Labour Legislations Notes

BA9267 - LABOUR LEGISLATIONSFACTORIES ACT 1948

The object of the Factories Act is to regulate the conditions of work in manufacturing establishments coming within the definition of the term "factory" as used in the Act.The first Act, in India, relating to the subject was passed in 1881. This was followed by new Acts in 1891, 1911, 1922, 1934 and 1948. The Act of 1948 is more comprehensive than the previous Acts. It contains detailed provisions regarding the health, safety and welfareof workers inside factories, the hours of work, the minimum age 6f, workers, leave with pay etc. The Act has been amended several times.The Act is based on the .provisions of the Factories Act of Great Britain passed in 1937.In 1976 the Act was amended extensively. The provisions of the Amendment have been quoted and summarised at the appropriate .places in this chapter.

Application Of The ActThe Factories Act of 1948 came into force on 1st April 1949; It applies to factories, as defined in. the Act, all over India, including the State of Jammu and Kashmir.Unless 'otherwise provided, the Factories Act applies to factories belonging to the Central or any State Government.--Sec. 116.

Definitions Under The Factories Act.Factory. The term Factory is defined in Section 2 (m) of the Act as follows: "Factory means any premises including the precincts thereof- .

whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on, or

whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on,___but does not include a mine subject to the operation of the Indian Mines Act, 1952 (Act XXXV of 1952), or a mobile unit belonging to the armed forces of the Union, a railway running shed or a hotel, restaurant or eating place.

Explanation.-For computing the number of workers for the purposes of this clause all the workers in different relays in a day shall. be taken into account.[Clause 2(m) as amended in 1976.]Under Section 85, the State Government is empowered to declare any establishment carrying on a manufacturing process to be a factory for the purposes of the Act even though it employs less than the prescribed minimum number of workers, provided that the manufacturing process is not being carried on by the owner only with the aid of his family.Summary: From Sec. 2(m) of the Act it follows that m establishment comes within the

definition of a Factory if the conditions stated below are satisfied :1. It is a place where a "manufacturing process" is carried on.2. It employs the prescribed minimum number of "workers"viz., ten if "'power" is used, and twenty if no "power" is used. It is sufficient if the prescribed number of workers were employed on any day of the preceding twelve months. 3. It is not a mine coming within the purview of the Indian Mines Act of 1952, a railway running shed, mobile unit belonging to the armed forces of the Union, a hotel, restaurant or

Prepared By: N.Prabha, Asst Professor, V.S.B. Engineering College, Karur

eating place.

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

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

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

composing types for printing, printing by letter press, lithography, photogravure or other similar processes or book binding ; or

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

preserving or storing any article in cold storage. For the corresponding section of the English Act, it was held that the different

processes enumerated in the clauses are merely illustrative so that laundries, ,carpet beating, or bottle washing works come within the Act, if mechanical power is used. Patterson v. Hune

The following undertakings have been held to be manufacturing processes-bidi-making; conversion of raw-films into finished products; the preparation of eatables in the kitchen of a restaurant ; use of a refrigerator for adapting any article with a view to its sale.The scraping out of salt and grading them, even though done by, manual labour, is a manufacturing process.

Worker. "Worker means a person employed, directly or by or through any agency (including a contractor) with or without the knowledge of the principal employer, whether for remuneration or not in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected 'with, the manufacturing process" or the subject of the manufacturing process but does not include any member of the armed forces of the Union."-Sec. 2(1), as amended in 1976.

Explanation: Worker means any person engaged in any work connected with or incidental to a manufacturing .process. Thus the definition is wide. The term includes persons engaged directly and, also those who are engaged through an agency (including a contractor with or without the knowledge of the principal employer). The term includes clerical workers and persons paid by piece rates in a factory.

The term 'worker' does not include any member of the armed forces of Union. ., ,In case of a factory worker there must be a relationship between the employer and the employe

Apprentices, whether remunerated or not, are workers within the meaning of the Act.

Power. "Power means electrical energy, or any other form of energy which is mechanically transmitted and is not generated by human or animal agency."--Sec. 2(g).Prime mover. "Prime mover means any engine, motor or other appliance which generates or otherwise provides power."--Sec. 2(h).

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


system of pulleys, coupling, clutch,'driving belt or other appliance or device by which the motion of a prime mover is transmitted to or received by any machinery or appliance".--Sec. 2(i).Machinery. "Machinery includes prime movers, transmission machinery and all other appliances whereby power is generated, transformed, transmitted or applied."--Sec. 2(j).Adult. "Adult means a person who has completed his eighteenth year of age".--Sec. 2(a).Adolescent. "Adolescent means a person who ha$ completed his fifteenth year of age °but has not completed his eighteenth year."Sec. 2(b).Child. ''Child means a person who has net completed his fifteenth year of age." Sec. 2( c) Young Person. "Young Person means a person who is either a child or an adolescent."--Sec. 2(d).Calendar Year. "Calendar Year means the period of twelve months beginning with the first day of January in any year."Sec. 2(dd). °Day. "Day means a period of twenty four hours beginning at midnight." --Sec. 2 ( e) .References to the time of the day in the ° Act are to the Indian Standard Time. In areas where the I.S.T. is not observed, the State Government can by rules define the local mean time.--Sec. 3.

Week. "Week means a period of seven days beginning 'at midnight on Saturday night or such other night as may be approved in writing Jar a particular area by the Chief Inspector of Factories." --Sec. 2(f).Shift and Relay. Where work of the same kind is carried out by two or more sets of workers working during different periods of the day, each of such sets is called a "relay" and each of such periods is called a "shift."-Sec. 2(r).Occupier. "Occupier" of a factory means the person who has ultimate control over the affairs of the factory, and where the said affairs are entrusted to a managing agent, such agent shall be deemed to be the occupier of the factory.--Sec. 2(n).

In case of a ship, which is being repaired or on maintenance work is being carried out in dry dock which is available for hire, the following persons for certain section of the Act will be deemed to be occupier (i) the owner of the dock, and (ii) the owner of the ship or his agent or master or other officers-in-charge in the ship or any person who contracts with such owner, agent or master or other officers-in-charge to carry out the repair or maintenance work.-Sec. 2(n) added by The Factories (Amendment) Act, 1976.The Act imposes several duties and responsibilities on the occupier of the factory. (See below).An occupier of factory may be an owner, a lessee or a mere licensee but he must have the right to occupy the property. He should also control the management.

APPROVAL, LICENCING AND REGISTRATION

It is necessary to obtain a" licence before a factory is started. Section 6 provides that the State Government may make rules requiring, for the purposes of this Act, the submission of. plans or any class or description of factories to the Chief Inspector or the State Government, and the plans and specifications of a factory and its location.The Amendment of 1976 provides that any replacement and addition to the factory will not be allowed if it does not reduce the I minimum clear space required for safe working around the plant or machinery or adversely affect the environmental conditions from the evolution or emission of steam, heat or dust or fumes injurious to health.

Notice by occupier. Section 7 provides that the occupier of a factory must, at least 15 days before he begins to occupy or use any premises as a factory; send to the Chief Inspector of Factories a written notice containing the following particulars:


(1) the name and situation of factory ;

(2) the name and address of the occupier ;

(3) the name and address of the owner of the premises or building (including the precincts thereof) ;( 4) the address to which communications relating to factory may be sent ;(5) the nature of the manufacturing process to be carried on in the factory during the next twelve months ;( 6) the total rated horse power installed or to be installed in the factory, which shall not include the rated – horse power or any separate stand-by plant;(7) the name of the manager of the factory for the purposes of this Act ;(8) the number of workers likely to be employed in the factory ;(9) such other particulars as may be prescribed.The rules stated above are enforced. Because the plans and specifications of the factory must insure proper measures of health, safety and welfare of the. Workers.

THE INSPECTI0N STAFF

The Factories Act empowers the State Government to appoint Inspectors, Chief Inspectors of Factories, Additional Chief Inspectors, Joint Chief Inspectors and Deputy Chief Inspectors. Every DistrictMagistrate is an Inspector for his district. No person can act as an Inspector if .he is or becomes directly or indirectly interested in a factory or in any process or business carried on therein or in any patent or machinery connected therewith. .

Powers of Inspectors. Section 9 provides that subject to any rules made in this behalf, an Inspector may exercise the following powers within the local limits for which he is appointed :

(a) enter, with such assistants, being persons in the service of the Government or any local or other public authority, as he thinks fit, and place which is used, or which he has reason to believe is used, as a. factory ;

(b) make examination of the premises, plant and machinery; (c) require the production of any prescribed register and any other document relating to the factory, and take on the spot or otherwise statements of any person which he may consider necessary for carrying out the purposes of the Act; and .(d) exercise such other powers as may be prescribed for carry ing out the purposes of this Act.

No person shall be compelled under this section to answer any question or give any evidence tending to incriminate himself.

Under Section 91, an Inspector may take a sample of any substance, used or intended to be used in a factory, for the purpose of finding out whether the substance is injurious and if the factory is violating any of the provisions of the Act.

Obstructing an Inspector. Whoever wilfully obstructs an Inspector in the exercise of any power conferred on him by or under this Act, or fails to produce on demand by an Inspector any registers Of other documents in his custody kept in pursuance of this Act or of any ru.!es made thereunder, or conceals or prevents any worker in a factory from appearing before, or being examined by, an Inspector, shall be punishable ~with imprisonment for a term which may extend to three months or with fine which may extend to Rs. 300 or with both.-Sec. 95. .The onus is on the prosecution to show that a person has obstructed an inspector.


Duties of Inspector. It is the duty of factory inspectors to enforce the provisions of the Factories Act and other industrial laws. For this purpose they inspect factories periodically. If any rule is violated they take steps like prosecuting the guilty persons etc.

CERTIFYING SURGEONS

Section 10 provides that the State Government may appoint qualified medical practitioners to .be certifying surgeons for the purposes of the Act for specified local areas or for specified factories or class of factories.No person can be a certifying surgeon for a factory or industry in which he is interested .directly or indirectly.-Sec. 10(3).The State Government may by order in writing and subject to specified conditions, exempt any person or class of persons from the provisions of this sub-section in respect of any factory or class or description of factories.

Duties. The certifying surgeon has the following duties under the Act and the rules framed under it.1. The examination and certification .of young persons. 2. The examination of persons engaged in factories in dangerous Occupations or processes. .3. Medical supervision of factories in cases where such supervision had been prescribed owing to the dangerous nature of the work carried on or for any other reason, viz.,(i) Cases of illness have occurred which it is reasonable to believe are due to the nature of the manufacturing process carried on,. or other conditions of work prevailing therein;(ii) by reason of any change in the manufacturing process carried on or in the substances used therein there is a likelihood of injury to the health of workers employed in that manufacturing process ;

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

PROVISIONS REGARDING THE HEALTH OF WORKERS

Sections 11 to 20 of the Act contain certain provisions intended to ensure that the conditions under .which work is carried on in factories do not affect the health of the workers injuriously. The summary of the provisions are explained below :

Summary of the provisions of the Factories Act. relating -to the health of workers are stated below.1. Cleanliness. Every factory shall be kept clean and free from dirt, and the outflow of drains etc. The floors must be cleaned. Drainage shall be provided. Inside walls, partitions and ceilings must be repainted at least once in five years. When washable water paint is used they must be painted once every three years and washed at least every period of six months.-Sec. 11,' as amended in 1976.2. Disposal of wastes and effluents. The waste materials produced from the manufacturing process must be effectively disposed off-Sec. 12.3. Ventilation 'and Temperature. There must be provision for adequate ventilation by the circulation of fresh air: The temperature must be kept at a comfortable level. Hot parts of machines must be 'separated and insulated.-Sec. 13.4. Dust and Fume. If the .manufacturing process used. gives off injurious or offensive dust and fume steps must be taken so that they are not inhaled or accumulated. The exhaust fumes of internal combustion engines must be conducted outside the factory.--Sec. 14.

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


from some source of drinking water supply. The State Government can frame rules .regarding the process of humidification etc.-8ec. 15. .6. OverCrowding. There must be no overcrowding in a factory. In factories existing before the commencement of the Act there must be at least 350 c.ft. (~r 55 cubic metres) of space per worker. For factories built afterwards, there must be at least 500 c.ft. (or 75 cubic metres) of space. In calculating the space, an account is to be taken of space above 14 ft. (or 5 metres) from the floor.-Sec. 16.7. Lighting. Factories must be well lighted. Effective measures must be adopted to prevent glare or formation of shadows which might cause eyestrain.-sec. 17.8. Drinking water. Arrangements must be made to provide a sufficient supply of wholesome drinking water. All supply' points of such water must be marked "drinking water". No such points shall be within 20 ft. (or 7.5 metres) of any latrine, washing place etc. Factories employing more than 250 workers must cool the water during the hot weather.-Sec. 18. .

9. Latrines and Urinals. Every factory must provide' sufficient number of latrines and urinals. There must be separate provision for male and female workers. Latrine and urinals must be kept in a clean and sanitary condition. In factories. employing more than 250 workers, they shall be of prescribed sanitary types.--sec. 19.

PROVISIONS REGARDING THE SAFETY OF WORKERS

Sections 21 to 40A, 40B and 41 of the Act lay down rules for the purpose of securing the safety of workers. Summary of the provisions of the Factories Act regarding the safety of the workers are stated below: (Sections 2l to 41) .1. Fencing ot machinery. All dangerous machinery must be securely fenced e.g., moving .parts- of prime movers and flywheels connected to every prime mover. electric generators. etc.-Sec. 2l.2. Work on or near machinery in motion. Work on or near machinery in motion must be carried out only by specially trained adult male workers wearing tightly fitting c1othes.-Sec. 22.3. Employment of young persons on dangerous machines. No young person shall work at any danger()us machine' unless he has been specially instructed as to the dangers and the precautions to be observed. has received sufficient training about th~ work. and is under the supervision of some person having thorough knowledge and experience of the machine.-Sec. 23.4. Striking gear and devices for cutting off power. In every factory suitable devices for cutting off power in emergencies from running machinery shall be provided and maintained in every workroom.~. 24.5. Self-acting machines. Moving parts of a self-acting machine must not be allowed to come within 45 cms. of any fixed structure which is not part of the machine.-Sec. 25.6. Casing of new machinery. In all machinery installed after the commencement of the Act. certain parts must be sunk, encased or otherwise effectively guarded e.g.. set screw. bolt. toothed gearing etc. -sec. 26.7. Women and children near cotton Openers. Women and children must not be allowed to work near cot/On openers, except In certain cases.-Sec. 278. Hoists, lifts, chains etc, Every hoist and lift must be so constructed as to be safe. There are detailed rules as to how such safety is to be secured. There are similar provisions regarding lifting machines. chains, ropes and lifting tackle .Sec. 28. 29.9. .Revolving machinery. Where grinding is . carried on the maximum safe working speed of


every revolving machinery connected therewith must be notified. Steps must be taken to see that the safe speed is not exceeded.-Sec. 30.

10. Pressure plant. Where any operation is carried on at a pressure higher than the atmospheric pressure, steps must be taken to ensure that the safe working pressure is not exceed~cL-.sec. 31.11. Floors, stairs and means of access. All floors, steps, stairs, passage and gangways shall be of sound construction and properly maintained. Handrails shall be provided where necessary. Safe means of access shall be provided to the place where the worker will carry on any work.-Sec. 32.12. Pits, sumps. openings in floors etc. Pits. sumps. openings in floors etc. must be securely covered or fenced.-Sec. 33.13. Excessive weights. No worker shall be made to carry a load so heavy as to cause him injury.-8ec. 34.14. Protection of eyes. Effective screen or suitable goggles shall be provided to protect the eyes of the worker from fragments thrown off in course of any manufacturing process and from excessive light if any.-Sec. 35.

15. Precautions against dangerous fumes. No person shall be allowed to enter any chamber. tank etc. where dangerous fumes are likely to ,be present. unless it is equipped with a manhole or other means of going out. In such space no portable electric light of more than 24 ,volts shall be used. Only a lamp or light of flame proof construction can be used in such space. For people entering such space suitable breathing apparatus, reviving apparatus etc. shall be provided. Such places shall be cooled by ventilation before any person is allowed to enter.-8ecs. 36 and 36A.16. Explosive or inflammable gas etc. where a manufacturing process produces inflammable gas. dust. fume. etc. steps must be taken to enclose the machine concerned, prevent the accumulation of substances and exclude all possible sources of ignition. Extra precautionary measures are to be taken where such substances are worked at greater than the atmospheric. pressure.-Sec. 37.

17. Precaution in case of fire. Fire escapes shall be provided. Windows and doors shall be constructed to open outwards. The means of exit in case of the fire shall be clearly marked in red letters. Arrangements must be made to give warning in case or fire -sec. 3818. Specifications of defectives etc. and safety of buildings and machinery. If any building or machine is in a defective or dangerous condition, the inspector of factories can ask fer the holding of tests to determine how they can be made safe. He can also direct the adoption of the measure necessary to make them safe. In case of immediate danger, the use of the building or machine can be prohibited.-Secs. 39. 40.19. Maintenance of Buildings. If the Inspector of Factories thinks that any building in a factory, or any. part of it. is in such a state of disrepair that it is likely to affect the health and welfare of the workers. he may serve on the occupier or manager or both in writing specifying the measures to be done before the specified date. Sec. 4OA.

20. Safety Officers. The State Government may notify to the occupier to employ a number of Safety Officers in a factory (i) wherein one thousand or more workers are ordinarily employed. or (ii) wherein any manufacturing process or operation which involves the risk of bodily injury, poisoning. disease or any other hazard to health of the persons employed in the factory .-Sec. 40B.21. Rules. The State Government may make rules providing for the use of such further devices for safety as may be necessary. Sec. 41.


PROVISIONS REGARDING THE WELFARE OF WORKERSSummary of the provisions of the Factories Act regarding the welfare of workers are stated below :1.. Washing. In every factory adequate and suitable facilities for washing shall be provided and maintained. They shatI be conveniently accessible and shall be kept clean. There must be separate provisions for male and female workers.-Sec. 42.2. Storing and drying. The State Government may make rules requiring the provision of suitable facilities for storing and drying clothing.-Sec. 43.3. Sitting. Sitting facilities must be provided for workers who have to work in a standing position. so that they may take rest when possible. When work can be done in a sitting position efficiently the Chief Inspector may direct the provision of sitting arrangements. Sec. 44. 4. First aid. Every factory must provide first aid boxes or cupboard. They must contain the prescribed materials and they must be in charge of persons trained in first aid treatment. Factories employing more than 500 persons must maintain an ambulance roam containing the prescribed equipment and in charge of the prescribed medical and nursing staff-Sec. 45.5. Canteens. Where more than 250 workers are employed. the state Government may require the opening of canteen or canteens for workers. Rules may be framed regarding the food served. its management etc.,..-Sec. 46.

6. Shelters. In every factory where more than 150 workers are employed there must be provided adequate and suitable shelters or rest. rooms and a lunch room (with drinking water supply) where workers may eat meals brought by them. Such rooms must be sufficiently lighted and ventilated and must be maintained in a cool and clean condition~. The standards may be fixed by the State Government. -Sec. 47,7. Creches. In every factory where more than 30 women a employed, a room shall be provided for the use of the children (below 6 years) of such women. The room shall be adequate size. well lighted and ventilated, maintained in a clean and sanitary condition and shall be in charge of a woman trained in the care of children and infants. The standards shall be laid down by the State Government.Sec. 48.8. Welfare officers. Welfare officers must be appointed in every factory where 500 or more workers are employed. The State Government may prescribe the duties, qualifications etc. of such officers. Sec. 49.9. Rules. The State Government may make rules regarding the welfare of workers.-Sec. 50.

THE WORKING HOURS OF ADULTS

Weekly Hours. No adult worker shall .be required or allowed . to-work in a factory for more than forty-eight hours in any week. Sec. 51.Daily Hours. No adult worker shall be required or allowed to work in a factory for more than nine hours in any working day. The daily maximum may be exceeded with the previous approval of the Chief Inspector, to facilitate change of shifts.-Sec. 54.Intervals for Rest. The periods of work of adult workers in a factory each day shall be so fixed that no period shall exceed five hours arid that no worker shall work for more than five hours before he has had an interval for rest of at least half an hour. The State Government or the Chief Inspector may, by order in writing, and for reasons stated therein, increase the work period to six.-Sec. 55.


Spreadover. The periods of work of an adult worker in a factory shall be arranged that inclusive of his intervals for rest under section 55, they shall not spread-over more than ten and half hours in any day. The Chief Inspector may for specified reasons increase the spreadover up to twelve hours.-Sec. 56.

RULES REGARDING EMPLOYMENT OF ADULTS

Night Shifts. Where a worker in a factory works on a. shift which extends beyond midnight, (a) his weekly holiday and compensatory holiday means a period of holiday for 24 consecutive hours beginning when his shift ends, and (b) the following day for him shall be deemed to be the period. of 24 hours beginning when such shift ends and the hours he has worked after midnight shall be counted in he previous day.-sec. 57Overlapping Shifts. Work shall not be carried on in any factory by means of a system of shifts so arranged. that more than one relay of workers is engaged in work of the same kind at the same time. The State Government or the Chief Inspector may grant exemption from this rule.-See. 58.Double Employment. No adult worker shall be required or allowed to work in any factory on any day on which he has already been working in any other factory, save In such circumstances as may be prescribed.-Sec. 60.Notice of Periods of Work. There must be displayed in every factory a notice showing periods of work of adults, classification of workers in groups according to nature of their work, shifts and relays etc. Change made in the system of work must be notified to the Inspector before change. The manager of every factory must maintain a Register of Adult Workers showing the name of each worker, the nature of his work, the group in which he is included, the relay in which he is allotted etc. The hours of work of an adult worker- must correspond with the notice referred to above and the Register.- Sections 61, 62, 63.No adult worker shall be required or allowed to work in any factory unless his name and other particulars have been entered' in the register of adult workers.-Sec. 62 (1A) added by the Factories (Amendment) Act, 1976.Exemptions. By sections 64 and 65, the State Government has been given power to exempt for limited periods certain factories from compliance with some of the provisions relating to hours of work and employment. Such exemptions are necessary in special cases, for example in the case of workers engaged in urgent repairs or in preparatory and complementary work. In some industries work if of an intermittent character and the enforcement of all the rules stated above will create hardship. The nature of the work in certain industries requires exceptional treatment, e.g., workers. engaged in engine rooms and boilers or in the printing of newspapers. The State Government may exempt persons holding positions of supervision and management or in confidential positions in a factory from the operation of the rules regarding working hours (except the rule against the employment of women at night)Confidential Position. The State Government may empower the Chief Inspector to declare a person other than any person defined by such rules, as a person holding position of supervision or management or employed in .a. confidential position in a factory, if, -the Chief Inspector is of opinion that he can be employed.If any such person does not get more than Rs. 750 p.m. as wages. he will be entitled to extra wages for overtime work.-Sec. 64(1). add~d by The Factories (Amendment) Act, 1976.Hours and Spreadover. Any exemption granted under Sec. 65 (2)


shall be subject to the following conditions, namely :(i) the total Lumber of hours of work in any day shall not exceed twelve ;(ii) the spread over. inclusive of intervals for rest, shall not exceed thirteen hours in any one day ;(iii) the total number of hours of work in any week. including overtime, shall not exceed sixty ;(iv) no worker shall be allowed to work overtime, for more than seven days at a stretch and

the total number of hours of overtime work in any quarter shall not exceed seventy five-Sec. 65(3), Factories (Amendment) Act, 1976.

(v)Quarter. This is a period of three consecutive months beginning on the 1st January, the 1st of April, the 1st of July or the 1st of October.-Sec. 64.

RESTRICTIONS ON THE EMPLOYMENT OF WOMEN

By section 66 the following restrictions have been imposed to women workers (a) Maximum daily work is 9 hours: No exemption from the provisions of Section 54 (which lays down that the maximum daily hours of work shall be nine hours) can be granted in respect of any women.(b) prohibition of night work: No women shall be required or allowed to work in any factory except between the hours of 6 a.m. and 7 p.m. The State Government may by notification in the official Gazette vary the limits for any factory or group or class or description of factories. But such variation must not authorise the employ -ment of women between the hours 10 p.m. and 5 a.m. .(c)Change of shift only after holiday:There shall be no change of shifts for women except after a weekly holiday or any other holiday.Exception: There is an exceptional case. The State Government may make rules providing for the exemption from the afore~aid restrictions (wholly or partially or conditionally) of women working in fish-curing or fish-canning factories. In factories, mentioned above, the employment of women beyond the hours specified is necessary to prevent damage to or deterioration in any raw material. But such rules shall remain in force for not more than three years at a time.Other restrictions: There are other restrictions on the employ ment of women workers :

1. Work on or near machinery in motion. No woman or young person shall be allowed to clean, lubricate or adjust any part of the machinery while the prime mover or transmission machinery is in motion or to work between moving parts, or between fixed and moving parts of any machinery which is in motion.-Sec. 22(2}. (See p. 16.)

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


purpose of controlling and regulating factories which carry on operations exposing women, young persons and other workers to a serious risk of bodily injury, poisoning or disease.-Sec. 87 (b). (See p. 43.)

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

Certificate of Fitness and Token. A child who has completed his fourteenth year or an adolescent shall not be required or allowed to work in any factory unless (a) he has been granted a certificate of fitness. which is. in the custody of the manager, and (b) such child or adolescent carries a token giving a reference to such certificate-Sec. 68.The Certificate of Fitness is a certificate granted to a child or adolescent by a Certifying Surgeon after. examination: The certificate is. given to a child if the surgeon is satisfied that he has completed his fourteenth year and has attained the prescribed physical standards. The certificate is granted to an adolescent if the surgeon is satisfied that he has completed his fifteenth year and is fit for a full day's we in a factory. The certifying surgeon must have personal knowledge of the intended place of work and of the manufacturing process involved. The certificate is valid only for a period of 12 months. It may be granted subject to conditions (e.g., that of periodical re-examination). Thecertificate may be renewed and, if necessary, revoked. Any fee pa: able for the certificate must be paid by the occupier of the factory all must not be recovered from the young person or his parents c guardian.-Sec. 69.

An adolescent who has been granted a certificate of fitness ant who carries a token is deemed to be an adult for the purposes of Chs. VI and VIII of the Act. (Ch. VI deals with the hours of work of an adult and Ch. VIII deals with "annual leave). But no adolescent who has not attained the age of seventeen years shall be employed or permitted to work in any factory during night. "Night" means a period of at least 12 consecutive hours which shall include an interval of at least seven consecutive hours falling between 10 p.m. and 7 a.m. An adolescent who has not been granted a certificate of fitness, shall be deemed to be a child ~or the purposes of the Act,-Sec. 70.Working hours for Children. The law regarding working hours for children are stated below.-Sec. 71 :1. No child shall be employed or. permitted to work in any factory- '

(a) for more than four and a half hours in any day;(b) during the night, .

Explanation: For the purpose of this sub-section "night" shall mean a period of at least twelve consecutive hours which shall include the interval between 10 p.m. and 6 a.m.

2. The period of work of all children employed in a factory shall be limited to two shifts which shall not overlap or spread-over more than five hours each, and each child shall be. employed in only one of the relays which shall not, except with the previous permission in writing of the Chief Inspector, be changed more frequently than once in a period of thirty days.

3. The provisions of section 52 shaIl apply also to child workers, and in respect of any child. (Sec. 52 relates to weekly holidays. See next ' Section).

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

already been working in another factory. Notice and Register. A notice must be displayed showing clearly the periods of work of


children.-,-Sec. 72.

The manager of every factory must maintain a Register of child workers showing the name of. each child worker, the nature of his work. the group (if any) in which he is included. the relay to which he is allotted and the number of his certificate of fitness.-Sec. 73.No child worker shall be required or allowed to work in any factory unless his name and other particulars have been entered in the register of child workers.-Sec. 73 (IA). Factories (Amendment) Act, 1976.The hours of work of a child must correspond with the Notice and the Register.-Sec. 74.Medical Examination. Where an Inspector is of opinion that a person working as an adult is a young person, or that a young person is not fit to work, he may direct the manager of the factory to. have the person medically examined by a certifying surgeon.--Sec. 75.Other rules regarding the employment of young persons. No young person shall work at any dangerous machine unless he has been fully instructed as to. the dangers arising in connection with the machine and the precautions to be observed, and (a) has received sufficient training in work at the machine or (b) is under adequate supervision by a person who has a thorough knowledge and experience of the machine. The State Government is to. prescribe what machines are dangerous far the purpose of this section.-5ec. 23.Certain restrictions an adolescents and children are stated in Sections 22(2), 27, 34 and' 87 (b). (See pp. 34-5).The State Government may make rules regarding the farms of the Certificate of Fitness, the procedure relating to. their issue, and the physical standards to. be attained by children and adolescents. Sec. 76.

The provisions relating to. the employment of young persons shall be in addition to and not in derogation of, the provisions of the Children Act of 193~., 1960 and 1978.-Sec. 77.

CHILD-LABOUR

Rules regarding child-Iabour are contained in the Factories Act, Mines Act etc. There are also. two. general Acts an the subject. The Children (Pledging of Labour) Act (Act 11 of 1933) prohibits the making of agreements to. pledge the labour of children and the employment of children whose labour has been pledged. The Children Act of 1938, 1960 and 1978 prohibit the employment of a child who. has not completed his fifteenth year of age in any occupation connected with the transport of passengers, goods or mails by railway or con -nected with a part authority Within the limits of any part. The Act also prohibits the employment of a child, who. has not completed his fourteenth year of age, in the processes set forth in the schedule to the Act. Children between 15 and 17 can be employed subject to certain restrictions as regards their periods of rest etc

HOLIDAYS AND LEAVE

The Factories Act provides for the following holidays, viz.,Weekly holidays, Compensatory holidays and Annual leave with wages according to certain rules. The provisions are explained below.Weekly Holidays. Section 52 provides that an adult workers shall have a holiday on the first day of the week. But the manager of the factory may fix the holiday on any other day which is with three days before or after the first day of the week in case of such substitution, notice must be given to the Inspector of Factories an displayed in the factory. No substitution can be made which will result in any worker working for more than ten days consecutively without a holiday for a whole day. The State Government may make rules providing for


exemption from the above section in certain cases, e.g., for urgent repairs.

The Weekly Holidays Act (Act XVIII of 1942) provides for the grant of weekly holidays to persons employed in shops, restaurants and theatres. The Act ,can be applied to a State by notification of the State Government.Compensatory Holidays. Where as a result of the exemption of factory from the operation of the role regarding weekly holidays, a worker is deprived from any weekly holiday he shall be allowed within the month in which the holidays were due, or within two months immediately following that month, compensatory holidays of equal number to the holidays lost.--Sec. 53.

Annual Leave with Wages. Sections 78 to 84 provide for the grant of a certain period of leave with wages to workmen.Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed during the subsequent calendar year, leave with wages for a number of days calculated at the rate of(i) if an adult, one day for every twenty days of work performed by him during the

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

previous calendar year.

Rules. Rules regarding the Annual Leave are summarised below :1. When counting the number of days of work performed by a worker, the following are to

be included: (a) days of lay-oft, (b) maternity leave to a female worker, not exceeding twelve weeks, and (c) the leave earned in the previous year. But the worker shall not earn leave for. these days.2. The leave admissible under the aforesaid rule shall be exclusive of all holidays whether occurring during or at either end of the period of leave.3. A worker whose service commences otherwise than on the first day of January shall be entitled to leave ,with wages at the rate laid down above if he has worked for two-thirds of the total number of days in the remainder ?f the calendar year.4, If a worker is discharged or dismissed from service of quits his employment or is superannuated or dies while in service, during the course of the calendar year, he or his heir or nominee, as the case may be, shall be entitled, to wages in lieu of the quantum of leave to which he was entitled Immediately before his discharge, dismissal,quitting of employment, ,superannuation or death calculated at therates specified in sub-section (1)even If he had not. worked for the entire period specified In sub-section (J) or sub-section (2) making him eligible to avail of such leave. Such payment shall be made

(i) where the worker is discharged or dismissed or quitsemployment-before the expiry of the second working day from the date of such

discharge, dismiss~l or quitting; and(iii) where the worker is superannuated or dies while in service -before the expiry of two

months from the date of such superannuation or death. (Amended by the Act of 1976).5, In calculating the leave period, fraction of leave for half a day or more shall be treated as one day and fractions of less amount shall be omitted.6. Leave earned, but not taken, can be carried forward to a succeeding year subject to a limit of thirty days in the case of an adult and forty days in the case of a child. But earned leave not allowed because of any. scheme for leave in operation, can be carried forward without limit.7. Application for leave must be submitted to the manager not less than 15 days before the date of commencement of leave. In the case of public utility service it must be made not less than 30


days before such date. If a worker becomes ill and wants to avail himself of the annual leave during the period of illness, he shall be granted leave even though the application is not made before the period specified above.8. The application for leave may be for the whole of the leave due or part of it. But earned leave cannot be taken more than three times during the same year. .9. For the purpose of ensuring the continuity of work, the occupier or manager of the factory may draw up a Scheme for regulating the grant of leave. The Scheme must be agreed to by the 'Works Committee, if any, or the representatives 6f workers. It must be lodged with the Chief Inspector and displayed in the factory. .10. An application for leave submitted in proper time shall not Be refused unless the refusal is in accordance with any leave scheme in operation.

11. The un availed leave of a worker shall not be taken into consideration in computing the period of any notice required to be given before discharge or dismissal

12. The State Government may exempt a factory from the operation of the above rules if it is satisfied that its own leave rules provide benefits (the totality - of benefits) which are not less favourable to the workers than the statutory leave rules.13. Where by virtue of any award, agreement (including settlement) or contract of service the worker is entitled to a longer period of leave than that provided by the aforesaid rules, he will be entitled such longer leave.14. The rules contained in these sections do not apply to railway Factory administered by the Government which are governed by leave rules approved by the Central Government.15. If an award, agreement (including settlement) or contract of Service provides for a longer annual leave with wages than provided in this chapter, the quantum of leave, which the worker shall be entitled to, shall be in accordance with such award, agreement or contract of service, but in relation to matters not provided for in such .award, agreement or contract of service or matters which are provided for less favourably therein, the provisions of sections 79 to 82, so far , as may be, shall apply. (Added by the Amendment of 1976).t

Wages during Leave Period. For the period of leave allowed to a worker according to rules, he shall be paid at a rate equal to the daily average of his total full-time earnings for the days on which he actually worked during the month immediately preceding his leave~The average rate is to be calculated, exclusive of any overtime and bonus, but inclusive of dearness allowance and the cash equivalent of the advantage accruing through the concessional sale to the worker of food-grains and other articles. The cash equivalent, referred to above, is to be computed according to the method used when calculating the extra wages payable -for overtime work. (See. post)-Sec. 80.lf the employment of a worker who is entitled to leave is terminated by the occupier of the factory before he has taken the entire leave to which he is entitled, he must be paid wages for the leave period not taken and such wages must be paid before the expiry of the second working day after such termination. Similarly, if the worker quits his service after having applied for and obtained leave, he must be paid wages (or the leave period and such wages must be paid on or before the next pay day. '!be amount of wages payable is to be calculated according to the provisions of Section 80.-Sec. 79(11) .A worker who has been. allowed leave for not less than four days in the case of an adult and five days in the case of a child, shall before his leave begins, be paid the wages due for the period of leave allowed.-Sec. 81.Wages -for the leave period, if not paid by an employer, shall be recoverable as delayed

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


EXTRA WAGES FOR OVERTIME

( 1 ) Where a worker works in a factory for more than nine hours in any day or for more than 48 hours in any week, he shall in respect of overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.-Sec 59(1) (2) For the purpose of sub-section (1), "ordinary rate of wages means the basic wages plus such allowances, including the cash equivalent of the advantage accruing through the concessional sale to workers of foodgrains and other articles, as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work.-Sec. 59(2).(3) Where any workers in factory are paid on a piece rate basis, the time rate of their work will include the following rules:

(i) if the workers bad been paid on the same or identical job during a month immediately preceding a month during which overtime work was done, the time rate shall be deemed to be equivalent to the daily average of their fulltime earnings for the days of the overtime work. Also such time rates shall be deemed to be the ordinary rates of wages of those workers.

(ii) In the case of a worker who had not worked in the immediately preceding calendar month on the same or identical job, the time rate shall be deemed to be equivalent to the daily average of the earning of the worker for the days on which he actually worked in the week in which the overtime work was done.

Explanation.-For the purposes of this sub-section in computing the earnings for the days on which the workers actually worked, the allowance include the cash equivalent in order to buy food grains and other articles through concessional sale as the worker is for the time being entitled to.Exception.-But any bonus or wages for overtime work payable in relation to the. period with reference. to which the earnings are being computed shall not be included.-Sec. 59(3).[Clauses (2) and (3) were substituted from the old Act by the Amendment of 1976]. '.(4 )The cash equivalent of the advantage accruing through the concessional sale to a worker of foodgrains and other articles shall be computed as often as may be prescribed on the basis of the maxi mum quantity of foodgrains and other articles admissible to a standard family.

Explanation 1.-"Standard family" means a family consisting of the worker, his or her spouse and two children below the age of fourteen years requiring in all three adult consumption units.

Explanation 2.- "Adult consumption unit" means the consumption unit of a male above the age of fourteen years; and the consumption unit of a female above the age of fourteen years and that or a child below the age of fourteen years shall be calculated at the rates of 0.8 and 0.6 respectively of one adult consumption unit. Sec. 59(4).(5) The State Government may make rules prescribing(a) the manner in which the cash equivalent of the advantage accruing through the concessional sale to a worker of food grains and other articles shall be computed; and

(b) the register~ that shall be maintained in a factory for the purpose of securing compliance with the provisions of this section.-Sec. 59(5).

WAGES AND SALARYBoth these terms are used to denote payment made for service. In Stroud's ludicial Dictionary, the following comments are made; "Where the engagement is for a period, is permanent or substantially permanent in character, and is for other than. manual or relative unskilled labour, the remuneration is generally called a salary." "... in general, the. word 'salary' 'is used for payment of services of a higher class,and 'wages' is confined to the earnings of labourers and


artisans.The High Court of Madras was of opinion that if the remuneration is to be paid daily or weekly it can be called Wages; but where there is monthly payment and is fairly high, considering the general standard of payment, it is to be called Salary. According to the Payment of Wages Act any amount over Rs. 200 (now Rs. 1000) may be considered as Salary for the purposes of Factories Act. Re Gemini Studio.1 (See ch. 7).

"Conceptually there is no difference between salary -and wages both being a recompense for work done or services rendered, though ordinarily the former expression is used in connection with services of non-manual type while the latter is used in connection with manual services." Gestetner Duplicators Pvt Ltd. v. The Commissioner of Income Tax W B . In this judgment the following cases were cited and approved, MohmeddIli v. Union of India; Gordon v. Jennings.

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

OBLIGATIONS OF WORKERS

Section 111 lays down that no worker in a factory

(a) shall wilfully interfere with or misuse any appliance, convenience or other things provided in a factory for the purpose of securing the health, safety or welfare of the workers therein,(b) shall wilfully and without reasonable cause do anything likely to endanger himself or others; (c) shall wilfully neglect to make use of any appliance or other thing provided in the factory for the purposes of securing the health or safety of the workers therein.

If any worker contravenes any of the previsions of this section or of any rule or order made there under he shall be punishable with imprisonment which may extend to 3 mcnths or with fine which may extend to Rs. 100 or 'with both.

