Industrial Relations and Labour Laws
Question Bank
Q1. A. Trace the evolution of industrial relations in India.
B. Define Industrial Relations and examine its nature, scope and objectives.
Ans. A. In India, the evolution of Industrial Relations has been seen in the following
manner:
1. Occupations in Ancient India.
a. Labour in Medieval India.
b. Guilds and Unions.
2. Industrial Relations in India.
a. Early British rule.
b. First world war to Pre independence Period.
c. Post Independence Period.
Lets go through these phases one by one.
1. Occupations in Ancient India.
In ancient India, the prime occupation was agriculture.Trading was next in
importance .Manual services formed the third area of occupation.The caste system
had a profound influence on the development and progress of various industries and
occupations.The concept of the caste system was originally based on the transfer of
skills and specialization which ultimately led to the standardization of professions.
a. Labour in Medieval India: The caste system unified a number of people
belonging in particular occupations and formed the basis of occupational guilds.
Foreign invasions ruined the works of crafts and arts of Indians and the artisans
lost their traditional skills.The situation improved only after the restoration of law
and order under the Mughals.Due to opening of government factories in certain
places, employees were able to develop their respective arts.A large number of
occupations were also carried out by a small manufacturers and traders in their
cottages mostly on a hereditary basis.A majority of artisans lived in the fringe of
starvation.
b. Guilds and Unions: From very early days craftsman and workers felt the need to
be united and these unions formed gained strength and were helpful not only in
the evolution of arts but were powerful centers of arts themselves.During the Epic
period, labourers working in the same industry had their own unions.These were
affiliated to bigger unions of different industries called “Nigam” or industrial
corporations.Almost every craft , profession or occupation had its own union,
which were called “Shreni”.These guilds and unions consisting of large number of
people wielded considerable political power and influence.
2. Industrial Relations in India: The economic conditions of the employees were very
deplorable because of the autocratic regime of the Muslim rulers. Labourers were
forced to leave their homes and wages, if paid were very meagre and insufficient even
for one day’s meal. They were also paid in the form of old, used and battered clothes.
Treatment of workers was harsh and cordial relations did not exist.
a. Early British Rule: There was not much of scope for industrial relations in India
during the early British rule. India was expected to be a colonial market for them
until the second half of the 19th century. A cotton mill was established and a jute
mill followed. However, the relations between the workers and the rulers
remained strained which gave way to several disputes. On the other hand,
industries started to open and flourish. The modern industry in India owes its
existence to a great deal to the initiatives of the Europeans.But still there was no
improvement in the workers’ conditions and this led the way for the Factories Act
to be passed in the year 1881.
b. World war 1(1914-1918): War was a period of boom for the employers. With
rising prices, their profits went up enormously. The wages of workers however
did not keep pace with the tendency. Their economic distress brought the workers
together and an organized working class movement began in the country. During
this period various laws were enacted like the worker’s compensation Act! 1923),
Trade unions Act! 1926) Etc. During the Second World War, employers made
enormous profits. Workers demanded their share and were given bonuses and
dearness allowances but still the money wages did not increase in proportion to
the rise in prices.
c. Post independence Era: Immediately after independence, in the interests of the
national economy, it was considered necessary to put a stop to strikes, lockouts
that interrupted production. Post independence industrial relations have been very
much influenced by the pre independence industrial environments and labour
management relations.During the second five year plan period, certain norms,
mechanism and practices were evolved which formulated the need based
minimum wage, wage boards, guidelines on rationalization, code of discipline,
code of conduct and scheme for workers participation in management.
Ans. B) Nature, scope and objectives of Industrial Relations:
Following are the objectives of Industrial Relations:
a. To safeguard the interest of the labours as well as the management by securing the
highest level of mutual understanding and goodwill.
b. To avoid industrial conflict and develop harmonious relations essential for
productive efficiency of workers and industrial progress in a country.
c. To raise productivity to a higher level in an era of full employment by lessening
the tendency of higher labour turnover and frequent absenteeism.
d. To establish and maintain industrial democracy based on labour partnerships not
only for sharing gains of organization but also for managerial decisions
themselves.
e. To bring about government control over units which are running into losses or
where the production has to be regulated in public interests.
f. To bridge the gap between the imbalanced, disordered and maladjusted social
order and the need for shaping the complex social relationships adaptable to the
technological advances.
Scope and nature of industrial relation are as follows:
The industrial life creates a series of social relationships, which regulate the relations
And working together of not only workmen and management but also of community
and industry.Thus its scope lies in:
a. Labour relations i.e. relations between union-management( also known as labour
management relations);
b. Employee-employer relations i.e. relations between the management and the
employees;
c. Group relations i.e. relations between various groups of workmen; and
d. Community of public relations i.e relations between the industry and the society.
