EMPLOYEES' PROVIDENT FUNDS AND
MISCELLANEOUS PROVISIONS ACT, 1952
The Employees’ Provident Funds and Miscellaneous Provisions Act, provides for compulsory contributory fund for the future of
an employee after his/her retirement or for his/her dependents in case of his/her early death. Its applicability: It extends to the
whole of India except the State of Jammu and Kashmir and is applicable to:
a)
b)
c)
every factory engaged in any industry specified in Schedule 1 in which 20 or more persons are employed;
every other establishment employing 20 or more persons or class of such establishments which the Central Govt. may
notify;
any other establishment so notified by the Central Government even if employing less than 20 persons.
Every employee, including the one employed through a contractor (but excluding an apprentice engaged under the Apprentices
Act or under the standing orders of the establishment and casual laborers), who is in receipt of wages up to Rs.6,500 p.m., shall be
eligible for becoming a member of the funds. The condition of three months’ continuous service or 60 days of actual work, for
membership of the scheme, has been done away.
Workers are now eligible for joining the scheme from the date of joining the service.
1.
The Act provides for three schemes viz.,
A. EMPLOYEES' PROVIDENT FUND SCHEME, 1952
An employee who is in receipt of pay up to Rs.6500/-p.m. is eligible for membership of the Fund. The contribution is 12
percent/10 percent of the monthly wages.
B. EMPLOYEES' PENSION SCHEME, 1995
Under this scheme, family members, of the employees who died in harness, were given monthly family pension. This
scheme is funded by diverting 8.33% of the wages of the employees out of the employers' contributions to the Provident
Fund. The Central Government contributes at the rate of 1-1/6% of the wages of the employees.
C. EMPLOYEES' DEPOSIT LINKED INSURANCE SCHEME, 1976
The employer shall pay such amount not being more than 1% of the basic wages dearness allowance and retaining
allowance (if any). The employer shall pay into the Insurance Fund such further sums not exceeding ¼% of the
contribution above to meet all the expenses in connection with administration of the Insurance Scheme. No contribution is
payable by the employee.
2.
The employer is required to contribute the following amounts towards Employees’ Provident Fund and Pension Fund:
a. In case of establishments’ employing less than 20 persons or a sick industrial (BIFR) company or ‘sick
establishments’ or any establishment in the jute, beedi, brick, coir or gaur gum industry. –the employer contribution is
10% of the basic wages, dearness allowance and retaining allowance, if any.
b. In case of all other establishments’ employing 20 or more person- the employer contribution is 12% of basic wages,
dearness allowance and retaining allowance, if any.
 A part of the contribution is remitted to the Pension Fund and the remaining balance continues to remain in Provident
Fund account.
 Where, the pay of an employee exceeds Rs.6,500 p.m., the contribution payable to Pension Fund shall be limited to
the amount payable on his pay of Rs.6,500/- only.
 “Basic wages" means all emoluments which are earned by an employee while on duty or on leave or on holidays with
wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash
to him but does not include:
(i) the cash value of any food concession;
(ii) any dearness allowance, house-rent allowance, overtime allowance, bonus, commission or any other similar
allowance.
(iii) any presents made by the employer;
For the purposes of this section dearness allowance shall be deemed to include also the cash value of any food
concession
allowed
to
the
employee.
Retaining allowance means an allowance payable for the time being to an employee of any factory or other
establishment during any period in which the establishment is not working for retaining his services.
3.
The contribution to the fund is to be deposited by the employer by 15th of the next month.
4.
Payment of contributions.
(1) The employer shall, in the first instance, pay both the contribution payable by himself and also, on behalf of the
member employed by him directly or by or through a contractor, the contribution payable by such member.
(2) In respect of employees employed by or through a contractor, the contractor shall recover the contribution payable by
such employee and shall pay to the principal employer the amount of member’s contribution so deducted together with an
equal amount of contribution and also administrative charges.
(3) It shall be the responsibility of the principal employer to pay both the contribution payable by himself in respect of the
employees directly employed by him and also in respect of the employees employed by or through a contractor and also
administrative charges.
5.
Recovery of damages for default in payment of any contribution.
Where an employer makes default in the payment of any contribution to the fund, or in the transfer of accumulations
required to be transferred by him under sub-section (2) of section 15 or sub-section (5) of section 17 of the Act or in the
payment of any charges payable under any other provisions of the Act or Scheme or under any of the conditions specified
under section 17 of the Act, the Central Provident Fund Commissioner or such officer as may be authorised by the Central
Government, by notification in the Official Gazette in this behalf, may recover from the employer by way of penalty,
damages at the rates given below:—
Period of default
(a)
(b)
(c)
(d)
6.
Less than two months
Two months and above but less than four months
Four months and above but less than six months
Six months and above
Rate of damages (% of arrears per
annum)
17
22
27
37
Duties of employers
(1)
Every employer shall send to the Commissioner within fifteen days of the close of each month a return—
(a)
in Form 5, of the employees qualifying to become members of the Fund for the first time during the
preceding month together with the declarations in Form 2 furnished by such qualifying employees, and
(b)
in prescribed form of the employees leaving service of the employer during the preceding month:
(2)
Every employer shall maintain an inspection note book in prescribed form for an Inspector to record his
observation on his visit to the establishment.
(3)
Every employer shall maintain such accounts in relation to the amounts contributed to the Fund by him and by his
employees as the Central Board may, from time to time, direct, and it shall be the duty of every employer to assist
the Central Board in making such payments from the Fund to his employees as are sanctioned by or under the
authority of the Central Board.
(4)
Every employer in relation to a factory or other establishment to which the Act applies on the date of coming into
force of the Employees’ Provident Funds (Tenth Amendment) Scheme, 1961, or is applied after that date, shall
furnish in duplicate to the Regional Commissioner in Form No. 5A annexed hereto, particulars of all the branches
and departments, owners, occupiers, directors, partners, manager or any other person or persons who have the
ultimate control over the affairs of such factory or establishment and also send intimation of any change in such
particulars, within fifteen days of such change, to the Regional Commissioner by registered post and in such other
manner as may be specified by the Regional Commissioner:
Provided that in the case of any employer of a factory or other establishment to which the Act and the Family Pension
Scheme, 1971, shall apply the aforesaid Form may be deemed to satisfy the requirements of the Employees’ Family
Pension Scheme, 1971, for the purpose specified above.
7.
Duties of contractors
Every contractor shall, within seven days of the close of every month, submit to the principal employer a statement
showing the recoveries of contributions in respect of employees employed by or through him and shall also furnish to him
such information as the principal employer is required to furnish under the provisions of the Scheme to the Commissioner.
8.
I.
Withdrawal from the Fund
Under the following circumstances withdrawal from the Fund is permitted.
(i)
For the purchase of a dwelling house/flat including a flat in a building owned jointly with others (outright or on
hire purchase basis),or for the construction of a dwelling house including the acquisition of a suitable site for the purpose
from the Central Government, the State Government, a co-operative society, and institution, a trust, a local body or a
Housing Finance Corporation (hereinafter referred to as the agency/agencies);(ii) for purchasing a dwelling site for the
purpose of construction of a dwelling house or a ready-built dwelling house/flat from any individual;(iii) for purchasing
dwelling house/flat on ownership basis from a promoter governed by the provisions of any Flats or Apartments Ownership
Act or by any other analogous or similar law of the Central Government or the State Government as may be in force in any
State or area for the time being and who intends to construct or constructs dwelling house or block of flats and the member is
required to pay to the said promoter in advance for financing the said construction of the house/flat (iv) for the construction
of a dwelling house on a site owned by the member or the spouse of the member or jointly by the member and the spouse, or
for completing/continuing the construction of a dwelling house already commenced by the member or the spouse, on such
site or for purchase of a house/flat in the joint name of the member and the spouse under clauses (i) and (ii) above.
(ii)
On an application from a member in the prescribed form the Commissioner or any authorized office may sanction
withdrawal from the amount standing to the credit of the member in the fund.
a) The amount of withdrawal for the purpose of purchase of a site for construction of house thereon shall not exceed the
member’s basic wages and dearness allowance for twenty-four months or the member’s own share of contributions,
together with the employer’s share of contributions with interest thereon or the actual cost towards the acquisition of
the dwelling site, whichever is the least.
b) The amount withdrawal for the purpose of acquisition of a ready built house/flat or for construction of a house/flat,
shall not exceed the member’s basic wages and dearness allowance for thirty-six months or the member’s own share
of contributions, together with the employer’s share of contributions, with interest thereon, or the total cost of
construction, whichever is the least.
No withdrawal under this paragraph shall be granted unless:
(i)
the member has completed five years’ membership of the Fund;
(ii)
the member’s own share of contributions with interest thereon in the amount standing to his credit in the
Fund is not less than one thousand rupees;
(iii)
a declaration from the member that the dwelling site or the dwelling house/flat or the house under
construction is free from encumbrances and the same is under title of the member and/or the spouse
II.
For repayment of loans in special cases.
(i)
The Commissioner or any authorized officer may on an application from a member, sanction from the amount
standing to the credit of the member in the Fund, withdrawal for the repayment, wholly or partly, of any outstanding
principal and interest of a loan obtained in the name of the member or spouse of the member or jointly by the member and
spouse from a State Government, registered co-operative society, State Housing Board, Nationalised banks, public
financial institutions, Municipal Corporation or any body similar to the Delhi Development Authority solely for the
purposes specified in (1)(i) above.
(ii)
The amount of withdrawal shall not exceed the member’s basic wages and dearness allowance for thirty-six
months or his own share of contributions together with the employer’s share of contributions, with interest thereon, in the
member’s account in the Fund or the amount of outstanding principal and interest of the said loan, whichever is least.
(iii)
No withdrawal shall be sanctioned under this paragraph unless—
(a)
the member has completed ten years’ membership of the Fund; and
(b)
the member’s own share of contributions, with interest thereon, in the amount standing to his credit in the
Fund, is one thousand rupees or more; and
(c)
the member produces a certificate to such other documents, as may be prescribed by the Commissioner or
where so authorised by the Commissioner, any officer subordinate to him, from such agency, indicating the
particulars of the member, the loan granted, the outstanding principal and interest of the loan and such other
particulars as may be required.
(iv)
The payment of the withdrawal under this paragraph shall be made direct to such agency on receipt of an
authorisation from the member
III.
Advance from the Fund for illness in certain cases.
i)
A member may be allowed non-refundable advance in cases of (a) hospitalisation lasting for one month or more,
or (b) major surgical operation in a hospital, or (c) suffering from T.B., leprosy, paralysis, cancer, mental
derangement or heart ailment and having been granted leave by his employer for treatment of the said illness.
(ii)
The advance shall be granted if the employer certifies that the Employees’ State Insurance Scheme facility and
benefits there under are not actually available to the member or the member produces a certificate from the
Employees’ State Insurance Corporation to the effect that he has ceased to be eligible for cash benefits under the
Employees’ State Insurance Scheme; and a doctor of the hospital certifies that a surgical operation or, as the case
may be, hospitalisation for one month or more had or has become necessary or a registered medical practitioner,
or in the case of a mental derangement or heart ailment, a specialist certifies that the member is suffering from
T.B., leprosy, paralysis, cancer, mental derangement or heart ailment.
(iii)
A member may be allowed non-refundable advance from his account in the fund for the treatment of a member of
his family who has been hospitalised, or requires hospitalisation, for one month or more for.
(a)
a major surgical operation, or
(b)
the treatment of T.B., Leprosy, paralysis, cancer, mental derangement or heart ailment:
Provided that no such advance shall be granted to a member unless he has produced—
 a certificate from a doctor of the hospital that the patient has been hospitalised or requires hospitalisation for
one month or more, or that a major surgical operation had or has become necessary, and
 a certificate from his employer that the Employees’ State Insurance Scheme facility and benefits are not
available to him for the treatment of the patient.
IV.
Advance for marriages or post-matriculation education of children.
(i)
(ii)
A non-refundable advance not exceeding fifty per cent of his or her own share of contribution with interest
thereon, standing to credit in the Fund of the member , on the date of such authorisation, for his or her own
marriage, the marriage of his or her daughter, son, sister or brother or for the post-matriculation education of his
or her son or daughter. Not more than three advances shall be admissible to a member under this paragraph.
No advance under this paragraph shall be sanctioned to a member unless—
(a)
he has completed seven years’ membership of the Fund; and
(b)
the amount of his own share of contributions with interest thereon standing to his credit in the
Fund is rupees one thousand or more.
V.
(1)
Grant of advances in abnormal conditions.
A non-refundable Advance may be given to a member whose property, movable or immovable, has been damaged by a
calamity of exceptional nature, such as floods, earthquakes or riots, authorise payment to him from the provident fund
account, a non-refundable advance, of rupees five thousand or fifty per cent of his own total contribution including
interest thereon standing to his credit on the date of such authorisation, whichever is less, to meet any unforeseen expenditure:
(2)
No advance under sub-paragraph (1) shall be paid unless—
(i)
the State Government has declared that the calamity has affected the general public in the area;
(ii)
the member produces a certificate from an appropriate authority to the effect that his property (movable or
immovable) has been damaged as a result of the calamity];
(iii)
the application for advance is made within a period of 4 months from the date of declaration referred to in subpara (i).
VI.
Grant of advance to members who are physically handicapped.
A physically handicapped member may be allowed a non-refundable advance from his account in the Fund, for purchasing an equipment required to minimise the hardship on account of handicap.
VII.
Withdrawal within one year before the retirement.
A member may be permitted to withdraw of up to 90 per cent of the amount standing at his credit, at any time after
attainment of the age of 54 years or within one year before his actual retirement on superannuation, whichever is later.
VIII.
Option for withdrawal at the age of 55 years for investment in Varishtha Pension Bima Yojana.
A member may be permitted withdrawal of up to 90 per cent of the amount standing at his credit at any time after
attaining the age of 55 years, which is to be transferred to the Life Insurance Corporation of India for investment in
Varishtha Pension Bima Yojana.
9.
Dispute, Determination and Recovery
In case, where a dispute arises regarding applicability of the Act, the Central Provident Fund Commissioner or any other
officer (to whom the powers of determination have been delegated), may decide the dispute and determine the amount due
from an employer, under the Act or the schemes framed there under. Before making any order the officer shall conduct
such inquiry as he may deem necessary and shall allow a reasonable opportunity to the employer for representing his case.
Further, where an officer has reason to believe that an amount due from the employer has escaped determination, he may
re-open the case within five years and re-determine the amount due from the employer.
Interest
The employer shall be liable to pay simple interest @ 12% p.a. on any amount due from him under the Act, from the date
on which it becomes due till the date of its actual payment.
Modes Of Recovery
Any amount of contribution, damages, accumulations required to be transferred, or administrative charges, due from an
employer, may be recovered from him in any of the following modes
attachment and sale of the movable or immovable property of the establishment/employer;