OTHER PROVISIONS OF THE FACTORIES ACT

A brief summary is given below of the other provisions of the Factories Act.Departments as Factories. The State Government may, upon application, declare that for the purposes of the Act, different departments or branches of a factory shall be treated as separate factories or that two or more factories of the occupier shall be treated as the same factory.Sec. 4. Exemption during Public Emergency. Factories or any class of factories may be exempted from the operation of any of the provisions of the Act during a public emergency (except that of Sec. 67, employment of children) for such periods and subject to such conditions as the Government may think fit. The exemption is to. be made by notification in the official Gazette for a period not exceeding three months at a time.-Sec. 5.Explanation.-For the purposes of this section ~'public emergency'" means a grave emergency whereby the security of India or of any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance.-Amendment of 1976.Exemption of Public Institutions. The State Government may exempt subject to such conditions as it may consider necessary, any workshop or workplace where a manufacturing process is carried on and which. is attached to a public institution maintained for the purposes of education, training, research or reformation from all or any of the provisions of the Act.. But no exemption is to be granted from the provisions relating to hours of work and holidays unless there is a scheme relating to such matters containing rules not less favourable to the workers than the provisions of the Act.-Sec. 86.

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


purpose of controlling and regulating factories which carry on manufacturing process or operation exposing workers to a serious risk of bodily injury, poisoning or disease. Sec. 87. Rules have be,en made providing for medical examination, protection of workers; restricting' and controlling the use of particular materials and processes ; payment of fees for medical examination by the occupier ; welfare amenities ; sanitary amenities ; measures to avoid imminent danger of poisons or toxicity.

Notifiable Accidents. (1) The manager of a factory must send a notice to the authorities whenever an accident occurs which causes death or which causes bodily injury preventing the worker from working for a Period of 48 or more hours or other types of injury which may be specified by rules.

(2) Where a notice given under sub-section (1) relates to an accident causing death, the authority to whom the notice is sent shall make an inquiry into the occurrence within one month of the receiptof the notice or, if such authority is not the Inspector, cause theInspector to make an inquiry within the said period. .

(3) The State Government may make rules for regulating the procedure at inquiries under this section.--Sec. 88.

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

Notice of certain dangerous occurrences. Where in a factory any dangerous occurrence of such nature as may be pr€scribed occurs, whether causing any -bodily injury or disability or not, the manager of the factory shall send notice thereof to such authorities, and in such form and within such time, as may be prescribed.--Sec. 88A, Factories (Amendment) Act, 1976.

Notifiable Diseases. The manager of a factory must send notice to the authorities _ whenever a worker contacts any -of the diseases mentioned in the Schedule to the Act. (These are known as Occupational Diseases. Examples: poisoning by lead, mercury, phosphorus etc.; anthrax; silicosis; cancer of the skin; toxic anaemia or jaundice; etc.). The medical practitioner attending the person, if any, shall without delay send a report to the Chief Inspector in writing, stating "the name of the person affected and other particulars.--Sec. 89.Enquiry into Accidents and Diseases. The State Government may appoint a competent person to enquire into the causes of any 'accident occurring in a factory or of a notifiable disease, and may also appoint one or more persons possessing legal or special knowledge to. act as assessors in such enquiry. The person appointed to enquire can call witnesses like a Civil Court and exercise any of the powers of an Inspector. He must submit a report to the State Government, together with his observations. The report or extracts therefrom may be published.-Sec. 90. Safety and Occupational Health Survey. The State Government or the Director General of Factory Advice Service and Labour Institutes etc., can employ the Chief Inspector and certain other persons to undertake safety and occupational health surveys. The occupier and manager and all other persons shall afford all facilities for such survey, including examination, testing of plant and machinery, collection of samples, other data, medical examination of persons calculation of wages and extra wages for overtime work.-Sec. 91A, added by The Factories (Amendment) Act, 1976.Penalties and Procedures. Sections 92 to 1.06 lay down the rules regarding penalties for offences against the Act.

Owner: The owner of any premises, let out for use as different factories, is responsible for the provision and maintenance of common facilities and 'Services, e.g., approach roads, drainage, water supply, latrines etc.


Occupier : In most cases the occupier of the factory is responsible for offences committed against the Act. But the occupier is exempted from liability if he can show that he has used due diligence to enforce the execution of the Act and that some other person committed the offence without his knowledge, consent or connivance.

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

Offences Imprisonment Fine Obstructing Inspector Up to 3 months and/or Up to Rs 500/-Wrongfully disclosing resultof analysis of sample --doContravention of any dutyor liability by a worker nil Rs 20/- Using false certificate offitness Up to 1 month. Rs 50/- Permitting double em -ployment of child nil -do-Cases not otherwise provided for .. Up to 3 months " " Rs. 2000Second offence for above" 6 months . " " Rs. 5000

Where contravention of any of the provisions of Chapter IV or any rule made thereunder or under Section 87 has resulted in an accident causing death or serious bodily injury, the fine shall not be less than one thousand rupees in the case of an accident causing death, and five hundred rupees in the case of an accident causing serious bodily injury.Explanation.-In this section and in section 94 "Serious bodily injury" means an injury which involves, or in all probability will involve, the permanent loss of the use of, or permanent injury to, any limb or the permanent loss of, or injury to sight or hearing, or the fracture of any bone, but shall not include, the fracture of bone or joint (not being fracture of more than one bone or joint) of any phalanges. of the hand or foot.-Sec. 92 added in the Amendment of 1976.

Cognizance: No court can take cognizance of an offence under the Act except on a complaint. by or with the previous sanction of an Inspector in writing. Only a Presidency Magistrate or a Magistrate of the first class can try offences under the Act. The. complaint must be filed within 3 months of the date when the commission of the offence came to the knowledge of an Inspector. For disobeying a written order of an Inspector, complaint may be filed within 6 months of the date when the offence was committed.Presumption: A person found in the factory when the factory . is going on or the machinery is in motion, except during the time of meal or rest, is presumed to be employed in the factory until the contrary is proved.

When in the opinion of the' Court a person is prima facie underage, the burden shall be on the accused to show that such person is not under-age.Appeals. The manager or the occupier of a factory on whom an order in writing has been served by an Inspector can appeal against it to the prescribed 'authority within thirty days.-Sec. 107.Notice. In certain cases (prescribed by the rules) abstracts of the Act and the rules are required to be displayed in the factory. All notices under the Act must be displayed in English and in a language understood by the majority of the workers employed therein. They must be displayed in a conspicuous and convenient place at or near the main entrance of the factory and must be maintained in a clean and legible condition. The Chief Inspector may require the


display of posters relating to the health, safety and welfare of workers. -Sec. 108.Returns. The owners, managers and occupiers of factories are required by rules to submit various returns and reports.-Sec. 110.Power of the Central Government. The Central Government may' give directions to a State Government as to the carrying into execution of the provisions of the Act.-Sec. 113.

Abolition of Contract Labour. The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in the Contract Labour (Regulation and Abolition) Act, 1970.Sec. 119, added by the Factories (Amendment) Act, 1976.


THE TRADE UNIONS ACT, 1926CONTENTS

IntroductionSections

CHAPTER IPRELIMINARY

1. Short title, extent and commencement.

2. DefinitionsCHAPTER II

REGISTRATION OF TRADE UNIONS3. Appointment of Registrars4. Mode of registration5. Application for registration6. Provisions to be contained in the rules of a Trade Union7. Power to call for further particulars and to require alterations of names.8. Registration9. Certificate of registration10. Cancellation of registration11. Appeal12. Registered office13. Incorporation of registered Trade Union14. Certain Acts not to apply to registered Trade Unions

CHAPTER IIIRIGHTS AND LIABILITIES OF REGISTERED TRADE UNIONS

15. Objects on which general funds may be spent16. Constitution of a separate fund for political purposes.17. Criminal conspiracy in trade disputes18. Immunity from civil suit in certain cases19. Enforceability of agreements20. Right to inspect books of Trade Union21. Rights of minors to membership of Trade Unions2 I A. Disqualifications of office-bearers of Trade Unions22. Proportion of officers to be connected with the industry23. Change of name24. Amalgamation of Trade Unions.25. Notice of change of name or amalgamation.26. Effects of change of name and of amalgamation27. Dissolution28. Returns

CHAPTER IVREGULATIONS

29. Power to make regulations30. Publication of regulations

CHAPTER VPENALTIES AND PROCEDURE

31. Failure to submit returns


32. Supplying false information regarding Trade Unions.33. Cognizance of offences

__________________________THE TRADE UNIONS ACT, 1926

INTRODUCTION

Trade Unionism has made its headway owing to growth of industrialization and capitalism. Trade Unionism asserts collectively the rights of the workers. In industrially advanced countries trade unionism has made a great impact on the social, political and economic life. India, being an agricultural country, trade unionism is restricted to industrial areas and it is still in a stage of growth. The earliest known trade unions in India were the Bombay Millhand’s Association formed in 1890, the Amalgamated Society of railway servants of India and Burma formed in 1897, Printers' Union formed in Calcutta in 1905, the Bombay Postal Union which was formed in 1907, the Kamgar Hitwardhak Sabha Bombay formed in 1910. Trade Union movement began in India after the end of First World War. After a decade following the end of First World War the pressing need for the coordination of the activities of the individual unions was recognised. Thus, the All India Trade Union Congress was formed in 1920 on a National Basis, the Central Labour Board, Bombay and the Bengal Trades Union Federation were formed in 1922. The All India Railwaymen's Federation was formed in the same year and this was followed by the cre-ation of both Provincial and Central federations of unions of postal and telegraph employees. The origin of the passing of a Trade Unions Act in India was the historic Buckingham Mill case of 1940 in which the Madras High Court granted an interim injunction against the Strike Com-mittee of the Madras Labour Union forbidding them to induce certain workers to break their con-tracts of employment by refusing to return to work. Trade Union leaders found that they were li-able to prosecution and imprisonment for bona fide union activities and it was felt that some leg-islation for the protection of trade union was necessary. In March, 1921, Shri N. M. Joshi, then General Secretary of the All India Trade Union Congress, successfully moved a resolution in the Central Legislative Assembly recommending that Government should introduce legislation for the registration and protection of trade unions. Opposition from employers to the adoption of such a measure was, however, so great that it was not untill 1926 that the Indian Trade Unions Act was passed. The Indian Trade Unions Bill, 1925 was introduced in the Central Legislative Assembly to provide for the registration of Trade Unions and in certain respects to define the law relating to registered Trade Unions in Provinces of India.

STATEMENT OF OBJECTS AND REASONS

This Bill has been prescribed in response to the following Resolution which was adopted by the Legislative Assembly on 1st March, 1924:

"This Assembly recommends to the Governor-General in Council that he should take steps to introduce, as soon as practicable, in the Indian Legislature, such legislation as may be necessary for the registration of Trade Unions."

The question was examined in detail by the Government of India and local Governments were consulted and public opinion was invited. In the light of opinions received a draft Bill was prepared and published in September, 1924. The Government of India, after considering the criticisms received on that Bill, see no ground for modifying the general principles underlying


the Bill, and except for minor alterations, the present Bill is a reproduction of the Bill previously published.

The general scheme of the Bill is that a Trade Union making the necessary application will, on compliance with certain stated conditions designed to ensure that the Union is a bona fide Trade Union, and that adequate safeguards are provided for the rights of its members, be entitled to registration. The Union and its members will thereupon receive protection in certain cases in respect of both civil and criminal liability. No restriction is placed upon the objects which a registered Trade Union may pursue, but the expenditure of its funds must be limited to specified Trade Union purposes. The legal position of Trade Unions which do not register will be unaffected by the Bill.

ACT 16 OF 1926

The Indian Trade Unions Bill, 1925 having been passed by the Legislature received its assent on 25th March, 1926. It came into force on 1st June, 1927 as the Indian Trade Unions Act, 1926 (16 of 1926). By section 3 of the Indian Trade Unions (Amendment) Act, 1964 (38 of 1964) the word "Indian" has been omitted and now it is known as THE TRADE UNIONS ACT, 1926 (16 of 1926).

LIST OF AMENDING ACTS AND ADAPTATION ORDERS

1. The Indian Trade Unions (Amendment) Act, 1928 (15 of 1928).2. The Government of India (Adaptation of Indian Laws) Order, 1937.3. The Repealing and Amending Act, 1942 (25 of 1942).4. The Indian Independence (Adaptation of Central Acts and Ordinances) Order, 1948.5. The Adaptation of Laws Order, 1950.6. The Part B States (Laws) Act, 1951 (3 of 195I).7. The Indian Trade Unions (Amendment) Act, 1960 (42 of 1960).8. The Indian Trade Unions (Amendment) Act, 1964 (38 of 1964).9. The Central Labour Laws (Extension to Jammu and Kashmir) Act, 1970.


THE TRADE UNIONS ACT, 1926

(16 of 1926)1

[25th March, 1926]

An Act to provide .for the registration of Trade Unions and in certain respects to define the law relating to registered Trade Unions 2[***]

WHEREAS it is expedient to provide for the registration of Trade Unions and in certain respects to define the law relating to registered Trade Unions 2[***].

It is hereby enacted as follows:-

CHAPTER 1PRELIMINARY

1. Short title, extent and commencement :-(1) This Act may be called the 3[***] Trade Unions Act, 1926.4[(2) It extends to the whole of India 5[***].(3) It shall come into force on such date6 as the Central Government may, by notification in the Official Gazette, appoint.

2. Definitions.-In this Act 7["the appropriate Government" means, in relation to Trade Unions whose objects are not confined to one State, the Central Government, and in relation to other Trade Unions, the State Government, and], unless there is anything repugnant in the subject or context,-

(a) "Executive’ means the body, by whatever name called, to which the management of the affairs of a Trade Union is entrusted;(b) "8[office-bearer]" in the case of a Trade Union, includes any member of the executive thereof, but does not include an auditor;(c) "prescribed" means prescribed by regulations made under this Act;(d) "registered office" means that office of a Trade Union which is registered under this Act as the head office thereof;(e) "registered Trade Union" means a Trade Union registered under this Act;9[(f) "Registrar" means-

(i) a Registrar of Trade Unions appointed by the appropriate Government under section 3, and includes any Additional or Deputy Registrar of Trade Unions, and(ii) in relation to any Trade Union, the Registrar appointed for the State in which the head or registered office, as the case may be, of the Trade Union is situated;](g) "trade dispute" means any dispute between employers and workmen or between workmen and workmen, or between employers and employers which is connected with the employment or non-employment, or the terms of employment or the conditions of labour, of any person, and "workmen" means all persons employed in trade or industry whether or not in the employment of the employer with whom the trade dispute arises; and(h) "Trade Union" means any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen, or between employers and employers, or for imposing restrictive


conditions on the conduct of any trade or business, and includes any federation of two or more TradeUnions:Provided that this Act shall not affect-(i) any agreement between partners as to their own business;(ii) any agreement between an employer and those employed by him as to such employment; or(iii) any agreement in consideration of the sale of the goodwill of a business or of instruction in any profession, trade or handicraft.

CHAPTER IIREGISTRA TION OF TRADE UNIONS

3. Appointment of Registrars.-1[(1)] 2[The appropriate Government] shall appoint a person to be the Registrar of Trade Unions for 3[each state].4[(2) The appropriate Government may appoint as many Additional and Deputy Registrars of Trade Unions as it thinks fit for the purpose of exercising and discharging, under the superintendence and direction of the Registrar, such powers and functions of the Registrar under this Act as it may, by order, specify and define the local limits within which any such Additional or Deputy Registrar shall exercise and discharge the powers and functions so specified.(3) Subject to the provisions of any order under sub-section (2), where an Additional or Deputy Registrar exercises and discharges the powers and functions of a Registrar in an area within which the registered office of a Trade Union is situated, the Additional or Deputy Registrar shall be deemed to be the Registrar in relation to the Trade Union for the purposes of this Act.]

4. Mode of registration.-1[(1) Any seven or more members of a Trade Union may, by subscribing their names to the rules of the Trade Union and by otherwise complying with the provisions of this Act with respect to registration, apply for registration of the Trade Union under this Act.2[(2) Where an application has been made under sub-section (1) for the registration of a Trade Union, such application shall not be deemed to have become invalid merely by reason of the tact that, at any time after the date of the application, but before the registration of the Trade Union, some of the applicants, but not exceeding half of the total number of persons who made the application, have ceased to be members of the Trade Union or have given notice in writing to the Registrar dissociating themselves from the application.]

5. Application for registration.-(1) Every application for registration of a Trade Union shall be made to the Registrar and shall be accompanied by a copy of the rules of the Trade Union and a statement of the following particulars, namely:-

(a) the names, occupations and address of the members making application;(b) the name of the Trade Union and the address of its head office; and(c) the titles, names, ages, addresses and occupations of the 3[office-bearers] of the Trade Union.

(2) Where a Trade Union has been in existence for more than one year before the making of an application for its registration, there shall be delivered to the Registrar, together with the application, a general statement of the assets and liabilities of the Trade Union prepared in such form and containing such particulars as may be prescribed.

6. Provisions to be contained in the rules of a Trade Union .-A Trade Union shall not be entitled to registration under this Act, unless the executive thereof is constituted in accordance


with the provisions of this Act, and the rules thereof provide for the following matters, namely:-

(a) the name of the Trade Union;(b) the whole of the objects for which the Trade Union has been established;

(c) the whole of the purposes for which the general funds of the Trade Union shall be applicable, all of which purposes shall be purposes to which such funds are lawfully applicable under this Act;

(d) the maintenance of a list of the members of the Trade Union and adequate facilities for the inspection thereof by the 1[office-bearers] and members of Trade Union;(e) the admission of ordinary members who shall be persons actually engaged or employed in an industry with which the Trade Union is connected, and also the admission of the number of honorary or temporary members as 1[office-bearers] required under section 22 to form the executive of the Trade Union;2[(ee) the payment of a subscription by members of the Trade Union which shall be not less than twenty-five naye paise per month per member;](f) the conditions under which any member shall be entitled to any benefit assured by the rules and under which any fine or forfeiture may be imposed on the members:(g) the manner in which the rules shall be amended, varied or rescinded;(h) the manner in which the members of the executive and the other 1[office-bearers] of the Trade union shall be appointed and removed;(i) the safe custody of the funds of the Trade Union, an annual audit, in such manner as may be prescribed, of the accounts thereof, and adequate facilities for the inspection of the account books by the 1[office-bearers ] and members of the Trade Union; and(j) the manner in which the Trade Union may be dissolved.

7. Power to call for further particulars and to require alterations of names.-(1) The Registrar may call for further information for the purpose of satisfying himself that any application complies with the provisions of section 5, or that the Trade Union is entitled to registration under section 6, and may refuse to register the Trade Union until such information is supplied.(2) If the name under which a Trade Union is proposed to be registered is identical with that by which any other existing Trade Union has been registered or, in the opinion of the Registrar, so nearly resembles such name as to be likely to deceive the public or the members of either Trade Union, the Registrar shall require the persons applying for registration to alter the name of the Trade Union stated in the application, and shall refuse to register tile Union until such alteration has been made.

8. Registration.- The Registrar, on being satisfied that the Trade Union has complied with all the requirements of this Act in regard to registration, shall register the Trade Union by entering in a register, to be maintained in such form as may be prescribed the particulars relating to the Trade Union contained in the statement accompanying the application for registration.

9. Certificate of registration.-The Registrar, on registering a Trade Union under section 8, shall issue a cel1ificate of registration in the prescribed form which shall be conclusive evidence that the Trade Union has been duly registered under this Act.

10. Cancellation of registration.-A certificate of registration of a Trade Union may be withdrawn or cancelled by the Registrar-


(a) on the application of the Trade Union to be verified in such manner as may be prescribed;(b) if the Registrar; is satisfied that the certificate has been obtained by fraud or mistake or that the Trade Union has ceased to exist or has wilfully and after notice from the Registrar contravened any provision of this Act or allowed any rule to continue in force which is inconsistent with any such provision or has rescinded any rule providing for any matter provision for which is required by section 6:

Provided that not less than two months previous notice in writing specifying the ground on which it is proposed to withdraw or cancel the certificate shall be given by the Registrar to the Trade Union before the certificate is withdrawn or cancelled otherwise than on the application of the Trade Union.

1[11. Appeal. -(1) Any person aggrieved by any refusal of the Registrar to register a Trade Union or by the withdrawal or cancellation of a certificate of registration may, within such period as may be prescribed, appeal-(a) where the head office of the Trade Union is situated within the limits of a Presidency town 2[***} to the High Court, or(b) where the head office is situated in any area, to such Court, not inferior to the Court of an additional or assistant Judge of a principal Civil Court of original jurisdiction as the 3[Appropriate Government] may appoint in this behalf for that area.(2) The appellate court may dismiss the appeal, or pass an order directing the Registrar to register the Union and to issue a certificate of registration under the provisions of section 9 or setting aside the order or withdrawal or cancellation of the certificate, as the case may be, and the Registrar shall comply with such order.(3) For the purpose of an appeal under sub-section (1) an appellate court shall, so far as may be, follow the same procedure and have the same power as it follows and has when trying a suit under the Code of Civil Procedure, 1908 (5 of 1908), and may direct by whom the whole or any part of the costs of the appeal shall be paid, and such costs shall be recovered as if they had been awarded in a suit under the said Code.(4) In the event of the dismissal of an appeal by any court appointed under clause (b) of sub-section (1) the person aggrieved shall have a right of appeal to the High Court, and the High Court shall, for the purpose of such appeal, have all the powers of an appellate court under sub-sections (2) and (3), and the provisions of those sub-sections shall apply accordingly.)

12. Registered office.-AII communications and notices to a registered Trade Union may be addressed to its registered office. Notice of any change in the address of the head office shall be given within fourteen days of such change to the Registrar in writing and the changed address shall be recorded in the register referred to in section 8,

13. lncorporation of registered Trade Union.-Every registered Trade Union shall be a body corporate by the name under which it is registered, and shall have perpetual succession and a common seal with power to acquire and hold both movable and immovable property and to contract, and shall by the said name sue and be sued.

14. Certain Acts not to apply to registered Trade Unions.- The following Acts namely- .(a) The Societies Registration Act, 1860 (21 of 1860)(b) The Co-operative Societies Act, 1912 (2 of 1912)1[(C) The Companies Act. 1956 (1 of 1956))


shall not apply to any registered Trade Union, and the registration of any such Trade Union under any such Act shall be void.

CHAPTER IIIRIGHTS AND LIABILITIES OF REGISTERED TRADE UNIONS

15. Objects on which general funds may be spent.- The general funds of a registered Trade Union shall not be spent on any other objects than the following.-namely:--(a) the payment of salaries, allowances and expenses to 1[office-bearers] of the Trade Union;(b) the payment of expenses for the administration of the Trade Union, including audit of the accounts of the general funds of the Trade Union;(c) the prosecution or defence of any legal proceeding to which the Trade Union or any member thereof is a party, when such prosecution or defence is undertaken for the purpose of securing or protecting any rights of the Trade Union as such or any rights arising out of the relations of any member with his employer or with a person whom the member employ;(d) the conduct of trade disputes on behalf of the Trade Union or any member thereof;(e) the compensation of members for loss arising out of trade disputes;(f) allowances to members or their dependants on account of death, old age, sickness, accidents or unemployment of such members;(g) the issue of, or the undertaking of liability under, policies of assurance on the lives of members, or (under) policies insuring members against sickness, accident or unemployment;(h) the provision of education, social or religious benefits for members (including the payment of the expenses of funeral or religious ceremonies for deceased members) or for the dependants of members;(i) the upkeep of a periodical published mainly for the purpose of discussing questions affecting employers or workmen as such;j) the payment, in furtherance of any of the objects on which the general funds of the Trade Union may be spent, of contributions to any cause intended to benefit workmen in general provided that the expenditure in respect of such contributions in any financial year shall not at any time during thatyear be in excess of one-fourth of the combined total of the gross income which has up to that time accrued to the general funds of the Trade Union during that year and of the balance at the credit of those funds at the commencement of that year; and(k) subject to any conditions contained in the notification, any other object notified by the 2[appropriate Government] in the Official Gazette.16. Constitution of a separate fund for political purposes.-(1) A registered Trade Union may constitute a separate fund, from contributions separately levied for or made to that fund, from which payments may be made, for the promotion of the civic and political interests of its members, in furtherance of any of the objects specified in sub-section (2).(2) The objects referred to in sub-section (1) are:-(a) the payment of any expenses incurred, either directly or indirectly, by a candidate or prospective candidate for election as a member of any legislative body constituted under 3[***] 4[the Constitution] or of any local authority, before, during, or after the election in connection with his candidature or election; or

(b) the holding of any meeting or the distribution of any literature or documents in support of any such candidate or prospective candidate; or(c) the maintenance of any person who is a member of any legislative body constituted under


1(***] 2(the Constitution] or for any local authority; or(d) the registration of electors or the selection of a candidate for any legislative body constituted under 1(***] 2(the Constitution] or for any local authority; or(e) the holding of political meetings of any kind, or the distribution of political literature or political documents of any kind.3[(2A) In its application to the State of Jammu and Kashmir, references in sub-section (2) to any legislative body constituted under the Constitution shall be construed as including references to the Legislature of that State.](3) No member shall be compelled to contribute to the fund constituted under sub-section (1); and a member who does not contribute to the said fund shall not be excluded from any benefits of the Trade Union, or placed in any respect either directly or indirectly under any disability or at any disadvantage as compared with other members of the Trade Union (except in relation to the control or management of the said fund) by reason of his not contributing to the said fund; and contribution to the said fund shall not be made a condition for admission to the Trade Union.17. Criminal conspiracy in trade disputes.-No 4(office-bearer] or member of a Registered Trade Union shall be liable to punishment under sub-section (2) of section 120B of the Indian Penal Code, 1860 (45 of 1860) in respect of any agreement made between the members for the purpose of furthering any such object of the Trade Union as is specified in section 15, unless the agreement is an agreement to commit an offence.18. Immunity from civil suit in certain cases.-(I) No suit or other legal proceeding shall be maintainable in any Civil Court against any registered Trade Union or any 4[office-bearer] or member thereof in respect of any act done in contemplation or furtherance of a trade dispute to which a member of the Trade Union is a party on the ground only that such act induces some other person to break a contract of employment, or that it is in interference with the trade, business or employment ofsome other person or with the right of some other person to dispose of his capital or of his labour as he wills.(2) A registered Trade Union shall not be liable in any suit or other legal proceeding in any civil court in respect of any tortious act done in contemplation or furtherance of a trade dispute by an agent of the Trade Union if it is proved that such person acted without the knowledge of, or contrary to express instructions given by, the executive of the Trade Unions.19. Enforceability of agreements.-Notwithstanding anything contained in any other law for the time being in force, an agreement between the members of a registered Trade Union shall not be void or voidable merely by reason of the fact that any of the objects of the agreement are in restraint of trade:Provided that nothing in this section shall enable any Civil Court to entertain any legal proceeding instituted for the express purpose of enforcing or recovering damages for the breach of any agreement concerning the conditions on which any members of a Trade Union shall or shall not sell their goods transact business, work, employ or be employed.20. Right to inspect books of Trade Union.- The account books of a registered Trade Union and the list of members thereof shall be open to inspection by an 1[office- bearer] or member of the Trade Union at such times as may be provided for in the rules of the Trade Union.21. Rights of minors to membership of Trade Unions.-Any person who has attained the age of fifteen years may be a member of a registered Trade Union subject to any rules of the Trade Union to the contrary, and may, subject as aforesaid, enjoy all the rights of a member and execute all instruments and give all acquittances necessary to be executed or given under the rules:2[**']


3[21A. Disqualifications of office-bearers of Trade Unions.-(1) A person shall be disqualified for being chosen as, and for being member of the executive or any other office-bearer of a registered Trade Union if-(i) he has not attained the age of eighteen years;(ii) he has been convicted by a court in India of any offence involving moral turpitude and sentenced to imprisonment, unless a period of five years has elapsed since his release.(2) Any member of the executive or other office-bearer of a registered Trade Union who, before the commencement of the Indian Trade Unions (Amendment) Act, 1964, has been convicted of any offence involving moral turpitude and sentenced to imprisonment, shall on the date of such commencement cease to be such member or office-bearer unless a period of five years has elapsed since his release before that date.]1[(3) In its application to the State of Jammu and Kashmir, reference in sub-section (2) to the commencement of the Indian Trade Unions (Amendment) Act, 1964, shall be construed as reference to the commencement of this Act in the said State.]22. Proportion of officers to be connected with the industry.-No less than one-half of the total number of the 2[office-bearers] of every registered Trade Union shall be persons actually engaged or employed in an industry with which the Trade Unions connected:Provided that the 3[appropriate Government] may, by special or general order, declare that the provisions of this section shall not apply to any Trade Union or class of Trade Unions specified in the order.23. Change of name.-Any registered Trade Union may, with the consent of not less than two thirds of the total number of its members and subject to the provisions of section 25, change its name.24. Amalgamation of Trade Unions.-Any two or more registered Trade Unions may become amalgamated together as one Trade Union with or without dissolution or division of the funds of such Trade Unions or either or any of them, provided that the votes of at least cine-half of the members of each or every such Trade Union entitled to vote are recorded, and that at least sixty per cent of the votes recorded are in favour of the proposal.25. Notice of change of name or amalgamation.-(1) Notice in writing of every change of name and of every amalgamation signed, in the case of a change of name, by the Secretary and by seven members of the Trade Union changing its name, and in the case of an amalgamation, by the Secretary and by seven members of each and every Trade Union which is a party thereto, shall be sent to the Registrar and where the head office of the amalgamated Trade Union is situated in a different State, to the Registrar of such State.(2) If the proposed name is identical with that by which any other existing Trade Union has been registered or, in the opinion of the Registrar, so nearly resembles such name as to be likely to deceive the public or the members of either Trade Union, the Registrar shall refuse to register the change of name.(3) Save as provided in sub-section (2), the Registrar shall, if he is satisfied that the provisions of this Act in respect of change of name have been complied with, register the change of name in the register referred to in section 8, and the change of name shall have effect from the date of such registration.(4) The registrar of the State in which the head office of the amalgamated Trade Union is situated shall, if he is satisfied that the provisions of this Act in respect of amalgamation have been complied with and that the Trade Union formed thereby is entitled to registration under section 6, register the Trade Union in the manner provided in section 8, and the amalgamation shall have effect from the date of such registration.


26. Effects of change of name and of amalgamation.-(1) The change in the name of a registered Trade Union shall not affect any rights or obligations of the Trade Union or render detective any legal proceeding by or against the Trade Union, and any legal proceeding which might have been continued or commenced by or against it by its former name may be continued or commenced by or against it by its new name.(2) An amalgamation of two or more registered Trade Unions shall not prejudice any right of any of such Trade Unions or any right of a creditor of any of them. 27. Dissolution.-(1) When a registered Trade Union is dissolved, notice of the dissolution signed by seven members and by the Secretary of the Trade Union shall, within fourteen days of the dissolution be sent to the Registrar, and shall be registered by him if he is satisfied that the dissolution has been effected in accordance with the rules of the Trade Union, and the dissolution shall have effect from the date of such registration.(2) Where the dissolution of a registered Trade Union has been registered and the rules of the Trade Union do not provide for the distribution of funds of the Trade Union on dissolution, the Registrar shall divide the funds amongst the members in such manner as may be prescribed.28. Returns.-(1) There shall be sent 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 Trade Union during the year ending on the 31st day of 1[December] next preceding such prescribed date, and of the assets and liabilities of the Trade Union existing on such 31st day of 1[December]. The statement shall be prepared in such form and shall comprise such particulars as may be prescribed.(2) Together with the general statement there shall be sent to the Registrar a statement showing changes of 2[office-bearers] made by the Trade Union during the year to which the general statement refers together also with a copy of the rules of the Trade Union corrected upto the date of the despatch thereof to the Registrar.(3) A copy of every alteration made in the rules of a registered Trade Union shall be sent to the Registrar within fifteen days of the making of the alteration.1[(4) For the purpose of examining the documents referred to in sub-sections (1), (2) and (3), the Registrar, or any officer authorised by him by general or special order, may at all reasonable times inspect the certificate of registration, account books, registers, and other documents, relating to a Trade Union, at its registered office or may require their production at such place as he may specify in this behalf, but no such place shall be at a distance of more than ten miles from the registered office of a Trade Union.]

CHA PTER IV - REGULATIONS29. Power to make regulations.-(1) 2[***] The 3[appropriate Government] may make regulations for the purpose of carrying into effect the provisions of this Act.(2) In particular and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters namely:-(a) the manner in which Trade Unions and the rules of Trade Unions shall be registered and the fees payable on registration;(b) the transfer of registration in the case of any registered Trade Union which has changed its head office from one State to another;(c) the manner in which, and the qualifications by whom, the accounts of registered Trade Unions or of any class of such Unions shall be audited;(d) the conditions subject to which inspection of documents kept by Registrars shall be allowed and the fees which shall be chargeable in respect of such inspections; and


(e) any matter which is to be or may be prescribed.

30. Publication of regulations.-(1) The power to make regulations conferred by section 29 is subject to the condition of the regulations being made after previous publication.(2) The date to be specified in accordance with clause (3) of section 23 of the General Clauses Act, 1897 (10 of 1897), as that after which a draft of regulations proposed to be made will be taken into consideration shall not be less than three months from the date on which the draft of the proposed regulations was published for general information.(3) Regulations as made shall be published in the Official Gazette, and on such publication shall have effect as if enacted in this Act.

CHAPTER VPENAL TIES AND PROCEDURE

31. Failure to submit returns.-(1) If default is made on the part of any registered Trade Union ill giving any notice or sending any statement or other document as required by or under any provision of this Act, every 1[office-bearer] or other person bound by the rules of the Trade Union to give or send the same, or, if there is no such officer or person, every member of the executive of the Trade Union, shall be punishable with fine which may extend to five rupees and, in the case of a continuing default, with an additional fine which may extend to five rupees for each week after the first during which the default continues:Provided that the aggregate fine shall not exceed fifty rupees.(2) Any person who wilfully makes, or causes to be made, any false entry in, or any omission from, the general statement required by section 28 or in or from any copy of rules or of alterations of rules sent to the Registrar under that section, shall be punishable with fine which may extend to five hundred rupees.32. Supplying false information regarding Trade Unions.-Any person who, with intent to deceive, gives to any member of a registered Trade Union or to any person intending or applying to become a member of such Trade Union any document purporting to be a copy of the rules of the Trade Union or of any alterations to the same which he /knows, or has reason to believe, is not a correct copy of such rules or alterations as are for the time being in force, or any person who, with the like intent, gives a copy of any rules of an unregistered Trade Union to any person on the pretence that such rules are the rules of a registered Trade Union, shall be punishable with fine which may extend to two hundred rupees.

33. Cognizance of offences.-(1) No court inferior to that of a Presidency Magistrate or a Magistrate of the first class shall try any offence under this Act.(2) No court shall take cognizance of any offence under this Act, unless complaint thereof has been made by, or with the previous sanction of, the Registrar or, in the case of an offence under section 32, by the person to whom the copy was given, within six months of the date on which the offence is alleged to have been committed.


The Payment of Wages Act, 1936

IntroductionPrior to 1936, there was no law regarding the regulation of payment to workmen. It was as early as 1925 that a Private Bill called the "Weekly Payment Bill" was for the first time introduced in the Legislative Assembly. The Bill was, however withdrawn on an assurance from the Government that the matter was under active consideration of the Government ar that time. This was an attempt to remedy some of the evils like delay in payment of wages, non-payment of wages, deductions made from wages on account of fines imposed by the employer. etc.During that period the Royal Commission on Labour in India draw attention to the abuses in the system of wage payment, and made valuable recommendation as under:

1. Children should be exempted from fines imposed by the employer.2. The minimum amount which could be deducted by way of fine should not exceed, in any month, half an anna in the rupee of the worker's earnings.3. The sum realised as fine should be utilised for some purpose beneficial to the employees as a class and should be approved by some recognised authority.4. A notice specifying the acts and omissions in respect of which fines. may be imposed should be posted and any other fine should deemed to be illegal.5. Any deduction made for goods having been damaged should not exceed the wholesale price of the goods damaged.6. Deductions may be made on account of provision for housing accommodation and of tools and raw materials.7. Imposition of any fine and deduction made which is not permitted by law should be made penal.

Based on these recommendations of Royal Commission on labour in India, a Bill of Payment of Wages Act was introduced in the Legislative Assembly in 1933. It was passed in 1936 and came into force on 21 st March 1936. The Payment of Wages Act was amended in the year 1937,1957,1964 and in 1976 according to the needs of the situation prevailing at that time. The Payment of Wages (Amendment) Act, 1976 extends the Act to the whole of India.

Object:

The object of the Act as specified in the preamble is "to regulate the payment of wages to certain classes of employed persons". The he regulation contemplated by the Act is two fold; (i) the date of payment of wages, and (ii) the deductions from wages, as fine or otherwise. In order to ensure payment of wages to persons covered by the Act, certain provisions have been made in this Act. The Bombay High Court in Arvind Mills Ud v. K.R. Gadgil (AIR 1941 Bom. 26) observed that "the general purpose of the Act is to provide that employed persons shall be paid wages in a particular form and at regular intervals without any unauthorised deductions". The use of expression "Certain classes of persons" in the preamble applies to persons drawing on an average wages less than rupees one thousand six hundred per a month [Sec. 1 (6) of the Act].This Act applies to the payment of wages to persons employed in any factory and to persons employed (otherwise than in a factory) on any railway by a railway administration or either directly or through a subcontractor, by a person' fulfilling a contract with a railway administration to coal-mines and plantations. as well as to establishments in which work relating to the construction, development or maintenance of buildings, roads, bridges, canals, or


relating to operations connected with navigation, irrigation or the supply of water, or relating to generation, transmission and distribution of electricity or any other form of power is carried on. The State Governments are, however, authorised to extend all or any of the provisions of the Act to any industrial establishment. But it cannot do so in relation to any industrial establishment owned by the Central Government with objects not confined to one State, without consulting the Central Government.

Definitions (See. 2)

For the purpose of this Act (a) industrial establishment means any tramway or motor omnibus service; air transport

service; dock, wharf or jetty, inland vessel mechanically propelled; mine, quarry or oilfield; plantation; workshop or other establishment in which articles are produced, adapted or manufactured with a view to there use, transport or sale; establishment in which any work relating to the construction, development or maintenance of buildings, roads, bridges or canals, or relating to operations connected with navigation, irrigation or the supply of water, or relatirigg to the generation, transmission and distribution of electricity or any other form of power is being arried on;

(b) wages means all remuneration's (whether by way of salary, allowance or otherwise) expressed in terms of money or capable of being so expressed whichwould, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and include

any remuneration payable under any. award or settlement between the parties or order of a Court;

any remuneration to which the person employed is entitled in respect of overtime work or holidays or any leave period;

any additional remuneration payable under the terms of employment (whether called a bonus or by any other name);

any sum by reason of the termination of employment of the person employed is payable under"any law. contract or instrument which provides for the payment of such sum, whether with or without deductions, but does not provide for the time within which the payment is to be made; (e) any sum to which the person employed is entitled under any scheme framed under any law for the time being in force; but does not include

any bonus (whether under a scheme of profit sharing or otherwise) which does not form part of the remuneration payable under terms of employment or which is not payable under any award or settlement between the parties or order of a Court;

the value of any house accommodation, or of the supply of light, water, medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the state Government;

any contribution paid by the employer to any pension or provident fund,and the interest which may have accrued thereon;

any travelling allowance or the value of any travelling concession; any sum paid to the employed person to defray special expenses entailed on him by the

nature of his employment; or any gratuity payable on the determination of employment in cases other than those

specified in sub-clause (d).


Responsibility for payment of wages (Sec. 3)

The responsibility for payment of wages to workmen is primarily that of the employer. In the case of factories, the manager; in industrial establishments, the person responsible to employer for supervisor. and control of the establishment; and upon railways, the person nominated by the railway administration on this behalf for the local area, shall be responsible for such payment. In respect of contractors, the intention of the Act is that the contractor should be responsible for payment where he undertakes actual work for the principal employer, and is in charge of the labour and that the principal employer or his manager shall be responsible where the contractor merely contracts for the supply of labour to the employer.

Wage-periods (Sec. 4)

Every person responsible for the payment of. wages must fix wage-periodsin respect of which wages shall be payable, and see that no wage-period exceeds one month in any case. The penalty for contravention of this provision is fine extending to Rs. 200.