The nature of industrial relations is:
a. Labour oriented since it is concerned with labour management.
b. Problem oriented since it is concerned with solving problems for the labour and
management.
c. Development oriented since it is also concerned with the development of the
industry.
Q2. A) Examine the evolution of Industrial Relations policies in India.
B) Comment on the future of Industrial Relations in India.
Ans. A) The following explains the evolution of Industrial Relations in India.
1. In Pre-independence India:
State intervention in labour/industrial relations had its beginning when the British
Government in India was constrained to protect its commercial interests in this
country. Deterioration in working conditions, because of greater development of
industrial units;unduly low wages and consequent dissatisfaction of the working
class;growing indiscipline among the workers ,strained relations between labour and
management , the formation of ILO, the emergence of AITUC(1920) and demand for
higher wages ,improved conditions of work and living led to serious industrial
troubles and created labour problems of large dimensions.The situation became
unmanageable in Bombay and Bengal.Hence, committees were appointed to look in
to the matter.
The beginning of Industrial relations dynamics can be traced back to the inception of
the Indian Labour Conference as far back as 1942 by Dr. B.R.Ambedkar, when the
policy of bringing together the three parties, namely, the government management
and labour on a common platform as a consultative tripartite forum for all matter of
labour policy and industrial relations was accepted.
When the second world war broke out, the Government of India passed the Defence
of India Rules and incorporated in them Section 81 A which banned strikes and
lockouts in any trade with a view to ensuring continuous supplies for the requirement
of the war and provided for compulsory adjudication of industrial disputes.
2. In Post-Independence India:
The Industrial Disputes Act (1947) provided for:
a. The establishment of a permanent machinery for the settlement of disputes in the
shape of certain authorities like the works committee, conciliation officers etc.
b. Making an award of a Tribunal or any settlement brought about by the conciliator
binding on the parties and legally enforceable.
The Act seeks:
a. The prevention and settlement of industrial disputes in all industries through
conciliation, arbitration and adjudication.
b. To prohibit strikes and lockouts during the pendency of conciliation and
adjudication proceeding.
Besides the anactment, two major efforts made were to amend the Trade Unions Act
(1926) once again in 1947 and again in 1950.These amendments were a break with
the colonial British traditions and were influenced by the American National Labour
Relations Act of 1935.
In 1950, two bills were brought by the government – a Labour Relations Bill and a
Trade Unions Bill.They retained the provisions of the 1947 amendment.They also
introduced the principle that collective bargaining would be compulsory for both
employers and unions under stipulated conditions.Labour courts were empowered to
certify unions as sole bargaining agents.All collective bargaining agreements were to
provide for peaceful settlement without work stoppage on all questions arising out of
such agreements by arbitration or otherwise.However, the draft Bill lapsed with the
dissolution of the Parliament.
Ans. B) Industrial Relations in India
Industrial Relation in India is not a happy scene.If a close observation of the
Industrial Relations in India is made, the immediate impression would be that here the
relations between labour and management are rather strained.These relations are
plagued by factors such as the existing wage structure which has often been chaotic,
confusing and full of anomalies and inadequate- the bonus, which is a wild cancer,
made more complicated by the zig-zag policy of the Government , the laxity on the
part of the employers to fully and speedily implement the award and settlements
pertaining to conditions against any wages and the lengthy procedures needed in
getting grievances redressed and industrial disputes settled.The key parties finding
themselves in opposition endeavor to maximize their gains often at the cost of the
other by making the best possible use of their relative strength and power.The
employer and their managers by and large consider trade unions and their leader as
nuisance and the trade unions on the other hand consider the employers and their
managers to be absolute exploiter obscurantist.Workers are misled by their union
leaders who make use of the collective strength for their vested interests.
Unless these menaces are removed, healthy industrial scene cannot prevail.In a
dynamic society like India, industrial relations should not be based on an integrated
and synthetic approach aiming at the development of a common social, cultural and
psychological consensus and understanding in the industrial society,on the one hand,
and retaining the conflict process and struggle complex on the other.
The philosophy of industrial relations in a democratic country based on social justice
must aim at the dignity, welfare and development of an individual into a good citizen
meaning thereby freedom from domination, regimentation or arbitrary authority
whether exercised by the management, union officials or the government
functionaries.
Thus, by the look of this discussion, one somehow feels that the industrial relations in
India at present is not a happy scene as the cordial and harmonious relations are a
rarity. There is less of democracy in industries and more of dominance and
corruption.
