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EMPLOYEES' PROVIDENT FUND SCHEME 1952

Employee Definition: "Employee" as defined in Section 2(f) of the Act means any person who is employee for wages in any kind of work manual or otherwise, in or in connection with the work of an establishment and who gets wages directly or indirectly from the employer and includes any person employed by or through a contractor in or in connection with the work of the establishment. Membership: All the employees (including casual, part time, Daily wage contract etc.) other then an excluded employee are required to be enrolled as members of the fund the day, the Act comes into force in such establishment. Basic Wages: "Basic Wages" means all emoluments which are earned by employee while on duty or on leave or holiday with wages in either case in accordance with the terms of the contract of employment and witch are paid or payable in cash, but dose not include a. b. The cash value of any food concession; Any dearness allowance (that is to say, all cash payment by whatever name called paid to an employee on account of a rise in the cost of living), house rent allowance, overtime allowance, bonus, commission or any other allowance payable to the employee in respect of employment or of work done in such employment. Any present made by the employer.

c.

Excluded Employee: "Exclude Employee" as defined under pare 2(f) of the Employees' Provident Fund Scheme means an employee who having been a member of the fund has withdraw the full amount of accumulation in the fund on retirement from service after attaining the age of 55 years; Or An employee, whose pay exceeds Rs. Five Thousand per month at the time, otherwise entitled to become a member of the fund. Explanation: 'Pay' includes basic wages with dearness allowance, retaining allowance, (if any) and cash value of food concessions admissible thereon. Employee Provident Fund Scheme: Employees' Provident Fund Scheme takes care of following needs of the members: (i) Retirement (ii) Medical Care (iii) Housing (iv) Family obligation (v) Education of Children (vi) Financing of Insurance Polices How the Employees' Provident Fund Scheme works: As per amendment-dated 22.9.1997 in the Act, both the employees and employer contribute to the fund at the rate of 12% of the basic wages, dearness allowance and retaining allowance, if any, payable to employees per month. The rate of contribution is 10% in the case of following establishments: Any covered establishment with less then 20 employees, for establishments cover prior to 22.9.97. Any sick industrial company as defined in clause (O) of Sub-Section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 and which has been declared as such by the Board for Industrial and Financial Reconstruction, Any establishment which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth and

Any establishment engaged in manufacturing of (a) jute (b) Breed (d) coir and (e) Guar gum Industries/ Factories. The contribution under the Employees' Provident Fund Scheme by the employee and employer will be as under with effect from 22.9.1997.

Employees' Provident Fund Interest rate: The rate of interest is fixed by the Central Government in consultation with the Central Board of trustees, Employees' Provident Fund every year during March/April. The interest is credited to the members account on monthly running balance with effect from the last day in each year. The rate of interest for the year 1998-99 has been notified as 12%. The rate of interest for 99-2000 w.e.f. 1.7.'99 was 11% on monthly balances. 2000-2001 CBT recommended 10.25% to be notified by the Government. Benefits: A) A member of the provident fund can withdraw full amount at the credit in the fund on retirement from service after attaining the age of 55 year. Full amount in provident fund can also be withdraw by the member under the following circumstance: A member who has not attained the age of 55 year at the time of termination of service. A member is retired on account of permanent and total disablement due to bodily or mental infirmity. On migration from India for permanent settlement abroad or for taking employment abroad. In the case of mass or individual retrenchment.

B) In the case of the following contingencies, the payment of provident fund be made after complementing a continuous period of not less than two months immediately preceding the date on which the application for withdrawal is made by the member: Where employees of close establishment are transferred to other establishment, which is not covered under the Act: Where a member is discharged and is given retrenchment compensation under the Industrial Dispute Act, 1947.

