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Subject - Re: books on labour laws

Hi everybody who requires knowledge of labour laws alongwith case history.

please go through the topics one by one

Apprentices Act

he !ain purpose of the Act is to provide practical training to technically qualified persons in various

trades. he objective is pro!otion of new skilled !anpower. he sche!e is also e"tended to engineers a

diplo!a holders.

he Act applies to areas and industries as notified by #entral govern!ent. $section %&'().

*bligation of +!ployer - +very e!ployer is under obligation to take apprentices in prescribed ratio of thskilled workers in his e!ploy!ent in different trades. $section %%). ,n every trade there will be reserved

places for scheduled castes and schedules tribes. $section A). Ratio of trade apprentices to workers sha

be deter!ined by #entral /overn!ent. +!ployer can engage !ore nu!ber of apprentices than prescrib!ini!u!. $section 0&%(). - - he e!ployer has to !ake arrange!ents for practical training of apprentice

$section 1&%(). +!ployer will pay stipends to apprentices at prescribed rates. ,f the e!ployees are less th

234 345 of cost is shared by /overn!ent. ,f e!ployer is e!ploying !ore than 234 workers he has tobear full cost of training.

6ho can be apprentice - Apprentice should be of !ini!u! age of %' years and he should satisfy the

standard of education and physical fitness as prescribed. $section ).

7uration of training - 7uration of training period and ratio of apprentices to skilled workers for differen

trades has been prescribed in Apprenticeship Rules %11%. 7uration of Apprenticeship !ay be fro! 8!onths to ' years depending on the trade as prescribed in Rules. 9eriod of training is deter!ined by

ational #ouncil for training in ;ocational rades &established by /overn!ent of ,ndia(.

#ontract with apprentice < Apprentice appointed has to e"ecute an contract of apprenticeship with

e!ployer. he contract has to be registered with Apprenticeship Adviser. ,f apprentice is !inor agree!

should be signed by his guardian. $section '&%(). - - Apprentice is entitled to casual leave of %2 days

!edical leave of %3 days and e"traordinary leave of %4 days in a year.

=egal 9osition of Apprentices - An apprentice is not a work!an during apprentice training. $section %0)

9rovisions of labour law like >onus 9? +S, Act gratuity ,ndustrial 7isputes Act etc. are not applicablhi!. However provisions of ?actories Act regarding health safety and welfare will apply to hi!.

Apprentice is also entitled to get co!pensation fro! e!ployer for e!ploy!ent injury. $section %8).

An e!ployer is under no obligation to e!ploy the apprentice after co!pletion of apprenticeship. $sectio

22&%(). However in @9 State Road ransport #orpn v. @9 9arivahan iga! Shishukh >erogar Sangh A

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%113 S# %%%' B &%113( 2 S## % it was held that other things being equal a trained apprentice should b

given preference over direct recruits. ,t was also held that he need not be sponsored by the e!ploy!ent

e"change. Age bar !ay also be rela"ed to the e"tent of training period. he concerned institute should!aintain a list of persons already trained and in between trained apprentices preference should be given

those who are senior. < sa!e view in @9 Rajya ;idyut 9arishad v. State of @9 2444 ==R 081 &S#(.

Stipend payable - he !ini!u! rate of stipend payable per !onth is as follows - &a( +ngineering gradua- Rs %1C4 p.!. for post-institutional training &b( Sandwich course students for degree e"a!ination - Rs

%'44 p.!. &c( diplo!a holders - Rs %'44 p.!. for post-institutional training &d( Sandwich course studen

for degree e"a!ination - Rs %%'4 p.!. &e( ;ocational certificate holder - Rs %414 p.!. $w.e.f. Day 244

,n case of ' year training the stipend is as follows < first year < Rs 024 p!. Second year < Rs 1'4 p!.

hird year < Rs %414 p!. ?ourth year < Rs %24 p!. $?ro! Day 244%).

est and 9roficiency certificate - *n co!pletion of training every trade apprentice has to appear for a te

conducted by ational #ouncil. ,f he passes he gets a certificate of proficiency.

Apprenticeship Adviser - /overn!ent is e!powered to appoint Apprenticeship Adviser 7y Apprentice

Adviser etc. to supervise the sche!e. ;arious powers have been conferred on the! under the Act.

#ontract =abour &Regulation and Abolition( Act %1C4

9urpose of the Act is to regulate e!ploy!ent of contract labour and to provide for abolition of contractlabour in certain cases.

+stablish!ent to which Act applies - he Act is applicable to every establish!ent in which 24 or !orework!en are e!ployed as contract labour or were so e!ployed anyti!e during last %2 !onths. $section

%&(&a() . ct will not apply to establish!ent where work of an inter!ittent or casual nature is perfor!ed.$section %&3(&a().

E+stablish!entF !eans any office or depart!ent of /overn!ent or a local authority or any place where a

industry trade business !anufacturing or occupation is going on. $section 2&%(&e(). - - +very such

establish!ent is required to get itself registered under the Act. $section C).

Danager or occupier of factory or head of depart!ent of /overn!entGlocal authority is ter!ed as

E9rincipal +!ployerF. $section 2&%(&g().

9rincipal +!ployer should !aintain register of contractors in prescribed for!. $section 21). He is requir

to ensure that contractor !akes adequate provision for canteen rest roo!s supply of drinking waterlatrines urinals wash roo!s etc. to contract labour. ,f contractor fails to do so within prescribed ti!e th9rincipal +!ployer shall provide the a!enities. can recover fro! contractor the cost incurred by hi! in

providing these a!enities. $section 24).

#ontract =abour < A work!an is dee!ed to be e!ployed as Econtract labourF in or in relation to work o

the establish!ent if he is hired for such work by or through a contractor with or without knowledge of

principal e!ployer. $section 2&%(&b().

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#ontractor - he Act applies to every contractor who e!ploys 24 or !ore work!en. $section %&(&b().

contractor sill be licensed. $section %2). #ontractor is required to !aintain !uster roll and register ofwages. $section 21). - - He is required to follow other provisions as !y be contained in Rules !ade by

Appropriate /overn!ent. #ontractor is required to pay wages to work!en on ti!e in presence of

authorised representative of principal e!ployer. $section 2%). - - He should issue wage slips to work!anand obtain signature or thu!b i!pression on wage register. - - if contractor fails to !ake pay!ent ofwages 9rincipal +!ployer is liable to !ake pay!ent of wages to contract labour. He can recover this

a!ount fro! contractor. $section 2%&'().

#ontractor is required to provide canteen facilities first-aid rest roo!s drinking water latrines and

washing facilities as per rules !ade by State /overn!ent. $sections %8 and %C).

#ontrolling authority < #ontrol over contract labour will be e"ercised by EAppropriate /overn!entF. - -

Appropriate /overn!ent !eans #entral /overn!ent in case of railways docks ,?#, +S,# =,#

*/# @, Airport Authority industry carried on by or under authority of #entral /overn!ent State

/overn!ent in case of other industrial disputes $section 2&%(&a(). - - Appropriate /overn!ent can !akerules. ,t will appoint inspecting staff to ensure that the provisions of Act are being followed. $section 20

*ther laws applicable to contract labour < >esides #ontract =abour &Regulation and Abolition( Act varother Acts are applicable to contract labour < &a( ?actories Act < he Act !akes no distinction between

persons directly e!ployed and e!ployed through contractor &b( +!ployees 9rovident ?unds Act &c( +S

&d( 9ay!ent of 6ages Act &e( Dini!u! 6ages Act &f( ,ndustrial 7isputes Act &g( 6ork!enFs#o!pensation Act.

9rohibition of e!ploy!ent of contract labour < Appropriate /overn!ent can prohibit e!ploy!ent ofcontract labour in any process operation or work in any establish!ent by issuing a notification. Such o

can be issued after consultation with Advisory >oard. $section %4&%(). >efore issuing such order in respeof any establish!ent /overn!ent will consider aspects of conditions of work and benefits provided to

contract labour whether process operation or work is incidental or necessary for theindustryGtradeGbusiness perennial nature whether it is done ordinarily through regular work!en in othe

si!ilar establish!ent. $section %4&2().

,n Steel Authority of ,ndia v. ational @nion 6ater ?ront 244%&3( S#A=+ 828 B 244% ==R 18% B A,R

244% S# 32C B I 244%&3( S# 842 B 244% ,,, #=R '1 B &244%( C S## % B 244% == %3 B 244% A,R

S#6 3C' &S# 3 !e!ber #onstitution bench( it was held that #entral G State /overn!ent can issuenotification uGs %4 abolishing contract labour only after following prescribed procedure regarding

consultation etc. ,t was also held that even if such a notification is issued the e!ployees with contractor

will not be auto!atically absorbed in the e!ploy!ent of the co!pany if the contact was genuine.However co!pany will give preference to the!. However if the contract was not genuine but a !ereca!ouflage the so called contract labour will have to be treated as e!ployees of principal e!ployer.

+!ployees 9rovident ?unds Act %132

As per 9rea!ble to the Act the +9? Act is enacted to provide for the institution of provident funds

pension fund and deposit lined insurance fund for e!ployees in factories and other establish!ents. - -

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+!ployeesF 9rovident ?unds and Discellaneous 9rovisions Act is a social security legislation to provide

for provident fund fa!ily pension and insurance to e!ployees. +!ployee has to pay contribution towar

the fund. +!ployer also pays equal contribution. he e!ployee gets a lu!p su! a!ount when he retirewhich will be useful to hi! after retire!ent. he Act covers three sche!es i.e. 9? &9rovident ?und

sche!e( ?9? &?a!ily 9ension ?und sche!e( and +7=, &+!ployees 7eposit =inked ,nsurance sche!e(

he +9? Act contains basic provisions in respect of applicability eligibility da!ages appeals recoveryetc. he three sche!es for!ed by #entral /overn!ent under the Act !ake provisions in respect of thos

sche!es.

Applicability of the Act - he Act applies to &a( +very establish!ent which is a factory engaged in indus

specified in Schedule , to the Act and in which 24 or !ore persons are e!ployed and &b( any other

establish!ent or class of establish!ent e!ploying 24 or !ore persons which !ay be specified by #entrgovern!ent by notification in official gaette. - - #entral /overn!ent can also apply provisions of the A

to any establish!ent even if it e!ploys less than 24 persons. $section %&().

