LABOUR LAWS-II 1

2 VIJAY LAW SERIES

Contents
I. INDEX i-iiI
II. SHORT NOTES INDEX iv-v
III. ESSAY QUESTIONS AND ANSWERS 1-89
IV. SHORT NOTES 90-119

Payment of Wages Act, 1936 1

1. Definition, scope and concept of wage 3
2. Mode and time of payment of wages 5
3. Deductions from wages 6
4. Authorised and permissible deductions 6
5. Powers and functions of inspectors 8
6. Claims arising out of deductions 9
Minimum Wages Act, 1948 11
7. Objects and Constitutional validity of Minimum Wages Act, 1948 11
8. Kinds of wages 13
9. Procedure for fixing and revising minimum wages 15
10. Authorities and their powers 17
Employees State Insurance Act, 1948 19
11. Objectives of ESI Act 19
12. Employment Injury 22
13. Employees State Insurance Corporation 23
14. Employees State Insurance Fund 24
15. Employees State Insurance Court 26
16. Contribution 27
17. Benefits 29
18. Powers and duties of ESI Corporation 31
LABOUR LAWS-II 3

Employees Provident Funds and Misc. Provisions Act, 1952 32

19. Scope and object of the Act 32
20. Schemes and Employees Provident Fund Act 34
21. Kinds of provident funds 34
22. Administration of provident fund scheme 36
The Workmen’s/Employee’s Compensation Act, 1923 38
23. Objectives and purpose of the Act 38
24. Temporary and permanent disablement/ 39
25. Total and partial disablement 39
26. Accident arising out of and during the course of employment 40
27. Theory of notional extension of employment 42
28. Occupational diseases 43
29. Computation or determination of compensation 44
30. Employer’s liability of compensation 46
31. Employer’s non-liability of compensation 48
32. Doctrine of Added Peril 48
33. Insolvency or liquidation of employer 51
34. Commissioners 52
Equal Remuneration Act, 1976 54
35. Equal pay for equal work 54
Payment of Bonus Act, 1965 58
36. Meaning and object of bonus 58
37. Kinds of bonus 60
38. Qualifications and disqualifications to receive bonus 60
39. Minimum bonus and maximum bonus 61
40. Set on and Set off of allocable surplus 63
41. Computation of bonus 64
Payment of Gratuity Act, 1972 66
42. Eligibility to receive gratuity/ 66
43. Conditions for the grant of gratuity 66
44. Determination of the amount of gratuity 68
4 VIJAY LAW SERIES

Salient Features of the

Minimum Wages Act, 1948

M
inimum Wages Act, 1948 provides for fixation and
enforcement of minimum wages in respect of schedule
employments to prevent exploitation of labour through payment
of low wages. Wage means all remuneration including house rent paid to
the workers for work done in accordance with the terms and conditions of
contract of employment. A Tripartite Committee namely the Committee on
Fair Wage was set up in 1948 to provide guidelines for wage structures in
India. The report of this Committee was a major landmark in the history of
formulation of wage policy in India. Its recommendations set out the key
concepts of the living wage, minimum wages and fair wage besides set-
ting out guidelines for wage fixation.
Object of the Act: The Preamble of the Act discloses the object of the Act
which runs as whereas it is expedient to provide for fixing minimum
rates of wages in certain employments. Thus the object of the Act is;
a. to fix minimum rates of wages in certain employment
b. to ensure a minimum subsistence wage for workers
c. to secure welfare of workers by fixing minimum limit of wages
d. to prevent exploitation of labour
Constitutional directive: Article 39 states that the State shall, in particu-
lar, direct its policy towards securing (a) that the citizen, men and women
equally shall have the right to an adequate livelihood and (b) that there is
equal pay for equal work for both men and women.
No discrimination between male and female: The Minimum Wages
Act does not provide for any discrimination between male and female work-
ers or different minimum wages for them. The provisions of the Act equally
apply to both male and female workers.
LABOUR LAWS-II 5