arrest of the employer and his detention in prison;

appointing a receiver for the management of the movable or immovable properties of the establishment/employer.
The Recovery Officer pursuant to a recovery certificate issued by the authorised officer specifying shall make the
recovery the amount of arrears.
Stay Of Recovery Proceedings
The authorised officer may grant time for the payment of the amount, and thereupon the Recovery Officer shall stay the
proceedings until the expiry of the time so granted.
EMPLOYEES’ STATE INSURANCE ACT, 1948
1.
It applies to all factories (including Government factories but excluding seasonal factories) employing 10 or more persons
and carrying on a manufacturing process with the aid of power or employing 20 or more persons and carrying on a
manufacturing process without the aid of power and such other establishments as the Government may specify.
2.
A factory or other establishment to which this Act applies, shall continue to be governed by its provisions even if the
number of workers employed therein falls below the specified limit or the manufacturing process therein ceases to be
carried on with the aid of power, subsequently.
3.
Every employee (including casual and temporary employees), whether employed directly or through a contractor, who is
in receipt of wages upto Rs. 6,500 p.m. is entitled to be insured under the E.S.I. Act. However, apprentices engaged under
the Apprentices Act are not entitled to the E.S.I. benefits. Coverage of part time employees under the ESI Act will depend
on whether they have contract of service or contract for service with the employer. The former is covered whereas the
latter are not covered under the E.S.I Act.
4.
An employer/establishments covered under the E.S.I. Act is exempt from the provisions of Maternity Benefit Act and
Workmen’s Compensation Act.
5.
The employer is required to contribute at the rate of 4.75% of the wages paid/payable in respect of every wage period.
The employees are also required to contribute at the rate of 1.75% of their wages, except when the "average daily wages
in a wage period" are equal to or less than Rs. 50. Employees earning less than and upto Rs. 50 per day are exempted from
payment of contribution.
"wages" means all remuneration paid or payable, in cash to an employee, if the terms of the contract of employment,
express or implied, were fulfilled and includes any payment to an employee in respect of any period of authorised leave,
lock-out, strike which is not illegal or lay -off and other additional remuneration, if any, paid at intervals not exceeding
two months, but does not include-
(a) any contribution paid by the employer to any pension fund or provident fund, or under this Act;
(b) any traveling allowance or the value of any traveling concession;
(c) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or
(d) any gratuity payable on discharge.
6.
It is the employer’s responsibility to deposit his own as well as employee’s contributions in respect of all employees
including the contract labour, into the E.S.I. Account up to 21st of the next month.
The employer shall be liable to pay simple interest at the rate of twelve per cent per annum or at such higher rate as may
be specified in the Scheme in case of delay.
Provided that higher rate of interest specified in the Scheme shall not exceed the lending rate of interest charged by any
scheduled bank.
A.
OBLIGATIONS OF EMPLOYERS
 The employer should get his factory or establishments registered with the E.S.I. Corporation within 15 days after the
Act becomes applicable to it, and obtain the employer’s Code Number.
 The employer should obtain the declaration form from the employees covered under the Act and submit the same
along with the return of declaration forms, to the E.S.I. office. He should arrange for the allotment of Insurance
Numbers to the employees and their Identity Cards.
 The employer should furnish a Return of Contributions along with the challans of monthly payment, within 30 days of
the end of each contribution period.
 The employer should cause to be maintained the prescribed records/registers namely the register of employees, the
inspection book and the accident book.
 The employer should report to the E.S.I. authorities of any accident in the place of employment, within 24 hours or
immediately in case of serious or fatal accidents. He should make arrangements for first aid and transportation of the
employee to the hospital. He should also furnish to the authorities such further information and particulars of an
accident as may be required.
 The employer should inform the local office and the nearest E.S.I. dispensary/hospital, in case of death of any
employee, immediately.
 The employer must not put to work any sick employee and allow him leave, if he has been issued the prescribed
certificate.
 The employer should not dismiss or discharge any employee during the period he/she is in receipt of
sickness/maternity/temporary disablement benefit, or is under medical treatment, or is absent from work as a result of
illness duly certified or due to pregnancy or confinement.
B.
DUTIES OF EMPLOYERS
 To pay compensation for an accident suffered by an employee, in accordance with the Act.
 To submit a statement to the Commissioner (within 30 days of receiving the notice) in the prescribed form, giving the
circumstances attending the death of a workman as result of an accident and indicating whether he is liable to deposit
any compensation for the same.
 To submit accident report to the Commissioner in the prescribed form within 7 days of the accident, which results in
death of a workman or a serious bodily injury to a workman.
 To maintain a notice book in the prescribed from at a place where it is readily accessible to the workman.
 To submit an annual return of accidents specifying the number of injuries for which compensation has been paid
during the year, the amount of such compensation and other prescribed particulars.
C.
EMPLOYEES’ BENEFITS :-
I)
SICKNESS BENEFIT
Every insured employee is entitled to the cash benefit for the period of sickness occurring during any benefit period and
certified by a duly appointed medical practitioner if the contributions in respect of him were payable for not less than (78
days) in the corresponding contribution period.
However, in the case of a newly appointed employee, eligible for the first time who has got shorter contribution period of
less than 156 days, he shall be entitled to claim sickness benefit if he pays contribution for not less than half the number of
days available for working in such contribution period. The benefit is payable at the standard benefit rate, corresponding
to his daily average wages. The benefit is, however, not payable for any day on which the employee works, remains on
leave, holiday or strike, in respect of which he receives wages.
Sickness benefit shall be allowed to an employee for any day on which he remains on strike, if: 
he is receiving medical treatment and attendance as an indoor patient in any E.S.I. hospital or a hospital recognised by
the E.S.I. Corporation for such treatment; or

he is entitled to receive extended sickness benefit for any of the diseases for which such benefit is admissible; or

he is in receipt of sickness benefit immediately preceding the date of commencement of notice of the strike given by
the Employees’ Union to the Management of the factory/establishment.
No sickness benefit shall be payable for the first two days of sickness following, at an interval of not more than 15 days,
after the sickness in respect of which sickness benefits were last paid.
Further no sickness benefit shall be payable to any person for more than 91 days in any two consecutive benefit periods.
CONDITIONS TO BE OBSERVED
Any person in receipt of sickness benefit:
II)

shall remain under medical treatment at the ESI dispensary or hospital and carry out the instructions of the medical
officer;

shall not do anything which retards or reduces his chances of recovery;

shall not leave the area where medical treatment is provided without medical officer’s permission;

shall get himself examined by the medical officer.
MATERNITY BENEFIT
A periodical cash benefit is payable to an insured woman employee, in case of confinement, miscarriage, medical
termination of pregnancy, premature birth of a child, or sickness arising from pregnancy, miscarriage, etc., occurring or
expected to occur in a benefit period, if the contributions, in respect of her were payable for at least (70 days) in the two
immediately preceding contribution periods.
The benefit is payable at twice the standard benefit rate or Rs. 20, whichever is higher, for all days on which the she does
not work for remuneration during the period prescribed as under.
III)
MEDICAL BOUNS
Rs.250 on account of confinement expenses shall be paid to an insured woman and an insured person in respect of his
wife, if confinement occurs at a place where necessary medical facilities under ESI Scheme are not available.
IV)
DISABLEMENT BENEFIT
Disablement benefit is payable in the form of cash installments, to an employee who is injured in the course of his
employment and is, permanently or temporarily, disabled, or contacts any occupational disease. It is sufficient if it is
proved that the injury was caused by an accident arising out of, and in the course of employment, no matter when it
occurred, and where it occurred.
The accident shall be deemed to have arisen out of and in the course of employment unless there is evidence to the
contrary,
 where an accident happens while the employee is travelling in employer’s transport, to or from his place of work;

where an accident happens in or about any premises at which the employee is employed for the purposes of his
employer’s trade or business, while the employee is taking steps, in an emergency, to rescue, secure or protect persons
who are injured or imperilled or to avert or minimize serious damage to property;

where the employee is at the time of the accident acting in contravention of any law or any safety rules and
instructions, if the employee is acting for the purpose of, and in connection with, the employer’s trade or business.
The employee claiming any disablement benefit is required to furnish a medical certificate as prescribed under the
regulations. The employee is also required to observe certain conditions as to medical examination etc., as prescribed for
sickness benefit.
The benefit for temporary disablement is, however, not payable for any day on which the employee works, remains on
lease, holiday or strike, in respect of which he receives wages.
However, disablement benefit for temporary disablement shall be allowed to an employee for any day on which he
remains on strike, if:

he is receiving medical treatment and attendance as an indoor patient in any ESI hospital or a hospital recognised by
the ESI corporation, for such treatment; or

he is in receipt of such disablement benefit immediately preceding the date of commencement of notice of the strike
given by the Employee’s Union to the management of the factory/establishment.
NOTICE OF INJURY
The insured employee who sustains an employment injury should give a notice of the same to the employer or manager or
supervisor or foreman, etc., by means of entry in the Accident Book or otherwise in writing or even orally. This notice is
very important for claiming the disablement benefit.
ACCIDENT REPORT BY THE EMPLOYER
In case of an accident in the establishment, the employer should prepare an ‘Accident Report’ in Form 16 (in triplicate)
and submit to the local office and the Insurance Medical Officer. The third copy is the office copy. The reports are to be
submitted within 48 hours in ordinary cases and immediately in death cases.
EMPLOYER TO ARRANGE FIRST AID
The employer shall make arrangements for the first aid and medical treatment and transport as an insured person may
require, in case of an accident.
BENEFITS NOT TO BE COMBINED
An employee shall not be entitled to receive for the same period
both sickness benefit and maternity benefit; or

both sickness benefit and disablement benefit for temporary disablement; or

both maternity benefit and disablement benefit for temporary disablement.
The employee shall be entitled to choose any one of the aforesaid benefits, at his option.
ABSTENTION VERIFICATION
The employer should furnish and verify the particulars in Form 28, in respect of the abstention of an employee from work,
for which sickness/maternity/temporary disablement benefit has been claimed.
D.
PAYMENT OF BENEFIT IN CASE OF DEATH
If an employee dies during any period for which he is entitled to a cash benefit, the amount of such benefit shall be
payable up to and including the day of his death. The amount of benefit shall be paid to the nominee or, where there is no
nomination, to the heir or legal representative of the deceased employee.
FUNERAL EXPENSES
If an insured employee dies, the eldest surviving member of his family or the person who incurs the expenditure of funeral
of the deceased employee, is entitled to reimbursement of such expenditure subject to a maximum of Rs. 1,500. The claim
for the payment of funeral expenses should be submitted in the prescribed form along with prescribed documents within 3
months of the death of the insured employee.
DEATH REPORT
In case of the death of an insured employee at the place of employment, the employer should immediately report to the
local office and to the nearest E.S.I dispensary or hospital.
E.
DISPUTES & REMEDIES
Any dispute arising under the Act shall be decided by the Employees Insurance Court and not by a Civil Court. It is
constituted by the State Government for such local areas as may be specified and consists of such number of judges, as the
Government may think fit. It shall adjudicate on the following disputes and claims.
Disputes as to –







