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SV Ramachandra Rao

9849948654

OVER VIEW OF LABOUR LAWS

CONFERENCE AT HYDERABAD
06.05.2017
SV Ramachandra Rao
9849948654

RECENT AMENDMENTS TO LABOUR LAWS

CONFERENCE AT HYDERABAD
06.05.2017
Resource Inputs Ltd
Maternity Benefit Act, 1961 svrr@resourceinputs.com

 The Act now mandates that the employer of the establishment should inform a
women all benefits made available under the law, at the time of her
appointment. Such information must be given in writing and electronically.

 Every establishment employing fifty or more employees shall provide crèche


facilities within a prescribed distance and the woman should be allowed four
visits to the crèche in a day. However, this includes her rest interval. This
provision will come into force w.e.f. 1.7.2017

 After completion of the statutory maternity benefit period with wages, an


employer can permit a woman to work from home, if the nature of work
assigned permits her to do so for a duration that is mutually decided by the
employer and the woman employee.
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Resource Inputs Ltd
Maternity Benefit Act, 1961 svrr@resourceinputs.com

 Leave up to twelve weeks for a woman who adopts a child below the age of
three months. The period of leave will be calculated from the date the child is
handed over to the adoptive mother.
 In surrogacy, the surrogate mother carries a child for another person after an
agreement made before conception of the child. The person wishing to adopt
and foster the child is called the commissioning person/couple. The amended
legislation provides leave up to 12 weeks for commissioning mothers also.

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Resource Inputs Ltd
Maternity Benefit Act, 1961 svrr@resourceinputs.com

 Maternity benefit shall be twenty six weeks of which not more eight weeks shall
precede the date of her expected date of delivery.

 Maternity benefit of a women having two or more surviving children shall be


twelve weeks of which not more than six weeks shall precede the date of her
expected delivery.
 Woman who have already availed 12 weeks of maternity benefit on or before
31st March 2017 will not be entitled to the enhanced benefits mentioned above.
 Woman who are on maternity benefit of 12 weeks and the period of 12 weeks
ends on or after 1st April 2017 will be entitled to the enhance maternity benefit
of twenty six weeks in place of twelve weeks.

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Resource Inputs Ltd
Payment of Bonus Act, 1965 svrr@resourceinputs.com

Section 2 Clause 13 – as per the amended Act

 “employee” means any person (other than an apprentice) employed on a salary


or wages not exceeding Twenty One Thousand per mensem in any industry to
do any skilled or unskilled manual, supervisory, managerial, administrative,
technical or clerical work for hire or reward, whether the terms of employment
be express or implied;

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Resource Inputs Ltd
Payment of Bonus Act, 1965 svrr@resourceinputs.com

Section 12 Calculation of bonus

 Where the salary or wage of an employee exceeds Seven Thousand or the


minimum wage for the scheduled employment as fixed by the appropriate
Government, whichever is higher per mensem, the bonus payable to such
employees under section 10 or as the case may be, under section 11, shall be
calculated as if his salary or wage were Seven Thousand or the minimum wage
for the scheduled employment as fixed by the appropriate Government,
whichever is higher per mensem.

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Resource Inputs Ltd
Payment of Bonus Act, 1965 svrr@resourceinputs.com

Minimum Wages Example – Chemicals & Pharmaceuticals

Designation 1.4.2016 to 30.9.2016 (Minimum Wage) 1.10.2016 to 31.3.2017(Minimum


Wage)
Sr Chemist / Chemist / A O 12200 12559
Accountant / Cashier 11229 11588
Manager 11023 11382
Asst. Chemist / Asst. Manager 9889 10248
Supervisor etc 9013 9372
Boiler Attn / Welder / DEO 8739 9098
Packer 8438 8797
Bottle Filler 8275 8634
Bottle Washer 8131 8490
Helper / unskilled 7885 8244
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Resource Inputs Ltd
Payment of Bonus Act, 1965 svrr@resourceinputs.com