It reflects the poor state of affairs and is a sorry sign for any country.However, one
hope that this would change in a few years time.
Q3. A) Define Collective Bargaining and examine its characteristics.
B). Explain how Collective Bargaining can help in dealing with the challenges posed
by the forces of globalization and liberalization.
Ans. A) Collective Barganing: It is a process of joint discussion making and basically
represents a democratic way of life in industry.It is a technique adopted by two parties to
reach an understanding acceptable to both through the process of discussion and
negotiation.Collective Bargaining plays an important role in improving the labour
management relations and ensuring industrial harmony.Most specifically, Collective
Bargaining is the procedure by which an employer and group of employees agree upon
the conditions of work.
Following are the characteristics of Collective Bargaining:
1. It is a group process wherein one group represents the employers and the other group
represents the employees and they sit together to negotiate terms of employment.
2. Negotiations form an important aspect of the process of Collective Bargaining i.e.
there is considerable scope of discussions, compromise or mutual give and take in
Collective Bargaining.
3. It is flexible and mobile and is not at all fixed or static.
4. Collective Bargaining is a process in the sense that it consists of a number of steps.It
begins with presentation of the charter of demands and ends with reaching of an
agreement which would serve as the basic law governing labour management
relations over a period of time in an enterprise.
5. It is a bipartite process involving two groups.
6. Collective Bargaining is a complimentary process i.e. each party needs something
that the other party has, labour can increase productivity and management can pay
better for their efforts.
7. Collective Bargaining is a continuous process.
8. It enables industrial democracy to be effective.
9. Collective Bargaining takes into account day to day changes, policies , potentialities,
capacities and interests.
Thus, these are the characteristics of Collective Bargaining.
Ans. B) Collective Bargaining is able to deal with the challenges posed by the forces of
globalization and liberalization. This could be seen from the following points:
1. It increases the capacity of the labour to fight against the management as it is a
collective process and understands the fact that an individual worker has a weak
bargaining power. Thus it avoids exploitation of labour.
2. Collective Bargaining ensures the implementation of schemes, which provides for
better welfare of the worker by providing cleanliness and a free working environment
for them.
3. Since Collective Bargaining is an agreement, the management has to acknowledge the
agreement which basically contains:
a. Economic package for the worker;
b. Work rules like hours of work, earned leaves etc;
c. Machinery for settling disputes.
4. Collective Bargaining gives voluntary recognition to the trade unions, that makes
them the contracting parties and which brings in positive benefits to improve
Industrial Relations and productivity.
5. Collective Bargaining makes the way for regular interaction between both the parties
involves and thus is the major cause for understanding each other’s needs.
6. Since Collective Bargaining demands for greater knowledge, training forms a crucial
part of the process. Thus it allows the workers to be more responsible and also makes
the management aware of the fact that the labours cannot be misled.
Thus, these points prove that Collective Bargaining is able to deal with the forces of
globalization and liberalization.
Q4. A) Explain the difference between mediation and conciliation.
B) Explain how conciliation helps in preventing and settling disputes in an industry.
Ans. A) Mediation and Conciliation are regarded as equivalent terms referring to
essentially the same kind of third party intervention in promoting voluntary settlement of
disputes.
Conciliation is limited to encouraging the parties to discuss their differences and to help
them develop their own proposed solutions.
Mediation on the other hand implies a stronger form of intervention and a mediator may
be permitted to offer to the parties proposals for settlements.
The distinction between the two terms tends to disappear in industrial relations practice
and there is no consistency in their use from one country to another.
Conciliation and mediation together with good offices have always been important in the
field of international relations for the peaceful settlement of conflicts between states.
Conciliation and mediation likewise have their importance in industrial relations as well.
Mediation is the ancient art of the peacemaker. It has been practiced in a number of areas
when people disagree. It is an ancient and honorable process for the settlements of
disputes between two warring nations, disputes between litigants, disputes between
labour and management disputes between people.
Let us now examine them one by one:
Mediation: It contemplates affirmative and positive action by a third party to bring about
a settlement of disputes. It encourages the employers and the unions to come to a decision
without any force or orders from the mediator.
Kind of mediators:
a. The eminent outsider;
b. The non governmental board;
c. The board connected with some part of the government system of the country.
Following are the essentials for a successful mediation:
1. It can only work in a climate of consent.
2. Mediator must be impartial and unprejudiced having no influence on any party.
3. Mediation must take place in a proper setting.
Let us not examine Conciliation:
Conciliation: It is the practice by which the services of a neutral third party are used as
means in a dispute to help the parties reduce the extent of their differences and arrive at
an amicable settlement of agreed solution.