,n R9?# v. S Hariharan %1C% =ab ,# 13% &S#( it was held that te!porary workers should not be counto decide whether the Act would apply.

+ven if the provisions of 9? Act are not applicable in a particular establish!ent if e!ployer and !ajoriof e!ployees agree the #entral 9rovident ?und #o!!issioner can apply the provisions to that

establish!ent by issuing a notification in *fficial /aette. $section %&'(). *nce the provisions of Act

beco!e applicable it continues to be applicable even if nu!ber of e!ployees fall below 24. $section %&

#overage of Act - he Act has been e"tended to ?actories Dines other than coal !ines Hotels and

restaurants 9lantation of tea coffee rubber $ea factories in Assa! have been e"cluded vide para %&(of +9? Sche!e) rading and co!!ercial establish!ents engaged in purchase sale or storage of good

+stablish!ents of e"porters i!porters advertisers stock e"changes #anteens +stablish!ents ofAttorneys #A ,#6As +ngineers and #ontractors architects and !edical practitioners Hospitals

ravel agencies >anks doing business only in one State /eneral ,nsurance +"pert services #lubsand societies rendering services to their !e!bers Agricultural far!s ?inancial +stablish!ents other

than banks >uilding and construction ,ndustry 9oultry far!ing @niversity college or schools. - -

Act has been e"tended w.e.f. %.'.244% vide notification dated 22..244% to courier services Aircraftairlines other than aircraft or airline owned or controlled by /overn!ent +stablish!ent engaged in

rendering cleaning and sweeping services.

*nce an establish!ent is covered under 9? all its depart!ents and branches wherever they are situated

also covered.

*ther non-factory establish!ents covered - >esides factories other establish!ents e!ploying 24 or !opersons can be covered under the Act uGs %&(&b(. ;arious notifications have been issued e"tending the

provisions of 9? Act to non-factory establish!ents. So!e !ajor a!ong the! are - plantation !ines

coffee hotels and restaurants cine!a and theatres trading and co!!ercial establish!ents laundrycanteens establish!ents of attorneysG#AG ,#6AGengineersG architectsG!edical practitioners hospitals

financial establish!ents &other than ,?#, @, ,7>, S?#( building and construction industry poultry

university college schools scientific institutions etc.

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ransitory provisions when Act is e"tended - ,t is possible that when 9? Act is e"tended to certain

establish!ent so!e 9? sche!e !ay be already in e"istence. Such sche!e will continue and the balancea!ount in such sche!e to credit of the e!ployee will be transferred to the 9rovident ?und under statuto

sche!e of 9? Act. $section %3).

+stablish!ent to include all depart!ents and branches - 6here an establish!ent consists of differentdepart!ents or has branches whether situate in the sa!e place or in different places all such depart!e

or branches shall be treated as parts of the sa!e establish!ent. $section 2A). - - hus if factory is cover

the head office and branches will also be covered under the Act.

Act not applicable to certain establish!ents - As per section %8&%( the 9? Act does not apply to &a( any

establish!ent registered under #ooperative Societies Act or State law relating to cooperative societiese!ploying less than 34 persons and working without paid of power &b( to any establish!ent belonging t

or under #ontrol of #entral /overn!ent or a State /overn!ent and whose e!ployees are entitled to

benefit of contributory provident fund or old age pension. &c( to any establish!ent set up under any #en

or State Act and whose e!ployees are entitled to benefit of contributory provident fund or old age pensi

6here 9? Act is not applicable - he 9? Act is not applicable to certain establish!entsJ ?actories or

establish!ents e!ploying less than 24 e!ployees. However once Act beco!es applicable it continues apply even if subsequently the nu!ber is lower than 24 >anks doing business in !ore than one State

#oal !ines @nits established under #ooperative Societies Act e!ploying less than 34 workers and

working without aid of power *ther establish!ents belonging to or under control of #entral /overn!or State /overn!ents and whose e!ployees are entitled to benefits of contributory provident fund or

pension. ea factories in Assa! +"e!ption granted by #entral /overn!ent by a special notification

Ad!inistration of the ?und - >oth e!ployer and e!ployee have to pay contribution at prescribed rates..

hese a!ounts are credited to a fund. he fund vests in and is ad!inistered by #entral >oard. $section3&%A().

+!ployees covered under the sche!e - As per section 2&f( Ke!ployeeL !eans any person who is e!plo

for wages in any kind of work !anual or otherwise in or in connection with the work of an establish!e

and who gets his wages directly or indirectly fro! the e!ployer. ,t includes any person - &i( e!ployed bor through a contractor in or in connection with the work of the establish!ent &ii( engaged as an apprent

not being an apprentice engaged under the Apprentices Act %18% or under the standing orders of the

establish!ent.

hus &a( 9ersons e!ployed through contractor in connection with work of establish!ent are covered &b

Apprentices e!ployed under Apprentices Act or under standing orders of establish!ent are e"cluded i.they are not e!ployees. $he !odel standing orders !erely state that an EapprenticeF is a learner who ispaid an allowance during the period of his training).

on-+ligible e!ployees under 9? - +!ployee whose EpayF is !ore than Rs. 8344 per !onth are noteligible. &,t !ay be noted that li!it of pay was Rs 3444 upto %.3.244% and Rs. 344 upto 4th Sept. 1

Apprentices as per certified standing orders or under Apprentices Act #asual e!ployees. However

e!ployees e!ployed through contractors have also to be covered under 9?.

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+!ployee to beco!e !e!ber of ?und i!!ediately on joining < +very e!ployee e!ployed in or in

connection with work of a factory or establish!ent to which the Act applies is entitled and required tobeco!e !e!ber of 9rovident ?und unless he is an e"cluded e!ployee. $para 28&%( of +9? Sche!e). A

e!ployee who is drawing EpayF above prescribed li!it &presently Rs 8344( can beco!e !e!ber with

per!ission of Assistant 9? #o!!issioner if he and his e!ployer agree. $para 28&8( of +9? Sche!e).

#ontribution by e!ployer and e!ployee - As per section 2&c( KcontributionL !eans a contribution payab

in respect of a !e!ber under a Sche!e or the contribution payable in respect of an e!ployee to who! t

,nsurance Sche!e applies.

As per section 8 contribution shall be paid by e!ployer M %45 of basic wages plus dearness allowance

plus retaining allowance. his a!ount is defined as EpayF as per e"planation to para 2&f(&ii( of +9? Sche

+qual contribution is payable by e!ployee also. his contribution can be increased to %25 by #entral

/overn!ent and in fact has been increased to %25 in !ost of the cases.

A person who is already a !e!ber continues to be a E!e!berF even if his EpayF e"ceeds Rs 8344.

However the contribution is li!ited to Rs 8344 only. $para 28A&2( of +9? Sche!e).

R9?# is liable under #onsu!er 9rotection Act - he Regional 9rovident ?und #o!!issioner is providi

service under the Act and hence he is liable under #onsu!er 9rotection Act. - R9?# v. Shiv Nu!ar Iosh

&%118( ' #I 043 B %118 ==R 8'% R# 3 !e!ber bench( - confir!ed in R9?# v. Shiv Nu!ar Ios%111 A,R S#6 ''38 B %111&C( S#A=+ '3 B 2444 ==R 2%C B A,R 2444 S# % B 11 #o!p #as 'C

&2444( #=A->= Supp 28 B 2' S#= '8 &S#(.

+!ployees 9rovident ?und Sche!e - his is the !ain sche!e under the Act. >oth e!ployer and e!ploy

have to pay contribution to 9rovident ?und. he e!ployer has to deduct contribution of e!ployee fro! salary of e!ployee and has to pay both e!ployeesF contribution as well as e!ployerFs contribution by a

challan in prescribed for!. he a!ount has to be paid in approved bank.

+!ployee can pay higher contribution - +!ployee has to contribute %2G%45 of his OpayO as contribution.

he e!ployee can voluntarily pay higher contribution above the statutory rate. However e!ployer doesnot have to !atch the voluntary contribution over and above the statutory rate. $para 28&2( of +9?

Sche!e).

#ontribution payable under 9? Sche!e - he 9rincipal +!ployer is liable to pay contribution of his ow

e!ployees as well as e!ployees e!ployed through contractor. 9rincipal +!ployer can recover fro!

contractor the a!ount paid by hi! on behalf of contractor. he contribution is %25 of EpayF i.e. basicwages plus dearness allowance cash value of food concession and retaining allowance. #ontribution ofboth e!ployer and e!ployee is sa!e i.e. %25 each. $para 21 of +9? Sche!e).

+!ployer has to pay his contribution to +9?. He cannot deduct his contribution fro! wages of thee!ployee. $9ara % of +9? Sche!e). However he has to deduct e!ployeeFs share fro! his salary and p

the sa!e in +9? sche!e. his deduction can be only fro! the wages pertaining to period for which

contribution is paid. However if there is accidental o!ission the a!ount can be recovered later. A!oun

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deducted fro! salary of e!ployees is held in trust by the e!ployer or contractor. $9ara 2 of +9? Sche!

*ut of e!ployerFs contribution of %2G%45 the +!ployerFs contribution of 0.5 will be diverted to+!ployeesF 9ension Sche!e. he balance will be retained in the +9? sche!e. hus on retire!ent the

e!ployee will get his full share plus the balance of +!ployerFs share retained to his credit in +9? accou

$his diversion is only w.e.f. %8th ove!ber 13. +arlier +!ployerFs contribution to their credit willcontinue to re!ain to their credit).

=ower contribution in certain cases - he e!ployerOs and e!ployeeFs contribution is %25 each. his is

applicable to !any of industries and establish!ents. However this contribution is not applicable to - aestablish!ent e!ploying less than 24 persons any establish!ent registered with >oard for ,ndustrial a

?inancial Reconstruction &>,?R( as a sick co!pany - the lower rate of contribution continues till its net

worth is positive any other establish!ent which has accu!ulated loss equal to or !ore than its assets ahas also suffered cash loss in last two years. Iute industry >eedi industry >rick industry #oir

industry other than the spinning sector /uar gu! factories. ,n these cases the contribution is %45.

