60% of Available Surplus, 67% in case of foreign companies. Make adjustment for ‘Set-on’ and ‘Set-off’. For calculating the amount of bonus in respect of an accounting year, allocable surplus is computed after considering the amount of set on and set off from the previous years, as illustrated in Fourth Schedule. SET ON Where for any accounting year, the allocable surplus exceeds the amount of maximum bonus payable to the employees, then, the excess shall, subject to a limit of twenty per cent of the total salary or wages 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 up to and inclusive of the fourth accounting year to be utilized for the purpose of payment of bonus. SET OFF 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, and there is no amount or 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. Set & Set Off 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 be taken into account. The allocable surplus so computed is distributed amongst the employees in proportion to salary or wages received by them during the relevant accounting year. DUTIES OF EMPLOYER To calculate and pay the annual bonus as required under the Act. To submit an annul return of bonus paid to employees during the year, in Form D, to the Inspector, within 30 days of the expiry of the time limit specified for payment of bonus.

To co-operate with the Inspector, produce before him the registers/records maintained, and such other information as may be required by them. RIGHTS OF EMPLOYER Right to forfeit bonus of an employee, who has been dismissed from service for fraud, riotous or violent behavior, or theft, misappropriation or sabotage of any property of the establishment. Right to make permissible deductions from the bonus payable to an employee, such as, festival/interim bonus paid and financial loss caused by misconduct of the employee. Right to refer any disputes relating to application or interpretation of any provision of the Act, to the Labour Court or Labour Tribunal. RIGHTS OF EMPLOYEES Right to claim bonus payable under the Act and to make an application to the Government, for the recovery of bonus due and unpaid, within one year of its becoming due. Right to refer any dispute to the Labour Court/Tribunal. Employees, to whom the Payment of Bonus Act does not apply, cannot raise a dispute regarding bonus under the Industrial Disputes Act. Right to seek clarification and obtain information, on any item in the accounts of the establishment.

OFFENCES AND PENALTIES For contravention of the provisions of the Act or rules the penalty is imprisonment upto 6 months, or fine up to Rs.1000, or both. For failure to comply with the directions or requisitions made the penalty is imprisonment upto 6 months, or fine up to Rs.1000, or both. In case of offences by companies, firms, body corporate or association of individuals, its director, partner or a principal officer responsible for the conduct of its business, shall be deemed to be guilty of that offence, unless the person concerned proves that the offence was

committed without his knowledge or that he exercised all due diligence.

Payment of Wages Act, 1936 Applicability It applies in the first instance to the payment of wages to persons employed in any factory, to persons employed (otherwise than in a factory) upon any railway by a railway administration or, either directly or through a subcontractor, by a person fulfilling a contract with a railway administration, and to persons employed in an industrial or other establishment specified. Responsibility for payment of wages Every employer shall be responsible for the payment to persons employed by him of all wages required to be paid under this Act: Provided that, in the case of persons employed (otherwise than by a contractor)-in factories, if a person has been named as the manager of the factory (b) in industrial or other establishments, if there is a person responsible to the employer for the supervision and control of the industrial or other establishments (c) upon railways (otherwise than in factories), if the employer is the railway administration and the railway administration has nominated a person in this behalf for the local area concerned. The person so named, the person. so, responsible to the employer, or the person so nominated, as the case may be; [shall also be responsible] for such payment. Fixation of wage-periods. (1) Every person responsible for the payment of wages under section 3 shall fix periods (in this Act referred to as wage periods) in respect of which such wages shall be payable. (2) No wage period shall exceed one month. Time of payment of wages 1) The wages of every person employed upon or in- (a) any railway, factory or industrial or other establishment] upon or in which less than one thousand persons are employed, shall be paid before the expiry of the seventh day, (b) any other railway, factory or industrial or other establishment, shall be paid before the expiry of the tenth day, after the last day of the wage period in respect of which the wages are payable: (c) in the case of persons employed on a dock, wharf or jetty or in a mine, the balance of wages found due on completion of the final tonnage account of the ship or wagons loaded or unloaded, as the case may be, shall be paid before the expiry of the seventh day from the day of such completion. 2) Where the employment of any person is terminated by or on behalf of the employer, the wages earned by him shall be paid before the expiry of the second working day from the day on which his employment is terminated 3) Where the employment of any person in an establishment is terminated due to the closure of the establishment for any reason other than a weekly or other recognized holiday, the wages earned by him shall be paid before the expiry of the second day from the day on which his employment is so terminated. 4) All payments of wages shall be made on a working day. Wages to be paid in current coin or currency*notes. All wages shall be paid in current coin or currency notes or in both: Provided that the employer may, after obtaining the written authorization of the employed person, pay him the wages either by cheque or by crediting the wages in his bank account

