Labour Laws in India

1. Indian Labour Legislation By: Rashi Shukla. M.S.W. Department of Social Work.
Institute of Social Sciences, Agra. Dr. B.R. Ambedkar University, India. Guided By:
Prof. Dr. R.K. Bharti.

2. Content 1. The Factories Act, 1948. 2. The Minimum Wages Act, 1948. 3. The
Payment Of Wages Act, 1936. 4. The Maternity Benefit Act, 1961. 5. The Payment Of
Gratuity Act, 1972. 6. The Payment Of Bonus Act, 1965. 7. The Industrial
Employment (Standing Orders) Act, 1946. 8. The Employees’ Compensation Act,
1923. 9. The Employees’ Provident Fund Act, 1952. 10. The Employees’ State
Insurance Act, 1948. 11. The Contract Labour ( Regulation & Abolition ) Act, 1970.

3. Labour Legislation in India The term ‘Labour Legislation’ is used to cover all the
laws which have been enacted to deal with employment and non-employment, wages,
working conditions, industrial relations, social security and welfare of persons
employed in industries. Labour Legislation refers to all laws of the government to
provide social and economic security to the workers. They maintain the dignity of
employees in their organization. Laws are Dynamic, Not Static.

4. 1.

5. The Factories Act, 1948 Objective An act to consolidate & amend the law
regulating labour in factories. Introduction Title: The Factories Act, 1948. Extent: It
extends to whole of India. 11 Chapters. 120 sections. 3 schedules. It is a protective
labour legislation. References to the time of day References to Indian Standard time
(IST) being five & half hours ahead of Greenwich Meridian time (GMT)

6. Continued… Definitions 1. Child: Person who has not completed his fifteenth year
of age. 2. Adolescent: Person who has completed his fifteenth year but has not
completed his eighteenth year of age. 3. Adult: Person who has completed his
eighteenth year of age. 4. Factory: Premises including the precincts thereof- (i) Where
10 or more workers are working or were working on any day of the preceding 12
months & in any part of which a manufacturing process is being carried on with the
aid of power. (ii) Where 20 or more workers are working or were working on any day
of the preceding 12 months & in any part of which a manufacturing process is being
carried on without the aid of power. 5. Hazardous Process: Any process or activity that
causes material impairment to the health of the workers & result in pollution of
general environment. 6. Young person: Person who is either a child or an adolescent.
7. Occupier: Person who has ultimate control over the affairs of the factory.
7. Continued… General duties of the Occupier To ensure: Health, Safety & welfare of
all the workers. Health • Cleanliness. • Disposal of wastes & effluents, due to
manufacturing process. • Ventilation & temperature. • Prevent inhalation of dust &
fumes. • Artificial humidification by prescribing standards of humidification. • Proper
lighting & clean drinking water. • Latrines & Urinals (separate enclosed
accommodation for men & women) • Facility of spittoons ( whoever spits in
contravention of this, shall be punishable with fine not exceeding five rupees) Safety
Proper fencing of machinery. Casing of new machinery. Work on or near
machinery in motion shall be made or carried out only by a specially trained adult
male worker wearing tight fitting clothes.

8. Continued… No woman or young person shall be allowed to clean, lubricate any

part of a moving machinery. No young person shall be required or allowed to work
at any machine unless he has been fully instructed about the dangers arising out &
the precautions to be taken. Prohibition of employment of women & children near
cotton openers. Hoists & lifts should be of good mechanical construction. The
maximum safe working load shall be plainly marked on every hoist or lift & no load
greater than such load shall be carried. Protection of eyes, against dangerous fumes,
gases & in case of fire. Safety officers: where 1000 or more workers are employed.
Welfare • Washing Facilities: (a) For the use of workers. (b) Separate & screened
facilities for use of male & female workers. • Facility for: Storing & drying clothes. •
First- aid appliances: To be provided & maintained, shall not be less than one for
every 150 workers.

9. Continued… • Facilities for: Sitting, Rest-rooms, Lunch rooms, Shelters. • Crèches:

Where more than 30 women workers are working, crèches shall be provided for the
use of Children under the age of 6 years • Canteens: Where 250 or more workers
employed. • Welfare Officers: Where 500 or more workers are employed. Working
Hours of Adults Weekly hours: Not more than 48 hours. Daily hours: Not more
than 9 hours. Weekly holidays: First day of the week. Compensatory holidays:
No. of holidays so lost. Spread over: Not more than 10.5 hours in any day. Chief
inspector in writing can increase spread over up to 12 hours. Overtime: Any worker
works for more than 9 hours in any day or for more than 48 hours in a week, shall be
entitled to wages at the rate of twice his ordinary rate of wages. Restriction on double
employment.