Withdrawal before retirement: A member can withdraw upto 90% of the amount of provident fund at credit after attaining the age of 54 years or within one year before actual retirement on superannuation whichever is later. Claim application in form 19 may be submitted to the concerned Provident Fund Office. Accumulations of a deceased member: Amount of Provident Fund at the credit of the deceased member is payable to nominees/ legal heirs. Claim application in form 20 may be submitted to the concerned Provident Fund Office. Transfer of Provident Fund account: Transfer of Provident Fund account from one region to other, from Exempted Provident Fund Trust to Unexampled Fund in a region and vice-versa can be done as per Scheme. Transfer Application in form 13 may be submitted to the concerned Provident Fund Office. Nomination: The member of Provident Fund shall make a declaration in Form 2, a nomination conferring the right to receive the amount that may stand to the credit in the fund in the event of death. The member may furnish the particulars concerning himself and his family. These particulars furnished by the member of Provident Fund in Form 2 will help the Organization in the building up the data bank for use in event of death of the member.

Annual Statement of account: As soon as possible and after the close of each period of currency of contribution, annual statements of accounts will de sent to each member through of the factory or other establishment where the member was last employed. The statement of accounts in the fund will show the opening balance at the beginning of the period, amount contribution during the year, the total amount of interest credited at the end of the period or any withdrawal during the period and the closing balance at the end of the period. Member should satisfy themselves as to the correctness f the annual statement of accounts and any error should be brought through employer to the notice of the correctness Provident Fund Office within 6 months of the receipt of the statement.

EMPLOYEES PENSION SCHEME 1995


Employees' Pension Scheme-95 came into effect from 16.11.95. The Employees' Pension Scheme-95 has been conceived as a Benefit defined Social Insurance Scheme formulated following actuarial principles for ensuring long term financial sustenance. The new Employees Pension Scheme-95, repealed and replaced the erstwhile Family Pension Scheme, 1971. The assets and liabilities of the erstwhile Pension Fund were transferred and merged with the new Pension Fund. The benefits and entitlements to the members under the old scheme remain protected and continued under the new Employees Pension Scheme -95. APPLICATION AND COVERAGE The Scheme was notified on 16.11.95 and made effective from that date with the provision for retrospective application from 1.4.93 in selective cases. The Scheme on its introduction applied on compulsory basis to all the new members of Provident Fund and the existing members who were contributing to the Employees' Family Pension Scheme-1971. The existing members (as on 16.11.95) of the Provident Fund who did not opt for joining the erstwhile Employees' Family Pension Scheme-1971 and the beneficiaries under the erstwhile Employees' Family Pension Scheme-1971 in case of death/exit occurring between 1.4.93 and 15.11.95 have option to join the new scheme. CONTRIBUTION No separate contribution is payable additionally by the member for the Pension Scheme benefits. The new Pension Scheme, alike the old Employees' Family Pension Scheme, 1971 derives its financial resource by partial diversion from the Provident Fund contribution, the rate being 8.33% in lieu of 2.33% against the old ceased Family Pension Scheme-1971.The Central Government continues contributing at the rate of 1.16% as before, on wages at the end of the year. BENEFITS 1. 2. Pension for life to the member, on superannuation/retirement and invalidation. To the members of the family upon death of the member: a. b. c. d. e. Pension to Widow/Widower for life or till re-marriage. To children/orphan, two at a time additionally upto 25 years of age simultaneously with widow/widower pension. Children/orphan with total and permanent disability shall be entitled to payment of children pension or orphan pension as the case may be irrespective of age and number of children in the family. Facility for payment of pension to nominee in the event of member who is unmarried or without any eligible family member to receive pension, and Facility for payment of pension to dependent father/mother in the event the member dies leaving behind no eligible family members and no nomination by such deceased member exist.

3. 4. 5.

Facility for capital return (corpus accretion) on option formula basis Commutation of pension up to 1/3rd of pension amount Scheme Certificate to retain membership of the Scheme till attaining the age of 58 years.

Superannuation/retirement pension under the new scheme will be payable on fulfilling:a. b. Minimum 10 years eligible service and Attaining age of 58 years.

On ceasing employment earlier than 58 years, pension may be availed of by a member at his option, before attaining the age of 58 years but not below 50 years. Such early pension will be subject to discounting factor. However, no such age restriction or eligibility requirement shall apply for pension entitlement on disablement or pension payable to the family members on death of the member. Membership with one contribution is enough in such cases. VALUATION OF PENSION FUND The Pension Fund is evaluated by an Actuary on an annual basis. Based on valuation recommendations, Central Government determines the amount of relief on pensions to existing pensioners.