Example of 8.33% Bonus of Newly covered employees &


Minimum Wage implication due to amendment to the Act
Name Designation Basic + Other Salary Min Min Bonus1 Bonus2 TTL
DA Allow PM Wage1 Wage2 Bonus
Ram Chemist 17,000 3,000 20,000 12,200 12,559 6,100 6,280 12,380

Gopi Accountant 17,000 3,000 20,000 11.229 11,588 5,615 5,794 11,409

Before amendment the above employees were not covered under Bonus Act but
now they are covered.
Though the salary is same for the two employees, the Bonus payable is different
due to the newly introduced concept of minimum wages.
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Resource Inputs Ltd
Payment of Bonus Act, 1965 svrr@resourceinputs.com

Example of 8.33% Bonus of employees whose wages (Basic + DA) are below the
threshold limit of Rs.7000/- or Minimum Wage
Name Designation Basic + Other Salary Min Min Bonus1 Bonus2 TTL
DA Allow PM Wage1 Wage2 Bonus
Ram Bottle filler 6,000 4,000 10,000 8,275 8,634 3,000 3,000 6,000
Yadav Bottle washer 6,000 4,000 10,000 8,131 8,490 3,000 3,000 6,000

Gopi Helper 6,000 4,000 10,000 7,885 8,244 3,000 3,000 6,000

The Basic + DA of the above employees is less than Rs. 7000/- & also the Minimum
wage. Hence bonus will become payable on actual Basic + DA of the employee.
Though the minimum wages are different for the above employees there is no
impact on bonus calculation.
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Resource Inputs Ltd
Payment of Bonus Act, 1965 svrr@resourceinputs.com

Example of 8.33% Bonus of employees whose wages (Basic + DA) are above
Rs.7000/- & below the Minimum Wage
Name Designation Basic + Other Salary Min Min Bonus1 Bonus2 TTL
DA Allow PM Wage1 Wage2 Bonus
Ram Bottle filler 7,500 4,000 11,500 8,275 8,634 3,750 3,750 7,500
Yadav Bottle washer 7,300 4,000 11,300 8,131 8,490 3,650 3,650 7,300

Gopi Helper 7,100 4,000 11,100 7,885 8,244 3,550 3,550 7,100

The Basic + DA of the above employees is more than Rs. 7000/- & less than the Minimum wage.
Hence bonus will become payable on actual Basic + DA of the employee and Rs. 7,000/- ceiling
will not operate as minimum wage more than Rs. 7,000/-
Though the minimum wages are different for the above employees there is no impact on bonus
calculation.
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Resource Inputs Ltd
Payment of Bonus Act, 1965 svrr@resourceinputs.com

Example of 8.33% Bonus of employees whose wages (Basic + DA) are above
Rs.7000/- & also above the Minimum Wage
Name Designation Basic + Other Salary Min Min Bonus1 Bonus2 TTL
DA Allow PM Wage1 Wage2 Bonus
Ram Bottle filler 9,000 4,000 13,000 8,275 8,634 4138 4317 8455
Yadav Bottle washer 8,800 4,000 12,800 8,131 8,490 4066 4245 8311

Gopi Helper 8,500 4,000 12,500 7,885 8,244 3943 4122 8065

As the Basic + DA of the above employees is more than Rs. 7000/- & also more than the
Minimum wage the minimum wage ceiling will be the applicable.
As the minimum wage is different for the first six months and next six months the bonus has to
calculated with two different ceilings in the same year.

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Resource Inputs Ltd
Payment of Bonus Act, 1965 svrr@resourceinputs.com

Form D – Annual Returns


Rule 5 (1) Every employer shall on or before 1st February every year in each year
upload the annual return in Form D on the web portal of the ministry of labour.

By GSR No. 1115(E) dated 6.12.2016, the sub rule (1) of Rule 5 of the Payment of
Bonus Rules providing for submission of return under Form D is omitted.

Rule 5 (2) remained in force – on or before 1st February may file the annual returns
in Form D to the Inspector.

Hence Form D has to be submitted manually to the inspector

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Resource Inputs Ltd
Apprentices Act, 1961 svrr@resourceinputs.com

New Category of Apprentices


 Optional Trade any subject field in engineering, non engineering and vocational
course – may be determined by the employer.