10. Continued… Employment of Young Persons Prohibition of young children. If

certifying surgeon certifies, adolescents can work as adults & come under all the
provisions of adults. Working Hours for Children: Not more than 4.5 hours in any
day. No female child required or allowed to work in any factory between 7:00 PM
& 8:00 AM. Offence & Penalties Contravention of any of the provisions of this act:
The occupier & manager shall be punishable with imprisonment for term which may
extend to 2 years or with fine which may extend to 1 Lakh or with both. If the
Contravention is continued after conviction: Fine may extend to 1000/- for each day,
on which contravention is continued.

11. 2.

12. The Minimum Wages Act, 1948 Objective To provide the minimum rate of wages
to the workers. To stop exploitation of workers. Introduction • This Act may ne
called The Minimum Wages Act, 1948. • It extends to whole of the India. • No. of
Sections: 31 sections. • It is a Protective Labour Legislation. Definitions Child:
Person who has not completed his fourteenth year of age. Adolescent: Person who
has completed his fourteenth year but has not completed his eighteenth year of age.
Adult: Person who has completed his eighteenth year of age.

13. Continued… Appropriate Government: India has a federal form of Government at

the Central & State level & Minimum Wages Act provide separate areas of
jurisdiction for both Central & State Government. Wages: All the remunerations, that
are capable of being expressed in terms of money. Minimum Rates of Wages 1.
Basic + Special Allowance (which varies with the cost of living index) 2. Basic +
Cash value of Concessional Supply of food grains & other articles. 3. Basic + Cost of
living allowance + Cash value of concessional supply of articles. Fixation & Revision
of Minimum Wages • The minimum rates of wages will be revised for every 5 years
by the Appropriate Government. • Appropriate Government can add any employment
to the Schedule, wherein 1000 or more workers are working. • Different M.R.W. will
be fixed for different Scheduled employments, different class of workers, different
localities.

14. Continued… Payment of Minimum Rates of Wages a) Payment of M.R.W. has to

be paid without any deductions, other than Statutory Deductions. b) Payment less than
M.R.W. on the account of less performance is illegal. Wages of worker who works for
less than Normal Working Day Worker is entitled to receive wages in respect of work
done by him on that day, as if he had worked for a full normal working day, Unless his
failure to work is caused by his unwillingness to work. Record Management
Particulars of employed persons. Work performed by them Wages paid to them
The receipts given by them.
15. Offence & Penalties Offence(s) • Payment of less than Minimum rates of wages to
the employees. Penalties • Imprisonment which may extend upto 6 months or with
fine which may extend upto Rs. 500/- or both.

16. 3.

17. The Payment Of Wages Act, 1936 “A worker ought to be paid wages, before
his/her sweat evaporates.” - Karl Marx. Objective An act to regulate the payment of
wages of certain classes of persons employed in Industries, whereas it is expedient to
regulate the payment of wages to certain classes of persons employed in Industries.
Introduction The Payment of Wages Act, 1936. It extends to Whole of The India.
Most successfully implemented labour law. It deals with “when the wages are to be
paid.”

18. Continued… Applicability Persons employed In: Any factory, Tramway service or
motor transport service, Air transport service, Dock, Wharf or Jetty, Mine, quarry or
oil-field plantation, Workshop or any other establishment. Legal obligations under this
Act Act last revised on 11th September, 2017. Regular, Periodical payment of
wages restricting illegal deductions. Covers Wages upto: Rs. 18000/- All wages
shall be paid in current coins or currency notes or in both. After obtaining the
authorization, either by Cheque or by crediting the wages in employee’s bank
Account. Compensation should be given for illegal deductions. This act ensure
timely payment of wages without any illegal deductions.