Conciliation tends to bring about a speedy settlement of disputes without resorting to
strikes or lockouts and to hasten the termination of work stoppages when these have
occurred.
There are some preliminary steps that have to be taken before the conciliator begins his
meeting for the discussion of issues.These steps are:
1. Give them information.
2. Obtain information from them.
3. Establish his relationship with them on a positive basis after which he prepares his
next move.
The process of conciliation consists of three phases.
1. The hard posture phase.
2. Search for accommodation.
3. Emergence of appropriate mood for settlement of compromise.
Ans. B) The process of Conciliation helps in proper settlement of disputes and also
preventing them too. It is because of the three phases that the process of Conciliation
takes place, which are:
1. The Hard posture phase: The parties come to Conciliation as adversaries in an openly
declared dispute. They come with hardened attitudes. During this phase, each party
invariably takes the stand that it is wholly right and the other side wholly
unreasonable or wrong; neither party can see or will admit any merit in any argument
or proposition put forward by the other side.
2. Search for accommodation: In this phase, each party is primarily concerned with
protecting its own bargaining position. Neither party normally takes the initiative in
adopting an accommodating attitude.
4. Emergence of appropriate mood for settlement of compromise: Here the conciliator
encourages the parties to make modified proposals and counter proposals, which
might indicate the areas of agreement within reach.
Following are some of the techniques that make conciliation so effective:
a. Listening attentively to the parties so that information /facts may be gathered.
b. Asking questions to obtain information.
c. Persuading the parties to overcome their differences and agree upon a compromise by
bringing reason and objectivity to bear on the discussion; by winning their
confidence.
An unique and essential characteristic of the conciliation process is its flexibility,
informality and simplicity, which set it apart from other methods of settling industrial
disputes.A conciliator generally does not follow the same procedure in every case. He
adjusts his approach, strategy and techniques to the circumstances of each dispute.
All these factors make the process of conciliation very effective and also make it very
important process of settlement of disputes. This proves that the process of conciliation
helps in proper settlement and prevention of disputes.
Q5. A) Examine the benefits arising out of arbitration.
B) What are the various types of arbitration? Explain the importance of each one of
them.
Ans. A) Following are the benefits arising out of arbitration.
1. Since the parties themselves establish it, arbitration has the particular advantage of
bringing the dispute settlement procedure sown to the level of the parties to the
dispute.
2. Since arbitration is established by agreement, it is more flexible than other procedure
and can be adjusted to the view, desires and experiences of the parties and to the
circumstances obtaining in the undertaking or industry.
3. This procedure, operating at the level closest to the parties in disputes, has the benefit
of enabling the arbitrators to acquire much greater familiarity with the characteristics
of the particular industry or undertaking than most courts or tribunals.
4. The procedure is relatively expeditious when compared to that in ordinary courts or
Labour tribunals. It cuts down delays and results in prompt settlement of differences.
5. It is informal in character because the parties themselves handle the disputes, often
without recourse to lawyers. Arbitration is therefore less expensive than other
procedure.
6. Awards are capable of implementation without any grudge on the part of both the
parties to the dispute and do not lead to further chances of litigation.
7. Since arbitration is based on the consent of both the parties, it helps build up a sound
base for healthy Industrial Relations, mutual understanding and co-operation.
8. It is popular because it is suitable and compelling. It is far better than a costly work
stoppage, even though not wholly satisfactory from either parties point of view.
Ans. B) Arbitration is basically of two types:
1. Voluntary.
2. Compulsory.
1.Voluntary arbitration: It implies that the two contending parties, unable to compose
their differences by themselves or with the help of the mediator or conciliator, agree to
submit the conflict /dispute to an impartial authority, whose decision they are ready to
accept.
In other words, under voluntary arbitration the parties to the dispute can and do
themselves refer voluntarily and dispute to arbitration before it is referred for
adjudication. This type of reference is known as a voluntary reference for the parties
themselves volunteer to come to a settlement through arbitration machinery.
The essential elements in voluntary arbitration are:
a. Voluntary submission of dispute to arbitration.
b. The subsequent attendance of witnesses and investigations.
c. The enforcement of an award may not be necessary and binding because there is no
compulsion. But generally, the acceptance of arbitration implies the acceptances of
the award-be it favorable or unfavorable.
d. Voluntary arbitration may be specially needed for disputes arising under agreements.
2. Compulsory arbitration: It is the one where the parties are required to accept
arbitration without any willingness on their part. When one of the parties to an industrial
dispute feels aggrieved by an act of the other, it may apply to the appropriate government
to refer the dispute to adjudication machinery. Such reference of a dispute is known as
“compulsory arbitration”.