Old Category of Apprentices


 Graduate or Technician Apprentice for candidates holding degree or diploma
both for engineering and non engineering.
 Technician (Vocational) Apprentice - ITIs and the like.

 Number of apprentices can be 2.5% to 10% of Total Manpower including


contractual workers.

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Resource Inputs Ltd
Apprentices Act, 1961 svrr@resourceinputs.com

Stipend for Optional Trade & ITIs

 First Year training : 70% of Semi Skilled Minimum Wage


 Second Year training : 80% of Semi Skilled Minimum Wage
 Third Year training : 90% of Semi Skilled Minimum Wage

 Apprentices are not covered under PROVIDENT FUND ACT & ESI Act

 Covered Employee Compensation Act & Maternity Benefit Act.

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Resource Inputs Ltd
New Legislation svrr@resourceinputs.com

Ease of Compliance to Maintain Registers


under various
Labour Laws Rules 2017

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Resource Inputs Ltd
New Legislation svrr@resourceinputs.com

The legislations covered under these new rules


- The Building and other Construction Workers’ (RE & CS) Act, 1996
- The Contract Labour (Regulation & Abolition) Act, 1970
- The Equal Remuneration Act, 1976
- The Inter-State Migrant Workmen (RE & CS) Act, 1979
- The Mines Act, 1948
- The Minimum Wages Act
- The Payment of Wages Act, 1936
- The Sales Promotion Employees ( C S) Act, 1976
- The Working journalists and Other Newspaper Employees (CS) & Misc. Provisions Act,
1955

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Resource Inputs Ltd
New Legislation svrr@resourceinputs.com

- Combined register to be maintained to cover all the legislations


- Registers can be maintained either electronically or otherwise

- New Registers
- Form A : Register of Workers / Employees
- Form B : Muster Roll & Over Time
- Form C : in place of register of deductions, fines and advances
- Form D : Register of Wages

Henceforth there will be only 4 registers for compliance to comply with all above
mentioned legislations (except Mines Act)

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Resource Inputs Ltd
Payment of Wages Act, 1936 svrr@resourceinputs.com

Ordinance Dt. 30.12.2016


Employer shall pay to every person employed the wages only by cheque or by
crediting the wages in his bank account.
Employees drawing monthly wages of Rs. 18,000/- are covered under the Act.

A P & Telangana Government Contract Labour (R&A) Act G.O w.e.f. 19.2.2008

The payment shall be made by way of cheque or by crediting the salaries to the
Bank Account of the concerned workers. Where banking facilities are not
available, the wages may be paid in cash.

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Resource Inputs Ltd
Employee Provident Fund Act svrr@resourceinputs.com

International Worker
 International Workers can withdraw retirement corpus when leaving India.
(w.e.f. 23.3.2017)
EPF – Pension Scheme

 The members of the Employees' Pension Scheme, 1995 who had contributed on
higher wages exceeding the statutory wage ceiling of Rs. 6500/- in the Provident
Fund can now divert 8.33% of the salary exceeding Rs.6500/- to the Pension
Fund with up to date interest as declared under EPF Scheme, 1952 from time to
time to get the benefit of pension on higher salary on receipt of joint option of
the Employer and Employee.

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Resource Inputs Limited
SV Ramachandra Rao

Prime Minister Rozgar Protsahan Yojana


Resource Inputs Ltd
Employee Provident Fund Act svrr@resourceinputs.com

The Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) Plan Scheme has been
designed to incentivize employers for generation of new employment, where
Government of India will be paying the 8.33% EPS contribution of the employer for
the new employment.

 All establishments registered with Employees’ Provident Fund Organization


(EPFO) can apply for availing benefits subject to:
(a) Having a Labour Identification Number
(b) Should have a valid organizational PAN
(c) Must have a valid Bank Account

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Resource Inputs Ltd
Employee Provident Fund Act svrr@resourceinputs.com

New Employee, for the purposes of the scheme, is an employee

• Earning wages less than Rs 15,000/- per month under semi-skilled and
unskilled category. New employees earning wages more than Rs 15,000/- per
month will not be eligible.
• A new employee will be determined by the allocation of a new Aadhar seeded
Universal Account Number (UAN) on or after 01.04.2016. (new employee did
not have a U A N prior to 1.4.2016)
&
• Not worked in any establishment registered with the EPFO in the past.