19. Continued… Time of payment of wages The wages of every person employed is
paid. When less than 1000 persons are employed, wages shall be paid before the
expiry of the 7th day of the following month. When more than 1000 workers
employed, wages shall be paid before the expiry of the 10th day of the following
month. Deduction(s) made from Wages Deductions such as: fine, deduction for
amenities and services supplied by the employer, advances paid, over payment of
wages, loan, granted for house-building or other purposes, income tax payable, in
pursuance of the order of the Court, Provident Fund contributions, cooperative
societies, premium for Life Insurance, contribution to any fund constituted by
employer or a trade union, recovery of losses, Employees’ State Insurance
contribution. Deduction for absence from duties for unauthorized absence.
Deduction for damage or loss. Deductions for recovery of advance(s). Deduction
for recovery of loans. Deductions for payment to co-operative societies and
insurance schemes.
20. Continued… Penalty for Offences under this Act Whoever being responsible for
the payment of wages to an employed person contravenes any of the provisions of
this act, shall be punishable with fine which shall not be less than one thousand five
hundred rupees, but may extend to seven thousand five hundred rupees. Protection of
action taken in Good faith No suit, prosecution or other legal proceeding shall lie
against the Government or any other officer of the Government for anything which is
in good faith done or intended to be done under this act.

21. 4.

22. The Maternity Benefit Act, 1961 Introduction • Title: The maternity benefit act,
1961. • Extends to: Whole of the India (Including J&K from 1970) • No. of Sections:
30 Sections. • This act is enacted on the basis of Article 39(e) & (f) of the
Constitution: “ State shall, in particular, direct its policy towards securing the health &
strength of workers, men & women.’’ Objective This act Regulates the employment of
women in certain establishments for a certain period, before & after child birth.
Further, It provides for maternity & other benefits. ‘‘Maternity benefits are aimed to
provide for the maintenance of woman & her child, when she is not working.’’

23. Continued… Applicability of the act • Where 10 or more workers are employed. •
Every establishment being a factory, mine or plantation. • Every establishment where
persons are employed for the exhibition of equestrian, acrobatic & other
performances. Eligibility for Maternity Benefit Must have worked in the
establishment for 80 days in 12 months before her date of Delivery. Woman earning
less than 15,000 may be offered ESI scheme by her employer and will not be
eligible for maternity benefit but will receive the maternity benefit under ESI scheme.
Definitions • Child: Includes a still-born child. • Delivery: Birth of a child.

24. Continued… • Appropriate Government includes: Establishment being a mine or

establishment for the exhibition of equestrian, acrobatic & other performances; THE
CENTRAL GOVERNMENT. Any other establishment; THE STATE
GOVERNMENT. • Miscarriage: Expulsion of the contents of a pregnant uterus at
any period prior to or during the twenty-sixth week of pregnancy. Does not include
any miscarriage which is punishable under Indian Penal Code. • Commissioning
Mother: Biological mother who uses her eggs(ovum) to create an embryo, implanted
in any other woman. • Wages: All remunerations paid or payable in cash, includes:
Cash Allowances (dearness allowance, house rent allowance), Incentive bonus,
Money value of the concessional supply of food grains & other articles.
25. Continued… Cash Benefits • Leave with wages upto 26 weeks (8 weeks before
expected date of delivery & 18 weeks after delivery) • In case of Miscarriage: Paid
leave of 8 weeks. • Tubectomy Operation: Paid leave of 2 weeks. • Mother who is
having 2 surviving children will get 12 weeks maternity leave. • Adopting mother:
Paid leave of 12 weeks. • Medical bonus: Rs. 3500/- (Minimum amount) • An
additional leave with pay up to one month. [Proof of illness] Non-Cash Benefits • No
discharge or dismissal while on maternity leave. • Light work for 10 weeks (6 weeks
plus 1 month) before delivery. • 2 Nursing breaks of 15 Minutes until the child is 15
months old. • Pregnant women discharged or dismissed ( in the case of gross
misconduct ) may still claim maternity benefit from employer. • Every establishment
having 50 or more employees shall have the facility of crèche. • Employer shall allow
4 visits a day to the crèche by the woman, which shall also include the interval for rest
allowed to her.

