INDUSTRIAL RELATIONS AND LABOUR WELFARE
Meaning of IR
Industrial relations encompasses ‘the processes of regulation and control over workplace
relations, the organisation of tasks, and the relations between employers and their
representatives, and employees and their representatives, and is the sum of economic, social
and political interactions in workplaces where employees provide manual and mental labour in
exchange for rewards allotted by employers, as well as the institutions established for the
purpose of governing workplace relations’
Objectives of IR

Understand the key strategic issues in industrial relations.

Explain the unitary, pluralist and radical approaches to industrial relations.

Appreciate the role of employers, trade unions and governments in industrial relations.

Understand individual and collective bargaining, conciliation and arbitration
Theories of IR
•
Dunlop’s System Theory (1958) The credit for applying the systems concept to
industrial relations goes to Dunlop.
•
“He analyses industrial relations systems as a sub-system of society. “An industrial
relations system at any one point time in its development is regarded as comprised of
certain actors, contexts, ideology which binds the industrial relations system together
and a body of rules created to govern the actors at the workplace and work community”.
•
Dunlop’s System model
•
IR=f(a,t,m,P,I)
•
A= actors-Labour, Employers Govt.
•
T=Technological Context
•
M=Market Context
•
P=Power Context
•
I=Ideological context that helps to bind together
•
The IR system as a web of rules formed by the interaction of the government, business
and labour, influenced by the existing and emerging economic, socio-political and
technological factors.
•
The Structural Contradictions Theory of Hyman, 1971
•
Marxian analysis of industrial relations and trade unionism has also taken several forms
broadly categorical into pessimistic and optimistic approaches.
•
The pessimistic school talks of limitations of trade union consciousness and feels that
unless the working class joins hands with intellectuals, it is not possible, to bring in a
new social order.
•
Optimist school, however, sees the role of working classes as not only maintenance and
enhancement of wage level, but also to carry class struggle against capitalist class in
thrust towards creating a classless society.
•
The pluralist Theory of Flanders(1970)/ Oxford Model
•
According to him, Conflict is inherent in an industrial system. Hence, collective
bargaining is required a s formal system to settle conflicts. Collective bargaining central
to the industrial relations system.
•
It can be expressed in the form of an equation
R=f(b) or r =f (c )
Where r = the rules governing industrial relations
b = collective bargaining
c = conflict resolved through collective bargaining
•
Human Relations theory
•
The main proponent of this theory is Keith Davis. According to him, human relations
are “the integration of people into a work-situation that motivates them to work together
productively, cooperatively and with economic, psychological and social satisfactions.
•
The goals of human relations are
•
1. to get people to produce
•
2. to co-operate through mutuality of interest and
•
3. to gain satisfaction from their relationships. The human relations approach highlights
certain policies and techniques to improve employee morale, efficiency and job
satisfaction.
•
4. Focussed on to remove labour-management relations.
•
The Trusteeship theory of Mahatma Gandhi
•
Gandhi had immense faith in the goodness of man and he believed that many of the evils
of the modern world have been brought about by wrong systems and not by wrong
individuals. He insisted on recognising each individual worker as a human being. He
believed in non-violent communism, going so far as to say that “if communism comes
without any violence, it would be welcome”. He laid down certain conditions for a
successful strike.
•
They were:
•
a. the cause of the strike must be just and there should be no strike without a grievances;
•
b. there should be no violence; and
•
C. non-strikers or “blacklegs” should never be molested.
Difference between IR and HRM
S.No
Dimension
TIR
EER/HRM
1.
Nature of relations
Pluralist
Unitarist
2
Contract
Emphasis on terms of
contract
defined
rules,contract
Beyond contract, innovative
ways
3
Conflict
Institutionalised
De-emphasised
patholoigical
4
Union legitimacy
Unions are acceptable
Not considered
Nurturing.
5.
Managerial task
relation to labour
Monitoring
Nurturing
6
Key relation
Labour-management
Customer
7
Pay
Standardised, based on job
evaluation
Performance related
8
Basis of labour-mgt
relations
Collective
contract
Individual contract
9
Job design
Division of labour
Team work
10
Conflict handling
Reach temporary truce,
reactive
Managing
climate
culture-proactive
in
bargaining
is
desirable
and
11
Key people
PM/IR
Line specialists
12
Focus of attention
Personnel procedures
Various
culture
and
structure-related personnel
strategies.
Unitarist-
Authoritarian
HR Management
Approaches to IR
Unitary approach
•
Industrial relations is grounded in mutual cooperation, individual treatment, teamwork
and
the
sharing
of common objectives.
•
The underlying assumption is that it is to the benefit of all to focus on common interests
and promote harmony.
•
Conflict is regarded as destructive.
•
Assumptions about workplace relations
•
- management and employees share common interest
•
- one source of legitimate authority (management)
•
Assumptions about workplace conflict
•
- inevitable, aberration, destructive, to be avoided
•
- caused by poor management, dissidents, agitators or poor communication
•
Assumptions about trade unions
•
- a competing and illegitimate source of authority
•
- an unwarranted intrusion in the workplace
•
- create conflict where none would otherwise exist
•
Assumptions about collective bargaining
•
- creates and institutionalizes unnecessary divisions of interest
•
- serves to generate workplace conflict rather than resolve it
•
PLURALIST APPROACH
Regards conflict as inevitable because employers and employees have conflicting
interests.
•
Trade unions are seen as legitimate representatives of employee interests.
•
Sees stability in industrial relations as the product of concessions and compromises
between management
and unions.
•
Assumptions about workplace relations
•
- managers and employees have different objectives
•
- multiple sources of legitimate authority
•
Assumptions about workplace conflict
•
- inevitable, caused by different opinions and values, benefit to an organization
•
- avoid by accepting trade unions, include in decision-making
•
Assumptions about the workplace role of trade unions
•
- not the cause of conflict
•
- are expression of diverse workplace interests that always exist
•
- a legitimate part of workplace relations
•
Assumptions about the role of collective bargaining
•
- deals with problems on a collective basis
•
- most efficient means for institutionalising employment rules
•
- fairer outcomes by balancing employee and management power
•
RADICALOR MARXIST APPROACH
•
Marxists, like the pluralists, regard conflict between management and employees as
inevitable.
•
Sees industrial conflict as an aspect of class conflict.
•
The solution to worker alienation and exploitation is the overthrow of the capitalist
system.
•
Assumptions about workplace relations
•
- reflects a wider class conflict between capital and labour
•
- reflects coercion of working class into dominant capitalist values
•
Assumptions about workplace conflict
•
- inevitable: capital seeks to reduce costs, workers seek fairer price for labour
•
- will only cease by revolutionary change in distribution of property and wealth
•
Assumptions about trade unions
•
- should raise revolutionary consciousness of workers
•
- should not limit action to improving material lot of workers
•
- union leaders who accommodate management betray the workers
•
Assumptions about collective bargaining
•
- merely offers temporary accommodations
•
- leaves important managerial powers in tact
History of IR
•
The relations between labour and management in the industry form the subject matter of
industrial relations.
•
The first labour legislation was in the form of the Factories Act.
•
Industrial revolution in England acted as a landmark event in transforming the industrial
situation all over
the world.
•
This was followed by World war I, labour unrest and a mass awakening of a labour.
This was followed by various legislations by the Government- Indian Industrial
Commission, Indian Industrial Commission, Indian Factories Act, Trade Disputes Act
etc.
•
The Government also appointed the Royal commission on labour to enquire into and
report on the existing conditions of workers in the country.
•
The Second World War brought in unprecedented expansion of Indian industry with
emphasis on maintenance of harmonious and peaceful relations between workers and
management. Strikes and industrial disputes were brought under the compulsory
arbitration of Government.
•
In the post-independence phase the labour scenario underwent major change. The
constitution of India provided for freedom of association to all citizens which gave rise
to trade unions. ID Act was enacted in 1947 which regulated worker-employer relations.
Other acts like ESI Act and Minimum Wages Act were enacted for workers welfare.
•
The first five year plan emphasises setting up a tripartite body for sorting out matters of
conflict with a mutually agreed grievance procedure.
•
The Second plan also dealt with code of discipline and in building a strong trade union
movement.
•
The third five year \plan envisaged setting up tribunals for resolution of industrial
disputes.
•
IR in the Fourth plan continued to be regulated by legislative measures. National
conference of labour was set up.
•
The fifth plan envisaged improvements in worker participation, communication systems
and incentive systems in addition to setting up of shop councils.
•
The sixth plan promoted professional management in the industrial harmony, employee
welfare and a cooperative attitude.
•
Essential Service Maintenance Act was also promoted.
•
Events like liberalisation and globalisation are continuously influencing the IR scene
even today leading to increased recognition and importance being given to the human
resources.
Understanding of IR
IR do not emerge in vaccum, they are born out of employment relationship in an
industrial setting. Without the existence of two parties, i.e., labour and management,
this relationship cannot exist.
IR are characterized by both conflict and co-operation.
As the labour and management do not operate in isolation but are part of a larger
system which includes environmental issues technology of the workplace, country’s
socio-economic and political environment, nation’s labour policy, attitude of trade
unions, workers and employers and impact of the new wave of global markets, global
supply demand and economy.
It also involve the study of conditions conducive to the labour, management cooperation as well as the practices and procedures required to elicit the desired cooperation from both the parties.
IR also study the laws, rules, regulations, agreements, awards of court, customs and
traditions, as well as policy framework laid down by the government for eliciting cooperation between labour and management and defining rights obligation of both the
parties.
Importance of IR
Prior to the IR, the problem of IR was literally non-existent as the owners were themselves
producers or the production was carried out by the family members themselves. As with
emergence of factories, the cottage industries were thrown in back gear, which compelled a
large number of workers to leave the farms and become wage earners in factories with meager
wages under tiring working conditions. Gradually two groups, the haves, the status dominated
and aspiring class and other haves not, both having different interests and ideologies developed
their own unions to give a tough fight to other.
The government came on the scene for regulating the working conditions of employees’
production, work methods, supply of better skilled workers etc. changed the complexion of
industrial relations considerably. Further changes in the techniques and methods of production,
work methods, supply of better skilled workers etc. changed the complexion of IR considerably.
IR patterns, Organized sector and their impact on unorganized.
The pattern of IR in the organized
sector of economy has a definite impact on labor
management relations in unorganized sector. The trends and pattern established in the organized
sector spills over or influences the practices of even the most unorganized industries.
Unions are important force in the important force in the Indian political system: The impact of
Indian trade unions on the political system is much wider than on industry. In addition, the
unions sponsored by the ruling party do influence the legislative process through the intense
lobbying activities.
Varying patterns of IR
In India, the patterns of industrial relations are not only in sharp contrast both in
unorganized and organized sector, but also within the latter, they exhibit a considerable
variation. In the unorganized sector due to non-unionization of the workers, the
grievances are usually redressed by the threat of dismissal, thus the problem of IR.
Status difference in the workers of public and private sector: The workers in the public
sector were considered to be government employees and accordingly, were givea fair
deal. In contrast to it, the workers in the private sector had to suffer on many counts,
Though situation started changing due to liberalization.
Scope and aspects of IR
The IR are therefore, part and parcel of industrial life, such they include
iLabor relations i.e., relations between union and management
iiEmployer-employee relations i.e., relations between management and employees
iiiGroup relations,i.e., relations between various groups of workmen; and
ivCommunity or public relations, i.e., relations between industry and society.
The main aspect of IR:
iPromotion and development of healthy labor-management relations
iiMaintenance of industrial peace and avoidance of industrial strife
iiiDevelopment of industrial democracy.
The existence of strong, well organized, democratic and responsible trade unions and
associations of employers. These organizations enhance the job security of employees help in
increased workers’ participation in management.
Collective bargaining recognizes equality of status between two conflicting groups and prepares
the ground in an atmosphere of trust and goodwill.
Welfare work, whether statutory or non-statutory, provided by the state, trade unions and
employers create, maintain and improve labor management relations and thereby contribute to
industrial peace.
The industrial peace can be largely nurtured through the following means:
Machinery should be set up for the prevention and settlement of industrial disputes: It can be
brought about by developing various legislative and administrative enactments like Trade
Unions Acts, Industrial Disputes act, etc.
The Government should have the power to refer disputes to adjudication when the situation
tends to get out of hand and industry is faced with economic collapse due to continued
stoppage of production on account of long strikes/lockouts.
The Government enjoys the power to maintain the status quo: This power is exercised when the
government, after referring the dispute to arbitration, finds that either party is continuing the
strike or lockout.
The provision of the bipartite and tripartite forums for the settlement of disputes. These forums
act on the basis of the Code of discipline in industry, the code of conduct, the code of efficiency
and
welfare,
model
standing
orders.
Development of Industrial democracy:
Establishment of the shop councils and joint management councils at the floor and plant level,
which endeavor to improve the working and living conditions of employee, to improve
productivity, encourage suggestions from employees to assist in the administration of laws and
agreements, serve as a channel between management and employees.
Recognition of Human Rights in Industry: This implies that lab our is not a commodity of
commerce which can be purchased and disposed. The workers are required to be treated as
human beings whose sense of self-respect is to be fostered.
Increase in lab our productivity: The factors which contribute to higher productivity are:
improvement in the level of efforts and skills of workers; improvement in production, process,
materials, equipment, layout, work methods etc.
The availability of proper work environment is necessary so that he worker can effectively carry
out his assignment , as it is this environment which stimulates or depresses, improves or
destroys the relations between labor and management.
Components of IR system
An industrial relations system is made up of certain institutions, which are popularly known as
‘three actors” of the system.
1Workers and their Organization: When the bulk of workforce is employed in the
production of goods and services, the relations between t hem impersonal and
dehumanized. Further, if they are forced to work in an alienated, monotonous,
unhygienic work environment where t heir activities are closely regulated and controlled
by the managerial personnel, their dissatisfaction with system forces them to revolt
against it, so workers form their unions.
2.The Management: The employer/management is the key actor in the system of IR
around which the whole process revolves. As they not only provide jobs to workers but
also lay down the terms and conditions of their employment, administer various social
security and labor welfare programme over and above managing various aspects of
industries that directly or indirectly influence the total system. Leadership styles that are
commonly practiced by the managers to manage people at work.
They are an exploitative and authoritative system, benevolent authoritative system, with
further growth of lab our legislation and the development of trade unions.
3. The Government: In the system of industrial relations, government acts as a
regulator and judge. Till 19th century, the Government almost everywhere including
India, adopted a policy of laissez faire, i.e. it did not bother to intervene between the