Whether an employee is covered by the Act or whether he is liable to pay the contribution, or
The rate of wages or average daily wages of an employee, or
The rate of contribution payable by the employer in respect of any employee, or
The person who is or was the principle employer in respect of any employee, or
The right to any benefit an the amount and duration thereof, or
Any direction issued by the Corporation on a review of any payment of dependents’ benefit, or
Any other matter in respect of any contribution or benefit or other due payable or recoverable under the Act.
Claims as to –





Recovery of contributions from the principle employer,
Recovery of contributions from a contractor,
Recovery for short payment or non-payment of any contribution under section 68,
Recovery of the value or amount of benefits received improperly under section 70,
Recovery of any benefit admissible under the Act
No dispute shall be admitted unless the employer deposits with the Court 50% of the amount due from him as claimed by
the Corporation.
APPEAL
An appeal shall lie to the High Court within 60 against an order of the Employees’ Insurance Court if it involves a
substantial question of law.
FACTORIES ACT, 1948
Objective & Applicability
The Factories Act, 1948 has been enacted to consolidate and amend the law regulating the workers working in the
factories. It extends to whole of India and applies to every factory wherein 20 or more workers are ordinary employed.
Since the aim and object of the Act is to safeguard the interest of workers and protect them from exploitation, the Act
prescribes certain standards with regard to safety, welfare and working hours of workers, apart from other provisions.
Factory
Means any premises including the precincts thereof where ten or more persons are working in any manufacturing
process being carried on with aid of power and where twenty or more workers are working without the aid of power.
Health

Every factory should be kept dean and free from effluvia arising from any drain, privy or other nuisance.
{Section 11}

Effective arrangements should be made in every factory for the treatment and effluents due to the
manufacturing process carried on therein, so as to render them innocuous, and for their disposal. {Section12}

Effective and suitable provisions should be made in every factory for securing and maintaining in every
workroom; adequate ventilation by the circulation of fresh air; and such a temperatures will secure to workers
therein reasonable conditions of comfort and prevent injury to health. {Section 13}

Effective measures should be taken to prevent inhalation of dust to prevent inhalation of dust and fume that may
produce in the course of manufacturing process. {Section 14}

In any factory where the humidity of air is artificially increased, the State Government may make rules
prescribing standards of humidification; regulating the methods used for artificially increasing humidity of the
air; and directing prescribed test for determining the humidity of the air to be correctly carried out and recorded;
and prescribing methods to be adopted for securing adequate ventilation and cooling of the air in the
workrooms. {Section 1S}

No room in any factory should lie overcrowded to an extent injurious to the health of the workers employed
therein. {Section 16}

In every part of a factory where workers are working or passing, there should be provided and maintained
sufficient and suitable lighting, natural or artificial, or both. {Section 17}

In every factory effective arrangements should be made to provide and maintain at suitable points conveniently'
situated for all workers employed therein a sufficient supply of wholesome drinking water. {Section 18}

In every factory sufficient latrine and urinal accommodation of prescribed types should be provided
conveniently situated and accessible to workers, separately for male and female workers, at all times while they
are at the factory. {Section 19}

In every factory there should be provided a sufficient number of spittoons in convenient places and they shall be
maintained in a clean and hygienic condition. {Section 20}
Safety

The machinery in every factory should be properly fenced. {Section 21}

Only the trained adult male worker, wearing tight fitting clothing which should be supplied by the Occupier,
should be allowed to work near the machinery in motion. {Section 22}

No young person shall be employed on dangerous machinery, unless he is fully instructed as to the danger
arising in connection with the machine and the precautions to be observed and he has received sufficient
training in work at the machine. {Section 23}

Suitable arrangements should be made to provide striking gear and devices for cutting off power in case of
emergencies. {Section 24}

Sufficient precautions should be taken with regard to self-acting machines to avoid accidents. {Section 25}

To prevent danger, all machinery driven by power should be encased and effectively guarded. {Section 26}

Woman worker and children should not be employed in any part of the factory for pressing cotton in which a
cotton-opener is at work. {Section 27}

Hoists and Lifts in a factory should be periodically inspected by the Competent Person. {Section 28}

Lifting Machines, Chains, Ropes and Lifting Tackles in a factory should be periodically inspected by the
Competent Person. {Section 29}

Where process of grinding is carried on, a notice indicating the maximum safe working peripheral speed of
every grind-stone or abrasive wheel etc., should be fixed to the revolving machinery.{Section 30}

Where any plant or machinery or any part thereof is operated at a pressure above atmospheric pressure,
effective measures should be taken to ensure that the safe working pressure of such plant of machinery or part is
not exceeded.{Section 31}

Floors, stairs and means of access should be soundly constructed and properly maintained. {Section 32}

Pits, sumps opening in floor etc., should be either securely covered or fenced. {Section 33}

No workman shall be employed in any factory to lift, carry or move any load so heavy as to be likely to cause
him injury. {Section 34}

Necessary protective equipment should be provided to protect the eyes of the workman, where the working
involves risk of injury to the eyes. {Section 35}

Suitable precautionary arrangements should be taken against dangerous fumes, gases etc. {Section 36}

Every practicable measures should be taken to prevent any explosion where the manufacturing process produces
dust, gas, fume or vapour etc. {Section 37}

Every practicable measures should be taken to prevent the outbreak of fire and its spread, both internally and
externally. {Section 38}

The Inspector of Factories can ask the Occupier or the Manager of the Factory to furnish drawings, specification
etc., of any building, machinery or a plant, in case he feels that condition of such building, machinery or the
plant may likely to cause danger to human life. {Section 39}

The Inspector of Factories can suggest suitable measures of steps to take by the Occupier or Manager for
implementation, when he feels the condition of any building, machinery or a plant may likely to cause danger to
human life. {Section 40}

Wherein 1000 or more workmen are employed in a factory, the Occupier should appoint a Safety Officer to
look after the safety aspects of the factory. {Section 40-B}
Welfare

Adequate and suitable 'washing facilities' should be provided in every factory. {Section 42}

Provision should be made to provide suitable places for keeping clothing not worn during working hours and
for the drying of wet clothing.{Section 43}

In every factory, suitable arrangements for sitting should be provided and maintained for all workers obliged to
work in a standing position, in order that they may take advantage of any opportunities for rest which may occur
in the course of their work.{Section 44}

First-Aid Boxes with the prescribed contents should be provided and maintained so as to be readily accessible
during all working hours at the rate of at least one Box for every 150 workmen. {Section 45}

In every factory wherein more than 500 workers are employed there should be provided and maintained an
Ambulance Room of the prescribed size, containing the prescribed equipment and in the charge of such medical
and nursing staff. {Section 45(4)}

The Occupier should provide a canteen for the use of workers in every factory, where the number of workmen
employed is more than 250.{Section 46}

In every factory wherein more than 150 workers are employed adequate and suitable shelters or rest rooms and
a suitable lunch room, with provision for drinking water, where workers can eat meals brought by them, should
be provided and maintained for the use of the workers. {Section 47}

In every factory wherein more than 30 women workers are ordinarily employed there should be provided and
maintained a suitable room for the use of children under the age of six years of such women. {Section 48}

In every factory wherein more than 500 or more workers are employed, the Occupier should employ in the
factory such number of Welfare Officers as may be prescribed. {Section 49}
Working Hours of Adult Workers

Ordinarily, a worker should not be allowed to work in a factory for more than 48 hours in any week. {Section
51}

The workman should have one holiday for a whole day in a week. Where he was asked to work on his
scheduled weekly holiday, he should be given compensatory holiday within three days of his scheduled weekly
holiday. {Section 52}

After obtaining approval from the Inspector of Factories, the workman shall be allowed to avail the
compensatory holidays unavailed by him, within that month during which the compensatory holidays are due or
within two months immediately following that month. {Section 53}

Subject to the provisions of Section 51 no worker should be allowed to work more than nine hours in a day.
{Section 54}

The timings of work should be fixed in such a way that no worker should be required to work continuously for
more than five hours; and he should be allowed to avail an interval for rest of at least half-an hour during his
work in a day. {Section 55}

The period of work of a workman should be so arranged that inclusive of his interval for rest under Section 55
should not spread over more than ten and a half hours in any day. {Section 56}.
General Duties of the Occupier
a)
Every Occupier should ensure, so far is reasonably practicable the health, safety and welfare of all workers
while they are at work in the factory.
b)
Without prejudice to the generality of the provisions of sub-section (1), the matters to which such duty extends,
include  the provisions and maintenance of plant and systems of work in the factory that are safe and without risks to
health; .
 the arrangements in the factory for ensuring safety and absence of risks to health in connection with the use,
handling, storage and transport of articles and substance;
 the provision of such information, instruction, training and supervision as are necessary to ensure .the health
and safety of all workers at work;
 the maintenance of all places of work in the factory in a condition that is safe and without risks to health and
the provision and maintenance of such means of access to, and egress from, such places as are safe and
without such risks;
 the provision, maintenance or monitoring of such working environment in the factory for the workers that is
safe, without risks to health and adequate s regards facilities and arrangements for their welfare at work.
c)
Except in such cases as may be prescribed, every Occupier should prepare, and, so often as may be appropriate,
revise, a written statement of his general policy with respect to the health and safety of the workers at work and
the organization and arrangements for the time being in force for carrying out that policy, and to bring the
statement and any revision thereof to the notice of all the workers in such manner as may be prescribed.
{Section 7-A}
MINIMUS WAGESACT, 1948
The Act provides for fixing minimum rates of wages in certain employments.
1.
“Wages" means all remuneration, capable of being expressed in terms of money, be payable to a person employed and
includes house rent allowance, but does not include(i)
the value of- (a) any house, accommodation, supply of light, water, medical attendance, or (b) any other amenity
or any service excluded by general or special order of the appropriate government;
(ii)
any contribution paid by the employer to any pension fund or provident fund or under any scheme of social
insurance;
(iii)
any travelling allowance or the value of any travelling concession;
(iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or
(v)
any gratuity payable on discharge;
2.
"Employee" means any person who is employed for hire or reward to do any work, skilled or unskilled, manual or
clerical, in a scheduled employment in respect of which minimum rates of wages have been fixed; and includes an outworker to whom any articles or materials are given out by another person to be made up, cleaned, washed, altered,
ornamented, finished, repaired, adapted or otherwise processed for sale for the purposes of the trade or business of that
other person where the process is to be carried out either in the home of the out-worker or in some other premises not
being premises under the control and management of that other person; and also includes an employee declared to be an
employee by the appropriate government; but does not include any member of the Armed Forces of the, Union.
3.
Fixing of minimum rates of wages
(i)
The appropriate government shall, (a)
fix the minimum rates of wages payable to employees employed in an employment specified in Part I or
Part II of the Schedule and in an employment added to either Part by notification
(b)
review at such intervals as it may think fit, such intervals not exceeding five years, the minimum rates of
wages.
The appropriate government may refrain from fixing minimum rates of wages in respect of any scheduled
employment in which there are in the whole State less than one thousand employees engaged in such
employment.
(ii)
In fixing or revising minimum rates of wages under this section, different minimum rates of wages may be fixed for-
(iii)

different scheduled employments;

different classes of work in the same scheduled employment;

adults, adolescents, children and apprentices;