26. Continued… Legal Obligations Under This Act • Ten weeks before the expected
delivery date, she may ask employer to give her light work after producing certificate
of pregnancy. • She should inform the employer seven weeks prior to the date of
delivery, about the leave period. • Name the person to whom the payment will be
made in case she cannot take herself. • Any woman who has not given the notice when
she was pregnant may give such notice as soon as possible after the delivery. • No
employer shall knowingly employ a woman in establishment during 6 weeks,
following date of her delivery or miscarriage. • No woman shall work in any
establishment during the 6 weeks immediately following her date of delivery or
miscarriage. • It shall be unlawful to dismiss her on account of such absence. • In case
of gross misconduct, the employer in writing can communicate about depriving such
benefits. • Within 60 days from date of deprivation of maternity benefit, any woman
can appeal to the authority prescribed by law.

27. Continued… Payment of Maternity Benefit Maternity benefit at the rate of

average daily wages for the period of her actual absence immediately preceding &
including the day of her delivery & for the 6 weeks immediately following that day.
Record Management • Every employer shall prepare and maintain registers, records,
muster-rolls. Penalty for Contravention of Act • Imprisonment with minimum period
of 3 months to maximum period 01 year. • Fine from Rupees Two Thousand to
Rupees Five Thousand.

28. 5.

29. The Payment of Gratuity Act, 1972 Objective To provide retiring benefits to the
workers for long & unblemished services. Introduction This act my be called the
payment of gratuity act, 1972. Extends to whole of the India (except plantations &
ports of J&K) Meaning of Gratuity • Gratuity means a lump sum payment made by
employer to an employee as a reward for his past services when his employment is
terminated. • Gratuity includes: Monetary Reward, Retirement Award, Retirement
Benefit. • Maximum Gratuity Limit: 20 Lakh Rupees.

30. Continued… Applicability • In an establishment, where 10 or more workers are

working or were working on any day of the preceding 12 months. • This act does not
cover apprentices. Eligibility • Employee must have worked for 5 or more years: only
will be paid gratuity. • Continuous year of service: Uninterrupted services. • Gratuity
is paid at the age of Super- Annuation, Retirement, Death or Disablement. • In
Perennial/Non-Seasonal Establishment: Worker must have worked 240 days in a
calendar year. • In Seasonal Establishment: 75% of actual working days. • In mines:
190 days for underground workers. • 6 or more months: Full Gratuity of year. • Less
than 6 months: No Gratuity.

31. Continued… Payment of Gratuity For a complete year: Worker will get 15 days
wages as Gratuity. Calculation of Gratuity 1. Monthly wages ÷ 26 Days = 1 Day
Wages 2. 1 Day Wages x 15 Days = Wages of 15 Days 3. 15 Days Wages x Total
Working Years = Gratuity Amount. Example Rs. 50000 ÷ 26 Days = Rs. 1923.07 /-
Rs. 1923.07 x 15 Days = Rs. 28846.05 /- Rs. 28846.05 x 9 Years = Rs.
259614.45 /- Gratuity Amount Calculated : Rs. 2,59,614.45 /-

32. Continued… Legal obligations under this act Dismissal for Gross Misconduct,
leads to termination: No Gratuity. Gratuity is tax free. Gratuity Fund: Every
employer obtain an insurance for his liability of payment of Gratuity from LIC or
any other insurer. Every employer employing 500 or more workers will establish an
approved Gratuity fund. Offence and Penalties For avoiding any payment or for any
false representation : Employer shall be punishable with imprisonment upto 6 months
& fine which may extend upto 10 thousand rupees or both.

33. 6.

34. The Payment Of Bonus Act, 1965 Objective Act to provide for the payment of
bonus to persons employed in certain establishments on the basis of profits or on the
basis of production or productivity and for matters connected therewith. Scope &
Applicability It extends to the whole of India Every establishment in which twenty
or more persons are employed any day during an accounting year. Note : For some
establishments, Payment of Bonus Act will apply even If the number of employees are
below 20, under two conditions: (i) Minimum of 10 employees. (ii) Notified in
gazette.

