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Factories Act. 1948.

Aims to protect workers employed in factories against industrial and occupational hazards and to ensure safe and healthy working conditions. Manufacturing process means any process for 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 pumping oil, etc.; generation and transmission of, printing, ship construction and repairs, etc. [S. 2 (k)] power Where, in any factory 10 or more workers (with power) and 20 or more workers (without power) are employed, the manager/occupier of such factory is required to apply for and obtain licence from the inspector of factories. [Ss. 6 & 7). Every manager/occupier is required to provide for healthy working conditions inside the factory which include - effective disposal of wastes and effluents, adequate ventilation, lighting and temperature, artificial humidification, prevention of overcrowding, provision of wholesome drinking water, latrines and urinals, spittoons, etc. (Ss. 11-20). To ensure strict safe working conditions, which include - fencing of machinery and casing of machinery in motion, devices for cutting of power in case of emergency, protection to eyes, precautions against dangerous fumes and fire, safe construction of floors, stairs and means of access, safe working loads of hoists and lifts, periodic checking of the chains, ropes, etc., prohibition of carrying excessive weights, prohibition of employment of young persons and women in hazardous operations, proper maintenance of plant, machinery and buildings, appointment of ,safety officers, constitution site appraisal committees, emergency' standards; right of workers to warn about imminent danger, etc. (Ss. 21-41-H). . Provision of facilities for sitting, and for storing/drying of clothes, and washing; first aid appliances; canteens, shelters and rest-rooms; creches; appointment of welfare officers, etc. (Ss. 4260). Weekly hours of working not to exceed 48 hours; weekly holiday on every Sunday; compensatory holidays; daily hours not to exceed' 9 hours, subject to certain exceptions; continuous work for more than five hours is prohibited without giving an interval for rest for half-an-hour interval; spreadover cannot exceed 10-1/2 hours in any day, and in any case not more than 12 hours; in the case of night-shift workers, holiday shall be reckoned as consisting of a period of 24 consecutive hours from the close of the night shift; prohibition- of overlapping shifts; extra wages for overtime work (for work exceeding 9 hours a day or 48 hours a week) at double the ordinary rate of wages; prohibition of double employment; display of notice of periods of work for adults; maintenance of register of adult workers; women workers shall in no case be asked to work between 10 p.m. and 5 p.m. (Ss. 61..88). Prohibition of employing children (who have not completed 14 years of age) in the factory; but children above 14 years and adolescents can be employed subject to certification by the certifying surgeon; children cannot be employed for more than 4 hours in any-day and during the night; notice of periods of work for children to be displayed; register of child workers be

maintained; young persons (child or an adolescent) should be sent by the employer for examination, if so directed by the Inspector; (Ss.67-77). Annual leave with wages be given for those who have put in work for two-thirds of total number of days; leave should be given at the rate of 1 day for every 20 days of actual work put in to be availed in the following calendar year; power of the Inspector to prohibit employment on account of serious hazard in any operation; fatal accidents and all ,other accidents resulting in disablement for more than 48 hours shall be intimated to the lnspector; notice of dangerous occurrences and diseases. etc., be given to the Inspector; penalties for violation, etc. (Ss. 78 onwards)

Payment of Wages Act 1936. Regulates the payment of wages in certain classes of persons employed in industry, 1he Act applies to the payment of wages to persons employed, in any factory or a railway establishment or an industrial establishment, either directly or through a contractor. The Act does not apply to persons whose wages exceed Rs. 1600 per month. Wages includes all remuneration payable under the contract and includes remuneration payable - a) under a settlement or award, b) for overtime work, c) bonus, d) at the time of termination, i.e., notice wages, etc., d) under any scheme framed under any law; . o but does not include: a) profit sharing or other bonus which does not form part of the remuneration under the terms of employment, b) any value .of house accommodation or of supply of water, light, medical attendance or other amenity or any service expressly excluded from computation of wages by an order of the State Government, c) contribution toward PF, etc., d) travelling allowance or concession, e) any sum paid to defray special expenses incurred by the employee in connection with his employment, andf) any gratuity payable. [S. 2 (vi)). Wages shall be payable by the employer in the current coin within the prescribed time limit (maximum being one month) and that no deductions other than those authorised by law are made by the employers. (Ss. 3-6). Authorised deductions include deductions towards - fines; absence from duty; damage to or loss of goods specifically entrusted to the person; for services rendered including houseaccommodation supplied by the employer or any agency and the amenities and services supplied; recovery of advances and loans; cooperative societies. (Ss.7-13). With the written authorisation of the emplloyee, deductions toward LlC premia; trade union subscriptions; national relief fund, etc. In case of unauthorised deduction or delayed payment of wages, the employee can approach the PW Authority; penalty includes recovery of the amount deducted unauthorisedly plus 10 times the amount so deducted; in case of delayed payment, a fine of Rs. 25 can be levied; if the claim of the employee is found frivolous, he is .liable to pay a fine of Rs. 50; appeal against the order of the PW Authority lies in a small causes court or District Court; Civil Courts are, however, barred from entertaining any suit for recovery of wages or deduction from wages, in so far as the sum so