different localities;
minimum rates of wages may be fixed by any one or more of the following wage periods, namely:
a) by the hour,
b) by the day,
c) by the month, or
d) by such other larger wage-period as may be prescribed;
and where such rates are fixed by the day or by the month, the manner of calculating wages for a month or for a day, as
the case may be, may be indicated:
PROVIDED that where any wage-periods have been fixed under section 4 of the Payment of Wages Act, 1936 (4 of
1936), minimum wages shall be fixed in accordance therewith.
5.
"Adolescent" means a person who has completed his fourteenth years of age but has not completed his
eighteenth year;
6.
"Adult" means a person who has completed his eighteenth years of age;
7.
Minimum rate of wages
(1) Any minimum rate of wages fixed or revised by the appropriate government may consist of(a)
a basic rate of wages and cost of living allowance; or
(b)
a basic rate of wages with or without the cost of living allowance, and the cash value of the concessions in respect
of supplies of essential commodities at concessional rates, where so authorised; or
(c)
an all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions,
if any.
8.
Where in respect of any scheduled employment a notification under section 5 is in force, the employer shall pay to every
employee engaged in a scheduled employment under him wages at a rate not less than the minimum rate of wages fixed
by such notification for that class of employees in that employment without any deductions except as may be authorized
within such time and subject to such conditions as may be prescribed.
Where an employee is employed on piecework for which minimum time rate and not a minimum piece rate has been fixed
under this Act, the employer shall pay to such employee wages at not less than the minimum time rate.
8.
Time & Conditions of Payment of wages and deductions
(i) The wage period with respect to any scheduled employment for which
one month and the wages of a worker in such employment shall be paid—
wages have been fixed shall not exceed
(a)
in the case of establishments in which less than one thousand persons are employed, before the expiry of
(b)
the seventh day, and
in the case of other establishments before the expiry of the tenth day, after the last day of the wage period
in respect of which the wages are payable.
(ii)
Where the employment of any person is terminated by or on behalf of the employer, the wages earned by him
shall be paid before the expiry of the second working day after the day on which his employment is terminated.
(iii)
The wages of an employed person shall be paid to him without deduction of any kind except those authorised by
or under these rules.
(iv)
Deductions from the wages of a person employed in a scheduled employment shall be of one or more of the
following kinds, namely :—
a) fines;
b) deductions for absence from duty;
c) deductions for damage to or loss of goods expressly entrusted to the employed person for custody, or for loss of
money for which he is required to account, where such damage or loss is directly attributable to his neglect or
default;
d) deductions for house accommodation supplied by the employer;
e) deductions for such amenities and services supplied by the employer as the Central Government may, by general
or special order, authorise.
Explanation.—The words ‘amenities and services’ in this clause does not include the supply of tools and
protectives required for the purposes of employment;
f) deductions for recovery of advances or for adjustment of over payments of wages :
Provided that such advances do not exceed an amount equal to wages for two calendar months of the employed
person and, in no case, shall the monthly instalment of deduction exceed one-fourth of the wages earned in that
month;
g) deductions of income-tax payable by the employed person;
h) deductions required to be made by order of a court or other competent authority;
i)
j)
deductions for subscriptions to, and for repayment of advances from any provident fund to which the Provident
Fund Act, 1925, applies or any recognised provident fund as defined in section 58A of the Indian Income-tax Act,
1922, or any provident fund approved in this behalf by the Central Government during the continuance of such
approval;
deductions for payment to co-operative societies or deductions for recovery of loans advanced by an employer
from out of a fund maintained for the purpose by the employer and approved in this behalf by the Central
Government or to a scheme of insurance approved by the Central Government;
k) deductions for recovery or adjustment of amounts, other than wages, paid to the employed person in error or in
excess of what is due to him;
l)
deductions made with the written authorisation of the employed persons (which may be given once generally and
not necessarily every time a deduction is made), for the purchase of securities of the Government of India or of
any State Government or for being deposited in any Post Office Savings Bank in furtherance of any savings
scheme of any such Government;
m) deductions made with the written authorisation of the employed person for contributions to the National Defence
Fund or the Prime Minister’s National Relief Fund or to any Defence Savings Scheme approved by the Central
Government or to such other Fund as the Central Government may, by notification in the Official Gazette, specify
in this behalf; and
n) deductions for recovery of loans granted for house building or other purposes approved by the Central
Government, and for the interest due in respect of such loans, subject to any rules made or approved by the
Central Government regulating the extent to which such loans may be granted and the rate of interest payable
thereon.
(v)
Notwithstanding anything contained in these rules, the total amount of deductions, which may be made in any
wage period, from the wages of an employee shall not exceed—
a) 75 per cent of such wages in cases where such deductions are wholly or partly made for payments to Consumer
Co-operative Stores run by any Co-operative Society under clause (x) of sub-rule (2); and
b) 50 per cent of such wages in any other case:
Provided that where the total amount of deductions which have to be made in any wage period from the wages of any
employee exceeds the limit specified in clause (i), or, as the case may be, clause (ii) of this sub-rule, the excess shall
be carried forward and recovered from the wages of succeeding wage period or wages periods as the case may be, in
such number of instalments as may be necessary.
(vi)
Any person desiring to impose a fine on an employed person or to make a deduction for damage or loss caused by
him shall explain to him personally and also in writing the act or omission or the damage or loss, in respect of which the
fine or deduction is proposed to be imposed or made and give him an opportunity to offer any explanation in the presence
of another person. The amount of the said fine or deduction shall also be intimated to him. The amount of fine or
deduction for damage or loss shall be subject to such limits as may be specified in this behalf by the Central Government.
All such fines imposed and deductions made shall be recorded in the registers maintained in Forms I and II, respectively.
These registers shall be kept at the workspot and maintained upto-date. Where no fine or deduction has been imposed or
made on or from any employee in a wage period, a ‘nil’ entry shall be made across the body of the relevant register at the
end of the wage period, indicating also in precise terms the wage period to which the ‘NIL’ entry relates.
Every employer shall send annually a return in Form III so as to reach the Inspector not later than the 1st February
following the end of the year to which it relates.
The amount of fine imposed shall be utilised only for such purposes beneficial to the employees as are approved by the
Central Government.
9.
Number of hours of work, which shall constitute a normal working day.

The number of hours, which shall constitute a normal working day shall be—
 in the case of an adult, 9 hours;




10.
in the case of a child, 4 hours.
The working day of an adult worker shall be so arranged that inclusive of the intervals for rest, if any, it shall not
spread over more than twelve hours on any day.
The number of hours of work in the case of an adolescent shall be the same as that of an adult or a child according
as he is certified to work as an adult or a child by a competent medical practitioner approved by the Central
Government.
No child shall be employed or permitted to work for more than 4½ hours on any day.
Extra wages for overtime
(1)
When a worker works in an employment for more than nine hours on any day or for more than forty-eight hours
in any week, he shall, in respect of such overtime work, be entitled to wages at double the “ordinary rate of wages”.
Explanation.—The expression “ordinary rate of wages” means the basic wage plus such allowances including the cash
equivalent of the advantages accruing through the concessional sale to the person employed of food grains and other
articles as the person employed is for the time being entitled to but does not include a bonus.
(2)
A register of overtime shall be maintained by every employer in Form IV in which entries under the columns
specified therein shall be made as and when overtime is worked in any establishment. The register shall be kept at the
work spot and maintained up-to-date. Where no overtime has been worked in any wage period, a ‘nil’ entry shall be made
across the body of the register at the end of the wage period indicating also in precise terms the wage period to which the
‘NIL’ entry relates.
11.
Register
A Register of Wages shall be maintained by every employer at the work spot in Form X.
(i) Every employer shall, in respect of each person employed in the establishment, complete the entries pertaining to a
wage period—
(a)
in columns 1 to 15 of Form X, before the date on which the wages for such wage period fall due ;
(b)
in columns 16 and 17 of the said Form, on the date when payment is made, and obtain the signature or
thumb impression of the employee in column 18 of the said Form on the date when payment is made.
(ii)
A Wage Slip in Form XI shall be issued by every employer to every person employed by him at least a day prior
to the disbursement of wages.
(iii)
Every employer shall get the signature or the thumb impression of the every person employed on the Register of
wages and wage slip.
(iv)
Entries in the Register of Wages and wage slip shall be authenticated by the employer or any person authorised by
him in this behalf.
(v)
A muster roll shall be maintained by every employer at the work spot in Form V and the attendance of each
person employed in the establishment shall be recorded daily in that Form within 3 hours of the commencement of the
work shift or relay for the day, as the case may be.
12.
Offences by Companies
(1)
If the person committing any offence under this Act is a company, every person who at the time the offence was
committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well
as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished
accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this
Act if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent
the commission of such offence.
(2)
Notwithstanding anything contained in (1) above , where an offence under this Act has been committed by a
company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any
neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary
or other officer of the company shall also be deemed to be guilty of that offence and shall be liable to be proceeded
against and punished accordingly.
PAYMENT OF WAGES ACT, 1936
(A)
Application: It applies to persons employed in any factory, to persons employed (otherwise than in a factory) upon any
railway by a railway administration or, by a person fulfilling a contract with a railway administration, and to persons
employed in an industrial or other establishment.
(B)
Nothing in this Act shall apply to wages payable in respect of a wage-period which over such wage-period, average 1600
rupees a month or more.
(C)
“Industrial or other establishment” means any(a) tramway service , or motor transport service engaged in carrying passengers or goods or both by road for hire or
reward;
(b) air transport service other than such service belonging to, or exclusively employed in the military, naval or air forces
of the Union or the Civil Aviation Department of the Government of India;
(c) dock, wharf or jetty;
(d) inland vessel, mechanically propelled;
(e) mine, quarry or oil-field;
(f) plantation;
(g) workshop or other establishment in which articles are produced, adapted or manufactured, with a view to their use,
transport or sale;
(h) establishment in which any work relating to the construction, development or maintenance of buildings, roads, bridges
or canals, or relating to operations connected with navigation, irrigation, or to the supply of water or relating to the
generation, transmission and distribution of electricity or any other form of power is being carried on;
(i) any other establishment or class of establishments which the Central Government or a State Government may,
specify, by notification in the Official Gazette.
(D)
“Wages” means all remuneration expressed in terms of money(a)
any remuneration payable under any award or settlement between the parties or order of a court;
(b)
(c)
(d)
any additional remuneration payable under the terms of employment (whether called a bonus or by any other
name);
any sum which by reason of the termination of employment of the person employed is payable under any law,
contract or instrument which provides for the payment of such sum, whether with or without deductions, but does
not provide for the time within which the payment is to be made;
any sum to which the person employed is entitled under any scheme framed under any law for the time being in
force,
but does not include
any bonus (whether under a scheme of profit sharing or otherwise) which does not form part of the
remuneration payable under the terms of employment or which is not payable under any award or settlement
between the parties or order of a court;

the value of any house-accommodation, or of the supply of light, water, medical attendance or other
amenity or of any service excluded from the computation of wages by a general or special order of the State
Government;

any contribution paid by the employer to any pension or provident fund, and the interest which may have
accrued thereon;

any travelling allowance or the value of any travelling concession;

any sum paid to the employed person to defray special expenses entailed on him by the nature of his
employment; or

(d).
any gratuity payable on the termination of employment in cases other than those specified in sub-clause
(E)
Every person responsible for the payment of wages under section 3 shall fix periods (in this Act referred to as wageperiods) in respect of which such wages shall be payable and no wage-period shall exceed one month.
(F)
Due date of Payment of Wages
The wages of every person employed upon or in(a)
any railway, factory or industrial or other establishment] upon or in which less than one thousand persons are
employed, shall be paid before the expiry of the seventh day,
(b)
any other railway, factory or industrial or other establishment, shall be paid before the expiry of the tenth day,
after
the
last
day
of
the
wage-period
in
respect
of
which
the
wages
are
payable:
Where the employment of any person is terminated by or on behalf of the employer, the wages, earned by him shall be
paid before the expiry of the second working day from the day on which his employment is terminated:
PROVIDED that where the employment of any person in an establishment is terminated due to the closure of the
establishment for any reason other than a weekly or other recognised holiday, the wages earned by him shall be paid
before the expiry of the second day from the day on which his employment is so terminated.
(G)
Mode of Payment
All
wages
shall
be
paid
in
current
coin
or
currency
notes
or
in
both.
PROVIDED that the employer may, after obtaining the written authorisation of the employed person, pay him the wages
either by cheque or by crediting the wages in his bank account.
(H)
Deductions
Deductions from the wages of an employed person shall be made only in accordance with the provisions of this Act, and
may be of the following kinds only, namely:
(a)
(b)
fines;
deductions for absence from duty;
(c) deductions for damage to or loss of goods expressly entrusted to the employed person for custody, or for loss of money
for which he is required to account, where such damage or loss is directly attributable to his neglect or default;
(d) deductions for house-accommodation supplied by the employer or by government or any housing board set up under any
law for the time being in force (whether the government or the board is the employer or not) or any other authority engaged in
the business of subsidising house- accommodation which may be specified in this behalf by the State Government by
notification in the Official Gazette;
(e) deductions for such amenities and services supplied by the employer as the State Government or any officer specified by
it in this behalf] may, by general or special order, authorise.
(f) deductions for recovery of advances of whatever nature (including advances for travelling allowance or
conveyance allowance), and the interest due in respect thereof, or for adjustment of over-payments of wages;
(g) deductions for recovery of loans made from any fund constituted for the welfare of labour in accordance with the
rules approved by the State Government, and the interest due in respect thereof;
(h) deductions for recovery of loans granted for house-building or other purposes approved by the State Government
and the interest due in respect thereof;]
(i) deductions of income-tax payable by the employed person;
(j) deductions required to be made by order of a court or other authority competent to make such order;
(k) deductions for subscriptions to, and for repayment of advances from any provident fund to which the Provident
Funds Act, 1925 (19 of 1925), applies or any recognised provident fund as defined in section 58A of the Indian
Income Tax Act, 1922 (11 of 1922)], or any provident fund approved in this behalf by the State Government,
during the continuance of such approval;
(l) deductions for payments to co-operative societies approved by the State Government 15[or any officer specified by
it in this behalf] or to a scheme of insurance maintained by the Indian Post Office, and
(m) deductions, made with the written authorisation of the person employed for payment of any premium on his life
insurance policy to the Life Insurance Corporation Act of India established under the Life Insurance Corporation
Act, 1956 (31 of 1956), or for the purchase of securities of the Government of India or of any State Government or
for being deposited in any Post Office Savings Bank in furtherance of any savings scheme of any such government.
(n) deductions, made with the written authorisation of the employed person, for the payment of his contribution to any
fund constituted by the employer or a trade union registered under the Trade Union Act, 1926 (16 of 1926), for the
welfare of the employed persons or the members of their families, or both, and approved by the State Government
or any officer specified by it in this behalf, during the continuance of such approval;
(o) deductions, made with the written authorisation of the employed person, for payment of the fees payable by him
for the membership of any trade union registered under the Trade Union Act, 1926 (16 of 1926);
(p) deductions,
for
payment
of
insurance
premium
on
Fidelity
Guarantee
Bonds;
(q) deductions for recovery of losses sustained by a railway administration on account of acceptance by the employed
person of counterfeit or base coins or mutilated or forged currency notes;
(r) deductions for recovery of losses sustained by a railway administration on account of the failure of the employed
person to invoice, to bill, to collect or to account for the appropriate charges due to that administration whether in
respect of fares, freight, demurrage, wharfage and cranage or in respect of sale of food in catering establishments
or
in
respect
of
sale
of
commodities
in
grain
shops
or
otherwise;
(s) deductions for recovery of losses sustained by a railway administration on account of any rebates or refunds
incorrectly granted by the employed person where such loss is directly attributable to his neglect or default;]
(t) deductions, made with the written authorisation of the employed person, for contribution to the Prime Minister’s
National Relief Fund or to such other Fund as the Central Government may, by notification in the Official Gazette,
specify;]
(u) deductions for contributions to any insurance scheme framed by the Central Government for the benefit of its
employees.
Notwithstanding anything contained in this Act, the total amount of deductions, which may be made in any wage-period from
the wages of any employed person shall not exceed
in cases where such deductions are wholly or partly made for payments to co-operative societies ,
seventy-five per cent of such wages, and