,nterest on account < 9? #o!!issioner shall !aintain account of each !e!ber of +9? sche!e. $9ara 3Sche!e). ,nterest is credited to the account of e!ployee. he ,nterest is calculated on !onthly running

balance basis. A!ount standing to credit at end of the !onth is considered for calculation of interest for

following !onth. he interest rate is declared every year by #entral /overn!ent in consultation with#entral >oard of rustees of 9rovident ?und. $9ara 84 of +9? Sche!e).

+!ployeesF 9ension Sche!e - his sche!e has been introduced w.e.f. %8th ove!ber 13. he Sche!eapplicable to all subscribers of +!ployersF 9rovident ?und. ,t is also co!pulsory to persons who were

subscribers as on %8.%%.13.

#ontribution - he e!ployerFs contribution of 0.5 will be diverted to the fund of 9ension Sche!e.

+!ployee does not have to !ake any contribution. +!ployerFs contribution is %25G %45. ,n such cases0.5 is diverted to 9ension sche!e and balance %.8C5G.8C5 as the case !ay be will be in credit of

e!ployeeFs na!e in 9rovident ?und account. he 0.5 is on !a"i!u! salary of Rs. 8344. ,f so!ee!ployers are paying contribution on salary in e"cess of Rs. 8344 the e"cess contribution will be credi

to 9rovident ?und account and not to 9ension sche!e.

o separate ad!inistration charges or inspection charges are payable as these are already paid along wi

9rovident ?und contribution.

>enefits under the sche!e - De!bers will get pension on superannuation or retire!ent fro! service and

upon disable!ent during e!ploy!ent. ?a!ily pension will be available to widowGwidower for life or ti

heGshe re!arries. ,n addition children will be entitled to pension upto 23 years of their age. ,n case oforphans pension at enhanced rate is available upon death of widowGwidower or ceasing pay!ent of widpension. >enefit of pension to children or orphan is only restricted for two childrenGorphans.

,f the person is un!arried or has no fa!ily pension is available to no!inee for a specified period.

#o!!utation of 9ension - he !e!ber can co!!ute .5 of the pension so as to receive hundred

ti!es the !onthly pension so co!!uted as co!!uted value of pension. >alance will be paid on !onthl

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basis.

+!ployees 7eposit =inked ,nsurance Sche!e - he purpose of the sche!e is to provide life insurancebenefits to e!ployees who are already covered under 9?G?9?. he e!ployer has pay contribution equal

4.345 of the total wages of e!ployees ,n addition ad!inistrative charges of 4.%5 of total wages.

$otification o. A* 34&+( dated 20-C-%1C8 issued uGs 8#&2( of 9? Act).

he e!ployee does not contribute any a!ount to the sche!e. he salary li!it for coverage of e!ployee

sa!e as that of 9rovident ?und.

+"e!ption fro! the sche!e can be obtained fro! R9?# if =,# /roup /ratuity sche!e is adopted by

e!ployer. ,f e"e!ption is granted only inspection charges M 4.4435 are payable to 9? authorities.

>enefit to no!inee of e!ployee - ,f an e!ployee dies during e!ploy!ent his no!inee or fa!ily !e!b

gets an a!ount equal to average balance in the 9rovident ?und Account of the deceased e!ployee durin

last %2 !onths. ,f such balance is !ore than Rs. 3444 the insurance a!ount payable is Rs. 3444 plu

235 of the a!ount in e"cess of Rs. 3444 subject to overall li!it of Rs. 84444. ,f the e!ployees arecovered under another life insurance sche!e whose benefits are better than this sche!e an e"e!ption f

this sche!e can be obtained. $,ncreased to 3444 and 84444 w.e.f. %.8.2444)

he +!ployees State ,nsurance Act &+S, Act(

he +S, Act has been passed to provide for certain benefits to e!ployees in case of sickness !aternity e!ploy!ent injury and to !ake provisions for related !atters. As the na!e suggests it is basically an

EinsuranceF sche!e i.e. e!ployee gets benefits if he is sick or disabled.

+S,# - +!ployees State ,nsurance #orporation &+S,#( has been for!ed to supervise the sche!e under

section of the Act. he #orporation supervises and controls the +S, sche!e.

o dis!issal or punish!ent during period of sickness - Section C of the Act provides that no e!ployershall dis!iss discharge or reduce or otherwise punish an e!ployee during the period e!ployee is in rec

of sickness benefit or !aternity benefit. He also cannot dis!iss discharge or otherwise punish e!ploye

when he is in receipt of disable!ent benefit or is under !edical treat!ent or is absent fro! work due tosickness.

his gives protection to e!ployee when he is in receipt of sickness benefit or !aternity benefit. +!ploycannot take disciplinary action against e!ployee in such cases. his provision is grossly !isused by

e!ployees.

However in >uckingha! P #arnatic #o v. ;enkatayya - A,R %18' S# %2C2 B %18&C( ?=R ' B &%18' S#R 283 B &%18( 2 ==I 80 B 23 ?IR 23 &S#( it was rightly held that this provision &of section C( i

applicable only in case of punitive action for all kinds of !isconduct during which e!ployee has receive

sickness benefits. his protection is not applicable in case of abandon!ent of e!ploy!ent or whenter!ination is auto!atic as per contract. < followed in Rajveer Singh v. Iudge %118 ==R 8% &Raj H#(

where it was hold that provisions of section C are not applicable when ter!ination of an e!ployee is

auto!atic.

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Applicability of +S, Sche!e - he sche!e is applicable to all factories. $section %&'(). he Appropriate

/overn!ent can also !ake it applicable to any other industrial co!!ercial agricultural or otherestablish!ents by issuing notification and giving 8 !onth notice. $section %&3().

hus +S, Act can be !ade applicable to EshopsF also. However since /overn!ent has to provide forhospitals and !edical facilities the Act can be !ade applicable to different parts of State at different dathus if a factory is at a place where +S,# is unable to provide !edical facilities +S, Act !ay not be !

applicable to that area. /overn!ent can e"e!pt a factory or establish!ent or persons or class of person

fro! provisions of +S, Act if the e!ployees are getting better !edical facilitiesG $e.g. if /overn!ent isconvinced that the factory itself is providing very good !edical facilities e.g. like ,S#*).

Regional *ffices G >ranch *ffices get covered - Regional offices of a factory which have their connectito the factory and where the 9rincipal +!ployer has control over the regional offices the regional office

will be covered under +S,# - Hyderabad Asbestos #e!ent 9roducts v. +S,# - A,R %1C0 S# 38 B &%1C

2 S#R '3 B &%1C % S## %1'. ,f head office is covered under +S,# branch offices are also covered

when branch and principal office are inter-dependent and there is unity of relationship. - ransport#orporation of ,ndia v. +S,# %111&C( S#A=+ 8 B 2444 ==R %% B 0 ?=R 1C4 B %111 A,R S#6 ''

A,R 2444 S# 20 &S# !e!ber bench(.

*utside agencies can be covered - ,n 9D 9atel v. @*, &%108( % S## 2 B AR %10C S# ''C B %103 ,, #

22 &S#( workers were given work of !aking ObidisO as ho!e. Right of rejection of bidis was with

e!ployer. ,t was held that test of control and supervision lies in the right of rejection. ,t was held thate!ployees working outside can be covered under +S,# if there is !aster servant relationship.

7efinition of EfactoryF as per +S, Act - he E?actoryF !eans any pre!ises where !anufacturing processcarried out. ,f !anufacture is without aid of power the Act is applicable if persons e!ployed are at leas

24. ,f !anufacture is with aid of power the Act applies if persons e!ployed are at least %4. $section 2&%- - However E!inesF have been e"cluded. - - EDanufacturing processF has sa!e !eaning as defined und?actories Act. $section 2&%'AA().

*ne a factory or establish!ent is covered it continues to be covered even if nu!ber of e!ployees reduc$section %&8()

#onstruction workers not covered < #onstruction workers e!ployed in construction activities are not

covered under +S,#. < +S,# circular o. 9-%2&%%(-%%G2CG11 ,ns.,; dated %'-8-%111. - - However ifad!inistrative office e!ploys 24 or !ore eligible e!ployees that establish!ent and e!ployees working

ad!inistrative office will be covered.

+!ployer under +S, Act < E9rincipal +!ployerF !eans owner or occupier of factory Head of

depart!ent in case of /overn!ent depart!ent and 9erson responsible for supervision and control in c

of any other establish!ent. $section 2&%C(). - - +!ployees working though contractor are also covered.E#ontractorF is ter!ed as E,!!ediate +!ployerF. E,!!ediate e!ployerF !eans a person who has

undertaken the e"ecution on the pre!ises of factory or establish!ent to which this Act applies. He !ay

on his own or under the supervision of 9rincipal +!ployer. he work should be part of work of factory

establish!ent of principal e!ployer or is preli!inary or incidental to the work of factory or establish!e

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$section 2&%(). 9ri!ary liability of +S, contribution is of 9rincipal +!ployer. $section '4&%(). He can

recover the contribution paid by hi! fro! the Ei!!ediate e!ployerF i.e. contractor. $section '%).

+!ployee under +S, Act - E+!ployeeF !eans any person e!ployed for wages in or in connection with

work of a factory or establish!ent to which the +S, Act applies. +!ployees drawing wages upto Rs. C3

per !onth can be presently covered under the +S, Act sche!e. $section 2&1().

+!ployees include persons e!ployed through contractor Apprentices other than those covered unde

EApprentices ActF 9ersons e!ployed in ad!inistration office depart!ent or branch for purchase or sal

of products. #asual workers engaged in work incidental to or connected with work of factory orestablish!ent +!ployees working at head office when factory is located at different place #anteen

staff watch and ward staff are e!ployees Staff in hospital attached to factory are e!ployees. - - De!

of ,ndian aval Dilitary or Air ?orces are e"cluded.

,f an e!ployee is drawing wages less than Rs. C344 per !onth at the beginning of his Econtribution

periodF his contributions are payable for whole period of contribution period of si" !onths even if in

between his wages go above Rs. C344 p.!. $proviso to section 2&1().

?ollowing are not e!ployees - 9ersons drawing wages over Rs. C344 per !onth !e!ber of Ar!y

avy or Air ?orce. 9artners of fir! are not e!ployees even if they are drawing wages - R7 +S,# v.Ra!anuja Datch ,ndustry A,R %103 S# 2C0 B %103&%( S## 2%0 B %110&8( S#A=+ 0 9ersons

e!ployed in /overn!ent establish!ents. construction workers engaged in raising additional building

subsequent to initial set up of factory.