35. Continued… Eligibility Apprentices are not included under this act. Salary or
wages should not exceed twenty one thousand. An employee must have worked 30
or more days in an accounting year. Bonus limit Bonus is paid for good
performance, above the salary. This bonus is other than festive bonus, interim
bonus. This is Statutory Bonus. Minimum bonus: 8.33% of worker’s wages or
Rs.100/- or Rs.60/- who is below 15 years of age, whichever is higher. Maximum
Bonus limit: 20%

36. Continued… Payment of Bonus Gross Profit : Aggregate cumulative profit

without legal deductions. Net Profit : Gross Profit – Legal Deductions. Net profit
becomes available surplus. Out of Available Surplus: 1. 67 % Allocable Surplus in
the case of Foreign Companies. 2. 60% Allocable Surplus in the case of Indian
Companies. Out of Allocable Surplus, Bonus is Paid. 20% of the bonus out of
allocable surplus is paid in the same year, and if it is more than 20%, then only 10%
can be set-on to the next year, & this shall be added upto 4 years. Legal obligations
under this act • Minimum bonus have to be given, whether there is profit or not. • If
there is one balance sheet & company has many branches, the company will be treated
as one. • After the closure of accounting year, within 8 months bonus is paid. •
Minimum wages should be Rs. 7000 /- to get bonus.

37. Offence(s) Contravention of any of the provision of this act. Default in

complying with the Act. Penalty Imprisonment upto 6 months or Fine of Rs. 10,000
or both. 1) Payment of Bonus shall be denied to an employee on the condition that on
the day of declaration of Bonus he was not engaged in employment ? NO! It violates
the provisions of Section 8 of the Act. 2) Whether a Probationer is eligible for Bonus
? A probationer will be eligible for bonus as there is no exclusion in the definition of
‘employee’ under the Act.

38. 7.

39. The Industrial Employment (Standing Orders) Act, 1946 Introduction • There was
no uniformity in the conditions of service of workers until this act was brought. • The
frequent causes of friction b/w management & workers in industrial undertakings in
India were mainly, due to absence of clear cut employment conditions known to the
workers. • This is why – The Labour investigation committee 1944-46 observed: “ An
Industrial worker has the right to know the Terms & conditions which he is expected
to follow” Objective - To minimize Industrial conflict. - To foster harmonious
relationship between employer & employees. - To require employers to define the
conditions of work.

40. Continued… Scope & Applicability - This Act apply to whole of The India. - It
applies to every Industrial establishment wherein 100 or more workmen are employed
or were employed on any day of the preceding 12 months. Act not applied to certain
industrial establishments To which the provisions of Chapter 7 of The Bombay
Industrial Relation Act or Madhya Pradesh Industrial Employment ( Standing Orders)
1961 are applicable.

41. Procedure, certification , Modification , Appeal Within 6 months from the date on
which this Act is applicable to an Industrial establishment : The employer of an
industrial establishment is required to submit to the certifying officer , five copies of
the draft standing orders proposed to be adopted by him in his industrial
establishment, together with the prescribed particulars (Form 1) of workmen
employed and name of trade union if any to which they belong. On receipt of the
draft, the certifying officer shall forward a (Form 2) copy thereof to the trade union,
if any, of the workmen or to the workmen requiring objections if any, which the
workmen may desire to make to the draft standing orders to be submitted by him
within 15 days from the receipt of the notice. Then the certifying officer shall decide
whether or not any modification or addition to the draft is necessary to render it
certifiable under the Act and shall make an order in writing. The Certifying Officer
shall thereupon certify the draft standing orders and shall send within 7 days, copies
of the certified standing orders to the employer and to the trade union or representative
of the workmen.

42. Continued… Appeal • Any employer, workman, trade union aggrieved by the
order of the certifying officer, may within 30 days appeal to the appellate authority,
whose decision shall be final. (Section 6) • The appellate authority shall within 7 days
of its order send copies to the certifying officer, to the employer and to the trade union
copies of the standing orders as certified by him and authenticated in the prescribed
manner. (Section 6) • The appellate authority has no power to set aside the order of the
Certifying Officer. It can confirm or amend the Standing Orders. Date of Operation of
Standing Orders Standing orders will unless an appeal is preferred, come into
operation on the expiry of 30 days from the date on which the authenticated copies of
the same are sent or where appeal is preferred, on the expiry of 7 days from the date
on which copies of order of the appellate authority are sent.
43. Register of S.O. • 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. • He shall
furnish a copy of it to any person on payment of the prescribed fees. Pasting of S.O.
The text of the standing orders finally certified shall be prominently pasted by the
employer in English and in language understood by the majority of the workmen on
special board to be maintained for that purpose at or near the entrance through which
the majority of workmen enter the industrial establishment. When the Standing Orders
be Modified Standing orders finally certified under this Act shall not be modified until
the expiry of six months from the date on which the standing order or the last
modifications thereof come into operation, unless the agreement provide otherwise.