Payment of gratuity act - 1972


1. 2. 3. 4. 1. 2. 3. 1. Applicability Every factory (as defined in Factories Act), mine, oilfield, plantation, port and railway. Every shop or establishment to which Shops & Establishment Act of a State applies in which 10 or more persons are employed at any time during the year end. Any establishment employing 10 or more persons as may be notified by the Central Government. Once Act applies, it continues to apply even if employment strength falls below 10. Eligibility Any person employed on wages/salary. At the time of retirement or resignation or on superannuation, an employee should have rendered continuous service of not less than five years, In case of death or disablement, the gratuity is payable, even if he has not completed 5 years of service. Benefits The quantum of gratuity is to be computed at the rate of 15 days wages (7 days wages in case of seasonal establishments) based on rate of wages last drawn by the employee concerned for every completed year of service or a part thereof exceeding 6 months. The total amount of gratuity payable shall not exceed the prescribed limit. In case where higher benefit of gratuity is available under any gratuity scheme of the Co., the employee will be entitled to higher benefit

2. 3.

1. 2.

Calculation of Gratuity Gratuity = Monthly Salary x 15 days x No. of yrs. of service 26 Max. Gratuity payable under the Act is Rs. 3,50,000/- (w.e.f. 24-9-1997)

Penal Provisions Nonpayment of gratuity payable under the Act is punishable with imprisonment up to 2 years (minimum 6 months) and/or fine up to RS 20,000/-. Other contravention/offenses attract imprisonment up to 1 year and/or fine up to RS 10,000.

Employee State Insurance Act, 1948 An overview


Introduction The Employee State Insurance Act, [ESIC] 1948, is a piece of social welfare legislation enacted primarily with the object of providing certain benefits to employees in case of sickness, maternity and employment injury and also to make provision for certain others matters incidental thereto. The Act in fact tries to attain the goal of socioeconomic justice enshrined in the Directive principles of state policy under part 4 of our constitution, in particular, articles 41, 42 and 43 which enjoin the state to make effective provision for securing, the right to work, to education and public assistance in cases of unemployment, old age, sickness and disablement. The act strives to materialize these avowed objects through only to a limited extent. This act becomes a wider spectrum than factory act, in the sense that the factory act is concerned with the health, safety, welfare, leave etc of the workers employed in the factory premises only. But the benefits of this act extend to employees whether working inside the factory or establishment or elsewhere or they are directly employed by the principal employee or through an intermediate agency, if the employment is incidental or in connection with the factory or establishment. Related Legislations: ESI (Central) Rules, 1950 and ESI (General) Regulations, 1950 Origin The Employee State Insurance act was promulgated by the Parliament of India in the year 1948. To begin with the ESIC scheme was initially launched on 2nd February 1952 at just two industrial centers in the country namely Kanpur and Delhi with a total coverage of about 1.20 lakh workers. There after the scheme was implemented in a phased manner across the country with the active involvement of the state governments. Objectives: The ESI Act is a social welfare legislation enacted with the object of providing certain benefits to employees in case of sickness, maternity and employment injury. Under the Act, employees will receive medical relief, cash benefits, maternity benefits, pension to dependents of deceased workers and compensation for fatal or other injuries and diseases. Definitions According to Section 2 (m) of Factories Act, 1948, Factory means any premises including the precints thereof - (a) whereon ten or more persons are employed or were employed for wages 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 (b) whereon twenty or more persons are employed or were employed for wages 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 Mines Act, 1952 or a railway running shed; According to Section 2 (k) of Factories Act, "manufacturing process" means any process for - (i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal, or (ii) pumping oil, water, sewage or any other substance; or; (iii) generating, transforming or transmitting power; or (iv)