employer and workers’ problems . As such, parties were left free to settle the score the
way they liked to combine for a common cause-for protest against the inhuman
conditions. Government attitude changed in the end of the 19th century, The Government
was constrained to bring in some type of protective legislation relating to conditions of
work etc.
In the early forties of the present century and after independence, the Government laid
emphasis on the need for consultation between the representatives of labour,
management and the Government in tripartite and bipartite forums.
These three actors in the system interact with each other to yield the basic output. Which
si the set of rules that govern working conditions and the terms of employment.
Approaches/Perspectives of IR
The IR can be viewed from the various angles which may range from the economic and
soical, political to the legal, psychological and managerial.
An economist tries to interpret the problem of IR in terms of interpersonal forces of the
laws of demand and supply. To a politician, the dynamics of IR, conflict revolves round
the problem of class war, for a psychologist, IR can be best studied in terms of work
behavior and attitude of labour and management and the like. A few approaches to IR
are discussed.
a. Psychological Approach to IR: The psychologists are of the view that the problem
of IR are deeply rooted in the perception and the attitude of focal participants. For ex.
A photograph of an ordinary middle aged person served as input, which both groups
were expected to rate. It is interesting to note that both the groups rated the photograph
in different manner, i.e., the Union leaders referred the person in the photograph as “
Manager” where the group of Executives saw Union leaders referred the person in the
photograph as “Manager” where the group of Executives” saw “Union leader” in the
photograph.
bThis variance in perception of parties is largely because of their individual perception.
The conflict between labor and management occurs because every group negatively
views/percieves the behavior of other i.e. even the honest intention of a party is looked
with suspicion.
b. Sociological Approach to IR: The industry is a social world made up of groups with
differing personalites, educational background, family breeding, emotions, likes and dislikes
and host of other personal factors such as attitudes and behaviour. Since ages, the problems of
IR have been looked upon as one basically concerned with wages, employment, conditions and
labour welfare. But in fact sociological aspects of the problem are more importatn than others.
This largely includes various sociological factors like value system, customs, norms, symbols
and attitude and perception of both labour and management that affect the IR in varied ways.
c.Human relations Approach to IR
Management of people at work is an exclusive prerogative of HR specialists, the various HR
policies including those relating to leadership and motivation have profound influence on their
work behaviour. For instance, a manager, using an autocratic style, designs, a close supervision
system and feels that display of atuhority would drives people to work. But this style leads to
dissatisfaction and hatred among people whereas in a democratic style, it is held that a desired
organisational behaviour can be cultivated if employees needs and wants are properly satisfied.
The manager working with such a style positively motivates people. Infact, no style is good or
bad is every situation demands a specific leadership behavour on the part of HR specialist.
4. Gandhian Approach to IR
Gandhiji advocated that for resolving disputes the following rules to be observed.
a. The workers should seek redressal of reasonalbe demands only thorugh collective action.
b. If they have to organise a strike, trade unions should seek by ballot authority from all workers
to do so, remain peaceful and use non-violent methods.
c.The workers should avoid strkes as far as possible in industries of essential services;
d.The workers should avoid formation of unions in philanthropic organisation.
e. The strikes should be resorted to only as a last resort after all other legitimate measures have
failed.
 THE TRADE UNIONS’ ACT, 1926
 I OBJECT: To provide for the registration of trade unions and to
law relating to registered trade unions.
define
 II APPLICABILITY: It extends to the whole of India.
 III TRADE UNIONS:
 means any combination whether temporary or permanent formed primarily for the
purpose of regulating the relations between workmen and employers for imposing
restrictive conditions on the conduct of any trade or business, and includes any
federation of two or more trade unions.
 IV MODE OF REGISTRATION:
 Any seven or more members of a trade union may apply for registration of a trade union
in Form - A to the Registrar appointed for the area.
 Along with byelaw, Seven ordinary members of the union to make an application for
registration of the union, and a treasury chalan of Rs.100/- remitted as registration fee.
(Section 4 and 5 read with Regulation: 3 & 5)
 V REGISTRATION CERTIFICATE:
 On receipt of the application for registration, the Registrar, after making reasonable
enquiry issue a Registration Certificate in Form - B (Section 8 & read with Regulation
6)
 VI CANCELLATION OF REGISTRATION :
 A certificate of Registration may be withdrawn or cancelled by the Registrar:
 1. On an application of a Trade Union in Form-H, or
 2. If the Registrar is satisfied that the certificate is obtained by fraud of mistake or that
the trade union had ceased to exist or willfully and after notice from the Registrar contra
vent any provisions of the Act or rules etc. (Section 10 read with Regulations 8 to 12)
 VII APPEAL :
 Any person aggrieved by any order of the Registrar may appeal within two months to
the Civil Court not inferior to the court of an Additional or Assistant Principal Civil
Court.
 (Section 11 read with Regulation 13)
 VIII CHANGE OF NAME
 Any registered trade union may with the consent of not less than 2/3 of its total
members may make application in Form-L, for the change of its name (Section - 23 read
with Regulation – 16-72)
 XI ANNUAL RETURNS
 Every trade union shall send annual returns to the Registrar on or before the 1st day of
May of the year succeeding the calendar year in Form-E in the case of individual trade
unions and in Form-F in the case of federation of trade unions (Section 28 read with
Regulation 21)
 XII PENALTIES
 Offences punishable for the failure to submit returns may extend to Rs.5/- and in the
case of continuing default with an additional fine which may extend to Rs.5/- for each
week and shall not exceed Rs.50.00. Any person who willfully makes, or causes to be
made any false entry or any omission from the general statement required by Section 28
etc. shall be punishable which may extend to Rs.500/-. Registered trade unions,
furnishing false informations, shall be punishable with fine which may extend to
Rs.200/- (Section 31)
 XIII WHO CAN FILE PROSECUTIONS:
 1. Registrar
 2. Persons with the previous sanction of the Registrar.
 3. Aggrieved person under Section 32.
 The complaint shall be filed within six months of the date on which the offence is
alleged to have been committed.
 No court inferior to that of a Presidency Magistrate or a Magistrate of First Class shall
try any offence under the Act.
 XIV AUTHORITIES UNDER THE ACT:
1. Registrar of Trade Unions (under Section - 3)
 Labour Commissioner
 2. Additional Registrar of Trade Unions
 Additional Labour Commissioner
 3. Deputy Registrar of Trade Unions
 Joint Labour Commissioner
 IX AMALGAMATION OF TRADE UNIONS
 IX AMALGAMATION OF TRADE UNIONS: Any two or more registered trade unions
may
 become amalgamated together as one trade union provided the votes of at least one half
of the members of each or every such trade union entitled to vote and at least 60% of the
votes recorded are in favor of the proposal. Notice of the amalgamation shall be sent to
the Registrar Form-R (Section 24 to 26 read with Regulation 18)
 X DISSOLUTION
 X DISSOLUTION: When a registered trade union is dissolved the notice of dissolution
shall be sent to the Registrar in Form - Q, within 14 days of the dissolution along with
the registration certificate (Section 27 read with Regulation 19)
______________________________________________________________________
 Employee rights
 *be paid the right wage for the job you do
 *protection from unfair dismissal (subject to statutory exclusion periods)
 general protections of your ‘workplace rights’
 *protection from unlawful discrimination
 *sick leave, annual leave, public holidays, family leave and long service leave
 *freedom to belong to or not belong to a union.
 *receive your wages without unlawful deduction (lawful deductions include tax or any
deduction you authorize in writing).
 Obligations
 arrive at work on time
 dress suitably for the job (including wearing appropriate safety equipment if required)
 work to the best of your ability
 respect your employer, colleagues and customers
 take care of your employer's property
 follow your employer’s 'reasonable and lawful' instructions (that is, instructions that are
not illegal, don't threaten your health and safety and you are capable of doing)
 obey safety rules
 ask for help if you need it
 know what the employer expects you to do if you can’t be at work for any reason (for
example, your employer’s policy on what to do if you need to advise you are sick)
 not discriminate or harass others in the workplace
 not act in a way that puts you – or others – at risk of injury in the workplace
 Collective Bargaining
 According to Dale Yoder, “Collective bargaining is the term used to describe a situation
in which the essential conditions of employment are determined by bargaining process
undertaken by representatives of a group of workers on the one hand and of one or more
employers on the other.”
 In the words of Flippo, “Collective bargaining is a process in which the representatives
of a labour organisation and the representatives of business organisation meet and
attempt to negotiate a contract or agreement, which specifies the nature of employeeemployer-union relationship.”
 Features of Collective Bargaining
 I. It is a collective process. The representatives of both workers and management
participate in bargaining.
 II. It is a continuous process. It establishes regular and stable relationship between the
parties involved. It involves not only the negotiation of the contract, but also the
administration of the contract.
 III. It is a flexible and dynamic process. The parties have to adopt a flexible attitude
through the process of bargaining.
 IV. It is a method of partnership of workers in management
 Subject Matter of collective bargaining
The Indian Institute of Personnel Management suggested the following subject matter of
collective bargaining:
I. Purpose of agreement, its scope, and the definition of important terms
II. Rights and responsibilities of the management and of the trade union
III. Wages, bonus, production norms, leave, retirement benefits, and terms and conditions of
service
IV. Grievance redressal procedure
V. Methods and machinery for the settlement of possible future disputes
 Importance of Collective Bargaining
Importance to employees
 Collective bargaining develops a sense of self respect and responsibility among the
employees.
 It increases the strength of the workforce, thereby, increasing their bargaining capacity
as a group.
 Collective bargaining increases the morale and productivity of employees.
 It restricts management’s freedom for arbitrary action against the employees. Moreover,
unilateral actions by the employer are also discouraged.
 Effective collective bargaining machinery strengthens the trade unions movement.
 The workers feel motivated as they can approach the management on various matters
and bargain for higher benefits.
 It helps in securing a prompt and fair settlement of grievances. It provides a flexible
means for the adjustment of wages and employment conditions to economic and
technological changes in the industry, as a result of which the chances for conflicts are
reduced.
 Importance of Collective Bargaining
Importance to employers
 It becomes easier for the management to resolve issues at the bargaining level rather
than taking up complaints of individual workers.
 Collective bargaining tends to promote a sense of job security among employees and
thereby tends to reduce the cost of labor turnover to management.
 Collective bargaining opens up the channel of communication between the workers and
the management and increases worker participation in decision making.
 Collective bargaining plays a vital role in settling and preventing industrial disputes.
 Importance of Collective Bargaining
Importance to society
 Collective bargaining leads to industrial peace in the country
 It results in establishment of a harmonious industrial climate which supports which helps
the pace of a nation’s efforts towards economic and social development since the
obstacles to such a development can be reduced considerably.
 The discrimination and exploitation of workers is constantly being checked.
 It provides a method or the regulation of the conditions of employment of those who are
directly concerned about them.
 Pre-requisites for collective bargaining:
Effective negotiations and enforcement requires a systematic preparation of the base or ground
for bargaining which involves the following three steps:
 Recognition of the Bargaining Agent. The management should give recognition to the
trade union for participating in the collective bargaining process. In case there is more
than one union, selection could be done through verification of membership by a
government agency giving representation to all the major unions through joint
consultations. Thus, the bargaining agent of the workers should be properly identified
before initiating any action.
 Deciding the Level of Bargaining. Whether the dealings are confined to enterprise
level, industry level, regional or national level should be decided as the contents, scope
and enforcement agencies differ in each case.
 Determining the Scope and Coverage of Bargaining. It would be better to have a
clear understanding of what are the issues to be covered under bargaining. Many a time,
bargaining is restricted to wage and working conditions related issues but it would be
advantageous for both the management and union to cover as many issues as possible to
prevent further friction and disputes. Therefore, all the important and interrelated issues
are to be taken for consideration.
 Problems of Collective Bargaining
 I. Due to the dominance of outsiders in trade unionism in the country, there is
multiplicity of unions which are weak and unstable, and do not represent majority of
the employees. Moreover, there are inter-union rivalries, which further hinder the
process of collective bargaining between the labour and the management.
 II. Since most of the trade unions are having political affiliations, they continue to be
dominated by politicians, who use the unions and their members to meet their political
ends.
 III. There is a lack of definite procedure to determine which union is to be recognised
to serve as a bargaining agent on behalf of the workers
 IV. In India, the law provides an easy access to adjudication. Under the Industrial
Disputes Act, the parties to the dispute may request the Government to refer the matter
to adjudication and the Government will constitute the adjudication machinery, i.e.,
labour court or industrial tribunal. Thus, the faith in the collective bargaining process is
discouraged.
 V. There has been very close association between the trade unions and political
parties. As a result, trade union movement has leaned towards political orientations
rather than collective bargaining.
General advantages and disadvantages of collective bargaining
 Pros
 Can lead to high-performance workplace where labor and management jointly engage in
problem solving, addressing issues on an equal standing.
 Provides legally based bilateral relationship.
 Management’s rights are clearly spelled out.
 Employers’ and employees’ rights protected by binding collective bargaining agreement.
 Multi-year contracts may provide budgetary predictability on salary and other
compensation issues.
 Unions may become strong allies in protecting higher education from the effects of an
economic slowdown.
Promotes fairness and consistency in employment policies and personnel decisions within and
across institutions.
 Employees may choose whether they want union representation.
 A strong labor management partnership may enable the workforce development needed
for engaging the technology revolution.
Cons
 Management’s authority and freedom are much more restricted by negotiated rules.
 Creates significant potential for polarization between employees and managers.
 Disproportionate effect of relatively few active employees on the many in the bargaining
unit. This is particularly the case when collective bargaining involves a system-wide
structure of elections.
 Increases bureaucratization and requires longer time needed for decision making.
 Increases participation by external entities (e.g., arbitrators, State Labor Relations
Board) in higher education’s decision making.
 More difficult for employees at smaller campuses to have their voices heard.
 Protects the status quo, thereby inhibiting innovation and change. This is particularly
the case when the change involves privatizations.
 Higher management costs associated with negotiating and administering the agreements.
 Eliminates ability of management to make unilateral changes in wages, hours, and other
terms and conditions of employment.
 Restricts management’s ability to deal directly with individual employees.
 Increased dependence on the private sector for certain services, particularly those
requiring technological competence, may be compromised.
 Contract administration is a very difficult process to manage and significantly changes
the skill set required of managers and supervisors.
 Workers participation in Management(WPM)
 WPM is the participation resulting from the practices which increase the scope for
employees’ share of influence in decision-making at different tiers of organizational
hierarch with associated assumption of responsibility.