44. Continued… Model Standing Orders (Matters to be covered in S.O.)

Classification of workers. Publication of work time, holidays, pay days, wage rates.
Working shift. Attendance & late coming. Payment of wages. Termination of
employment. Disciplinary action for misconduct. Suspension. Dismissal.
Complaints. Penalties & Procedures An employer who fails to submit draft standing
orders shall be punishable with fine which may extend to 5000 rupees and in case of a
continuing offence with a further fine which may extend to 200 rupees for every day
after the first, during which the offence continues.

45. 8.

46. The Employees’ Compensation Act, 1923 Introduction • This act extends to whole
of India. • It came into force on first day of July, 1924. • This act imposes statutory
liability upon an employer to discharge his moral obligations towards employees,
when they suffer from any physical disabilities, diseases, etcetera. Objective To
provide quick & cheaper disposal of disputes relating to the compensation which is
not possible in case of proceedings of civil law. This act also helps the dependents to
get relieved from the hardship, rising from accident.

47. When compensation is to be Given ?

48. Factors Considered 1. Nature of Injury. 2. Monthly wages of the Employee. 3.

Relevant factor. Other conditions to be fulfilled

49. Continued… Temporary Disablement Benefit • Personal injury that lasts for than
three days & less than 5 years, may be an accident. • 25% monthly wages are given
half monthly ( 2 installments ) • Compensation commissioner keeps the record.
Permanent-partial disablement • In the second schedule of this act, compensation rate
has been given according to the level of disability. • We consider total disablement as
100% on comparing to, how much disablement has been caused, the compensation is
given according to it. • Example: 80% partial disablement has been caused, then 80%
of the wages shall be given as compensation. • Permanent Disablement: (a) Total
( Lump sum amount is given) (b) Partial (Amount not given in Lump sum)

50. Continued… Permanent-Total Disablement • 60% of the wages (monthly) x

Relevant Factor. • Compensation can never be less than 1 Lakh 40 Thousand. • The
compensation is given considering Rs. 8000 /- as wages of the employee & not the
actual wages. • Compensation becomes due on the respective day of accident & can
not be delayed for more than 3 months by the compensation commissioner.
Compensation in case of Death In case of Death: 50% of monthly wages x Relevant
Factor. Medical Expenses • 100% reimbursement of the actual medical expenses.

51. Continued… Funeral Expenses • Not less than Rs. 5000/- will be paid in
compensation as funeral expenses, it is given to the dependent who has actually done
these expenses. • Paid by the employer. Relevant Factor It is a mathematical figure,
calculated with reference to the age of the employee. Penalty Where an employer is
default in paying the compensation, within one month from the date it fell due, the
commissioner shall, Direct that the employer in addition to the amount of arrears, pay
simple interest at the rate of 12% per annum or on such higher rates.

52. 9.

53. The Employees’ Provident Fund Act,1952 Introduction The Employees’ Provident
Fund and Miscellaneous Provisions Act, 1952 is a Central Act and is being
administered by the Government of India, through EPF Organization which has
offices all over The India. Objectives 1) The Employees’ Provident Fund Scheme
1952 provides for contributory Provident Fund. 2) The Employees’ Pension Scheme
1995 provides for Monthly Member Pension, Widow Pension, Orphan Pension and
Nominee Pension. 3) The Employees’ Deposit-Linked Insurance Scheme 1976
provides for insurance cover to all PF members in the event of their unfortunate death
while in service.

54. Continued… Under this Act the following three Schemes have been framed: • The
Employees’ Provident Funds Scheme 1952. • The Employees’ Deposit-Linked
Insurance Scheme 1976. • The Employees’ Pension Scheme 1995. (Earlier called The
Family Pension Scheme 1971) THE EMPLOYEES' PROVIDENT FUND SCHEME,
1952 The statutory rate of contribution to the provident fund by the employees and the
employers, as prescribed in the Act, is 10% of the pay of the employees. The term
"wages" includes basic wage, dearness allowance, including cash value of food
concession and retaining allowance, if any.