composing types for printing, printing by letter press, lithography, photogravure or other similar process or book binding; lra-6 ] [ lra-7 or lra-7 ] (v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels; (vi) preserving or storing any article in cold storage; According to Section 2 (h) of The Minimum Wages Act, "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 Applicability: The ESI Act extends to the whole of India. It applies to all the factories including Government factories (excluding seasonal factories), which employ 10 or more employees and carry on a manufacturing process with the aid of power and 20 employees where manufacturing process is carried out without the aid of power. The act also applies to shops and establishments. Generally, shops and establishments employing more than 20 employees are covered by the Act. Shop according to the Delhi Shops and Establishment Act, 1954 means any premises where goods are sold either by retail or wholesale or where services are rendered to customers, and includes an office, a store-room, godown, warehouse or workhouse or work place, whether in the same premises or otherwise, used in or in connection with such trade or business but does not include a factory or a commercial establishment. Establishment means a shop, a commercial establishment, residential hotel, restaurant, eating-house, theatre or other places of public amusement or entertainment to which this Act applies and includes such other establishment as Government may, by notification in the Official Gazette, declare to be an establishment for the purpose of this Act. According to the Delhi Shops and Establishment Act, 1954, Commercial Establishment means any premises wherein any trade, business or profession or any work in connection with, or incidental or ancillary thereto is carried on and includes a society registered under the Societies Registration Act, 1860, and charitable or other trust, whether registered or not, which carries on any business, trade or profession or work in connection with, or incidental or ancillary thereto, journalistic and printing establishments, contractors and auditors establishments, quarries and mines not governed by the Mines Act, 1952, educational or other institutions run for private gain, and premises in which business of banking, insurance, stocks and shares, brokerage or produce exchange is carried on, but does not include a shop or a factory registered under the Factories Act, 1948, or theatres, cinemas, restaurants, eating houses, residential hotels, clubs or other places of public amusements or entertainment. Form 01 Employers Registration Form also requires a copy of the registration certificate or licence obtained under the Shops and Establishment Act to be attached along with this form. From this it is quite evident that ESI Act will be applicable to shops and establishments. Again the definition of shops and establishment will vary from state to state depending on the shops and establishment act of that particular state. The act does not apply to any member of Indian Naval, Military or Air Forces. All employees including casual, temporary or contract employees drawing wages less than Rs 10,000 per month are covered. The ceiling limit has been raised from Rs.7500 to Rs.10000 with effect from 01.10.06. Apprentices covered under the Apprenticeship Act are not covered under this Act. According to Apprenticeship Act 1961, apprentice means a person who is undergoing apprenticeship training in pursuance of a contract of apprenticeship.

The apprentices under any scheme as the name suggests come to learn the tricks of the trade and may not count much so far as the output of the factory is concerned, with that end in view, the apprentices are exempted from the operation of laws relating to labour unless the State Government thought otherwise.-- Regional Director ESIC v. M/s Arudyog 1987 (1) LLJ 292. A factory or establishment, to which this Act applies, shall continue to be governed by its provisions even if the number of workers employed falls below the specified limit or the manufacturing process therein ceases to be carried on with the aid of power subsequently. Where a workman is covered under the ESI scheme, Compensation under the Workmen's Compensation Act cannot be claimed in respect of employment injury. No benefits can be claimed under the Maternity Benefits Act. o Areas Covered The ESI Scheme is being implemented area-wise by stages. The Scheme is being implemented in almost all union territories and states except Nagaland, Manipur, Tripura, Sikkim, Arunachal Pradesh and Mizoram. Registration The employer should get his factory or establishment registered with the ESI Corporation within 15 days after the Act becomes applicable to it and also obtain the employers code number. Application should be made in Form 01 and after having being satisfied with the application form, the regional office will allot a code number to the employer, which must be quoted in all documents and correspondence. Identity Card An employee is required to file a declaration form upon employment in factory or establishment to show that he is covered under the Act. On registration every insured person is provided with a temporary identification certificate whic h is valid ordinarily for a period of three months but may be extended, if necessary, for a further period of 3 months. Within this period, the insured person is given a permanent family photo identity card in exchange for the certificate. The identity card serves as a means of identification and has to be produced at the time of claiming medical care at the dispensary / clinic and cash benefit at the local office of the corporation. In the event of change of employment, it should be produced before the new employer as evidence of registration under the scheme to prevent any duplicate registration. The identity card bears the signature/thumb impression of the insured person. Since medical benefit is also available to the families of Insured persons, the particulars of family members entitled to medical benefit are also given in the identity card affixed with a postcard size family photo. If the identity card is lost, a duplicate card is issued on payment as prescribed. Employers / Employees Contribution Like most of the social security schemes, the world over, ESI scheme is a self-financing health insurance scheme. Contributions are raised from covered employees and their employers as a fixed percentage of wages. Presently covered employees contribute 1.75% of the wages, whereas as the employers contribute 4.75% of the wages, payable to the insured persons. Employees earning less than and up to Rs. 50 per day are exempted from payment of contribution. The contribution is deposited by the employer in cash or by cheque at the designated branches of some nationalized banks. The responsibility for payment of all contributions is that of the employer with a right to deduct the employees share of contribution from employees wages relating to the period in respec t of which the contribution is payable. There are two contribution periods each of six months duration and two corresponding benefit periods. Cash benefits under the scheme are generally linked with contribution paid. Contribution period - 1st April to 30th September, its corresponding Cash Benefit period is 1st January to 30th June of the following year.