claimed forms the subject of an application under S. 15 or has formed the subject of a direction under S. 15 or could have been recovered under that section. (Ss. 15, 17 & 22).

Minimum Wages Act. 1948 The Minimum Wages Act is an off-shoot of the resolution passed at the Minimum Wages Fixing Machinery Convention (1928) of the International Labour Organisation. The object of the said resolution was to fix minimum wages in the cases of trades, or parts of trades (and, in particular, home working trades) in which no arrangements exist for the effective regulation of wages by collective agreements or otherwise and wages are exceptionally low. The MW Act was passed with a view to give effect to these resolutions. Aims at preventing exploitation of labour by making provision for the statutory fixation of minimum rates of wages in industries and a number of scheduled 'employments, where labour is not organised and sweated labour is most prevalent. The appropriate government can fix minimum rates of wages for different scheduled employments, or different classes of work in the same scheduled employment, or separate rates for adults, adolescents, children and apprentices, and/or for different localities. (S. 3) o For instance, the expression "scheduled employments" includes/covers employment in carpet-making, rice and flour mills, tobacco industry, plantations, oil mills, local authority, construction industry, stone-crushing and stone-breaking, lac manufacturing, mica works, public motor transport, tanneries, mining, railways, docks and ports, etc. The sweep of the Act is very wide and the appropriate Government is empowered to bring any employment and any establishment under the purview of the MW Act The appropriate government is empowered to fix minimum rates of wages for time work (MTR) or piece work (MPR) including guaranteed time-rate where piece-rate systems are in vogue (MGTR) and overtime rate (OTR). (S. 3). The minimum rate of wages fixed/revised under the Act may consist of: (a) a basic rate plus special allowance towards cost of living index number; (b) a basic rate with or without the cost of living allowance, and the cash value of the concessional supply of essential commodities, where so authorised; (c) an all inclusive rate allowing for basic rate, cost of living allowance and the cash value of the concession, if any. (S.4). The wages may be fixed by anyone or more of the following wage periods, namely, by the hour, or by the-day or by the month or by such other larger wage-period. The minimum rates of wages may consist of basic wages including cost of living allowance or an all inclusive basic rate, (S. 5). The government may follow one of the two procedures in fixing minimum rates, namely, (8) by appointing-a committee to advise it in respect of fixation or revision of minimum rates of wages; or (b) by publishing proposals in the official gazette and calling for, objections, if any, ,from the affected parties and, after giving ,them a hearing, finally fixing the minimum rates. The final

notification fixing/revising minimum rates of wages shall unless otherwise specified, come into force on the expiry of three months from the date of its issue. (S. 5). The government may also appoint a Standing Advisory Board to advise it on fixation/revision of minimum rates of wages and to co-ordinate the work of committees and sub-committees appointed under S. 3. (Ss. 7 & 8). In case of payment of less than the minimum rate of wages, an employee can move the Authority under the Act to recover the difference along with penal damages from the employer. The maximum damages that can be levied by the Authority under the Act are 10 times the shortfall. (S. 20).

Payment of Bonus Act 1965 The object of the Act is to provide for the payment of bonus to persons employed in certain establishments. The scheme of the Act is quadri-dimensional: (a) to impose statutory liability upon an employer covered by the Act to pay bonus to his employees; (b) to define the principle of payment of bonus according to the prescribed formula; (c) to provide for payment of minimum and maximum bonus and linking the payment of bonus with the scheme of "set-on and set-off' of allocable surplus; and (d) to provide machinery for enforcement of the liability for payment of bonus. The Act applies to every factory and every other establishment where 20 or more persons are employed on any day during the accounting year. The term 'establishment' includes departments, undertakings and branches. It does not apply to persons employed by insurance companies, seamen, persons registered as dock workers, employees of any industry carried on by or under the authority of any department of the Central or State Government or a local authority. The Act provides for computation gross profits and determination of available surplus. From out of the available surplus, 60% in the case of a banking company and 67% in any other case is treated as allocable surplus. This allocable surplus is the workers' share in the available surplus. (Ss. 4-7). Every employee who has worked for not less than 30 working days in an accounting year is entitled to the bonus under the Act. In respect of employees drawing wages more than Rs. 3500 per month, bonus will be calculated as if their wages are Rs. 2,500 per month. The Act provides for payment of minimum bonus @ 8.33% basic wages and dearness allowance, whether or not there is allocable surplus. The maximum bonus is fixed @ 20%. (Ss. 8-11). If in any accounting year, the allocable surplus exceeds the amount of maximum bonus payable, then, the excess shall, subject to a limit of 20% of the total wage of the employees, be carried forward for being 'set on' in the succeeding accounting year and so on up to and inclusive of the fourth accounting year to be utilized for paying bonus. Similarly, in case of deficiency to pay the minimum bonus and there is no sufficient amount carried forward under 'set on', such minimum