55. Continued… EPF Interest Rate The employees' provident fund scheme, the central
government, on the recommendation of the central board of trustees, declares the rate
of interest to be credited annually to the accounts of provident fund subscribers.
Withdrawals Under the scheme, a member may withdraw the full amount standing to
his credit in the fund in the event of : i) Retirement from service after attaining the age
of 55; ii) Retirement on account of permanent and total incapacity; iii) Migration from
India for permanent settlement abroad; and iv) Termination of service in the course of
mass retrenchment (involving 3 or more persons).

56. Continued… The Scheme provides for non-refundable partial withdrawals/

advances to meet certain contingencies : 1) Financing of life insurance policies; 2)
House-building; 3) Purchasing shares of consumers co-operative credit housing
societies; 4) During temporary closure of establishments; 5) Illness of member, family
members; 6) Member's own marriage or for the marriage of his/her sister, brother or
daughter/ son and post-matriculation education of children; 7) Damages to movable
and immovable property of members due to a calamity of exceptional nature; 8)
Unemployment relief to individual retrenched members; 9) Cut in supply of electricity
to the factory/establishment. 10) Grant of advance to members who are physically
handicapped for the purchase of equipment.

57. Continued… The Employees' Pension Scheme, 1995 • Employees' Pension

Scheme 1995 has been made applicable on 16.11.1995 retrospectively with effect
from 1.4.1993. This new Scheme replaces the erstwhile Family Pension Scheme,
1971. Contribution • Employee is not required to contribute separately under the
Employees' Pension Scheme 1995. Employer share of provident fund contribution at
the rate of 8.33 % is diverted to pension fund every month Service for Pension •
Actual service rendered after 16.11.1995 together with the service for which the
contribution has been made under the eased Family Pension Scheme 1971, if any will
be treated as service for pension. • A person is entitled for pension after, completing
the age of 58 years with minimum service of 10 years. • Six months or more shall be
treated as one year and the service less than six months shall be ignored.

58. Continued… The Employees' Deposit-linked Insurance Scheme, 1976 • The

scheme came into force from August 1, 1976. It is applicable to all factories/
establishments to which the Employees' Provident Funds and Miscellaneous
Provisions Act, 1952 applies. All the provident fund member-employees, both in the
exempted and Non-exempted establishments, are covered under this scheme. • While
the employees are not required to contribute to the Insurance Fund, the employers are
required to pay contributions to it at the rate of 0.5% of the pay of the employers who
are provident fund subscribers. • The Central Government also contributes to the'
insurance fund at the rate of 0.25% of the pay in respect of the covered employee.
Applicability Employees’ Provident Funds & Miscellaneous Provisions Act 1952 is an
important Social Security Legislation and is applicable to certain kind of
industries/classes of establishments, as notified in the Gazette by the Government of
India, Ministry of Labour from time to time.

59. Continued… Penalty & Procedures An employer who contravenes any of the
provisions of his act, shall be punishable with imprisonment for a term which may
extend to one year or with fine of Five thousand rupees or with both.

60. 10.

61. The Employees’ State Insurance Act, 1948 Objective To provide certain benefits to
employees in case of sickness, maternity & employment injuries & to make provisions
for related matters. Introduction The ESI Scheme is an integrated measure of Social
Insurance. It is designed to complete the task of protecting “Employees” against the
hazards of sickness, maternity, disablement or death due to employment injuries & to
provide full medical care to insured persons & their families. Applicability • Factories
employing 10 or more workers. • Shops, hotels, Restaurants, cinemas employing 20 or
more workers. • Private medical institutions & Educational Institutions employing 20
or more workers.

62. ESI Contribution Share

63. Continued… Contribution & Benefit Period • Employers covered under this act
are required to pay the contribution on a monthly basis. • There are two contribution
periods, each of Six months & two corresponding benefit periods also of Six months.
Example: Contribution Benefit period 1st April to 30th September 1st January to 30th
June 1st October to 31st March 1st July to 31st December

64. Continued… Social Security Benefits 1. Sickness & Extended Sickness Benefit •
Represents periodical payments made to an insured person for the period of certified
sickness after completing 9 months in insurable employment. • To qualify,
contribution should be for minimum 78 days in the relevant period. • Maximum
duration for benefit is 91 days. • Rates of Payment: Average of 50% of Daily Wages.
2. Maternity Benefit • Implies cash payment to an insured woman in case of
confinement or miscarriage or sickness arising out of pregnancy or premature birth. •
Woman should have contributed for minimum 70 days in the preceding two
consecutive contribution periods. • Rates of Payment: Double the Standard sickness
benefit rate, i.e. Full Wages.