Norms for fixation or revision of minimum wages: The norms include

those which were recommended by the Indian Labour Conference in its
session held in 1957. Section 3 empowers appropriate Government to fix
the minimum rates of wages in the scheduled employments.
Calculation of Minimum Wages: 15th Indian Labor Conference the
prescribed the following standards which forms the basis for calculating
the minimum wages. They are;
a. Standard working family of
1 man (earning)+ 1 women (wife) + 2 children.
b. 2700 calories for adult 80% for wife and 60% for child (daily)
c. 72 yards of cloth per annum.
d. Government rental cost for housing
e. 20% of above for fuel, lighting, miscellaneous.
Mode of payment of wages: According to Section 6, the wages period
shall be fixed for the payment of wages at intervals not exceeding one-
month. Wages shall be paid before the expiry of the 7th day after the last
day of the wages period in respect of which the wages are payable.
Wages in kind: According to Section 11 the minimum wages payable
under this Act shall be paid in cash. Where it has been the custom to pay
wages wholly or partly in kind, the appropriate Government by notification in
the Official Gazette, authorize the payment of minimum wages either wholly
or partly in kind. If the appropriate Government is of the opinion that provi-
sion should be made for the supply of essential commodities at concession
rates, the appropriate Government may, by notification in the Official Ga-
zette, authorize the provision of such supplies at concession rates.
In People’s Union for Democratic Rights and others v. Union of India
and others (1982) 3 SCC 235 (Asiad Workers Case) the Supreme Court
said that when a person provides labour of service to another for remu-
neration which is lees than the minimum wage, the labour or service
provided by him clearly falls within the scope and ambit of the words
forced labour under Article 23 of the Constitution of India. The Court
further pointed out that non-payment of minimum wage amounts to bonded
labour which would amount to a criminal offence as well as a constitu-
tional offence.
In Bandhua Mukti Morcha v. Union of India and others 1984 3 SCC 161
the Supreme Court remarked that whenever it is shown that the labourer
is made to provide forced labour, the Court would raise a presumption
6 VIJAY LAW SERIES

Shortnotes Index
Added peril 92 Fair wage 105
Annual leave with wages 92 First notice 105
Bonus 93 Fixation of wage period 106
Bonus Commission 93 Funeral expenses 106
Bonus is not wage 93 Gratuity 106
Calculation of Gratuity 93 Harvester Case 106
Central Advisory Board 94 Hazardous process 106
Certificates of fitness 94 Insolvency 107
Collection of Contribution 94 Kinds of wages 107
Commissioners 94 Leave for miscarriage 107
Compensatory holidays 95 Limit of deduction 108
Computation of Gratuity 95 Liquidation 108
Computation of bonus 95 Living wage 108
Concept of Wage 96 Manufacturing process 108
Contribution 96 Maternity Benefit 109
Creches 96 Maternity Benefit Act 109
Deduction from wages 96 Maximum bonus 109
Deemed deductions 97 Medical benefit 110
Dependants’ Benefit 97 Minimum bonus 110
Disablement benefit 98 Minimum wage 110
Disqualification for bonus 98 Minimum Wages Act 110
Doctrine of Added Peril 98 Mode of payment of wages 111
Double recovery 99 Night Shifts 111
Eligibility for bonus 99 Nursing breaks 111
Eligibility to receive gratuity 99 Occupational Diseases 111
Employee 99 Occupier 112
Employment Injury 103 Overtime 112
Enhanced Sickness Benefits 103 Partial disablement 112
Equal Pay for Equal Work 103 Payment of Bonus Act 113
Equal Remuneration Act 104 Payment of Wages Act 113
Extra leave 104 Permissible deduction 114
Extra wages for overtime 104 Personal injury 114
Factories Act 105 Production Bonus 114
Factory 105 Profit Bonus 115
LABOUR LAWS-II 7