Under compulsory arbitration, the parties are forced to arbitration by the state when:
1. The parties fail to arrive at a settlement by a voluntary method;
2. When there is a national emergency which requires that the wheels of production
should not be obstructed by frequent work stoppages;
3. The country is passing through grave economic crisis;
4. There is a grave public dissatisfaction with the existing Industrial Relations;
5. Industries of strategic importance are involved;
6. Parties are ill balanced i.e. where the unions are weak, ill organized and powerless;
7. Means of production are in the hands of the capitalists who are well organized and
powerful;
8. Public interest and the working conditions have to be safeguarded and regulated by
the state.
Q6. A) What are the model principles for references of disputes to Adjudication?
B) Define a grievance. Draft a model grievance procedure.
Ans. A) The Indian Labour Conference (held in Madras in July 1959) laid down model
principles for references of disputes to adjudication. These principles were:
1. All disputes ordinarily are referred to adjudication on request.
2. Disputes may not, however, be ordinarily referred to adjudication.
a. Unless efforts at conciliation have failed.
b. If a strike or lock out is declared illegal by a court.
c. If the issues involved have been the subject matter of recent judicial decisions.
d. If it is in respect of demands for which other legal remedies are available i.e. matters
covered by the Factories Act, Workmen’s Compensation Act, etc.
3. Industrial disputes raised in regard to individual cases, may be referred for
adjudication when the legality or propriety of such action is questioned, and in
particular;
a. If there is a case of victimization or unfair labour practice:
b. If the standing orders in force or the principles of natural justice have not been
followed; and
c. If the conciliation machinery reports that injustice has been done to the worker.
Also in addition to this, the following principles regarding the powers of the government
to make a reference of industrial disputes have been established by a series of judicial
decisions:
1. The government must be of the opinion that an industrial dispute actually exists or is
apprehended:
2. Government’s order cannot be challenged on ground that, the Government has no
material before it come to the conclusion that the dispute exists:
3. Expediency of making a reference is a matter entirely for the Government to decide.
Making of reference, is not a duty or an obligation on the part of the government but a
matter of discretion;
4. The Government may refer the dispute or any matter appearing to be connected
therewith or relevant to the dispute, whether it relates to any matter specified in the
Second Schedule or the Third Schedule, to a tribunal for adjudication:
5. Where the dispute relates to any matter specified in the Third Schedule and is not
likely to affect more than 100 workers, the government may make a reference to a
labour court;
6. It is mandatory upon the government to make a reference of disputes to courts or
tribunals where;
a. the dispute relates to a public utility service;
b. a notice of strikes or lock out has been given;
c. where the parties to the dispute apply in the prescribed manner for reference and the
government is satisfied that the persons represent the majority of each party.
Ans. B) Grievance: It is defined as any form of discontent or dissatisfaction, whether
expressed or not, whether valid or not, arising out of anything connected which an
employee thinks, believes and even feels to be unfair, unjust or inequitable.
A complaint of any one or more workers in respect of wages, allowances , conditions of
work and interpretation of service stipulations, covering such areas as overtime, leave,
transfer, promotion, seniority, work assignment and discharge constitute grievance.
Therefore, following points constitute grievance:
1. It covers dissatisfaction and may have the following characteristics:
a. It may be unvoiced or expressively stated.
b. It may be written or verbal.
c. It may be valid and legitimate, untrue or false or ridiculous.
d. It may arise out of something connected with the organization or work.
2. An employee feels injustice has been done to him.
Following is the grievance procedure:
Work with grievance
Verbal Referring
Immediate superior
Time limit for
answering.48 hrs.
Dept. Head
Time limit for
answering .3days
Grievance Committee
Recommendation
within. 7days.
Higher Management
for Revisions
Union may ask
for Voluntary
Arbitration
Voluntary Arbitration
Decision Binding on both Parties
Q7. A) What are the permissible authorized deductions under the Payment of
Wages Act, 1936?
B) Explain the procedure lay down under the Minimum Wages Act, 1948 for
fixation and revision of minimum rates of wages.
Ans. A) Following are the permissible authorized deductions under the Payment of
Wages Act, 1936:
1. Fine.
2. Deductions for absence from duty.
3. Deductions for damage to or loss of goods expressly entrusted to employed person for
custody, or for loss for money, for which he is required to account, where such
damage or loss is directly attributable to his neglect or default.
4. Deductions for such amenities and services supplied by the employer.
5. Deductions for recovery of advances i.e. travelling allowance or conveyance
allowances.