in any other case, fifty per cent of such wages:
PROVIDED that where the total deductions authorised exceed seventy five per cent or, as the case may be, fifty per cent
of the wages, the excess may be recovered in such manner as may be prescribed.
(I)
Imposition of Fine
 No fine shall be imposed on any employed person save in respect of such acts and omissions on his part as the
employer, otherwise than by notice.
 The total amount of fine, which may be imposed in any one wage-period on any employed person shall not exceed an
amount equal to three per cent of the wages payable to him in respect of that wage-period.
 No fine shall be imposed on any employed person who is under the age of fifteen years.
 No fine imposed on any employed person shall be recovered from him by installments or after the expiry of sixty days
from the day on which it was imposed.
(J)
Payment of undisbursed wages in cases of death of employed person.
(1)
Subject to the other provisions of the Act, all amounts payable to an employed person as wages shall, if such
amounts could not or cannot be paid on account of his death before payment or on account of his whereabouts not being
known,—
(a)
(b)
(2)
be paid to the person nominated by him in this behalf in accordance with the rules made under this Act; or
where no such nomination has been made or where for any reasons such amounts cannot be paid to the person so
nominated, be deposited with the prescribed authority who shall deal with the amounts so deposited in such
manner as may be prescribed.
Where, in accordance with the provisions of sub-section (1), all amounts payable to an employed person as
wages—
(a)
(b)
are paid by the employer to the person nominated by the employed person; or
are deposited by the employer with the prescribed authority, the employer shall be discharged of his liability to
pay those wages.
(K)
Registers & Records
Every employer shall maintain such registers and records giving such particulars of persons employed by him, the work
performed by them, the wages paid to them, the deductions made from their wages, the receipts given by them and such
other particulars and in such form as may be prescribed.
Every register and record required to be maintained under this section shall, for the purposes of this Act, be preserved for
a period of three years after the date of the last entry made therein.
(L)
Penalty for offences under the Act.
1)
Whoever being responsible for the payment of wages to an employed person contravenes any of the provisions
of any of the following sections, namely, section 5 except sub-section (4) thereof, section 7, section 8 except
sub-section (8) thereof, section 9, section 10, except sub-section (2) thereof, and sections 11 to 13, both
inclusive, shall be punishable with fine which shall not be less than two hundred rupees but which may extend
to one thousand rupees.
Whoever contravenes the provisions of section 4, sub-section (4) of section 5, section 6, sub-section (8) of
section 8, sub-section (2) of section 10 or section 25 shall be punishable with fine, which may extend to five
hundred rupees.
2)
3)
Whoever being required under this Act to maintain any records or registers or to furnish any information or return—
a)
b)
c)
d)
4)
fails to maintain such register or record; or
wilfully refuses or without lawful excuse neglects to furnish such information or return; or
wilfully furnishes or causes to be furnished any information or return which he knows to be false; or
refuses to answer or wilfully gives a false answer to any question necessary for obtaining any information
required to be furnished under this Act,
e) shall, for each such offence, be punishable with fine which shall not be less than two hundred rupees but which
may extend to one thousand rupees.
Whoever—
a) wilfully obstructs an Inspector in the discharge of his duties under this Act; or
b) refuses or wilfully neglects to afford an Inspector any reasonable facility for making any entry, inspection, examination, supervision, or inquiry authorised by or under this Act in relation to any railway, factory or industrial or other
establishment; or
c) wilfully refuses to produce on the demand of an Inspector any register or other document kept in pursuance of this
Act; or
d) prevents or attempts to prevent or does anything which he has any reason to believe is likely to prevent any person
from appearing before or being examined by an Inspector acting in pursuance of his duties under this Act,
e) shall be punishable with fine which shall not be less than two hundred rupees but which may extend to one thousand
rupees.
5)
If any person who has been convicted of any offence punishable under this Act is again guilty of an offence
involving contravention of the same provision, he shall be punishable on a subsequent conviction with
imprisonment for a term which shall not be less than one month but which may extend to six months and with
fine which shall not be less than five hundred rupees but which may extend to three thousand rupees :
Provided that for the purpose of this sub-section, no cognizance shall be taken of any conviction made more than two
years before the date on which the commission of the offence, which is being punished came to the knowledge of the
Inspector.
6)
If any person fails or wilfully neglects to pay the wages of any employed person by the date fixed by the authority in this
behalf, he shall, without prejudice to any other action that may be taken against him, be punishable with an additional fine
which may extend to one hundred rupees for each day for which such failure or neglect continues.
(M)
The person responsible for the payment of wages to persons ; employed in a factory or an industrial or other establishment
shall cause to be displayed in such factory or industrial or other establishment a notice containing such abstracts of this
Act and of the rules made there under in English and in the language of the majority of the persons employed in the
factory, or industrial or other establishment, as may be prescribed.
PAYMENT OF BONUS ACT, 1965
Application of Payment of Bonus Act,1695
It applies to the entity as it shall apply to,(a)
every factory; and
(b)
every other establishment in which twenty or more persons are employed on any day during the year.
Eligibility For Bonus
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 working days in that year.
“Employee” means any person (other than an apprentice) employed on a salary or wage not exceeding 3500 per mensem in any
industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or
reward, whether the terms of employment be express or implied.
“Salary or wages” means all remuneration (other than remuneration in respect of over-time work), includes dearness allowance
but does not include:
(i)
any other allowance
(i)
the value of any house accommodation or of supply of light, water, medical attendance or other amenity or of
any service or of any concessional supply of food grains or other articles;
(iii)
any travelling concession;
(iv)
any bonus (including incentive, production and attendance bonus);
(v)
any contribution paid or payable by the employer to any pension fund or provident fund
(vi)
any retrenchment compensation or any gratuity or other retirement benefit;
(vii)
any commission payable to the employee.
Explanation: Free food allowance or free food by his employer, such food allowance or the value of such food in lieu of
salary be deemed to form part of the salary or wages of such employee.
Disqualification for Bonus
An employee shall be disqualified from receiving bonus under this Act, if he is dismissed from service for,-
(a)
fraud; or
(b)
riotous or violent behaviour while on the premises of the establishment; or
(c)
theft, misappropriation or sabotage of any property of the establishment.
Payment of Minimum and Maximum Bonus

Every employer shall be bound to pay to every employee, a minimum bonus which shall be 8.33 per cent of the salary or
wages earned by the employee or rupees one hundred, whichever is higher, whether or not the employer has any allocable
surplus(as
defined
under
the
act)
in
the
accounting
year.
Provided that where an employee has not completed fifteen years of age at the beginning of the accounting year, for one
hundred rupees" the words "sixty rupees" will be substituted.

Where in respect of any accounting year, the allocable surplus (as defined under the Act) exceeds the amount of
minimum bonus payable to the employees, the employer shall, in lieu of such minimum bonus, be bound to pay
to every employee, bonus which shall be an amount in proportion to the salary or wages earned by the employee,
subject to a maximum of 20% of such salary or wage.
Calculation Of Bonus
The method for calculation of annual bonus is as follows:

Calculate the gross profit in the manner specified in Second Schedule

Calculate the Available Surplus.
Available Surplus = A+B, where A = Gross Profit – Depreciation admissible u/s 32 of the Income tax Act - Development
allowance - Direct taxes payable for the accounting year (calculated as per Sec.7) – Sums specified in the Third Schedule.
B = Direct Taxes (calculated as per Sec. 7) in respect of gross profits for the immediately preceding accounting year –
Direct Taxes in respect of such gross profits as reduced by the amount of bonus, for the immediately preceding accounting
year.

Calculate Allocable Surplus
Allocable Surplus = 60% of Available Surplus

Make adjustment for ‘Set-on’ and ‘Set-off’. For calculating the amount of bonus in respect of an accounting year,
allocable surplus is computed after considering the amount of set on and set off from the previous years, as illustrated in
Fourth Schedule.

The allocable surplus so computed is distributed amongst the employees in proportion to salary or wages received by
them during the relevant accounting year.
In case of an employee receiving salary or wages above Rs.2,500 the bonus payable is to be calculated as if the salary or wages
were Rs.2,500 p.m. only.
Duties of Employer

To calculate and pay the annual bonus as required under the Act.

To submit an annul return of bonus, in Form D, within 30 days of the expiry of the time limit specified for payment of
bonus (eighteen months from the end of the financial year).

To co-operate with the Inspector, produce before him the registers/records maintained, and such other information as may
be required by them.

To get his account audited as per the directions of a Labour Court/Tribunal or of any such other authority.
Rights Of Employer
An employer has the following rights:

Right to forfeit bonus of an employee, who has been dismissed from service for fraud, riotous or violent behaviour, or
theft, misappropriation or sabotage of any property of the establishment.

Right to make permissible deductions from the bonus payable to an employee, such as, festival/interim bonus paid and
financial loss caused by misconduct of the employee.

Right to refer any disputes relating to application or interpretation of any provision of the Act, to the Labour Court or
Labour Tribunal.
Rights Of Employees

Right to claim bonus payable under the Act and to make an application to the Government, for the recovery of bonus due
and unpaid, within one year of its becoming due.

Right to refer any dispute to the Labour Court/Tribunal Employees, to whom the Payment of Bonus Act does not apply,
cannot raise a dispute regarding bonus under the Industrial Disputes Act.