#ontribution to +S,# ?und - >oth e!ployee and e!ployer have to !ake contribution to +S,#. he

e!ployer has to deduct contribution fro! wages of e!ployee and pay to +S,# both the e!ployerFscontribution as well as e!ployeesF contribution. $section 1&%().

he contribution is payable for Ewage periodF i.e. the period in respect of which wages are payable to

e!ployee. $section 1&2(). or!ally Ewage periodF is a !onth. he e!ployeeFs contribution is %.C35 owages. ,t should be rounded off to ne"t 3 paise. +!ployees contribution is not payable when daily wage

are below Rs %3G-.

+!ployerFs contribution is '.C35 of total wage bill of all e!ployees in respect of every wage period. h

it is not necessary to calculate e!ployerOs contribution separately for each e!ployee. '.C35 of gross wa

should be calculated and rounded off to ne"t 3 paise. +!ployees drawing wages lower than Rs 23 per ddo not have to pay e!ployeeOs share. he contribution has to be paid within 2% days fro! close of the

!onth. ,t is payable by a challan in authorised bank. - - ,f the contribution is not paid in ti!e interest M

%25 is payable. $section 1&3(&a().

,n addition +S,# authorities can i!pose Eda!agesF varying between 35 to 235 of arrears of contributi

uGs 03>.

+!ployer cannot deduct e!ployerFs contribution fro! the salary of e!ployee. $section '4&().

=iability of principal e!ployer < ,n case of e!ployees of contractor liability is of 9rincipal +!ployer. ,

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>ritannia ,ndustries v. +S,# &244%( 10 ?IR 324 &Dad H#( it was held that 9rincipal +!ployer will be

liable to penalty and da!ages also if contribution is not paid on due date. < sa!e view in 9ad!ini 9rodu

v. +S,# 2444&2( Nar =I 81 &Narn H#(.

6age for purpose of +S, Act - E6agesF !eans all re!uneration paid or payable in cash to e!ployee

according to ter!s of contract of e!ploy!ent and includes any pay!ent !ade to an e!ployee in respecperiod of authorised leave lock-out lay-off strike which is not illegal and other additional re!uneratiopaid at interval not e"ceeding two !onths. ,t does not include contribution paid by e!ployer to any

pension fund or provident fund ravelling allowance Rei!burse!ent of e"penses !ade by nature of

e!ploy!ent of the e!ployee gratuity. $section 2&22().

hus wages include basic pay dearness allowance city co!pensatory allowance pay!ent of day of res

overti!e wages house rent allowance incentive allowance attendance bonus !eal allowance andincentive bonus. However wages do not include annual bonus unilateral rewards sche!e &ina!( e" gra

pay!ents !ade every quarter or every year travelling allowance retrench!ent co!pensation encash!e

of leave and gratuity.

#ontribution period and >enefit period - #ontribution period is &a( %st Septe!ber to %st Darch &b( %st

April to 4th Septe!ber. he corresponding benefit period is &a( following %st Iuly to %st 7ece!ber &b

following %st Ianuary to 4th Iune. hus Ebenefit periodF starts three !onths after the Econtribution periis over. he relevance of this definition is that sickness benefit and !aternity benefit is available only

during Ebenefit periodF. hus an e!ployee gets these benefits only after 1 !onths after joining

e!ploy!ent and paying contribution. However other benefits are available during contribution periodalso.

>enefits to e!ployees covered under +S, Act - An e!ployee is entitled to get benefits which are !edicabenefits as well as cash benefits. He also can get disable!ent benefit.

+qual Re!uneration Act

As the na!e of the Act suggests the object of the Act is to provide for pay!ent of equal re!uneration t

!en and wo!en workers and to prevent discri!ination on the ground of se" against wo!en in

e!ploy!ent. - - he Act has overriding effect over other Acts. $section )

7uty of e!ployer to pay equal re!uneration < ,t is duty of each e!ployer not to !ake any discri!inatio

while paying re!uneration to any worker of opposite se". He should pay sa!e wages to work!en of bose" for perfor!ing sa!e work or work of a si!ilar nature. $section ').

Sa!e work or work of si!ilar natureF !eans work in respect of which the skill effort and responsibilityrequired are the sa!e when perfor!ed under si!ilar working conditions by a !an or wo!an and thedifference if any between the skill effort and responsibility required of a !an and those required of a

wo!an are not of practical i!portance in relation to the ter!s and conditions of e!ploy!ent. $section

2&h().

o discri!ination while recruit!ent or pro!otion < here should be no discri!ination on recruit!ent

pro!otion training or transfer e"cept where e!ploy!ent of wo!en is restricted. $section 3). - - hese

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provisions are not applicable when priority is to be given to schedules castes schedules tribes e"-

service!en or retrenched e!ployees.

?actories Act %1'0

his is one of the earliest welfare legislation. he object is to secure to workers health safety welfareproper working hours and other benefits.- - ,n >hikusa Qa!asa Nshatriya v. @*, A,R %18 S# %31% it observed that ?actories Act is enacted pri!arily with object to of protecting workers e!ployed in factor

against industrial and occupational haards. - - he Act requires that workers should work in healthy an

sanitary conditions and for that purpose it provides that precautions should be taken for safety of workerand prevention of accidents. - - ,ncidental provisions have also been !adeF.

,n S D 7atta v. State of /ujarat 244%&3( S#A=+ '3C B %44 ?IR 28 B 244% A,R S#6 % it wasobserved E?irst ?actories Act was passed in %004. ?actories Act %1'0 was engrafted in the Statute >ook

where e!phasis had been on the welfare of the workers. ?actory ,nspectors have been placed with heav

responsibility on the!. - - he Act undoubtedly is a welfare legislation and cannot be ter!ed to be a

co!plete code in itself. - - ,n this case it was held that if a work!an is found working during period notnotified beforehand prosecution can be launched.

O?actoryO !eans any pre!ises where %4 or !ore workers are working and a !anufacturing process iscarried out with aid of power &24 if !anufacture is without aid of power(. $section 2&!(). EDanufacturin

processF !eans process of altering repairing orna!enting finishing packing oiling washing cleaning

breaking up de!olishing or otherwise treating or adopting any article or substance. ,t also includes pu!ping oil water sewage or any other substance /enerating transfor!ing or trans!itting power

#o!posing typing printing #onstructing repairing breaking of ships or vessels 9reserving articles

cold storage. $section 2&k(). - - 6orker !eans a person e!ployed in any !anufacturing process or cleanor any work incidental to !anufacturing process. ,t includes persons e!ployed through contractor. $sect

2&l().

,f the e!ploy!ent is less than these nu!bers the unit gets covered under Shop P +stablish!ent Act. - -+S,# v. Iaihind Roadways 244% ==R 3C4 B %4% ?IR 0 &Nar H#( it was held that transportation of goo

on contract basis fro! one place to another is not E!anufacturing processF.

O?actoryO should be licensed G registered with #hief ,nspector of ?actories &ter!ed as 7irector of ,ndustr

Health P Safety in so!e States(. $section 8). he license G registration has to be renewed every year by

paying prescribed fees.

*ccupier of the factory < E*ccupierF of a factory !eans the person who has ulti!ate control over the aff

of factory. ,t includes a partner in case of fir! and director in case of a co!pany. ,n case of /overn!enco!pany OoccupierO need not be a director. ,n that case person appointed to !anage affairs of the factorshall be EoccupierF. $section 2&n(). - - a!e of OoccupierO of the factory should be infor!ed to ?actories

,nspector. he OoccupierO will be held responsible if provisions of ?actories Act are not co!plied with. -

He has to give notice %3 days before he begins to occupy the pre!ises as a factory giving details asprescribed in section C.

>esides OoccupierO na!e of ODanagerO should also be infor!ed. Any change in na!e of Danager shall a

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be infor!ed. $section C&'().

7uties of occupier < he occupier shall ensure as far as possible health safety and welfare of workerswhile they are working in factory. $section CA).

7uties of every !anufacturer < +very !anufacturer or i!porter of ay article or substance in factory shadesign it in such a way that it is safe to use and carry. Adequate safety infor!ation about the article shoube given. $section C>).

?acilities and conveniences - he factory should be kept clean. $section %%). here should be arrange!eto dispose of wastes and effluents. $section %2). ;entilation should be adequate. Reasonable te!perature

co!fort of e!ployees should be !aintained. $section %). 7ust and fu!es should be controlled below

per!issible li!its. $section %'). Artificial hu!idification should be at prescribed standard level. $section%3). *vercrowding should be avoided. $section %8). Adequate lighting drinking water latrines urinals a

spittoons should be provided. $sections %C to %1). Adequate spittoons should be provided. $section 24).

6elfare - Adequate facilities for washing sitting storing cloths when not worn during working hours.$section '2). ,f a worker has to work in standing position sitting arrange!ent to take short rests should b

provided. $section ''). Adequate ?irst aid bo"es shall be provided and !aintained $section '3).

?acilities in case of large factories - ?ollowing facilities are required to be provided by large factories -

A!bulance roo! if 344 or !ore workers are e!ployed #anteen if 234 or !ore workers are e!ployed

should be sufficiently lighted and ventilated and suitably located. $section '8). Rest roo!s G shelters wdrinking water when %34 or !ore work!en are e!ployed $section 'C) #rches if 4 or !ore wo!en

workers are e!ployed. $section '0) ?ull ti!e 6elfare *fficer if factory e!ploys 344 or !ore workers

$section '1) Safety *fficer if %444 or !ore work!en are e!ployed.

Safety - All !achinery should be properly fenced to protect workers when !achinery is in !otion. $sect2% to 2C). Hoists and lifts should be in good condition and tested periodically. $section 20 and 21). 9ress

plants should be checked as per rules. $section %). ?loor stairs and !eans of access should be of soundconstruction and free for! obstructions. $section 2). Safety appliances for eyes dangerous dusts gas

fu!es should be provided. $sections 3 and 8). 6orker is also under obligation to use the safety

appliances. He should not !isuse any appliance convenience or other things provided. $section %%%). ,ncase of haardous substances additional safety !easures have been prescribed. $sections '%A to '%H). -

Adequate fire fighting equip!ent should be available. $section 0). - - Safety *fficer should be appointe

nu!ber of workers in factory are %444 or !ore. $section '4>).