65. Continued… 3. Disablement Benefit • Temporary Disablement: Benefit is

admissible for the entire period for which the insured person does not work. •
Permanent Disablement: Partial or Total loss of earning capacity, periodical payments
to be made for life. One time Lump-Sum payment is permissible in certain cases. 4.
Dependent’s Benefit • Periodical pension paid to dependent(s) of deceased, where
death occurs out of employment injury or disease. • Total amount distributed not to
exceed ceiling of disablement benefit. 5. Medical Benefit • Treatment continues even
if person goes out of coverage, till sickness ends. • Package covers all aspects of
health, such as: Out-Patient Treatment, Domiciliary treatment, Specialist consultation,
Diagnostic Facilities, X-ray & Lab investigations, Ambulance Services, etcetera.

66. Continued… 6. Funeral Expenses • An amount of Rs. 10,000/- is payable to the

dependents. Note: All Payments under The ESI Scheme are paid in Cash except
MEDICAL BENEFIT, which is given in Kind. Offence & Penalties

67. 11.

68. The Contract Labour ( Regulation & Abolition ) Act, 1970 Objective To prevent
exploitation of Contract labour. To introduce better conditions of work .
Introduction • This Act may be called The Contract Labour Act, 1970. • It extends to
whole of The India. Applicability To every establishment in which twenty or more
workmen are employed or were employed on any day of the preceding twelve
months as contract labour. To every contractor who employees or who employed on
any day of the preceding twelve months twenty or more workmen.

69. Continued… Registration of Certain Employments 1. Every principal employer of

an establishment to which this Act applies shall, make an application to the
Registering Officer in the prescribed manner for registration of the establishment 2. If
the application for registration is complete in all respects, the registering officer shall
register the establishment and issue to the Principal employer of the establishment a
Certificate of Registration containing such particulars as may be prescribed.
Revocation of Registration in Certain Cases If the Registering Officer is satisfied that,
the registration of any establishment has been obtained by misrepresentation or
suppression of any material fact, or that for any other reason the registration has
become useless or ineffective.
70. Registration & Licensing Registration • Issued on payment of fees. • Taken by the
Principal Employer. • Not renewable on year to year basis. • Certificate of
Registration need not to be displayed at the establishment by Principal Employer. •
Only Bank Draft Required. License • Issued on payment of fees & Security money. •
Taken by Contractor. • Valid only for one year/ should be renewed before due date. •
License shall be displayed prominently at the premises where the contract work is
being carried on. • Bank Draft + Certificate of Principal Employer is required.

71. Continued… Liabilities of Principal Employer To pay wages, incase the contactor
fails to do so. To nominate a representative to be present at the time of distribution
of wages by the contractor. To provide welfare & health facilities. Maintain
Register, Records. Display notice at a prominent place in English & Local
language containing information, like: Rate of wages, Hours of work, Wage period,
etcetera. Submission of yearly return to Licensing Officer. Liabilities of Contractor
• Maintaining Register, Muster Rolls, etcetera. • Issue an employment card to each
worker & to issue a service certificate on termination of employment. • Submission of
half yearly return to Licensing officer.

72. Continued… Welfare & Health of workers Canteens. Rest Rooms. First aid
facilities, Responsibility for payment of Wages. Penalty & Procedures Whenever
any provision of this Act is contravened (extending to provisions relating to license),
it is implied that such an action has been acted against the regulation of contract labor.
Hence, the person concerned shall be punishable with an imprisonment for a term that
may extend to a maximum of three months or may be penalized with a fine up to One
thousand rupees or both. In the case of continuing contravention, an additional fine of
Rs. 100/- for each day may be imposed during which such contravention continues.

73. Conclusion • In a dynamic context, Laws need to be reviewed from time to time.
Hence, review/updating labour laws is a continuous process in order to bring them in
tune with the emerging needs of the economy including attaining higher levels of
productivity and competitiveness, increasing employment opportunities, attracting
more investment for growth, etcetera. • Strikes, lockouts, protests or other organized
actions are tightly restricted in order to preserve “Harmony” • Violating these rules is
a criminal offence. Labour laws should be consolidated in a few cognate groups to
reduce multiplicity of laws for better enforcement and more effective compliance.