Benefits under the Scheme Employees covered under the scheme are entitled to medical facilities for self and dependants. They are also entitled to cash benefits in the event of specified contingencies resulting in loss of wages or earning capacity. The insured women are entitled to maternity benefit for confinement. Where death of an insured employee occurs due to employment injury or occupational disease, the dependants are entitled to family pension. Various benefits that the insured employees and their dependants are entitled to, the duration of benefits and contributory conditions thereof are as under: Medical benefits Sickness benefits Extended sickness benefit Enhanced sickness benefit Maternity benefit Disablement benefit Dependants benefit Other benefits like funeral expenses, vocational rehabilitation, free supply of physical aids and appliances, preventive health care and medical bonus. Obligations Of Employers 1. The employer should get his factory or establishments registered with the E.S.I. Corporation within 15 days after the Act becomes applicable to it, and obtain the employers Code Number. 2. 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. 3. The employer should deposit the employees and his own contributions to the E.S.I. Account in the prescribed manner, whether he has sufficient resources or not, his liability under the Act cannot be disputed. He cannot justify non-payment of E.S.I. contribution due to non-availability of finance. 4. The employer should furnish a Return of Contribution along with the challans of monthly payment, within 30 days of the end of each contribution period. 5. The employer should not reduce the wages of an employee on account of the contribution payable by him (employer). 6. The employer should cause to be maintained the prescribed records/registers namely the register of employees, the inspection book and the accident book. 7. The employer should report to the E.S.I. authorities of any accident in the place of employment, within 24 hours or immediately in case of serious or fatal accidents. He should make arrangements for first aid and transportation of the employee to the hospital. He should also furnish to the authorities such further information and particulars of an accident as may be required. 8. The employer should inform the local office and the nearest E.S.I. dispensary/hospital, in case of death of any employee, immediately. 9. The employer must not put to work any sick employee and allow him leave, if he has been issued the prescribed certificate. 10. The employer should not dismiss or discharge any employee during the period he/she is in receipt of sickness/maternity/temporary disablement benefit, or is under medical treatment, or is absent from work as a result of illness duly certified or due to pregnancy or confinement. Records To Be Maintained For Inspection By ESI authorities 1. 2. 3. 4. 5. 6. Attendance Register / Muster Roll Salary / Wage Register / Payroll EC (Employees & Employers Contribution) Statement Employees Register Accident Book Return of Contribution

7. Return of Declaration Forms 8. Receipted Copies of Challans 9. Books of Account viz. Cash/Bank, Expense Register, Sales/Purchase Register, Petty Cash Book, Ledger, Supporting Bills and Vouchers, Delivery Challans (if any). 10. Form of annual information on company Employees Insurance Court Any dispute arising under the ESI Act will 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.