6orking hours - A worker cannot be e!ployed for !ore than '0 hours in a week. $section 3%). 6eekly

holiday is co!pulsory. ,f he is asked to work on weekly holiday he should have full holiday on one ofthree days i!!ediately or after the nor!al day of holiday. $section 32&%(). He cannot be e!ployed for !than 1 hours in a day. $section 3'). At least half an hour rest should be provided after 3 hours. $section 3

otal period of work inclusive of rest interval cannot be !ore than %4.3 hours. $section 38). A worker

should be given a weekly holiday. *verlapping of shifts is not per!itted. $section 30). otice of period work should be displayed. $section 8%).

*verti!e wages - ,f a worker works beyond 1 hours a day or '0 hours a week overti!e wages are doub

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the rate of wages are payable. $section 31&%(). A work!an cannot work in two factories. here is restrict

on double e!ploy!ent. $section 84). However overti!e wages are not payable when the worker is on t

otal working hours including overti!e should not e"ceed 84 in a week and total overti!e hours in aquarter should not e"ceed 34. Register of overti!e should be !aintained. - - An e!ployee working outs

the factory pre!ises like field workers etc. on tour outside headquarters are not entitled to overti!e. < R

Ananthan v. Avery ,ndia %1C2&'2( ?IR 4' &Dad H#( 7irector of Stores v. 9 S 7ube %1C0 =ab ,# 1432 ?IR 211 B %1C0 , == '8' B 8 ?=R '24.

+!ploy!ent of wo!en - A wo!an worker cannot be e!ployed beyond the hours 8 a.!. to C.44 p!. Sta

/overn!ent can grant e"e!ption to any factory or group or class of factories but no wo!an can beper!itted to work during %4 9D to 3 AD. Shift change can be only after weekly or other holiday and no

between. $section 88).

Record of work!en - A register &!uster roll( of all workers should be !aintained. o worker should be

per!itted to work unless his na!e is in the register. Record of overti!e is also required to be !aintaine

$section 82).

=eave - A worker is entitled in every calendar year annual leave with wages at the rate of one day for ev

24 days of work perfor!ed in the previous calendar year provided that he had worked for 2'4 days or

!ore in the previous calendar year. #hild worker is entitled to one day per every %3 days. 6hile calcula2'4 days earned leave !aternity leave upto %2 weeks and lay off days will be considered but leave sha

not be earned on those days. $section C1). < =eave can be accu!ulated upto 4 days in case of adult and

days in case of child. =eave ad!issible is e"clusive of holidays occurring during or at either end of theleave period. 6age for period !ust be paid before leave begins if leave is for ' or !ore days. $section 0

=eave cannot be taken for !ore than three ti!es in a year. Application for leave should not nor!ally be

refused. $hese are !ini!u! benefits. +!ployer can of course give additional or higher benefits).

6ages for * and leave salary - O6agesO for leave encash!ent and overti!e will include dearnessallowance and cash equivalent of any benefit. However it will not include bonus or overti!e.

#hild e!ploy!ent - #hild below age of %' cannot be e!ployed. $section 8C). #hild above %' but below

years of age can be e!ployed only for '.3 hours per day or during the night. $section C%). He should be

certified fit by a certifying surgeon. $section 80). He cannot be e!ployed during night between %4 p! toa!. $section C%). A person over %3 but below %0 years of age is ter!ed as EadolescentF. He can be

e!ployed as an adult if he has a certificate of fitness for a full dayOs work fro! certifying surgeon. An

adolescent is not per!itted to work between C p! and 8 a!. $section C4). here are !ore restrictions one!ploy!ent of fe!ale adolescent. - - Register of child workers should be !aintained. $section C).

7isplay on notice board - A notice containing abstract of the ?actories Act and the rules !ade thereundein +nglish and local language should be displayed. a!e and address of ?actories ,nspector and thecertifying surgeon should also be displayed on notice board. $section %40&%().

otice of accidents diseases etc. - otice of any accident causing disable!ent of !ore than '0 hoursdangerous occurrences and any worker contacting occupational disease should be infor!ed to ?actories

,nspector. $section 00). otice of dangerous occurrences and specified diseases should be given. $section

00A and 01).

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o punish!ent to 6elfare *fficer without sanction - o punish!ent can be i!posed on 6elfare *ffice

without prior sanction of #hief #o!!issioner. However a si!ple order of ter!ination as per ter!s ofappoint!ent is not a Epunish!entF and such ter!ination order is valid. < Arun Nu!ar >ali v. /overn!e

of # of 7elhi 2442 ==R 31 &7el H#( < relying on Associated #e!ent #o =td. v. 9 Shar!a A,R

%183 S# %313.

*bligation regarding haardous processes G substances - ,nfor!ation about haardous substances G

processes should be given. 6orkers and general public in vicinity should be infor!ed about dangers and

health haards. Safety !easures and e!ergency plan should be ready. Safety #o!!ittee should beappointed.

=abour =aws &+"e!ption ?ro! furnishing returns and !aintaining registers by #ertain +stablish!ents(Act %100

he Act has been passed to give relief to establish!ents e!ploying s!all nu!ber of persons fro!

furnishing returns and !aintaining registers under certain labour laws.

ES!all establish!entF !eans an establish!ent in which not less than ten and not !ore than nineteen

persons are e!ployed or were e!ployed during past %2 !onths. $section 2&e(). E;ery S!all establish!e!eans an establish!ent in which not !ore than nine persons are e!ployed or were e!ployed during pas

%2 !onths. $section 2&f().

Such establish!ents are e"pected to sub!it only a Ecore returnF in prescribed for! as on %st 7ece!ber

every year. he return should be filed on or before %3th ?ebruary of succeeding year. ,n addition a Es!a

establish!entF is required to !aintain registers in prescribed for! > # and 7. A Every s!all establish!is required to !aintain only register in for! +. $section '&%().

,n addition e!ployer is required to issue wage slips to work!en. Returns relating to accidents are requi

under ?actories Act and 9lantation =abour Act are required to be sub!itted.

*nce such annual return is filed and registers are !aintained no further return or records are required

under any of following laws - 9ay!ent of 6ages Act 6eekly Holidays Act Dini!u! 6ages Act ?actories Act 9lantations =abour Act 6orking Iournalists and *ther ewspaper +!ployees Act

#ontract =abour &Regulation and Abolition( Act Sales 9ro!otion +!ployees onditions of Service(

+qual Re!uneration Act. $?irst Schedule to the Act). $section '&().

9ay!ent of >onus Act %183

>onus is really a reward for good work or share of profit of the unit where the e!ployee is working. *ftthere were disputes between e!ployer and e!ployees about bonus to be paid. ,t was thought that a

legislation will solve the proble! and hence >onus Act was passed. @nfortunately in the process bonus

has beco!e al!ost as deferred wages due to provision of pay!ent of !ini!u! 0.5 and !a"i!u! 24bonus. >onus Act has not in any way reduced the disputes.

he Act is applicable to &a( any factory e!ploying %4 or !ore persons where any processing is carried o

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with aid of power &b( *ther establish!ents &established for purpose of profit( e!ploying 24 or !ore

persons. Dini!u! bonus payable is 0.5 and !a"i!u! is 245. >onus is payable annually within 0

!onths fro! close of accounting year. >onus is payable to all e!ployees whose salary or wages do note"ceed Rs 344 per !onth provided they have worked for at least 4 days in the accounting year.

However for calculation of bonus !a"i!u! salary of Rs 2344 is considered.

*nce the Act is applicable it continues to apply even if nu!ber of e!ployees fall below 24. he Act isapplicable to /overn!ent co!panies and corporations owned by /overn!ent which produces goods or

renders services in co!petition with private sector. However the Act is not applicable to /overn!ent

e!ployees the e!ployees of Dunicipal #orporation or Dunicipality railway e!ployees university ande!ployees of educational institutions public sector insurance e!ployees e!ployees of R>, and public

sector financial institutions charitable hospitals social welfare organisations and defense e!ployees. h

Act does not apply to any institution established not for purposes of profit.

+stablish!ents to which the Act is applicable - he Act applies toJ &a( every factory and &b( every oth

establish!ent in which twenty or !ore persons are e!ployed on any day during an accounting year.

$section %&().E?actoryF has sa!e !eaning as per ?actories Act. $section 2&%C( of >onus Act).

he words used are Enu!ber of persons e!ployedF. Hence all persons e!ployed are to be consideredincluding those who are not eligible for bonus. hus all e!ployees including those whose salary or wa

e"ceed Rs 344 per annu! will have to be considered for purpose of deciding eligibility.

Deaning of Eestablish!entF - he word Eestablish!entF is not defined in the Act. or!ally Eestablish!e

is a per!anently fi"ed place for business. he ter! Eestablish!entF is !uch wider than EfactoryF. ,t cove

any office or fi"ed place where business is carried out.

+stablish!ent in public sector covered only in certain cases - he Act applies to establish!ent in publicsector only if the establish!ent in public sector sells the goods or renders services in co!petition with a

establish!ent in private sector and the inco!e fro! such sale or services or both is not less than twentyper cent of the gross inco!e of the establish!ent in public sector for that year. $section 24&%(). ,n other

cases the provisions of this Act do not apply to the e!ployees e!ployed by any establish!ent in public

sector. $section 24&2(). As per section 2&v(&c( the Act does not apply to any institution established not fpurposes of profit.

+stablish!ent in public sector !eans an establish!ent owned controlled or !anaged byJ &a( a/overn!ent co!pany as defined in section 8%C of the #o!panies Act %138 &% of %138( &b( a corporatio

in which not less than forty per cent of its capital is held &whether singly or taken together( by the

/overn!ent or the Reserve >ank of ,ndia or a corporation owned by the /overn!ent or the Reserve>ank of ,ndia. $section 2&%8(). +stablish!ent which is not in public sector is Eestablish!ent in privatesectorF $section 2&%3().

K#orporationL !eans any body corporate established by or under any #entral 9rovincial or State Act budoes not include a co!pany or a co-operative society. $section 2&%%().