Maintenance of registers and records. (1) Every employer shall maintain such registers and records giving such particulars of persons employed. by him, the work performed by them, the wages paid to them, the deductions made from their wages, the receipts given by them and such other particulars and in such form as may be prescribed. (2) Every register and record required to be maintained under this section shall, for the purposes of this Act, be preserved for a period of three years after the date of the last entry made therein. Inspectors. (1) An Inspector of Factories appointed under Factories Act, 1948 shall be an Inspector for the purposes of this Act in respect of all factories within the local limits assigned to him. (2) The [State Government] may appoint Inspectors for the purposes of this Act in respect of all persons employed upon a railway (otherwise than in a factory) to whom this Act applies. (3) The State Government may, by notification in the Official Gazette appoint such other persons as it thinks fit to be Inspectors for the purposes of this Act, and 'may define the local limits within which and the class of factories and industrial or other establishments in respect of which they shall exercise their functions. (4) An Inspector may,- (a) make such examination and inquiry as he thinks fit in order to ascertain whether the provisions of this Act or rules made there under are being observed; (b) with such assistance, if any, as he thinks fit, enter, inspect and search any premises of any railway, factory or [industrial or other establishment] at any reasonable time for the purpose of carrying out the objects of this Act; (c) supervise the payment of wages to persons employed upon any railway or in any factory or industrial or other establishment; (d) require by a written order the production at, such place, as may be prescribed, of any register or record maintained in pursuance of this Act and take on the spot or other wise statements of any persons which he may, consider necessary for carrying out the put-poses of this Act; (e) seize or take copies of such registers or documents or portions thereof as he may consider relevant in respect of an offence under this Act which lie has reason to believe has been committed by an employer; (f) exercise such other powers as may be prescribed: No person shall be compelled under this section to answer any question or make any statement tending to incriminate himself. Penalty for offences under the Act. Whoever being responsible for the payment of wages to an employed person contravenes both inclusive, shall be punishable with fine which shall not be less than two hundred rupees but which may extend to one thousand rupees or five hundred rupees (3) Whoever being required under this Act to maintain any records or registers or to furnish any information or return (a) fails to maintain such register or record; or (b) willfully ref uses or without lawful excuse neglects to furnish such information or return; or (c) willfully furnishes or causes to be furnished any information or return which he knows to be false; or

(d) refuses to answer or willfully gives a false answer to any question necessary for obtaining any information required to be furnished under this Act; Shall, for each such offence, be punishable with fine which shall not be less than two hundred rupees but which may extend to one thousand rupees. (4) Whoever­ (a) willfully obstructs an Inspector in the discharge of his duties under this Act; or (b) refuses or willfully neglects to afford an Inspector any reasonable facility for making any entry, inspection, examination, supervision, or inquiry authorised by or under this Act in relation to any railway, factory or [industrial or other establishment]; or (c) willfully refuses to produce on the demand of an Inspector any register or other document kept in pursuance of this Act; or (d) prevents or attempts to prevent or does anything which he has any reason to believe is likely to prevent any person from appearing before or being examined by an Inspector acting in pursuance of his duties under this Act. (e) shall be punishable with fine which shall not be less than two hundred rupees but which may extend to one thousand rupees]. (5) If any person who has been convicted of any offence punishable under this Act is again guilty of an offence involving contravention of the same provision, he shall be punishable on a subsequent conviction with imprisonment for a term which shall not be less than one month but which may extend to six months and with fine which shall not be less than five hundred rupees but which may extend to three thousand rupees (6) If any person fails or willfully neglects to pay the wages of any employed person by the date fixed by the authority in this behalf, he shall, without prejudice to any other action that may be taken against him, be punishable with an additional fine which may extend to one hundred rupees for each day for which such failure or neglect continues.