Workers’ participation may be viewed as:
 An instrument for increasing the efficiency of enterprises and establishing harmonious
relations;
o A device for developing social education for promoting solidarity among workers and for
tapping human talents;
o A means for achieving industrial peace and harmony which leads to higher productivity and
increased production;
o A humanitarian act, elevating the status of a worker in the society;
o An ideological way of developing self-management and promoting industrial democracy.
Other objectives of WPM can be cited as:
o To improve the quality of working life (QWL) by allowing the workers greater influence and
involvement in work and satisfaction obtained from work; and
 To secure the mutual co-operation of employees and employers in achieving industrial
peace; greater efficiency and productivity in the interest of the enterprise, the workers,
the consumers and the nation.

The main implications of workers’ participation in management as summarized by ILO:
o
Workers
have
ideas
which
can
be
useful;
o Workers may work more intelligently if they are informed about the reasons for and
the intention of decisions that are taken in a participative atmosphere.
 Importance of WPM
 Unique motivational power and a great psychological value.

Peace and harmony between workers and management.

Workers get to see how their actions would contribute to the overall growth of the
company.

They tend to view the decisions as `their own’ and are more enthusiastic in their
implementation.

Participation makes them more responsible.

They become more willing to take initiative and come out with cost-saving suggestions
and growth-oriented ideas.
 Scope and ways of participation:
 One view is that workers or the trade unions should, as equal partners, sit with the
management and make joint managerial decisions. The other view is that workers should
only be given an opportunity, through their representatives, to influence managerial
decisions at various levels. In practice, the participation of workers can take place by
one or all the methods listed below:

Participation at the Board level:
 This would be the highest form of industrial democracy.

The workers’ representative on the Board can play a useful role in safeguarding the
interests of workers.

He or she can serve as a guide and a control element.

He or she can prevail upon top management not to take measures that would be
unpopular with the employees.

He or she can guide the Board members on matters of investment in employee benefit
schemes like housing, and so forth.
The Government of India took the initiative and appointed workers’ representatives on the
Board of Hindustan Antibiotics (Pune), HMT (Bangalore), and even nationalized banks.
The Tatas, DCM, and a few others have adopted this practice.
 Participation through ownership:
 This involves making the workers’ shareholders of the company by inducing them to
buy
equity
shares.
o In many cases, advances and financial assistance in the form of easy repayment
options are extended to enable employees to buy equity shares.
Examples of this method are available in the manufacturing as well as the service sector.
Advantage:
o Makes the workers committed to the job and to the organization.
Drawback:
o Effect on participation is limited because ownership and management are two different things.
 Participation through complete control:
 Workers acquire complete control of the management through elected boards.

The system of self-management in Yugoslavia is based on this concept.

Self-management gives complete control to workers to manage directly all aspects of
industries through their representatives.
 Advantages:
o
o
o
Ensures
identification
of
the
workers
with
their
organization.
Industrial disputes disappear when workers develop loyalty to the organization.
Trade unions welcome this type of participation.
Conclusion: Complete control by workers is not an answer to the problem of participation
because the workers do not evince interest in management decisions.
 Participation through Staff and Works Councils:
 Staff councils or works councils are bodies on which the representation is entirely of the
employees.

There may be one council for the entire organization or a hierarchy of councils.

The employees of the respective sections elect the members of the councils.
Such councils play a varied role.
 Their role ranges from seeking information on the management’s intentions to a full
share in decision-making.

Such councils have not enjoyed too much of success because trade union leaders fear
the erosion of their power and prestige if such workers’ bodies were to prevail.
 Participation through Joint Councils and Committees:
 Joint councils are bodies comprising representatives of employers and employees.

This method sees a very loose form of participation, as these councils are mostly
consultative bodies.

Work committees are a legal requirement in industrial establishments employing 100 or
more workers.

Such committees discuss a wide range of topics connected to labour welfare.

Examples of such committees are welfare committee, safety committee, etc.
 Such committees have not proven to be too effective in promoting industrial democracy,
increasing productivity and reducing labour unrest.
 Participation through Collective Bargaining:
 Through the process of CB, management and workers may reach collective agreement
regarding rules for the formulation and termination of the contract of employment, as
well as conditions of service in an establishment.

Even though these agreements are not legally binding, they do have some force.

For CB to work, the workers’ and the employers’ representatives need to bargain in the
right spirit. But in practice, while bargaining, each party tries to take advantage of the
other.

This process of CB cannot be called WPM in its strongest sense as in reality; CB is
based on the crude concept of exercising power for the benefit of one party.
 WPM, on the other hand, brings both the parties together and develops appropriate
mutual understanding and brings about a mature responsible relationship.
 Participation through Job Enlargement and Job Enrichment:
Excessive job specialization that is seen as a by-product of mass production in industries, leads
to boredom and associated problems in employees. Two methods of job designing – job
enlargement and job enrichment– are seen as methods of addressing the problems. Job
enlargement means expanding the job content – adding task elements horizontally. Job
enrichment means adding `motivators’ to the job to make it more rewarding.
This is WPM in that it offers freedom and scope to the workers to use their judgment. But this
form of participation is very basic as it provides only limited freedom to a worker concerning
the method of performing his/her job. The worker has no say in other vital issues of concern to
him – issues such as job and income security, welfare schemes and other policy decisions.
 Participation through Suggestion Schemes:
 Employees’ views are invited and reward is given for the best suggestion.

With this scheme, the employees’ interest in the problems of the organization is aroused
and maintained.

Progressive managements increasingly use the suggestion schemes.

Suggestions
can
come
from
various
levels.
The ideas could range from changes in inspection procedures to design changes, process
simplification, paper-work reduction and the like.
 Out of various suggestions, those accepted could provide marginal to substantial benefits
to
the
company.
The rewards given to the employees are in line with the benefits derived from the
suggestions.
 Participation through Quality Circles:
 Concept originated in Japan in the early 1960s and has now spread all over the world.

A QC consists of seven to ten people from the same work area who meet regularly to
define, analyze, and solve quality and related problems in their area.

Training in problem-solving techniques is provided to the members.
QCs are said to provide quick, concrete, and impressive results when correctly
implemented.

Advantages:
o Employees become involved in decision-making, acquire communication and
analytical
skills
and
improve
efficiency
of
the
work
place.
o
Organization
gets
to
enjoy
higher
savings-to-cost
ratios.
o Chances of QC members to get promotions are enhanced.
 The Indian Scenario:QC

Tried by BHEL, Mahindra and Mahindra, Godrej and Boyce among others.

Workers got to get out of their daily routine and do something challenging.

These circles require a lot of time and commitment on the part of members for regular
meetings, analysis, brainstorming, etc.

Most QCs have a definite life cycle – one to three years.
 Few circles survive beyond this limit either because they loose steam or they face simple
problems.

QCs can be an excellent bridge between participative and non-participative approaches.

For QCs to succeed in the long run, the management needs to show its commitment by
implementing some of the suggestions of the groups and providing feedback on the
disposition of all suggestions.
 Empowered Teams:
 Empowerment occurs when authority and responsibility are passed on to the employees
who then experience a sense of ownership and control over their jobs.
 Employees may feel more responsible, may take initiative in their work, may get more
work done, and may enjoy the work more.

For empowerment to occur, the following approach needs to be followed as compared
to the traditional approach:
 Features of empowered or self-directed teams:

Empowered to share various management and leadership functions.

Plan, control and improve their work.

Often create their schedules and review their performance as a group.

May prepare their own budgets and co-ordinate their work with other departments.

Usually order materials, keep inventories and deal with suppliers.

Frequently responsible for acquiring any new training they might need.

May hire their own replacement to assume responsibility for the quality of their
products or services.
 Total Quality Management:
 TQM refers to the deep commitment, almost obsession, of an organization to quality.

Every step in company’s processes is subjected to intense and regular scrutiny for ways
to improve it.
Quality in the job of the QC Personnel.
 Meet the customer’s requirement on time, the first time, and 100% of the time.

Strive to do error-free work.

Manage by prevention, not correction.

Measure the cost of quality.

TQM is called participative because it is a formal programme involving every employee
in the organization; making each one responsible for improving quality everyday.
 Financial Participation:
 This
method
involves
less
consultations
or
even
joint
decisions.
Performance of the organization is linked to the performance of the employee.

The logic behind this is that if an employee has a financial stake in the organization,
he/she is likely to be more positively motivated and involved.

Some
schemes
Profit-linkedpay
Profit
sharing
and
Pension-fund participation.
of
Employees’
financial
Stock
participation:
Option
schemes.
 Advantages
 Technology and organizations today are so complex that specialized work-roles are
required.
 This means employees will not be able to participate effectively in matters beyond their
particular environment.

Everybody need not want participation.

The role of trade unions in promoting participative management has been far from
satisfactory.

Employers are unwilling to share power with the workers’ representatives.
Managers consider participative management a fraud.
 Evolution of WPM in India:
 The beginning towards WPM was made with the Industrial Disputes Act, 1947, which
made Works Committees mandatory in industrial establishments employing 100 or more
workers.

The Industrial Policy Resolution adopted by the government in 1956 stated that there
should be some joint consultation to ensure industrial peace, and improve employeremployee relations.

The functions of both these joint bodies were to be consultative and were not binding on
themanagement.
The response to these schemes was encouraging to begin with, but gradually waned.
 A study team was appointed in 1962 to report on the working of joint councils and
committees.

The team identified some reasons for their failure. No concrete steps were taken to
remove the difficulties, or change the pattern of participative management.

During the emergency of 1975-77, the interest in these schemes was revived by the then
Prime Minister by including Workers’ Participation in industry in the government’s 20point programme.
 The government started persuading large enterprises to set up joint consultative
committees and councils at different levels.

The Janata Government who came to power in 1977 carried on this initiative.
 In was again emphasized by the Congress government who came back n 1979.
This continued in a “non-statutory vein” till the late 1980s, and the response from the
employers
and
employees
stayed
luke-warm.
o Then, the 42nd Amendment to the Constitution was made.
 Article 43-A reads: The State shall take steps, by suitable legislation, or in any other
way, to secure the participation of workers in the management of undertakings,
establishments or other organizations engaged in any industry.

Thus, participative management is a constitutional commitment in India.
And then, on May 30,1990; the government introduced the Participation of Workers in
Management Bill in the Rajya Sabha.

The bill requires every industrial enterprise to constitute one or more `Shop-Floor
Councils’ at the shop floor level, and`Establishment Council’ at the establishment level.

These councils will have equal representation of employers and employees.

Shop-Floor councils enjoy powers over a wide range of functions from production,
wastage
control
to
safety
hazards.
 The Establishment Council enjoys similar powers. The bill provides for the constitution
of a Board of Management of every corporate body owning an industrial establishment.

The bill also provides for penalties on individuals who contravene any provision of the
bill.