Shortnotes
A dded peril: This doctrine is
based on the principles of tor-
tuous liability under the law of torts.
first day of January shall be entitled to
leave with wages at the rate laid down
in clause (i) or, as the case may be,
According to this principle if a work- clause (ii) of sub-section (1) if he has
man while engaged in employer’s worked for two-thirds of the total
work, track or business engages him- number of days in the remainder of
self in some other work which ordi- the calendar year.
narily he is not required to do and such
onus Commission: On 6 th De
work involves extra danger, he can-
not hold the master liable for the risks
B cember 1961 a Tripartite Com-
mission was set up by the Govern-
arising there from or also not a con-
ment of India to consider in a com-
tractual liability, even if there is con-
prehensive manner, the question of
tract to that effect not to claim com-
payment of bonus based on profits to
pensation from the employer for an
employees employed in establishments
inury caused to workmen. An em-
and to make recommendations to the
ployer under the provisions of the Act
Government. The Government of
is liable to compensation at the rates
India accepted the recommendations
fixed in the Act itself to any workman
of the Commission subject to certain
incapacitated by an accident arising out
modifications. To implement these rec-
of and in the course of his employ-
ommendations the Payment of Bonus
ment.
Ordinance, 1965 was promulgated on
Annual leave with wages: Accord- 29th May, 1965.
ing to Section 79 Every worker who
Bonus is not wage: In Lipton Ltd. v.
has worked for a period of 240 days
Workmen (1959) 2 SCR 150 the Court
or more in a factory during a calendar
said that there is a distinction between
year shall be allowed during the sub-
bonus and wages. Bonus comes out
sequent calendar year, leave with
of profits and is paid, if after meeting
wages for a number of days calcu-
prior charges, there is an available sur-
lated at the rate of-(i) if an adult, one
plus. Wages primarily rest on con-
day for every twenty days of work
tract and are determined on a long
performed by him during the previ-
terms basis which is not necessarily
ous calendar year; (ii) if a child, one
dependent on profits made in a year.
day for every fifteen days of work
formed by him during the previous Bonus means extra payment due to
calendar year. A worker whose serv- good performance. Bonus is a kind
ice commences otherwise than on the of gift or tip. It is something extra or
8 VIJAY LAW SERIES
Dictionary
Abolish: annul
Abolition: annulment, extinction
Abusing: misusing
Accelerate: quicken
Accused: charge
Adequacy: sufficiency
Adjudicated: determine
Adjudication: judgment
Adjudicator: judge
Adventures: daring enterprises
Aggressive: making first attack
Aggrieved: injured
Akin to: related by blood
Allied matters: united subject
Allowances: sum of money granted
Ambit: extent
Ameliorate: make better
Amenity: pleasantness
Amity: friendship, good will
Animating: living
Apex societies: top societies
Apprehended: seize
Apprentice: learner
Appropriate level: proper surface
Arbitrator: umpire
Arisen: happen
Ascertaining: find out
Assaulting: attacking
Assumed: take upon one’s self
Attendant: servant
Authenticated: prove to be true
Authorities: powers
Avenues: ways
Avocations: employments
Award: judgment
Ban: public proclamation
Bargain: stipulation
Bargaining: stipulating
Basic wages: fundamental salaries
Bench: seat of the judges in a court
Biased: prejudiced
Board: council
Bona fides: good faith
Bonded labour: bound work
Bonus: extra payment
Borne: carried
Breakdown: stop working
Calling: employment, address
Casual: informal
Catering of food: provide food
Ceases: come to an end
Certification: official recognition
Charitable: generous
Charitable trust: generous group
Claimant: one who claims
Cloak: pretext
Closure: closing
Club activities: society activities
Code of discipline: system of order
Coercing: forcing
Coercion: compulsion
Coexist: exist at the same time
Coined: invent
Collective stoppage: group strike
Collectively: unitedly
Colourably: specious
Common cause: universal source
Compel: constrain
Competent: qualified
Comply: fulfill