Time of payment of wages (Sec. 5, 6)

In regard to the time of payment of wages the following rules must be observed:

1. In the case of undertakings employing less than one thousand persons wages must be paid before the expiry of the seventh (lay, and in other cases before the expiry of the tenth day, after the last day of the wage period in respect of which the wages are payable. In the case of persons employed on a dock, wharf or jetty or in mine, the balance of wages found due on completion of the final tonnage account of the ship or wagons loaded or unloaded, as the case m~y be, shall be paid before the expiry of the seveflih day from the day ot such completion

2. A discharged worker must be paid his wages before the expiry of the second' working day from the day on which his employment is terminated.

3. All payments of wages must be made on a working day (Sec. 5).Penalty for c. avention is fine tip to Rs. 500.

4. All wage, must be paid in current coin or currency notes or in both or with the written authorisation of the employed person, wages may be paid by cheque or by crediting the wages in his bank account (Sec. 6). Penalty for contravention is fine up to Rs. 200.

Deductions which may be made from wages (See. 7)

It is laid down in this Section that notwithstanding the-provisions of Sec. 47(2) of the Indian Railways Act, 1890, the wages of employed person shall be paid to him without deductions of any kind except those authorised by or under this Act. Sec. 47(2) of the Indian Railways Act provides for fine or forfeiture of one month's pay for breach of rules made under that Section. According to Sec. 7 of the present Act, no such deduction can be -.Trade in respect of any railway worker whose monthly wages do not amount to Rs. 1600 or more.Every payment made by the. employed person to the employer or his agent shall be deemed to be a deduction from wages.Any loss of wages resulting from the imposition, for good and sufficient cause, upon a person employed of any of the following penalties, namely(i) the withholding of increment or promotion (including the stoppage of increment of an efficiency bar) ;


(ii) the reduction to a lower post or time-scale or to a lower stage in a time-scale; or

(iii) suspension; shall not be deemed to be a deduction from wages in any case where the rules framed by the employer for the imposition of such penalty are in conformity with the requirements as specified by the State Government.

Deductions from the wages of an employed person shall be made only in accordance with the provisions of this Act, .and may be of the following kinds only: (1) fines; (2) for absence from duty; (3) for damages or loss; (4) for house accommodation; (5) for amenities and services; (6) on account of advances which the employer is compelled to make, including advances for travelling allowance or conveyance allowance, or for adjustment of over-payment of wages; (7) on account of payments to certain provident funds, to cooperative societies, or premium for life insurance; (8) for recovery of loans made from any fund constituted for the welfare of labour; for recovery of loans granted for house-building; (9) for income-tax payable by the employed person; (10) under an order of a Court; (11) for payment to cooperative societies; (12) made with the written authority of the worker in furtherance of any War Savings scheme approved by the State Government for the purchase of securities of the Government of India; (13) for payment of insurance premia; (14) for recovery of losses sustained by a railway administration on account of acceptance by the employed person of counterfeit or base coins, mutilated or forged currency notes; (15) other losses sustained by a railway administration through the negligence of an employed person.The total amount of deductions which may be made in any wage-period fromthe wages of any employed person shall not exceed

(i) in cases where such deductions are wholly or partly made k)r payment to cooperative societies, 75 per cent of such wages; and(ii) in any other case, 50 per cent of such wages.

Fines (Sec. 8).

The following rules apply to deductions by way of fines Fines can be imposed only for acts and omissions specified in notices approved by the

State Government, or the Chief Inspector of Factories. in the case of factories, or the Supervisor in other cases.

No fine can be imposed on any employed person unless he has been given an opportunity of showing cause against the fine.

No fine can be imposed any employed person who is under the age of 15 years. The total amount of fine which may be imposed in any wage-period on any employed

person must not exceed an amount equal to half-ananna in the rupee of the wages payable to him in respect of that wage period.

The fine shall be deemed to have been imposed on the day of the act or omission in respect of which it as imposed and cannot be recovered from the person by installments or after the expiry of 60 days front the day on which it was imposed.

All the lines so realised or realised must be recorded in a prescriber' register and must be credited to a fine fund. .

The proceeds of the fine fund must be utilised only for such purposes beneficial to the workers of the factory or the establishment as are approved by the prescribed authority. Penalty for contravention of any of these rules in fine tip to Rs. 500,


Deductions for absence from duty (See. 9)

Deductions for absence from duty are permitted but the amount of such deductions cannot exceed the sum v2hic- the person Would have been entitled to if he had worked the same number of days for which the deduction is made; provided that, subject to any rules made in, this behalf 'by the State Government, i1' ten or more employed persons acting in concert absent themselves, without due notice and without reasonable cause, such deduction from any such person may include such amount not exceeding his wages for 8 days as may by any such terms be due to the employer in lieu of the due notice. By an amending Act of 1937 employers are permitted to withhold wages in die case of "stay-in" strikes. Penalty for contravention is fine up to Rs. 500,

Deductions for damage or loss (See. 10)

Deduction for damage to or loss of good expressly entrusted to the employed person for custody, or for the loss of money for which he is required to account are permitted only where such damage or loss is directly attributable to his neglect or default and only after he has been given an opportunity of showing cause against the deduction. Such deductions arc not to exceed the amount of the damage or loss to the employer and must be recorded in a prescribed register. Penalty for contravention is fine tip to Rs. 500.

Deductions for services rendered (Sec. 11)Deductions for house accommodation and for amenities and services rendered by the employer are permitted, but only when a". employed person has accepted the house accommodation, amenity or service as a term of employment or otherwise, and shall not exceed an amount equivalent to their value. Furthermore, the deductions in respect of amenities and services can be made subject only to the following conditions:

1. The approval of the Chief Inspector of Factories shall be obtained in writing to compulsory or general deductions from waves for any amenities or services provided by the employer. .

2. The kind and standard of services and amenities provided shall be subject to the approval of the Chief Inspector of Factories.

3. The maximum deduction shall not exceed half the wages at my period. Penalty for the contravention of any provisions of this Section is 'me up to Rs. 500.

The house accommodation, for which deductions are now allowed, may be supplied by the employer or by Government or by any housing board set up under law, e.g., under the Subsidised Industrial Housing Scheme (whether the Government or the board is the employer or not) or any other authority engaged in the business of subsidising house-accommodation.Deductions for recovery of advances (Sec. 12)Deductions for recovery of advances or for adjustment of over-payments ofwages can be made only on the following conditions:

1. An advance of money made before employment must be recovered from the first payment of wages, but advances given for travelling expenses can in no case be recovered.

2. Advances of wages not already earned are subject to rules made by State Governments, which are as follows:


an advance of wages not already earned shall not, without the previous permission of an Inspector, exceed an amount equivalent to the wages earned by the employed person during the preceding two (Bombay four) calendar months, or if he has not been employed for that period, mice the wages he is likely to earn during he two (Mumbai four) subsequent calendar months;

the advance may be recovered in instalments by deductions from wages spread over not more than twelve (Bombay eighteen) months. No instalment shall exceed one-third, or where the wage., of any wage-period are not more than twenty rupees, one fourth of the wages for the wage-period in respect of which the deduction is made;

the amounts of all advances sanctioned and the payment thereof shall be enturd in a prescribed register;

(Bombay only) the rate of interest charged for advances granted shall not exceed 6 per cent per annum.Penalty for contravention is fine up to Rs. 500.

Other Deductions Permitted by the Act (Sees. 12-A an 13)

The Act also permits the following deductions from the wages of an employee:

1 . Deductions or Income-tax payable by (lie employed person;2. Deductions required to be made by order of a Court or other competent authority;3. Deductions for contribution to and repayment of advance from any recognised or approved fund;4. deductions, made with the written authorisation of the employee for payment of any premium oil his life insurance policy to the Life Insurance Corporation of India, or for tile purchase Of SeCUrilie5 of the Government of India or of any Smile Government or for being deposited in any Post Office Saving Bank in furtherance of any savings scheme of any such Government;5. deductions, made with tile written authorisation of the employed person, for contribution to [Prime Minister's National Relief Fund or to such other Fund as the Central Government may, by notification in tile Official Gazelle, specify. Penalty for contravention is fine up to Rs. 500.

Inspectors (Sec.14)

The administration and enforcement of the Act Is the responsibility of the State Inspectors of Factories in the case of factories within their local limit~, and that of the Chief Labour Commissioner (Central) in the case of persons employed on railway (other than in railway factories). The Inspector or tile Labour Commissioner may, at all 1 ea51 011aldC hours, Liner on any premises, and make such examination of register or document relating to the calculation and payment of wages, and take on the spot otherwise such evidence of any person, and exercise such other powers of inspection, as he may deem necessary for carrying out the purpose of this Act

Sec.14-A provides that every employer shall afford an Inspector all reasonable facilities for making an entry, inspection, supervision or inquiry under the Act.

Claims for wrongful deductions (See. 15)

The State Government may either appoint a Presiding Officer of any Labour Court or Industrial

Tribunal or a Commissioner for Workmen's Compensation or other Officer with judicial

experience (Civil Judge or Magistrate) to hear and decideall claims arising out of deductions from the wage" and delay in payment of wages,


Where any wrongful deductions have been made from file wages of a person, or any payment of wages has been delayed, such person himself, or my legal practitioner or any official of a registered trade union authorised in writing to act on his behalf, or any Inspector under this Act, or any other person acting with the permission or the authority may, within twelve months of the dale of deduction or the date on which tile payment of wages was due, apply to die authority for a direction. Ali application presented after the expiry of twelve months may he admitted by the authority for sufficient causeOn admitting the application, the authority will give an opportunity (0 the applicant and the employer or any person responsible for tile payment of wages to be heard, and on being satisfied, direct the employer or (lie other person to pay to the claimant the amount wrongfully withheld plus compensation tip to tell times that sum in the case of deduction, and not exceeding Rs. 25 per head in the case of delay. But the payment of compensation for delayed wages will net be ordered if the delay vas, due to

(a) bona fide error or bona fide dispute as; to the amount payable to theemployee; or

(b) the occurrence of an emergency or the existence of exceptional circumstances, such that the person responsible for the payment of the wages was unable, though exercising reasonable diligence, to makeprompt payment; or :

(c) the failure of die employed person to apply for or accept payment.An amount directed to be paid by the employer to the employed person maybe recovered as if it were a fine imposed by a magistrate.The authority may refuse to entertain the application, if after giving theapplicant an opportunity to be .heard, the authority is satisfied that

(a) the applicant is not entitled to present an application; or(b) the delay in payment of wages was excusable, as provided above; or (c) the applicant shows no sufficient cause for making a direction for

payment; or(d) the application is insufficiently stumped or is otherwise incomplete.

If the authority hearing the application is satisfied that it was either malicious or vexatious, the authority may direct the applicant to pay a penalty not exceeding Rs. 50 to the employer.Single application in respect of claims from unpaid group (Sec. 16)Employed persons are said to belong to the same unpaid group (as explaindin Sec. 26) if :(i) they are born on the same establishment,(ii) deductions have been made from their wages in contravention of the Act for the same cause and during the same wage period(s), or(iii) their wages for the same wage periods have remained unpaid after the day fixed by section 5.Sec. 16 1 (2) lays down that a single application may be presented under Sec. 15 on behalf or in respect of any number of employed persons belonging to the same unpaid group, and in such case ever person on whose behalf such application is presented may be awarded maximum compensation to the extent specified in Sec. 15(3) of the Act.Sec. 16(3) lays down that if several applications are pending, presented under Sec. 15 by employees belonging to the same unpaid group, the Authority can do with them as if it was a single application by an unpaid group.


Appeal (Sec. 17)

This section provides that an appeal may be preferred from the following

orders or directions of the Authority:(i) an order directing the employer or the persons responsible for payment

of wages. to refund the delayed wages;(ii) an order directing payment of compensation to the employee under

Sec. 5 (3)(iii) an order imposing penalty whether on the employee or the employer

under Sec. 5 (4)An appeal under this section can be made within 30 days of the date on which the order or direction was made in Presidency town before the Court of small causes and elsewhere before the District Court within whose jurisdiction the industrial establishment is situated.An appeal may be filed by the employer or other person responsible for thepayment of wages under Sec. 3, if: .

(i) the total sum directed to be paid by way of wages and compensationexceeds Rs. 300/- or(ii) such direction has the effect of imposing on the employer or the otherperson a financial liability exceeding Rs. 1000/-.

An appeal may be final by an employed person or any legal practitioner or any official of a registered Trade Union authorised in writing to act on his behalf or any inspector under this Act, or any other person permitted by ihe authority to make an application under Sec. 15(2); if th~ total amount of wages claimed to have been with held:(i) from employed person exceeds Rs. 20/-; or(ii) from the unpaid group to which the employed person belongs or belonged exceeds Rs. 50/An appeal may also be preferred by any person directed to pay a penaltyunder Sec. 15(4) of the Act.No appeal shall lie as aforesaid unless the memorandum of appeal is accompanied by a certificate by the authority to the effect that the appellant has deposited the amount payable under the direction appealed against.Section 17(2) lays down that any order dismissing either or wholly or in part on application made under Sec 15(2) or a direction made under Sec 15(3) or Sec 15(4) shall be final unless an appeal under Sec. 17(1) is preferred against any such order or direction. Sec. 17(3) provides that where an employer prefers an appealunder this section, the authority against whose decision the appeal is filed may, pending the decision of the appeal, with hold payment of any sum in deposit with it. Whese a direction to withhold payment such sum is made by the Court of Appeal, such authority shall, and in other cases, may withhold payment of any sum so deposited wi:h it.Sec. 17(4) provides that the Court of appeal may in its discretion, submit any question of law for the decision of the High Court. Where any such question in so referred, the Court of Appeal shall decide the matter in conformity with the decision of the High Court.Conditional attachment of property of employer or other person who is responsible for payment of wages (Sec. 17 A)

This section makes provisions for conditional attachment of so much of the property of the ernployer or orher person responsible tor payment of wages as is, in the opinion of the authority


or the Court, sufficient to satisfy the amount which may be payable under the direction. The conditional attachment may be made under the following circumstances.(a) When the application under Sec. 15(2) or appeal under Sec. 17 has been filed by the employed person or any official of a registered Trade Union authorised in writing to act on his behalf, or any legal practitioner. or any Inspector under Sec. 15 (2) of the Act. .(b) When the authority or the Court is satisfied that the employer or other person responsible for the payment of wages under Sec. 3 is likely to evade payment of any amount that may be directed to be paid under Sec. 15 or Sec. 17.(c) When the authority or the Court is of the opinion that the ends of justice would be defeated by the delay.However, under the circumstances mentioned above, an order of attachment passed for the payment of wages, the employer or the person responsible for payment shall be given an opportunity if being heard.

Power of authority appointed under Sec. 15 (Sec. 18)

Every Authority appointed under Sec. 15 of the Act shall have all the powers of a Civii Court under the Code of Civil Procedure, 1908 for the purpose of (a) taking evidence; (b) enforcing the attendance of witness; and (c) compelling the production of documents. Further, any such Authority s~all be deemed to be a Civil Court for all purposes of Sec. 195 of Code of Criminal Procedure, 1898.

MISCELLANEOUS PROVISIONS OF THE ACT

1. Maintenance of registers and records (Sec. 13-A)

Sec 13-A lays down that every employer shall maintain such registers and records in the prescribed manner containing the following particulars:

(i) particulars of person employed by him,(ii) the work performed by the persons employed,(iii) the wages paid to the persons employed,(iv) the deductions made from the wages of the persons employed,

. (v) receipts given by the persons employed; and,(vi) such other particulars, if any

Penalty for offences under the Act (Sec. 20)Any person responsible for contravention of the following provisions of the Act, for the payment of wages to an employed person, shall be punishable with fine extending to not less than Rs. 200- but to a maximum of Rs. 1000- :(a) failure to maintain such register or record; or(b) willful refusal or neglect without lawful cause to furnish such informatior or return; or(c) willfully furnishing or causing to be furnished any information or return which he knows to be false; or(d) refusal to answer or willfully giving a false answer to any question necessary for obtaining any information required to be furnished under this ActThe following offences shall be punishable with a minimum fine of Rs. 200/-but extend to Rs. 1000/- under Sec. 20(4) of the Act.

(a) wilfully obstructing an Inspector in the discharge of his duties under the Act; or(b) refusal or wilfully neglecting to afford an Inspector any reasonable facility for making any entry, inspection, examination, supervision or inquiry authorised by or under this Act in relation


to any railway, factory or industrial or other establishment or(c) wilful refusal to produce, on demand of an inspector, any register or other document kept in pursuance of this Act; or(d) preventing or attempting to prevent or doing anything which he has any reason to believe is likely to prevent any person from appearing before or being examined by an Inspector acting in pursuance of his duties under this Act.Section 20(5) lays down that if any person who has been convicted of any offence punishable under this Act, is again guilty of involving contravention of the same provision. He shall be punishable on subsequent conviction with imprisonmentfor a term which shall not be less than one month, but which may extend to sixmonths with fine, which shall not be less than Rs. 500/-, but may extend to Rs. 30001-. But for the purposes of this sub-section, no cognizance shall be taken of any conviction made than two years.According to Sec. 20(6); if any person fails or wilfully, neglects to pay the wages of any employed person by the date fixed by the authority in this behalf, he shall without prejudice to any other action that may be taken against him, be punishable with additional fine, which may extend to Rs. 100/- for each day for which such failure or neglect continues.

Procedure in trial of offences (Sec 21)

This section provides that before any Court shall take cognizance of a complaint against any person for an offence under this section, the following conditions must be fulfilled;(i) An application in respect of the facts constituting of offence has beenPresented under Sec. 15 ; (ii) the application must have been granted wholly or in part, and (iii) the authority empowered under Sec. 15 or the Appellate Court grantingthe application must have sanctioned the making of the complaint for such offence.Sec. 21 (2) provides furthers that before sanctioning the making of a complaint against any person for an offence, the authority empowered under Sec. 15 or the Appellate Court, as the case may be, shall give an opportunity to such person of showing cause against the granting of such sanction. The sanction shall not begranted if such person satisfied the authority or Court that his default was due to :

(a) a bona-fide error or bona-fide dispute as to the amount payable to theemployed person; or

(b) the occurrence of an emergency or the existence of exceptionalcircumstances; or

the failure of the employed person to apply for Or accept paymentSec 21 (3) provides that no Court shall take cognizance of a contravention of any rule

made under Sec 26, except on a complaint made by or with the sanction of an Inspector under Act.Sec 21 (4) provides that in imposing any fine for an offence under Sec. 20(1) the Court shall take into consideration the amount of any compensation already awarded against the accused in any proceedings taken under Sec. 15.

Bar for suit (Sec.22)

This section provides that a suit for the recovery of wages or of any wrongful deduction from wages shall not be entertained by any Court under the following circumstances.(a) The amount claimed forms the subject of an application under sec. 15 which has been


presented by the plaintiff and is pending before the authority appointed under this section or of an appeal under Sec 17; or(b) The amount claimed had formed the subject of a direction under Sec.15 in favour of the plaintiff; or(c) The amount claimed had been adjudged in any proceeding under Sec. 15 not to be owed to the palintiff; or(d) The amount claimed could have been recovered by an application under Sec. 15

Protection of action taken in good-faith (Sec.22-A)

A suit, prosecution, or the other legal proceeding shall not lie against the Government or any officer of the Government for any thing which is in good-faith done or intended to be done under this Act.

Contracting Out (Sec. 23)Any contract or agreement whether made before or after the commencement of this Act, whereby an employed person relinquishes any right conferred by this Act shall be null and void in so far as it purports to deprive him of such right. Sec 23 only prevents an employee from contracting away the rights which are given to him by the Act and that it does not prevent him from entering into an agreement advantageous or beneficial- to him. (Case: F.W. Heilgers Co. v. Nagesh Chandra Chakrawarti, AIR 1949, FC 142) In a decision of the Court (In Dinaram Chutiya v. Divisional Manager, AIR 1958), it was held that the mere deduction of serven1allowance either partial or whole cannot be said to contravene Sec. 23 of the Act. It was further observed in this case that a contract validly entered into between the employer and the employee by which the contract of service has been modified as regards the amount of wages is not hit by Sec. 23. This Act confers the following subject: (i) to receive wages; (ii) to receive them at the proper time specified in the Act; and (iii) to receive from without deduction.

The employer and the employees may, by mutual agreement, change the scale of wages, and such agreement does not amount to contracting out within the preview of Sec. 23 of the Act. It was held -that Sec 23 of the Payment of Wages Act does not prevent the employee from entering into an agreement advantageous or beneficial to him. Deduction from wages is for the betterment of employees.

Application of Act to railways, mines and oil fields (Sec. 24)The powers of this Act conferred upon the State Government shall, in relation to any oil fields, be power of the Central Government.

Display by notice of abstract of the Act (See 25)

The person responsible for the payment of wages to person employed in a factory or an industrial or other establishment shall be displayed a notice containing such abstracts of this Act and the rules made thereunder in English and in the language of the majority of the persons employed there, as may be prescribed.

Payment of undisbursed wages in cases of death of employed person (Sec. 25A)

Subject to the other provisions of the Act, all amounts payable to an employed person as wages shall be paid to (a) the person nominated by him in this behalf inaccordance with the rule made under the Act or (b) where no such nomination has been made or where for any reasons such amounts cannot be paid to the person so nominated be deposited with the prescribed authority who shall deal wit the


amounts so deposited in such manner as may be prescribed, so that the employer shall be discharged of his liability to pay those wages.

Rule-making power (Sec. 26)

The State Government may make the rules to regulate the procedure to beFollowed by the Authorities and Courts referred to in Sec. 15 and 17.The rules made under Sec. 26 of the Act may:(a) Require the maintenance of such registers, records, returns and notices,etc; .(b) Require the display in conspicuous place on premises where the employment is carried on;(c) Provides for the regular inspection of the weights, measures, etc.(d) Prescribe the authority competent to approve the omission in respect of which fines may be imposed.(e) Prescribe the procedure for the imposition of fines.(f) Prescribe the extent to which advances may be made and the installments’ by which they may be recovered; including the rate of interest payable the reon.(g) Prescribe the powers of inspectors.(h) Prescribe the amount of Court fees payable in respect of any proceedings under the Act.Every rule made by the Central Government under this section shall be laid before each House of Parliament.


MINIMUM WAGES ACT, 1948Introduction

In a labour surplus economy like India wages couldn’t be left to be determined entirely by forces of demand and supply as it would lead to the fixation of wages at a very low level resulting in exploitation of less privileged class. Keeping this in view, the Government of India enacted the Minimum Wages Act, 1948. The purpose of the Act is to provide that no employer shall pay to workers in certain categories of employments wages at a rate less than the minimum wage prescribed by notification under the Act. In fact the sole purpose of this act is to prevent exploitation of sweeted and unorganised labour, working in compititive market.

The Act provides for fixation / periodic revision of minimum wages in employments where the labour is vulnerable to exploitation. Under the Act, the appropriate Government, both Central and State can fix / revise the minimum wages in such scheduled employments falling in their respective jurisdiction.

The term ‘Minimum Wage Fixation’ implies the fixation of the rate or rates of minimum wages by a process or by invoking the authority of the State. Minimum wage consists of a basic wage and an allowance linked to the cost of living index and is to be paid in cash, though payment of wages fully in kind or partly in kind may be allowed in certain cases. The statutory minimum wages has the force of law and it becomes obligatory on the part of the employers not to pay below the prescribed minimum wage to its employees. The obligation of the employer to pay the said wage is absolute. The process helps the employees in getting fair and reasonable wages more particularly in the unorganised sector and eliminates exploitation of labour to a large extent. This ensures rapid growth and equitable distribution of the national income thereby ensuring sound development of the national economy.

It has been the constant endeavour of the Government to ensure minimum rates of wages to the workers in the sweated industries and which has been sought to be achieved through the fixation of minimum wages, which is to be the only solution to this problem.

II Concepts

II(a)Minimum Wage

The Act under section 2(h) defines wages, but does not define “minimum wages”. As it is not possible to bring down a uniform minimum wage for all the industries throughout the country.

Section 2(h)"wages" means all remuneration capable of being expressed in terms of money which would if the terms of the contract of employment express or implied were fulfilled be payable to a person employed in respect of his employment or of work done in such employment and includes house rent allowance but does not include - (i) the value of - (a) any house accommodation supply of light water medical attendance or (b) any other amenity or any service excluded by general or special order of the appropriate government; (ii) any contribution paid by the employer to any person fund or provident fund or under any scheme of social insurance; (iii) any traveling allowance or the value of any traveling concession; (iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or (v) any gratuity payable on discharge;


II(a)(i)Essential Ingredient

(ii) Wage should be by way of remuneration

(iii) It should be capable of being expressed in terms of money.

(iv) It should be payable to a person employed in respect of his employment or of work done in such employment.

(v)It should be payable to a workmen.

(vi) It should be payable if the terms of employment, express or implied, are fulfilled.

(vii) It includes house rent allowance.

(viii) It does not include house accommodation, supply of light, water, medical attendance, traveling allowance, contribution of employer towards provident fund, gratuity , any scheme of social insurance etc.

II (b) Classification of Wages

The Supreme Court has classified “Wages” into three categories. They are:

1. The Living Wage ( highest standard of wage)

2. The Fair Wage (between living and minimum wage)

3. The Minimum Wage.( it is the lowest standard of wage)

The living and fair wages are acquired by workers with their “collective bargaining”. When the workers have no unions and who have no capacity of collective bargain could not demand the employers for their just and genuine wage. The State come to rescue them through such legislations.

III Main provisions under the Act

1. Fixing of minimum rates of wages Section 3

1. The appropriate Government may fix the minimum rates of wages payable to employees employed in an employment specified in Part - I or Part - II of the Schedule and in an employment subsequently added to the Schedule. The Government may review the minimum rates of wages and revise the minimum rates at intervals not exceeding five years.

2. The appropriate Government may refrain from fixing minimum wages in respect of any scheduled employment in which there are in the whole State less than one thousand employees engaged in such employment.

3. The appropriate Government may fix separate minimum rates of wages for time rate and for piece rate. Different wage rates may be fixed for different scheduled employments, different classes of work in the same scheduled employment, for adults, adolescents, children and apprentices and for different localities and for any one or more of the wage periods, viz., by the hour or by the day or by the month or by such larger wage period as may be prescribed.

2. Minimum rate of wages (Section 4)

Any minimum rate of wages fixed or revised may consist of

a basic rate of wages and a special allowance ; or


a basic rate of wages with or without cost of living allowance and the cash value of concessions in respect of supplies of essential commodities at concessional rates; or

an all inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of concessions, if any.

3 Procedure for fixing and revising minimum wages (section 5)

The appropriate Government is required to appoint an Advisory Board for advising it, generally in the matter of fixing and revising minimum rates of wages.

The Central Government appoints a Central Advisory Board for the purpose of advising the Central and State Governments in the matters of the fixation and revision of minimum rates of wages as well as for co-ordinating the work of Advisory Boards.

The Central Advisory Board consists of persons to be nominated by the Central Government representing employers and employees in the scheduled employments, in equal number and independent persons not exceeding one third of its total number of members. One of such independent persons is to be appointed the Chairman of the Board by the Central Government.

4 Wages in kind (section 11)

Minimum wages payable under this Act are to be paid in cash. However, the payment of minimum wages can be made wholly or partly in kind, by notifying in the official Gazette, where it is customary to pay wages either wholly or partly in kind.

5 Payment of minimum rate of wages (Section 12)

The employer is required to pay to every employee, engaged in a scheduled employment under him, wages at a rate not less than the minimum rate of wages notified for that class of employees without any deduction except as may be authorised.( see the Payment of Wages Act 1936 (4 of 1936) for permissible deduction)

6. Fixing hours for normal working day (section 13)

In regard to any scheduled employment, minimum rates of wages in respect of which have been fixed under this Act, the appropriate Government may

fix the number of hours of work which shall constitute a normal working day, inclusive of one or more specified intervals;

provide for a day of rest in every period of seven days which shall be allowed to all employees or to any specified class of employees and for the payment of remuneration in respect of such days of rest;

provide for payment for work on a day of rest at a rate not less than the overtime rate.

7. Overtime (Section 14)

If any employee whose minimum rate of wages is fixed under the Act works on any day in excess of the number of hours constituting normal working day, the employer is required to pay him for excess hours at the overtime rate fixed under this Act or under any law of the appropriate Government for the time being in force, whichever is higher.

8. Wages for two or more classes of work (Section 16)

If an employee does two or more classes of work, to each of which a different rate of wages is applicable, the employer is required to pay to such employee in respect of the time respectively occupied in each such class of work, wages at not less than the minimum rate in force in respect


of each such class.

9. Maintenance of registers and records(Section 18)

Every employer is required to maintain registers and records giving particulars of employees, the work performed by them, the wages paid to them, the receipts given by them and any other required particulars.

10 Inspections(Section 19)

The appropriate Government may, by notification in the official Gazette, appoint inspectors for the purpose of this Act and define the local limits for their functions.

11. Claims (Section 20)

The appropriate Government may, by notification in the official Gazette, appoint Labour Commissioner or Commissioner for Workmen’s Compensation or any officer not below the rank of Labour Commissioner or any other officer with experience as a judge of a civil court or as a Stipendiary Magistrate, to hear and decide for any specified area, all claims arising out of the payment of less than the minimum rates of wages as well as payment for days of rest or for work done.

12. Penalties for Offences(Section 22)

Any employer who contravenes any provision of this Act shall be punishable with imprisonment for a term, which may extend to six months or with fine, which may extend to five hundred rupees or with both.

The Industrial Disputes Act, 1947


Preliminary:

The Industrial Disputes Act, 1947 extends to whole of India. It came into operation on the first day of April, 1947. This Act replaced the Trade Disputes Act of 1929. The Trade Disputes Act imposed certain restraints on the right of strike and lockout in Public Utility Services. But no provision was existing for the settlement of Industrial Disputes, either by reference to a Board of Conciliation or to a Court of Inquiry. In order to remove this deficiency, the Industrial Disputes Act, 1947 was passed.

Scope and Objects (Sec. 1) ,

The objects of the industrial relation's legislation in general are to maintain

industrial peace and, to achieve economic justice. . .

The prosperity of any industry very much depends upon its growing production. Production is possible when the industry functions smoothly without any disturbances. This means industrial peace through harmonious relationship between labour and management. Therefore every industrial relations legislatiqn necessarily aims at providing conditions congeniel to the industrial peace.

Economic justice is another objective of industrial legislation. Almost all industrial interuptions in production are due to industrial disputes. Dissatisfaction with the existing economic conditions is the root cause of industrial disputes. The labour demands for fair return is expressed in varied forms; e.g. increase in wages, resistance to decrease in wages and grant of allowance and benefits etc. If a labourer wants to achieve these gains individually, he fails because of his weaker bargaining power against the sound economic footing of the management. Therefore, the economic struggle of labour with capital can be fought collectivity by organised labours. It is with this object to provide economic justice by ensuring fair return to the labour, the State, being the custodian of public interest, intervenes by 'State legislation' Economic justice has also been ensured to the people of India by our Constitution.

Thus the main object of all labour legislation is to ensure fair wages and to prevent disputes so that the production might not be adversely affected2. The principal objects of Industrial Disputes Act as analyzed and interpreted by the Supreme Court are as follows.3

(1) The promotion of measures for securring and preserving amity and good relations between employers and workmen;

(2) Investigation and settlement of industrial dispute between employers and employers, employers and workmen, or between workmen and workmen with a right of representation by a registered Trade Union or . Federation of Trade Unions or Association of Employers or a Federation of Association of Employers.

(3) The prevention of illegal strikes and lock-outs;(4) Relief to workmen in the matter of lay-oft, retrenchment and closure of

an undertaking. .

(5) Collective bargaining.

Main Features or Characteristics of the Act::

Some of the important features of the Act may be summearised as below:

1. Any industrial dispute may be referred to an industrial tribinal by mutual consent of paries to dispute or by the State Government, if it deems expedient to do so.


2. An award shall be binding on both the parties to the dispute for the operated period, not exceeding one year;3. Strike and lockouts are prohibited during:(a) The pendency of conciliation and adjudication proceedings;(b) The pendency of settlements reached in the course of conciliation proceedings, and(c) The pendency of awards of Industrial Tribunal declared binding by the appropriate Government.4. In public interest or emergency, the appropriate Government has power to declare the transport (other than railways), coal, cotton textiles, food stuffs and iron and steel industries to be public utility services for the purpose of the Act, for a maximum period of six months.5. In case of lay-oft or retrenchment of workmen, the employer is requested to pay compensation to them. This provision stands in the case of transfer or closure of an undertaking.6. A number of authorities (Works Committees, Conciliation Officers, Board of conciliation, Courts of Inquiry, Labour Courts, Tribunal and National Tribunal) are provided for settlement of Industrial disputes. Although the nature of powers, functions and duties of these authorities differ from each other, everyone plays important role in ensuring industrial peace.

Definitions (Sec.2) :

(a) Appropriate Government: The Central Government as well as the State Government are vested with various powers and duties in relation to matters dealt with in this Act. In relation to some industrial disputes the Central Government and in relation to some others, the State Government concerned are the appropriate Government to deal with such disputes.Under sub-section [(i) (a)] and [(i)(b)] of the Act, Companies/Corporations/Trusts/Boards/ Authorities, etc. established under the Act of Parliament; the Central Government is the Appropriate Authority.In all other cases, the Appropriate Government is the State Government within whose territory the industrial dispute aries Sub-section (ii). (aa) Arbitrator - Arbitrator includes an umpire.(aaa) Average Pay - "Average Pay" means the average of the wages payable to a workmen, Average pay in the case of workmen means:(i) In the Case of monthly paid workman- The average of monthly wages payable in three complete calendar months.(ii) In the case of weekly paid workman - the average of the weekly wages payable in four complete weeks.(iii) In the case of daily paid workman - the average of the wages for twelve full working days.(b) Award - 'Award' means an interim or final determination of any' industrial dispute or of any question relating thereto. The determination must be made by any Labour Court, Industrial Tribunal or National Tribunal.Enforcement of an award - An award may be enforced in the following ways:(1) The aggrieved party may apply to Appropriate Government for prosecuting the defaulting party under Sec. 29 or 31 of this Act.(2) Where the work man 'is to claim money from the employer, the workman may move the Appropriate Government for recovery of the money due to him under the award.(3) The party in whose favour the award has been granted may file a suit and obtain a decree, which shall be enforced extension under provisions of the Civil Procedure Code.


Where the interim order did not determine any part of the industrial dispute orany other question relating there to, but only determined whether the Industrial Tribunal has been properly constituted to which the industrial dispute could be referred for adjudication, such order cannot be said to be an award as defined in Sec. 2(b)2(bb) Banking Company - 'Banking Company' means a banking company as defined in Sec.5 of the Banking Companies Act, 1949.(c) Board - 'Board' means a Board of Conciliation constituted under this Act.(cc) Closure - 'Closure' means the permanent closing down of a place of employment or part thereof

Penalty for closure (Sec. 25R)

1. Any employer who close down an undertaking without complying with the provisions of the Sub-Sec. (1) of Sec. 25-0 shall be punishable with imprisonment up to 6 months, or with fine up to Rs. 5,000 or with both.2. Any employer, who contravenes a direction given under Sub-sec. (2) of Sec. 25-0 or Sec. 25-P, shall be punishable with imprisonment up to one year, or with fine up to Rs. 2,000 for every day during which the contravention continues after the conviction.3. Any employer who contravenes the provisions of Sub Sec. 25-0 shall be punishable with imprisonment up to one month, or with fine up to Rs. 1000 or with both.(d) Conciliation Officer - 'Conciliation Officer' means a conciliation officer appointed

under the Act. .(e) Conciliation Proceeding - 'Conciliation Proceeding' means any proceeding held by a Conciliation Officer or Board under the Act.(ee) Controlled Industry - "Controlled Industry" means any industry the control of which, by the Union has been declared by any Central Act to the expedient in the public interest. That is, an industry which is controlled by the Central Government. But it must also be declared by the Central Act to be controlled by the Union.(f) Court - "Court" means a Court of Inquiry constituted under this Act. (g) (g) Employer - "Employer" means, in relation to industries carried on by or under the authority of (i) Central Government, (ii) State Government, or (iii) Local Authorities.(h) Executive - "Executive", in relation to a Trade Union means the body by whatever name called, to which by management of the affairs of the Trade Union is entrusted.(i) Independent - Means, for the purpose of appointment of a person as Chairman or other member of a Board, Court or Tribunal. In order that a person may be eligible for his appointment to these bodies, he must possess the following qualifications:(i) . He must be unconnected with industrial dispute in question, or(ii) He must be unconnected with any industry directly affected by such dispute.(j) Industry - Industry means any business, trade, undertaking, manufacture or any service, employment, handicraft or industrial occupation or vocation of workmen.In a Case In Banglore Water.Supply v. A Rajappa 1 a bench of the Supreme Court consisting of seven judges exclusively considered the scope of industry and laid down the following test which has practically reiterated as under:"Where there is (i) systematic activity, (ii) organised by co-operation between employer and employee, (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes, prima facie, these is an "Industry" in that enterprise." This is known as Triple Test.

The Following points were also emphasised in the said case:


(1) Industry does not include spiritual or religious services or services geared to celestial bliss, e.g. making on a large scale, "parsed" or food.

(2) Absence of profit motive or gainful objective is irrelevant but, be the Venture in the public, joint, private or other sector.

(3) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations.

(4) If the organisation is a trade or business, it does not cease to be one because of philanthropy animating the undertaking.Therefore, the consequences of the decision in this case are that professions, clubs, educational institutions, co-operatives research insthtions, charitable projects and other kind of adventures, if they fulfil the triple test stated above cannot be exempted from the scope of industry.'(k) Industrial Disputes - Industrial Dispute is : (1) a dispute or difference between(a) Employers and employers, or (b) Employers and workmen,(c) Workmen and workmen; . .(2) the dispute or difference should be connected with (a) employment or . Non-employment or (b) terms of employment, or (c) conditions of labour of any person;(3) the dispute may be in relation to any workman or workmen or any other person in whom they are interested as a body.(ka) Industrial Establishment or Undertaking - It means an establishment or undertaking in which any industry is carried on; provided that, where several activities are carried on in an establishement or undertaking and only one or some of such activities is or are an industry or industries:(kk) Insurance Company - According to this sub-section, an insurance is one, which company is defined in Sec. 2 of the Insurance Act, 1938, having branches or other establishments in more than one State.(kka) Khadi - "Khadi" has the meaning assigned to it in clause ( d) of Sec. 2 of the Khadi and Village Industries Commission Act, 1956.(kkb) labour Court.- It means a Labour.Court constituted under Sec. 7 of the Industrial Disputes Act, 1947.(kkk) lay Off - Means putting aside workmen temporarily. The duration of lay off should not be for a period longer than the period of emergency. The employer-employee relationship does not come to an end during the period of lay-off but is merely suspended during the period of emergency.Any such refusal or failure to employ a workman may be on account of:

shortage of coal, power or raw materials or the accumulation of stock; or the breakdown of machinery; or natural calamity; or any other connected reasons.

Prohibition of lay-off (as substituted by Amendment Act; 1984)

According to Sec. 25M of Industrial Disputes Act, 1947, no workman whose name is borne on the muster rolls of an industrial establishment shall be laid off by his employer except with the prior permission of the appropriate Government or such authority, as may be specified by that Government.

Recovery of money due from an employer (Sec. 33C)


Where any money is due to a workman from an employer under a settlement or an award or for layoff or retrenchment, the workman himself or any other person authorised by him in writing in this behalf, or in the case of the death of the workman, his assignee or heirs may, without prejudice to any other mode of recovery, make an application, within one year from the date on which the money became due to the workman, to appropriate Government for the recovery of money due to him, and if the appropriate Government is satisfied that any money is due to him, it shall issue a certificate for that amount to the Collector who shall proceed to recover the same in the same manner as an arrear of land revenue.