Right to seek clarification and obtain information, on any item in the accounts of the establishment.
Offences And Penalties
For contravention of the provisions of the Act or rules the penalty is imprisonment up to 6 months, or fine up to Rs.1000, or both.
For failure to comply with the directions or requisitions made the penalty is imprisonment up to 6 months, or fine up to Rs.1000,
or both.
In case of offences by companies its director or a principal officer responsible for the conduct of its business, as the case may be,
shall be deemed to be guilty of that offence and punished accordingly, unless the person concerned proves that the offence was
committed without his knowledge or that he exercised all due diligence
PAYMENT OF GRATUITY ACT, 1972
Application
1.
This act applies to Every factory, mine oil field, plantation, port and railway company; Every shop or establishment within
the meaning of any law in relation to shops and establishments in a state in which 10 or more persons are employed on
any day of the preceding 12 months; Every such other establishments in which in which 10 or more persons are employed
on any day of the preceding 12 months as notified by central government.
2.
Gratuity is payable to an employee on the termination of his employment after his continuous service of not less
than 5 years (not applicable in case of death or disablement).
In the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been
made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the
controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as
may be prescribed, until such minor attains majority.
3.
For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an
employee at the rate of fifteen days’ wages based on the rate of wages last drawn by the employee concerned:
Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total
wages received by him for a period of three months immediately preceding the termination of his employment,
and, for this purpose, the wages paid for any overtime work shall not be taken into account:
Explanation: In the case of a monthly rated employee, the fifteen days’ wages shall be calculated by dividing the
monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.
For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on
reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him
during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so
reduced.
wages" means all emoluments which are earned by an employee while on duty or on leave in accordance with the
terms and conditions of his employment and which are paid or are payable to him in cash and includes dearness
allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other
allowance.
4.
The amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand rupees.
5.
The gratuity of an employee, whose services have been terminated for any act, wilful 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 so caused.
6.
The gratuity payable to an employee may be wholly or partially forfeited—
(i)
if the services of such employee have been terminated for his riotous or disorderly conduct or any other act
of violence on his part, or
(ii)
if the services of such employee have been terminated for any act which constitutes an offence involving
moral turpitude, provided that such offence is committed by him in the course of his employment.
7.
An employee who is eligible for payment of gratuity under the Act, or any person authorised in writing, to act on
his behalf, shall apply ordinarily within thirty days from the date the gratuity became payable, in Form ‘I’ to the
employer.
8.
Each employee, who has completed one year of service may make nomination. The nomination shall be in Form
‘F’ and submitted in duplicate by personal service by the employee, after taking proper receipt or by sending
through registered post acknowledgement due to the employer,—
(i)
in the case of an employee who is already in employment for a year or more on the date of commencement
of these rules, ordinarily, within ninety days from such date, and
(ii)
in the case of an employee who completes one year of service after the date of commencement of these
rules, ordinarily, within thirty days of the completion of one year of service :
9.
Whoever, for the purpose of avoiding any payment to be made by himself under this Act or of enabling any other
person to avoid such payment, knowingly makes or causes to be made any false statement or false representation
shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend
to ten thousand rupees or with both.
An employer who contravenes, or makes default in complying with, any of the provisions of this Act or any rule or
order made there-under shall be punishable with imprisonment for a term which shall not be less than three
months but which may extend to one year, or with fine which shall not be less than ten thousand rupees but which
may extend to twenty thousand rupees, or with both:
Provided that where the offence relates to non-payment of any gratuity payable under this Act, the employer shall
be punishable with imprisonment for a term which shall not be less than six months but which may extend to two
years unless the court trying the offence, for reasons to be recorded by it in writing, is of opinion that a lesser term
of imprisonment or the imposition of a fine would meet the ends of justice.
10.
No gratuity payable under this Act and no gratuity payable to an employee employed in any establishment,
factory, mine, oilfield, plantation, port, railway company or shop exempted under section shall be liable to attachment in execution of any decree or order of any civil, revenue or criminal court.
INDUSTRIAL DISPUTE ACT, 1947
This Act applies to workers carrying out manual, unskilled, technical, operational or supervisory work and does not apply to
workers earning more than Rs.1,600 per month carrying out managerial work. In addition, the worker must have had continuous
service of at least one year.
It provides for the conciliation and adjudication of industrial disputes by Conciliation Officers, a Board of Conciliation, Courts of
Inquiry, Labour Courts, Industrial Tribunals and a National Industrial Tribunal. Each has a different jurisdiction or purpose,
except for Conciliation Officers, whose jurisdiction is more general. Industrial dispute means any dispute or difference between
employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the
employment or non-employment or the terms of employment or with the conditions of labour, of any person. Industrial disputes
include cases of unfair dismissal.
Dismissal,
etc.,
of
an
individual
workman
to
be
deemed
to
be
an
industrial
dispute
Where any employer discharges, dismisses, retrenches or otherwise terminates the services of an individual workman, any dispute
or difference between that workman and his employer connected with, or arising out of, such discharge, dismissal, retrenchment
or termination shall be deemed to be an industrial dispute notwithstanding that no other workman nor any union of workmen is a
party to the dispute.
1.
AUTHORITIES UNDER THIS ACT FOR ADJUDICATION OF INDUSTIAL DISPUTES
a)
Works Committee
In the case of any industrial establishment in which one hundred or more workmen are employed or have been employed
on any day in the preceding twelve months, the State government may by general or special order require the employer to
constitute in the prescribed manner a Works Committee consisting of representatives of employers and workmen engaged
in the establishment.
Any employer to whom an order made under sub-section (1) of section 3 relates shall forthwith proceed to
constitute a Works Committee in the manner prescribed in this part.
The duty of the Works Committee is to promote measures for securing and preserving amity and good relations between
the employer and workmen and, to that end, to comment upon matters of their common interest or concern and endeavour
to compose any material difference of opinion in respect of such matters.
b)
Conciliation officers
A conciliation officer is appointed by the Government, who are charged with the duty of mediating in and
promoting the settlement of industrial disputes.
A conciliation officer may be appointed for a specified area or for specified industries in a specified area or for one or
more specified industries and either permanently or for a limited period.
c)
Boards of Conciliation, Courts of Inquiry, Labour Courts, Tribunals, National Tribunals
A Board of Conciliation, Labour Courts, Tribunals, National Tribunals are constituted by the Government for promoting
the settlement/ adjudication of an industrial dispute.
2.
SETTING UP OF GRIEVANCE SETTLEMENT AUTHORITIES
a)
The employer in relation to every industrial establishment in which fifty or more workmen are employed or have been
employed on any day in the preceding twelve months, shall provide for, in accordance with the rules made in that behalf
under this Act, a Grievance Settlement Authority for the settlement of industrial disputes connected with an individual
workman employed in the establishment.
b)
Where an industrial dispute connected with an individual workman arises in an establishment referred above, a workman
or any trade union of workmen of which such workman is a member, refer such dispute for settlement to the Grievance
Settlement Authority provided for by the employer.
c)
No reference shall be made to Boards, courts or Tribunals with respect to any dispute referred to in this section unless
such dispute has been referred to the Grievance Settlement Authority concerned and the decision of the Grievance
Settlement Authority is not acceptable to any of the parties to the dispute.
3.
VOLUNTARY REFERENCE OF DISPUTES TO ARBITRATION.
a)
Where any industrial dispute exists or is apprehended and the employer and the workmen agree to refer the dispute to
arbitration, they may, at any time before the dispute has been referred under section 10 to a Labour Court, or Tribunal or
National Tribunal, by a written agreement, refer the dispute to arbitration and the reference shall be to such person or
persons (including the presiding officer of a Labour Court or Tribunal or National Tribunal) as an arbitrator or arbitrators
as may be specified in the arbitration agreement.
b)
Where an arbitration agreement provides for a reference of the dispute to an even number of arbitrators, the agreement
shall provide for the appointment of another person as umpire who shall enter upon the reference, if the arbitrators are
equally divided in their opinion, and the award of the umpire shall prevail and shall be deemed to be the arbitration award
for the purposes of this Act.
c)
A copy of the arbitration agreement shall be forwarded to the State Government and the conciliation officer and the State
Government shall, within one month from the date of the receipt of such copy, publish the same in the Official Gazette.
d)
The arbitrator or arbitrators shall investigate the dispute and submit to the State Government the arbitration award signed
by the arbitrator or all the arbitrators, as the case may be.
e)
Where an industrial dispute has been referred to arbitration and a notification has been issued, the State Government may,
by order, prohibit the continuance of any strike or lock-out in connection with such dispute which may be in existence on
the date of the reference.
f)
Nothing in the Arbitration Act, 1940 (10 of 1940), shall apply to arbitrations under this section.
4.
REFERENCE OF DISPUTES TO BOARDS, COURTS OR TRIBUNALS.
a)
Where the State Government is of opinion that any industrial dispute exists or is apprehended, it may at any time, by order
in writing, refer the dispute to a Board for promoting a settlement thereof or refer any matter appearing to be connected
with or relevant to the dispute to a Court for inquiry.
b)
For any matter specified in the Second Schedule the State Government may refer the dispute or any matter appearing to be
connected with, or relevant to, the dispute, to a Labour Court for adjudication or where it relates to any matter specified
in the Second Schedule or the Third Schedule the State Government may refer the dispute or any matter appearing to be
connected with, or relevant to, the dispute to a Tribunal for adjudication.
Provided that where the dispute relates to any matter specified in the Third Schedule and is not likely to affect more than
one hundred workmen, the State Government may, if it so thinks fit, make the reference to a Labour Court.
c)
Where the Central Government is of opinion that any industrial dispute exists or is apprehended and the dispute involves
any question of national importance or is of such a nature that industrial establishments situated in more than one State are
likely to be interested in, or affected by, such dispute and that the dispute should be adjudicated by a National Tribunal,
then, the Central Government may by order in writing, refer the dispute to a National Tribunal for adjudication.
d)
Where the parties to an industrial dispute apply in the prescribed manner, whether jointly or separately, for a reference of
the dispute to a Board, Court, Labour Court, Tribunal or National Tribunal, the State Government, if satisfied that the
persons applying represent the majority of each party, shall make the reference accordingly.
e)
Where an industrial dispute has been referred to a Board, Labour Court, Tribunal or National Tribunal the State
Government may by order prohibit the continuance of any strike or lock-out in connection with such dispute which may
be in existence on the date of the reference.
5.
PAYMENT OF FULL WAGES TO WORKMAN PENDING PROCEEDINGS IN HIGHER COURTS.
Where in any case a Labour-Court, Tribunal or National Tribunal by its award directs reinstatement of any workman and
the employer prefers any proceedings against such award in a High Court or the Supreme Court, the employer shall be
liable to pay such workman, during the period of pendency of such proceedings in the High Court or the Supreme Court,
full wages last drawn by him, inclusive of any maintenance allowance admissible to him under any rule if the workman
had not been employed in any establishment during such period and an affidavit by such workman had been filed to that
effect in such Court :
Provided that where it is proved to the satisfaction of the High Court or the Supreme Court that such workman had been
employed and had been receiving adequate remuneration during any such period or part thereof, the Court shall order that
no wages shall be payable under this provision for such period or part, as the case may be.
6.
PERIOD OF OPERATION OF SETTLEMENTS AND AWARDS.
a)
A settlement shall come into operation on such date as is agreed upon by the parties to the dispute, and if no date is agreed
upon, on the date on which the memorandum of the settlement is signed by the parties to the dispute.
b)
Such settlement shall be binding for such period as is agreed upon by the parties, and if no such period is agreed upon, for
a period of six months from the date on which the memorandum of settlement is signed by the parties to the dispute, and
shall continue to be binding on the parties after the expiry of the period aforesaid, until the expiry of two months from the
date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party
or parties to the settlement.
c)
An award shall, subject to the provisions of this section, remain in operation for a period of one year from the date on
which the award becomes enforceable under section 17A:
Provided that the State Government may reduce the said period and fix such period as it thinks fit :
Provided further that the State Government may, before the expiry of the said period, extend the period of operation by
any period not exceeding one year at a time as it thinks fit, so however, that the total period of operation of any award
does not exceed three years from the date on which it came into operation.
d)
Where the appropriate Government, whether of its own motion or on the application of any party bound by the award,
considers that since the award was made, there has been a material change in the circumstances on which it was based, the
appropriate Government may refer the award or a part of it to a Labour Court, if the award was that of a Labour Court or
to a Tribunal, if the award was that of a Tribunal or of a National Tribunal, for decision whether the period of operation
should not, by reason of such change, be shortened and the decision of Labour Court or the Tribunal, as the case may be,
on such reference shall be final.
e)
Nothing contained in (c) above shall apply to any award which by its nature, terms or other circumstances does not
impose, after it has been given effect to, any continuing obligation on the parties bound by the award.
f)
Notwithstanding the expiry of the period of operation stated in (c) above, the award shall continue to be binding on the
parties until a period of two months has elapsed from the date on which notice is given by any party bound by the award
to the other party or parties intimating its intention to terminate the award.
g)
No notice given as stated in (b) & (f) above shall have effect, unless it is given by a party representing the majority of
persons bound by the settlement or award, as the case may be.
7.
STRIKES AND LOCKOUTS.
A)
GENERAL PROHIBITION OF STRIKES AND LOCKOUTS.
No workman who is employed in any industrial establishment shall go on strike in breach of contract and no employer of
any such workman shall declare a lock-out–
a)
during the pendency of conciliation proceedings before a Board and seven days after the conclusion of such proceedings;
b)
during the pendency of proceedings before a Labour Court, Tribunal or National Tribunal and two months after the
conclusion of such proceedings;
c)
during the pendency of arbitration proceedings before an arbitrator and two months after the conclusion of such
proceedings; or
d)
during any period in which a settlement or award is in operation, in respect of any of the matters covered by the settlement
or award.
B)
ILLEGAL STRIKES AND LOCK-OUTS.
(1)
A strike or a lock-out shall be illegal if –
(i) it is commenced or declared in contravention of conditions specified in 7 above; or
(ii) it is continued in contravention of an order made by the state Government after reference of Industrial disputes to the
Board, Labour Court, Tribunal or National Tribunal under section 10 or after the reference under section 10A for
arbitration;
(2)
Where a strike or lock-out in pursuance of an industrial dispute has already commenced and is in existence at the time of
the reference of the dispute to a Board, an arbitrator, a Labour Court, Tribunal or National Tribunal, the continuance of