6. Deductions of income tax payable by the employed person.
7. Deductions required to be made by the order of court or other authority competent to
make such order.
8. Deductions for subscription to and for payment of advances from any provident fund
to which the provident fund applies.
9. Deductions for payment to cooperative societies approved by the state government or
to scheme of insurance maintained by the Indian Post Office.
10. Deductions for payment of premium on his life insurance policy to the Life Insurance
Corporation of India.
11. Deductions of payment of insurance premium of Fidelity Guarantee Bonds.
12. Deductions for recovery of loss sustained by a railway administration on account of
acceptance by the employed person of counterfeit or debased coins or forged currency
notes.
13. Deductions for recovery of losses sustained by railway administration on account of
failure to collect the appropriate charges whether in respect of fares, freight,
demurrage, wharfage or in case of sale of food in catering establishment.
14. Deductions for recovery of losses sustained by a railway administration on account
of any rebates or refunds.
15. Deductions made with the written authorization of the employed person, for
contribution by the employed person, for contribution to the Prime Minister’s Relief
Fund.
16. Deductions for contribution to any insurance scheme framed by the Central
Government for the benefit of its employees.
Ans. B) Following is the procedure for fixing and revising minimum rates of wages:
1. Appoint as many committees and sub committees as it considers necessary to hold
enquiries and advise it in respect of such fixation or revision , as the case may be or,
2. 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.
3. Advisory Committee and sub committees to be formed for the above purpose.
For the purpose of coordinating the work of committees and sub committees
appointed and advising the appropriate government generally in the matter of fixing
and revising minimum rate of wages, the appropriate government shall appoint an
advisory board.
4. Central Advisory Board:
a. For the purpose of advising the central and state government in the matters of the
fixation and revision of minimum rate of wages and other matters under this act and
for coordinating the work of the advisory boards, the central government shall
appoint a central advisory board.
b. The central advisory board shall consist of persons to be nominated by the central
government representing employers and employees in the scheduled employment,
who shall be equal in numbers and independent persons not exceeding one thirds of
its total number of members, one of such independent person shall be appointed the
chairman of the Board by the Central Government.
Q8. A)”Bonus is a dynamic concept”- Elucidate.
B) Examine the provisions relating to registrations of Unions under the Trade
Unions Act, 1926.
Ans. A) Bonus:
1. It is given to employees who have worked in an organization and is given to them due
to the profits earned by the company. The company decides to give bonuses to its
employees who have been primarily responsible for the profits earned.
2. Although not every year does an organization earn profits, but then the Payment of
Bonus Act, 1966 gives employees statutory rights to obtain a share in the profits of
the company irrespective of whether the company makes a profit or not.
3. The objective of the Act is to maintain peace and harmony between employers and
employees by enabling the employees to share the prosperity of the company. It is
assumed here that the profits earned by the company are in part, due to the efforts of
the workmen.
4. Every employee shall be entitled to be paid by his employer in an accounting year,
bonus in accordance with the provisions of this Act, provided he has worked in the
establishment for not less than thirty days in that year.
5. An employee shall be disqualified from receiving bonus under this Act, if he is
dismissed from service for –
a. fraud
b. riotous or violent behavior while on the premises of the establishment ; or theft ,
misappropriation or sabotage of any property of the establihment.
B) Registration of the trade union
The provision related to the registration of the union under the trade union act 1926,are
between section 5 to section 8 they are:
Section 5: Application for registration
I. Every application for registration of a trade union shall made to the registrar, and
shall be accomplained by copy of the rules of the trade union.Any seven or more
members of a tarde union may apply for registration of trade union under this act,
after complying with the provisions of this act and furnishing the statement of the
following particularly namely:
a) The names, occupation and address of the member making the application.
b) The name of the trade union and the address of its head office.
c) The title, names, ages, address, and the occupations of office bearers of the trade
union.
2. And the general statement of the assets and liabilities of the trade union in prescribed
form if existing for more than one year before the making of the application for its
registration.
Section 6:provision to be contained in the rules of trade union.
a) The name of the trade union.
b) The whole of the objects for which the trade union established.
c) The purpose for which the general fund of the trade union shall be applicable.
d) The maintaince of the members of the trade union and adequate facilities
thereof for inspection.
e) The admission of ordinary members and admission of the number of honorary
or temporary members as (office bearers)
f) The payment of a subscription by members shall not less than rs 12/- per
annum in organized section, rs 3/-annum in unorganized sector, rs 1/-per an in
the rural sector.
g) The conditions under which any member shall be entitled to any benefits
assured by the rules and under which any fine or forfeiture may be imposed on
the members.
h) The manner, in which the rules shall be amended, varied.
i) In which way members of the executive and other office bearer of the trade
union shall be appointed & removed.
j) Safe custody of funds of the trade union, and annual audit.
k) The manner in which the trade union may be dissolved.