Minimum Wages Act, 1948


The Minimum Wages Act, 1948 was enacted to safeguard the interests of workers, mostly in the unorganised sector by providing for the fixation of minimum wages in certain specified employments. It binds the employers to pay their workers the minimum wages fixed under the Act from time to time. Under the Act, both the Central Government and the State Governments are the appropriate Governments to fix, revise, review and enforce the payment of minimum wages to workers in respect of 'scheduled employments' under their respective jurisdictions. There are 45 scheduled employments in the Central sphere and as many as 1530 in State sphere. In the Central sphere, the Act is enforced through the Central Industrial Relations Machinery (CIRM). CIRM is an attached office of the Ministry of Labour and is also known as the Chief Labour Commissioner (Central) [CLC(C)] Organisation. The CIRM is headed by the Chief Labour Commissioner (Central). While, the State Industrial Relations Machinery ensures the enforcement of the Act at the State level. The norms recommended by the Indian Labour Conference (ILC), held in 1957 are taken into accountwhile fixing the minimum wages. These are as follows:(i) (ii) (iii) (iv) (v) 3 consumption units for one earner. Minimum food requirements of 2700 calories per average Indian adult. Clothing requirements of 72 yards per annum per family. Rent corresponding to the minimum area provided for under Governments Industrial Housing Scheme. Fuel, Lighting and other miscellaneous items of expenditure to constitute 20% of the total minimum wage.

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. Minimum 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 minimum rate of wages consists of a basic wage and a special allowance, known as 'Variable Dearness Allowance (VDA)' linked to the Consumer Price Index Number. The allowance is revised twice a year, once in April and then in October.Under the Minimum Wages Act, there are two methods for fixation/revision of minimum wages, namely: Committee method - Under this method, committees and sub-committees are set up by the appropriate Governments to hold enquiries and make recommendations with regard to fixation and revision of minimum wages, as the case may be.

Notification method - Under this method, Government proposals are published in the Official Gazette for information of the persons likely to be affected thereby and specify a date not less than two months from the date of the notification on which the proposals will be taken into consideration.

After considering the advice of the Committees/Sub-committees and all the representations received by the specified date in Notification method, the appropriate Government shall, by notification in the Official Gazette, fix/revise the minimum wage in respect of the concerned scheduled employment and it shall come into force on expiry of three months from the date of its issue. The Government may review the minimum rates of wages and revise the minimum rates at intervals not exceeding five years. The fixation of minimum wages depends on a number of factors such as level of income and paying capacity, prices of essential commodities, productivity,local conditions, etc. Since these factors vary from State to State, the wages accordingly differ throughout the country. Hence, in the absence of a uniform national minimum wage, the Central Government introduced a 'national floor level minimum wage'. Initially, this minimum wage level was fixed at Rs. 35/- per day and has been revised periodically. The last revision beingRs. 66/- per day with effect from 1.2.2004, on the recommendations of the Central Advisory Board. All the States/UTs Governments are required to ensure that fixation/revision of minimum rates of wages in all the scheduled employments is not below this national minimum wage. Also, in order to bring uniformity in the minimum wages of scheduled employments, the Union Government has requested the States to form regional Committees. Hence, five Regional Minimum Wages Advisory Committees have been formed in the country. These include:Region Eastern Region North Eastern Region Southern Region Northern Region Western Region States/UTs covered West Bengal, Odisha, Bihar, Jharkhand and Andaman & Nicobar Islands. Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Sikkim, Nagaland and Tripura. Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, Pondicherry and Lakshadwadeep. Punjab, Rajasthan, Himachal Pradesh, Jammu & Kashmir, Haryana, Uttar Pradesh, Uttarakhand, Delhi and Chandigarh. Maharashtra, Gujarat, Goa, Madhya Pradesh, Chhattisgarh, Dadra & Nagar Haveli and Daman & Diu.

Industrial Disputes Act- 1947


Industrial disputes are the disputes which arise due to any disagreement in an industrial relation. The term 'industrial relation' involves various aspects of interactions between the employer and the employees; among the employees as well as between the employers. In such relations whenever there is a clash of interest, it may result in dissatisfaction for either of the parties involved and hence lead to industrial disputes or conflicts. These disputes may take various forms such as protests, strikes, demonstrations, lock-outs, retrenchment, dismissal of workers, etc. Some of the important causes of an industrial dispute are: Demand for higher wages and allowances. Demand for payment of bonus and determination of its rate thereof. Demand for higher social security benefits. Demand for good and safer working conditions, including length of a working day, the interval and frequency of leisure and physical work environment.