Penalty for layoff without permission (Sec. 25Q)

Any member who contravenes the provisions of Sec. 25M shall be punishable with imprisonment for a term which may extend to one month, or with fine which may extend to Rs. 1000, or with both.

(I) Lock out - Means the closing of a place of employment, or thesuspension of work, or the refusal by an employer to continue to employ any number of persons employed by him.While strike is a weapon in the hands of the labour to force the management to accept their demands, lockout is a weapon in the hands of the management to coerce the labour to come down in their demand srelating to the conditions of employment.Lockouts has been described by the Supreme Court as the antithesis of strike.1

Difference between lockout and lay-off:

(1) Lockout is an act on the part of the employer to pressurise the labour; while layoff is for trade reasons, beyond the control of the employer; i.e., it is not intentional act.

(2) Lockout is exercised due to an industrial dispute and continues during the period of dispute; layoff is not necessiorily concerned with dispute with workmen.

Difference between lock-out and retrenchment

Temporary or permanent: Lockout is temporary measure, while retrenchment is permanent.Relationship: In lockout the relationship of employer and employee is only suspended; it does not come to an end. In retrenchment such a relationship is severed at the instance of the employer.Motive: Lockout is with a motive to coerce the workmen; the intention of retrenchment is to dispense with surplus labour.Trade dispute: Lockout is due to an industrial dispute, whereas in case of retrenchment, there is no such dispute

Difference between lock-out and closure

(1) Temporary/Permanent: Lockout is temporary measure, whereas closure is permanent.

.(2) Weapon of coercion: Lockout is a weapon of coercion in the hands of employer; while closure is generally made for trade reasons.(3) Trade Dispute: Lockout is declared during an industrial dispute, while in case of closure, there need not be any dispute.(Ia) Major Port: Means a port as defined in clause 8 of Sec. 3 of the Indian Port Act. 1903;

which reads as follows:


"Any port which the Central Government may by notification in official Gazette declare or may by any law for the time being in force, have declared to be a major port".

(I b) Mine: Means a mine as defined in clause (j) of sub-section (1) of Sec. 2 of the Mines Act, 1952, Which reads as under:"Mine means any excavation where any operation for the purpose of searching for or obtaining minerals has been, or is being carried on, and includes, (unless exempted by the Central Government by notification in the official Gazette) any premises or part thereof, on which any process ancillary to the getting, dressing or preparation for sale of mineral or of coke is being carried on :"

(II) National Tribunal: Means a National Tribunal constituted under Sec. 78 of the Act.(III) Office Bearer: In relation to a Trade union, it includes any member of theexecutive thereof, but does not include on auditor. (m) Prescribed: Means prescribed by rules made under this act. (n) Public utility services: The following are public utility services as laid down by the Act :(i) Any railway service;(ii) Any transport service for the carriage of passengers or goods by air;(iii) Any service in or in connection with the working of any major port or dock;(iv) Any section of an industrial establishment, on the working of which the safety of the establishment or the workmen employed therein depends;(v) Any postal, telegraph or telephone service;(vi) Any industry which supplies power, light or water to the public; (vii) any system of public conservancy or sanitation.(viii) any industry specified in the First Schedule which the appropriate Government may, if satisfied that public emergency or public interest so requires, by notification in the Official Gazette declare to be a public utility service for the purpose of this Act, for such period as may be specified in the notification.

(0) Railway company – Means a Railway Company as defined in Sec.8 of the Indian Railway Act, 1890. Sec 3(5) of the Indian Railways Act states, "Railway Company" includes any person whether incorporated or not who are owners or lessees of a railway or parties to any agreement for working a railway."Sec. 3(4) of the Indian Railways Act defines the term "Railway" as. "Railway means a railway, or any portion of a railway, for the public carriage of passengers, animals or goods. and includes:(a) All lines of rails, or branches worked over the purpose of or in connection with a railway.(b) All stations, Offices, Workhouses, wherever, workshops, Fixed plant and machinery and other works constructed in connection with a railway, and(c) All ferries, ships, boats and rafts which are used in inland waters for the purpose of traffic of railway and belong to or are hired or worked by the authority administering the railways." .(00) Retrenchment - Means the discharge of surplus labour or staff by the employer for any reason What-so-ever.' The term "retrenchment" defines under the section 2(00) may be analysed as:

(1) Retrenchment means the termination by the employer of the services of a workman.(2) The termination may be for any reason what so ever.(3) But the termination should not be as a measure. of punishment by way of disciplinary action.

Conditions of retrenchment:

According to Sec. 25F of the Act no workman employed in any industry who has been in


continuous service for not less than one year under an employer shall beRetrenched by the employer until:(a) the workman has been given one month's notice in writing indicating the reasons for retrenchment, or the workman has been paid in lieu of such notice, wages for the period of notice;(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to 15 days average pay for every completed year of continuous service or any part thereof, in excess of 6 months, and(c) Notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the Official Gazette.

Re-employment of retrenched workmen

According to Sec. 25H of the Act, where any workmen are retrenched and the employer proposes to employ any persons, be shall, in such manner as may be prescribed, give an opportunity to retrenched workmen who are citizens of India offer themselves for the re-employment, and the retrenched workmen who offer themselves for re-employment, shall have preference over others. But this section cannot be applied retrospectively [Case: R,S Ramdayal v. Labour Appellate Tribunal (Sec. 567) -1964].

The following cases are not retrenchment

(a) Voluntary retirement of a workman, or(b) retirement of a workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or(bb) Termination of the service of a workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated.

Difference between retrenchment and closure

(1) Retrenchment affects only some of the workman, whereas closure affects all workmen.

(2) In retrenchment the trade or business remains uninterrupted as it Continues; while in closure

the business itself is discontinued.(q) Strike - Strike means (1) cessation of work by a body of persons employed in any industry acting in combination, or (2) a concerted refusal of any number of persons who are or have been employed in any industry to continue to work or to accept employment; or (3) to refusal under a common understanding of any number of persons who are or have been employed in industry to continue to work or to accept employment.Features of strike(1) It is the stoppage of work by a body of workmen acting in concert with a view to bring pressure upon the employer to concede to their demands.(2) The workmen must be employed in any industry.(3) More cessation of work does not come within the preview of strike, unless it can be shown that such cessation of work was a concerted action for the enforcement of an industrial demand1.Kinds of strikeThese are three kinds of strikes, namely: (1) General strike, (2) Stay-in-strike,and (3) Go slow strike.


(1) General strike: A general strike is one, where the workmen join together for common cause and stay away from work, depriving the employer of their labour needed to run the factory.(2) Stay-in-strike: A stay-in-strike is also known as "total-dawn-strike" or 'pen-dawn-strike". It is the form of strike where the workmen report to their duties, occupy the premises, but do not work. The employer is thus prevented from employing other labour to carryon his business.(3) Go-slow strike: In a 'Go Slow' strike, the .workmen do not stay away from work, they do come to their work and work also, but with a slow speed in order to lower down production, and thereby cause loss to the employer. In addition to these three forms of strike a few more may be cited, although some of them are not strike within the meaning of Sub-Section 2(q). Such forms are:

(i) Sympathetic strike: A sympathetic strike is resorted to in sympathy of other striking workmen. Its aim is to encourage or to extend moral support to or indirectly to aid the striking workmen. The sympathisers resorting to such strike have no demand of grievance of their own.

(ii) Hunger strike: In hunger strike, a group of workmen resort to fasting on or near the place of work or the residence of the employer with a view to coerce the employer to accept their demands.

(iii) Work to rule : The employers in this case of "work to rule" strictly adhere to rules while performing their duties which ordinarily they do not observe. This causes the slowing down the tempo of work. It is not a strike because there is no stoppage of work at all.(qq) Trade Union: Means a trade union registered under the Trade Union Act, 1926.(r) Tribunal: Tribunal means an Industrial Tribunal constituted under Sec. 7 -A of the Act. It also includes an Industrial Tribunal constituted before 10th March, 1957 under this Act.(ra) Unfair labour practice: It means any of the practices specified in the Fifth Schedule.(rb) Village Industries: It has the meaning assigned to it in clause (h) of Sec.2 of the Khadi and Village Industries Commission Act, 1956.(rr) Wages: It means all remuneration capable of being expressed in terms of money, which would, if the terms of payment, expressed or implied were fulfilled, be payable to a workman in respect of his employment or of work done in such employment. Wages also includes(i) dearness allowance as the workmen is for the time being entitled to; (ii) the value of any house accommodation, or of the supply of light, water, medical benefits or any concessional, supply of food grains or other articles; (iii) any travelling concession; (iv) any commission payable on sales promotion or business, or both.However, the following are not wages:- (a) any bonus; (b) any contribution paid or payable by the employer to any pension fund or provident fund., (c) any gratuity payable on the termination of service of workman.(s) Workman: 'Workman" means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, .and for the purpose of any proceeding under this Act. ."Workman" does not include any such person - (i) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 1957, or (ii) who is employed in the Police Service or as an officer or other employee of a prison, or (iii) who is employed mainly in a managerial or administrative capacity, or (iv) who, being employed in a supervisory capacity, draws wages exceeding Rs. 1600/- per mensem, or exercises functions mainly of management nature.


Difference between workman and independent contractor:

(1) For any person to be a workman, it is necessary that he should be in the employment of an employer. Merely a contract to do some work is not enough to be called as worker.(2) Relationship of master and servant must be implied in the term of "employed" as a workman. In the absence of such a relationship one cannot be admitted or established as a workman.

Authorities under the ACT

Power and Duties

The adjudication of industrial disputes has been kept out of the jurisdiction of Municipal Courts at the first instance so that effort may be made for settlement of such disputes through some other agencies. The various modes of settlement of industrial disputes provided by the Act. may be classified under three heads: (1) Conciliation (2) Adjudication and (3) Arbitration

Authorities make use of conciliationThe authorities that make use of conciliation on the sole method of settlement of disputes are:(1) Works Committee(2) Conciliation Officer(3) Board of ConciliationThe adjudicating authorities that decide any dispute under the Act. are: (1) Court of Inquiry(2) The Labour Court(3) Industrial Tribunal;(4) National Tribunal, andSec. 10-A of the Act. makes provision for voluntary reference of disputes to arbitration. Apart from the above, provision has also been made for constitution of Court of Inquiry, whose main function is inquire into any matter appearing to be connected with or relevant to an industrial dispute

1. Work committee (Sec.3)

The works committee is considered to be powerful social institution only to secure cooperation between workers and employers, but to make the will of the employees effective on the management. According to sec.3 of the Industrial Disputes Act, 194"1, in the case of an industrial establishment in which 100 or more workmen are employed or have been employed oh any day in the preceding 12 months, the appropriate Government may, by general or special order, require the employer to constitute a Works committee consisting of representatives of employers and workmen engaged in the establishment. The number of representatives of workmen on Works Committee shall be not being less than that of the representatives of the employers.The representatives of the workmen shall be chosen from among the workmen in consultation with their trade union, if any registered under the Indian Trade Union Act.1926. .The duties of the Works Committee are to promote measures for securing and preserving amity and good relations between the employers and workmen and to comment upon matters of their interest or concern and to endeavour to compose any material difference of opinion in respect of matters of common intents or concern of employers and workmen.


2. Conciliation Officers (Sec.4)

The appropriate Government may by notification in the official gazette, interest appoint conciliation officers for any specified area or for one or more specified industries, either permanently or for a limited period of time. Conciliation officers are charged with the duty of holding conciliatory proceedings for the purpose of bringing about a fair and amicable settlement of any industrial dispute. The jurisdiction, powers and other matters in respect of the Conciliation Officer ~hall be published in the Gazette Powers of Conciliation Officer: According to Sec.11 of the Act, conciliation officer may, for the purpose of inquiry into any existing or apprehended industrial dispute, after giving reasonable notice, enter the premises occupied by any establishment which the dispute relates. He may call for and inspect any document which he has ground for considering to be relevant to the industrial dispute or be necessary for the purpose of verifying the implementation of any award or carrying out any duty imposed on him under the Act. and for the aforesaid purposes. He will have the same powers as one vested in a Civil Court, in respect of compelling the production of documents.

Under Sec 11(6), Conciliation Officers are members of Board or Court and the Presiding Officer of Labour Court Tribunal or National Tribunal shall be deemed to be public servants within the meaning of Sec.21 of IPC.

Duties of Conciliation Officers (sec.12):

For the purpose of bringing about fair and amicable settlement of an industrial dispute, the Conciliation Officer is required to discharge the following duties- .

(1) where any industrial dispute exists or is apprehended, the Conciliation Officer, shall hold conciliation proceedings. He will interview both the workmen concerned with the dispute and endeavour to bring about a settlement.(2) The conciliation Officer shall, for the purpose of bringing about a settlement of the dispute, investigate the dispute and all matters affecting the merits and the right settlement thereof and may do all such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute. .(3) If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation proceedings, the Conciliation Officer shall send a report thereof to the settlement singed by the parties to dispute. .(4) If no such settlement is arrived at, the Conciliation Officer shall, as soon as practicable after the close of the investigation, send to the appropriate Government a full report setting forth the steps taken by him for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof, together with a full statement of such facts and circumstances, and the reasons on account of which, in his opinion, a settlement could not be arrived at.(5) The report must be submitted within 14 days of the commencement of the conciliation proceedings or within such shorter period as may be fixed by the appropriate Government: provided that, subject to the approval of the Conciliation Officer, the time for the submission of the report may be extended by such period as may be agreed upon in writing by all the parties to the dispute.(6). If, on a consideration of the report in respect of failure of settlement, the appropriate Government is satisfied that there is a case for reference to Board, Labour Court, Tribunal or National Tribunal, it may make such reference. Where the Government does not make such a


reference, it shall record and communicate to the parties concerned it's reasons thereof

3 Board of Conciliation (Sec.5)The appropriate Govt. may as occasion arises by notification in the in the Official Gazette constitute a Board of Conciliation for promoting the settlement of an industrial dispute. A Board shall consist of a Chairman and two or four other members, as the appropriate Government thinks fit. The Chairman shall be an independent person and shall be appointed on the recommendation of the party they represent. The quorum for a meeting is two where the total number is three, and three where the number is five. A Board, having a quorum, may act not withstanding the absence of the chairman or any of its members, or any vacancy in it's number. But; if the Government informs the board that the services of the Chairman or any other member have ceased to be available, the board must not act until a new Chairman or member has been appointed.

Powers of Conciliation Officer

Conciliation Officer has all powers of a Civil Court when trying a suit in respect Duties of

Conciliation Officer (Sec.13)

Conciliation Officer has to endeavour to bring about a settlement of a dispute referred to him and to do anything to induce the parties to come to a fair and amicable settlement. Where a settlement is reached a similar report and a memorandum of settlement have to be submitted to the appropriate Government. But in case of failure, apart from furnishing all the details as required in the case of a report, by a Conciliation Officer, he is also required to submit his recommendations for tha determination of the dispute. The time limit prescribed for submission of such reports is 2 months of the date on which the dispute was referred to him or within such shorter period as may be fixed by the appropriate Government or all the parties to the dispute may, however, further extend the period by agreement in writing. Where a dispute, in which the Board has failed to bring about a settlement, relates to a public utility service and the Government does not refer it to a Labour Court, Tribunal or National Tribunal, he must inform the parties concerned the reasons for not doing so.

Courts of Inquiry (Sec.G)

The appropriate Government may, as occasion arises, by notification in the official Gazette, constitute a Court of Inquiry for inquiring into any matter appearingto be connected with or relevant to an industrial dispute. Such a Court may consist of one or more independent persons, as the Government may appoint. Where it consists of more than one member, one of them shall be appointed as Chairman. The Court having the prescribed quorum may act even if the Chairman or a member is absent; but not if the services of the Chairman have ceased to be available, and on other Chairman has beer' appointed. The Court shall inquire into the matters referred to it and report thereon to the appropriate Government within 6 months from the date of commencement of the inquiry.Members of Court of Inquiry shall deemed to be public servants within the meaning of Sec. 21 of IPC. The Court of Inquiry, if it so thinks fit, appoint one or more persons having special knowledge of the matter under consideration as assessor or assessors to advise it In the proceeding before it.On a perusal of the relevant Sections 22, 23 and 33 of the Act. relating to the Court during the pendency of a proceeding before a Court of Inquiry, the following right remain unaffected, such as:


(i) The right of a workman to go on strike(ii) The right of an employer to lookout his business. and(iii) The right of the employer to dismiss or otherwise to punish the workman in certain cases under Sec.33

Duties of Courts of Inquiry (Sec. 14)

The Court of Inquiry of shall inquire into the matters referred to it and thereport of Inquiry thereon be presented before the appropriate Government; ordinarily within a period of 6 months from the commencement of inquiry.The report of the Court of Inquiry shall be in writing and be signed by all the members of the Court, provided that a member may record a minutes of dissent also. Labour Court The appropriate Government may, by notification in the Official Gazette, constitute one or more Labour Courts for the adjudication of industrial disputes relating to any of the following matters or for performing such other function as may be assigned to them under the Act. The functions of the Labour Court as provided in the

. Act. are:

(i) Adjudication of industrial disputes relating to any matter specified in the Second Schedule(ii) Performing of such other functions as may be assigned to them under this Act. 1 he following matters are specified in the Second Schedule, namely(i) The propriety or legality of an order passed by an employer under Standing Orders; .

(ii) The application and interpretation of Standing Orders;(iii) Discharge or dismissal of workman including re-instatement of, or grant of relief to; workmen wrongfully dismissed;(iv) Withdrawal of any customary concession or privilege;(v) Illegality or otherwise of a strike or lockout; and(vi) All matters other than those specified in the Third Schedule.According to sec. (2) a Labour Court shall consist of one person only who shall be appointed by the appropriate Government. But no person shall be appointed as 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 not less than 3 years been a District Judge; or (c) he has held the office of the Chairman of any other member of any tribunal, for a period of not less then two years; or (e) he has been the presiding Officer of a Labour Court constituted under any provincial Act for not less than five years.

Powers of the Labour Court (Sec. 11)

Powers of the Labour Court to give appropriate relief in case of discharge orDismissals of workman are as under.(1) Subject to any rule that may be made in this behalf, the labour Court may follow such procedure that it may think fit.(2) The Presiding Officer of the Court may, for the purpose of inquiry into any existing or apprehended dispute, enter into the premises occupied by any establishment to which the dispute relates.(3) The Labour Court shall have all the powers as are vested to a Civil Court.(4) If it thinks fit, appoint one or more persons, having special knowledge. of the matter under consideration, as an assessor to advise it in the proceedings before it.

Duties of Labour Court (Sec. 15)


Where an industrial dispute has been referred to Labour-Court, for adjudication, it shall hold its adjudication expeditiously and shall, submit its award to the appropriate Government. The award of Labour Court shall be in writing and be signed by its Presiding Officer (Sec.16)Every award of Labour Court, shall within a period of 30 days from the date of its receipt by the appropriate Government, be published by if in the official Gazette. The award published by the. appropriate Government shall be final and binding on the parties to dispute. Sec.17 -A provides that an award (including arbitration award) shall become enforceable on the expiry of 30 days from the date of its publication under Sec. 17. The award shall not become enforceable on the expiry of 30 days:

(a) if the appropriate Government is of opinion, in any case where theaward has been given by a Labour Court or Tribunal in relation to an industrial dispute to which it is a party that it will be in expedient to give effect to the whole or any part of the award on public grounds effecting: .(i) national economy, (ii) social justice. .(b) if the Central Government, in any case where the award has been given by aNational Tribunal, on similar grounds in of the opinion that it would be in expedient togive effect to the whole .or part of the award.For the purpose of stopping the enforcement of any award, a notification in the Official Gazette is necessary.

Industrial Tribunals (Sec. 7 A)

Industrial Tribunals were created for it's first time by the Industrial Dispute Act.1947. Commenting upon the starts of these tribunal, the Supreme Court has observed that tribunals under the Act. are invested with many trappings of a Court; but do not have the same status as courts'. The Tribunal is the judicial body or at any rate, a quasi-judicial body2.The appropriate Government may by notification in the Official Gazette, constitute one or more industrial tribunals for the adjudication of industrial dispute s relating to any matters specified above as in the case of Labour Court, or the followingmatters, namely(1) Wages including the period and mode of payment (2) Compensatory and other allowances;(3) Hours of work and rest intervals; (4) Leave with wages and holidays; (5) Bonus, profit sharing, provident fund and gratuity; (6) Shift working otherwise than in accordance with standing orders; (7) Classification by grades; (8) Rules of discipline; (9) Rationalization; (10) Retrenchment of workmen and closure of establishment; and (11) Any other matter that may be prescribed.A Tribunal shall consist of one person only to be appointed by the appropriate Government. A person to be appointed as a Presiding Officer of a Tribunal must .be, or must have been, a judge of a high Court; or if he has for a period of not less than three years, be a District Judge or on Additional District-Judge. Only experienced persons of high integrity can be appointed as Providing Officer of the Tribunal. It is provided by Sec.7-A(4) that the Appropriate Government, if thinks fit, may appoint two persons as assessors to advise the Tribunal in the proceedings before it.Industrial Tribunals shall have the same power vested in a Civil Court when trying a suit, such as: (a) enforcing the attendance of any person and examining him on oath, (b) compelling the production of document and material object, (c) issuing commissions for the examination of witness and any such matters as may be prescribed.. .


National Tribunals (Sec 78) .. .

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.A National Tribunal shall consist of one person only to be appointed by the Central Government. In order to be qualified as a Presiding Officer of a National Tribunal, a person must be or must have been a Judge of a High Court, or must have held the office of the Chairman or any other member of the Labour Appellate Tribunal for at least 2 years. The Central Government may appoint two assessors to advise the National Tribunal, in proceeding before it. .

Disqualifications for Presiding Officiers of Labour Courts, Tribunals And National Tribunals (Sec.7 - C).

No person shall be appointed to, or continue in the office of the Presiding Officer of a Labour Court, Tribunal or National Tribunal if (a) he is not an independent person or (b) he has attained the age of sixty five years.

Filling of Vacancies (Sec. 8)

If a vacancy occurs in the office of the Presiding Officer of a LabourCourt, Tribunal or National Tribunal, the appropriate Government shall appoint another person in accordance with the provisions of the Act. A vacancy may arise due to transfer resignation or acquisition of any disqualification as provided in Sec. 7 -C of the Act.

Finality of orders constituting boards (Sec. 9)The main object of enacting Sec. 9 of the Industrial Disputes Act is to make immune, any order of the appointment made under Sections 5 to 7 of the Act, from being called in question. Therefore, no question can be raised whether an appointment was legally and properly made or not. Sec. 9 (1) of the Act provides that no order of the appropriate Government or of the Central Government appointing any person as the Chairman or any other member of the Board or Court, or as the Presiding officer of a Labour Court, Tribunal or National Tribunal shall be called in question in any manner on the ground of merely of the existence of any vacancy in, or defect in the constitution of such Board or Court.

Reference to grievance settlement authorities (Sec. 9-C)

A new Chapter II - B has been instead by Industrial Disputes (Amendment) Act, 1982 whereby a new Sec. 9 - C has- been added But this Chapter has not been enforced till now.

According to Sec. 9 - C:

(1) The employer in relation to every industrial establishment in which 50 or more workmen are employed or have been employed on any day in the preceding 12 months shall provide for a grievance settlement authority for settlement of industrial disputes with an individual workman employed in the establishment in accordance with the rules made' in this behalf under the Act.(2) Where an individual dispute connected with an individual workman arises in an establishment referred to in sub. sec. (1) a workman or any trade union cf workmen of which such workman is member, may refer in such manner as may be prescribed such dispute to Grievance Settlement Authority provided for, by the employer, for settlement.


(3) The Grievance Settlement Authority shall follow such procedure and complete its proceedings within such period as may be prescribed.(4) 'No reference shall be made under Chapter III with respect to any dispute referred to in thissection unless such dispute has been referred to the Grievance Settlement Authoritiesconcerned and the decision of the Grievance Settlement Authority is not acceptable to any ofthe parities to the dispute.

Powers of National Tribunals (Sec.11)

1. Subject to any rules that may be made in this behalf, National Tribunal shallfollow such procedure as the arbitrator or other authority concerned may think fit.

2. The presiding officer of National Tribunal may for the purpose of inquiry into any existing or apprehended industrial dispute, after giving reasonable notice, enter the premises occupied by any establishment to which the dispute relates.

3. Every national Tribunal shall have the same powers as are vested in only experienced persons of high integrity can be appointed as presiding offer of the TribunaL It is. provided by Sec. 7 - A (4) that the Appropriate Government of it thinks fit may appoint two persons as assessors to advise the Tribunal in the proceedings before It a Civil Court under CPC, 1908 when trying a suit, in respect of the fo!!owing matters, viz.,-(a) enforcing the attendance of any person and examining him on oath; (b) compelling the production of document and material objects; (c) Issued commissions for the examination of witness; (d) in respect of such other matters as may be prescribe: and every by a Board, Court, Labour Court, Tribunal or National Tribunal shall be deemed to be a judicial proceeding within the meaning of Sec. 193 arid 228 of the Indian Penal Code.

(4) National Tribunal may, if it so thinks fit, appoint one or more persons having special knowledge of the matter under consideration as assessor or assessors to advise it in the proceeding before it.

(5) All the Presiding Officers of a National Tribunal shall be deemed to be publicservants within the meaning of Sec. 21 of the Indian Penal Code.

(6) Subject to any rules made under this Act, the costs of, and incidental to, any proceeding before a National Tribunal shall be in the discretion of that National Tribunal, and shall have full power to determine by and to whom and to what extent and subject to what conditions, of any, such costs are. top be paid, and to give all necessary direction for the purpose aforesaid and such costs may, on application made to the .appropriate Government by the person entitled, be recovered by the Government in the same manner as an arrear of land revenue.

(7) Every National Tribunal shall be deemed to be a Court for the purpose of Sec. 480, 482 and 484 of the Criminal Procedure Code, 1948.

Note: The procedure and power of different authorities laid down under Sec. 11 of the Act, are equally applicable in the case of Conciliation Officers / Board, Court of Inquiry, Labour Court, And Tribunals.

Persons on whom settlement and awards are binding (Sec. 18)

For this purpose, settlements are classified into two catagories, namely(i) Settlement arrived at otherwise than in the course of conciliation proceedings, i.e. without the aid of statutory agency; and(ii) Settlement arrived at in the course of conciliation proceedings; Le. With the aid of statutory


agency.In the first case, a settlement under Section 18(1) arrived at by agreement between the employer and workmen otherwise than in the course of conciliation proceedings, shall be binding on the parties to the agreement. But any such settlement; in order to be binding must be signed by the parties there to in the manner prescribed by rule and a copy of it must also be sent the appropriate Government. .In the second case Sec. 18 (2 and 3) provide that an arbitration award which has become enforceable shall be binding on the parties to the agreement who referred the disJ3ute to the arbitration. This section 18(3) provides that(i) a settlement arrived at in the course of conciliation proceeding under this Act.(ii) an arbitration award in a case where a notification has been issued under sub section (3-A) of Sec. 10-A; or(iii) an award of a Labour Court, Tribunal or National Tribunal which has become enforceable shall binding on;(a) all parties to the in industrial dispute.(b) all other parties summoned to appear in the proceedings as parties to the. dispute,(c) where a party referred to is an employer, his heirs, successors or assigns in respect of the establishment in which the dispute relates.(d) where a party referred to in clause (a) or (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part there of.

Certain matters to be kept confidential (Sec. 21)

This section of the Act. provides that certain matters are to be kept confidential. Therefore, such things shall not be included in any report or award made under the Act. Any information obtained by a Conciliation Officer, Board, Court, Labour Court, Tribunal, National Tribunal or an Arbitrator in the course of any investigation on inquiry, which relates to a Trade Union on any individual business (whether carried on by a person, firm or company) which is not available otherwise than through the evidence given before any such authority, shall not be included in any report or award; if the parties concerned or in question has made a request in writing to treat such information as confidential.REFERENCE OF DISPUTES TO BOARDS, COURTS OR TRIBUNALS

Section 10(1) of the Industrial Disputes Act.,1947 provides that where the appropriate Government is of the opinion that any industrial dispute exists or apprehended, it may, at any time:(a) refer the dispute to a Board of conciliation for promoting a settlement there of; or(b) refer any matter appearing to be Connected with or relevant to the dispute to a Court for Inquiry; or(c) refer the dispute or any matter appearing to be connected with, or relevant to the dispute to a Labour Court for adjudication provided the dispute relates to any matter specified in the Second Schedule; or(d) refer the dispute or any matter appearing to be connected with or relevant to the dispute to a Tribunal for adjudication, where it relates to any matter specified in the Second or Third Schedule., provided that:


(i) where the dispute relates to any matter specified in the Third Schedule and is not likely to effect more than 100 workmen; the appropriate Government may make the reference to a Labour Court.(ii) where the dispute in relation to which the Central Government is the appropriate Government, it shall be competent for the Government to refer the dispute to a Labour Court / Tribunal constituted by the State Government(iii) where the dispute relates to a public utility service and a notice of strike or lockout under Sec. 22 has been the appropriate Government shall be competent to refer the dispute to a Labour Court or any Industrial Tribunal, Constituted by the Government.Under Sec.1 0(1-A), the Central Government may refer any dispute to a National tribunal for adjudication, if it is the opinion that:(i) any dispute exists or is appended; and(ii) the dispute involves any question of national importance; or(iii) the dispute is of such nature that industrial establishment situated in more than one State are likely to be interested in, or affected by such dispute; and(iv) the dispute should be adjudicated by National Tribunal (the reference to National Tribunal shall be made by the Central Government only).Sec.10(3) of the Act. provides that where an industrial dispute has been referred to Board, Labour Court, Tribunal or National Tribunal, under Sec. 10 of the Act, the appropriate Government may issue an order prohibiting the continuance of any strike or lockout in connection with such dispute which may be in existence on the date of reference.Sec.10(6) of the Act. provides that where any reference has been made under sub-section (1-A) to a National Tribunal, then notwithstanding anything contained in this Act., no Labour Court or Tribunal shall have jurisdiction to adjudicate dicta upon any matter which is under adjudication before the National Tribunal.Sections 10 and 1 O-A are the alternative remedies to settle industrial dispute. Once the parties have chosen the remedy under Sec.1 O-A, the Government cannot refer the same dispute for adjudication under Sec. 10. If any such reference is made, it is invalid.1

Voluntary Reference of Disputes to Arbitration (Sec. 10-A)

This section provides that where any industrial dispute exist or is apprehended, the employer and the workman agree to refer the dispute to arbitration, they may refer the dispute to arbitration: Such referen<?e by agreement may be made at any time before the dispute has been referred under Sec.1 0 a Labour Court, Tribunal or National Tribunal. The agreement to make a reference must be in writing.Sec. 10-A(1-A) provided that where an arbitration agreement provides for reference of the dispute to an even number of, arbitrators the agreement shall provide for appointment of another person as umpire who shail enter upon the reference if the arbitrators are equally divided in their opinion.Sec. 1 0-A(2) provides that an arbitration agreement referred to in sub-section (1) shall be in such form and shall be signed by the parties there to in such a number as may be prescribed.Under Sec. 10-A(3) copy of the arbitration agreement shall be forwarded to appropriate Government and the Conciliation Officer, and the appropriate Government shall within one month from the date of receipt of such copy publish. the same in the official Gazette.Under Sec. 10-A(4) the arbitrator or arbitrators shall investigate the dispute and submit to the appropriate Government the arbitration award signed by the arbitrator or all arbitrators as the case may be.


Under Sec.(4-A): where an industrial dispute has been referred to arbitration and a notification has been issu8d, the appropriate Government may prohibit the continuance of any strike or lockout in connection with such dispute. The appropriate Government shall do so by issuing an order.Sub-sec.(5) provider that nothing in the Arbitration Act. 1940 shall apply to arbitration under this section.An arbitrator functioning under Sec.1 O-A of the Act is a statutory Tribunal.

STRIKES AND LOCKOUTS IN INDUSTRIAL UNITS

Strike is collective stoppage of work by workmen undertaken in order to bring pressure upon the employer. It is a spontaneous and concerted withdrawal of workmen from production. A strike in usually organized by common agreement on the part of the workers with a view to obtaining or resisting change to their conditions of work.Lockout is a weapon in the hands of the employer; which is used to curb the militant spirit of the workers. In Lock-out, an employer shuts down his place of business as a result of reprisal, or 2S an instrument of coercion or as a mode of exerting pressure upon the employees with a view it dictate his own terms to them.Strikes and lockouts have now become important factors in the employer employee relations.

Prohibition of strikes and lockouts (Sec. 22 and 23)

Sec.22 of the Industrial Disputes Act provides that:(1) No person employed in a public utility service go on strike in breach of contract:(a) without giving notice of strike to the employer within six weeks before striking, or(b) within 14 days of giving notice, or(c)before the expiry of the date of strike specified in any such notice as aforesaid, or(d) during the pendency of any conciliation proceedings and 7 days after the conclusion of such proceedings.(2) No employer on any public utility service shall lockout any of his workmen(a) Without giving them notice of lock-out as herein after provided within six weeks before locking out; or(b) Within 14 days of giving such notice; or(c) Before the expiry of the date of lockout specified in any such notice as aforesaid; or(d) During the pendency of any conciliation proceeding before Conciliation Officer and seven days after the conclusion of such proceedings.However, notice of strike or lockout will not be necessary where there is already in existence a strike or lockout in the public utility service. The employer in such a case must notify to concerned authority as may be appointed by the appropriate Government, of the declaration of a strike or lockout. The notice of strike or lockout shall be given by such number of persons in the prescribed manner [Sec.22(4&5)]

General provisions of strikes and lockouts:

Sec.23 of the Act provides that, "no workmen who is employed in any industrial establishment shall go on strike in breach of contract and on employer of any such workmen shall declare a lockout:

(i) during the pendency of conciliation proceeding before a Board, and 7 days after its conclusion.


(ii) during the pendency of proceeding before Labour Court, Tribunal or National Tribunal, and 2 months after its conclusion.(iii) during pendency of arbitration proceedings before an arbitrator and two months after completion of such proceedings, where a notification has been issued under Sub sec.(3-A) of Sec. 10-A; or(iv) during the period of which a settlement or award is in operation in respect of the matters covered by such settlement or award.

Illegal strikes and Lockouts (Sec. 24)

Sec. 24 of the Act provides that a strike or a lockout shall be illegal if it is: (a) commenced or declared in contravention of Sec. 22 or 23, and(b) continued in contravention of the prohibitory order made by appropriate Government after the dispute has been referred under Sec. 10(3) or sub-section( 4-A) of Sec.1 ()"A of the Act.

Prohibition of financial aid to illegal strikes and lockouts (Sec. 25)

This section of the Act prohibits financial aid to illegal. strikes and lockouts.This section has the following ingradients: .(1) spending or applying money:(2) money spent or applied in direct furtherance or support of an illegal strike, Punishments (Sec. 28)

For any violation of provisions of Sec. 25, punishment is imposed by Sec. 28 of the Act. According to the provision, even a person who is not a workmen can be penalized violating the provisions of Sec. 25. The effect of Sections 25 and 28 is the prosecution to support a conviction for breach of Sec.25 must prove that:

(i) the strike or lock-out in question was illegaL(ii) the accused had knowledge that(a) the strike or lockout was iIIegal and(b) the money spent or applied by him was in direct furtherance support of a strike or lockout.(iii) that the money was actually spent or applied by the accused.However, assistance to strikers in any other from, for example, supplying clothes, food, etc. is not prohibited under Sec. 25 of the Act.

LAY-OFF AND RETRENCHMENT: COMPENSATION THERE OFThe Industrial Disputes Act, 1947, as originally enacted made no provision for the payment of "Lay-Off" or "Retrenchment" compensation. Therefore, there were no uniform rule that can be said to have observed by the adjudicating bodies in the case of payment of compensation for "lay-off" or "retrenchment". In order to overcome the situation, the President of India promulgated the Industrial Disputes (Amendment) Ordinance in Oct., 1953 to the effect from 24th Oct. 1953. The said Ordinance was repealed and replaced by the Industrial Disputes (Amendment) Act, 1953 took effect from 23rd Dee ember 1953. According to this amendment, Section 25-A to Section 25-J were added by this Amendment Act of 1953.According to Sec. 25A (application of Sections 25-C to 25E inclusive) shallnot apply to industrial establishment to which Chapter V-B applies, or :(a) to industrial establishment in which less than 50 workmen, on an average per working day have been employed in the preceding calendar month, and(b) to industrial establishment which are of a seasonal character or in which work is performed only intermittantly.


Thus, where the exemption under Sec 25-A applies, the workmen are not entitled to lay-off compensation and the Tribunal has no right to grant relief on any fanciful notices of Social Justice.Sec 25 B of the Act defines continuous service. Sub-sec.2 defines continuous service for a period of one year or a period of six months Clause (a) of Sub-Section (2) provides that a workman. shall be deemed to have been in continuous service for a year, if1. he has been in employment for 12 calendar months; and2. he actually worked for not less than (a) One hundred and ninety days in the case of a workmen employed below ground in a mine; and(b) Two hundred and forty days in any other case.The following conditions must be fulfilled by a workman to entitle him for a continuous service of six months:(1) The workman has been in employment for a period of six calendar months;(2) Such workman has actually worked for not less than:(a) Ninety five days in the case of his being employed below ground in mine, and(b) One-hundred and twenty days in any other case.

Rights of workman laid-Off for compensation (Sec.25-C)

This section of the Act entitles a workman to get compensation from the employer for the period he is laid off. When the employer is unable to provide work to his workmen for reasons beyond his control, he owns duty to pay lay-off compensation to such workmen. For a workman to be eligible to claim lay-off compensation, he must fulfil the following conditions:(1) his name must be borne on the muster rolls of an industrial establishment and(2) he must have completed at least one year's continuous service (andefined in Sec. 25-B)

The above rule is subject to the following limitations:

(1) If a workman is laid off for more than 45 days during any period of 12 months, no compensation shall be payable in respect of any period of the lay-off after the expiry 45 days, provided these is an agreement between the workman and the employer to this effect.(2) Where a workman is laid off for a period of 45 days during 12 months. the employer has a right to retrench such workman at any time after the expiry of 45 days of lay-off. When an employer decides to retrench a workman he musf comply with the requirements of Sec.25F of the Act (as stated below).

.Workmen not entitled to Compensation in Certain Cases (Sec. 25-E)

This section of the Act provides that a laid off workman shall not be entitled tocompensation:(1) If he refuses to accept alternative employment provided that such alternative employment is offered in the same establishment or in any other establishment belonging to the same employer in the same town or village within a radius of 5 miles from the establishment he belongs.(2) If he does not present himself for work at the establishment at the appointed time during normal working hours at least once a day. (3) If the lay-off is due to strike or slowing down of production on the part of workmen in another part of the same establishment.

Conditions precedent to retrenchment of workmen (Sec. 25 F)


This section lays down the requirements for a valid retrenchment of an employed who has been in continuous service for not less than one year. This section prescribes three conditions for a valid retrenchment; namely.

(a) The workman should be given one months notice in writing indicating the reasons for retrenchment. .

(b) The workman has been paid, at the time of retrenchment, compensation equivalent to 15 days average pay for every completed year of continuous service or any part thereof in excess of 6 months.(c) Notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the Official Gazette.Compensation to workmen in case of transfer of undertakings (Sec. 25 FF) This section provides that in case of transfer of ownership or management of an undertaking from one employer to another, every workman:

(a) Shall, before such transfer entitled to notice, and(b) Shall also be entitled to compensation in accordance with provisions of Sec. 25-F, as if the workman had been retrenched. In order to entitle a workman compensation under this section, the following conditions must be simultaneously complied with:(1)the service of the workman has not been interrupted by the transfer and(2) terms and conditions of service to the workrnan, after such transfer, are not in any way less favourable to the workman than those applicable immediately before the transfer.