Section 8:Registration
The registrar, on being satisfy that the trade union has complied with all the
requirements of this act in regard to registration, shall register the trade union by
entering in a register, to be maintained in such form as may be prescribed register.
However if the registrar does not communicate with the union and keeps quit a for a
period exceeding 6 months, the union can file a writ of mandamus before the high
court.
Q9. A) Critically examine the benefits that are available to the insured persons and
their dependents under the Employees State Insurance Act, 1948.
B) Explain the contents of the Employees Deposit Linked Insurance and the Pension
Scheme, 1995.
Ans. A) Following are the benefits that are available to the insured persons under the
Employees State Insurance Act, 1948:
1. Sickness Benefit: Periodic payments to any insured person in case of his sickness
certified by a duly appointed medical practitioner.In order to claim this benefit, the
insured person should have contributed for atleast 78 days during the contribution
period.The benefit is paid at a Standard Benefit rate which is close to 50% of the
average wage.It is available for maximum 91 days during 2 consecutive benefit
periods.
a. Extended Sickness benefit is available to an insured person who is a member of the
ESI Scheme for the minimum period of 2 years. If such an insured person contracts
any specified malignant disease then he is eligible to claim extended sickness benefits
for 309 days.
b. Enhanced Sickness benefit is available to an insured person when he/she undergoes
family planning operation. This benefit is available for a period ranging between 6 to
12 days depending upon the type of operation. This benefit is paid at double the
standard benefit rate.
2. Maternity benefit: Periodic payment to an insured woman in case of confinement or
miscarriage or sickness arising out of pregnancy, confinement, premature birth of
child or miscarriage. This benefit is available to an insured woman if she has
contributed for minimum 70 days prior to confinement. This benefit is paid at a rate,
which is double the standard benefit rate.
3. Disablement benefit: Periodic payment to an insured person suffering from
disablement as a result of an employment injury sustained as an employee under this
act.This benefit is available to the insured person from day one.In order to avail this
benefit, the insured person who has met with an employment injury should be
disabled from joining duties for minimum 3 days.This benefit is paid at a rate which
is 40% above the standard benefit rate.
4. Dependent’s benefit: Periodic payment to dependents of an insured person who dies
as a result of an employment injury. This benefit is paid to the spouse and two minor
children.This amount is paid on a monthly basis depending on the last income of the
insured person.Out of the payable amount 3/5 is given to the widow and 2/5 is given
to the children.Each child gets 1/5 of the amount.The child gets this amount till he
reaches the age of 18, the widow gets this amount till her death or till her re-marriage
whichever is earlier.
5. Medical benefit: Medical treatment for attendance on insured person.
6. Funeral benefit: Payment to the eldest surviving member of the family of an insured
person who has died, towards the expenditure on the funeral of the deceased insured
person. The amount payable as funeral benefit at present is Rs.2500.
Ans. B) Following are the contents of the Employees Deposit Linked Insurance:
1. The scheme was introduced by an amendment in the year 1976.
2. It provides for relief to the nominee of the Provident Fund subscriber in case of
premature death of the subscriber.
3. No contribution is payable by the employee under the scheme, but the employer has
to make contributions @ 0.5% of basic wage, dearness allowance and retaining
allowance.
4. In case of premature death, if the employees balance for the past three years is
Rs.1000 then he gets an equivalent amount subject to maximum Rs.60000.
5. If employers formulate a better scheme than the EDLI then exemption can be
obtained from the government.
6. LIC provides for RS.62000 in its scheme irrespective of balance in the subscribers
account.
Following are the contents of the Pension Scheme, 1995:
1. The New Pension Scheme was formulated by Mr. Ram Vilas Paswan when he was
the Labour Minister.
2. Same scheme by the Congress Govt. was opposed by the CPI and CPM
3. The reason being that they wanted it to be a Third Terminal Benefit after Provident
Fund and Gratuity.
4. Earlier the contribution was 1.1/6% towards the Family Pension Scheme.
5. Out of 12% of employers contribution,8.33% is to be paid in New Pension Scheme
and remaining 3.67% to be paid in Provident Fund.
6. The entire contribution of 12% of employee’s contribution is to be credited in
Provident Fund account.