In spite of all these efforts, only the government and the academicians have been
interested
in
participative
management.
But participative management is staging a comeback.
 The compulsions of emerging competitive environment have made employee
involvement more relevant than ever before.
 Managers and the managed are forced to forget their known stands, break barriers, and
work in unison.
 Managers and workers are partners in the progress of business.
Gratuity Act 1972
Section
Extent and Application
1
It extends to the whole of India
Applicable to:
every factory, mine, oilfield, plantation, port and railway company;
every shop or establishment in which 10 or more persons are employed, or were employed, on
any day of the preceding twelve months
Section2
Definitions
S.2 (e) "employee" means any person employed to do any skilled, semi-skilled, or unskilled,
manual, supervisory, technical or clerical work
it does not include an apprentice
S.2 (s) "wages" includes dearness allowance but does not include any bonus, commission,
house rent allowance, overtime wages and any other allowance.
MEANING OF GRATUITY
THE TERM “GRATUITY” WAS CONSIDERED AS AN AMOUNT GIVEN FREELY AND COULD
NOT BE DEMANDED AS A MATTER OF RIGHT BY THE EMPLOYEES. IN MANY CASES
GRATUITY WAS GIVEN AS A MATTER OF FAVOUR.
EMPLOYERS USED TO PAY GRATUITY AS A REWARD FOR LONG,CONTINOUS &
MERITRORIOUS SERVICE.
WITH A VIEW TO ENSURE A UNIFORM PATTERN OF THE PAYMENT OF GRATUITY TO
THE EMPLOYEES ,THE “CENTRALGOVERNMENT ENACTED THE”THE PAYMENT OF
GRATUITY ACT,1972”.
Section:
Gratuity when payable ?
Gratuity shall be payable to an employee
Who has rendered continuous service for not less than 05 years
on the termination of his employment on his superannuation, or
on his retirement or
4
resignation, or
on his death or disablement due to accident or disease:
Note:The completion of continuous service of five years shall not be necessary where the
termination of the employment of any employee is due to death or disablement:
How to calculate the Amount of Gratuity
Monthly rated employee :
At the rate of 15 days wages based on the rate of wages last drawn by the employee
concerned:
Formula:-last drawn wages X 15 days X No. of completed year of service
26
piece-rated employee, daily wages :
On the average of the total wages received by him for a period of three months
immediately preceding the termination of his employment excluding overtime wages
seasonal establishment
At the rate of seven days wages for each season.
Maximum Limit Rs.3,50,000/Higher benefits can be paid if the employer so desires.
Can Gratuity be withheld by the employer ?
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.
The gratuity payable to an employee may be wholly or partially forfeited
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
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.
Section:
Nomination
6
Each employee, who has completed one year of service, shall make nomination for to receive
the amount of gratuity.
In his nomination, an employee may, distribute the amount of gratuity payable to him
amongst more than one nominee.
If at the time of making nomination he has already family, he can not make nomination in
favour of a person who is not a member of his family. If he does so it shall be void.
Fresh nomination in favour of one or more members of his family is required where he has not
family at the time of making nomination..
If a nominee predeceases the employee, the interest of the nominee shall revert to the
employee who can make a fresh nomination.
Every nomination, fresh nomination or alteration of nomination, as the case may be, shall be
sent by the employee to his employer, who shall keep the same in his safe custody.
Section:
Determination of the amount of gratuity
7
A person who is eligible for payment of gratuity shall send a written application to the
employer.
The employer shall determine the amount of gratuity and give notice in writing to the person
to whom the gratuity is payable and also to the controlling authority specifying the amount
gratuity so determined as soon as gratuity becomes payable and whether or not an
application has been made by the concerned employee.
The employer shall arrange to pay the amount of gratuity within 30 days from the date it
becomes payable.
Section:
Penalties
9
Knowingly making false statement/ false representation to avoid to make payment 
imprisonment up to 06 months, or with fine which may extend to Rs.10,000/- or with both.
Breach, or makes default in complying with any of the provisions of this Act  imprisonment
for 03 months to 01 year, or with fine which shall not be less than Rs.10,000/- but which may
extend to Rs.20,000/- or with both:
Non-payment of any gratuity  imprisonment 6 months to 02 years + a fine.
 Payment of Bonus Act
 The practice of paying bonus in India appears to have originated during First World War
when certain textile mills granted 10% of wages as war bonus to their workers 1917.
 In certain of industrial disputes demand for payment of bonus cases was also included.
In 1950, the Full Bench of the Labour Appellate evolved a formula for determination of
bonus.
 A plea was made to raise that formula in 1959. At the second and third meetings of the
Eighteenth Session of Standing Labour Committee (G.O.I.) held in New Delhi in
March/April 1960, it was agreed that a Commission beappointed to go into the
question
of
bonus
and
evolve
suitable norms.
 Eligibility
 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
 Disqualification for bonus
 Notwithstanding anything contained in this Act, 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 behavior while on the premises of
 the establishment; or
 (c) theft, misappropriation or sabotage of any property of the establishment
 Payment of minimum bonus
 Every employer shall be bound to pay to every employee a minimum bonus which shall
be 8.33 percent of the salary or wage earned by the employee during the accounting
year .
 Payment of maximum bonus
 If the allocable surplus exceeds the amount of minimum bonus payable to the
employees under that section, the employer shall, in lieu of such minimum bonus, be
bound to pay to every employee in respect of that accounting; year bonus which shall
be an amount in proportion to the salary or wage earned by the employee during the
accounting year subject to a maximum of twenty per cent, of such salary or wage.
 In computing the allocable surplus under this section, the amount set on or the amount
set off under the provisions shall be taken into account in accordance with the
provisions of that section
 Computation of number of working days
 An employee shall be deemed to have worked in an establishment in any accounting
year
also
on
the
days
on
which–
(a)
he
has
been
laid
off
under
an
agreement
or
as
permitted
by
standing
orders
under
the
Industrial
Employment (Standing Orders) Act, 1946
 (b) he has been on leave with salary or wage;
 he
has
been
absent
due
disablement
caused
by
accident
and in the course of his employment; and
 (d)
with
year
the
employee
salary
or
has
wage,
been
on
during
to
arising
temporary
out
of
maternity
leave
the
accounting
 Set on and set off allocable surplus
 Where for any accounting year, the allocable surplus exceeds the amount of maximum
bonus payable to the employees in the establishment, then, the excess shall, subject to
a limit of twenty per cent. of the total salary or wage of the employees employed in the
establishment in that accounting year, be carried forward for being set on in the
succeeding accounting year and so on
 Where for any accounting year, there is no available surplus or the allocable surplus in
respect of that year falls short of the amount of minimum bonus payable to the
employees in the establishment and there is no amount of sufficient amount carried
forward and set on which could be utilized for the purpose of payment of the minimum
bonus, then, such minimum amount or the deficiency, as the case may be, shall be
carried forward for being set off in the succeeding accounting year and so
on up to and inclusive of the fourth accounting year in the manner
 Where in any accounting year any amount has been carried forward and set on or set
off under this section, then, in calculating bonus for the succeeding accounting year,
the amount of set on or set off carried forward from the earliest accounting year shall
first betaken into account
 Where any money is due to an employee by way of bonus from his employer under a
settlement
or
an
award or agreement, the employee himself or any other person authorized by him in
writing in this behalf, or in the case of the death of the employee, his assignee or heirs
may, without prejudice to any other mode of recovery, make an application to the
appropriate Government or such authority as the appropriate Government may specify
in this behalf is satisfied that any money is so due, it shall issue a certificate for that
amount to the Collector who shall proceed to recover the same in the same manner as
an arrears of land revenue
 Provided that every such application shall be made within one year from the date on
which the money became due to the employee from the employer
 Provided further that any such application may be entertained after the expiry of the
said period of one year, if the appropriate Government is satisfied that the applicant
had sufficient cause for not making the application within the said period.
 set on--first we calculate allocable surplus and out of that surplus we pay bonus and
after paying max bonus i.e 20% ,if some amount left balance is called set on and this
amount
is
kept
in
reserve
for
future
.
set off-if in any accounting year you do not have sufficient surplus and even you are not
able to pay minimum bonus of 8.33% than legally you have to pay 8.33%,so balance
amount which you do not have in surplus will be shown as set off for future and you
have to take care of set off/on in future before deciding rate of bonus.
 PF ACT 1952
PF act was came into force in 1952 in order to secure the life of an employee for rendering his
services to organization, this is a statutory liability of employer to give PF amt to an employee.
This amount is paid after the retirement from the services.
Applicability of the act

PF is applicable in any organization where 20 or more persons are employed

PF is applicable in every state except J & k.
 Benefits of the act
 To provide Monetary benefits to survive after retirement.
 To minimize risk against health, sickness, disablement of the employee and his
dependents.
 Old age Pension benefits.
 Widow pension.
 To maintain dignity & Social status.
 PF Contribution
PF is deducted on basic salary. If employee's basic is less than or equals to Rs.6500 he will be
covered in pf.
12 % Employee side
3.67%(epf part)+ 8.33 % (Pension part)
13.61% Employer side
3.67 (EPF)+8.33 (Pension)+ 1.1(Admin charge) + 0.5(EDLI) +
0.01(Inspection charge /admin on edli)
Employees Deposit linked insurance scheme.
Challans & Returns
PF challans are submitted on 15th of every month, 5 days grace period is given to
submit challans.
PF Returns are submitted twice a yearPF RETURNS
Form 5 is used to submit pf monthly return in which new employee details is
mentioned.
Form 10 is used to submit pf monthly return in which left employee details is
mentioned.
Form 12A that is used for the same purpose which contains consolidated details of that
particular month-new joinees, left employees & employees/employer pf contribution.
Form 3A is used for pf annual return.
 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.
 EMPLOYEES ENTITLED TO COMPENSATION
 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.
 EMPLOYER’S LIABILITY FOR COMPENSATION (ACCIDENTS)
 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
toi. the workmen having been at the time thereof under the influence or drugs, or
ii. 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
iii. 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.
iv. 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
v. When the employee has filed a suit for damages against the employer or any other
person, in a Civil Court.
 WHAT IS DISABLEMENT
 Disablement is the loss of the earning capacity resulting from injury caused to a
workman
by
an
accident.
· Disablement’s can be classified as (a) Total, and (b) Partial. It can further be classified
into (i) Permanent, and (ii) Temporary, Disablement, whether permanent or temporary
is said to be total when it incapacitates a worker for all work he was capable of doing at
the time of the accident resulting in such disablement.
 ACCIDENT ARISING OUT OF AND IN THE COURSE OF EMPLOYMENT
 An accident arising out of employment implies a casual connection between the injury
and the accident and the work done in the course of employment. Employment should
be the distinctive and the proximate cause of the injury. The three tests for
determining whether an accident arose out of employment are:
1. At the time of injury workman must have been engaged in the business of the
employer and must not be doing something for his personal benefit;
2. That accident occurred at the place where he as performing his duties; and
3. Injury must have resulted from some risk incidental to the duties of the service, or
inherent in the nature condition of employment.
 The general principles that are evolved are:
 · There must be a casual connection between the injury and the accident and the work
done
in
the
course
of
employment;
· It is not necessary that the workman must be actually working at the time of his death
or that death must occur while he was working or had just ceased to work;
 COMPENSATION IN CASE OF OCCUPATIONAL DISEASES
 Workers employed in certain types of occupations are exposed to the risk of
contracting certain diseases, which are peculiar and inherent to those occupations. A
worker contracting an occupational disease is deemed to have suffered an accident out
of and in the course of employment and the employer is liable to pay compensation for
the
same.
Occupational diseases have been categorized in Parts A, B and C of Schedule III. The
employer
is
liable
to
pay
compensation:
a. When a workman contracts any disease specified in Part B, while in service for a
continuous period of 6 months under one employer.
 b. When a workman contracts any disease specified in Part C, while he has been in
continuous service for a specified period, whether under one or more employers.
 CALCULATION OF COMPENSATION
 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. 50,000,
whichever
is
more
and
Rs.1000
for
funeral
expenses.
(b) In case of total permanent disablement Specified under -60% of the monthly wages
X Relevant Factor or Rs. 60,000, whichever is more.
 (d) In case of partial permanent disablement .-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
 WHEN COMPENSATION TO BE DEPOSITED WITH COMMISSIONER ?
 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:
i.
in
case
of
death
of
the
employee;
ii. in case of lump sum compensation payable to a 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.
The receipt of deposit with the Commissioner shall be a sufficient proof of discharge of the
employer’s liability.
 AMOUNTS PERMISSIBLE TO BE PAID TO THE WORKMAN/ DEPENDENTS DIRECTLY
Following amounts may be paid directly to the workman or his dependents:
a. In case of death of the workman, any advance on account of compensation up to [an
amount equal to three months’ wages of such workman] may be paid to any
dependent.
b. In case of lump sum compensation payable to an adult male worker not suffering
from
any
legal
disability.
In case of half-monthly payments payable to any workman.
 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.
FILING OF CLAIMS
 A claim for the compensation shall be made before the Commissioner.
No claim for compensation shall be entertained by the Commissioner unless the notice
of accident has been given by the workman in the prescribed manner, except in the
following circumstances:

a. in case of death of workman resulting from an accident which occurred on the
premises of the employer, or at any place where the workman at the time of the
accident was working died on such premises or such place or in the vicinity of such
premises
or
place;
b. in case the employer has knowledge of the accident from any other source, at or
about
the
time
of
its
occurrence;
c. in case the failure to give notice or prefer the claim, was due to sufficient cause.
LIMITATION