Notice to be given of intention to close down any undertaking (Sec. 25FFA)Any employer who intends to close down an undertaking shall serve, at least 60 days before the date on which the intended closure is to become effective, in a prescribed manner on the appropriate Government, stating therein that noting in this section shall apply to :(a) an undertaking in which (i) less than 50 workmen are employed, or (ii) less than fifty workman were employed, on an average, per working day in the preceding 12 months;(b) an undertaking set-up for the construction of building, bridges, roads, canals. dams or for other construction work or project.Compensation to workmen in the case of closing down of undertaking (Sec. 25-FFF)The purpose of this section is to create a sense of security in a workman that if he sticks to his work, he will not be thrown away out of his employment in case of closing down of the undertakingProcedure for Retrenchment

The well recognised principle of retrenchment in industrial law is 'first come last go' and 'last come first go'. This principle has been incorporated in Sec 25-G of the Act. The protection provided under this section can be claimed by a workman on fulfilment of the following conditions:(1) The workman must be a workman within the meaning of Sec. 2(8) of the Act. (2) The workman should be an Indian Citizen.(3) The workman should be employed in an establishment which is anindustry within the meaning of Sec. 2(J) of the Act.(4) The workman should belong to a particular category of workmen in theestablishment; and(5) There should be no agreement contrary to the principle of 'first come last go' between the employer and workman.


Re-employment of retrenched Workman (Sec. 25H)

According to this section, when a workman has been retrenched by employer on the ground of surplus staff. such a workman should first be given an opportunity to join service whenever an occasion to employ another hand arises. In order to claim preference in employment under this section, a workman must satisfy thefollowing conditions:

(1) He should have been retrenched prior to re-employment.(2) He should be a citizen of India; and(3) He should have been retrenched from the same category of service.

Special provisions relating to lay-off, retrenchment and closure incertain establishments:By-an amendment made in the year 1978, a new Chapter V-B has been added to the Industrial Disputes Act (Sec. 25-K) .The provision of this Chapter shall apply to an industrial establishment, not being an establishment of a seasonal character For the purpose of this chapter V-B, Sec. 25-L, defines (a) Industrial establishment means:(i) a factory as defined in clause (m) of Sec.2 of the Factories Act. 1948;(ii) a mine as defined in clause (j) of sub-section (1) of Sec.2 of the Mines Act, 1952; or(iii) a plantation as defined in clause (f) of Sec.2 of the Plantations Labour Act, 1951;

Prohibition of Lay-Off (Sec. 25-M)

No workman (other than a 'bad Ii' workman or a casual workman) whose name is borne on the muster rolls of an industrial establishment to which this Chapter V-B applies shall be laid off by employer except with the prior permission of the appropriate Government or such authority as may be specified by the Government by notification in official gazette (Sub.Sec.1).Where the workman of an industrial establishment being a mine, have been laid off under sub-section (1) above, for reasons of fire, flood or excess of inflammable gas or explosion, the employer in relation to such establishment, shall within a period of 30 days from the date of such lay-off apply in the presented manner, to the Appropriate Government or the specified authority (Sub Sec. (3))Where an application for permission under Sub. See (1) and (3) has been made to appropriate Government after making inquiry as it thinks fit and after being heard to the employer, the workmen concerned and the person interested in such lay off, grant or refuse to grant, permission. A copy of such order shall be communicated to the employer and the workmen.

Conditions precedent to retrenchment of Workmen (Sec. 25-N) :

No workman employed in any industrial establishment, who has been in continuous service for not less than one year under an employer shall be retrenched by the employer, until the workman has been given three months notice in writing indicating the reasons for retrenchment or the workman has been paid wages in lien of notice period, if the period of notice has expired.

Procedure for closing down an undertaking (Sec. 25-0) :

An employer who intends to close down an undertaking of an industrial establishment shall, in the prescribed manner, apply to the appropriate Government for prior permission 90 days before the intended closure is to become effective, stating the reasons for the intended closure.


A copy of such application shall also be served on the representative of the workmen in the prescribed manner (Sub Sec. (1 )).On receipt of application, the appropriate Government, makes inquiry as it thinks fit and after giving reasonable opportunity of being hard to the employer, the workman and the persons interested in such closure may grant or refuse to grant permission, and a copy of such order shall be served to the employer and the workmen.

Special Provisions as to Restarting of closed down undertaking (Before Commencement of the Industrial Disputes (Amendment) Act, 1976, (Sec. 25-P)If the appropriate Government is of opinion in respect of any understanding of an industrial establishment which was closed down before the commencement of Amendment Act, 1976

(a) that it was closed down otherwise than on account of unavoidable circumstance beyond the control of the employers;(b) that there are possibilities of restarting the undertaking;(c) that it is necessary for the rehabilitation of the workmen employed before its closure or for the maintenance of supplies and services essential to the life of the community to restart the undertaking; or both; and (d) that the restarting of the undertaking will not result in hardship to the employer in relation to the undertaking.After it may after giving an opportunity to such employer and workmen, the appropriate Government may direct by order published in official Gazette that the undertaking shall be restarted within such time published in the official Gazette, (not being less than one month from the date of order) as may be specified in the order.

Penalty for Lay-Off and Retrenchment with Previous Permission (Sec. 25-Q)

Any employer who contravenes the provision of Sec. 25 M or Sec. 25 N, shallbe punishable with imprisonment for a term which may extend to one month, or with fine which may extend to Rs. 1000/-, or with both.Penalty for Closure (Sec. 2 R)Any employer who closes down an undertaking without complying with the provisions of sub-section (1) of Sec. 25-0 shall be permissible with imprisonment for a term which may extend to six months, o(with fine which may extend to Rs. 5000/ -, or with both.Similarly, any employer who contravenes an order refusing to grant permission to close down an undertaking under sub-section (2) of Sec. 25-0 or a direction given under Sec. 25-P, shall be permissible with imprisonment for a term which may extend to Rs. 5000/-, or with both. Where the contravention continuous further, with a further which may extend to Rs. 2000/- for every day during the contravention continues after the conviction.No employer or workmen or a Trade Union, whether registered under TradeUnion's Act, 1926, or not, shall commit any unfair labour practice (Sec. 25-T)Any person who commits any unfair labour practice shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to Rs. 1000/- or with both.

PENALTIES AND MISCELLANEOUS PROVISIONS

Penalty for illegal strikes and lockouts (Sec. 26)This section prescribes penalty imposed on any workman who continues or otherwise acts in furtherance of a strike which is illegal under this Act. Any workman found guilty of participating in an illegal strike shall be punishable with imprisonment for a term which may extend to one month or with a maximum fine of 50/-, or with both.


.In the case of employer, sub section (2) of Sec. 26 provides that the employer shall be punishable with imprisonment extending to one month or with a maximum fine of Rs. 1000/-, or with both, if:(1) such employer commences, continues or otherwise; acts in furtherance of lock-out; and(2) such lock-out is illegal under the Act. Penalty for instigation, etc.(Sec. 27):

This section makes the following acts punishable:(1) Instigation or incitement to others to take part in an illegal strike or lockout;(2) Otherwise acting in furtherance of a strike or lockout which is illegal under the Act.Any person, other then employer and workmen, who has no personal interest in a dispute, instigate or inciting of an illegal strike or lockout is more severely punishable under the Act. There must be something tangible in evidence to show that the persons are responsible for instigating or inciting the strike.

Penalty for giving Financial Aid to illegal strike and lockout (Sec. 28)

Any person who knowingly extends or applies any money in direct furtherance or support of any illegal strike shall be punishable under this section. Punishment may extend to six months imprisonment, or Rs. 1000/- as fine, or with both.

Penalty for breach of settlement of award (Sec. 29)

In order to be penalised a person under this section, the following facts must be proved:(1) An award or settlement was in operation at the time of breach;(2) Such award or settlement must be valid,(3)The award or settlement must be binding on the accused,(4)The accused must be responsible for committing breach of such award or settlement.(5) The appropriate Government must have made complaint regarding thebreach.If these requirements are cumulatively fulfilled the accused shall be punishable with imprisonment extending to 6 months or with fine or with both. If the breach is continuing a further fine which may extend to two hundred rupees for every day during which the breach continues after the conviction for the first breach.

Penalty for disclosing confidential Information (Sec. 30)

Any person who discloses any information in contravention of Sec. 21(confidential matters) shall be penalised under Sec. 30 of the Act. Punishment provided is imprisonment extending to 6 months or fine upto Rs. 1000/-, or with both. For valid exercise of power under this section, the following conditions must be satisfied:(1) A complaint must have been made by or on behalf of (a) the TradeUnion, or (b) the individual members affected. (2) Complaint should be made to the appropriate Government. (3) It should be against any person who wilfully disclose any such information and the disclosure must be in contravention of the provisions of Sec.21.

Penalty for closure without notice (Sec.3D-A)

Any employer who closes down any undertaking without complying with provisions of Sec. 25 FFA shall be punishable with imprisonment for a term which may extend to six months or with fine, which may extend to Rs. 5000/-, or with both.

Penalty for other offences (Sec. 31)

This section provides that at any employer who contravene the provisions of Sec. 33 shall be


punishable with imprisonment for a term which may extend to six months or with fine which may extend to Rs. 1000/-, or with both (sub. Sec.1)A Criminal Court has jurisdiction to try any employer for violation of Sec. 33 these two sections 31 and 33 are intended to protect the right of workmen pending industrial dispute and for that purpose the employer is prohibited from doing anything to the prejudice of workmen without express permission or approval of the authorities before whom a reference is pending. .

(Sec.33 ensures against victimization of workmen by the employer).

Offence by companies etc. (sec.32).

This section provides that where a person committing an offence under this Act. is a company, or other body corporate or an association of persons (whether incorporated or not) every director manager, secretary, agent or other officer or person concerned with management thereof shall, that the offence was committed without his knowledge or consent, be deemed to be guilty of such offence.

Conditions of service, etc. to remain unchanged (Sec. 33)

The purpose of this section is to maintain status quo during the pending of certain proceeding under this Act. This section applies during the pendency of the following proceedings:

(a) conciliation proceedings before a Conciliation Officer or Board.(b) any proceeding before an Arbitrator; and(c) any proceeding before Labour Court, Tribunal or National Tribunal.

Sec. 33(3)'of the Act deals with the right of protected workman. The employer shall not take the following action against a "protected workman" in regard to any matter connected with the pending dispute:

Special provision for adjudication as to whether conditions of service etc. changed during the pendency of proceedings (Sec.33-A).

Where an employer contravenes the provisions of Sec. 33 du ring the pendency of proceedings before a Conciliation Officer, Board, an Arbitrator, a Labour Court, Tribunal or National Tribunal, an employee aggrieved by such contravention may make compliant in writing, in the prescribed manner, to such authority before it the matter is pending,The object of Sec. 33 and 33-A is to protect workmen against victimization by the employer.

Recovery of money due from an employer (Sec. 33-C)

This section deals with the proceeding for recovery of money due to a workman from an employer under a settlement or an award or under the provisions of Chapter VA or VBThe application for recovery of money due may be made to the appropriate Government. If the Government is satisfied that the claim in genuine it shall issue a certificate for that amount to the District Collector, who shall recover the amount, as shown in the recovery certificate as an of land revenue.

Every application for recovery shall be made within one year from the date on which the money becomes due to the workman from the employer. However, the appropriate Government may consider the application which was presented even after one year if it is satisfied that the applicant had sufficient reason for not making the application within the period of one year.

Cognizance of offences (Sec. 34).

This section provides that a Court shall take cognizance of any offence punishable under this


Act or of the abatement of any such offence, if a compliant to that effect is made either:(i) by the appropriate Government, or(ii) under the authority of the appropriate Government. [sub sec. (1)] Sub section (2), provides that any Court inferior to the Court of Metropolitan

Magistrate or a Judicial Magistrate of tha first class shall not try any offence punishable under this Act.

Protection of persons (Sec. 35).

No person refusing to take part or to continue to take part in any strike orlockout which is illegal under the Act shall, by reason of such refusal or by reason of any action taken by him under this section, be subject to expulsion from any trade or society, or to any fine or penalty, or to deprivation of any right or benefit to which he or his legal representatives would otherwise be entitled, either directly or indirectly,

. under any disability or at any disadvantage as compared with other members of the Union or Society, anything to the contrary in the rules of a trade union or society notwithstanding.

This section further provides that nothing ill the rules of a Trade Union orSociety requiring the settlement of disputes shall apply to any proceeding for enforcing any right or exemption secured by this section and in any such proceeding, the Civil Court may, in lieu ordering a person who has been expelled from membership of a Trade Union or Society to be restored to membership, order that he be paid out of the Trade Union funds such sum by way of compensation or damages as that Court thinks fit.

Representation of parties (Sec. 36)

According to sub section (1), a workman who is a party to a dispute shall beentitled to be represented in any proceeding under this Act by:

(a) any member of the executive or other office bearer of a registered Trade Union of which he is a member;(b) any member of the executive or officer bearer of a Federation of Trade Union to which the Trade Union is affiliated;(c) where the workman is not a member of any Trade Union, by any member of executive or other office bearer of any Trade Union connected with it or by any workman employed in, or the industry in which the worker is employed and authorized in such manner as may be prescribed.In the opinion of the appropriate Government, any difficulty or doubt arises as to interpretation of any provision of the award, or settlement, it may refer the matter to such Labour Court / Tribunal/National Tribunal; as it may think fit (Sec 36-A).The decision of the Labour Court ITribunal1 National Tribunal shall be final and binding on all the parties.Power to exempt from the provisions of the Act (Sec 36-B) Para Where the appropriate Government is satisfied in relation to any industrial establishment or undertaking carried on by a department of the Government that adequate provisions exist for the investigations and settlement of industrial disputes; such class of establishments or undertaking, it may, by notification in the official Gazette, exempt, conditionally or unconditionally such establishments, or undertakings from all or any of the provisions of this Act.

Protection of action taken under the Act (Sec. 37)

No suit, prosecution or other legal proceeding shall exist against any person for anything done in good faith or intended to be done in pursuance of this Act, or any rule made there under.


Power to make rules (Sec. 38)

The appropriate Government may make rules for the purpose of giving effect to the provisions of this Act. Such rules may provide for all or any of the following matters; namely

(a) the powers and procedure of Conciliation Officers, Boards, Court, Labour Courts, Tribunals or National Tribunal, including rules as to the summoning of witness, the production of document concerned.(aa) the form of arbitration agreement.(aaa) the appointment of assessors in proceeding under this Act,(ab) the constitution of Grievance Settlement Authorities.(b) the constitution and functions of, and the filling of vacancies in Works Committees, and the procedure to be followed by it.(c) the allowances admissible to members of Courts and Boards and Presiding Officers of labour Courts, Tribunals and National Tribunal.(d) the ministerial establishment which may be allotted to a Court, Board, Tribunal or National Tribunal.(e) the manner in which and the persons by and to whom notice of strike or lockout may be given and mode of communication.(f) the conditions subject to which parties may be represented by legal practitioners in proceeding under this Act before a Court, Labour Court, Tribunal or National Tribunal(g) any other matter which is to be or may be prescribed.

Delegation of powers (Sec. 39)

The appropriate Government may by notification in the official Gazette, direct that any power exercisable by it under the Act or rules made there under, shall be exercisable by:

(a) by such officer or authority subordinate to the Central Government,(where the appropriate Government is the Central Government) or by the State Government or by such officer or authority subordinate to the state Government as may be specified in the notification; and

(b) where the appropriate Government is a State Government, by such officer or authority subordinate to the state Government, as may be specified in the notification.

Power to amend schedules (Sec. 40)

If the appropriate Government or the Central Government feels it necessary in the public interest, can amend the schedule by notification issued in the official Gazette. The first; second or third schedule can be amended.

CAUSES CONSEQUENCES AND SETTLEMENT OFINDUSTRIAL DISPUTES

Industrial Disputes Act provides for a machinery for just and equitable settlement of Industrial disputes by adjudication, negotiation and conciliation. It promotes measures for securing and preserving amity and good relations between employer and workmen. It helps prevention of illegal strikes and lockouts, and provides provisionfor relief to workmen in the case of layoff and retrenchment. It promotes a base or collective bargaining also.

Causes of Industrial Disputes

The problem of industrial unrest is inherent in the industrial system. The main features of


industrial work anywhere are that (a) it involves division of labour; (b) it is a group activity; (c) it is carried under control. Broadly speaking, the causes of industrial disputes can be classified as:

1. Economic causes2. Management causes, and3. Political causesA brief description of each, is given below:

1. Economic causesEconomic causes include questions pertaining to wages, bonus and allowances,

retrenchment of workmen by the employer retionalisation and automation, faulty retrenchment system, leave and so on. Low wages, irrespective of rising prices, demand for a rise in D.A., intolerable working and living conditions, issues pertaining to hours of work, etc. are some other economic causes that provoked a number of strikes in India.

The worker factors responsible for industrial unrest have been: (1) Inter union rivalries, (2) Economic and political environment that exercise adverse effects on workers attitudes, and (3) Indiscipline amongst workers.

2. Managerial causes

Some of the causes of discontent are inherent in the industrial system, itselfsuch as:

(1) Workers do not get any opportunity for self-expression; or(2) Their social needs are not fulfilled; that is. the position of workers within in informal qroups formed in jndustrial undertakings and problems of conflict within the groups may not be taken into account.(3)Lack of communication on one hand, between the workers and management may turn petty quarrels into industrial unrest and on the other, the problem of discipline in industrial units may assume serious dimensions.The other managerial factors responsible for industrial unrest have been as

1. Mental inertia on the part of management and labour. 2. Management's general attitude of hatred towards their workers,3..Lack of competence on the supervisor and other managers in human relations.4..Management's desire to pay comparatively lesser amount of bonus or dearness allowance against the desire of workmen.5. .Efforts to introduce modernisation without prior or appropriate environment.6. Excessive work load and inadequate welfare facilities.7. Defective policy of lay-off.8. Denial of the workers right to recognize union.9. Unfair practices like victimization or termination of services without assigning any reasons.

10.Lack of definite wage policy and stabilization of prices. 12. Lack of a proper policy of union recognition.

13.Denial of worker's right to organise, etc.

Political causes

Industrial disputes are pertly political also. Some important political strikes I organized by industrial workers in India. Prior to independence, as early , there was a mass strike in Mumbai against the sentence of imprisonment strikes occurred on account of actions taken against, for


participating in demonstrations, trial of political leaders, etc. After the independence also, some stirkes have occurred owing to agitation's of political parties on questions like re-organisation ation of States, National Language, etc. Percentage distribution of industrial disputes by causes as published by the Ministry of Labour,

Impact/Effect/Consequences of Industrial Disputes

The consequences of Industrial disputes are many. A brief description is given(1) Disturb the economic, social and political life of a country: When labour and equipment

in the whole or any part of an industry are rendered idle by strike or lockout, national dividend suffers in a way that injures economic welfare.Loss of Output:

(2)Loss of Output : Loss of output in an industry which is directly affected by a dispute, but other industries are also affected adversely, as stoppage of work in one industry checks activity in other industries too.

(3) Decline in the demand for goods and services: Strikes reduces the demand for the goods that other industries make, if the industry in which stoppage has occured is one that furnishes raw materials semi-finished goods or service largely used in the products of other industries.

(4) Lasting loss to the workers: There is a lasting injury to the workers in the form of work being interrupted due to the strikes which involves a loss of time which cannot be replaced. The wages are lost and the workers can least afford to lose them specially when the average earning of a worker is not very high.

(5) Increase in indebtedness : This increases the indebtedness among the workers and not only the old debts become heavier but fresh debts may also be incurred.

(6) Loss of health of family members : The workers and their family members also suffer from loss of health due to mental warrious resulting from loss of wages.

(7) Problem to consumers : Strikes and lockouts create problem to consumers also. Articles of their requirements are not available in time, and the prices of such articles reach high due to black marketing activities. ..

(8) Loss to the management/employer : When workers stop working, the plant and machinery remain idle. The fixed express are to borne by the employer even when the production stops. This way the employer suffers from great loss.

(9) Bad effect on labour relations: Strikes and lockouts bring bad effects on industrial relations. With the result the workmen and the employer always be in mental tension.

(10) Obstruction to economic growth: Strikes creates many kinds ofviolence which obstruct the growth of economy.

PREVENTION AND SETTLEMENT OF INDUSTRIAL DISPUTES:Machinery for prevention of disputes in India: The frequency with which the strikes took place and the serious industrial and social dislocation which they cause has underlined the importance of preserving industrial peace. The methods for prevention of industrial disputes include broadly all such measures which directly or indirectly contribute towards improvement of Industrial relations. The prevention methods, therefore cover the entire field of relations between industry and labour which are described below:


(1) Strong Trade Union(2) Profit Sharing and Co-partnership(3) Joint Consultation(4) Inrlustrial Employment Standing Orders(5) Code of Discipline(6) Collective Bargaining(7) Works Committees(8) Workers Participation in Management(9) Tripartite Bodies/ Machinery(10) LabourWelfare Officer(11 ) Wage Board

1. Strong Trade Union: A strong trade union responsible to the welfare of workers must work to protect and promote the interests of workers and the condition of their employment. It must provide advice and information to management on personnel policies and practices. Unions also impress upon workers the need to exercise restraint in the use of their rights. Unions assist employers in maintaining discipline and in increasing productivity. Unions should act as a link between employers and workers so as to develop mutual understanding and co orporation between the two sides. As a matter of fact a trade union is the most switable and most effective agency to conduct bargaining strong.2. Profit Sharing and Co-partnership: (a) Profit-Sharing: This method helps for maintenance of good industrial relations. Profit sharing means that the employer gives to the workers a portion of profit of the business, in addition to wages. It is usually based on an agreement between the employer and the workers.

Importance of profit sharing:(1) The award to labour of a share of profits would create psychological

conditions favourable to the restoration of industrial peace.(2) Profit sharing is likely to strongthen the common interest of labour and

capital and thereby increase the productive efficiency of the workers.(3) Profit sharing e"nhances social justice so far as labour, a primary factor

of production, that produces profits, is allowed to share in them.(4) Protit sharing makes the worker responsible, creates a feeling of identity

with business and settles all disputes peacefully.Limitations of profit sharing:(1) Although the purpose of profit sharing is to lay foundation for harmonious industrial relations, they often fail to gain the confidence of the worker since the amount of profits accruing to the workers has not been very large. The workers suspect honesty and good faith on the part of the employer in distribution of profits.(2) There is possibility of conflicts since the employees contend that the increased profits are due to their efforts.(3) The workers often fear that employers may use the profit-sharing scheme to weaken the trade unions and to make the workers dependent upon them.(4) Profit sharing may make the workers sluggish and therefore, production instead of being augmented, may actually diminish.Broadly speaking; until a climate of mutual trust and confidence is created between the two sides, the success of profit sharing schemes in industry so far as industrial peace is concerned, seems doubtful.(b) Co-partnership:


Co-partnership has come to be a applied to schemes which include a system of profit sharing as well as control in the management. It is necessary that in order to acquire control of business, the workers may other acquire share-capital gaining thereby the rights and responsibility of share-holders or may form a co-partnership committee having a voice in internal management of the business. So far as India is concerned, acquiring of share capital or joining in a co-partnership committee by workers seems difficult because of their law earnings and backward in education. Therefore, in the context of Indian conditions, it is proper to lay emphasis on workers participation in management.(3) Joint consultation:

The industrial democracy necessitates joint consultation in industry between employer~ and workers to eliminate most of the problems faced by them. Joint consultation involves a regular and continuous relationship between workers and management, and therefore, pre-supposes the willing acceptance by management of the participation of workers representatives in discussing Common problems of interest to the enterprise. While full joint consultation can be expected only after the establishment of a collective bargaining relationship, mutual consultation at the plant level often helps to bring the parties together and to train them in the discussion of common problems. Thus, there is tremendous scope of reducing industrial tension and improving productivity through joint consultation in industry.

The system of joint consultation in India could not develop adequently before independence mainly because of the illiteracy, migratory character and lack of proper organisation of workers. After 1947, with the initiation of Five Year Plans greater emphasis was laid on more production and workers interests began to attract greater attention. The Industrial Disputes Act, 1947 provided for establishment of 'works committees' at the plant level. Now the consultative machinery in this country exists almost at every levels i.e. undertaking, industry, State and National levels. At the undertaking level, there are Joint Committees or Joint Councils. At the industry level, there are Wage Boards and Industrial Committees to deal with specific problems of workers that arose from time to time in particular industries. At the State Level, the Labour Advisory Board functions, and at the national level there are Indian Labour Committee, etc.

The functions of Joint Consultative Machinery in India have been the prevention of disputes, reduction in mutual differences and friction, and creation of a proper work climate in industry.4. Industrial Employment Standing Orders: This is another constructive step towards the prevention of industrial disputes which determine the terms and conditions of industrial employment. Every worker should have the knowledge about the terms and conditions in which he has been employed. He is also expected to know the rules of discipline that is supposed to be followed by him. This problem is solved by 'Standing Orders' in which terms and conditions for employers and employees are prescribed. The provision for 'Standing orders was for the first time, made in the Bombay Industrial Disputes Act, 1938. Thereafter, in order to define the condition of employment and to make them known to the workmen, the Government enacted the Industrial Employment (Standing Orders) Act, 1946. This Act applies to every industrial establishment wherein 100 or more workers are employed or were employed on any day of the preceding 12 months.5. Code of Discipline: The Indian Labour Conference at its 15th Session in 1957 evolved a 'Code of Industrial Discipline'. The Code voluntarily binds the employers and workers to settle all grievances and disputes by mutual negotiations, conciliation and voluntary arbitration. The main features of this Code include the following.(1) Both, employers and employees should recognise the rights and responsibilities of each


other.(2) Neither party will have recourse to coercion, intimidation, litigation and victimisation, but will settle all disputes through the existing machineryfor the settlement of industrial disputes. (3) A mutually agreed procedure will be set up and both the parties will abide by it without taking arbitrary action.6. Collective Bargaining: It is a form of joint consultation, and a process in which the representative of the employer and of the employees meet and attempt to negotiate a contract governing the employer-employees union relationship. It involves discussion and negotiation between the two groups as to the terms and conditions of employment. The main object of collective bargaining is to protect the interests of workers through collective action and by preventing unilateral action on the part of the employer. It promotes industrial democracy.7. Works committees: Works committees are the most suitable agency for prevention of industrial disputes. In most of the countries like India, works committees are required to the established through legislation.According to Sec. 3 of the Industrial Disputes Act 1947, in the case of an industrial establishment in which 100 or more workmen are employed or have beenemployed on any day in the preceding 12 months, the appropriate Government may, by general or special order require the employer to constitute a Works Committee consisting of representatives of employers and worker engaged in the establishment, the number of representatives of workmen not being less than that of the employers representatives, to be chosen in consultation with their trade union, if any.The duties of the Works Committee are to promote measures for securing and preserving amity and good relations between the employer and workmen and to comment upon matters of their interest, and to endeavor to compose any material difference of opinion in respect of such matters.8. Workers participation in management: These councils aim at enabling the workers to participate in management, help them to understand the problems and difficulties of the industry concerned and bring about better relationship between the management and labour.9. Tripartite Bodies/Machinery: Several tripartite bodies have been constituted at Central and State levels. The Indian Labour Conference, Standing Labour Committees, Wage Bounds and Industrial Committees operate at the Centre. At the State Level, State Labour Advisory Bounds have been set up. All these bodies play important role in reaching at agreements on various labour matters. The recommendations of these bodies are advisory in nature but carry a great weight on employers, trade unions and the Government. All these bodies constitute the consultative machinery for the private sector.

WORKMEN'S COMPENSATION ACT 1923

Object and ScopeApplication. The Workmen's Compensation Act (Act VIII of 1923) came into force from 1st


July, 1924. It applies to the whole of India, including the State of Jammu and Kashmir. The Act provides for the payment of compensation by certain. classes of employers to their workmen, for injury by accidents.The Workmen's Compensation Act does not apply to factories covered by the Employees State Insurance Act.The Amendment of 1976. The Workmen's Compensation (Amendment) Act, 1976, was passed with the object of providing suitable scales of compensation for the higher wage levels beyond Rs. 500. The reason is that all wages have been increased. Before the amendment, the Act covered workmen whose wages did not exceed Rs. 500 per month. (See, Schedule, p. 90).

Defences of the Employer. Prior to the passing of this Act, the employer was liable to pay compensation only if he was guilty of negligence. Even in case of proved negligence, the employer could get rid of his liability by using any of the following defences :1. The Doctrine of Assumed Risks. If the employee knew the nature of tte risks he was undertaking when working in a factory, the employer had no liability for injuries. The court assumed in such case that the workman had voluntarily accepted the risks incidental to his work. The doctrine followed from the rule V olenti Non Fit Injuria, which means that one, who has volunteered to take a risk of injury, is not entitled to damages if injury actually occurs.2. The Doctrine of Common Employment. Under this rule, when several Persons work together for a common purpose and one of them is injured by some act or omission of another, the employer is not liable to pay compensation for the injury.3. The Doctrine of Contributory Negligence: Under this rule' a person is not entitled to damages for injury if he was himself guilty of negligence and such negligence contributed to the injury.The three aforesaid defences and the rule "no negligence no liability made It almost impossible for an employee to obtain relief in cases of accident. The Workmen's Compensation Act 'of 1923 radically changed the .law. According to this Act, the employer is liable to pay compensation irrespective of negligence. The Act looks upon compensation as relief to the workman and not as damages payable by the employer for a wrongful act or tort. Hence contributory negligence by the employee does not disentitle him from relief. For the same reason, it is not possible for the employer to plead to the defence of common employment or assumed risks for the purpose of avoiding liability. Thus the Act makes it possible for the workman to get compensation for injuries, unimpeded by the legal obstacles set up by the law of Torts.Two ways of claiming compensation. An injured workman may, if he wishes, file a civil suit for damages against the employer. Section 3(5) of the Workmen's Compensation Act, however, provides that if such a suit is filed, compensation cannot be claimed under the Act and if compensation has been claimed under the Act, or if an agreement has been entered into between the employer and the workman for the payment of .compensation, no suit can be filed in the civil court. Thus the workman has to choose between two reliefs (i)

civil suit for damages and (ii) claim for compensation under the Act. . He cannot have both. .In a civil suit for damages, it is open to the employer to plead all the defences provided by

the law of Torts. Therefore, a civil suit is a risky procedure for a workman and is rarely adopted. The legal position of workmen has, however, been improved by two Acts, viz., The Indian Fatal Accidents Act of 1855 and the Employers' Liability Act of 1938.

DEFINITIONS UNDER WORKMEN'S COMPBNSATION ACT

Dependant. Section 2(d) gives a list of persons who come within the category of "dependant" of a workman. In ordinary language the dependant of a person is one who lives on his earnings. Under Section 2 (d) there are three categories of dependants.1. The following relations are dependants, whether actually so or not-widow, minor legitimate son, unmarried legitimate daughter, a widowed mother.-Sub-sec. (i).


2. The following relations come within the category if any were wholly dependant on the earnings of the deceased workman at the time of his death-a son or daughter who has attained the age of 18 years and who is infirm--sub-sec. (ii).3. The following relations are dependants if they were wholly or partially so at the time of the workman's death-widower; parent, other than widowed mother; minor illegitimate son; unmarried illegitimate daughter or a daughter legitimate or illegitimate if married and a .minor or if widowed and a minor, a minor brother or an unmarried sister or widowed sister if minor; a widowed daughter-in-law, a minor child from a predeceased son; a minor child from a predeceased daughter where no parent or child is alive: or a paternal grand parent if no parent of the workman is alive.--Sub-sec. (iii). Parent, other than widowed mother. Calcutta High Court held that the term 'step mother' does not include this phrase. Manada Devi v. Bengal Bone Mill. But Nagpur High Court held that the term includes an adoptive widowed mother. Additional Dy. Commissioner, Simbhum v. Smt. Lakhmibai Naidu.8Minor. Minor means a person who has not attained the age of 18 years.-Sec. 2(ff).Employer. Sec. 2( e) provides that the term Employer "includes" the following: (i) any body of persons, whether incorporated or not (ii) any managing agent of an employer (iii) the legal representatives of a deceased employer, and (iv) any person to whom the services of a workman are temporarily lent or let out, while the workman is working for him. The definition is not exhaustive.Partial Disablement. Disablement, in ordinary language, means loss of capacity to work or move. Such incapacity may be partial or total and accordingly there are two types of disablement, partial and total. In the Act both types .of disablement are further subdivided into two classes, temporary and permanent. By Section 2 (g) Temporary Partial Disablement means such disablement as reduces the earning capacity of a workman in any employment in which he was engaged at the time of the accident, and Permanent Partial Disablement means such disablement .as reduces his earning capacity in every employment he was capable of undertaking at that time. -The Act is not limited only to physical capacity of disablement, but extends to ~he reduction of earning capacity as weii. Sukkai v. Hukum Chand lute Mills Ltd.'

In a case of Partial Disablement it is necessary that (a) there should be. an accident, (b) as a result of the accident the workman should suffer injury, (c) which should result in permanent disablement and (d) as a result whereof his earning capacity must have decreased permanently. In the proportion in which his earning capacity has been decreased permanently he is entitled to compensation. The medical evidence showing loss of physical capacity is a relevant factor but it is certainly not the decisive factor as to the loss of earning capacity. It is the loss of earning capacity that has to be determined. Commrs. for Port of Cal. v. A. K. Ghosh.

The type of disablement suffered is to be determined from the facts of the case. But it is provided that every injury specified in Schedule I to the Act shall be deemed to result in permanent partial disablement. The schedule also mentions the percentage loss of earning capacity which is to be presumed in each such case.

Examples: (From Schedule 1) Percentage lossDescription of Injury of earning

capacityLoss of both hands . . . . 100Severe facial disfigurement . . . . 100Absolute deafness .. . . 100.Loss of thumb . '. . . 30Loss. of one eye . . . . 40Middle finger of left hand (whole) . . 14


(There are 54 items listed in the Schedule with percentage loss ofearning capacity for each item mentioned.)

Total Disablement. According to Section 2( 1) total disablement means such disablement, whether of a temporary or permanent nature, as incapacitates a workman for all work which he was capable of performing at the time of the accident resulting in such disablement, provided that permanent total disablement shall be deemed to result from the permanent total loss of the sight of both eyes or from any combination of injuries specified in Schedule I, where the aggregate. percentage of the loss of earning capacity as specified in that schedule against those injuries, amounts to one hundred per cent.

Wages. Wages include any privilege or benefit which is capable of being estimated in money, other than a travelling allowance or the value of any travelling concession. or a contribution paid by the employer of a workman towards any pension or provident fund or a sum 'paid to a workman to cover any special expenses entailed on him by the' nature of his employment.-Sec. 2 (m). .The definition of wages is important because an employee whose monthly wages exceed Rs. 1000 is not a workman for the purpose of the Act.The definition of wages is not exhaustive. Wages include all payment which can be calculated in terms of money, e.g., ordinary wages, extra payment for overtime, bonus and other inducements in the shape of payment. for idle time, free meals, allowances for grain and clothing, free or cheap housing, etc., offered to the workman to enter into a contract with the employer. Godavari Sugar Mills v. Sakuntala. But travelling expenses or employer's provident fund contributions are excluded. Local allowance to a workman for cost of living in a particular place forms part of wages. Share of profit or bonus under a profit sharing. scheme is wages. Chit/ra Tanti v. Tata Iron & Steel Co. I This sub-section read with section 5 indicates that payments made by a third party, e.g., tips by customers to boys in restaurants are not wages. Tips may be included within the terms wages if they were received by the workman with the knowledge of the employer. Penn v. Spiers & PondsMonthly Wages. Section 5 of the Act defines "monthly wages" and states the methods of calculating it. "Monthly" wages means the amount of wages deemed to be payable for a. month's service (whether the wages are payable by the month or by whatever other period or at piece rate). Monthly wages are calculated as follows :(a) Where the workman was in service for a continuous period of 12 months immediately preceding the accident, monthly wages shall be one-twelfth of the total wages due for the last twelve months of the period.(b) Where the whole of the period of continuous service was less than one month, monthly wages shall be the average monthly amount which during the twelve months immediately preceding the accident was being earned by a workman employed on the same work by the same employer, or if there was no workman so employed, by a workman employed on similar work in the same locality.(c) In other cases, including cases in which it is not possible for want of necessary information to calculate the monthly wages under clause (b) the monthly wages shall be thirty times the total wages earned in respect of the last continuous period or service immediately preceding the accident from the employer who is liable to pay compensation divided by the number of days comprising such period.A period of service is deemed to be continuous which has not been interrupted by a period of absence exceeding 14 days.

Workman. The definition of the term workman is important because only a person coming


within the definition is entitled to the reliefs provided by the Workmen's Compensation Act. "Workman" is defined in Section 2(n) read with .Schedule II to the Act.In Schedule IT, a list (consisting of 32 items) is given of persons who come within the category of workmen. Examples: Persons employed otherwise than in a clerical capacity or in a railway to operate or maintain a lift or a vehicle propelled by steam, electricity or any mechanical power ; person employed otherwise than in a clerical capacity in premises where a manufacturing process is carried on; seamen in ships of a certain tonnage; persons employed in constructing or repairing building or electric fittings ; persons employed in a circus or as a diver; etc.Subject to the exceptions noted below, the term workman means ~(a) a railway servant as defined in Section 3 of the Indian Railways Act of 1890 who is not permanently employed in any administrative, district or sub-divisional office of a railway and not employed in any capacity as is specified in schedule II or (b) employed on monthly wages not exceeding Rs. 1000 in any such capacity as is mentioned in Schedule II. IFrom 1st April 1976, the limit of monthly wages for purposes of this Act, was raised from Rs. 500 to Rs. 1000. IThe words used in clause (b) mean that the wages must not exceed on average (now Rs. 1000) a month. The contract of employment may be expressed or implied, oral orin writing.

The Act provides that the following categories of persons are notto be deemed as workmen for the purposes of the Act :(a) Persons working in the capacity of a member of the Armed Forces of the Union.b) A person whose employment is of a casual nature and who is employed otherwise than for the purposes of the employer's trade or business.The exercise and performance of the powers and duties of a local authority or of any department acting on behalf of the Government shalt, for the purposes of the Act, unless a contrary intention appears be deemed to be the trade or business of such authority or department.The State Government has been given power to add to the list in Schedule II any hazardous occupation or specified injuries in such an occupation. The addition may be made by notification in the official Gazette, with not less than 3 months' notice.There are legal decision regarding the question who is a workman. The general rule is that there must be the relationship of master and servant between the employer and the workman. Workman is a person whom the empIoyer can command and control in the manner of performing the work Yewen v. Noakes. & According to Wills, the following points are to be taken into consideration in determining the question whether a person is a workman: (a) the term of engagement (b) the payment of wages (c) the power of control over the work (J) the power of dismissWhat is employment of a casual nature? Employees of a casual nature, if not employed in the employer trade or business do not come within the definition of the term workman as used in the Act. Generally speaking, casual work is one which is not regular .or continuous. A person doing odd jobs was employed by the occupier of a private premises to clean windows. Held, his work was of a casual nature. Hill v. Begg." A person officiating in a leave vacancy is not a casual worker. In the matter of Alam Singh.~Whether the employment is for the purpose of the employer's trade or business depends on whether the contract of service entered into by the employer was hi his capacity as businessman or in a private capacity. When a coal mine employs workers to dig for coal it is for his trade or


business. But a mine owner engaging workers for building his residence, is not engaging them for his trade or business.A person who does service which is illegal and void cannot bea workman and cannot claim compensation. Kemp v. Lewis."