+stablish!ents to include depart!ents undertakings and branches - 6here an establish!ent consists of

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different depart!ents or undertakings or has branches whether situated in the sa!e place or in different

places all such depart!ents or undertakings or branches shall be treated as parts of the sa!e establish!

for the purpose of co!putation of bonus under this Act. $section )

6ho are eligible for bonus - +!ployees drawing salary or wages upto Rs 344 per !onth are entitled t

bonus if he has worked for at least 4 working days in an accounting year. +ven a worker working inseasonal factory is eligible if he has worked for at least 4 working days. Apprentices are not eligible fobonus.

Salary above Rs. 2344 is not considered for calculation of >onus. $section %2). +!ployee drawingsalaryGwage e"ceeding Rs 344 is not entitled to any bonus under the Act.

hus !ini!u! bonus M 0.5 will be Rs 2344 and !a"i!u! M 245 will be Rs 8444 for the yearwhen salary of e!ployee e"ceeds Rs 2344 but is less than Rs 344.

+ligibility for bonus if worked for !ini!u! 4 days - +very e!ployee shall be entitled to be paid be hi

e!ployer in an accounting year bonus in accordance with the provisions of this Act provided he hasworked in the establish!ent for not less than thirty working days in that year. $section 0)

#o!putation of a!ount available for distribution as bonus - he establish!ent has to prepare a balancesheet and profit and loss account of the year and calculate the Egross profitF Eavailable surplusF and

Eallocable surplusF as per !ethod and for!ula given in >onus Act.

he first step is to calculate E/ross 9rofitF. As per section ' the gross profit in respect of any accounting

year is required to be calculated as per ?irst Schedule to Act in case of banking co!pany and as per seco

schedule in case of other establish!ents. After calculation of E/ross 9rofitF as per section ' ne"t step iscalculate EAvailable SurplusF. As per section 3 Eavailable surplusF is calculated by deducting su!s as

specified in section 8 fro! Egross profitF arrived at as per section 8 and adding difference equal to inco!ta" on the bonus paid in the preceding year.

hus Available Surplus is equal to /ross 9rofit $as per section ') less prior charges allowable as deduct

uGs 8 plus a!ount equal to inco!e ta" on bonus portion calculated as per proviso &b( to section 3.

Allocable surplus is equal to 845 of Eavailable surplusF calculated as per provisions of section 3. $,n cas

co!pany which does not deduct ta" at source as per provisions of section %1' of ,nco!e a" Act

Eallocable surplusF will be 8C5 of Eavailable surplusF. ?rankly , a! not able to visualise a situation wheco!pany can legally ignore provisions of section %1' of ,nco!e a" Act). - - his Eallocable surplusF ha

be distributed as bonus a!ong e!ployees in proportion to the salary or wages actually earned by each

e!ployee during the year. However this is subject to !ini!u! 0.5 and !a"i!u! 245 as e"plainedbelow.

Set off and set on provisions - ,t !ay happen that in so!e years the allocable surplus is !ore than the

a!ount paid to e!ployees as bonus calculating it M 245. Such e"cess Eallocable surplusF is carriedforward to ne"t year for calculation purposes. his is called Ecarry forward for being set on in succeedin

yearsF. he ceiling on set on that is required to be carried forward is 245 of total salary and wages of

e!ployees e!ployed in the establish!ent. ,n other words even if actual e"cess is !ore than 245 of

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salaryGwages only 245 is required to be carried forward. he a!ount set on is carried forward only upt

and inclusive of the fourth accounting year. ,f the a!ount carried forward is not utilised in that period i

lapses $section %3&%().

Si!ilarly in a particular year there !ay be lower Eallocable surplusF or no Eallocable surplusF even for

pay!ent of 0.5 bonus. Such shortfall is also carried to ne"t year. his is called Ecarry forward for beiset off in succeeding yearsF. hus in every year Eallocable surplusF is calculated. o this a!ount set onfro! previous years is added. Si!ilarly set off if any fro! previous years is deducted. his gives a!ou

which is available for distribution as bonus. he a!ount set off is carried forward only upto and inclusiv

of the fourth accounting year. ,f the a!ount carried forward is not set off in that period it lapses. $sectio%3&2()

Dini!u! bonus - +very e!ployer shall be bound to pay to every e!ployee in respect of any accountingyear a !ini!u! bonus which shall be 0. per cent of the salary or wage earned by the e!ployee durin

the accounting year or one hundred rupees whichever is higher whether or not the e!ployer has any

allocable surplus in the accounting year. 6here an e!ployee has not co!pleted fifteen years of age at th

beginning of the accounting year the !ini!u! bonus payable is 0.5 or Rs 84 whichever is higher.$section %4).

6hile co!puting nu!ber of working days an e!ployee shall be dee!ed to have worked in anestablish!ent even on the days on which &a( He was laid off &b( He was on leave with salaryGwages&c( H

was absent due to te!porary disable!ent caused by accident arising out of and in course of e!ploy!ent

and &d( +!ployee was on !aternity leave with salaryGwages. $section %').

9ay!ent of !a"i!u! bonus - 6here in respect of any accounting year the allocable surplus e"ceeds th

a!ount of !ini!u! bonus payable to the e!ployees the e!ployer shall in lieu of such !ini!u! bonube bound to pay to every e!ployee in respect of that accounting year bonus which shall be an a!ount in

proportion to the salary or wage earned by the e!ployee during the accounting year subject to a !a"i!uof twenty per cent of such salary or wage. $section %%&%(). - - ,n co!puting the allocable surplus under th

section the a!ount set on or the a!ount set off under the provisions of section %3 shall be taken intoaccount in accordance with the provisions of that section. $section %%&2().

hus !a"i!u! bonus payable to e!ployee is 245 in any accounting year.

Salary or wages for calculating bonus - 6here the salary or wage of an e!ployee e"ceeds Rs 2344 per

!onth the bonus payable to such e!ployee under sections %4 or %% shall be calculated as if his salary owages were Rs 2344 per !onth. $section %). ,n other words e!ployees drawing salary or wages betw

Rs 2344 to Rs 344 per !onth are entitled to bonus on the basis of Rs 2344 per !oth salary only.

9ay!ent of /ratuity Act %1C2

/ratuity is a lu!p su! pay!ent to e!ployee when he retires or leaves service. ,t is basically a retire!e

benefit to an e!ployee so that he can live life co!fortably after retire!ent. However under /ratuity Acgratuity is payable even to an e!ployee who resigns after co!pleting at least 3 years of service.

,n 7# Retired +!ployees v. 7elhi ransport #orporation 244%&'( S#A=+ 4 B 244% A,R S#6 2443

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was observed that gratuity is essentially a retiring benefit which as per Statute has been !ade applicable

voluntary resignation as well. /ratuity is reward for good efficient and faithful service rendered for a

considerable period.

Act provides for !ini!u! gratuity only < he /ratuity Act provides only for !ini!u! gratuity payabl

e!ployee has right to receive higher gratuity under a contract or under an award the e!ployee is entitleto get higher gratuity. $section '&3().

+!ployers liable under the sche!e - he Act applies to every factory !ine plantation port and railwa

co!pany. ,t also applies to every shop and establish!ent where %4 or !ore persons are e!ployed or wee!ployed on any day in preceding %2 !onths. $section%&(). Since the Act is also applicable to all shops

and establish!ents it will apply to !otor transport undertakings clubs cha!bers of co!!erce and

associations local bodies solicitorFs offices etc. if they are e!ploying %4 or !ore persons.

+!ployees eligible for gratuity < F+!ployeeF !eans any person &other than apprentice( e!ployed on wa

in any establish!ent factory !ine oilfield plantation port railway co!pany or shop to do any skilled

se!i-skilled or unskilled !anual supervisory technical or clerical work whether ter!s of suche!ploy!ent are e"press or i!plied and whether such person is e!ployed in a !anagerial or ad!inistra

capacity. However it does not include any #entralGState /overn!ent e!ployee. $section 2&e(). hus th

Act is applicable to all e!ployees - workers as well as persons e!ployed in ad!inistrative and !anagercapacity.

/ratuity is payable to a person on &a( resignation &b( ter!ination on account of death or disable!ent dueaccident or disease &c( retire!ent &d( death. or!ally gratuity is payable only after an e!ployee co!pl

five years of continuous service. ,n case of death and disable!ent the condition of !ini!u! 3 yearsF

service is not applicable. $section '&%().

he Act is applicable to all e!ployees irrespective of the salary.

A!ount of gratuity payable - /ratuity is payable M %3 days wages for every year of co!pleted service.the last year of service if the e!ployee has co!pleted !ore than 8 !onths it will be treated as full year

purpose of gratuity. - - ,n case of seasonal establish!ent gratuity is payable M C days wages for each

season. $section '&2().

6ages shall consist of basic plus 7.A as per last drawn salary. However allowances like bonus

co!!ission HRA overti!e etc. are not to be considered for calculations. $section 2&s().

,n case of e!ployees paid on !onthly wages basis per day wages should be calculated by dividing

!onthly salary by 28 days to arrive at daily wages e.g. if last drawn salary of a person &basic plus 7A( iRs. 2844 per !onth his salary per day will be Rs. %44 &2844 divided by %44(. hus the e!ployee isentitled to get Rs. %344 $%3 days !ultiplied by Rs. %44 daily salary) for every year of co!pleted service

he has co!pleted 4 years of service he is entitled to get gratuity of Rs. '3444 &Rs. %344 !ultiplied by

4(. Da"i!u! gratuity payable under the Act is Rs. .34 lakhs &the ceiling was Rs. %44444 which wasincreased to 2.34 lakhs on 2'.1.1C by an ordinance which was later increased to Rs .34 lakhs while

converting the ordinance into Act).

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Da"i!u! gratuity payable < Da"i!u! gratuity payable is Rs .34 lakhs. $Section '&(). $*f course

e!ployer can pay !ore. +!ployee has also right to get !ore if obtainable under an award or contract w

e!ployer as !ade clear in section '&3().