Workman, to the Commissioner, may file the claim for accident compensation in the
prescribed form, within 2 years from the occurrence of the accident or from the date of
death.
The
claim
must
be
preceded
by
(i)
a
notice
of
accident,
and
(ii) the claimant-employee must present himself for medical examination if so required
by the employer.
DUTIES OF EMPLOYERS / EMPLOYEES
 · 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.
THE EMPLOYEE’S STATE INSURANCE ACT 1948
•
•
ESI Scheme …
ESI Scheme for India is an integrated social security scheme tailored to provide Social
Production to workers and their dependents, in the organised sector, in contingencies,
such as Sickness, Maternity and Death or Disablement due to an employment injury or
Occupational hazard
1. Employees’ Contribution – 1.75% of the Wages
2. Employers’ Contribution – 4.75% of the Wages
TOTAL
- 6.5 % of the Wages
•
Benefits to Employees …
•
ESI Scheme Major Social Security Benefits in Cash and Kind include …
1. Medical Benefit – for self & Family
2. Sickness Benefit – for self
3. Maternity Benefit - for self
4. Disablement Benefit
a). Temporary Disablement Benefit – for self
b). Permanent Disablement Benefit – for self
5. Dependents’ Benefit – for dependents in case of death due to employment injury
•
Benefits to Employees …
•
In addition, the Scheme also provides some other need based benefits to insured
workers. These are:
i). Funeral Expenses – to a person who
performs the last rites of IP
ii). Rehabilitation allowances – for self
iii). Vocational Rehabilitation - for self
iv). Old age Medicare – for self and spouse
v). Medical Bonus – for insured women and IP’s wife
•
Medical Benefit …
•
Medical Benefit means Medical care of IPs and their families, wherever covered for
medical benefit.
•
The Standard medical care consists of out-door treatment, in-patient treatment, all
necessary drugs and dressing, pathological and radiological specialist consultation and
care, ante-natal and post natal care, emergency treatment etc.,
•
Out-door medical care is provided at the state Insurance Dispensaries or Mobile
Dispensaries manned by full-time doctors (service’ system) or at the private clinics of
Insurance Medical Practitioners (Panel System)
•
Medical Benefit …
•
Insured worker and members of his family are eligible for medical care from the very
first day of the worker coming under ESI Scheme.
•
A worker who is covered under the scheme for first time is eligible for medical care for
the period of three months. If he/she contributes at least for 78 days in a contribution
period the eligibility is there up to the end of the corresponding benefit period.
•
A worker is also eligible for extended sickness benefit when he/she is suffering from
any one of the long term 34 diseases listed in the Act. This is admissible after the
worker has been under ESI these conditions are satisfied medical benefit is admissible
for a maximum period of 730 days for the IP and his/ her family.
•
Sickness Benefit …
•
Sickness signifies a state of health necessitating Medical treatment and attendance and
abstention from work on Medical grounds. Financial support extended by the
corporation is such a contingency is called sickness Benefit
•
Sickness Benefit represents periodical payments made to an Insured Person for the
period of certified sickness after completing 9 Months in insurable employment.
•
Benefits to Employees …
•
To qualify for this benefit, contributions should have been payable for atleast 78 days
in the relevant contribution period.
•
The Maximum duration for availing sickness Benefit is 91 days in two consecutive
benefit periods
•
Standard benefit rate – this rate corresponds to the average daily wage of an Insured
person during the corresponding contribution period and is roughly half of the daily
wage rate.
•
Extended Sickness Benefit …
•
Extended Sickness Benefit is a Cash Benefit paid for prolonged illness (Tuberculosis /
Leprosy, Mental and Malignant diseases) due to any of the 34 Specified diseases
•
The IP should have been in continuous employment for a period of 2 years and should
have contributed for atleast 156 days in 4 preceding contribution periods
•
Extended Sickness Benefit …
•
The daily rate of Extended Sickness Benefit is 40% more than the standard Sickness
Benefit rate admissible
•
After exhausting sickness Benefit Payable for 91 days the Extended Sickness Benefit is
payable upto further period of 124 / 309 days that can be extended upto 2 years in
special circumstances
•
Enhanced Sickness Benefit …
•
Is Cash Benefit for IP undergoing sterilisation operation of vasectomy / tuberctomy for
family planning.
•
The contributory conditions are the dame as for claiming sickness benefits
•
The daily rate of this benefit is double the standard benefit rate. Say, not less than the
daily wage.
•
The benefit rate of this benefit is double the standard benefit rate. Say, not less than
the daily wage.
•
The benefit is available upto 7 days for vasectomy and upto 14 days for tubectomy
operations.
•
Maternity Benefit…
•
Maternity Benefit is cash payable to an Insured women for the specified period of
abstention from work for confinement or mis-carriage or for sickness arising out of
pregnancy, “confinement” “premature birth of child or miscarriage” “confinement”
connotes labour after 26 weeks of pregnancy whether the result issue is alive or dead,
•
“Miscarriage” means expulsion of the contents of a pregnant uterus at any period prior
to or during 26th week of pregnancy.
•
Maternity Benefit…
•
Criminal abortion or miscarriage does not, however, entitle to benefit.
•
The contribution condition is the same as for Sickness Benefit.
•
The daily benefit rate is double the sickness Benefit rate and is thus roughly equivalent
to the full wages. Benefits is paid for Sundays also.
•
Maternity Benefit…
•
The Benefit is paid as follows (Duration)
a). For Confinement
For a total period 12 Weeks beginning not more than 6 weeks before the expected date of
child birth, if the insured women dies during confinement or with in 6 weeks thereafter,
leaving behind the living child, the benefit continues to be payable for the whole of the period.
But the child also die during that period, the benefit will be paid upto and including the day of
the death of the child.
•
Maternity Benefit…
b). For Miscarriage
For the period of 6 weeks following the
date of miscarriage
c). For sickness arising out of pregnancy,
confinement, Premature birth of child or
miscarriage :
For an additional period or upto four weeks.
In all the cases, the benefit is paid only if the
insured women does not work for
remuneration during the period for which benefit is claimed. There is no waiting period.
•
Maternity Benefit…
•
Medical Bonus
Medical Bonus is lump sum payment made to an Insured woman or the wife of an insures
person in case she does not avail medical facility from an ESI hospital at the time of delivery of
a child. This bonus of Rs. 250/- has been increased to Rs. 1000/- from 1st April 2003
•
Disablement Benefit …
a). Temporary disablement benefit :
•
In case of temporary disability arising out of an employment injury or occupational
disease.,
•
Disablement benefit is admissible to insured person for the entire period so certified
by an Insurance Medical officer / Practitioner for which IP does not work for wages.
•
The benefit is not subject to any contributory condition and is payable at a rate which is
not less than 70% of daily average wages.
•
However, not payable if the incapacity lasts for less than 3 days excluding the date of
accident.
•
Permanent disablement benefit …
•
In case an employment injury or occupational disease results in permanent, partial or
total loss of earning capacity,
•
Periodical payments are made to the IP for life at a rate depending on the actual loss of
earning capacity as may be determined and certified by a duly-constituted Medical
Board.
•
The rates of Disablement Benefits are determined in accordance with the provisions of
Rule 57 of ESI (Central) Rules, 1991.
•
In order to product erosion in real value of the periodical payments of Permanent
Disablement benefits, against rise in the cost of living index, periodical increases are
granted, based on actuarial calculation
•
Permanent disablement benefit …
•
Commutation of periodical payments into lump sum (one time payment) is permissible
where the permanent disablement stands assessed as final.
•
Commutation of Permanent Disablement Benefit into lump sum payment is also
allowed in case the total commuted value does not exceed Rs.10000/- (The ceiling is
now being raised to Rs.30000/-).
•
Dependants’ Benefit …
•
Dependents Benefit is a monthly pension payable to the eligible dependents of an
insured person who dies as a result of an Employment Injury or occupational disease
•
Beneficiaries and Duration of benefit
a). Widow / widows during life or until remarriage
b). Legitimate or adopted son until age 18 or if legitimate son is infirm, till infirmity lasts.
c). Legitimate or adopted unmarried daughter until age 18 or until marriage, whichever is
earlier, or if infirm, till infirmity lasts and she continues to be unmarried.
In the absence of any widow or legitimate child, the benefit is payable to a parent or
grandparent for life, to any other male dependent until age 18 or to an unmarried or widowed
female dependent until age 18.
How much …
•
The total divisible benefit is equivalent to the temporary disablement benefit rate
(roughly 70% of the wage rate). The widow / widows share 3/5 th of the benefit and the
legitimate or adopted son and daughter 2/5th each of the benefit. If the total benefit so
divided exceeds the full rate, there is a proportionate reduction in the respective
shares of the beneficiaries.
•
The amount of pension paid to the dependents of a deceased insured person is
reviewed vis-à-vis the cost of living index and increases are granted from time to time
to compensate for erosion in its real value.
Maternity Benefit Act 1961

 Object of the Act
 To protect the dignity of motherhood and the dignity of a new person’ birth by providing for
the full and healthy maintenance of the woman and her child at this important time when she
is not working

 Coverage of the Act
Upon all women employees either employed directly or through contractor except domestic
women employed in mines, factories, plantations and also in other establishments if the State
Government so decides. Therefore, if the State Government decides to apply this Act to
women employees in shops and commercial establishments, they also will get the benefit of
this Act. Sec.3
 Conditionsforeligibilityof benefits
 Women indulging temporary or unmarried are eligible for maternity benefit when she
is expecting a child and has worked for her employer for at least 80 days in the 12
months immediately preceding the date of her expected delivery.
Sec. 5
CONDITIONS FOR CLAIMING BENEFITS
 Ten weeks before the date of her expected delivery, she may ask the employer to give
her light work for a month. At that time she should produce a certificate that she is
pregnant.
 She should give written notice to the employer about seven weeks before the date of
her delivery that she will be absent for six weeks before and after her delivery. She
should also name the person to who payment will be made in case she cannot take it
herself.
 She should take the payment for the first six weeks before she goes on leave.
 She will get payment for the six weeks after child-birth within 48 hours of giving proof
that she has had child. She will be entitled to 2 nursing breaks of 15 minutes each in the
course of her daily work till her child is 15 months.
 Her employer cannot discharge her or change her conditions of service while she is on
maternity leave.
Sec.5
 Cash Benefits
 Leave with average pay for six weeks before the delivery
 Leave with average pay for six weeks after the delivery
 A medical bonus of Rs. 1000, if the employer does not provide free medical care to the
woman.
 An additional leave with pay up to one month if the woman shows proof of illness due
to the pregnancy, delivery, miscarriage, or premature birth.
 In case of miscarriage, six weeks leave with average pay from the date of miscarriage.

Non Cash Benefits & Privilege
 Light work for 10 weeks (6 weeks plus 1 month) before the date of her expected
delivery, if she asks for it.
 2 Nursing breaks in the course of her daily
 No discharge or dismissal while she is on
work until the child 15 months old.
maternity leave.
 No charge to her disadvantage in any of the conditions of her employment while on
maternity leave.

Leave for Miscarriage & Tubectomy Operation
 Leave with wages at the rate of maternity benefit, for a period of 6 weeks immediately
following the day of her miscarriage or her medical termination of pregnancy.
 Entitled to leave with wages at the rate of maternity benefit for a period of 2 weeks
immediately following the day of her tubectomy operation.
 Leave
for
illness
arising
out
of
pregnancy
etc.,

Forfeiture of maternity benefit
o
If permitted by her employer to absent herself under the provisions of sec.6 for any
period during such authorised absence, she shall forfeit her claim to the maternity
benefit for such period.
o
For discharging or dismissing such a woman during or on account of her absence from
work, the employer shall be punishable with imprisonment which shall not be less than
3 months, but it will extend to one year and will find, but not exceeding Rs. 5000/-
Industrial Disputes Act
 What are Industrial Disputes?
 Industrial Dispute means any dispute or differences 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
 What are the different categories of Industrial Disputes?
The Second Schedule of the I.D. Act deals with matters within the jurisdiction of Labour
Courts which fall under the category of Rights Disputes.
 The propriety or legality of an order passed by an employer under the standing orders;
 The application and interpretation of standing orders which regulate conditions of
employment.
 Discharge or dismissal of workmen including reinstatement of, or grant of relief to
workmen wrongfully dismissed;
 Withdrawal of any customary concession or privilege;
 Illegality or otherwise of a strike or lock-out;
The Third Schedule of the I.D. Act deals with matters within the jurisdiction of Industrial
Tribunals which could be classified as Interest Disputes.
 These are :
 Wages, including the period and mode of payment;
 Compensatory and other allowances;
 Hours of work and rest intervals;
 Leave with wages and holidays;
 Bonus, profit sharing, provident fund and gratuity;
 Shift working otherwise than in accordance with standing orders;
 Classification by grades;
 Rules of discipline;
 Rationalization;
 Retrenchment of workmen and closure of establishment; and
 Any other matter that may be prescribed.
 Who can raise an Industrial Dispute?
 Any person who is a workman employed in an industry can raise an industrial dispute.
 A workman includes any person (including an apprentice) employed in an industry to
do manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire
or reward.
 It excludes those employed in managerial or administrative capacity.
 Industry means any business, trade, undertaking, manufacture and includes any
service, employment, handicraft, or industrial occupation or avocation of workmen.
 How to raise an Industrial Dispute?
 A workman can raise a dispute directly before a Conciliation Officer in the case of
discharge, dismissal, retrenchment or any form of termination of service. In all other
cases listed at 2 above, the dispute has to be raised by a Union / Management.