RULES REGARDING WORKMEN'S COMPENSATIONWhen is employer liable to pay compensation? Section 3(I) lays down that if personal injury is caused to a workman by accident arising out of and in course of employment, his employer shalt be liable to pay compensation.From the above it follows that the employer is liable when (a) injury is caused to a workman by accident and (b) the accident arises out of and in course of employment. An occupational disease is deemed to be an injury by accident and the employer is liable to pay compensation. The section itself provides that in certain cases of injury, no compensation is payable.What is an accident? Lord Macnaughten in Fenton v, Thorley & Company defined an accident as “an unlocked for mishap or untoward event which is not expected or designed". Thus a self infficted injury is not an accident ordinarily. In Grim.e v. Fletcher a person became insane as a result of accident and then committed suicide. It was held that death was the result of the accident and compensation was awarded. But where insanity was not the direct result of the accident compensation cannot be awarded. e.g., where suicide was due to brooding over the accident. Withers v. L. B. &. S. C. Raiways.' A series of tiny accidents, each producing some unidentifiable result and operating cumulatively to produce the final condition of injury, would constitute together an accident to furnish a proper foundation for a claim under the Act.

Personal Injury. A personal injury is not necessarily confined to physical or bodily injury. Injury includes psychological at physiotogical injury such as nervous shock, insanity etc. The injury must be personal. An injury to the belonging of a workman does not come within the Act.A workman had to go into a heating room and from there to cooling plant. The changes of temperature caused pneumonia an, the workman died. Held, the death was due to personal injury. The Indian News Chronick Ltd. v. Mrs. Luis Lazarus.” Death was the result of heat-stroke. Held that dependant was entitled to compensations. Santon Fernandez v. B.P. (India) Ltd."Arising out of and in the course of employment. This phrase been copied from the English Act on the subject. The phrase has been interpreted in a large number of cases, English and Indian. But difficulties still remain.

In the course of employment: This part of the phrase covers the period of time during which the employment continues. Compensation is payable if the accident occurs within the period of employment. Generally speaking employment commences when the employee reaches his place of work and ceases when he leaves the place. 'But there are several exceptions to the above rule.(1) when the workman uses transport provided by the employer for the purpose of going to and from the place of work the time during which he uses the transport, is included in the course of his employment. (2) The time during which the workman is upon the premises of the employer should be included in the period of employment. An employee of the E. I. Railways was knocked down and killed by a train while returning from duty by crossing the platform. area, Held, the accident arose out of and in course of employment. (3) If the workman reaches the place of employment before the time when the employment begins: if it was necessary and not too early, or if at the time of accident he was doing something to equip himself for the work, he is in course of employment(4) If the workman with the knowledge and permission of the employer lives at some distance


from the place where he is called upon to work and if in the course of proceeding at a reasonable time and in a reasonable manner from his place to the place of work. he meets with fatal accident then his accident must be held to arise out of and in course of employment. (5) The period of rest during the period of employment is in the course of employment. But if the workman goes outside the employer's premises during the rest period and meets with an accident, it is not in course of employment. Arising out of the employment: In Dennis vs Whlite, it was observed that, "When a man runs a risk incidental to his employment and is thereby injured, then the injury arises out of the employment." Notional Extension. . As a rule the employment of a workman does not commence until he has reached the place of employment and does not continue when he has left the place of employment, the journey to and from the place of employment being excluded. It is now wen settled, however, that this is subject to the theory or notional extension of employer's premises so as to include an area which the Workman passes and repasses in going to and in leaving the actual place of work". Occupational Diseases. Persons employed in certain occupations are liable to be attacked by certain diseases. For example, a person engaged in an employment involving exposure to dust containing silica is liable to contract silicosis, telegraph operators are liable to have what is called Telegraphist's Cramp. Such diseases are known as Occupational Diseases. Schedule III to the Workmen's Compensation Act contains a list of occupational diseases divided into three parts, part A, Part B and Part C. Part A includes Anthrax, Compressed Air Sickness, Poisoning by lead tetra-ethyl and nitrous fumes. 'Part B includes poisoning by lead compounds, phosphorus, mercury etc., cancer of the skin, telegraphist's cramp etc. Part C includes Silicosis, Asbestosis etc.

Section 3(2) of the Act provides that an occupational disease. "shall be deemed to be an injury by accident within the meaning of this section and. unless the contrary is proved, the accident shall be deemed to have arisen out of, and in the course of, the employment."For diseases included in Part A of Schedule III, the employer liability' to pay compensation

when a workman employed by him contracts the disease. For the diseases included in Part B, the employer is liable if a workman contracts it while in his service and if the workman has been in his service for a continuous period of six months. which period shall not include a period of service under any other employer in the same kind of employment. For diseases included in Part C of Schedule III, the workman is entitled to Compensation if he has been in the service of one or more employers for such continuous period as the Central Government may specify. In such cases the compensation is to be paid by all the employers in such proportions as the Commissioner of Workmen's Compensation may deem just.-Sec. 3(2A).

This list of occupational diseases and the employments producing them as contained in Schedule In may be extended (by notification) by the State Government in the case of Parts A and B and bythe Central Government in the case of Part C. .

Section 3 ( 4) lays down that save as provided above, no compensation shall be payable to a workman in respect of any disease unless the disease is directly attributable to a specific injury by accident arising out of, and in the course of his employment.

When is employer not liable to pay compensation? Section 3 of the Act provides that the employer is not liable to pay compensation in the following cases :(a) in respect of any injury which does not result in thc total or partial disablement of the workman for a period exceeding three days(b) in respect of any injury not resulting in death, caused by an accident which is directly attributable to-(i) the workman having been at the time thereof under the influence of drink or drugs, or,


(ii) the wilful 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 wiIfuI removall or disregard by the workman of any safety guard or other device which he knew to have been provided for the purpose of securing the safety of workmen.As regards exception clause (b) (in a workman would not lose his right to compensation only by reason of tile fact that he had acted thoughtlessly or foolishly. From Section 3 it follows that the employer is not liable to pay compensation under the Workmen's Compensation Act,in the cases also-When the accident did not arise out of or in the course of the employment.-When the workmen filed a suit for damages in the Civil Court: and-When disablement lasted 3 days or less(that is ,injuries were not significant)The Amount of Compensation- The Act provides for compensation for –(1) Death(2) Permanent total disablement (3) permanent partial disablement and (4) Temporary disablement.For determining the amount of compensation payable under the Act, Section 4 has to be rad with Schedule IV to the Act. In Schedule IV, there is a table having four columns. The rules regarding the amount of compensation, as laid down 1:

Section 4, are stated below; .

For Death; The employer must pay the amount mentioned in column 2 of Schedule IV.

For Permanent Total Disablement. The employer must pay the amount mentioned in column 3 of Schedule IV.For Permanent Partial Disablement: Schedule I to the Act contains a list of injuries deemed to result in permanent partia1 disablement together with the percentage loss of earning capacity which is presumed to occur in each case When permanent partial disablement occurs from an injury specified in Schedule I, the amount of compensation is to be calculated by finding out from Schedule IV the compensation payable for permanent total disablement to the workman concerned and multiplying it with the percentage loss of earning capacity as stated in Schedule I. Thus, suppose that there is an injury which, according to Schedule I, causes a 30% loss of earning capacity. Suppose that the monthly wage of the workman is Rs. 50. From Schedule IV it is seen that for permanent total disablement be would have obtained Rs. 10,080. Hence for the permanent partial disablement he would get 30% of Rs. 10,080, i.e., Rs. 3,024.In the case of an injury not specified in Schedule I, the percentage loss of earning capacity permanently caused must be found out. This figure multiplied by the amount of compensation for permanent total disablement gives the amount of compensation payable for the partial disablement.Where more injuries than one are caused by the same accident, the amount of compensation payable under this head shall be aggregated but not so in any case as to exceed the amount which would have been payable if permanent total disablement had resulted fromthe injuries.For Temporary disablement: Where as a result of the injury there is a temporary disablement, total or partial, the employer is required to make a half-monthly payment to the workman. The rate of half-monthly payment is given in column 4 of Schedule IV. (There are different-rates for different wage groups.)Rules regarding Half-monthly Payment: The first half-monthly payment is to be made on the sixteenth day (i) from the date of the disablement, where such disablement lasts for a period of 28 days or' more, or (ii) after the expiry of a waiting period of three days from the date of the disablement, where such disablement lasts for a period of less than 28 days. Thereafter the payments must be made half monthly during the disablement or during a


period of five years. whichever period is shorter. From any lump sum payment made for compensation and from any half-monthly payment, any sum which the workman has received from the employer, prior to the receipt of the lump sum or half monthly payment, may be deducted. But any sum received for medical treatment, cannot be so deducted.-Sec. 4 (1) (a).No half-monthly payment shall in any cases exceed the amount, if any, by which half the amount of the monthly wages of the workman before the accident exceeds half the amount of such wages which he is earning after the accident.-Sec. 4 (1) (b).On the ceasing of the disablement before the date on which any half-monthly payment falls due, there shall be payable in respect of that half month a sum proportionate to the duration of the disablement in that half-month.-Sec. 4 (2).

Any half-monthly payment payable to' a workman may be reviewed by the Commissioner on the -application of either the employer or the workman on. the ground that there has been a change in the condition of the workman. The payment may upon review, be continued, increased, decreased or ended or (in case the injury has resulted in a permanent disablement) converted into a lump sum -Sec. 6. .A right to receive half-monthly payment may, by agreement or by order of the Commissioner, be redeemed by the payment of a lump sum. This is called commutation of half-monthly payments.-Sec. 7.Distribution of Compensation. Section 8 lays down the following rules regarding the distribution of compensation :

1. Compensation for death and lump sum payment due to a woman or to a person under a legal disability must be deposited with the Commissioner.2. But in the case of a deceased workman, an employer may make to .any dependent advances on account of compensation not exceeding an aggregate of one hundred rupees. So much of such aggregate as does not exceed the compensation payable to that dependent shall be deducted by the Commissioner from such compensation and repaid to the employer.

3. Any other sum amounting to not less than Rs. 10 which is payable as compensation may be deposited with the Commissioner on behalf of the person entitled thereto. .4. The receipt of the Commissioner shall be sufficient discharging respect of any compensation deposited with him.5. After the deposit of the compensation, the Commissioner shall deduct therefrom the actual cost of the- workman's funeral expenses to an amount not exceeding Rs. 50 and pay the' same to the person by whom the expenses were incurred.6. The Commissioner may serve notices calling upon the dependents to appear before him for the purpose of determining the distri bution of the compensation.7. If the Commissioner is satisfied that no dependent exists, he shall repay the balance of the money to the employer.8. The Commissioner shall on application by the employer, furnish a statement showing in detail all disbursements made.9. The compensation money is to be distributed among the dependents in such proportions as the Commissioner thinks fit. The whole of it may be given to one person.10. Except in the case of a woman or a person under a legal disability, the compensation money is to be paid Jo the person entitled thereto11. Money payable to a woman or a person under a legal dis ability may be invested or otherwise dealt with as the Commissioner thinks fit. Half-monthly payments payable to a person under a legal disability may be paid to a dependent of the workman or to any other person whom the Commissioner thinks best fitted to provide for the welfare of the workman.


12. The orders of the Commissioner regarding the distribution of compensation may be varied later if necessary.13. Notice must be given to the parties affected.14. Where under the previous para, the Commissioner varies an order on the ground .that the payment of compensation to any person has been obtained by fraud, impersonation or other improper means,. any amount so paid may be recovered by the procedure laid down for the recovery of arrears of land revenue.

OTHER PROVISIONS REGARDING COMPENSATION

Payment of Compensation. [Sec. 4A.] Compensation shall be paid as soon as it falls due. Where the employer does not accept the liability to the extent claimed, he must make provisional payment basedon the extent of liability which he accepts. This is without prejudice to the right of the workman to make any further claim.If an employer fails to pay the compensation within one month of the date on which it fell due, the Commissioner may direct the payment of simple interest thereon at 6%.If the Commissioner thinks that there. is no justification for the delay, he may direct. the payment of a further sum, not exceeding 50% of the sum due, by way of penalty. .

Protection of Compensation. Save as provided by this Act, no lump sum or half-monthly payment payable- under the Act shall in any way be capable of being assigned or charged or be liable to attachment or pass to any person other than' the workman by operation of law, nor shall any claim be set off against the same.--Sec. ..9.This section has been framed, to protect as far as possible the workman from moneylenders.Notice and Claim. Section 10 of the Act provides that no claim or compensation shall be entertained by the Commissioner unless notice of the accident has been given in the manner provided as soon as practicable. (This is subject to certain exceptions noted below.)The required notice must be served upon the employer or upon any of several employers or upon any person responsible to the employer for the management of any branch of the trade or business in which theinjured workman was employed. .The notice shall give the name and address of the person injured,the cause of the injury and the date of the accident. The notice may be given by the injured workman or by anybody on his behalf. It may be served by delivering it or sending it by registered post.The State Government may require that any prescribed class of employers shaIl keep at the place of employment a notice book (accessible to all workers or persons acting bonafide on their behalf) where the occurrence of accidents may be recorded. An entry in the notice book is sufficient notice.The want of notice or any defect or irregularity in it shall not be a bar to a claim in the following cases :(1) Where a workman dies or an accident occurring in the premises of the employer or while working under the control of the employer or of. any person employed by him~ and the workman died on the premises or without leaving the vicinity of the premises.(2) If the employer or anyone of several employers or any person responsible to the employer for the management of any. branch of the trade or business in which the injured workman was employed, had knowledge of the accident from any other source at or about the time. when it occurred.(3) If the Commissioner is satisfied that the failure to give notice was due to sufficient cause.


A workman is bound to give notice of any accident which is not merely trivial, and it is not for him to decide whether it is likely to give rise to a claim for compensation. Section 10 also provide s that a claim for compensation must be preferred before the Commissioner. within two years of the occurrence of the accident or the date of death as the case may be. In case the accident is the contracting of a disease the date of its occurrence is the first of the days during which the workman was continuously absent from work in consequence of the disablement caused by the disease.

The Commissioner may entertain a claim filed after the prescribed time, if he is of opinion that the failure to file it within time, was due to.

Fatal Accident. Section 10 A provides that where a Commissioner receives information that a workman has died as a result of an accident arising out of and in course of his employment, he may send by registered post a notice to the workman's employer requiring him to submit, within thirty days of the service of the notice, a statement in the prescribed form, giving the circumstances attending the death of the workman, and indicating whether in the opinion of the employer, he is or is not liable to deposit compensation on account of the death.

If the employer is of opinion that he is liable, he shall make the deposit within thirty days of the service of the notice. If he is of opinion that he is not liable, he must state his grounds. In the latter case, the Commissioner, after such enquiry as he may think fit inform any of the dependents of the .deceased workman that it is open to them to prefer a claim and may give them such further information as he may think fit. Section 10 B provides that where by any law for the time being in force, notice is required to be given to any authority by or on behalf of an employer, at any accident resulting in death or serious bodily injury, the person required to give the notice shall also send a report to the Commissioner. The report may be sent alternatively to any other authority prescribed by the State Government.The State government may extend the scope of the provision requiring reports of fatal accidents to any class of premises. But Sec. 10 B does not apply to factories to which the Employees' State Insurance Act applies.

Medical Examination. [Sec. 11.] 1. After a workman gives notice of an accident, the employer may, within three days of the service of the notice, offer to have him examined free of charge by a qualified medical practitioner. ,2. Any workman in receipt of half-monthly payments may also be required to submit for examination from time to time.3. The Examination must be in accordance with the rules framed for the purpose. .4. If the workman refuses, without sufficient cause, to submit to the examination or if he leave the vicinity of the place in which he was employed, his right to receive compensation shaIl be suspended during the continuance of the refusal or until his return to the vicinity and examination.5. In case 1he workman, who refused medical examination, subsequently dies, the Commissioner has discretionary powers of direct payment of compensation to the dependents of the deceased workman.6. The condition of an injured workman may be aggravated by refusal to submit to. medical examination or refusal to follow the instructions of the medical examiner or failure to be attended by or follow the instructions of a qualified medical practitioner7. In such a case he would get compensation, not for the aggravated injury, but for what the injury would have been had he been properly treated.


Employment by contractors. [Sec. 12.] When an employer engages contractors who engage workmen, any workman injured may recover compensation from the employer if the following conditions are satisfied :(a) the contractor is engaged to do a work, which is part of the Trade or business of the principal,. .(b) the engagement is in the course of or for the purposes of his trade or business, and(c) the accident occurred in or about the vicinity of the employer's premises.The workman may also proceed against the contractor. So he has alternative remedies. When the employer pays compensation, he is entitled to be indemnified by the contractor.

Remdies of employer against stranger. [Sec. 13.] Where a workman has recovered compensation in respect of any injury caused under circumstances creating a legal liability of some person over than the person by whom the compensation was paid and any person who has been called on to pay an indemnity under Section 12 shall be indemnified by the Person so liable to pay damages as aforesaid.Insolvency of Employer. [Sec. 14.] The liability to pay workmen's compensation can be insured against. If an employer who has entered into a contract of insurance for this purpose, becomes insolvent or enters into a scheme of composition or arrangement or (being a company) is wound up, the rights or the employer as against the insurer shall be transferred to and vest in. the workman. The liability to pay compensation to a workman is to. be treated as a preferred debt under insolvency and winding" up. For this purpose, the liability to pay half-monthly payments is to be taken as equivalent to the lump sum payment into which it can be commuted. This section does not apply where a company is wound up voluntarily merely for the purpose of reconstruction or amalgamation with another company.Transfer of Assets by Employer. [Sec. 14A..] Where an employer transfers his assets before any amount due in respect of any compensation, the liability wherefore accrued before the date of the transfer, has been paid, such amount shall, notwithstanding anything contained in any other law for the time being in force, be a first charge on that part of .he assets so transferred as consists of immovable property.Master and Seamen. So far as masters and seamen are concerned, the provisions of the Act apply with certain modifications laid down in Section 15.Returns. The State Government may, by notification in the official Gazette, direct employers to submit returns regarding compensation paid by them and particulars relating to the compensation. Sec. 16.Contracting Out. Section 17 provides that any contract by which a worker relinquishes bis right to receive compensation for injury is null and void in so far as it purports to remove or reduce the liability of any person to pay compensation under this Act.Penalties. Section 18A provides for penalties for failure to perform the duties prescribed under the Act, e.g., failure to send returns or maintain notice books etc.Bar to Civil Suits. A Civil Court has no jurisdiction to settle, decide or deal with any question which, because of the provisions of the Act, is required to be decided or dealt with by the Commissioner or to enforce any liability under this Act.-Sec. 19(2). Recovery of the amount awarded. Any amount payable under the Act, whether under an agreement or otherwise, shall be recovered as an arrear of land revenue.--Sec. 31

COMMISSIONERSThe Act provides for appointment of Officers to be known as Commissioners of Workmen's Compensation. The Commissioners are to determine the liability of any person to pay


compensation (including the question whether a person is or is not a workman) and the amount or duration of compensation (including any question as to the nature or extent of disablement). No civil court bas jurisdiction to deal with matters which are required to be dealt with by a Commissioner. Certain powers have been given to the Commissioners, e.g., the power to call for further deposits. The Commissioner has the powers of a Civil Court.Form of application: No application for settlement of any matter by a Commissioner shall be made, if the parties have been able to settle it by agreement.An application to the Commissioner shall be made in the prescribed form according to the rules, and accompanied by a prescribed fee. The following particulars must be given namely-(a) concise statement of the circumstances and the relief claimed; (b) in case of claim for compensation against an employer, the date of service of notice of accident, with its due time of notice and the reason why notice was not given; (c) the names and addresses of the parties; and (d) except in case of application by dependent for compensation a concise statement of the matter on which, agreement has and of those on which agreement has not been come to. If the applicant is illiterate or for any reason is unable to furnish the required information, the application, if the applicant so desires, shall be prepared under the direction of the Commissioner.-Sec. 22.Appearance of parties: Appearance may be done on behalf of applicant by a legal practitioner or an official of an Insurance Company, or an authorised person of a registered Trude Union, duly authorised.-Sec. 24.Appeals and References: For proceedings under the Act, the High Court of the State is the Appellate Court. The Commissioner can refer a question of law to the High Court for decision and he must decide the matter according to such decision.--Sec 27.Appeals. An appeal lies to the High Court from the following orders of a Commissioner(a) an order awarding as compensation a lump sum whether by way of redemption of a half-monthly payment or otherwise or an order awarding interest or penalty under section 4A;(b) an order refusing to allow redemption of a half-monthlypayment ;( c) an order providing for the distribution of compensation among the dependents of a deceased workman, or disallowing any dain1 of person alleging himself to be such dependent;(d) an order allowing or disallowing any claim for the amountof an indemnity under the provisions of section 12(2) ;(e) an order refusing to register a memorandum of agreement or registering the same or providing for the registration of the same subject to conditions.

Other Provisions Regarding Appeal :1. No appeal shall lie against any order unless a substantiaI question of law, is involved in the appeal and, in the case of an order other than an order such as is referred to in clause (b), unless the amount in dispute in the appeal is not less than Rs. 300.No appeal lies in any case in which the parties have agreed to abide by the decision of the Commissioner, or in which the order of the Commissioner gives effect to an agreement come to by the parties.3. No appeal by employer lies unless the memorandum of appeal is accompanied by a certificate by the Commissioner to the effect that the applicant has deposited with him the amount payable under the order appealed against.4. The period of limitation for an appeal under this section shall be 60 days and the provisions of Section 5 of the Indian Limitation Act, 1908, shall be applicable to appeals under this section.


THE PAYMENT OF GRATUITY ACT, 1972

CONTENTS

Sections

1. Short title, extent, application and commencement2. Definitions2A. Continuous service3. Controlling authority4. Payment of gratuity4A. Compulsory insurance5. Power to exempt6. Nomination7. Determination of the amount of gratuity7A. Inspectors7B. Powers of Inspectors8. Recovery of gratuity9. Penalties10. Exemption of employer from liability in certain cases11. Congnizance of offences12. Protection of action taken in good faith13. Protection of gratuity14. Act to override other enactments, etc.15. Power to make rules

PAYMENT OF GRATUITY ACT, 1972

[39 OF 1972]An Act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental thereto.BE it enacted by Parliament in the Twenty-third Year of Republic of India as follows :—Short title, extent, application and commencement.1. (1) This Act may be called the Payment of Gratuity Act, 1972.(2) It extends to the whole of India:Provided that in so far as it relates to plantations or ports, it shall not extend to the State of Jammu and Kashmir.(3) It shall apply to—(a) every factory, mine, oilfield, plantation, port and railway company(b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;

(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.


1[(3A) A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.](4) It shall come into force on such date as the Central Government may, by notification, appoint.Definitions.2. In this Act, unless the context otherwise requires,— (a) “appropriate Government” means,—(i) in relation to an establishment—(a) belonging to, or under the control of, the Central Government,(b) having branches in more than one State,(c) of a factory belonging to, or under the control of, the Central Government,(d) of a major port, mine, oilfield or railway company, the Central Government,(ii) in any other case, the State Government;(b) “completed year of service” means continuous service for one year ;[(c) “continuous service” means continuous service as defined in section 2A;](d) “controlling authority” means an authority appointed by the appropriate Government under section 3 ;(e) “employee” means any person (other than an apprentice) employed on wages, 3[* * *] in any establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied, 4[and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity].

Explanation : 5[* * *](f) “employer” means, in relation to any establishment, factory, mine, oilfield, plantation, port, railway company or shop—

(i) belonging to, or under the control of, the Central Government or a State Government, a person or authority appointed by the appropriate Government for the supervision and control of employees, or where no person or authority has been so appointed, the head of the Ministry or the Department concerned,(ii) belonging to, or under the control of, any local authority, the person appointed by such authority for the supervision and control of employees or where no person has been so appointed, the chief executive office of the local authority,(iii) in any other case, the person, who, or the authority which, has the ultimate control over the affairs of the establishment, factory, mine, oilfield, plantation, port, railway company or shop, and where the said affairs are entrusted to any other person, whether called a manager, managing director or by any other name, such person ;

(g) “factory” has the meaning assigned to it in clause (m) of section 2 of the Factories Act, 1948 (63 of 1948);

(h) “family”, in relation to an employee, shall be deemed to consist of —(i) in the case of a male employee, himself, his wife, his children, whether married or


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unmarried, his dependent parents 6[and the dependent parents of his wife and the widow] and children of his predeceased son, if any,

(ii) in the case of a female employee, herself, her husband, her children, whether married or unmarried, her dependent parents and the dependent parents of her husband and the widow and children of her predeceased son, if any :7[* * *]

Explanation : Where the personal law of an employee permits the adoption by him of a child, any child lawfully adopted by him shall be deemed to be included in his family, and where a child of an employee has been adopted by another person and such adoption is, under the personal law of the person making such adoption, lawful, such child shall be deemed to be excluded from the family of the employee ;

(i) “major port” has the meaning assigned to it in clause (8) of section 3 of the Indian Ports Act, 1908 (15 of 1908) ;

(j) “mine” has the meaning assigned to it in clause (j) of sub-section (1) of section 2 of the Mines Act, 1952 (35 of 1952) ;

(k) “notification” means a notification published in the Official Gazette ;(l) “oilfield” has the meaning assigned to it in clause (e) of section 3 of the Oilfields

(Regulation and Development) Act, 1948 (53 of 1948) ;(m) “plantation” has the meaning assigned to it in clause (f) of section 2 of the Plantations

Labour Act, 1951 (69 of 1951) ;(n) “port” has the meaning assigned to it in clause (4) of section 3 of the Indian Ports Act,

1908 (15 of 1908) ;(o) “prescribed” means prescribed by rules made under this Act ;(p) “railway company” has the meaning assigned to it in clause (5) of section 3 of the Indian

Railways Act, 1890 (9 of 1890) ;(q) “retirement” means termination of the service of an employee otherwise than on

superannuation ;8[(r) “superannuation”, in relation to an employee, means the attainment by the employee of

such age as is fixed in the contract or conditions of service at the age on the attainment of which the employee shall vacate the employment ;]

(s) “wages” means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance.

9[Continuous service.2A. For the purposes of this Act, —(1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order 10[* * *] treating the absence as break in service has been passed in accordance with the standing order, rules or regulations governing the employees of the establishment), lay off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.(2) where an employee (not being an employee employed in a seasonal establishment) is not







in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer —(a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than —

(i) one hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week ; and(ii) two hundred and forty days, in any other case;(b) for the said period of six months, if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than—(i) ninety-five days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week ; and(ii) one hundred and twenty days, in any other case;[Explanation: For the purpose of clause (2), the number of days on which an employeehas actually worked under an employer shall include the days on which —(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment ;(ii) he has been on leave with full wages, earned in the previous year;(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment ; and(iv) in the case of a female, she has been on maternity leave ; so, however, that the total period of such maternity leave does not exceed twelve weeks.]

(3) where an employee employed in a seasonal establishment, is not in continuous service within the meaning of clause (7), for any period of one year or six months, he shall be deemed to be in continuous service under the employer for such period if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during such period.]

Controlling authority.3. The appropriate Government may, by notification, appoint any officer to be a controlling authority, who shall be responsible for the administration of this Act and different controlling authorities may be appointed for different areas.Payment of gratuity.4. (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, —

(a) on his superannuation, or(b) on his retirement or resignation, or(c) on his death or disablement due to accident or disease :

Provided that 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:[Provided further that in the case of death of the employee, gratuity payable to him shall be


paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.]Explanation : For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days’ wages based on the rate of wages last drawn by the employee concerned :Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:Provided further that in the case of 13[an employee who is employed in a seasonal establishment and who is not so employed throughout the year], the employer shall pay the gratuity at the rate of seven days’ wages for each season.[Explanation: In the case of a monthly rated employee, the fifteen days’ wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen].(3) The amount of gratuity payable to an employee shall not exceed 15[15a[three lakhs and fifty thousand] rupees].(4) For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.(5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.(6) Notwithstanding anything contained in sub-section (1), —(a) 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.(b) the gratuity payable to an employee 16[may be wholly or partially forfeited]—

(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or

(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.

Compulsory insurance.4A. (1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed



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insurer :Provided that different dates may be appointed for different establishments or class of establishments or for different areas.(2) The appropriate Government may, subject to such conditions as may be prescribed, exempt every employer who had already established an approved gratuity fund in respect of his employees and who desires to continue such arrangement, and every employer employing five hundred or more persons who establishes an approved gratuity fund in the manner prescribed from the provisions of sub-section (1).(3) For the purpose of effectively implementing the provisions of this section, every employer shall within such time as may be prescribed get his establishment registered with the controlling authority in the prescribed manner and no employer shall be registered under the provisions of this section unless he has taken an insurance referred to in sub-section (1) or has established an approved gratuity fund referred to in sub-section (2).(4) The appropriate Government may, by notification, make rules to give effect to the provisions of this section and such rules may provide for the composition of the Board of Trustees of the approved gratuity fund and for the recovery by the controlling authority of the amount of the gratuity payable to an employee from the Life Insurance Corporation of India or any other insurer with whom an insurance has been taken under sub-section (1), or as the case may be, the Board of Trustees of the approved gratuity fund.(5) Where an employer fails to make any payment by way of premium to the insurance referred to in sub-section (1) or by way of contribution to an approved gratuity fund referred to in sub-section (2), he shall be liable to pay the amount of gratuity due under this Act (including interest, if any, for delayed payments) forthwith to the controlling authority.(6) Whoever contravenes the provisions of sub-section (5) shall be punishable with fine which may extend to ten thousand rupees and in the case of a continuing offence with a further fine which may extend to one thousand rupees for each day during which the offence continues.Explanation : In this section “approved gratuity fund” shall have the same meaning as in clause (5) of section 2 of the Income-tax Act, 1961 (43 of 1961)].Power to exempt.5. 19[(1) The appropriate Government may, by notification, and subject to such conditions as may be specified in the notification, exempt any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act if, in the opinion of the appropriate Government, the employees in such establishment, factory, mine, oilfield, plantation, port, railway company or shop are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.20(2) The appropriate Government may, by notification and subject to such conditions as may be specified in the notification, exempt any employee or class of employees employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act, if, in the opinion of the appropriate Government, such employee or class of employees are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.]21[(3) A notification issued under sub-section (1) or sub-section (2) may be issued retrospectively a date not earlier than the date of commencement of this Act, but no such notification shall be issued so as to prejudicially affect the interests of any person.]Nomination.





6. (1) Each employee, who has completed one year of service, shall make, within such time, in such form and in such manner, as may be prescribed, nomination for the purpose of the second proviso to sub-section (1) of section 4.(2) An employee may, in his nomination, distribute the amount of gratuity payable to him under this Act amongst more than one nominee.(3) If an employee has a family at the time of making a nomination, the nomination shall be made in favour of one or more members of his family, and any nomination made by such employee in favour of a person who is not a member of his family, shall be void.(4) If at the time of making a nomination the employee has no family, the nomination may be made in favour of any person or persons but if the employee subsequently acquires a family, such nomination shall forthwith become invalid and the employee shall make, within such time as may be prescribed, a fresh nomination in favour of one or more members of his family.(5) A nomination may, subject to the provisions of sub-sections (3) and (4), be modified by an employee at any time, after giving to his employer a written notice in such form and in such manner as may be prescribed, of his intention to do so.(6) If a nominee predeceases the employee, the interest of the nominee shall revert to the employee who shall make a fresh nomination, in the prescribed form, in respect of such interest.(7) 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.Determination of the amount of gratuity.7. (1) A person who is eligible for payment of gratuity under this Act or any person authorised, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity.(2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-section (1) has been made or not, 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 of gratuity so determined.22[(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.(3A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify :Provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground.](4) (a) If there is any dispute as to the amount of gratuity payable to an employee under this Act or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, the employer shall deposit with the controlling authority such amount as he admits to be payable by him as gratuity.23[* * *]24[(b) Where there is a dispute with regard to any matter or matters specified in clause (a), the employer or employee or any other person raising the dispute may make an application to the controlling authority for deciding the dispute.]





26[25[(c)] The controlling authority shall, after due inquiry and after giving the parties to the dispute a reasonable opportunity of being heard, determine the matter or matters in dispute and if, as a result of such inquiry any amount is found to be payable to the employee, the controlling authority shall direct the employer to pay such amount or, as the case may be, such amount as reduced by the amount already deposited by the employer.]25[(d)] The controlling authority shall pay the amount deposited, including the excess amount, if any, deposited by the employer, to the person entitled thereto.25[(e)] As soon as may be after a deposit is made under clause (a), the controlling authority shall pay the amount of the deposit —(i) to the applicant where he is the employee ; or(ii) where the applicant is not the employee, to the 27[nominee or, as the case may be, the guardian of such nominee or] heir of the employee if the controlling authority is satisfied that there is no dispute as to the right of the applicant to receive the amount of gratuity.(5) For the purpose of conducting an inquiry under sub-section (4), the controlling authority shall have the same powers as are vested in a court, while trying a suit, under the Code of Civil Procedure, 1908 (5 of 1908), in respect of the following matters, namely :—

(a) enforcing the attendance of any person or examining him on oath ;(b) requiring the discovery and production of documents ;(c) receiving evidence on affidavits ;(d) issuing commissions for the examination of witnesses.

(6) Any inquiry under this section shall be a judicial proceeding within the meaning of sections 193 and 228, and for the purpose of section 196, of the Indian Penal Code, 1860 (45 of 1860).(7) Any person aggrieved by an order under sub-section (4) may, within sixty days from the date of the receipt of the order, prefer an appeal to the appropriate Government or such other authority as may be specified by the appropriate Government in this behalf:Provided that the appropriate Government or the appellate authority, as the case may be, may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said period of sixty days, extend the said period by a further period of sixty days.28[Provided further that no appeal by an employer shall be admitted unless at the time of preferring the appeal, the appellant either produces a certificate of the controlling authority to the effect that the appellant has deposited with him an amount equal to the amount of gratuity required to be deposited under sub-section (4), or deposits with the appellate authority such amount.](8) The appropriate Government or the appellate authority, as the case may be, may, after giving the parties to the appeal a reasonable opportunity of being heard, confirm, modify or reverse the decision of the controlling authority.29[Inspectors.7A. (1) The appropriate Government may, by notification, appoint as many Inspectors, as it deems fit, for the purposes of this Act.(2) The appropriate Government may, by general or special order, define the area to which the authority of an Inspector so appointed shall extend and where two or more Inspectors are appointed for the same area, also provide, by such order, for the distribution or allocation of work to be performed by them under this Act.(3) Every Inspector shall be deemed to be a public servant within the meaning of section 21 of









the Indian Penal Code, 1860 (45 of 1860).Powers of Inspectors.7B. (1) Subject to any rules made by the appropriate Government in this behalf, an Inspector may, for the purpose of ascertaining whether any of the provisions of this Act or the conditions, if any, of any exemption granted thereunder, have been complied with, exercise all or any of the following powers, namely:—

(a) require an employer to furnish such information as he may consider necessary;(b) enter and inspect, at all reasonable hours, with such assistants (if any), being persons in the

service of the Government or local or any public authority, as he thinks fit, any premises of or place in any factory, mine, oilfield, plantation, port, railway company, shop or other establishment to which this Act applies, for the purpose of examining any register, record or notice or other document required to be kept or exhibited under this Act or the rules made thereunder, or otherwise kept or exhibited in relation to the employment of any person or the payment of gratuity to the employees, and require the production thereof for inspection ;

(c) examine with respect to any matter relevant to any of the purposes aforesaid, the employer or any person whom he finds in such premises or place and who, he has reasonable cause to believe, is an employee employed therein;

(d) make copies of, or take extracts from, any register, record, notice or other document, as he may consider relevant, and where he has reason to believe that any offence under this Act has been committed by an employer, search and seize with. such assistance as he may think fit, such register, record, notice or other document as he may consider relevant in respect of that offence ;

(e) exercise such other powers as may be prescribed.(2) Any person required to produce any register, record, notice or other document or to give any information by an Inspector under sub-section (1) shall be deemed to be legally bound to do so within the meaning of sections 175 and 176 of the Indian Penal Code 1860 (45 of 1860).

(3) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall so far as may be, apply to any search or seizure under this section as they apply to any search or seizure made under the authority of a warrant issued under section 94 of that Code.]Recovery of gratuity.8. If the amount of gratuity payable under this Act is not paid by the employer, within the prescribed time, to the person entitled thereto, the controlling authority shall, on an application made to it in this behalf by the aggrieved person, issue a certificate for that amount to the Collector, who shall recover the same, together with compound interest thereon 30[at such rate as the Central Government may, by notification, specify,] from the date of expiry of the prescribed time, as arrears of land revenue and pay the same to the person entitled thereto :31Provided that the controlling authority shall, before issuing a certificate under this section, give the employer a reasonable opportunity of showing cause against the issue of such certificate :Provided further that the amount of interest payable under this section shall, in no case exceed the amount of gratuity payable under this Act.]Penalties.9. (1) Whoever, for the purpose of avoiding any payment to be made by himself under this Act or of enabling any other person to avoid such payment, knowingly makes or causes to be made any false statement or false representation shall be punishable with imprisonment for a term which




may extend to six months, or with fine which may extend to 32[ten thousand rupees] or with both.(2) An employer who contravenes, or makes default in complying with, any of the provisions of this Act or any rule or order made thereunder shall be punishable with imprisonment for a term 33[which shall not be less than three months but which may extend to one year, or with fine which shall not be less than ten thousand rupees but which may extend to twenty thousand rupees, or with both]:Provided that where the offence relates to non-payment of any gratuity payable under this Act, the employer shall be punishable with imprisonment for a term which shall not be less than 34[six months but which may extend to two years] unless the court trying the offence, for reasons to be recorded by it in writing, is of opinion that a lesser term of imprisonment or the imposition of a fine would meet the ends of justice.Exemption of employer from liability in certain cases.10. Where an employer is charged with an offence punishable under this Act, he shall be entitled, upon complaint duly made by him and on giving to the complainant not less than three clear days’ notice in writing of his intention to do so, to have any other person whom he charges as the actual offender brought before the court at the time appointed for hearing the charge; and if, after the commission of the offence has been proved, the employer proves to the satisfaction of the court —

(a) that he has used due diligence to enforce the execution of this Act, and(b) that the said other person committed the offence in question without his knowledge consent

or connivance, that other person shall be convicted of the offence and shall be liable to the like punishment as if he were the employer and the employer shall be discharged from any liability under this Act in respect of such offence :

Provided that in seeking to prove as aforesaid, the employer may be examined on oath and his evidence and that of any witness whom he calls in his support shall be subject to cross-examination on behalf of the person he charges as the actual offender and by the prosecutor:Provided further that, if the person charged as the actual offender by the employer cannot be brought before the court at the time appointed for hearing the charge, the court shall adjourn the hearing from time to time for a period not exceeding three months and if by the end of the said period the person charged as the actual offender cannot still be brought before the court, the court shall proceed to hear the charge against the employer and shall, if the offence be proved, convict the employer.Cognizance of offences.11. (1) No court shall take cognizance of any offence punishable under this Act save on a complaint made by or under the authority of the appropriate Government:Provided that where the amount of gratuity has not been paid, or recovered, within six months from the expiry of the prescribed time, the appropriate Government shall authorise the controlling authority to make a complaint against the employer, whereupon the controlling authority shall, within fifteen days from the date of such authorisation, make such complaint to a Magistrate having jurisdiction to try the offence.(2) No court inferior to that of a 35[Metropolitan Magistrate or a Judicial Magistrate of the first class] shall try any offence punishable under this Act.Protection of action taken in good faith.12. No suit or other legal proceeding shall lie against the controlling authority or any other person in respect of anything which is in good faith done or intended to be done under this Act or any rule or order made thereunder.Protection of gratuity.






13. No gratuity payable under this Act 36[and no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted under section 5] shall be liable to attachment in execution of any decree or order of any civil, revenue or criminal court. Act to override other enactments, etc.14. The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act. Power to make rules.15. (1) The appropriate Government may, by notification make rules for the purpose of carrying out the provisions of this Act.(2) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall, thereafter, have effect only in such modified form or be of no effect as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.



The Payment of Bonus Act, 1965

Applicability of Act (Sec 1)Every factory wherein 10 or more persons are employed with the aid of power or An establish-ment In which 20 or more persons are employed without the aid of power on any day during an accounting year.