,nco!e-a" e"e!ption - /ratuity received upto Rs. .34 lakhs is e"e!pt fro! ,nco!e a". /ratuity pai

above that li!it is ta"able. $section %4&%4( of ,nco!e a" Act). - - However e!ployee can clai! relief u01 in respect of the e"cess a!ount.

o #o!pulsory insurance of gratuity liability < Section 'A provides that every e!ployer !ust obtain

insurance of his gratuity liability with =,# or any other insurer. However /overn!ent co!panies need obtain such insurance. ,f an e!ployee is already !e!ber

T7 Report ;iolation

43-%%-2448 %%:2' 9D

ak!%0 ?ollow?ull De!ber

Ioin 7ate: Aug 2443

=ocation: /urgaon Haryana ,nd9osts: 810

Subject - Re: books on labour lawscont....

,nco!e-a" e"e!ption - /ratuity received upto Rs. .34 lakhs is e"e!pt fro! ,nco!e a". /ratuity pai

above that li!it is ta"able. $section %4&%4( of ,nco!e a" Act). - - However e!ployee can clai! relief u01 in respect of the e"cess a!ount.

o #o!pulsory insurance of gratuity liability < Section 'A provides that every e!ployer !ust obtaininsurance of his gratuity liability with =,# or any other insurer. However /overn!ent co!panies need

obtain such insurance. ,f an e!ployee is already !e!ber of gratuity fund established by an e!ployer h

has option to continue that arrange!ent. ,f an e!ployer e!ploying !ore than 344 persons establishes anapproved gratuity fund he need not obtain insurance for gratuity liability. - - However this section has n

yet been brought into force. Hence presently such co!pulsory insurance is not necessary.

/ratuity cannot be attached - /ratuity payable cannot be attached in e"ecution of any decree or order ofany civil revenue or cri!inal court as per section % of the Act.

,ndustrial 7isputes Act

he object of the Act is to !ake provisions for investigation and settle!ent of industrial disputes. Howe

it !akes other provisions in respect of lay off retrench!ent closure etc. he purpose is to bring theconflicts between e!ployer and e!ployees to an a!icable settle!ent. $he Act is achieving e"actly

opposite). he Act provides !achinery for settle!ent of disputes if dispute cannot be solved through

collective bargaining.

E,ndustryF under ,ndustrial 7isputes Act < he definition of EindustryF is as follows < E,ndustry !eans an

business trade undertaking !anufacture or calling of e!ployers and includes any calling service

e!ploy!ent handicraft or industrial occupation or avocation of work!en. $section 2&j(). hus the

http://www.citehr.com/16746-books-labour-laws.html#post72722http://www.citehr.com/report.php?p=72722http://www.citehr.com/member.php?u=4867http://www.citehr.com/member.php?u=4867http://www.citehr.com/profile.php?do=addlist&userlist=buddy&u=4867http://www.citehr.com/profile.php?do=addlist&userlist=buddy&u=4867http://www.citehr.com/16746-books-labour-laws.html#tophttp://www.citehr.com/report.php?p=72722http://www.citehr.com/member.php?u=4867http://www.citehr.com/profile.php?do=addlist&userlist=buddy&u=4867http://www.citehr.com/16746-books-labour-laws.html#post72722

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definition is very wide. - - he scope is !uch wider than what is generally understood by the ter!

EindustryF.

,n >angalore 6ater Supply P Sewerage >oard v. Rajappa &%1C 2 S## 2% B 8 ?=R 288 B %1C0&2(

S#R 2% B %1C0&%( ==I '1 B A,R %1C0 S# 3'0 &S# C !e!ber bench 3 v 2 judg!ent( a very wide

interpretation to the ter! OindustryO was given. ,t was held that profit !otive or a desire to generate inco!is not necessary. Any syste!atic activity organied by cooperation between e!ployer and e!ployees fo

the production andGor distribution of goods and services calculated to satisfy hu!an wants and wishes is

EindustryF.

hus !any hospitals educational institutions universities charitable institutions and welfare organisat

have got covered under the Act. 9rofessions clubs cooperatives research institutes etc. are also covered

E,ndustry 7isputeF and E6ork!anF < he definition of Eindustrial disputeF and Ework!anF is as follows -

,ndustrial 7ispute < ,ndustrial dispute !eans any dispute or difference between e!ployers and e!ploye

or between e!ployers and work!en or between work!en and work!en which is connected with thee!ploy!ent or non-e!ploy!ent or the ter!s and conditions of e!ploy!ent or with the conditions of

labour of any person. $section 2&k(). - - Section 2A provides that dis!issal discharge retrench!ent of

even a single work!an will be Eindustrial disputeF even if no other work!an or any union is a party to thdispute.

6ork!an < E6ork!anF !eans any person &including apprentice( e!ployed in any industry to do any!anual clerical or supervisory work for hire or reward. ,t includes dis!issed discharged or retrenched

person also. However it does not include &i( Ar!ed ?orces i.e. those subject to Air ?orce Act Ar!y Act

avy Act &ii( 9olice or e!ployees of prison &iii( +!ployed in !ainly !anagerial or ad!inistrative capaor &iv( person in supervisory capacity drawing wages e"ceeding Rs %844 per !onth or functions are is

!ainly of !anagerial nature. $section 2&"().

Adjudication of disputes < he Act provides for E6orks #o!!itteeF in factories e!ploying %44 or !ore

workers. $section ). he co!!ittee will consist of equal nu!ber of representatives of e!ployer and

e!ployees. Representatives of e!ployees will be selected in consultation with Registered rade @nion.

he 6orks #o!!ittee will first try to settle disputes. ,f dispute is not solved it will be referred toE#onciliation *fficerF. He is appointed by /overn!ent. $section '). he !atter !ay also be referred to

E>oard of #onciliationF. $section '). He will try to arrive at fair and a!icable settle!ent acceptable to bo

parties. ,f he is unable to do so he will send report to appropriate /overn!ent. $section %2&'(). he/overn!ent !ay then refer the industrial dispute to >oard of conciliation =abour #ourt or ,ndustrial

ribunal. $section %2&3().

+!ployer and e!ployees can voluntarily refer the !atter to arbitration. $section %4A). $his provision i

very rarely used by e!ployer and work!en. /enerally they prefer the #ourt route).

,f no settle!ent is arrived at there is three tier syste! of adjudication < =abour #ourt ,ndustrial ribunand ational ribunal. he order !ade by the! is EawardF.

EAwardF !eans an interi! or final deter!ination of any industrial dispute or of any question relating the

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by any =abour #ourt ,ndustrial ribunal or ational ribunal. ,t also includes arbitration award. $sectio

2&b(). - - he EawardF is required to be published by StateG#entral /overn!ent within 4 days. $section

he award beco!es effective 4 days after its publication. $section %CA).

=abour #ourt < =abour #ourts are constituted by State /overn!ents uGs C. ,t will be presided over by

E9residing *fficerF. he =abour #ourt has powers in respect of ,nterpretation of Standing *rders ;iolation of Standing *rders 7ischarge or dis!issal of a work!an 6ithdrawal of any custo!aryconcession or privilege ,llegality or otherwise of a strike or lock-out *ther !atters which are not und

,ndustrial ribunal. $Second Schedule to the Act)

,ndustrial tribunal < ,ndustrial ribunal is constituted by State /overn!ent uGs CA. he tribunal will be

presided over by E9residing *fficer. he ,ndustrial ribunal has powers in respect of 6ages including

period and !ode of pay!ent #o!pensatory and other allowances Hours of work and rest intervals =eave with wages and holidays >onus profit sharing provident fund and gratuity Shift working

changes #lassification by grades Rules of discipline Ratinlanisation and retrench!ent of work!en

$hird Schedule to Act).

ational ribunal < ational ribunal is for!ed by #entral /overn!ent for adjudication of industrial

disputes of national i!portance or where industrial establish!ents situated in !ore than one States are

involved. $section C>).

Reference of dispute < Appropriate /overn!ent can refer any dispute to >oard of #onciliation #ourt o

+nquiry =abour #ourt or ,ndustrial ribunal. $section %4&%(). - - Appropriate /overn!ent !eans #en/overn!ent in case of railways docks ,?#, +S,# =,# */# @, Airport Authority industry carri

on by or under authority of #entral /overn!ent State /overn!ent in case of other industrial disputes

$section 2&a().

#ourtGribunal can reduce punish!ent and order reinstate!ent - As per section %%A the =abour #ourt aribunal have wide powers. hey can reappraise evidence. hey can also see whether the punish!ent is

disproportionate to the gravity of the !isconduct proved. ,f the #ourt or ribunal is of the view that thepunish!ent is disproportionate it can i!pose lesser punish!ent or even set aside the ter!ination and or

reinstate!ent. - - ,f #ourt orders reinstate!ent and e!ployer files appeal in Higher #ourt the e!ployer

required to pay full wages to the e!ployee during the period of pendency of proceedings with High #ouor Supre!e #ourt. However if the work!an was gainfully e!ployed elsewhere #ourt can order that

pay!ent of such wages is not to be !ade. $section %C>).

Settle!ent - ESettle!entF !eans a settle!ent arrived at in the course of conciliation proceedings. ,t inclu

a written agree!ent between e!ployer and work!en arrived at otherwise than in course of conciliation

proceedings &i.e. outside the conciliation proceedings(. - - he difference is that settle!ent arrived at incourse of conciliation or an arbitration award or award of labour court or ribunal binds all parties toindustrial dispute including present and future work!en and all parties who were su!!oned to appear i

the proceedings. $section %0&(). ,f settle!ent is arrived at by !utual agree!ent it binds only those who

were actually party to agree!ent. $section %0&%(). - - he settle!ent is binding during the period it is inforce. +ven after that period is over it continues to be binding unless a 2 !onth notice of ter!ination is

given by one party to another. $section %1&2). - - ,f no period has been specified settle!ent is valid for 8

!onths and an award is valid for one year.

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Iurisdiction of civil court qua industrial dispute < er!ination of a work!an constitutes an ,ndustrial

7ispute. Relief sought can be given by foru! under ,ndustrial 7isputes Act and hence jurisdiction of cicourt is i!pliedly barred. < #handrakant ukara! ika! v. Dunicipal #orporation 2442 A,R S#6 C%4

2442&2( S#A=+ CC B 2442 ==R '10 B %44 ?IR 3%1 &S# !e!ber bench(.

=ay off retrench!ent and closure < F=ay offF !eans failure refusal or inability of e!ployer on accountshortage of coal power or raw !aterials or accu!ulation of stock or break down of !achinery or natura

cala!ity to give e!ploy!ent to a work!an on !uster roll. - - E=ay offF !eans not giving e!ploy!ent

within two hours after reporting to work. - - =ay off can be for half day also. ,n such case worker can basked to co!e in second half of the shift. $section 2&kkk().