Purpose of the Act
 SETTLEMENT MACHINERIES
 CONCILITAION
 ARBITRATION
 COURT OF INQUIRY
-INDUSTRIAL TRIBUNAL
NATIONAL TRIBUNAL
 Works Committee
 It shall be the duty of the Works Committee to promote
securing and preserving amity and good relations between
and workmen and, to that end, to comment upon matters of
interest or concern and endeavour to compose any material
opinion in respect of such matters
measures for
the employer
their common
difference of
 Conciliation officer
 The appropriate Government may, by notification in the Official Gazette, appoint such
number of persons as it thinks fit, to be conciliation officers, 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.
 Board of conciliation
 Provided that, if any party fails to make a recommendation as aforesaid within the
prescribed time, the appropriate Government shall appoint such persons as it thinks fit
to represent that party.
 (4) A Board, having the prescribed quorum, may act notwithstanding the absence of
the Chairman or any of its members or any vacancy in its number:
 Provided that if the appropriate Government notifies the Board that the services of the
Chairman or of any other member have ceased to be available, the Board shall not act
until a new chairman or member, as the case may be, has been appointed
 Courts of inquiry
 Labour courts
 (3) A person shall not be qualified for appointment as the Presiding Officer of a Labour
Court,
unless
(a)
he
is,
or
has
been,
a
Judge
of
a
High
Court;
or
(b) he has, for a period of not less than three years, been a District Judge or
 an
Additional
District
Judge;
or]
(c) he has held any judicial office in India for not less than seven years ; or
(d) he has been the Presiding Officer of a Labour Court constituted under
 any Provincial Act or State Act for not less than five years
 Industrial tribunals
 The appropriate Government may, by notification in the Official Gazette, constitute
one or more Industrial Tribunals for the adjudication of industrial disputes relating to
any matter and for performing such other functions as may be assigned to them under
this Act.
 (2) A Tribunal shall consist of one person only to be appointed by the
 appropriate Government.
 (3) A person shall not be qualified for appointment as the presiding officer of a
 Tribunal unless:
 (a) he is, or has been, a Judge of a High Court; or
 (b) he has, for a period of not less than three years, been a District Judge or an
Additional District Judge.
 (4) The appropriate Government may, if it so thinks fit, appoint two person as assessor,
to advise the tribunal
 National tribunals
 The Central Government may, by notification in the Official Gazette,
 constitute one or more National Industrial Tribunals for the adjudication of industrial
disputes which, in the opinion of the Central Government, involve questions of national
importance or are of such a nature that industrial establishments situated in more than
one State are likely to be interested in, or affected by, such disputes.
 (2) A National Tribunal shall consist of one-person only to be appointed by the Central
Government.
 (3) A person shall not be qualified for appointment as the presiding officer of a
 National Tribunal unless he is, or has been, a Judge of a High Court.
 (4) The Central Government may, if it so thinks fit, appoint two persons as assessors to
advise the National Tribunal in the proceeding before it
 Strike
1. By workmen
2. Refusal to work/ accept employment
 Lockout
 By employee
 Temporary closure
 Refusal to continue to employ the persons employed
 Illegal strikes
 Without giving 14 days notice
 Commenced after 42 days of notice
 Prior to the date indicated in the notice
 In non PUs
 During the pendency of proceedings
 Strike/lock out will be illegal if Govt bans.
 Lay off
 Temporary suspension or permanent termination of employees.
 Where in 50 or more workers are employed, shall be laid off by prior permission of the
appropriate government.
 Lay off compensation
 50% of Basic + DA
 Alternative employment within 5 miles not eligible for compensation.
 Retrenchment
 It is a way of downsizing, cutting costs.
 One month notice /pay for small Co.
 3 months notice /pay in larger establishments.
 Retrenchment Compensation
 15 days wages for every completed year.
 Closure
 Permanent closure of place of employment.
 No permission is required in case of smaller establishments
 For larger establishments, 90 days prior in advance to get permission from the
government.
CONTRACT LABOUR (REGULARATION & ABOLITION) ACT, 1970 & THE RULES
CHECKLIST
Applicability
 Every establishment in which 20 or more
workmen are employed or were
employed on any day of the preceding
12 months as contract labor.
 Every contractor who employs or who
employed on any day of the preceding
twelve months 20 or more workmen.
Sec. 1
Object of the Act
To regulate the
employment of contract
labor in certain
establishments and to
provide for its abolition in
certain circumstances and
for matters connected
therewith.
Prohibition of Employment of Contract
Labour
Only by the appropriate Government
through
issue
of
notification
after
consultation with the Board (and not Courts)
can order the prohibition of employment of
contract labor.
Sec. 10
Revocation or Suspension &
Amendment of Licences
 When obtained by misrepresentation or
suppression of material facts.
 Failure of the contractor to comply with
the conditions or contravention of Act or
the
Rules.
Sec. 14
Laws,
Agreement or standing
orders inconsistent with the ActNot Permissible
Unless the privileges in the contract
Revocation of Registration
When obtained by
Misrepresentation
or
suppression
Of material facts etc. after
opportunity to the principal
Employer
Sec. 9
Registration of
Establishment
Principal employer employing
20 or more workers through
the
contractor
or
the
contractor(s) on deposit of
required fee in Form 1
Sec. 7
Licensing of Contractor
 Engaging 20 or more than
20 workers and on deposit
of required fee in Form IV.
 Valid
for
specified
period.Sec.12, Rule 21
Welfare measures to be taken by the Contractor
 Contract labor either one hundred or more employed by a contractor for
one or more canteens shall be provided and maintained.
 First Aid facilities.
 Number of rest-rooms as required under the Act.
 Drinking water, latrines and washing facilities. Sec. 16 & 17
Liability of Principal Employer
 To ensure provision for canteen, restrooms, sufficient supply of drinking
water, latrines and urinals, washing facilities.
 Principal employer entitled to recover from the contractor for providing such
amenities or to make deductions from amount payable. Sec. 20
Registers of Contractors
 Principal employer
 To maintain a register of contractor in
respect of every establishment in Form
XII.
 Contractor
Rule 74
 To maintain register of workers for
each registered establishment in Form
XIII.
 To issue an employment card to each
worker in Form XIV.
 To issue service certificate to every
workman on his termination in Form
XV.
Rules 75, 76 and 77
PENALTIES
Sec.
Sec. 22
Offence
Obstructions
Muster Roll, Wages Register, Deduction Register and Overtime Register by
Contractor
 Every contractor shall
 Maintain Muster Roll and a Register of Wages in Form XVI and Form XVII respectively
when combined.
 Register or wage-cum-Muster Roll in Form XVII where the wage period is a fortnight or
less.
 Maintain a Register of Deductions for damage or loss, Register or Fines and Register of
Avances in Form XX, from XXI and Form XXII respectively.
 Maintain a Register of Overtime in Form XXIII.
 To issue wage slips in Form XIX, to the workmen at least a day prior to the disbursement
of wages.
 Obtain the signature or thumb impression of the worker concerned against the entries
relating to him on the Register of wages or Muster Roll-Cum-Wages Register.
 When covered by Payment of Wages Act, register and records to be maintained under
the rules
 Muster Roll, Register of wages, Register of Deductions, Register of Overtime, Register of
Fines, Register of Advances, Wage slip.
Rule 79
 To display an abstract of the act and Rules in English and Hindi and in the language
spoken by the Majority of workers in such forms as may be approved by appropriate
authority
Rule 80
 To display notices showing rates of wages, hours of work, wage period, dates of
Punishment
payment, names and addresses of the inspector and to send copy to the inspector and
For
the inspector or failing to produce registers etc. Rule 81
anyobstructing
change forwithwith
- 3 months’ imprisonment or fine upto Rs.500, or both.
Sec.23
Violation
For violation of the provisions of Act or the Rules, imprisonment of 3
Months or fine upto Rs.1000. On continuing contravention, additional fine
upto Rs.100 per day
EMPLOYEES’ PROVIDENT FUNDS & MISC. PROVISIONS ACT, 1952
& THE SCHEMES
CHECKLIST
Eligibility
Any person who is employed for
work of an establishment or
employed through contractor in
or in connection with the work of
an establishment.
Payment of Contribution
 The employer shall pay the
contribution payable to the EPF,
DLI and Employees’ Pension Fund
in respect of the member of the
Employees’
Pension
Fund
employed by him directly by or
through a contractor.
 It shall be the responsibility of the
principal employer to pay the
contributions payable to the EPF,
DLI and Employees’ Pension Fund
by himself in respect of the
employees directly employed by
him and also in respect of the
employees directly employed by
him and also in respect of the
employees employed by or through
Clarification
a contractor. about Contribution
After revision in wage ceiling from
Rs.5000 to Rs.6500 w.e.f. 1.6.2001 per
month, the government will continue to
Applicability
 Every establishment which is factory engaged in any industry specified in
Schedule 1 and in which 20 or more persons are employed.
 Any other establishment employing 20 or more persons which Central
Government may, by notification, specify in this behalf.
 Any establishment employing even less than 20 persons can be covered
voluntarily u/s 1(4) of the Act.
Benefits
Employees covered enjoy a benefit of Social Security in the form of an
unattachable and unwithdrawable (except in severely restricted circumstances
like buying house, marriage/education, etc.) financial nest egg to which
employees and employers contribute equally throughout the covered persons’
employment.
This sum is payable normally on retirement or death. Other Benefits include
Employees’ Pension Scheme and Employees’ Deposit Linked Insurance Scheme.
Rates of Contribution
SCHEME
Provident
Scheme
Fund
EMPLOYEE’S
12%
EMPLOYER’S
Amount > 8.33%
(in case where
contribution is 12%
of 10%)
10% (in case of
certain
Establishments as
CENTRAL GOVT’S
NIL
Damages
 Less than 2 months
….@ 17% per annum
 Two months and above but less than upto four months ….@22% per annum
 Four months and above but less than upto six months
….@ 27% per annum
 Six months and above
Penal Provision
Liable to be arrested without warrants being a cognizable offence.
EMPLOYEES’ STATE INSURANCE
ACT, 1948 & the SCHEME
CHECK LIST
Defaults by employer in paying contributions or inspection/administrative
charges attract imprisonment upto 3 years and fines upto Rs.10, 000 (S.14).
For any retrospective application, all dues have to be paid by employer with
damages upto 100% of arrears.
Applicability of
the Act & Scheme
Is extended in areawise to factories using
power and employing
10 or more persons
and to non-power
using manufacturing
units and establishments employing 20
or more person upto
Rs.7500/- per month
w.e.f. 1.4.2004.
It
has also been extended
upon
shops,
hotels,
restaurants,
roads motor transport
undertakings, equipment
maintenance
staff in the hospitals.
Coverage
Of employees
Drawing wages
Rate of
Contribution of
the wages
Employers’
4.75%
Upto
Manner and Time Limit
For making Payment of contribution
THE ESI SCHEME TODAY
No. of implemented Centres
677
No. of Employers covered
2.38 lacs
No. of Insured Persons
85 lacs
No. of Beneficiaries
330 lacs
No. of Regional Offices/SRO’s
26
No. of ESI Hospitals/Annexes
183
No. of ESI Dispensaries
Benefits
1453
No.To
of Panel
Clinics
2950
the employees
under the
Act
The total amount of contribution (employee’s
share and employer’s share) is to be deposited
Employees’ 1.75%
with the authorized bank through a challan in
the prescribed form in quadruplicate on ore
before 21st of month following the calendar
month in which the wages fall due.
Rs.10000/- per
month
Medical, sickness, extended sickness
for
certain
diseases,
enhanced
sickness,
dependents
maternity,
besides funeral expenses, rehabilitation
allowance, medical benefit to insured
person and his or her spouse.
WAGES FOR ESI CONTRIBUTIONS
Registers/files to be maintained by the employers
To be deemed as wages
NOT to be deemed as
wages
 Basic pay
 Dearness allowance
 House rent allowance
 City
allowance
compensatory
 Overtime wages (but not
to be taken into account
for
determining
the
coverage of an employee)
 Payment for day of rest
than
 Night shift allowance
 Heat,
Gas
allowance
&
Dust
 Payment for unsubstituted
holidays
 Meal/food allowance
 Suspension allowance
FACTORIES
Lay off compensation
ACT,
 Sum paid to defray special
expenses entailed by the
nature of employment –
Daily allowance paid for
the period spent on tour.
 Gratuity
payable
discharge.
 Production incentive
 Bonus
other
statutory bonus
 Contribution paid by kthe
employer
to
any
pension/provident fund or
under ESI Act.
1948
CHECK
Children LIST education
allowance
(not
being
reimbursement for actual
tuition fee)
on
 Pay in lieu of notice of
retrenchment
compensation
 Benefits paid under the
ESI Scheme.
 Encashment of leave
 Payment of Inam which
does not form part of the
terms of employment.
 Washing
livery
allowance
for
 Conveyance
Amount
towards
reimbursement
for duty related journey
Applicability of the Act
Any premises whereon 10 or
more persons with the aid of
power or 20 or more workers
are/were without aid of power
working on any dyad preceding
12
months,
wherein
Manufacturing process is being
carried on.
Sec.2(ii)
Safety Measures
Contribution
period
If
the
person
joined
insurance employment for
1st April to 30th
the first time, say on 5th
September.
January,
his
first
contribution period will be
from 5th January to 31st
March
and
his
Penalties
corresponding first benefit
will be from 5th October to
1st October to 31st
31st December.
March
Different punishment have been prescribed for different
types of offences in terms of Section 85: (I) (six
months imprisonment and fine Rs.5000), (ii) (one year
imprisonment
and
fine),
and
85-A:
(five
years
imprisonment and not less to 2 years) and 85-C (2) of
the ESI Act, which are self explanatory. Besides these
provisions, action also can be taken under section 406
of the IPC in cases where an employer deducts
contributions from the wages of his employees but
does not pay the same to the corporation which
amounts to criminal breach of trust.
Employer to ensure health of
workers pertaining to
Registration & Renewal
of Factories
 Cleanliness Disposal of wastes and
effluents
 Ventilation and temperature dust and
fume
 Overcrowding Artificial humidification
Lighting
 Drinking water Spittons.
Secs. 11 to 20
To be granted by Chief
Inspector of Factories on
submission of prescribed
form, fee and plan.
 Self-acting machines.
 Casing of new machinery.
 Prohibition of employment of
women and children near
cotton-openers.
 Hoists and lifts.
 Facing of machinery
 Work on near machinery in motion.
 Employment prohibition of young persons
on dangerous machines.
 Striking gear and devices for cutting off
power. Working Hours, Spread Over & Overtime of Adults
Weekly hours not more than 48.
Daily hours, not more than 9 hours.
Intervals for rest at least ½ hour on working for 5 hours.
Spreadover not more than 10½ hours.
Contribution
period
Secs. 6
Welfare Measures
 Washing facilities
 Facilities for storing and drying
clothing
 Facilities for sitting
 First-aid appliances – one first aid
box not less than one for every
150 workers.
 Canteens when there are 250 or
more workers.
 Shelters, rest rooms and lunch
rooms when there are 150 or more
workers.
Employment of Young Persons
Annual Leave with Wages
 Prohibition of employment of young children e.g. 14 years.
 Non-adult workers to carry tokens e.g. certificate of fitnekss.
 Working hours for children not more than 4 ½ hrs. And not permitted to
work during night shift.
Secs. 51, 54 to 56, 59 & 60
A worker having worked for 240 days @
one day for every 20 days and for a child
one day for working of 15 days.
OFFENCE
 For contravention of the Provisions of the
Act or Rules
 On Continuation of contravention
 On contravention of Chapter IV pertaining to
safety or dangerous operations.
 Subsequent
provisions
contravention
of
some
 Obstructing Inspectors
 Wrongful disclosing result pertaining to
results of analysis.
 For contravention of the provisions of
Sec.41B, 41C and 41H pertaining to
compulsory disclosure of information by
occupier, specific responsibility of occupier
or right of workers to work imminent
danger.
Accumulation of leave for 30 days.
PENALTIES
Secs. 79
Sec.92 to
 Imprisonment upto 2 years or fine upto
Rs.1,00,000 or both
 Rs.1000 per day
 Not less than Rs.25000 in case of death.
 Not less than Rs.5000 in case of serious
injuries.
 Imprisonment upto 3 years or fine not less
than Rs.10, 000 which may extend to Rs.2,
00,000.
 Imprisonment upto 6 months or fine upto
Rs.10, 000 or both.
 Imprisonment upto 6 months or fine upto
Rs.10, 000 or both.
 Imprisonment upto 7 years with fine upto
Rs.2, 00,000 and on continuation fine @
Rs.5, 000 per day.
 Imprisonment
of
10
years
when
contravention continues for one year.
INDUSTRIAL DISPUTES ACT, 1947
Object of the Act
Provisions for investigation and settlement of industrial disputes and for certain other purposes.
Important Clarifications
Industry – has attained wider meaning than defined
except for domestic employment, covers from barber
shops to big steel companies.
Sec.2 (I)
Works Committee–Joint Committee with equal number
of employers and employees’ representatives for
discussion of certain common problems.
Sec.3
Conciliation–is an attempt by a third party in helping to
settle the disputes
Sec.4
Adjudication
Labour Court,
Industrial Tribunal
Lay off &– Payment
of Compensation
– or
Conditions
Laying
off the dispute.
National Tribunal
to hearforand
decide
Failure,
refusal
Secs.7, 7A
& 7Bor inability of an employer to provide
work due to
 Shortage of coal, power or raw material.
 Accumulation of stocks.
 Breakdown of machinery.
Power of Labour Court to give
Appropriate Relief
Labour Court/Industrial Tribunal can
Modify the punishment of dismissal or
discharge of workmen and give appropriate
relief including reinstatement. Sec.11A
Persons Bound by Settlement
 When in the course of conciliation
proceedings etc., all persons working
or joining subsequently.
 Otherwise than in course of
settlement upon the parties to the
settlement.
Sec.18
Notice of Change
21 days by an employer to workmen
about changing the conditions of service
as provided in Ivth Schedule. Sec.9A
Right of a Workman during Pendency
of Proceedings in High Court
Employer to pay last drawn wages to
reinstated workman when proceedings
challenging the award of his
reinstatement are pending in the
higher Courts.
Sec.17B
Period of Operation of
Settlements and Awards
 A settlement for a period as
agreed by the parties, or
 Period of six months on signing
of settlement.
 An award for one year after its
enforcement.
Sec.19
Prior Permission for Lay off
When there are more than 100
workmen during proceeding 12
months. Sec.25-M
Lay off Compensation
Payment of wages except for
intervening
weekly
holiday
compensation 50% of total or
basic wages and DA for a period
of lay off upto maximum 45 days
in a year.
Sec.25-C
Prohibition of Strikes & Lock Outs
 Without giving to the employer notice of strike, as  During the pendency of proceedings before a Labour Court,
hereinafter provided, within six weeks before striking.
proceedings, where a notification has been issued under
before a conciliation officer and seven days after the
Sub-Section(3A) of section 10A
conclusion of such proceedings.
 During the pendency of conciliation proceedings before  During any period in which a settlement or award is in
operation, in respect of any of the matters covered by the
a Board and seven days after the conclusion of such
settlement or award.
Secs.22&23
proceedings.
Conditions of service etc. to remain unchanged under certain circumstances during pendency of proceedings
Prior Permission by the
Government for Retrenchment
 When there are more than 100 (in
UP 300 or more) workmen during
preceding 12 months.
 Three months’ notice or wages
thereto.
 Form QA
 Compensation @ 15 days’ wages.
Sec. 25-N
Prohibition of unfair labour
practice either by employer or
workman or a trade union as
stipulated in fifth schedule
Both the employer and the Union can
be punished. Sec.25-T
 Not to alter to the prejudice of workmen concerned the condition of service.
 To seek Express permission of the concerned authority by paying one month’s wages on dismissal, discharge
or punish a protected workman connected with the dispute.
 To seek approval of the authority by paying one month’s wages before altering condition of service, dismissing
or discharging or punishing a workman. Sec.33