such strike or lock-out shall not be deemed to be illegal, provided that such strike or lock-out was not at its
commencement in contravention of the provisions of this Act or the continuance thereof was not prohibited as specified in
sub clause (ii) above.
(3)
A lock-out declared in consequence of an illegal strike or a strike declared in consequence of an illegal lock-out shall not
be deemed to be illegal.
C)
PENALTY FOR ILLEGAL STRIKES AND LOCK-OUTS.
(1)
Any workman who commences, continues or otherwise acts in furtherance of, a strike which is illegal under this Act, shall
be punishable with imprisonment for a term which may extend to one month, or with fine which may extend to fifty
rupees, or with both.
(2)
Any employer who commences, continues, or otherwise acts in furtherance of a lock-out which is illegal under this Act,
shall be punishable with imprisonment for a term which may extend to one month, or with fine which may extend to one
thousand rupees, or with both.
8.
LAY-OFF OF WORKMEN
A)
PROHIBITION OF LAY-OFF
(1)
No workman (other than a badli workman or a casual workman) whose name is borne on the muster-rolls of an industrial
establishment in which not less than one hundred workmen were employed on an, average per working day for the
preceding twelve months, shall be laid-off by his employer except with the prior permission of the State Government or
such authority as may be specified by the State Government by notification in the Official Gazette, obtained on an
application made in this behalf unless such lay-off is due to shortage of power or to natural calamity.
(2)
An application for permission under sub-section (1) shall be made by the employer in the prescribed manner stating
clearly the reasons for the intended lay-off and a copy of such application shall also be served simultaneously on the
workmen concerned in the prescribed manner.
(3)
Where an application for permission under sub-section (1) has been made the State Government or the specified authority,
after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the
workmen concerned and the persons interested in such lay-off, may, having regard to the genuineness and adequacy of the
reasons for such lay-off, the interests of the workmen and all other relevant factors, by order and for reasons to be
recorded in writing, grant or refuse to grant such permission and a copy of such order shall be communicated to the
employer and the workmen.
(4)
Where an application for permission under sub-section (1) has been made and the appropriate Government or the
specified authority does not communicate the order granting or refusing to grant permission to the employer within a
period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have
been granted on the expiration of the said period of sixty days.
(5)
An order of the State Government or the specified authority granting or refusing to grant permission shall be final and
binding on all the parties concerned and shall remain in force for one year from the date of such order.
Provided the State Government or the specified authority may, either on its own motion or on the application made by the
employer or any workman, review its order granting or refusing to grant permission or refer the matter, or, as the case
may be, cause it to be referred, to a Tribunal for adjudication. Where a reference has been made to a Tribunal under this
sub-section, it shall pass an award within a period of thirty days from the date of such reference.
(6)
Where no application for permission is made within the period specified therein, or where the permission for any lay-off
has been refused, such lay-off shall be deemed to be illegal from the date on which the workmen had been laid-off and the
workmen shall be entitled to all the benefits under any law for the time being in force as if they had not been laid-off.
(7)
Notwithstanding anything contained in the foregoing provisions of this section, the State Government may, if it is satisfied
that owing to such exceptional circumstances as accident in the establishment or death of the employer or the like, it is
necessary so to do, by order, direct that the provisions of sub-section (1) specified above shall not apply in relation to such
establishment for such period as may be specified in the order.
Explanation : For the purposes of this section, a workman shall not be deemed to be laid-off by an employer if such
employer offers any alternative employment (which in the opinion of the employer does not call for any special skill or
previous experience and can be done by the workman) in the same establishment from which he has been laid-off or in
any other establishment belonging to the same employer, situate in the same town or village, or situate within such
distance from the establishment to which he belongs that the transfer will not involve undue hardship to the workman
having regard to the facts and circumstances of his case, provided that the wages which would normally have been paid to
the workman are offered for the alternative appointment also.
B)
RIGHT OF WORKMEN LAID OFF FOR COMPENSATION
Whenever a workman (other than a badli workman or a casual workman) whose name is borne on the muster rolls of an
industrial establishment and who has completed not less than one year of continuous service under an employer is laid off,
whether continuously or intermittently, he shall be paid by the employer for all days during which he is so laid off, except
for such weekly holidays as may intervene, compensation which shall be equal to fifty per cent of the total of the basic
wages and dearness allowance that would have been payable to him had he not been so laid off :
Provided that if during any period of twelve months, a workman is so laid-off for more than forty-five days, no such
compensation shall be payable in respect of any period of the lay-off after the expiry of the first forty-five days, if there is
an agreement to that effect between the workman and the employer:
Provided further that it shall be lawful for the employer in any case falling within the foregoing proviso to retrench the
workman in accordance with the provisions contained (as specified below) for retrenchment at any time after the expiry of
the first forty-five days of the lay-off and when he does so, any compensation paid to the workman for having been laidoff during the preceding twelve months may be set off against the compensation payable for retrenchment.
C)
WORKMEN NOT ENTITLED TO COMPENSATION IN CERTAIN CASES
No compensation shall be paid to a workman who has been laid off –
(i)
if he refuses to accept any alternative employment in the same establishment from which he has been laid off, or
in any other establishment belonging to the same employer situate in the same town or village or situate within a radius of
five miles from the establishment to which he belongs, if, in the opinion of the employer, such alternative employment
does not call for any special skill or previous experience and can be done by the workman, provided that the wages which
would normally have been paid to the workman are offered for the alternative employment also;
(ii)
if he does not present himself for work at the establishment at the appointed time during normal working hours at
least once a day;
(iii)
if such laying off is due to a strike or slowing-down of production on the part of workmen in another part of the
establishment.
D)
EMPLOYER TO MAINTAIN MUSTER ROLLS OF WORKMEN
Notwithstanding that workmen in any industrial establishment have been laid off, it shall be the duty of every employer to
maintain for the purposes of this Chapter a muster roll, and to provide for the making of entries therein by workmen who
may present themselves for work at the establishment at the appointed time during normal working hours.
9.
RETRENCHMENT OF WORKMEN
A)
CONDITIONS PRECEDENT TO RETRENCHMENT OF WORKMEN
(1)
No workman employed in any industrial establishment in which not less than one hundred workmen were employed on
an, average per working day for the preceding twelve months, who has been in continuous service for not less than one
year under an employer shall be retrenched by that employer until, -
a) the workman has been given three months' notice in writing indicating the reasons for retrenchment and the period of
notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; and
b) the prior permission of the State Government or such authority as may be specified by that Government by
notification in the Official Gazette has been obtained on an application made in this behalf.
(2)
An application for permission under sub-section (1) shall be made by the employer in the prescribed manner stating
clearly the reasons for the intended retrenchment and a copy of such application shall also be served simultaneously on the
workmen concerned in the prescribed manner.
(3)
Where an application for permission under sub-section (1) has been made, the State Government or the specified
authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the
employer, the workmen concerned and the persons interested in such retrenchment, may, having regard to the genuineness
and adequacy of the reasons stated by the employer, the interests of the workmen and all other relevant factors, by order
and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be
communicated to the employer and the workmen.
(4)
Where an application for permission has been made under sub-section (1) and the State Government or the specified
authority does not communicate the order granting or refusing to grant permission to the employer within a period of sixty
days from the date on which such application is made, the permission applied for shall be deemed to have been granted on
the expiration of the said period of sixty days.
(5)
An order of the State Government or the specified authority granting or refusing to grant permission shall, subject to the
provisions of sub-section (6) below, be final and binding on all the parties concerned and shall remain in force for one
year from the date of such order.
(6)
The appropriate Government or the specified authority may, either on its own motion or on the application made by the
employer or any workman, review its order granting or refusing to grant permission or refer the matter or, as the case may
be, cause it to be referred, to a Tribunal for adjudication:
Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period
of thirty days from the date of such reference.
(7)
Where no application for permission under sub-section (1) above is made, or where the permission for any retrenchment
has been refused, such retrenchment shall be deemed to be illegal from the date on which the notice of retrenchment was
given to the workman and the workman shall be entitled to all the benefits under any law for the time being in force as if
no notice had been given to him.
(8)
Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government may, if it is
satisfied that owing to such exceptional circumstances as accident in the establishment or death of the employer or the
like, it is necessary so to do, by order, direct that the provisions of sub-section (1) above shall not apply in relation to such
establishment for such period as may be specified in the order.
(9)
Where permission for retrenchment has been granted under sub-section (3) above or where permission for retrenchment is
deemed to be granted under sub-section (4) above, every workman who is employed in that establishment immediately
before the date of application for permission under this section shall be entitled to receive, at the time of retrenchment,
compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any
part thereof in excess of six months.
B)
PROCEDURE FOR RETRENCHMENT
Where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he belongs to a
particular category of workmen in that establishment, in the absence of any agreement between the employer and the
workman in this behalf, the employer shall ordinarily retrench the workman who was the last person to be employed in
that category, unless for reasons to be recorded the employer retrenches any other workman.
C)
RE-EMPLOYMENT OF RETRENCHED WORKMEN
Where any workmen are retrenched, and the employer proposes to take into his employment any persons, he shall, in such
manner as may be prescribed, give an opportunity to the retrenched workmen who are citizens of India to offer themselves
for re-employment, and such retrenched workmen who offer themselves for re-employment shall have preference over
other persons.
10.
PROHIBITION OF UNFAIR LABOUR PRACTICE.
No employer or workman or a trade union, whether registered under the Trade Unions Act, 1926 or not, shall commit any
unfair labour practice.
Following activities are unfair labour practices.
A.
On the part of employers and trade unions of employers
1.
To interfere with, restrain from, or coerce, workmen in the exercise of their right to organise, form, join or assist a trade
union or to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection, that
is to say: a) threatening workmen with discharge or dismissal, if they join a trade union;
b) threatening a lock-out or closure, if a trade union is organised; and
c) granting wage increase to workmen at crucial periods of trade union organisation, with a view to undermining the
efforts of the trade union at organisation.
2.
To dominate, interfere with or contribute support, financial or otherwise, to any trade union, that is to say: a) an employer taking an active interest in organising a trade, union of his workmen; and
b) an employer showing partiality or granting favour to one of several trade unions attempting to organise his workmen
or to its members, where such a trade union is not a recognised trade union.
3.
To establish employer-sponsored trade unions of workmen.
4.
To encourage or discourage membership in any trade union by discriminating against any workman, that is to say :a) discharging or punishing a workman, because he urged other workmen to join or organise a trade union;
b) discharging or dismissing a workman for taking part in any strike (not being a strike which it deemed to be an illegal
strike under this Act);
c) changing seniority rating of workmen because of trade union activities;
d) refusing to promote workmen to higher posts on account of their trade union activities;
e) giving unmerited promotions to certain workmen with a view to creating discord amongst other workmen, or to
undermine the strength of their trade union;
f) discharging office bearers or active members of the trade union on account of their trade union activities.
5.
To discharge or dismiss workmen –
a) by way of victimisation;
b) not in good faith, but in the colourable exercise of the employer's rights;
c) by falsely implicating a workman in a criminal case on false evidence or on concocted evidence;
d) for patently false reasons;
e) on untrue or trumpet up allegations of absence without leave;
f) in utter disregard of the principles of natural justice in the conduct of domestic enquiry or with undue haste;
g) for misconduct of a minor or technical character, without having any regard to the nature of the particular misconduct
or the past record of service of the workman, thereby leading to a disproportionate punishment.
6.
To abolish the work of a regular nature being done by workmen, and to give such work to contractors as a measure of
breaking a strike.
7.
To transfer a workman mala fide from one place to another, under the guise of following management policy.
8.
To insist upon individual workmen, who are on a legal strike to sign a good conduct bond, as a precondition to allowing
them to resume work.
9.
To show favouritism or partiality to one set of workers regardless of merit.
10.
11.
To employ workmen as "badlis" casuals or temporaries and to continue them as such for years, with the object of
depriving them of the status and privileges of permanent workmen.
To discharge or discriminate against any workman for filing charges or testifying against an employer in any enquiry or
proceeding relating to any industrial dispute.
12.
To recruit workmen during a strike, which is not an illegal strike.
13.
Failure to implement award, settlement or agreement.
14.
To indulge in acts of force or violence.
15.
To refuse to bargain collectively, in good faith with the recognised trade unions.
16.
Proposing or continuing a lockout deemed to be illegal under this Act.
B.
On the part of workmen and trade unions of workmen
1.
To advise or actively support or instigate any strike deemed to be illegal under this Act.
2.
To coerce workmen in the exercise of their right to self-organisation or to join a trade union or refrain from joining any
trade union, that is to say –
a) for a trade union or its members to picketing in such a manner that non-striking workmen are physically debarred
from entering the work places;
b) to indulge in acts of force or violence or to hold out threats of intimidation in connection with a strike against nonstriking workmen or against managerial staff.
3.
For a recognised union to refuse to bargain collectively in good faith with the employer.
4.
To indulge in coercive activities against certification of bargaining representative.
5.
To stage, encourage or instigate such forms of coercive actions as wilful "go slow", squatting on the work premises after
working hours or "gherao" of any of the members of the managerial or other staff.
6.
To stage demonstrations at the residences of the employers or the managerial staff members.
7.
To incite or indulge in wilful damage to employer's property connected with the industry.
8.
To indulge in acts of force or violence or to hold out threats of intimidation against any workman with a view to prevent
him from attending work.
11.
PENALTY FOR COMMITTING UNFAIR LABOUR PRACTICES
Any person who commits any unfair labour practice shall be punishable with imprisonment for a term which may extend
to six months or with fine which may extend to one thousand rupees or with both.
12.
OFFENCE BY COMPANIES, ETC.
Where a person committing an offence under this Act is a company, or other body corporate, or an association of persons
(whether incorporated or not), every director, manager, secretary, agent or other officer or person concerned with the
management thereof shall, unless he proves that the offence was committed without his knowledge or consent, be deemed
to be guilty of such offence.
WORKMEN COMPENSATION ACT
The Workmen’s Compensation Act, aims to provide workmen and/or their dependents some relief in case of accidents
arising out of and in the course of employment and causing either death or disablement of workmen.
It provides for payment by certain classes of employers to their workmen compensation for injury by accident.