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Resource Inputs Ltd
Employee Provident Fund Act svrr@resourceinputs.com

 The PMRPY Scheme is operational from 09 August 2016 for a period of 3 years.
 The employers will continue to get reimbursed the 8.33% contribution paid by
the Government for these eligible new employees for the next 3 years, provided
they continue in employment by the same employer.
Process
 The eligible establishment has to update the PMRPY interface each month (by
10th of following month) through a PMRPY form wherein the description of the
job role of the new employment and the date of joining.
 Date of leaving to be updated wherever applicable.
 An online certificate/ undertaking should be given by the employer stating that
he claimed only in respect of new employees without past service and for newly
created posts

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Resource Inputs Ltd
Employee Compensation Act 1923 svrr@resourceinputs.com

 All persons working in a Factory and employees covered under Shops and
Establishments Act and not covered under E S I Act will get covered under this
Act.
With effect from 12.4.2017
 Every employer shall immediately at the time of employment of an employee
inform the employee his rights to compensation under this Act, in writing, as
well as through electronic means.
 If fails to inform the employee his rights fine of Rs. 50,000/- which may extend
to Rs. One Lakh.
 Section 30A withholding of certain payments pending decision of appeal has
been omitted.

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Resource Inputs Ltd
Payment of Gratuity Act 1972 svrr@resourceinputs.com

It is only proposal in the form of bill for amendment

Sec 4 ( 3) The amount of gratuity payable to an employee shall not exceed TEN LAKHS
(Twenty Lakhs) rupees.

The amendment is yet to take place.

If it is done, the amount received as gratuity upto Rs. 20 lakhs will not be taxable under
Income Tax Act.

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Resource Inputs Ltd
B O C W Act and B O C W Welfare Cess Act svrr@resourceinputs.com

The BOCWA has defined building or other construction work as the construction,
alternation, repairs….. but does not include any building or other construction
work to which the provisions of the Factories Act, 1948.

The Supreme Court examined the issue of when do the provisions of Factories Act
will apply and held that during the period of construction of green field factory the
provisions of Factories Act are not applicable. Hence BOCW Welfare Cess Act is
applicable and cess is payable.

Manufacturing Process
Worker
Factory
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Resource Inputs Limited
SV Ramachandra Rao

A P State Amendments after re-organisation


of States
Resource Inputs Ltd
Industrial Disputes Act, 1947 svrr@resourceinputs.com

Go Slow
 The Industrial Disputes Act has not defined ‘Go Slow’. ‘Go Slow’ is not falling
within the definition of ‘Strike’ under the Act.

 The Fifth Schedule of Industrial Disputes Act has listed ‘go slow’ as an unfair
labour practice on the part of workmen and trade unions of workmen.

 The model standing orders has listed wilful slowing down in performance of
work or abetment or instigation thereof as a misconduct

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Resource Inputs Ltd
Industrial Disputes Act, 1947 svrr@resourceinputs.com

Go Slow
 The Andhra Pradesh Government made an amendment to ID Act to bring clarity
on ‘Go Slow’.
 The explanation given in the Fifth Schedule is as under :

Any activity by any number workmen, acting in combination or with common


understanding, to slow down or to delay the process of production or work
purposely whether called by work to rule or by any other name so as the fixed or
average or normal level of production or work or output of workmen of the
establishment is not achieved. Provided that all necessary ingredients and inputs
for standard quality production or work are made available in time and in
sufficient quantity.

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Resource Inputs Ltd
Industrial Disputes Act, 1947 svrr@resourceinputs.com

Chapter V-A & V-B


 These chapters deal with the procedure and compensation payable for lay-off,
retrenchment, closure and transfer of undertaking.
 The application of these chapter are based on the number of workmen
employed by the industrial establishment ie 50 or 100 workmen.