Establishment : Establishment includes departments, undertakings and branches, etc.

Computation of available surplus (Sec.5) : The following sums shall be deducted from the gross profits as prior charges, namely:-

(a) any amount. by way of depreciation admissible in accordance with the provisions of sub-sec-tion (1) of section 32 of the Income-tax Act, or in accordance with the provisions of the agricul -tural income-tax law, as the case may be:Provided that where an employer has been paying bonus to his employees under a settlement or an award or agreement made before the 29th May, 1965, and subsisting on that date after deduct -ing from the gross profits notional normal depreciation, then, the amount of depreciation to be deducted under this clause shall, at the option of such employer (such option to be exercised once and within one year from that date) continue to be such notional normal depreciation;(b) any amount by way of 2[development rebate or investment allowance or development al-lowance] which the employer is entitled to deduct from his income under the income-tax Act;(c) subject to the provision of section 7, any direct tax which the employer is liable to pay for the accounting year in respect of his income, profit and gain during that year;

Components of Bonus :- Sec. 2(21) : Salary or wages includes dearness allowance but no other allowances e.g. over-time, house rent, incentive or commission.

Separate establishment (Sec. 3) : I profit loss accounts are prepared and mainland in respect of any such department or undertaking or branch, then such department or undertaking or branch is treated as a separate establishment.

Disqualification and Deduction of Bonus : Sec 1 :• On dismissal of an employee for fraud; or• riotous or violent behaviour while on the premises of the establishment; or• theft, misappropriation or sabotage of any property of the establishment; or• Misconduct of causing financial loss to the employer to the extent that bonus can be deducted for that year.

Computation of gross profits : For banking company, as per First Schedule. Others, as per Sec-ond Schedule.

Eligibility of Bonus : An employee will be entitled only when he has worked for 30 working days in that year. Sec. 8

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). Sec. 10

Eligible Employees: – Employees drawing wages upto Rs.10000/- per month or less. For calcu-lation purposes Rs.3500 per month maximum will be taken even if an employee is drawing upto Rs.3500 per month. (Sec. 12)

Time Limit for Payment of Bonus : Within 8 months from the close of accounting year. (Sec. 19)


Set-off and Set-on : As per Schedule IV. Sec. 15

Submission of Return : In Form D to the inspector within 30 days of the expiry of time limit un-der Section 19. Rule 5

Maintenance of Registers and Records etc. Sec. 2(21) :

• A register showing the computation of the allocable surplus referred to In clause (4) of section 2, in 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 deduc -tions under sections 17 and 18 and the amount actually disbursed, In Form C.

Non applicability of the Act: – Act not applicable to certain employees of LIC. General Insur-ance, Dock Yards, Red Cross, Universities* Educational Institutions, Chambers of Commerce, Social Welfare Institutions. etc. Sec.32

Penalty : For contravention of any provision of the Act or the Rules: Upto 6 months or with fine upto Rs.1000. Sec.28

EMPLOYEES' PROVIDENT FUNDS AND


MISCELLANEOUS PROVISIONS ACT, 1952

The Employees’ Provident Funds and Miscellaneous Provisions Act, provides for compulsory contributory fund for the future of an employee after his/her retirement or for his/her dependents in case of his/her early death. Its applicability: It extends to the whole of India except the State of Jammu and Kashmir and is applicable to:a) every factory engaged in any industry specified in Schedule 1 in which 20 or more persons are employed; b) every other establishment employing 20 or more persons or class of such establishments which the Central Govt. may notify; c) any other establishment so notified by the Central Government even if employing less than 20 persons.Every employee, including the one employed through a contractor (but excluding an apprentice engaged under the Apprentices Act or under the standing orders of the establishment and casual laborers), who is in receipt of wages up to Rs.6,500 p.m., shall be eligible for becoming a member of the funds. The condition of three months’ continuous service or 60 days of actual work, for membership of the scheme, has been done away.

Workers are now eligible for joining the scheme from the date of joining the service.1. The Act provides for three schemes viz.,A. EMPLOYEES' PROVIDENT FUND SCHEME, 1952

An employee who is in receipt of pay up to Rs.6500/-p.m. is eligible for membership of the Fund. The contribution is 12 percent/10 percent of the monthly wages.B. EMPLOYEES' PENSION SCHEME, 1995

Under this scheme, family members, of the employees who died in harness, were given monthly family pension. This scheme is funded by diverting 8.33% of the wages of the employees out of the employers' contributions to the Provident Fund. The Central Government contributes at the rate of 1-1/6% of the wages of the employees. C. EMPLOYEES' DEPOSIT LINKED INSURANCE SCHEME, 1976

The employer shall pay such amount not being more than 1% of the basic wages dearness allowance and retaining allowance (if any). The employer shall pay into the Insurance Fund such further sums not exceeding ¼% of the contribution above to meet all the expenses in connection with administration of the Insurance Scheme. No contribution is payable by the employee. 2. The employer is required to contribute the following amounts towards Employees’ Provident Fund and Pension Fund:a. In case of establishments’ employing less than 20 persons or a sick industrial (BIFR) company or ‘sick establishments’ or any establishment in the jute, beedi, brick, coir or gaur gum industry. –the employer contribution is 10% of the basic wages, dearness allowance and retaining allowance, if any. b. In case of all other establishments’ employing 20 or more person- the employer contribution is 12% of basic wages, dearness allowance and retaining allowance, if any. A part of the contribution is remitted to the Pension Fund and the remaining balance continues to remain in Provident Fund account. Where, the pay of an employee exceeds Rs.6,500 p.m., the contribution payable to Pension Fund shall be limited to the amount payable on his pay of Rs.6,500/- only. “Basic wages" means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him but does not include:


(i) the cash value of any food concession; (ii) any dearness allowance, house-rent allowance, overtime allowance, bonus, commission or any other similar allowance.(iii) any presents made by the employer; For the purposes of this section dearness allowance shall be deemed to include also the cash value of any food concession allowed to the employee.Retaining allowance means an allowance payable for the time being to an employee of any factory or other establishment during any period in which the establishment is not working for retaining his services.3. The contribution to the fund is to be deposited by the employer by 15th of the next month.4. Payment of contributions.(1) The employer shall, in the first instance, pay both the contribution payable by himself and also, on behalf of the member employed by him directly or by or through a contractor, the contribution payable by such member.(2) In respect of employees employed by or through a contractor, the contractor shall recover the contribution payable by such employee and shall pay to the principal employer the amount of member’s contribution so deducted together with an equal amount of contribution and also administrative charges.(3) It shall be the responsibility of the principal employer to pay both the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor and also administrative charges.

5. Recovery of damages for default in payment of any contribution.Where an employer makes default in the payment of any contribution to the fund, or in the transfer of accumulations required to be transferred by him under sub-section (2) of section 15 or sub-section (5) of section 17 of the Act or in the payment of any charges payable under any other provisions of the Act or Scheme or under any of the conditions specified under section 17 of the Act, the Central Provident Fund Commissioner or such officer as may be authorised by the Central Government, by notification in the Official Gazette in this behalf, may recover from the employer by way of penalty, damages at the rates given below:—

Period of default Rate of damages (% of arrears per annum)(a) Less than two months 17(b) Two months and above but less than four months 22(c) Four months and above but less than six months 27(d) Six months and above 37

6. Duties of employers(1) Every employer shall send to the Commissioner within fifteen days of the close of each month a return—(a) in Form 5, of the employees qualifying to become members of the Fund for the first time during the preceding month together with the declarations in Form 2 furnished by such qualifying employees, and(b) in prescribed form of the employees leaving service of the employer during the preceding month:(2) Every employer shall maintain an inspection note book in prescribed form for an Inspector to record his observation on his visit to the establishment.(3) Every employer shall maintain such accounts in relation to the amounts contributed to the


Fund by him and by his employees as the Central Board may, from time to time, direct, and it shall be the duty of every employer to assist the Central Board in making such payments from the Fund to his employees as are sanctioned by or under the authority of the Central Board.(4) Every employer in relation to a factory or other establishment to which the Act applies on the date of coming into force of the Employees’ Provident Funds (Tenth Amendment) Scheme, 1961, or is applied after that date, shall furnish in duplicate to the Regional Commissioner in Form No. 5A annexed hereto, particulars of all the branches and departments, owners, occupiers, directors, partners, manager or any other person or persons who have the ultimate control over the affairs of such factory or establishment and also send intimation of any change in such particulars, within fifteen days of such change, to the Regional Commissioner by registered post and in such other manner as may be specified by the Regional Commissioner:Provided that in the case of any employer of a factory or other establishment to which the Act and the Family Pension Scheme, 1971, shall apply the aforesaid Form may be deemed to satisfy the requirements of the Employees’ Family Pension Scheme, 1971, for the purpose specified above.

7. Duties of contractorsEvery contractor shall, within seven days of the close of every month, submit to the principal employer a statement showing the recoveries of contributions in respect of employees employed by or through him and shall also furnish to him such information as the principal employer is required to furnish under the provisions of the Scheme to the Commissioner.8. Withdrawal from the FundUnder the following circumstances withdrawal from the Fund is permitted.I. (i) For the purchase of a dwelling house/flat including a flat in a building owned jointly with others (outright or on hire purchase basis),or for the construction of a dwelling house including the acquisition of a suitable site for the purpose from the Central Govern¬ment, the State Government, a co-operative society, and institution, a trust, a local body or a Housing Finance Corpora¬tion (hereinafter referred to as the agency/agencies);(ii) for purchasing a dwelling site for the purpose of construc¬tion of a dwelling house or a ready-built dwelling house/flat from any individual;(iii) for purchasing dwelling house/flat on ownership basis from a promoter governed by the provisions of any Flats or Apart¬ments Ownership Act or by any other analogous or similar law of the Central Government or the State Government as may be in force in any State or area for the time being and who intends to con¬struct or constructs dwelling house or block of flats and the member is required to pay to the said promoter in advance for financing the said construction of the house/flat (iv) for the construction of a dwelling house on a site owned by the member or the spouse of the member or jointly by the member and the spouse, or for completing/continuing the construction of a dwelling house already commenced by the member or the spouse, on such site or for purchase of a house/flat in the joint name of the member and the spouse under clauses (i) and (ii) above.(ii) On an application from a member in the prescribed form the Commissioner or any authorized office may sanction withdrawal from the amount standing to the credit of the member in the fund.a) The amount of withdrawal for the purpose of purchase of a site for construc¬tion of house thereon shall not exceed the member’s basic wages and dearness allowance for twenty-four months or the member’s own share of contributions, together with the employer’s share of contributions with interest thereon or the actual cost towards the acquisition of the dwelling site, whichever is the least.b) The amount withdrawal for the purpose of acquisition of a ready built house/flat or for


construction of a house/flat, shall not exceed the member’s basic wages and dearness allowance for thirty-six months or the member’s own share of contributions, together with the employer’s share of contributions, with interest thereon, or the total cost of construction, whichever is the least.No withdrawal under this paragraph shall be granted unless:

(i) the member has completed five years’ membership of the Fund;(ii) the member’s own share of contributions with interest thereon in the amount standing to his credit in the Fund is not less than one thousand rupees;(iii) a declaration from the member that the dwelling site or the dwelling house/flat or the house under construction is free from encumbrances and the same is under title of the member and/or the spouse II. For repayment of loans in special cases.(i) The Commissioner or any authorized officer may on an applica¬tion from a member, sanction from the amount standing to the credit of the member in the Fund, withdrawal for the repayment, wholly or partly, of any outstanding principal and interest of a loan obtained in the name of the member or spouse of the member or jointly by the member and spouse from a State Government, registered co-operative society, State Housing Board, Nationalised banks, public financial institutions, Municipal Corporation or any body similar to the Delhi Development Authority solely for the purposes specified in (1)(i) above.(ii) The amount of withdrawal shall not exceed the member’s basic wages and dearness allowance for thirty-six months or his own share of contributions together with the employer’s share of contributions, with interest thereon, in the member’s account in the Fund or the amount of outstanding principal and interest of the said loan, whichever is least.(iii) No withdrawal shall be sanctioned under this paragraph unless—(a) the member has completed ten years’ membership of the Fund; and(b) the member’s own share of contributions, with interest there¬on, in the amount standing to his credit in the Fund, is one thousand rupees or more; and (c) the member produces a certificate to such other documents, as may be prescribed by the Commissioner or where so authorised by the Commissioner, any officer subordinate to him, from such agency, indicating the particulars of the member, the loan grant¬ed, the outstanding principal and interest of the loan and such other particulars as may be required.(iv) The payment of the withdrawal under this paragraph shall be made direct to such agency on receipt of an authorisation from the member III. Advance from the Fund for illness in certain cases.i) A member may be allowed non-refundable advance in cases of (a) hospitalisation lasting for one month or more, or (b) major surgical operation in a hospital, or (c) suffering from T.B., leprosy, paralysis, cancer, mental derangement or heart ailment and having been granted leave by his employer for treatment of the said illness.(ii) The advance shall be granted if the employer certifies that the Employees’ State Insur¬ance Scheme facility and benefits there under are not actually available to the member or the member produces a certificate from the Employees’ State Insurance Corporation to the effect that he has ceased to be eligible for cash benefits under the Employees’ State Insurance Scheme; and a doctor of the hospital certifies that a surgical operation or, as the case may be, hospitalisation for one month or more had or has become necessary or a registered medical practitioner, or in the case of a mental derangement or heart ailment, a specialist certifies that the member is suffering from T.B., leprosy, paralysis, cancer, mental derangement or heart ailment.(iii) A member may be allowed non-refundable advance from his account in the fund for the


treatment of a member of his family who has been hospitalised, or requires hospitalisation, for one month or more for.(a) a major surgical operation, or (b) the treatment of T.B., Leprosy, paralysis, cancer, mental derangement or heart ailment:Provided that no such advance shall be granted to a member unless he has produced— a certificate from a doctor of the hospital that the patient has been hospitalised or requires hospitalisation for one month or more, or that a major surgical operation had or has become necessary, and a certificate from his employer that the Employees’ State Insurance Scheme facility and benefits are not available to him for the treatment of the patient.

IV. Advance for marriages or post-matriculation education of children.(i) A non-refundable advance not exceeding fifty per cent of his or her own share of contribution with interest thereon, standing to credit in the Fund of the member , on the date of such authorisation, for his or her own marriage, the marriage of his or her daughter, son, sister or brother or for the post-matriculation education of his or her son or daugh¬ter. Not more than three advances shall be admissible to a member under this paragraph.(ii) No advance under this paragraph shall be sanctioned to a member unless—(a) he has completed seven years’ membership of the Fund; and (b) the amount of his own share of contributions with inter¬est thereon standing to his credit in the Fund is rupees one thousand or more.V. Grant of advances in abnormal conditions.(1) A non-refundable Advance may be given to a member whose property, movable or immovable, has been damaged by a calamity of exceptional nature, such as floods, earthquakes or riots, authorise payment to him from the provident fund account, a non-refundable advance, of rupees five thousand or fifty per cent of his own total contribution includ¬ing interest thereon standing to his credit on the date of such authorisation, whichever is less, to meet any unforeseen expendi¬ture:(2) No advance under sub-paragraph (1) shall be paid unless—(i) the State Government has declared that the calamity has affected the general public in the area; (ii) the member produces a certificate from an appropriate authority to the effect that his property (movable or immovable) has been damaged as a result of the calamity];(iii) the application for advance is made within a period of 4 months from the date of declaration referred to in sub-para (i). VI. Grant of advance to members who are physically handicapped.A physically handicapped member may be allowed a non-refundable advance from his account in the Fund, for pur¬chasing an equipment required to minimise the hardship on account of handicap.

VII. Withdrawal within one year before the retirement.A member may be permitted to withdraw of up to 90 per cent of the amount standing at his credit, at any time after attainment of the age of 54 years or within one year before his actual retirement on superannuation, whichever is later.

VIII. Option for withdrawal at the age of 55 years for investment in Varishtha Pension Bima Yojana.


A member may be permitted withdrawal of up to 90 per cent of the amount standing at his credit at any time after attaining the age of 55 years, which is to be transferred to the Life Insurance Corporation of India for investment in Varishtha Pension Bima Yojana.

9. Dispute, Determination and RecoveryIn case, where a dispute arises regarding applicability of the Act, the Central Provident Fund Commissioner or any other officer (to whom the powers of determination have been delegated), may decide the dispute and determine the amount due from an employer, under the Act or the schemes framed there under. Before making any order the officer shall conduct such inquiry as he may deem necessary and shall allow a reasonable opportunity to the employer for representing his case.Further, where an officer has reason to believe that an amount due from the employer has escaped determination, he may re-open the case within five years and re-determine the amount due from the employer.InterestThe employer shall be liable to pay simple interest @ 12% p.a. on any amount due from him under the Act, from the date on which it becomes due till the date of its actual payment.

Modes of RecoveryAny amount of contribution, damages, accumulations required to be transferred, or administrative charges, due from an employer, may be recovered from him in any of the following modes- attachment and sale of the movable or immovable property of the establishment/employer; arrest of the employer and his detention in prison; appointing a receiver for the management of the movable or immovable properties of the establishment/employer.The Recovery Officer pursuant to a recovery certificate issued by the authorised officer specifying shall make the recovery the amount of arrears.Stay Of Recovery Proceedings

The authorised officer may grant time for the payment of the amount, and thereupon the Recovery Officer shall stay the proceedings until the expiry of the time so granted.

EMPLOYEES’ STATE INSURANCE ACT, 1948


1. It applies to all factories (including Government factories but excluding seasonal factor-ies) employing 10 or more persons and carrying on a manufacturing process with the aid of power or employing 20 or more persons and carrying on a manufacturing process without the aid of power and such other establishments as the Government may specify.

2. A factory or other establishment to which this Act applies, shall continue to be governed by its provisions even if the number of workers employed therein falls below the spe-cified limit or the manufacturing process therein ceases to be carried on with the aid of power, subsequently.

3. Every employee (including casual and temporary employees), whether employed directly or through a contractor, who is in receipt of wages upto Rs. 6,500 p.m. is entitled to be insured under the E.S.I. Act. However, apprentices engaged under the Apprentices Act are not entitled to the E.S.I. benefits. Coverage of part time employees under the ESI Act will depend on whether they have contract of service or contract for service with the em-ployer. The former is covered whereas the latter are not covered under the E.S.I Act.

4. An employer/establishments covered under the E.S.I. Act is exempt from the provisions of Maternity Benefit Act and Workmen’s Compensation Act.

5. The employer is required to contribute at the rate of 4.75% of the wages paid/payable in respect of every wage period. The employees are also required to contribute at the rate of 1.75% of their wages, except when the "average daily wages in a wage period" are equal to or less than Rs. 50. Employees earning less than and upto Rs. 50 per day are exempted from payment of contribution."wages" means all remuneration paid or payable, in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes any payment to an employee in respect of any period of authorised leave, lock-out, strike which is not illegal or lay -off and other additional remuneration, if any, paid at intervals not exceeding two months, but does not include-

(a) any contribution paid by the employer to any pension fund or provident fund, or under this Act; (b) any traveling allowance or the value of any traveling concession; (c) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or

(d) any gratuity payable on discharge.6. It is the employer’s responsibility to deposit his own as well as employee’s contributions

in respect of all employees including the contract labour, into the E.S.I. Account up to 21st of the next month.The employer shall be liable to pay simple interest at the rate of twelve per cent per annum or at such higher rate as may be specified in the Scheme in case of delay.Provided that higher rate of interest specified in the Scheme shall not exceed the lending rate of interest charged by any scheduled bank.

A. OBLIGATIONS OF EMPLOYERS

The employer should get his factory or establishments registered with the E.S.I. Cor-poration within 15 days after the Act becomes applicable to it, and obtain the em-ployer’s Code Number.

The employer should obtain the declaration form from the employees covered under the Act and submit the same along with the return of declaration forms, to the E.S.I.


office. He should arrange for the allotment of Insurance Numbers to the employees and their Identity Cards.

The employer should furnish a Return of Contributions along with the challans of monthly payment, within 30 days of the end of each contribution period.

The employer should cause to be maintained the prescribed records/registers namely the register of employees, the inspection book and the accident book.

The employer should report to the E.S.I. authorities of any accident in the place of employment, within 24 hours or immediately in case of serious or fatal accidents. He should make arrangements for first aid and transportation of the employee to the hos-pital. He should also furnish to the authorities such further information and particulars of an accident as may be required.

The employer should inform the local office and the nearest E.S.I. dispensary/hos-pital, in case of death of any employee, immediately.

The employer must not put to work any sick employee and allow him leave, if he has been issued the prescribed certificate.

The employer should not dismiss or discharge any employee during the period he/she is in receipt of sickness/maternity/temporary disablement benefit, or is under medical treatment, or is absent from work as a result of illness duly certified or due to preg-nancy or confinement.

B. DUTIES OF EMPLOYERS To pay compensation for an accident suffered by an employee, in accordance with the

Act. To submit a statement to the Commissioner (within 30 days of receiving the notice) in

the prescribed form, giving the circumstances attending the death of a workman as result of an accident and indicating whether he is liable to deposit any compensation for the same.

To submit accident report to the Commissioner in the prescribed form within 7 days of the accident, which results in death of a workman or a serious bodily injury to a workman.

To maintain a notice book in the prescribed from at a place where it is readily access-ible to the workman.

To submit an annual return of accidents specifying the number of injuries for which compensation has been paid during the year, the amount of such compensation and other prescribed particulars.

C. EMPLOYEES’ BENEFITS :-

I) SICKNESS BENEFITEvery insured employee is entitled to the cash benefit for the period of sickness occurring during any benefit period and certified by a duly appointed medical practitioner if the contributions in respect of him were payable for not less than (78 days) in the corresponding contribution period. However, in the case of a newly appointed employee, eligible for the first time who has got shorter contribution period of less than 156 days, he shall be entitled to claim sickness benefit if he pays contribution for not less than half the number of days available for working in such contribution period. The benefit is payable at the standard benefit rate, corresponding to his daily average wages. The benefit is, however, not payable for any day on which the employee works, remains on leave, holiday or strike, in respect of


which he receives wages.

Sickness benefit shall be allowed to an employee for any day on which he remains on strike, if: - he is receiving medical treatment and attendance as an indoor patient in any E.S.I.

hospital or a hospital recognised by the E.S.I. Corporation for such treatment; or he is entitled to receive extended sickness benefit for any of the diseases for which

such benefit is admissible; or he is in receipt of sickness benefit immediately preceding the date of commencement

of notice of the strike given by the Employees’ Union to the Management of the fact-ory/establishment.

No sickness benefit shall be payable for the first two days of sickness following, at an interval of not more than 15 days, after the sickness in respect of which sickness benefits were last paid.

Further no sickness benefit shall be payable to any person for more than 91 days in any two consecutive benefit periods.

CONDITIONS TO BE OBSERVEDAny person in receipt of sickness benefit: shall remain under medical treatment at the ESI dispensary or hospital and carry out

the instructions of the medical officer; shall not do anything which retards or reduces his chances of recovery; shall not leave the area where medical treatment is provided without medical officer’s

permission; shall get himself examined by the medical officer.

II) MATERNITY BENEFIT A periodical cash benefit is payable to an insured woman employee, in case of confinement, miscarriage, medical termination of pregnancy, premature birth of a child, or sickness arising from pregnancy, miscarriage, etc., occurring or expected to occur in a benefit period, if the contributions, in respect of her were payable for at least (70 days) in the two immediately preceding contribution periods.The benefit is payable at twice the standard benefit rate or Rs. 20, whichever is higher, for all days on which the she does not work for remuneration during the period prescribed as under.

III) MEDICAL BOUNSRs.250 on account of confinement expenses shall be paid to an insured woman and an insured person in respect of his wife, if confinement occurs at a place where necessary medical facilities under ESI Scheme are not available.

IV) DISABLEMENT BENEFITDisablement benefit is payable in the form of cash installments, to an employee who is injured in the course of his employment and is, permanently or temporarily, disabled, or contacts any occupational disease. It is sufficient if it is proved that the injury was caused by an accident arising out of, and in the course of employment, no matter when it occurred, and where it occurred.The accident shall be deemed to have arisen out of and in the course of employment unless there is evidence to the contrary,


where an accident happens while the employee is travelling in employer’s transport, to or from his place of work;

where an accident happens in or about any premises at which the employee is em-ployed for the purposes of his employer’s trade or business, while the employee is taking steps, in an emergency, to rescue, secure or protect persons who are injured or imperilled or to avert or minimize serious damage to property;

where the employee is at the time of the accident acting in contravention of any law or any safety rules and instructions, if the employee is acting for the purpose of, and in connection with, the employer’s trade or business.

The employee claiming any disablement benefit is required to furnish a medical certificate as prescribed under the regulations. The employee is also required to observe certain conditions as to medical examination etc., as prescribed for sickness benefit.The benefit for temporary disablement is, however, not payable for any day on which the employee works, remains on lease, holiday or strike, in respect of which he receives wages.However, disablement benefit for temporary disablement shall be allowed to an employee for any day on which he remains on strike, if: he is receiving medical treatment and attendance as an indoor patient in any ESI hos-

pital or a hospital recognised by the ESI corporation, for such treatment; or he is in receipt of such disablement benefit immediately preceding the date of com-

mencement of notice of the strike given by the Employee’s Union to the management of the factory/establishment.

NOTICE OF INJURYThe insured employee who sustains an employment injury should give a notice of the same to the employer or manager or supervisor or foreman, etc., by means of entry in the Accident Book or otherwise in writing or even orally. This notice is very important for claiming the disablement benefit.ACCIDENT REPORT BY THE EMPLOYERIn case of an accident in the establishment, the employer should prepare an ‘Accident Report’ in Form 16 (in triplicate) and submit to the local office and the Insurance Medical Officer. The third copy is the office copy. The reports are to be submitted within 48 hours in ordinary cases and immediately in death cases.EMPLOYER TO ARRANGE FIRST AID The employer shall make arrangements for the first aid and medical treatment and transport as an insured person may require, in case of an accident.BENEFITS NOT TO BE COMBINEDAn employee shall not be entitled to receive for the same period- both sickness benefit and maternity benefit; or both sickness benefit and disablement benefit for temporary disablement; or both maternity benefit and disablement benefit for temporary disablement.The employee shall be entitled to choose any one of the aforesaid benefits, at his option.ABSTENTION VERIFICATIONThe employer should furnish and verify the particulars in Form 28, in respect of the abstention of an employee from work, for which sickness/maternity/temporary disablement benefit has been claimed.

D. PAYMENT OF BENEFIT IN CASE OF DEATHIf an employee dies during any period for which he is entitled to a cash benefit, the amount of such benefit shall be payable up to and including the day of his death. The


amount of benefit shall be paid to the nominee or, where there is no nomination, to the heir or legal representative of the deceased employee.FUNERAL EXPENSES If an insured employee dies, the eldest surviving member of his family or the person who incurs the expenditure of funeral of the deceased employee, is entitled to reimbursement of such expenditure subject to a maximum of Rs. 1,500. The claim for the payment of funeral expenses should be submitted in the prescribed form along with prescribed documents within 3 months of the death of the insured employee. DEATH REPORTIn case of the death of an insured employee at the place of employment, the employer should immediately report to the local office and to the nearest E.S.I dispensary or hospital.

E. DISPUTES & REMEDIESAny dispute arising under the Act shall be decided by the Employees Insurance Court and not by a Civil Court. It is constituted by the State Government for such local areas as may be specified and consists of such number of judges, as the Government may think fit. It shall adjudicate on the following disputes and claims.Disputes as to – Whether an employee is covered by the Act or whether he is liable to pay the contri-

bution, or The rate of wages or average daily wages of an employee, or The rate of contribution payable by the employer in respect of any employee, or The person who is or was the principle employer in respect of any employee, or The right to any benefit an the amount and duration thereof, or Any direction issued by the Corporation on a review of any payment of dependents’

benefit, or Any other matter in respect of any contribution or benefit or other due payable or re-

coverable under the Act.

Claims as to – Recovery of contributions from the principle employer, Recovery of contributions from a contractor, Recovery for short payment or non-payment of any contribution under section 68, Recovery of the value or amount of benefits received improperly under section 70, Recovery of any benefit admissible under the Act

No dispute shall be admitted unless the employer deposits with the Court 50% of the amount due from him as claimed by the Corporation.

APPEAL

An appeal shall lie to the High Court within 60 against an order of the Employees’ Insurance Court if it involve

Industrial Employment (Standing Orders) Act, 1946

SectionsPreamble


1. Short title, extent and application2. Interpretation3. Submission of draft standing orders4. Conditions for certification of standing orders5. Certification of standing orders6. Appeals7. Date of operation of standing orders8. Register of standing orders9. Posting of standing orders10. Duration and modification of standing orders 10-A. Payment of subsistence allowance11. Certifying Officers and appellate authorities to have power of Civil Court12. Oral evidence in contradiction of standing orders not admissible12-A. Temporary application of model standing orders13. Penalties and procedure13-A. Interpretation, etc., of standing orders13-B. Act not to apply to certain industrial establishments14. Power to exempt14-A. Delegation of powers15. Power to make rules

THE SCHEDULE

Industrial Employment (Standing Orders)

Act, 1946[Act No. 20 of 19461As Amended by Acts Nos. 3 of 1951, 36 of 1956, 16 of 1961, 39 or 19632, 51 of 1970 and 18 of 19823][23rd April, 1946]

An Ac4t require employers in industrial establishments formally to define conditions of employ-ment under themWhereas it is expedient to require employers in industrial establishments to define with sufficient precision the conditions of employment under them and to make the said conditions known to workmen employed by them.

It is hereby enacted as follow :1. Short title, extent and application.- (1) This act may be called the Industrial Employment (Standing Orders) Act, 1946.(2) It extends to5[the whole of India 6[***].] 7(3) It applies to every industrial establishment wherein one hundred or more workmen are em-ployed, or were employed on any day of the preceding twelve months:

Provided that the appropriate Government may, after giving not less than two months’ notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any industrial establishment employing such number of number of persons less than one hundred as may be specified in the notification :8[* * * *]


History of the Act.- The Act has been amended by the Indian Independence (Adaptation of Cen-tral Acts and Ordinances ) Order, 1943; The A.O. 1950; Act 3 of 1951; Act 36 of 1956; Act 16 of 1961; Act 39 of 1963; 51 of 1970 and 18 of 1982,

Object of the Act.- That the object of the Act is to have uniform Standing Orders providing for the matters enumerated in the Schedule to the Act, that it was not intended that there should be different conditions of service for those who are employed before and those employed after the Standing Orders came into force and finally, once the Standing Orders come into the force, they bind all those presently in the employment of the concerned establishment as well as those who are appointed thereafter. Agra Electric Supply Co. Ltd. v. Aladdin, (1969) 2 SCC 598; U.P. Elec-tric Supply Co. Ltd. v. Their Workman, (1972) 2 SEC 54.

(i)any industry to which the provisions of Chapter VII of the Bombay Industrial Relations Act, 1946, apply; or(ii)any industrial establishment to which the provisions of the Madhya Pradesh Industrial Em-ployment (Standing Orders) Act, 1961 apply :Provided that notwithstanding anything contained in the Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961, the provisions of this Act shall apply to all industrial establish-ments under the control of the Central Government .]

2. Interpretation.- In this Act, unless there is anything repugnant in the subject or context

10[(a) “appellate authority” means an authority appointed by the appropriate Government by no-tification in the Official Gazette to exercise in such area as may be specified in the notification the functions of an appellate authority under this Act :Provided that in relation to an appeal pending before an Industrial Court or other authority imme-diately before the commencement of the Industrial Employment (Standing Orders) Amendment Act, 1963, that Court or authority shall be deemed to be the appellate authority:](b)“appropriate Government” means in respect of industrial establishments under the control of the Central Government or a

11[Railway administration] or in a major Port, mine or oil field, the Central Government, and in all other in all other cases the State Government :

12[Provided that where question arises as to whether any industrial establishment is under the control of the Central industrial establishment is under the control of the Central Government that Government may, either on a reference made to it by the employer or the workman or a trade union or other representative body of the workmen, or on its own motion and after giving the parties an opportunity of being heard, decide the question and such decision shall be final and binding on the parties :]13[ (c) “Certifying Officer” means a Labour Commissioner or a Regional Labour Commissioner, and includes any other officer appointed by the appropriate Government, by notification in the Official Gazette, to perform all or any of the functions of a Certifying Officer under this Act:](d)“employer” means the owner of an industrial establishment to which this Act for the time be-ing applies, and includes-


(i)in a factory, any person named under 14[clause (f) of sub-section (1) of Section 7 of the Fac-tories Act,1948], as manager of the factory;(ii)in any industrial establishment under the control of any department of any Government in In-dia, the authority appointed by such Government in this behalf, or where no authority is so ap-pointed, the head of the department;(iii)in any other industrial establishment, any person responsible to the owner for the supervision and control of the industrial establishment;

(e)“industrial establishment” means(i)an industrial establishment as defined in clause (ii) of Section 2 of the Payment of Wages Act, 1936, or15[(ii) a factory as defined in clause (m) of Section 2 of the Factories Act, 1948, or ](iii)a railway as defined in clause (4) of Section 2 of the Indian Railway Act, 1890, or(iv)the establishment of a person who, for the purpose of fulfilling a contract with the owner of any industrial establishment, employs workmen;(f)“prescribed’ means prescribed by rules made by the appropriate Government under this Act ;(g)“ standing orders” means rules relating to matters set out in the Schedule:(h)“trade union” means a trade union for the time being registered under the Indian Trade Union Act, 1926;16[(i) “wages” and “workman” have the meanings respectively assigned to them in clauses (rr) and (s) of Section 2 of the Industrial Disputes Act, 1947 (14 of 1947).]

3. Submission of draft standing orders.--(1) Within six months from the date on which this Act becomes applicable to an industrial establishment, the employer shall submit to the Certifying Officer five copies of the draft standing orders proposed by him for adoption in this industrial es-tablishment.(2)Provision shall be made in such draft for every matter set out in the Schedule which may be applicable to the industrial establishment, and where Model standing orders have been prescribed shall be, so far as is practicable, in conformity with such model.(3)The draft standing orders submitting under this section shall be accompanied by a statement giving prescribed particulars of the workmen employed in the industrial establishment including the name of the trade union, if any, to which they belong(4)Subject to such conditions as may be prescribed, a group of employers in similar industrial es-tablishments may submit a joint draft of standing orders under this section.4. Conditions for certification of standing orders.--Standing orders shall be certifiable under this Act if-- (a)provision is made therein for every matter set out in the Schedule which is applicable to the industrial establishment, and(b)the standing orders are otherwise in conformity with the provisions of this Act ;and it 17[shall be the function] of the Certifying Officer or appellate authority to adjudicate upon the fairness or reasonableness of the provisions of any standing orders.

5. Certification of standing orders.--(1) On receipt of the draft under Section3, the Certifying Of-ficer shall forward a copy thereof to the trade union, if any, of the workmen, or where there is no such trade union, if any, of the workmen or where there is no trade union, to the workmen in such manner as may be prescribed, together with a notice in the prescribed form requiring objec-tions, if any, which the workmen may desire to make to the draft standing orders to be submitted to him within fifteen days from the receipt of the notice.


(2)After giving the employer and the trade union or such other representatives of the workmen as may be prescribed an opportunity of being heard, the Certifying Officer shall decide whether or not any modification of or addition to the draft submitted by the employer is necessary to render the draft standing orders certifiable under this Act, and shall make an order in writing accord-ingly.

(3)The Certifying Officer shall thereupon certify the draft standing orders, after making any modifications there in which his order under sub-section (2) may require, and shall within seven days thereafter send copies of the certified standing orders authenticated in the prescribed man-ner and of his order under sub-section (2) to the employer and to the trade union or other pre-scribed representatives of the workmen.

6. Appeals.--(1) 18[Any employer, workmen, trade union or other prescribed representatives of the workmen] aggrieved by the order of the Certifying Officer under sub-section (2) of Section 5 may, within 19 [thirty days] from the date on which copies are sent under sub-section (3) of that section, appeal to the appellate authority, and the appellate authority, whose decision shall be fi-nal, shall by order in writing confirm the standing orders either in the form certified by the Certi-fying Officer or after amending the said standing orders by making such modifications thereof or additions there to as it thinks necessary to render the standing orders certifiable under this Act.

(2) The appellate authority shall, within seven days of its order under sub-section (1) send copies thereof to the Certifying Officer, to the employer and to the trade union or other prescribed rep-resentatives of the workmen, accompanied, unless it has confirmed without amendment the standing orders as certified by the Certifying Officer, by copies of the standing orders a certified by it and authenticated in the prescribed manner.

7. Date of operation of standing orders.--Standing orders shall, unless an appeal is preferred un-der Section 6, come into operation on the expiry of thirty days from the date on which authenti-cated copies thereof are sent under sub-section (3) of Section 5, or where an appeal as aforesaid is preferred, on the expiry of seven days from the date on which copies of the order of the appel-late authority are sent under sub-section (2) of Section 6.

8.Register of standing orders. -- A copy of all standing orders as finally certified under this Act shall be filed by the Certifying Officer in a register in the prescribed form maintained for the pur-pose, and the Certifying Officer shall furnish a copy there of to any person applying there for on payment of the prescribed fee.

9.Posting of standing orders.--The text of the standing orders as finally certified under this Act shall be prominently posted by the employer in English and in the language understood by the majority of his workmen on special boards to be maintained for the purpose at or near the en-trance through which the majority of the workmen enter the industrial establishment and in all departments thereof where the workmen are employed.

10.Duration and modification of standing orders.--(1) Standing orders finally certified under this Act shall not, except on agreement between the employer and the


workmen 20[or a trade union or other representative body of the workmen] be liable to modifica-tion until the expiry of six months from the date on which the standing orders or the last modifi-cations thereof came in to operation.

21[(2) Subject to the provisions of sub-section (1), an employer or workman 22[ or a trade union or other representative body of the workmen] may apply to the Certifying Officer to have the standing orders modified, and such application shall be accompanied by five copies of 23[***] the modifications proposed to be made, and where such modifications are proposed to be made by agreement between the employer and the

workmen 19[or a trade union or other representative body of the workmen], a certified copy of that agreement shall be filed along with the application.]

(3) The foregoing provisions of this Act shall apply in respect of an application under sub-sec-tion (2) as they apply to the certification of the first standing orders.

24[(4) Nothing contained in sub-section (2) shall apply to an industrial establishment in respect of which the appropriate Government is the Government of the State of Gujarat or the Govern-ment of the State of Maharashtra.]

25[10-A. Payment of subsistence allowance.--(1) Where any workman is suspended by the em-ployer pending investigation or inquiry into complaints or charges of misconduct against him, the employer shall pay to such workman subsistence allowance-(a) at the rate of fifty per cent of the wages which workman was entitled to immediately preced-ing the date of such suspension, for the first ninety days of suspension; and (b) at the rate of seventy-five per cent of such wages for the remaining period of suspension if the delay in the completion of disciplinary proceedings against such workman is not directly at-tributable to the conduct of such workman.

(2)If any dispute arises regarding the subsistence allowance payable to a workman under sub-section (1), the workman or the employer concerned may refer the dispute to the Labour Court, constituted under the Industrial Disputes Act, 1947 (14 of 1947), within the local limits of whose jurisdiction the industrial establishment wherein such workman is employed is situate and the Labour Court to which the dispute is so referred shall, after giving the parties an opportunity of being heard, decide the dispute and such decision shall be final and binding on the parties.

(3)Not with standing anything contained in the foregoing provisions of this section, where provi-sions relating to payment of subsistence allowance under any other law for the time being in force in any State are more beneficial than the provisions of this section, the provisions of such other law shall be applicable to the payment of subsistence allowance in that State.]