Closure of an Undertaking
60 days’ notice to the labour authorities for
intended closure in Form QA. Sec.25FFA
Sec.25-U
Offence
Committing unfair labour practices
Illegal strike and lock-ourts
26
27
28
29
30
31A
31







Retrenchment of Workmen Compensation & Conditions
Workman must have worked for 240 days.
Retrenchment compensation @ 15 days’ wages for every completed year to be calculated at last drawn wages
One month’s notice or wages in lieu thereof.
Reasons for retrenchment
Complying with principle of ‘last come first go’.
Sending Form P to Labour Authorities.
Conditions of service etc. to remain unchanged under certain circumstances during pendency of proceedings
 Not to alter to the prejudice of workmen concerned the condition of service.

To seek Express permission of the concerned authority by paying one month’s wages on dismissal, discharge or punish a
protected workman connected with the dispute.
 To seek approval of the authority by paying one month’s wages before altering condition of service, dismissing or discharging
or punishing a workman. Sec.33
Prior permission atleast 90 days before in
Form O by the Government when there are
100 ore more workmen during preceding 12
months (in UP 300 or more workmen)
Sec.25-O
PENALTIES
Tribunal or National
 Within fourteen days of giving such notice.
 Tribunal and two months, after the conclusion of such
proceedings.
 Before the expiry of the date of strike specified in any
such notice as aforesaid.
 During the pendency of arbitration proceedings before an
arbitrator and two months after the conclusion of such
 During the pendency of any conciliation proceedings
Instigation etc. for illegal strike or lock-outs.
MATERNITY
BENEFIT ACT,
1961
Giving financial
aid to
CHECK LIST
illegal strikes and lock-outs.
Breach of settlement or award
<Punishment
Imprisonment of upto 6 months or with fine upto Rs.3, 000.
Imprisonment upto one month or with fine upto Rs.50 (Rs.1000 for lock-out)
or with both.
Imprisonment upto 6 months or with fine upto Rs.1, 000
Imprisonment for 6 months or with fine upto Rs.1, 000
Coverage of the Act
Conditions for eligibility of
Object
of theconfidential
Act
Imprisonment
6 months or with fine.On continuity of offence fine
Disclosing
informationUpon
pertaining
Sec.21 employees
all to
women
either upto
employed
benefits
To protect the dignity of
uptoRs.200 per day
directly or through contractor
except domestic
without 60 days’ notice under Sec.25 FFA
motherhoodClosure
and the
women employees employed
in mines, factories,
Women
indulging
Imprisonment upto 6 months or with fine
upto Rs.1,
000 temporary of
dignity of a new person’s
plantations
and
also
in
other
establishments
if the
unmarried are eligible for
Contravention of Sec.33 pertaining to change of conditions of
birth by providing for the
maternity
benefit
State Government so decides.
Therefore,
the or with fine
Imprisonment
upto 6if months
upto Rs.5,
000 when she is
full and healthy Service during pendency of dispute etc.
expecting a child and has
State Government decides to apply this Act to
maintenance of the
worked
employer
for at
Imprisonment
upto 6 months or fine upto
Rs.1, for
000.her Fine
upto Rs.100
women employees in shops
and commercial
woman and herWhen
childno
atpenally is provided for contravention
least 80 days in the 12 months
establishments, they also will get the benefit of
immediately proceeding the
this important time when
this Act. Bihar, Punjab Haryana, West Bengal,
date of her expected delivery
she is not working.
U.P., Orissa and Andhra have done so.
Sec. 5.
Cash Benefits
Leave with average pay for six weeks before the delivery.
Leave with average pay for six weeks after the delivery.
A medical bonus of Rs.25 if the employer does not provide free medical care to the woman.
An additional leave with pay up to one month if the woman shows proof of illness due to the
pregnancy, delivery, miscarriage, or premature birth.
In case of miscarriage, six weeks leave with average pay from the date of miscarriage.
Non Cash Benefits/Privilege
Light work for ten weeks (six weeks plus one month) before the date of her expected delivery, if
she asks for it.
Two nursing breaks in the course of her daily work until the child is 15 months old.
Conditions for eligibility of
benefits
 Ten weeks before the date of her
expected delivery, she may ask
the employer to give her light
work for a month. At that time
she should produce a certificate
that she is pregnant.
 She should give written notice to
Leave for Miscarriage
& Tubectomy Operation
Leave for illness arising out of
pregnancy etc. etc.
 Leave with wages at the rate of
A woman suffering from illness arising
maternity benefit, for a period of six
our of pregnancy, delivery, premature
weeks immediately following the day of
birth of child (Miscarriage, medical
her miscarriage or her medical
termination of pregnancy or tubectomy
termination of pregnancy.
operation) be entitled, in addition to
 Entitled to leave with wages at the rate
the period of absence allowed to her
of maternity benefit for a period of two
weeks immediately following the day of
leave with wages at the rate of
her tubectomy operation.
maternity benefit for a maximum
Prohibition of dismissal during absence of pregnancy
periodof such absence
of
one
 Discharge or dismissal of a woman employed during or on account
or to
give noticemonth.
or discharge or dismissal on such a day that the notice
will expire during such absence or to very her disadvantage. Sec. 10
 Discharge or dismissal during or on account of such absence or to give notice of discharge or dismissal on such a day that the notice will expire during such
absence, or to vary to her disadvantage any of the conditions of her service.
 At the time during her pregnancy, if the woman but for such discharge or dismissal would have been entitled to maternity benefit or medical bonus, etc.
 Not barred in case of dismissal for cross misconduct.
Sec.
Failure to Display
Forfeiture of maternity benefit
Extract of Act
If permitted by her employer to absent herself under the provisions of section 6 for any period
Imprisonment may
during such authorized absence, she shall forfeit her claim to the maternity benefit for such
extend to one year or
MINIMUM WAGESperiod.
ACT, 1948
fine.
For discharging or dismissing such a woman during or on account of her absence from work,
CHECK LIST
the employer shall be punishable with imprisonment which shall not be less than 3 months, but
it will extend to one year and will find, but not exceeding Rs.5, 000.
Sec. 18
Object of the Act
To provide for fixing
minimum rates of wages
in certain employments
Minimum Rates of
Wages
Such as Basic rates of
wages etc. Variable DA
and
Value
of
other
concessions etc. Sec. 4
Fixing Hours for
Normal Working
 Shall
constitute
a
normal working day
inclusive of one or more
specified intervals.
 To provide for a day of
rest in every period of
Fixation of Minimum Rates of Wages
 The appropriate government to fix minimum rates of wages. The employees
employed in para 1 or B of Schedule either at 2 or either part of notification u/s 27.
 To make review at such intervals not exceeding five years the minimum rates or so
fixed and revised the minimum rates.
Government can also fix Minimum Wages for
 Time work  Piece work at piece rate  Piece work for the purpose of securing to
such employees on a time work basis  Overtime work done by employees for piece
work or time rate workers.
Sec. 3
Procedure for fixing and
revising Minimum Rates of
Wages
Appointing Committee issue of
Notification
Sec. 5
Overtime etc.
To be fixed by the hour, by the
day or by such a longer wageperiod works on any day in
excess of the number of hours
constituting normal working day.
Composition of
Committee
Representation
of
employer and employee
in schedule employer in
equal
number
and
independent persons not
exceeding 1/3rd or its
total number one such
person to be appointed
by the Chairman.
Sec. 9
Payment of
Minimum Rates of
Wages
Employer to pay to every
employee engated
in
schedule employment at
a rate not less than
minimum rates of wages
as fixed by Notification by
not making deduction
other than prescribed.
Sec.12
Wages of workers who works for less than normal
working days
Save as otherwise hereinafter provided, be entitled to
receive wages in respect of work done by him on that day
as if he had worked for a full normal working day.
Wages for two class of work
Where an employee does two or more
classes of work to each of which a different
minimum rate of wages is applicable,
wages at not less than the minimum rate in
respect of each such class.
Sec. 16