Every employee (including those employed through a contractor but excluding casual employees), who is engaged for the
purposes of employer’s business and who suffers an injury in any accident arising out of and in the course of his
employment, shall be entitled for compensation under the Act.

The employer of any establishment covered under this Act, is required to compensate an employee:
(a) who has suffered an accident arising out of and in the course of his employment, resulting into (i) death, (ii)
permanent total disablement, (iii) permanent partial disablement, or (iv) temporary disablement whether total or
partial, or
(b) who has contracted an occupational disease

However the employer shall not be liable a)
in respect of any injury which does not result in the total or partial disablement of the workmen for a period
exceeding three days;
b)
in respect of any injury not resulting in death, caused by an accident which is directly attributable to 


the workmen having been at the time thereof under the influence or drugs, or
the willful disobedience of the workman to an order expressly given, or to a rule expressly framed, for the purpose
of securing the safety of workmen, or
the willful removal or disregard by the workmen of any safeguard or other device which he knew to have been
provided for the purpose of securing the safety of workmen.
The burden of proving intentional disobedience on the part of the employee shall lie upon the employer.

when the employee has contacted a disease which is not directly attributable to a specific injury caused
by the accident or to the occupation; or


when the employee has filed a suit for damages against the employer or any other person, in a Civil Court.
Any contract or agreement which makes the workman give up or reduce his right to compensation from the employer is
null and void insofar as it aims at reducing or removing the liability of the employer to pay compensation under the Act.
Amount of Compensation Payable
(1)
The amount of compensation payable by the employer shall be calculated as follows:
(a)
In case of death. - 50% of the monthly wages X Relevant Factor or Rs.80,000, whichever is more. and Rs.1000
for funeral expenses.
(b)
In case of total permanent disablement Specified under Schedule I - 60% of the monthly wages X Relevant Factor
or Rs.90,000, whichever is more.
(c)
In case of partial permanent disablement specified under Schedule I - Such percentage of the compensation
payable in case (b) above as is the percentage of the loss in earning capacity (specified in Schedule I)
(d)
In case of partial permanent disablement not specified under Schedule I -Such percentage of the compensation
payable in case (b) above, as is proportionate to the loss of earning Capacity (as assessed by a qualified medical
practitioner).
(e)
In case of temporary disablement (whether total or partial) - A half-monthly installment equal to 25% of the
monthly wages, for the period of disablement or 5 years, whichever is shorter.
Explanation I: For the purposes of clause (a) and clause (b), “relevant factor”, in relation to a workman means the factor
specified in the second column of Schedule IV against the entry in the first column of that Schedule specifying the
number of years which are the same as the completed years of the age of the workman on his last birthday immediately
preceding the date on which the compensation fell due.
Explanation II: Where the monthly wages of a workman exceed four thousand rupees, his monthly wages for the purposes
of clause (a) and clause (b) shall be deemed to be four thousand rupees only;
(2)
For fixing the amount of compensation payable to a workman in respect of an accident occurred outside India, the
Commissioner shall take into account the amount of compensation, if any, awarded to such workman in accordance with
the law of the country in which the accident occurred and shall reduce the amount fixed by him by the amount of
compensation awarded to the workman in accordance with the law of that country.
Duties of employers

To pay compensation for an accident suffered by an employee, in accordance with the Act.

To submit a statement to the Commissioner (within 30 days of receiving the notice) in the prescribed form, giving the
circumstances attending the death of a workman as result of an accident and indicating whether he is liable to deposit any
compensation for the same.

To submit accident report to the Commissioner in the prescribed form within 7 days of the accident, which results in death
of a workman or a serious bodily injury to a workman.

To maintain a notice book in the prescribed from at a place where it is readily accessible to the workman.

To submit an annual return of accidents specifying the number of injuries for which compensation has been paid during
the year, the amount of such compensation and other prescribed particulars.
Duties Of Employees

To send a notice of the accident in the prescribed form, to the Commissioner and the employer, within such time as soon
as it is practicable for him. The notice is precondition for the admission of the claim for compensation.

To present himself for medical examination, if required by the employer.
Manner of payment of Compensation
The amount of compensation is not payable to the workman directly. It is generally deposited along with the prescribed statement,
with the Commissioner who will then pay it to the workman. Any payment made to the workman or his dependents, directly, in
the following cases will not be deemed to be a payment of compensation:

in case of death of the employee;

in case of lump sum compensation payable to a woman or a minor or a person of unsound mind or whose entitlement to
the compensation is in dispute or a person under a legal disability.
Besides, compensation of Rs.10 or more may be deposited with the Commissioner on behalf of the person entitled thereto.
The receipt of deposit with the Commissioner shall be a sufficient proof of discharge of the employer’s liability.
Compensation to be paid when due and penalty for default.
(1)
Compensation referred shall be paid as soon as it falls due.
(2)
In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to
make provisional payment based on the extent of liability which he accepts, and, such payment shall be deposited with the
Commissioner or made to the workman, as the case may be, without prejudice to the right of the workman to make any
further claim.
(3)
Where any employer is in default in paying the compensation due under this Act within one month from the date it fell
due, the Commissioner shall—
(a)
direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of
twelve per cent per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank
as may be specified by the Central Government, by notification in the Official Gazette, on the amount due; and
(b)
if, in his opinion, there is no justification for the delay, direct that the employer shall, in addition to the amount of
the arrears and interest thereon, pay a further sum not exceeding fifty per cent of such amount by way of penalty :
Provided that an order for the payment of penalty shall not be passed under clause (b) without giving a reasonable
opportunity to the employer to show cause why it should not be passed.
(4)
The interest and the penalty payable under sub-section (3) shall be paid to the workman or his dependant, as the case may
be.
Registration Of Agreements Of Compensation
1.
Where the amount payable as compensation has been settled by agreement a memorandum thereof shall be sent by the
employer to the Commissioner, who shall, on being satisfied about its genuineness, record the memorandum in a
registered manner.
2.
However where it appears to the Commissioner that the agreement ought not to be registered by reason of the inadequacy
of the sum or amount, or by reason that the agreement has been obtained by fraud or undue influence or other improper
means he may refuse to record the agreement and may make such order including an order as to any sum already paid
under the agreement as he thinks just in the circumstances.
3.
An agreement for payment of compensation, which has been registered shall be enforceable under this act notwithstanding
anything contained in the Indian Contract Act, or any other law for the time being in force.
Effect Of Failure To Register Agreement
When a memorandum of any agreement is not sent to the Commissioner for registration, the employer shall be liable to pay the
full amount of compensation, which he is liable to pay under the provisions of this Act.
Appeal / Bar To Civil Remedy
An appeal against and order of the Commissioner lies to the High Court, within 60 days of the order. The employer is required to
deposit the compensation before filing the appeal.
No right to compensation in respect of any injury shall exist under this act if he has instituted in Civil Court a suit for damages in
respect of the injury against the employer or any other person; and no suit for damages shall be maintainable by a workmen in any
Court of law in respect of any injury 
if he has instituted a claim to compensation respect of the injury before a Commissioner; or

if an agreement has come to between the workman and his employer providing for the payment of compensation in
respect of the injury in accordance with the provisions of his Act.
CONTRACT LABOUR (REGULATION AND ABOLITION)
CENTRAL ACT, 1971
The Object of the Contract Labour Regulation and Abolition) Act, 1970 is to prevent exploitation of contract labour and also to
introduce better conditions of work. A workman is deemed to be employed as Contract Labour when he is hired in connection
with the work of an establishment by or through a Contractor. Contract workmen are indirect employees. Contract Labour differs
from Direct Labour in terms of employment relationship with the establishment and method of wage payment. Contract Labour,
by and large is not borne on pay roll nor is paid directly. The Contract Workmen are hired, supervised and remunerated by the
Contractor, who in turn, is remunerated by the Establishment hiring the services of the Contractor.
a)
This Act applies toi.
to every establishment in which 20 or more workmen are employed or were employed on any day on the
preceding 12 months as contract labour.
ii.
to every contractor who employs or who employed on any day of the preceding 12 months 20 or more
workmen.
(This Act does not apply to establishment in which work of casual or intermittent nature is performed)
For the purpose of calculating the number, contract labour employed for different purposes through different
contractor has to be taken into consideration.
b)
The Act, covers every workman employed in or in connection with any work of the establishment, by or through a
contractor, with or without the knowledge of the principal employer but excludes persons employed in managerial
or administrative capacity, persons employed as supervisors and receiving wages exceeding Rs.1600 p.m.
c)
A workman shall be deemed to be employed as contract labour when he is hired in or in connection with such work by or
through a contractor, with or without the knowledge of the principal employer.
d)
The employer and the contractor should exhibit in the premises of the establishment, notices containing hours of
work, wage period, nature of duty and other prescribed particulars.
e)
Wages have to be calculated as per Payment of Wages Act, 1936.
f)
Registration And Licensing
If a Principal Employer or the Contractor falls within the vicinity of this Act then, such Principal Employer and the
Contractor have to apply for Registration of the Establishment and License respectively. The Act also provides for
Temporary Registration in case the Contract Labour is hired for a period not more than 15 days. Any change occurring in
the particulars specified in the Registration or Licensing Certificate needs to be informed to the concerned Registering
Officer within 30 days of such change.
From combined reading of Section 7 and Rules 17 & 18 of the Contract Labour (Regulation and Abolition) Central Rules,
1971, it appears that the Principal Employer has to apply for registration in respect of each establishment. Other
important point to note is that a License issued for One Contract cannot be used for entirely different Contract work even
though there is no change in the Establishment.
Penal Provisions
Section 9 of the Act provides that the Principal Employer, to whom this Act is applicable, fails to get registered under the Act,
then such Principal Employer cannot employ contract labour. It also appears that if the Establishment is not registered or if the
Contractor is not licensed then the contract labour shall be deemed to be the direct workmen and the Principal Employer or the
Establishment shall be liable for the wages, services and facilities of the contract labour etc. For contravention of the provisions of
the Act or any rules made there under, the punishment is imprisonment for a maximum term up to 3 months and a fine up to a
maximum of Rs.1000/-.
Responsibilities
The Act enjoins Joint and Several responsibity on the Principal Employer and the Contractor. The Principal Employer
should
ensure
that
the
Contractor
does
the
following:
a)
b)
c)
Pays the wages as determined by the Government, if any, or;
Pays the wages as may be fixed by the Commissioner of Labour.
In their absence pays fair wages to contract labourer.
d)
Provides the following facilities:
(i)
(ii)
(iii)
(iv)
Canteen (if employing 100 or more workmen in one place) and if the work is likely to last for 6 months or
more.
Rest rooms where the workmen are required to halt at night and the work is likely to last for 3 months or
more.
Requisite number of latrines and urinals - separate for men and women.
Drinking water.
(v)
(vi)
(vii)
Washing.
First Aid.
Crèche
e)
Maintains various registers and records, displays notices, abstracts of the Acts, Rules etc.
f)
Issues employment card to his workmen, etc.
g)
Notice on the board of canteen has been displayed that these are carried out at no profit/no loss basis.
h)
Audit of these canteens have been carried out once in a year by registered accountants and auditors.
i)
If the facilities/wages have not been provided by the Contractor, then these are provided by the principal officer.
j)
Necessary deductions have been made from contractor for such provisions/wage payments by the principal.
k)
Every contractor shall send half yearly return in Form no. XXIV so as to reach the licensing officer concerned not
later than 30 days from the close of the half year.
l)
Every principal employer of the registered establishment shall send annually a return in form no. XXV not later
than 15th February following the end of the year to which it relates.
m)
Contractor should ensure:
(1) Licensing.
(2) Renewal of the License.
(3) Maintenance and Preservation of Register of Persons employed, Muster Roll, Register of wages, Register of
Fines, Register of Deductions for damages or loss, Register of advances, Register of overtime.
(4) Display of Notice rate of wages, hours of work, wage period, date of payment of wages, date of payment of
unpaid wages and name and address of the inspector having jurisdiction
(5) Provide facilities of Canteen, Drinking Water, Washing, Rest Room, Latrines and Urinals, First Aid, Crche
(6) Employment card
(7) Service Certificates
(8) Half yearly return