11. Certifying Officers and appellate authorities to have powers of Civil Court.-

(1)Every Certifying Officer and appellate authority shall have all the powers of a Civil Court for the purposes of receiving evidence, administering oaths,, enforcing the attendance of witnesses, and compelling the discovery and production of documents, and shall be deemed to be a Civil Court within the meaning of [Sections 345 and 346 of theCode of Criminal Procedure, 1973 (2 of 1974)]26


27[(2) Clerical or arithmetical mistakes in appellate authority, or errors arising therein any time, be corrected by that Officer or officer or authority, as the case may be.]any order passed by a Certifying officer or from any accidental slip or omission may, at authority or the successor in office of such

12. Oral evidence in contradiction of standing orders not admissible.--No oral evidence having the effect of adding to or otherwise varying or contradicting standing orders finally certified un-der this Act shall be admitted in any Court.

28[12-A. Temporary application of model standing orders.--(1) Notwithstanding anything con-tained in Sections to12, for the period commencing on the date on which this Act becomes appli-cable to an industrial establishment and ending with the date on which the standing orders as fi-nally certified under this Act come into operation under Section 7 in that establishment, the pre-scribed model standing orders shall be deemed to be adopted in that establishment, and the provi-sions of Section 9, sub-section (2) of Section 13 and Section 13-A shall apply to such model standing orders as they apply to the standing orders so certified.

(2) Nothing contained in sub-section (1) shall apply to an industrial establishment in respect of which the appropriate Government is the Government of the State of Gujarat or the Government of the State of Maharashtra.]

Section 12-A.--Where there are two categories of workmen, one in respect of the daily rated workmen and the other in respect of the monthly rated workmen, if there are certified standing orders in respect of the daily rated workers only, the prescribed model standing orders should be deemed to have been adopted for those who are employed on the monthly basis until such cate-gories have their own certified standing orders,

13. Penalties and procedure.--(1) An employer who fails to submit draft standing orders as re-quired by Section 3 or who modifies his standing orders otherwise than in accordance with Sec-tion 10, shall be punishable with fine which may extend to five thousand rupees, and in the case of a continuing offence with a further fine which may extend to two hundred rupees for every day after the first during which the offence continues.(2)An employer who does any act in contravention of the standing orders finally certified under this Act for his industrial establishment shall be punishable with fine which may extend to one hundred rupees, and in the case of a continuing offence with a further fine which may extend to twenty-five rupees for every day after the first during which the offence continues.(3)No prosecution for an offence punishable under this section shall be instituted except with the previous sanction of the appropriate Government.(4)No Court inferior to that of 29[a Metropolitan or Judicial Magistrate of the second class] shall try any offence under this section.

30[13-A. Interpretation, etc., of standing orders.--If any question arises as to the application or interpretation of a standing order certified under this Act, any employer or workman [or a trade union or other representative body of the workmen]31 may refer the question to any one of the Labour Courts constituted under the Industrial Disputes Act,. 1947, and specified for the disposal of such proceeding by the appropriate Government by notification in the Official Gazette, and the Labour Court to which the question is so referred shall, after giving the parties an opportunity of being heard, decide the question and such decision shall be final and binding on the parties.


13-B. Act not to apply to certain industrial establishments.--Nothing in this Act shall apply to an industrial establishment in so far as the workmen employed therein are persons to whom the Fundamental and Supplementary Rules, Civil Services (Classification, Control and Appeal)Rules, Civil Services (Temporary Service) Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defense Service (Classification, Control and Appeal) Rules or the In-dian Railway Establishment Code or any other rules or regulations than may be notified in this behalf by the appropriate Government in the Official Gazette, apply.]

14. Power of exempt.--The appropriate Government may by notification in the Official Gazette exempt, conditionally or unconditionally any industrial establishment or class of industrial estab-lishments from all or any of the provisions of this Act.

32[14-A. Delegation of powers.--The appropriate Government may by notification in the Official Gazette, direct that any power exercisable by it under this Act or any rules made thereunder shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable also-(a)Where the appropriate Government is the Central Government, by such officer or authority subordinate to the Central Government or by the State Government, or by such officer or author-ity subordinate to the State Government, as may be specified in the notification;(b)where the appropriate Government is a State Government, by such officer or authority subor-dinate to the State Government, as may be specified in the notification.]

15. Power to make rules.--(1) The appropriate Government may after previous publication, by notification in the Official Gazette, make rules to carry out the purposes of this Act.(2) In particular and without prejudice to the generality of the foregoing power, such rules may--(a)prescribe additional matters to be included in the Schedule, and the procedure to be followed in modifying standing orders certified under this Act in accordance with any such addition;(b)set out model standing orders for the purposes of this Act;(c)prescribe the procedure of Certifying Officers and appellate authorities;(d)Prescribe the fee which may be charged for copies of standing orders entered in the register of standing orders;(e)provide for any other matter which is to be or may be prescribed;

Provided that before any rules are made under clause (a) representatives of both employers and workmen shall be consulted by the appropriate Government.

33[(3) Every rule made by the Central Government under this section shall be laid as soon as may be after it is made, before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session or 34 [in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive ses-sions aforesaid] both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be ; so however that any such modification or annulment shall be without prejudice to the validity of any thing previously done under that rule.]

MATTERS TO BE PROVIDED IN STANDING ORDERS UNDER


THIS ACT1. Classification of workmen, e.g., whether permanent, temporary, apprentices, probationers, or badlis.2. Manner of intimating to workmen periods and hours of work, holidays, pay-days and wage rates.3. Shift working.4. Attendance and late coming.5. Conditions of, procedure in applying for, and the authority which may grant leave and holi-days.6. Requirement to enter premises by certain gates, an liability to search.7. Closing and reporting of sections of the industrial establishment, temporary stoppages of work and the rights and liabilities of he employer and workmen arising there from.8. Termination of employment, and the notice thereof to be given by employer and workmen.9. Suspension or dismissal for misconduct, and acts or omissions which constitute misconduct.10. Means of redress for workmen against unfair treatment or wrongful exactions by the em-ployer or his agents or servants.11. Any other matter which may be prescribed.

The Apprentices Act, 1961

The main purpose of the Act is to provide practical training to technically qualified persons in


various trades. The objective is promotion of new skilled manpower. The scheme is also ex-tended to engineers and diploma holders.

The Act applies to areas and industries as notified by Central government. [section 1(4)].

Obligation of Employer - Every employer is under obligation to take apprentices in prescribed ratio of the skilled workers in his employment in different trades. [section 11]. In every trade, there will be reserved places for scheduled castes and schedules tribes. [section 3A]. Ratio of trade apprentices to workers shall be determined by Central Government. Employer can engage more number of apprentices than prescribed minimum. [section 8(1)]. - - The employer has to make arrangements for practical training of apprentice [section 9(1)]. Employer will pay stipends to apprentices at prescribed rates. If the employees are less than 250, 50% of cost is shared by Government. If employer is employing more than 250 workers, he has to bear full cost of train-ing.

Who can be apprentice - Apprentice should be of minimum age of 14 years and he should satisfy the standard of education and physical fitness as prescribed. [section 3].

Duration of training - Duration of training period and ratio of apprentices to skilled workers for different trades has been prescribed in Apprenticeship Rules, 1991. Duration of Apprenticeship may be from 6 months to 4 years depending on the trade, as prescribed in Rules. Period of train-ing is determined by National Council for training in Vocational Trades (established by Govern-ment of India).

Contract with apprentice – Apprentice appointed has to execute an contract of apprenticeship with employer. The contract has to be registered with Apprenticeship Adviser. If apprentice is minor, agreement should be signed by his guardian. [section 4(1)]. - - Apprentice is entitled to casual leave of 12 days, medical leave of 15 days and extraordinary leave of 10 days in a year.

Legal Position of Apprentices - An apprentice is not a workman during apprentice training. [sec-tion 18]. Provisions of labour law like Bonus, PF, ESI Act, gratuity, Industrial Disputes Act etc. are not applicable to him. However, provisions of Factories Act regarding health, safety and wel-fare will apply to him. Apprentice is also entitled to get compensation from employer for em-ployment injury. [section 16].

An employer is under no obligation to employ the apprentice after completion of apprenticeship. [section 22(1)]. However, in UP State Road Transport Corpn v. UP Parivahan Nigam Shishukh Berozgar Sangh AIR 1995 SC 1114 = (1995) 2 SCC 1 , it was held that other things being equal, a trained apprentice should be given preference over direct recruits. It was also held that he need not be sponsored by the employment exchange. Age bar may also be relaxed, to the extent of training period. The concerned institute should maintain a list of persons already trained and in between trained apprentices, preference should be given to those who are senior. – same view in UP Rajya Vidyut Parishad v. State of UP 2000 LLR 869 (SC).

Stipend payable - The minimum rate of stipend payable per month is as follows - (a) Engineering graduates - Rs 1,970 p.m. for post-institutional training (b) Sandwich course students for degree examination - Rs 1,400 p.m. (c) diploma holders - Rs 1,400 p.m. for post-institutional training (d) Sandwich course students for degree examination - Rs 1,140 p.m. (e) Vocational certificate


holder - Rs 1,090 p.m. [w.e.f. May 2001]

In case of 4 year training, the stipend is as follows – first year – Rs 820 pm. Second year – Rs 940 pm. Third year – Rs 1,090 pm. Fourth year – Rs 1,230 pm. [From May 2001].

Test and Proficiency certificate - On completion of training, every trade apprentice has to appear for a test conducted by National Council. If he passes, he gets a certificate of proficiency.

Apprenticeship Adviser - Government is empowered to appoint Apprenticeship Adviser, Dy Ap-prenticeship Adviser etc. to supervise the scheme. Various powers hegarave been conferred on them under the Act.

The Equal Remuneration Act, 1976ACT NO. 25 OF 1976 [ 11th February, 1976]


An Act to provide for the payment of equal remuneration to men and women workers and for the prevention of discrimination, on the ground of sex, against women in the matter of employment and for matters connected therewith or incidental thereto.

1. Short title, extent and commencement.-

(1) This Act may be called the Equal Remuneration Act, 1976 . (2) It extends to the whole of India. (3) It shall come into force on such date 1[ , not being later than three years from the passing of this Act, as the Central Government may, by notification, appoint and different dates may be appointed for different establishments or employments.

2. Definitions.- In this Act, unless the context otherwise requires,-- (a) " appropriate Government" means,-- (i) in relation to any employment carried on by or under the authority of the Central Government or a railway administration, or in relation to a banking company, a mine, oilfield or major port or any corporation established by or under a Central Act, the Central Government; and (ii) in relation to any other employment, the State Government; (b) " commencement of this Act" means, in relation to an establishment or employment, the date on which this Act comes into force in respect of that establishment or employment; (c) " employer" has the meaning assigned to it in clause (f) of section 2 of the Payment of Gratuity Act, 1972 (39 of 1972 ); (d) " man" and" woman" mean male and female human beings, respectively, of any age; (e) " notification" means a notification published in the Official Gazette; 1. 8- 3- 1976: vide Notif. No. S. O. 175 (e), dated 6- 3- 1976, Gazette of India, Extraordinary, Pt. II, Sec. 3 (ii). (f) " prescribed" means prescribed by rules made under this Act; (g) " remuneration" means the basic wage or salary, and any additional emoluments whatsoever payable, either in cash or in kind, to a person employed in respect of employment or work done in such employment, if the terms of the contract of employment, express or implied, were fulfilled; (h) " same work or work of a similar nature" means work in respect of which the skill, effort and responsibility required are the same, when performed under similar working conditions, by a man or a woman and the differences, if any, between the skill, effort and responsibility required of a man and those required of a woman are not of practical importance in relation to the terms and conditions of employment; (i) " worker" means a worker in any establishment or employment in respect of which this Act has come into force; (j) words and expressions used in this Act and not defined but defined in the Industrial Disputes Act, 1947 (14 of 1947 ), shall have the meanings respectively assigned to them in that Act.

3. Act to have overriding effect.- The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law or in the terms of any award, agreement or contract of service, whether made before or after the commencement of this Act, or in any instrument having effect under any law for the time being in force. CHAP PAYMENT OF REMUNERATION AT EQUAL RATES TO MEN AND WOMEN WORKERS ANDOTHER MATTERS CHAPTER II PAYMENT OF REMUNERATION AT EQUAL RATES TO MEN AND WOMEN WORKERS AND OTHER MATTERS


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4. Duty of employer to pay equal remuneration to men and women workers for same work or work of a similar nature.- (1) No employer shall pay to any worker, employed by him in an establishment or employment, remuneration, whether payable in cash or in kind, at rates less favourable than those at which remuneration is paid by him to the workers of the opposite sex in such establishment or employment for performing the same work or work of a similar nature. (2) No employer shall, for the purpose of complying with the provisions of sub- section (1), reduce the rate of remuneration of any worker. (3) Where, in an establishment or employment, the rates of remuneration payable before the commencement of this Act for men and women workers for the same work or work of a similar nature are different only on the ground of sex, then the higher (in cases where there are only two rates), or, as the highest (in cases where there are more than two rates), of such rates shall be the rate at which remuneration shall be payable, on and from such commencement, to such men and women workers: Provided that nothing in this sub- section shall be deemed to entitle a worker to the revision of the rate of remuneration payable to him or her with reference to the service rendered by him or her before the commencement of this Act.

5. No discrimination to be made while recruiting men and women workers.- On and from the commencement of this Act, no employer shall, while making recruitment for the same work or work of a similar nature, 1[ or in any condition of service subsequent to recruitment such as promotions, training or transfer,] make any discrimination against women except where the employment of women in such work is prohibited or restricted by or under any law for the time being in force: Provided that the provisions of this section shall not affect any priority or reservation for Scheduled Castes or Scheduled Tribes, ex- servicemen, retrenched employees or any other class or category of persons in the matter of recruitment to the posts in an establishment or employment.

6. Advisory Committee.- (1) For the purpose of providing increasing employment opportunities for women, the appropriate Government shall constitute one or more Advisory Committees to advise it with regard to the extent to which women may be employed in such establishments or employments as the Central Government may, by notification, specify in this behalf. (2) Every Advisory Committee shall consist of not less than ten persons, to be nominated by the appropriate Government, of which one- half shall be women. (3) In tendering its advice, the Advisory Committee shall have regard to the number of women employed in the concerned establishment or employment, the nature of work, hours of work, suitability of women for employment, as the case may be, the need for providing increasing employment opportunities for women, including part- time employment, and such other relevant factors as the Committee may think fit. (4) The Advisory Committee shall regulate its own procedure. (5) The appropriate Government may, after considering the advice tendered to it by the Advisory Committee and after giving to the persons concerned in the establishment or employment an opportunity to make representations, issue such directions in respect of employment of women workers, as the appropriate Government may think fit. 1. Ins. by Act 49 of 1987, s. 2.













7. Power of appropriate Government to appoint authorities for hearing and deciding claims and complaints.- (1) The appropriate Government may, by notification, appoint such officers, not below the rank of a Labour Officer, as it thinks fit to be the authorities for the purpose of hearing and deciding-- (a) complaints with regard to the contravention of any provision of this Act; (b) claims arising out of non- payment of wages at equal rates to men and women workers for the same work or work of a similar nature, and may, by the same or subsequent notification, define the local limits within which each such authority shall exercise its jurisdiction. (2) Every complaint or claim referred to in sub- section (1) shall be made in such manner as may be prescribed. (3) If any question arises as to whether two or more works are of the same nature or of a similar nature, it shall be decided by the authority appointed under sub- section (1). (4) Where a complaint or claim is made to the authority appointed under sub- section (1), it may, after giving the applicant and the employer an opportunity of being heard, and after such inquiry as it may consider necessary, direct,-- (i) in the case of a claim arising out of non- payment of wages at equal rates to men and women workers for the same work or work of a similar nature, that payment be made to the worker of the amount by which the wages payable to him exceed the amount actually paid; (ii) in the case of complaint, that adequate steps be taken by the employer so as to ensure that there is no contravention of any provision of this Act. (5) Every authority appointed under sub- section (1) shall have all the powers of a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908 ), for the purpose of taking evidence and of enforcing the attendance of witnesses and compelling the production of documents, and every such authority shall be deemed to be a Civil Court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974 ). (6) Any employer or worker aggrieved by any order made by an authority appointed under sub- section (1), on a complaint or claim may, within thirty days from the date of the order, prefer an appeal to such authority as the appropriate Government may, by notification, specify in this behalf, and that authority may, after hearing the appeal, confirm, modify or reverse the order appealed against and no further appeal shall lie against the order made by such authority. (7) The authority referred to in sub- section (6) may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the period specified in sub- section (6), allow the appeal to be preferred within a further period of thirty days but not thereafter. (8) The provisions of sub- section (1) of section 33C of the Industrial Disputes Act, 1947 (14 of 1947 ), shall apply for the recovery of monies due from an employer arising out of the decision of an authority appointed under this section. CHAP MISCELLANEOUS CHAPTER III MISCELLANEOUS

8. Duty of employers to maintain registers.- On and from the commencement of this Act, every employer shall maintain such registers and other documents in relation to the workers employed by him as may be prescribed.

9. Inspectors.- (1) The appropriate Government may, by notification, appoint such persons as it may think fit to be Inspectors for the purpose of making an investigation as to whether the provisions of this Act, or the rules made thereunder, are being complied with by employers, and may define the local limits within which an Inspector may make such investigation.


















(2) Every Inspector shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code (45 of 1860 ). (3) An Inspector may, at any place within the local limits of his jurisdiction,-- (a) enter, at any reasonable time, with such assistance as he thinks fit, any building, factory, premises or vessel; (b) require any employer to produce any register, muster- roll or other documents relating to the employment of workers, and examine such documents; (c) take, on the spot or otherwise, the evidence of any person for the purpose of ascertaining whether the provisions of this Act are being, or have been, complied with; (d) examine the employer, his agent or servant or any other person found in charge of the establishment or any premises connected therewith or any person whom the Inspector has reasonable cause to believe to be, or to have been a worker in the establishment; (e) make copies, or take extracts from, any register or other document maintained in relation to the establishment under this Act. (4) Any person required by an Inspector to produce any register or other document or to give any information shall comply with such requisition.

10. Penalties.- (1) If after the commencement of this Act, any employer, being required by or under the Act, so to do-- (a) omits or fails to maintain any register or other document in relation to workers employed by him, or (b) omits or fails to produce any register, muster- roll or other document relating to the employment of workers, or (c) omits or refuses to give any evidence or prevents his agent, servant, or any other person in charge of the establishment, or any worker, from giving evidence, or (d) omits or refuses to give any information, he shall be punishable 1[ with simple imprisonment for a term which may extend to one month or with fine which may extend to ten thousand rupees or with both]. (2) If, after the commencement of this Act, any employer-- (a) makes any recruitment in contravention of the provisions of this Act, or (b) makes any payment of remuneration at unequal rates to men and women workers, for the same work or work of a similar nature, or (c) makes any discrimination between men and women workers in contravention of the provisions of this Act, or (d) omits or fails to carry out any direction made by the appropriate Government under sub- section (5) of section 6, he shall be punishable 1[ with fine which shall not be less than ten thousand rupees but which may extend to twenty thousand rupees or with imprisonment for a term which shall be not less than three months but which may extend to one year or with both for the first offence, and with imprisonment which may extend to two years for the second and subsequent offences]. (3) If any person being required so to do, omits or refuses to produce to an Inspector any register or other document or to give any information, he shall be punishable with fine which may extend to five hundred rupees.

11. Offences by companies.- (1) Where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the
























conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: 1. Subs. by Act 49 of 1987, s. 3. Provided that nothing contained in this sub- section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in sub- section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.-- For the purposes of this section,-- (a) " company" means any body corporate and includes a firm or other association of individuals; and (b) " director", in relation to a firm, means a partner in the firm.

12. 1[ Cognizance and trial of offences.- (1) No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under this Act. (2) No court shall take cognizance of an offence punishable under this Act except upon-- (a) its own knowledge or upon a complaint made by the appropriate Government or an officer authorised by it in this behalf, or (b) a complaint made by the person aggrieved by the offence or by any recognised welfare institution or organisation. Explanation.-- For the purposes of this sub- section" recognised welfare institution or organisation" means a social welfare institution or organisation recognised in this behalf by the Central or State Government.]

13. Power to make rules.- (1) The Central Government may, by notification, make rules for carrying out the provisions of this Act. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:-- (a) the manner in which complaint or claim referred to in sub- section (1) of section 7 shall be made; (b) registers and other documents which an employer is required under section 8 to maintain in relation to the workers employed by him; (c) any other matter which is required to be, or may be, prescribed. (3) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any 1. Subs. by Act 49 of 1987, s. 4. modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of any thing previously done under that rule.

















14. Power of Central Government to give directions.- The Central Government may give directions to a State Government as to the carrying into execution of this Act in the State.

15. 1[ Act not to apply in certain special cases.- Nothing in this Act shall apply-- (a) to cases affecting the terms and conditions of a woman' s employment in complying with the requirements of any law giving special treatment to women, or (b) to any special treatment accorded to women in connection with-- (i) the birth or expected birth of a child, or (ii) the terms and conditions relating to retirement, marriage or death or to any provision made in connection with the retirement, marriage or death.]

16. Power to make declaration.- Where the appropriate Government is, on a consideration of all the circumstances of the case, satisfied that the differences in regard to the remuneration, or a particular species of remuneration, of men and women workers in any establishment or employment is based on a factor other than sex, it may, by notification, make a declaration to that effect, and any act of the employer attributable to such a difference shall not be deemed to be a contravention of any provision of this Act.

17. Power to remove difficulties.- If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by notification, make any order, not inconsistent with the provisions of this Act, which appears to it to be necessary for the purpose of removing the difficulty: Provided that every such order shall, as soon as may be after it is made, be laid before each House of Parliament.

18. Repeal and saving.- (1) The Equal Remuneration Ordinance, 1975 (Ord. 12 of 1975 ) is hereby repealed. (2) Notwithstanding such repeal, anything done or any action taken under the Ordinance so repealed (including any notification, nomination, appointment, order or direction made thereunder) shall be deemed to have been done or taken under the corresponding provisions of this Act as if this Act were in force when such thing was done or action was taken.

THE MATERNITY BENEFIT ACT, 1961Prior to the enactment of the Maternity Benefit Act, of 1961 there were in force several central and State Maternity Benefit Acts in the country. But there was no uniformity in their provisions













for all women workers in the country. It is true that its object was achieved by the enactment of the Employees' State Insurance Act of 1948, which superseded the provisions of several Mater-nity Benefit Acts. But the Employees' State Insurance Act did not cover all women workers in the country. The Maternity Benefit Act of 1961 was therefore passed to provide uniform mater-nity benefit for women workers in certain industries not covered by the Employees' State Insur-ance Act. Note: The Act is amended by the Amendment Act No. 29 of 1995. The Amendment Act has come into force with effect from 1st Feb 1996.

Object of the Act To protect the dignity of motherhood and the dignity of a new person's 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 ActUpon all women employees either employed directly or through contractor except domestic women employee 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. Bihar, Punjab Haryana, West Bengal, U.P., Orissa and Andhra have don so.

Conditions for eligibility of benefitsWomen indulging temporary of unmarried are eligible for maternity benefit when she is expect-ing a child and has worked for her employer for at least 80 days in the 12 months immediately proceeding the date of her expected delivery {Section 5}

Cash BenefitsLeave 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/PrivilegeLight 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 No discharge or dismissal while she is on maternity leave No change to her disadvantage in any of the conditions of her employment while on maternity leave Pregnant women discharged or dismissed may still claim maternity benefit from the employer Exception: Women dismissed for gross misconduct lose their right under the Act for Maternity Benefit

Conditions for eligibility of benefitsTen 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 per-son to whom 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 a child She will be entitled to two nursing breaks of fifteen minutes each in the course of her daily work till her child is fifteen months old Her employer cannot discharge her or change her conditions of service while she is on maternity leave {Section 5}

Leave for Miscarriage & Tubectomy OperationLeave with wages at the rate of maternity benefit, for a period of six weeks immediately follow-ing 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 two weeks immedi-ately following the day of her tubectomy operation

Leave for illness arising out of pregnancy etc.A woman suffering from illness arising our of pregnancy, delivery, premature birth of child (Miscarriage, medical termination of pregnancy or tubectomy operation) be entitled, in addition to the period of absence allowed to her leave with wages at the rate of maternity benefit for a maximum period of one month. {Section 10}

Contract Labour Regulations and Abolition Act, 1970Contract labour remained ignored for a long time. Neither the contractor nor the principal employer cared for contract labour. The Parliament, therefore, passed the Contract Labour (Regulation and Abolition) Act in 1970 to prevent the exploitation of contract labour. The policy of the Act is to prohibit the employment of contract labour and wherever this is not possible, to improve the conditions of work of contract labour. Apart from providing for prohibition of employment of contract labour, the Act, therefore provides for health and welfare of the contract labour

Object of the Act To regulate the employment of contract labor in certain establishments and to provide for its abo-lition in certain circumstances and for matters connected therewith.

ApplicabilityEvery establishment in which 20 more more workmen are employed or where employed on any day of the preceding twelve months as contract labour. Every contractor who employs or who employed on any day of the preceding twelve months 20 are more workmen {Section 1}Registration of EstablishmentPrincipal employer employing 20 or more workers through the contractor or the contractor(s) on deposit of required fee in Form 1 {Section 7}


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Prohibition of Employment of Contract LabourOnly 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. {Section 10}

Revocation of RegistrationWhen obtained by misrepresentation or suppression of material facts etc. after opportunity to the principal employer {Section 9}

Licensing of ContractorEngaging 20 or more than 20 workers and on deposit of required fee in Form IV Valid for specified period {Section 12, Rule 21}

Revocation or Suspension & Amendment of LicencesWhen obtained by misrepresentation or suppression of material facts Failure of the contractor to comply with the conditions or contravention of Act or the Rules {Section 14}

Welfare measures to be taken by the ContractorContract labour 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 {Section 16 & Section 17}Laws, Agreement or standing orders inconsistent with the Act-Not PermissibleUnless the privileges in the contract between the parties or more favorable than the prescribed in the Act, such contract will be invalid and the workers will continue to get more favorable bene-fits {Section 20}

Liability of Principal EmployerTo ensure provision for canteen, restrooms, sufficient supply of drinking water, latrines and uri-nals, washing facilities Principal employer entitled to recover from the contractor for providing such amenities or to make deductions from amount payable {Section 20}

Registers of ContractorsPrincipal employer• To maintain a register of contractor in respect of every establishment in Form XII {Rule 74} Contractor• 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 {Rule 75, 76 & 77}Muster Roll, Wages Register, Deduction Register and Overtime Register by ContractorMaintain Muster Roll and a Register of Wages in Form XVI & 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 of Fines and Register of Ad-vances in Form XX, Form XXI & Form XXII respectively












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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 & 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 payment, names and address of the inspector and to send copy to the inspector and any change for with {Rule 81}

PENALTIESFor obstructing the inspector or failing to produce registers etc. 3 moths' imprisonment or fine upto Rs. 500 or both {Section 22} For violation of the provisions of Act or the Rules, imprisonment of 3Months or fine upto Rs. 1000. On continuing contravention, additional fine upto Rs. 100 per day {Section 23}

The Child Labour (Prohibition And Regulation) Act, 1986An Act to prohibit the engagement of children in certain employments and to regulate the conditions of work of children in certain other employments.


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1. Short title, extent and commencement.

(1) This Act may be called the Child Labour (Prohibition and Regulation) Act, 1986 . (2) It extends to the whole of India. (3) The provisions of this Act, other than Part III, shall come into force at once, and Part III shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different States and for different classes of establishments.

2. Definitions. In this Act, unless the context otherwise requires,-- (i) " appropriate Government" means, in relation to an establishment under the control of the Central Government or a railway administration or a major port or a mine or oilfield, the Central Government, and in all other cases, the State Government; (ii) " child" means a person who has not completed his fourteenth year of age; (iii) " day" means a period of twenty- four hours beginning at midnight; (iv) " establishment" includes a shop, commercial establishment, workshop, farm, residential hotel, restaurant, eating house, theatre or other place of public amusement or entertainment; (v) " family", in relation to an occupier, means the individual, the wife or husband, as the case may be, of such individual, and their children, brother or sister of such individual; (vi) " occupier", in relation to an establishment or a workshop, means the person who has the ultimate control over the affairs of the establishment or workshop; (vii) " port authority" means any authority administering a port; (viii) " prescribed" means prescribed by rules made under section 18; (ix) " week" means a period of seven days beginning at midnight on Saturday night or such other night as may be approved in writing for a particular area by the Inspector; (x) " workshop" means any premises (including the precincts thereof) wherein any indusrial process is carried on, but does not include any premises to which the provisions of section 67 of the Factories Act, 1948 (63 of 1948 ), for the time being, apply. PART PROHIBITION OF EMPLOYMENT OF CHILDREN IN CERTAIN OCCUPATIONS ANDPROCESSES PART II PROHIBITION OF EMPLOYMENT OF CHILDREN IN CERTAIN OCCUPATIONS AND PROCESSES

3. Prohibition of employment of children in certain occupations and processes. No child shall be employed or permitted to work in any of the occupations set forth in Part A of the Schedule or in any workshop wherein any of the processes set forth in Part B of the Schedule is carried on: Provided that nothing in this section shall apply to any workshop wherein any process is carried on by the occupier with the aid of his family or to any school established by, or receiving assistance or recognition from, Government.

4. Power to amend the Schedule. The Central Government, after giving by notification in the Official Gazette, not less than three months notice of its intention so to do, may, by like notification, add any occupation or process to the Schedule and thereupon the Schedule shall be deemed to have been amended accordingly. 5. Child Labour Technical Advisory Committee. (1) The Central Government may, by notification in the Official Gazette, constitute an advisory committee to be called the Child Labour Technical Advisory Committee (hereafter in this section referred to as the Committee) to advise the Central Government for the purpose of addition of occupations and processes to the Schedule.


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(2) The Committee shall consist of a Chairman and such other members not exceeding ten, as may be appointed by the Central Government. (3) The Committee shall meet as often as it may consider necessary and shall have power to regulate its own procedure. (4) The Committee may, if it deems it necessary so to do, constitute one or more sub- committees and may appoint to any such sub- committee, whether generally or for the consideration of any particular matter, any person who is not a member of the Committee. (5) The term of office, of the manner of filling casual vacancies in the office of, and the allowances, if any, payable to, the Chairman and other members of the Committee, and the conditions and restrictions subject to which the Committee may appoint any person who is not a member of the Committee as a member of any of its sub- committees shall be such as may be prescribed. PART REGULATION OF CONDITIONS OF WORK OF CHILDREN PART III REGULATION OF CONDITIONS OF WORK OF CHILDREN

6. Application of Part. The provisions of this Part shall apply to an establishment or a class of establishments in which none of the occupations or processes referred to in section 3 is carried on.

7. Hours and period of work. (1) No child shall be required or permitted to work in any establishment in excess of such number of hours as may be prescribed for such establishment or class of establishments. (2) The period of work on each day shall be so fixed that no period shall exceed three hours and that no child shall work for more than three hours before he has had an interval for rest for at least one hour. (3) The period of work of a child shall be so arranged that inclusive of his interval for rest, under sub- section (2), it shall not be spread over more than six hours, including the time spent in waiting for work on any day. (4) No child shall be permitted or required to work between 7 p. m and 8 a. m. (5) No child shall be required or permitted to work overtime. (6) No child shall be required or permitted to work in any establishment on any day on which he has already been working in another establishment.

8. Weekly holidays. Every child employed in an establishment shall be allowed in each week, a holiday of one whole day, which day shall be specified by the occupier in a notice permanently exhibited in a conspicuous place in the establishment and the day so specified shall not be altered by the occupier more than once in three months.

9. Notice to Inspector. (1) Every occupier in relation to an establishment in which a child was employed or permitted to work immediately before the date of commencement of this Act in relation to such establishment shall, within a period of thirty days from such commencement, send to the Inspector within whose local limits the establishment is situated, a written notice containing the following particulars, namely:-- (a) the name and situation of the establishment; (b) the name of the person in actual management of the establishment; (c) the address to which communications relating to the establishment should be sent; and (d) the nature of the occupation or process carried on in the establishment. (2) Every occupier, in relation to an establishment, who employs, or permits to work, any child






















after the date of commencement of this Act in relation to such establishment, shall, within a period of thirty days from the date of such employment, send to the Inspector within whose local limits the establishment is situated, a written notice containing the particulars as are mentioned in sub- section (1). Explanation.-- For the purposes of sub- sections (1) and (2)," date of commencement of this Act, in relation to an establishment" means the date of bringing into force of this Act in relation to such establishment. (3) Nothing in sections 7, 8 and 9 shall apply to any establishment wherein any process is carried on by the occupier with the aid of his family or to any school established by, or receiving assistance or recognition from, Government.

10. Disputes as to age. If any question arises between an Inspector and an occupier as to the age of any child who is employed or is permitted to work by him in an establishment, the question shall, in the absence of a certificate as to the age of such child granted by the prescribed medical authority, be referred by the Inspector for decision to the prescribed medical authority.

11. Maintenance of register. There shall be maintained by every occupier in respect of children employed or permitted to work in any establishment, a register to be available for inspection by an Inspector at all times during working hours or when work is being carried on in any such establishment, showing-- (a) the name and date of birth of every child so employed or permitted to work; (b) hours and periods of work of any such child and the intervals of rest to which he is entitled; (c) the nature of work of any such child; and (d) such other particulars as may be prescribed.

12. Display of notice containing abstract of sections 3 and 14. Every railway administration, every port authority and every occupier shall cause to be displayed in a conspicuous and accessible place at every station on its railway or within the limits of a port or at the place of work, as the case may be, a notice in the local language and in the English language containing an abstract of sections 3 and 14.

13. Health and safety. (1) The appropriate Government may, by notification in the Official Gazette, make rules for the health and safety of the children employed or permitted to work in any establishment or class of establishments. (2) Without prejudice to the generality of the foregoing provisions, the said rules may provide for all or any of the following matters, namely:-- (a) cleanliness in the place of work and its freedom from nuisance; (b) disposal of wastes and effluents; (c) ventilation and temperature; (d) dust and fume; (e) artificial humidification; (f) lighting; (g) drinking water; (h) latrine and urinals; (i) spittoons; (j) fencing of machinery; (k) work at or near machinery in motion; (l) employment of children on dangerous machines;

























(m) instructions, training and supervision in relation to employment of children on dangerous machines; (n) device for cutting off power; (o) self- acting machines; (p) easing of new machinery; (q) floor, stairs and means of access; (r) pits, sumps, openings in floors, etc.; (s) excessive weights; (t) protection of eyes; (u) explosive or inflammable dust, gas, etc.; (v) precautions in case of fire; (w) maintenance of buildings; and (x) safety of buildings and machinery. PART MISCELLANEOUS PART IV MISCELLANEOUS

14. Penalties. (1) Whoever employs any child or permits any child to work in contravention of the provisions of section 3 shall be punishable with imprisonment for a term which shall not be less than three months but which may extend to one year or with fine which shall not be less than ten thousand rupees but which may extend to twenty thousand rupees or with both. (2) Whoever, having been convicted of an offence under section 3, commits a like offence afterwards, he shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to two years. (3) Whoever-- (a) fails to give notice as required by section 9; or (b) fails to maintain a register as required by section 11 or makes any false entry in any such register; or (c) fails to display a notice containing an abstract of section 3 and this section as required by section 12; or (d) fails to comply with or contravenes any other provisions of this Act or the rules made thereunder. shall be punishable with simple imprisonment which may extend to one month or with fine which may extend to ten thousand rupees or with both.

15. Modified application of certain laws in relation to penalties. (1) Where any person is found guilty and convicted of contravention of any of the provisions mentioned in sub- section (2), he shall be liable to penalties as provided in sub- sections (1) and (2) of section 14 of this Act and not under the Acts in which those provisions are contained. (2) The provisions referred to in sub- section (1) are the provisions mentioned below:-- (a) section 67 of the Factories Act, 1948 (63 of 1948 ); (b) section 40 of the Mines Act, 1952 (35 of 1982 ); (c) section 109 of the Merchant Shipping Act, 1958 (44 of 1958 ); and (d) section 21 of the Motor Transport Workers Act, 1961 (27 of 1961 ).

16. Procedure relating to offences. (1) Any person, police officer or Inspector may file a complaint of the commission of an offence under this Act in any court of competent jurisdiction. (2) Every certificate as to the age of a child which has been granted by a prescribed medical authority shall, for the purposes of this Act, be conclusive evidence as to the age of the child to
































whom it relates. (3) No court inferior to that of a Metropolitan Magistrate or a Magistrate of the first class shall try any offence under this Act.

17. Appointment of Inspectors. The appropriate Government may appoint Inspectors for the purposes of securing compliance with the provisions of this Act and any Inspector so appointed shall be deemed to be a public servant within the meaning of the Indian Penal Code (45 of 1860)

18. Power to make rules. (1) The appropriate Government may, by notification in the Official Gazette and subject to the condition of previous publication, make rules for carrying into effect the provisions of this Act. (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:-- (a) the term of office of, the manner of filling casual vacancies of, and the allowances payable to the Chairman and members of the Child Labour Technical Advisory Committee and the conditions and restrictions subject to which a non- member may be appointed to a sub- committee under sub- section (5) of section 5; (b) number of hours for which a child may be required or permitted to work under sub- section (1) of section 7; (c) grant of certificates of age in respect of young persons in employment or seeking employment, the medical authorities which may issue such certificate, the form of such certificate, the charges which may be made thereunder and the manner in which such certificate may be issued: Provided that no charge shall be made for the issue of any such certificate if the application is accompanied by evidence of age deemed satisfactory by the authority concerned; (d) the other particulars which a register maintained under section 11 should contain.

19. Rules and notifications to be laid before Parliament or State legislature. (1) Every rule made under this Act by the Central Government and every notification issued under section 4, shall be laid, as soon as may be after it is made or issued, before each House of Parliament, while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or notification or both Houses agree that the rule or notification should not be made or issued, the rule or notification shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or notification. (2) Every rule made by a State Government under this Act shall be laid as soon as may be after it is made, before the legislature of that State.

20. Certain other provisions of law not barred. Subject to the provisions contained in section 15, the provisions of this Act and the rules made thereunder shall be in addition to, and not in derogation of, the provisions of the Factories Act, 1948 (63 of 1948 ), the Plantations Labour Act, 1951 (69 of 1951 ) and the Mines Act, 1952 (35 of 1952 ).

21. Power to remove difficulties. (1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government

















may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as appear to it to be necessary or expedient for removal of the difficulty: Provided that no such order shall be made after the expiry of a period of three years from the date on which this Act receives the assent of the President. (2) Every order made under this section shall, as soon as may be after it is made, be laid before the Houses of Parliament.

22. Repeal and savings. (1) The Employment of Children Act, 1938 (26 of 1938 ) is hereby repealed. (2) Notwithstanding such repeal, anything done or any action taken or purported to have been done or taken under the Act so repealed shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act.

23. Amendment of Act 11 of 1948 . In section 2 of the Minimum Wages Act, 1948 ,-- (i) for clause (a), the following clauses shall be substituted, namely:-- (a) " adolescent" means a person who has completed his fourteenth year of age but has not completed his eighteenth year; (aa) " adult" means a person who has completed his eighteenth year of age;'; (ii) after clause (b), the following clause shall be inserted, namely:-- (bb) " child" means a person who has not completed his fourteenth year of age;'.

24. Amendment of Act 69 of 1951 . In the Plantations Labour Act, 1951 ,-- (a) in section 2, in clauses (a) and (c), for the word" fifteenth", the word" fourteenth" shall be substituted; (b) section 24 shall be omitted; (c) in section 26, in the opening portion, the words" who has completed his twelfth year" shall be omitted.

25. Amendment of Act 44 of 1958 . In the Merchant Shipping Act, 1958 , in section 109, for the word" fifteen", the word" fourteen" shall be substituted. 26. Amendment of Act 27 of 1961 . In the Motor Transport Workers Act, 1961 , in section 2, in clauses (a) and (c), for the word" fifteenth", the word" fourteenth" shall be substituted.


















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