7. Employee and employer can contribute on more than Rs.6500 but the contribution
towards the Pension Scheme will be restricted to Rs.542 p.m. i.e. 8.33% of Rs.6500.
8. The contribution towards the Pension Scheme is to be made till the Superannuating
age.
Q10. (A) Examine the provision of health and welfare under the factories Act ,1948.
(B)”Gratuity is paid not for long and meritorious services” Examine this statement
in the light of the forfeiture clause lay down under the payment of Gratuity act
1972.
ANS( A)The provision of health as well as welfare are under section 11-20 & 42–49
respectively :
Section 11 : related to cleanliness
Every factory should be kept clean & free from dust arising from drain or otherwise. The
following steps should be taken.
 Daily removal of dirt & refuse by sweeping from floor, workrooms, benches,
staircase, passage.
 Suitable disposal of dirt
 Maximum weekly washing of work room floor
 Effective means of drainage


All doors & windows should be painted at least once in 5 year.
A register of all work carried as above should be maintained.
Section 12:wastage
Proper & effective arrangement should be made for treatment & disposal of wastage &
effluents.
Section 13: Ventilation & temperature
There should be effective & suitable provision for securing & maintaining in every
workroom.
 Adequate ventilation by circulation of fresh air.
 Reasonable temperature
 High temperature processes should be separated
Section 14 Dust & fumes
 Effective measures should be taken to prevent inhalation & accretions of dust &
fumes
Proper exhaust appliance should be installed.
Section 15: Artifical humidification
If humidity of air is artificially increased in factory their following steps should be taken
 Effective purification of drinking water.
 Adequate ventilation & cooling of air.
Regulation of method used for increasing artificial humidification.
Section 16: overcrowding
Overcrowding should not be allowed in the work place .the maximum no of workers
which can work in a work room should be specified .for factories already in existence at
the time of commencement of the factories act.
Section 17: lighting
There should be sufficient and suitable natural or artificial light in the work place. All
glaced windows should be kept clean and formation of shadows carrying eyestrains
should be prevented.
Section 18 : Drinking Water
Effective arrangement should be made at suitable points and conviently situated for
wholesome drinking water. the supply should be sufficient. The places should be clearly
marked drinking water where it is kept.
Section 19: Toilets
Toilets should be maintained in sufficient number of prescribed types they should be
conviently situation and accessible at all the time. Separate toilets for male & female
workers. They should be adequately lighted and ventilated & kept in clean condition ,if
workers are more than 250,then the govt. regulation should be complied way.
Section 20: spittoons
They should be maintained in sufficient numbers prescribed types at conviental places &
they should be kept in clean & hygienic condition.
& The welfare measures are:
Section 42: Washing Facilities
Adequate and suitable facilities for washing shall be provided and maintained for the use
of the workers there in separated for male and female workers.
Section 43
Facilities for storing and drying clothing. Suitable arrangements shall be made and
maintained for storing and drying clothes foe male and female separated
Section 44: Facilities for sitting
In every factory suitable arrangements for sitting shall be provided and maintained for all
workers when they get an opportunity for rest during the course of their work.
Section 45: First aid appliances
 There shall in every factory be provided and maintained so as to be readily
accessible during working hours first –aid boxes well equipped.
 In every factory where in more than five hundred workers are working are
ordinarily employed should maintained an ambulance room.
Section 46: canteen
Where in more than two hundred and fifty workers are ordinarily employed a employed a
canteen or canteens shall be provided and maintained by the occupier for the of the
workers and a managing committee for canteen shall be constituted consisting of
representatives of the workers and the management.
Section 47 : Shelters ,rest room and lunch rooms
In every factory where in more than one hundred and fifty workers are ordinarily
employed, Adequate and suitable shelter or rest rooms or lunchrooms with the provision
of drinking water shall be provided and maintained for the worker and the management.
Section 48: crèches
In every factory where in more than thirty women workers are ordinarily employed
employed there shall be provided and maintained suitable rooms for the use of children
under the age of six years of women workers.
Section 49: welfare officers
In every factory where in five hundred or more workers are ordinarily employed the
occupier shall employ in the factory such number of welfare officer as may be prescribed.
(B) The gratuity of an employee, whose services have been terminated for any act, of
willful omission or negligence causing any damage or loss to, or destruction of , property
belonging to the employer, shall be forfeited to the extent of the damage or loss caused;
the gratuity payable to an employee may be wholly or partially forfeited to
 if the services of such employee have been terminated for his riotous or disorderly
conduct or any other act of violence on his part’
 if the services of such employee have been terminated for any act which
constitutes an offance involving moral turpitude ,providing that such offence is
committed by him in the course of his employment.