amount or deficiency shall be carried forward for being 'set off' in the succeeding accounting year and so on upto and inclusive of the fourth accounting year. (S. 15). Bonus under the Act has to be paid within 8 months from the close of the accounting year. The employer can adjust any customary or pooja bonus paid from the annual bonus. The employer can also deduct any sum towards loss of damage caused by the employee and proved in an enquiry and the employee is entitled to receive only the balance. if any. (Ss. 17-19). An employee shall be disqualified to receive bonus under the Act, if he is dismissed from service for - fraud; or riotous or viOlent behaviour; or theft, misappropriation or sabotage of any property of the establishment. (S. 9). Where any money is due to an employee by way of bonus from him employer. the employee or his authorised representative or in the event of his death, his legal heirs, may make an application to the appropriate Government, which shall issue a certificate for that amount to the Collector who shall proceed to recover the same as an arrear of land revenue. Such application has to be made by the employee, etc., within one year from the date on which the money became due. (S.21). The Act also provides for linking bonus to production or productivity, provided the maximum bonus payable does not exceed 20% of the basic wages and dearness allowance. (S.31.A).

The Trade Unions Act. 1926 This was enacted with a view to provide for the registration of trade unions and to spell out the rights and liabilities of registered trade unions. 'Trade Union' is any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers and workmen and workmen, or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more Trade Unions [S. 2 (h)]. Any seven or more members of a trade union may, by subscribing their names to the rules of the trade union and by complying with the provisions of the Act may apply for registration. It should, however, be ensured that not less than one-half of the total number of the office bearers shall be persons actually engaged or employed in the industry with which the trade union is connected. The application for registration should be accompanied by a copy of the rules of the trade union, a statement of the. personal-cum-official particulars of the members and name and address of the trade union (Ss. 4 & 5). The rules of the trade union should provide for such matters as the name of the union, objects, the purposes for which the funds shall be applicable, mode of maintainingthe list of members, the quantum and mode of collecting subscription, the range of benefits to which the members are entitled to, the--manner of amending the rules, the safe custody of union funds and the audit of its annual accounts, the mode of dissolution of union, etc. (S. 6). . A certificate of registration of a trade union can be withdrawn or cancelled by the Registrar -

o on the application of the trade union, subject to verification, or (b) if the registrar is satisfied that the certificate was obtained by fraud or mistake or that the trade union has ceased to exist or has wilfully contravened any provision of the Act or allowed any rule to remain in force which is inconsistent with any such provision, or has rescinded any rule providing for any matter provision which is required by S. 6. However, a notice of two months be given by the registrar before the certificate is withdrawn or cancelled. An appeal lies in the civil court and/or High Court against the order of the Registrar. (Ss. 10 & 11). A union so registered will enjoy certain rights. The general funds of the union can only be spent on certain objects, such as payment of salaries, etc. to the officers of the trade union; administrative expenses; compensation to members in the event of loss due to trade disputes, allowances to members or their dependants on account of death, old age, sickness, etc. provision of educational or social or religious benefits for the members, etc.. The Act permits constitution of separate fund for political purposes. . The general funds of the union can only be spent on objects, such as, payment of salaries, etc., to the office bearers, administrative expenses, prosecution/defending of a legal proceeding, conduct of a trade dispute, compensation to members for loss arising out of trade disputes, allowances to dependants in case of death, etc. of members, provision of education, social or religious benefits for members, the upkeep of any periodical, etc. The union may, however, constitute a separate fund for political purposes, but cannot utilise the general funds for political purposes of any of the office bearer or member or any other person. (Ss. 15 & 16). The union office-bearers enjoy immunity against criminal conspiracy under S. 120-8 of the Indian Penal Code, for any agreement made between the members in furtherance of any legitimate object of the union, unless the agreement is an agreement to commit an offence punishable under the IPC (S. 17). Likewise, the trade union and its office- bearers are protected from any civil action for damages, in respect of any legitimate act done in contemplation or furtherance of a trade dispute even if results in interference with the trade or business or employment of some other person or with the right of some other person to dispose of the capital or of his labour as he wills. No agreement between the members of a trade union is void or voidable merely by reason of the fact that the object(s) of the agreement are in restraint of trade (Ss. 18 & 19). A person below 18 years of age is disqualified; so also a person convicted of any offence involving moral turpitude and sentenced to imprisonment is disqualified for a period of five years from the date of release. (S. 21-A). The name of a union can be changed with the consent of at least two-thirds of the total number of its members. Two or more unions can amalgamate into one with or without dissolution or division of funds, provided the votes Of at least 50 per cent members of each and every such union are recorded, and that at least 60 per cent of the votes recorded are in favour of the proposal. Notice of change of name or amalgamation to be given to the Registrar in the manner prescribed (Ss. 23-25)