Minimum time rate wages for piece work
Not less than minimum rates wages as
fixed .
Sec. 17
Maintenance of registers and records
Sec.15
Register of Fines – Form I Rule 21(4)
Annual Returns – Form III Rule 21 (4-A)
Register for Overtime – Form IV Rule 25
Register of Wages–Form X, Wages slip–Form XI, Muster Roll–Form V Rule 26
Representation of register – for three year Rule 26-A
Sec. 18
Claims by employees
 To be filed by before authority constituted under the Act within 6 months.
 Compensation upto 10 times on under or non-payment of wages Sec. 16
PENALITIES
Offence
Punishment
Sec. 20
For
paying
less
than Imprisonment
minimum rates of wages
months or with
Rs.500/For contravention of any Imprisonment
provisions pertaining to fixing months or with
hours for normal working day Rs.500/etc.
upto
6
fine upto
upto
6
fine upto
TRADE UNIONS ACT, 1926
CHECKLIST
Object of the Act
To provide for the registration of Trade Union and in certain respects
To define the law relating to registered Trade Unions
Registration of trade Union
Registration of trade Union
 Any 7 or more members of a trade union may, by subscribing
their names to the rules of the trade union and its compliance.
 There should be at least 10%, or 100 of the work-men,
whichever is less, engaged or employed in the establishment or
industry with which it is connected.
 It has on the date of making application not less than 7 persons
as its members, who are workmen engaged or employed in the
establishment
or industry with
Minimum
requirements
for which it is connected.
membership of trade union
Not less than
10%, or 100 of
the workmen, whichever is less,
Cancellation of
Registration
 If the certificate has been
obtained by fraud or mistake or
it has ceased to exist or has
willfully contravened any
Prescribed form with following details.
 Names, occupations and
members’ place of work.
address
of
the
 Address of its head office; and
 Names, ages, addresses and occupations of its
office bearers.
Sec. 5
Criminal conspiracy in trade
disputes
No office bearer or member of a registered
trade union shall be liable to punishment
under sub section (2) of conspiracy u/s 120B
Disqualification of office bearers of
Trade Union
If one has not attained the age of
Annually to the Registrar, on or before such date as may be
prescribed, a general statement, audited in the prescribed
manner, of all receipts and expenditure of every registered
18 years.
Conviction for an offence involving moral turpitude.
Not applicable when
Returns
5 years have elapsed.
Trade Union during the year ending on the
31st December.
Sec. 28
Sec. 21-A
Penalties
Offence

For making false entry in or any
omission in general statement
required for sending returns.

Fine upto Rs.500. On continuing
default, additional fault, Rs.5 for
each week (not exceeding Rs.50).

For making false entry in the
form.

Fine upto Rs.500.

Supplying false information
regarding Trade Union

Fine upto Rs.200.
U/s 31
U/s 32
Punishment
PAYMENT OF BONUS ACT, 1965 & THE RULES
CHECKLIST
Applicability of Act
Every factory where in
Establishment
10 or more persons are employed
with the aid of power or
An establishment in which
Establishment includes
20 or more persons are employed
without the aid of power on any day during an accounting year
Computation of available surplus
Components of Bonus
Income taxes and direct taxes as payable.
Salary or wages includes
dearness allowance but no
Depreciation as per section 32 of Income
other allowances e.g.
Tax Act.
over-time, house rent,
incentive or commission.
Disqualification
Development rebate,
investment or& Deduction of Bonus
development allowance.
Sec.2 (21)
On
dismissal of an employee for
Sec.5
Departments,
undertakings
Separate establishment
and branches, etc.
If profit and loss accounts are
prepared and maintained in
respect
of
any
such
department or undertaking or
branch, then such department
or undertaking or branch is
treated
as
a
separate
establishment.
Computation of gross
Sec.3
profit
For banking company, as per
First Schedule.
 Fraud; or
 riotous or violent behavior while on the premises of the establishment;
or
 theft, misappropriation or sabotage of any property of the establishment
or
Others, as per
Eligible Employees
Eligibility of Bonus
An employee will be entitled
only when he has worked for
Payment of Minimum Bonus
8.33% of the salary or Rs.100
(on completion of 5 years after 1st
Accounting year even if there is no
profit)
Employees drawing wages
upto Rs.3500 per month or
less.
For calculation purposes
Rs.2500
per
month
30 working days in that year.
maximum will be taken
Sec.10
even if an employee is
Time Limit for
Set-off and
Sec. 8
Sec. 8
drawing upto Rs.3500 per
Payment of Bonus
Set-on
month.
Within 8 months from the close of
As per Schedule IV.
Sec.12
accounting y ear.
Sec. 19
Note: The proposal to
Sec.
15
Maintenance of Registers and Records etc.
enhance the existing ceiling of
Rs.3500 is under active
consideration
Govt.
 A register showing the computation of the allocable surplus referred to in clause (4)
of section 2,byinthe
form
A.
 A register showing the set-on and set-off of the allocable surplus, under section 15, in form B
 A register showing the details of the amount of bonus due to each of the employees, the deductions under
section 17 and 18 and the amount actually disbursed, in form C.
Sec.26, Rule 4
PENALT
Fortocontravention
anyGeneral
provision
of DockYards,
Upto 6 Red
months
or with& Educational
fine upto
Act not applicable
certain employees of
of LIC,
Insurance,
Cross, Universities
Institutions,
Chambers
of
Commerce,
Social
Welfare
Institutions,
Building
Contractors,
etc.
etc.
Sec.32.
Y
the Act or the Rule
Rs.1000.
Sec.28
PAYMENT OF
GRATUITY
ACT, 1972 & THE RULES
1
Applicability
Sec.
Sec.
2(s)
Wages for
Calculation
CHECKLIST
Every factory,
mine, oil field,
plantation, port,
railways, company,
shop,
establishment or
educational
Sec.
institutions
employing 10 1or
more employees Calculation
Calculation
Piece-rated
Seasonal
employee
employee
@ 15 days
wages for
every
completed
year on an
average of 3
months’
wages
@ 7 days’
wages for every
completed year
of service.
Sec.
2(e)
Employee
Qualifying period
All employees
irrespective of
status or salary
Entitlement
On completion
of five years’
service except
in case of death
Sec.
or disablement
4(3)
On rendering of 5
years’ service,
either termination,
resignation or
retirement.
@ 15 days’ wages
for every
completed year as
if the month
comprises of 26
days at the last
drawn wages.
Rule
4
Display of Notice
On conspicuous
place at the main
entrance in English
language or the
language
understood by
majority of
employees of the
factory, etc.
Sec.6
Rule 6
Maximum
Ceiling
Nomination
Rule
9
Mode of
payment
Rs.3, 50,000
To be obtained
by employer after
expiry of one
year’s service, in
Form ‘F’
Sec.8
Rule 8
Recovery of
Gratuity
To apply within
30 days in Form I
when not paid
within 30 days
Penalties
Cash or, if so
desired, by
Bank Draft or
Cheque
Sec.
4(6)
Forfeiture of Gratuity
 On termination of an
employee
for
moral
turpitude or riotous or
disorderly behavior.
 Wholly or partially for
willfully
causing
loss,
destruction of property etc.
Rule
9
Sec.
13
Protection of
Gratuity
Can’t be attached
in execution of
any decree
 Imprisonment for
6 months or fine
upto Rs.10, 000
for avoiding to
make payment by
making false statement or representa
-tion.
 Imprisonment not
less than 3 months
and upto one year
with
fine
on
default in complying
with
the
provisions of Act or
Rules.
PAYMENT OF WAGES ACT, 1936
CHECKLIST
Applicability of Act
 Factory industrial Establishment
 Tramway service or motor
transport service engaged in
carrying passengers or good or
both by road for hire or reward.
 Air transport service Dock,
Wharf or Jetty  Inland vessel,
mechanically propelled
 Mine, quarry or oil-field
Plantation
 Workshop or other establishment
etc.
Coverage of Employees
Drawing average wage upto
Rs.6500 pm as amended w.e.f.
Fines as prescribed by
6.9.05.
Not to imposed unless the
employer is given an opportunity to
show cause
To
record in the register
Sec.8
Deductions for service
rendered
When accommodation amenity or
service has been accepted by the
Object of the Act
To regulate the payment of wages of certain
classes of employed persons
Time of payment of wages
The wages of every person employed is
paid.
When less than 1000 persons are employed
shall be paid before the expiry of the 7th day
of the following month.
When more than 1000 workers, before the
expiry of the 10th day of the following
month.Deduction made from wages
Sec. 5
Deductions such as, fine, deduction for
amenities and services supplied by the
employer, advances paid, over payment of
wages, loan, granted for house-building or
other purposes, income tax payable, in
pursuance of the order of the Court, PF
contributions,
cooperative
societies,
premium for Life Insurance, contribution to
any fund constituted by employer or a trade
damage
loss
union,Deduction
recovery offor
losses,
ESI or
contributions
etc.etc.
Sec. 7
For default or negligence of an employee
Wages to be paid in
current coins or currency
notes
All wages shall be paid in
current coins or currency
notes or in both.
After obtaining the
authorization, either by
Cheque or by crediting the
wages in employees banks
Account Sec. 6
Deduction for absence
from duties for
unauthorized absence
Absence for whole or any
part of the day –
If ten or more persons
absent without reasonable
cause, deduction of wages
upto 8 days.
On contravention of S.5 (except sub-sec.4), S.7, S.8
(except Ss.8), S.9, S.10 (except Ss.2) and Secs.11 to 13.
 For failing to maintain registers or records; or
 Willfully refusing or without lawful excuse neglecting to
furnish information or return; or
 Willfully furnishing or causing to be furnished any
information or return which he knows to be false or
 Refusing to answer or willfully giving a false answer to
any question necessary for obtaining any information
required to be furnished under this Act.
 Willfully obstructing an Inspector in the discharge of his
duties under this Act; or
 Refusing or willfully neglecting to afford an Inspector any
reasonable facility for making any entry, inspection etc.
 Willfully refusing to produce on the demand of an
inspector any register or other document kept in
pursuance of this Act; or preventing any person for
WORKMEN’S
COMPENSATION
appearance
etc.
ACT, 1923
CHECKLIST
Fine not less than Rs.1000, which may extend to Rs.5000.
On subsequent conviction fine not less than Rs.5000, may
extend to Rs.10, 000. On contravention S.4, S.5 (4), S6,
S.8 (8), S.10 (2) or S.25 fine not less than Rs.1000. – may
extend to Rs.5000. On subsequent On conviction fine not
less.
 Fine which shall not be less than Rs.1000 but may
extend to Rs.5000 – On record conviction fine not less
than Rs.5000, may extend to Rs.10, 000.
 For second or subsequent conviction, fine not less than
Rs.5000 but may extend to Rs.10,000
Fine not less than Rs.1000 extendable
Upto Rs.5000 – On subsequent conviction fine
not less than Rs.5000 – may extent to Rs.10,000
 On conviction for any offence and again guilty of
 Imprisonment not less than one month extendable upto
Contravention of same provision. Coverage of Workmen six months and fine not
less than liability
Rs.2000 extendable
Employer’s
to pay
Applicability
 Failing
or neglecting to pay All
wages
to any
employeeof their status
upto
workers
irrespective
or Rs.15000.
compensation to a workman
 Additional fine On
upto
Rs.100
for each injury
day. resulting into
death
or personal
salaries either directly or through
All over India
contractor or a person recruited to work
abroad. Sec.1 (3)
Sec.1
Amount of compensation
 Where death of a workman results from the injury
 An amount equal to fifty per cent of the monthly wages of the
deceased workman multiplied by the relevant factor on an
amount of eighty thousand rupees, whichever is more.
 Where permanent total disablement results from the injury.
 An amount equal to sixty per cent of the monthly wages of the
injured workman multiplied by the relevant factor or an amount
of ninety thousand rupees, whichever is more
Wages Procedure for calculation
Notice
Accident
Higher the age – Lower the compensation
 Relevant factor specified in second column of Schedule IV giving
When
monthlyupon
wages
are of the concerned workman.
slabsthe
depending
the age
As soon as
more
than Rs.4000
month it
 Example:
In case per
of death.
Practicable
will be
deemed
Rs.4000.
Wages
Rs.3000
PM ● Age 23 years
 Factor as schedule IV Rs.19.95
of accident
Sec.4Report
Exh.b
 Amount of compensation
Rs.329935
Rule 11
Form EE
 In case of total disablement
Rs.395910.
Sec. 10
Sec. 4
Report of fatal Accident and Serious Injury within 7 days to the
Commissioner (not application when ESI Act applies).
Sec.10B
total or partial disablement or occupational
disease caused to a workman arising out
of and during the course of employment.
Sec.3
When an employee is not liable for
compensation
 In respect of any injury which does
result in the total or partial disablement
of the workman for a period exceeding
three days.
 In respect of any injury, not resulting in
death or permanent total disablement
caused by an accident which is directly
attributable to The workman having been at the time
thereof under the influence of drink or
drugs, or
Bar upon contracting out
 Willful disobedience of the workman to
an order expressly given, or to a rule
expressly framed, for the purpose of
Any
workman
relinquishing
his right
securing
the safety
of workmen,
or for
personal
not permissible.
 Willful injury
removal
or disregard by the
workman of any safety guard or other
device which he knew to haveSec.14
been
provided for the purpose of securing the
safety of workman.
Sec.3 (a) & (b)
PENALTY
 In case of default by employer
 Deposit of Compensation
 50% of the compensation amount + interest to be paid to the
workman or his dependents as the case may be.
 Within one month with the Compensation Commissioner
Sec.4A