Demand for improved labour welfare and other benefits. For example, adequate canteen, rest, recreation and accommodation facility, arrangements for travel to and from distant places,etc. Besides, poor personnel management; conflicting legislative measure or government policies; and psychological factors such as denial of opportunity to the worker for satisfying his/ her basic urge for selfexpression, personal achievement and betterment may also result in labour problems. Objectives The objective of the Industrial Disputes Act is to secure industrial peace and harmony by providing machinery and procedure for the investigation and settlement of industrial disputes by negotiations. Various studies indicate that Indian labour laws are highly protective of labour, and labour markets are relatively inflexible. These laws apply only to the organised sector. Consequently, these laws have restricted labour mobility, have led to capital-intensive methods in the organised sector and adversely affected the sectors long -run demand for labour. Labour being a subject in the concurrent list, State-level labour regulations are also an important determinant of industrial performance. Evidence suggests that States, which have enacted more pro-worker regulations, have lost out on industrial production in general. -- (Ministry of Finance, 2006, p. 209 the Industrial Disputes Act (IDA) of 1947. Particular attention has been paid to its Chapter V-B, introduced by an amendment in 1976, which required firms employing 300 or more workers to obtain government permission for layoffs, retrenchments and closures. A further amendment in 1982 (which took effect in 1984) expanded its ambit by reducing the threshold to 100 workers. It is argued that since permission is difficult to obtain, employers are reluctant to hire workers whom they cannot easily get rid of. Job security laws thus protect a tiny minority of workers in the organised sector and prevent the expansion of industrial employment that could benefit the mass of workers outside. It is also argued that the restriction on retrenchment has adversely affected workplace discipline, while the threshold set at 100 has discouraged factories from expanding to economic scales of production, thereby harming productivity. Several other sections of the IDA allegedly have similar effects, because they increase workers bargaining strength and thereby raise labour costs either directly through wages or indirectly by inhibiting work reorganization in response to changes in demand and technology. The Act also lays down 1. 2. 3. The provision for payment of compensation to the workman on account of closure or lay off or retrenchment. The procedure for prior permission of appropriate Government for laying off or retrenching the workers or closing down industrial establishments Unfair labour practices on part of an employer or a trade union or workers.

Applicability The Industrial Disputes Act extends to whole of India and applies to every industrial establishment carrying on any business, trade, manufacture or distribution of goods and services irrespective of the number of workmen employed therein. Every person employed in an establishment for hire or reward including contract labour, apprentices and part time employees to do any manual, clerical,skilled, unskilled, technical, operational or supervisory work, is covered by the Act. This Act though does not apply to persons mainly in managerial or administrative capacity,persons engaged in a supervisory capacity and drawing > 10,000 p.m or executing managerial functions and persons subject to Army Act, Air Force and Navy Act or those in police service or officer or employee of a prison.

Payment of bonus act -1965


Applicality Every factory wherein 10 or more persons are employed with the aid of power or An establishment 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-section (1) of section 32 of the Income-tax Act, or in accordance with the provisions of the agricultural 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 deducting 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 allowance] 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 Second 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 calculation 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 under Section 19. 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 de ductions 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 Insurance, 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

Workmen's Compensation Act, 1923


Applicability Employer includes any person whether incorporated or not and any agent of employer and when services are temporarily lent or let on hire to another person, then means such other person. Eligibility Any workman who is injured by accident arising out of and in the course of his employment in specified list of employment contracts any disease specified therein as an occupational disease peculiar to that occupation.

Benefits: Amount of compensation shall be payable by the employer i) Where death results from injury 40% of monthly wages x relevant factor or Rs. 20,000/- whichever is more. ii) Where permanent total disablement results from the injury 50% of monthly wages x relevant factor or Rs. 24,000/- whichever is more (relevant factor depends upon the age of a workman) iii)Where permanent, partial disablement or temporary disablement results from injury as per prescribed schedule. Penal Provisions Any contract by a worker waiving his right to be compensated under this Act is null and void. Compensation should be paid earlydelay beyond 1 month attract interest @ 6% p.a. and penalty of up to 50% of the compensation. Certain other offenses attract fine up to RS 5,000.