Where a union is dissolved, notice thereof shall be given to the Registrar duly signed by seven members and by the Secretary of the union within 14 days of the dissolution. The Act requires the union to furnish returns as prescribed and keep the records available for inspection by the authorities. (Ss. 27 & 28).

The Employees' State Insurance Act 1948 This Act is a landmark in the history of social security in India. It is one at compulsory State insurance providing for certain benefits. It is conceived as a means of extinction of the evils of society, namely, want, disease, dirt, ignorance and indigence. The Act applies to all factories, and industrial establishments. However, the extension of the provisions of the Act to different areas in the country will be notified depending upon the provision of the facilities for treatment, etc. In the areas where the provisions of the Act are not applicable, the Workmen's Compensation Act, 1923 together with the Fatal Accidents Act, 1855 and Maternity Benefit Act, 1961 operate in the alternative. The Act confers benefit on industrial employees, including those employed through a contractor, in. the event of sickness, maternity, and other types of disablement. These benefits are secured by financial contributions to the scheme by both the employers and employees. For the purpose of contributions to the ESI Scheme, the employees are divided into 9 groups on the basis of their monthly wages. The employees drawing a monthly wage of Rs. 540 and above are required pay contribution @ 1..75 per cent of their wages rounded off to the next higher multiple at 5 paise. Employees drawing a daily wage of Rs. 15 and below are exempted from contributing to the scheme, but are entitled to the benefits. Employer's contribution is 4.75 percent of the total wage bill. (Ss. 38-45-B). o o The Act provides the following benefits (Ss. 46-52) Medical benefit (treatment at the ESI hospital); Sickness benefit (cash payment. during the period of absence due to sickness);

o Maternity benefit (cash payments during the period of absence for a maximum period of 12 weeks); o Disablement benefit (cash payments in case of dis8plement due to an accident arising out of and in the course of employment); o Dependants benefit (cash payment to' the dependents of the deceased employees in case of fatal accident); o Funeral benefit (lump-sum cash payment to meet the funeral expenses in case of the death of an employee).

The quantum of benefit under each head is determined on the basis of the "Standard Benefit Rate" (for short, "SSR") which approximately works out to 43 - 63% of the average daily wage of an employee. The daily wage is arrived at by dividing the monthly wage by 26 o Illustration-I: The average daily wage of an employee drawing a monthly wage of Rs. 420 is (420/26=) Rs. 16 (apprx.). His SBR will be Rs. 10, which works out to about 62% of his average daily wage. o Illustration-II: The average daily wage of an employee drawing a monthly wage of Rs. 600 is (600/26 =) Rs. 23 (appx.). His SBR will be Rs. 10, which works out to about 44% of his average daily wage. The daily rate of cash benefit in each case is as follows:

o Sickness = SBR corresponding to the average daily wage; for not more than 91 days in a year (two consecutive benefit periods of six months each). Maternity = Twice the SBR; for a maximum of 12 weeks. o Disablement (whether temporary for not less than 3 days or permanent) = as per the rate assessed by the ESI Corporation; in other cases, 40% more than the SBR. o o Dependants benefit = As per the rate prescribed from time to time. Funeral expenses = A lump-sum amount of Rs. 1000.