A factory e!ploying 34 or !ore but less than %44 e!ployees on an average per working day can lay offwork!en who have co!pleted one year of service by paying co!pensation equal to 345 of salary &ba

plus 7A( &section 23# of ,7A(. - - +!ployer can offer hi! alternate e!ploy!ent if the alternate

e!ploy!ent does not call for any special skill or previous e"perience and lay off co!pensation will no

payable if e!ployee refuses to accept the alternate e!ploy!ent &section 23+(.

Above provisions of co!pensation for lay off do not apply to &a( ,ndustrial establish!ents e!ploying le

than 34 work!en &b( seasonal industry &c( +stablish!ents e!ploying %44 or !ore work!en as in theircase prior approval of Appropriate /overn!ent is necessary uGs 23D&%(.

Retrench!ent < ERetrench!entF !eans ter!ination by the e!ployer of service of a work!an for anyreason other than as a punish!ent inflicted by a disciplinary action. However Eretrench!entF does not

include voluntary retire!ent or retire!ent on reaching age of superannuation or ter!ination on account

non-renewal of contract or ter!ination on account of continued ill-health of a work!an. $section 2&oo()

ERetrench!entF !eans discharge of surplus labour or staff by e!ployer. ,t is not by way of punish!ent.he retrench!ent should be on basis of Elast in first outF basis in respect of each category i.e. junior-!o

e!ployee in the category &where there is e"cess( should be retrenched first. $section 23/). ,f e!ployerwants to re-e!ployer persons first preference should be given to retrenched work!en. $section 23H).

A worker who has co!pleted one year of service can be retrenched by giving one !onth notice &or payione !onthFs salary( plus retrench!ent co!pensation at the ti!e of retire!ent M %3 daysF average wag

for every co!pleted year of service &section 23?(.

,n 9arryFs +!ployees @nion v. hird ,ndustrial ribunal 244% ==R '82 al H#( it was held that for

purposes of retrench!ent co!pensation under ,7 Act the !onthly salary should be divided by 4. $@nd

/ratuity Act it has to be divided by 28).

,f nu!ber of work!en are %44 or !ore prior per!ission of Appropriate /overn!ent is necessary uGs

23&%().

Deaning of Econtinuous serviceF < 9rovisions of co!pensation for lay off and retrench!ent are applicab

only to work!an who is in Econtinuous serviceF for one year. As per section 23> Econtinuous serviceF

includes service interrupted by sickness authorised leave accident or strike which is not illegal or lock

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or cessation of work which is not due to fault of work!an. -- ,n 6ork!en v. Danage!ent of A!erican

+"press A,R %108 S# 3'0 B %103&'( S## C% it was held that Eactually workedF cannot !ean only those

days where work!an worked with ha!!er sickle or pen but !ust necessarily co!prehend all those daduring which he was in the e!ploy!ent of e!ployer and for which has been paid wages either under

e"press of i!plied contract of service or by co!pulsion of statute standing orders etc.

#losure < E#losureF !eans per!anent closing down of a place of e!ploy!ent or part thereof. $section2&cc(). - - hus closure can be of part of establish!ent also. - - 84 days notice should be given for closu

to /overn!ent if nu!ber of persons e!ployed are 34 or !ore. 84 days notice is not necessary if nu!be

of persons e!ployed are less than 34. $section 23??A). #o!pensation has to be given as if the work!anretrenched. $section 23???&%(). - - ,f nu!ber of work!en e!ployed are %44 or !ore prior per!ission o

/overn!ent is necessary for closure uGs 23-*.

9rovisions for large industries for lay off and closure - =arge industries e!ploying %44 or !ore work!e

on an average for preceding %2 !onths cannot lay-off retrench or close down the undertaking without

per!ission fro! /overn!ent &sections 23D to 23-* of ,ndustrial 7isputes Act(. ,nvariably such

per!ission is al!ost never given whatever !ay be the !erits of the case.

9rovisions of section 23D in respect of prior per!ission for lay off have been upheld in 9apnasan =abou

@nion v. Dadura #oats A,R %113 S# 2244. 9rovisions of section 23 were upheld in 6ork!en v.Deenakshi Dills =td. - &%112( 82 a"!an 384 B %112&%( S#A=+ %2'0 B %112 A,R S#6 %C0 B &%112

S## 8 B I %112&( S# ''8 B %112 ==R '0% B A,R %11' S# 2818 &3 !e!ber bench(. ,n this case it

was held that powers to give prior per!ission are quasi-judicial and hence opportunity of hearing !ust bgiven and the order giving per!ission or refusing per!ission is subject to judicial review. ,n >haratia

+lectric Steel #o. =td. v. State of Haryana %110 ==R 22 &9PH H# 7>( it was observed that operation

section 23-* should be li!ited to cases where e!ployer is acting arbitrarily or unfairly. ,f the reasons gby e!ployer for closure are genuine and adequate per!ission cannot be refused.

,n *rissa e"tiles v. State of *rissa 2442 A,R S#6 B 2442 ==R 223 B %44 ?IR '2 &S# 3 !e!ber

#onstitution >ench( it was held that order uGs 3-* should be in writing with reasons. he order can bereviewed after one year even for the sa!e reasons.

,f >anks refuse to give further loans to run the plant the e!ployer has to either abandon the plant or devso!e dubious ways to sur!ount the difficulties. *ne of the !ajor reason why foreign investors are

reluctant to co!e to ,ndia in a big way is lack of Ee"it policyF. So!e industrial sickness and closures are

inevitable in a E!arket oriented econo!yF. Absence of official e"it policy creates proble!s for honeste!ployers &7ishonest e!ployers devise their own ways(.

otice of change in conditions of service < Section 1A provides that an e!ployer cannot effect any chanin the conditions of service applicable to any work!an without giving 2% days notice. Such notice is norequired if there is settle!ent or award of =abour #ourt or ribunal. As per fourth schedule to the Act s

2% day notice is required if there is going to be change in wages wage period 9? contribution allowanc

hours of work and rest intervals shift ti!ings new rules of discipline increase or decrease in nu!ber opersons e!ployed in any depart!ent or shift.

Strike and lock-out < EStrikeF !eans a cessation of work by a body of persons e!ployed in any industry

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acting in co!bination or a concerted refusal or a refusal under a co!!on understanding of any nu!be

of persons who are or have been so e!ployed to continue to work or to accept e!ploy!ent. $section 2&q

As per section 2 work!an should not go on strike in during pendency of conciliation proceedings an

days thereafter during pendency of proceedings before =abour #ourt ,ndustrial ribunal or ational

ribunal 7uring period of arbitration proceedings 7uring period when settle!ent or award is inoperation in respect of the !atters covered by award or settle!ent.

9rohibition of strike and lock out in public utility service - .,n case of public utility e!ployees have to g

at least %' days notice for strike. he notice is valid only if strike co!!ences within 8 weeks. *therwisfresh notice is required. - - Si!ilarly an e!ployer cannot declare lock out without giving %' days notice

$section 22). ,f such notice is received /overn!ent authority should be infor!ed within five days. - - A

per section 2&n( E9ublic @tility ServiceF includes railways !ajor port and docks section of industry onworking of which safety of establish!ent depends postalGtelegraphG telephone services industry supply

powerG lightG water syste! of public conservancy or sanitation. $section 2&n(). ,n addition /overn!ent

declare industry specified in Schedule , as E9ublic @tility ServicesF. Such declaration can be !ade for 8

!onths at a ti!e $section 2&n(&vi(). $,ndustries in first schedule include banking transport ce!ent coaldefence establish!ents security press hospitals and dispensaries oil fields !ining of certain specified

ores foodstuff cotton te"tiles iron and steel etc).

=ock-out < E=ock-outF !eans te!porary closing or a place of e!ploy!ent or the suspension of work or

refusal by an e!ployer to continue to e!ploy any nu!ber of persons e!ployed by hi!. $section 2&l(). -

6orkers go on strike while Elock-outF is to be declared by e!ployer.

6ages during strike period - 6ages during strike period are payable only if the strike is both legal and

justified - Syndicate >ank v. N @!esh aik &%11'( 3 S## 3C2 B %11' A,R S#6 ''18 B %11' ,, ==I 0B %11' ,, == %218 B &%11'( S#A=+ 383 B A,R %113 S# %1 B %11' ,, #=R C3 B %11' ==R 00 &

constitution bench( - followed in HD =td. v. HD Head *ffice +!ployees Assn %11C A,R S#6 %3 A,R %11C S# 303 B %11C ==R C30. ,n HA= +!ployees @nion v. 9residing *fficer %118 ==R 8C &S#(

was held that when lockout by e!ployer is legal and justified work!en are not entitled to pay!ent ofwages for the period during which the lock-out continued.

o work no pay - 9rinciple of Eo work no payF has been accepted by Supre!e #ourt. - >ank of ,ndia vS Nelawala %101 ==R 2CC &%114 ==R % U( B %114&S@9( S#A=+ %'4&2( B &%114( ' S## C'' &S#(

Syndicate >ank v. N @!esh aik &%11'( 3 S## 3C2 B %11' A,R S#6 ''18 B %11' ,, ==I 08 B %11'

== %218 B A,R %113 S# %1 B %11'&( S#A=+ 383 B %11' ,, #=R C3 B %11' ==R 00 &S#constitution bench(. he principle of Eno work no payF is also applicable when a !an was eligible for

pro!otion but was not pro!oted and in fact did not work in the higher post. ,n such case he is not eligi

to get pay for higher scale - 9aluru Ra!krishnaiah v. @*, - &%101( 2 S#R 12 - followed in State ofHaryana v. *9 /upta - %118&%( S#A=+ 842.

,llegal strike or lock-out < Strike or lock out in violation of sections 22 or 2 and when it is continuing i

violation of order issued by /overn!ent uGs %4&( &when !atter is referred to #onciliation >oard orribunal( is illegal. $section 2'). ?ine upto Rs 34 per day to work!an and Rs %444 to e!ployer can be

i!posed. ,n addition he can be i!prisoned upto one !onth. $section 28).

7/2