Andhra Pradesh State Amendment

 Applicability of these sections have been made to industrial establishments


employing 300 or more workmen.

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Resource Inputs Ltd
Contract Labour (R&A) Act, 1970 svrr@resourceinputs.com

Andhra Pradesh State Amendment

 The Act is applicable to every establishment in which 50 or more workmen are


employed.

 To every contractor to who employs 50 or more workmen on any day.

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Resource Inputs Limited
SV Ramachandra Rao

Other States who amended Labour Laws


Resource Inputs Ltd
State Amendments to Labour Laws svrr@resourceinputs.com

RAJASTHAN
 Industrial Disputes Act
 Factories Act
 Trade Union Act
 Contract Labour R & A Act
HARYANA

 Industrial Disputes Act


 Factories Act
 Contract Labour R & A act

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Resource Inputs Ltd
State Amendments to Labour Laws svrr@resourceinputs.com

MAHARASHTRA
 Factories Act
 Contract Labour R & A Act

GUJARATH

 Industrial Disputes Act


 Trade Union Act
 Factories Act
 Contract Labour R & A Act
 Labour Law ( Gujarat Amendment) Act

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Resource Inputs Ltd
State Amendments to Labour Laws svrr@resourceinputs.com

MADHYA PRADESH
Labour Laws (Amendment) and Miscellaneous Provisions Act, 2015
 Building & Other Construction Workers Act
 Building & Other Construction Welfare Cess Act.
 The Contract Labour R & A Act
 The Factories Act
 The Industrial Disputes Act
 The Inter State Migrant Workmen Act
 Motor Transport Workers Act
 Exemption from maintaining multiple registers and submission of multiple
returns.

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Resource Inputs Limited
SV Ramachandra Rao

EPF Amnesty Scheme


closes on 30th June 2017
Eligibility & Procedure Resource Inputs Limited
SV Ramachandra Rao

Eligibility
• Persons who are required or entitled to become member between 01 April
2009 to 31 December 2016 but not enrolled.
• Employer should have collected Form-11
• Must be alive as on the date of declaration
• Must be with the employer at the time of declaration.
• No inquiry under Section 7A of the Act should have been initiated
Procedure
• Must submit a declaration in the prescribed format (online/physical form)
• Remit the dues within 15 days of submission of declaration

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Nature of Dues Account No. Quantum Status
Employees Share of EPF Dues I 12% of Wages Waived if not deducted
Employers Share of EPF Dues I 3.67% of wages To be paid
Employers Share of EPS Dues X 8.33% of Wages To be paid
1.10%/0.85% of EPF
EPF Administrative Charges II Waived
Wages
EDLI Contributions XXI 0.5% of Wages To be paid
EDLI Administrative Charges XXII 0.01% of Wages Waived
Interest All Accounts 12% of dues To be paid

Penal Damages All Acccounts Upto 25% of dues Re.1/- per annum

To remit 12.50% of Wages along with simple Interest and Re.1/- per annum
Resource Inputs Limited
SV Ramachandra Rao

ESI Amnesty Scheme


closes on 30th June 2017
Eligibility & Procedure Resource Inputs Limited
SV Ramachandra Rao

Eligibility
• Persons who are required or entitled to become member between 01 April
2009 to 31 December 2016 but not enrolled.
• Employer should registered under ESIC but not registered.
Procedure
• Must submit a declaration in the prescribed format (online/physical form)
• Enroll eligible employees prospectively.
• Register the company / organization under ESIC prospectively.
• No questions asked for the past period.

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Resource Inputs Limited
SV Ramachandra Rao

Thank You

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About us Resource Inputs Limited
SV Ramachandra Rao

Resource Inputs Limited & HR Chambers Outsourcing Pvt Ltd


Established on 10-02-2000
Our Services
• Recruitment & Executive Search Services
• Payroll Management
• Manpower Outsourcing
• Labour Law Audit & Compliance Services
• Labour Law & Industrial Relations Strategic Support Services
• HR Consulting
• Skill Development

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Resource Inputs Ltd &
Partners of our progress HR Chambers Outsourcing Pvt Ltd

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