Workmen's Compensation Act. 1923 The passing of we Act in 1923 was the first step towards social security of workmen. The main object of the Act is to provide for the payment of compensation by certain classes of employers to their workmen in the event of an accident arising out of and in the course of employment. The theory of workmen's compensation is that "the cost of product should bear the blood of the workmen. " The Act provides special machinery to deal with cases of compensation in the event of accidents and to make arrangement for prompt compensation to the injured workmen who cannot afford to go to the courts of law. The injured workman or, in the case of his death, his dependants may either file a civil suit for damages against the employer or claim compensation under the WC Act.. The suitor, however, has to make a choice between these two types of relief. However, between the two, the claim under the WC Act is safer and less expensive. 'Disablement' has been defined as loss of capacity to work or to move. Disablement of a workman may result in loss or reduction of his earning capacity. In the latter case, he is not liable to earn as much as he used to earn before his disablement. It may be partial or total. Further it may be permanent or temporary (S. 2). Thus, there can be four combinations of disablement:

o Temporary Partial Disablement (TPD) - is, one which reduces the earning capacity of a workman in any employment in which he was engaged at the time of accident which resulted in such disablement. o Permanent Partial Disablement (PPD) - is one which reduces the earning capacity of a workmen in every employment which he was capable of undertaking at the time of injury. o Temporary Total Disablement (TTD) - incapacitates a workman for a certain period of time far all work which he was capable of performing at the time of accident resulting in such disablement. o Permanent Total Disablement (PTD) - incapacitates a workman far ever for all work which he was capable of performing at the time of accident resulting in such disablement. An employer is liable to pay compensation to a workman if a personal injury is caused to him by accident arising out of and in the course of his employment (S. 3). The phrase 'in the course of employment' refers to the time when the accidental injury was caused, whereas the phrase 'out of employment' emphasizes that there must be a causal connection between the employment and the accidental injury. An accident arising out of employment necessarily occurs in the course of employment, but an accident arising in the course of employment may not necessarily arise out of employment, though ordinarily it will. The expression 'employment' is notionally extended beyond the portals of the factory or place work and is referred to as the "theory of notional extension of employment". In Saurashtra Salt Manufacturing Co. v. Bai Valu Raja, (AIR 1958 SC 881), the Supreme Court laid down the said theory as under: o '''As a rule, the employment of a workman does not commence until he has reached the place of employment and does not continue when he has left the place of employment: the journey to and from the place of work is thus excluded from the notion of employment. However, it is now well settled that this is subject to the theory of notional extension of the employer's premises, so as to include in it an area which the workman passes and repasses in going to and in leaving the actual place of work, so that there may be some reasonable extension in both time and place of work and a workman may be regarded as in the course of his employment even though he had not reached or had left the actual premises where he was employed. The facts and circumstances of each case will have to be examined carefully in order to determine whether the accident arose out of and in the course of employment of a workman, keeping in view at all times this theory of notional. extension. " o o The amount of compensation payable to a workman depends on: the nature of the injury caused by the accident, the monthly wages of the workman concerned, and

o the relevant factor for working out lump-sum equivalent of compensation amount as specified in Schedule IV,

There is no difference between an adult and a minor worker with respect to the amount of compensation. o o o o Compensation is payable for death, permanent total disablement, . permanent partial disablement, and temporary disablement, whether total or partial. (S.4 rlw Schedule IV).

Where temporary disablement, whether total or partial, results from the injury, the amount of compensation shall be a half-monthly payment of the sum equivalent to 25 per cent of monthly wages of the workman, i.e., 25 per cent of monthly wages of the workman shall be payable every half month. The half monthly payment is payable on the 16th day o or from the date of disablement where such disablement lasts for a period of 28 days or more,

o after the expiry of a waiting period of 3 days from the date of disablement where such disablement lasts for a period of less than 28' days. Thereafter, the compensation shall be payable half-monthly during the disablement or during a period of 5 years, whichever period is shorter. The Commissioner for workmens' compensation is empowered to review, on application by the workman, the half-monthly payments and he may, thereon, (i) continue, (ii) increase, (iii) decrease, (iv) end, or (v) convert the same into a lumpsum. The half-monthly payments can be commuted by agreement between the parties (Ss. 6 & 7). The Act provides for distribution of compensation among the claimants in the event of a fatal accident (S. 8). No compensation - whether lump-sum or half-monthly - payable under the Act is capable of being assigned or charged or be liable to attachment or pass to any person other than the workmen by operation law, nor shall any claim be set against the same. (S. 9). . No claim for compensation shall be entertained by the Commissioner unless the notice of accident has-been given by the workman in writing the prescribed manner. , Claim for compensation shall be preferred before the Commissioner within 2 years of the occurrence of the accident, or in case of death within 2 years from the date of death (S. 10).

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