28002157 introduction to indian labour laws

7/16/2019 28002157 Introduction to Indian Labour Laws

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PRACTICAL HANDBOOK

FOR

MAJOR COMPLIANCES

UNDER

LABOUR LAWS

BY

SANTOSH BAGWE

C:santosh/personal/compliance under labour laws



COMPLIANCES UNDER LABOUR LAWS

INDEX

Sr. No. Particulars

1 The Apprentices Act,1961

2 The Contract Labour (Regulation & Abolition) Act, 1970

3 The Employee’s Provident Fund & Miscellaneous Provisions Act, 1952

4 The Employees’ State Insurance Act, 1948

5 The Employment Exchanges (Compulsory notification of vacancies)Act, 1959

6 The Equal Remuneration Act, 1976

7 The Factories Act, 1948

8 The Indian Fatal Accidents Act, 1985

9 The Industrial Dispute Act, 1947

10 The Industrial Employment (Standing Orders) Act, 1946

11 The Maternity Benefit Act, 1961

12 The Minimum Wages Act, 1948

13 The Payment of Bonus Act, 1965

14 The Payment of Gratuity Act, 1972

15 The Payment of Wages Act, 1936

16 The Workmen’s Compensation Act, 1923




APPROPRIATION OF LABOUR LAWS

Broadly Labour laws can be appropriated as under:

1) Labour laws related to welfare measures

2) Labour laws related to payroll

3) Labour laws related to administration

4) Labour laws related to social measures

5) Labour laws related to fire-fighting role of Personnel and HR Manager




Labour Laws relating to welfare measures

Sr. No. Particulars

1 The Employee’s Provident Fund & Miscellaneous Provisions Act, 1952

2 The Employees’ State Insurance Act, 1948

3 The Maternity Benefit Act, 1961

4 The Payment of Gratuity Act, 1972

5 The Workmen’s Compensation Act, 1923

Labour Laws relating to payroll

Sr. No. Particulars

1 The Equal Remuneration Act, 1976

2 The Minimum Wages Act, 1948

3 The Payment of Bonus Act, 1965

4 The Payment of Wages Act, 1936

Labour Laws relating to administration

Sr. No. Particulars

1 The Factories Act, 1948

2 The Indian Fatal Accidents Act, 1985




Labour Laws relating to Social Measures

Sr. No. Particulars

1 The Apprentices Act,1961

2 The Contract Labour (Regulation & Abolition) Act, 1970

3 The Employment Exchanges (Compulsory Notification of Vacancies)

Act, 1959

Labour Laws relating to fire fighting role of Personnel and HR Manager

Sr. No. Particulars

1 The Industrial Dispute Act,

2 The Industrial Employment (Standing Orders) Act, 1946




The Apprentices Act, 1961

Applicability: It is a statutory obligation of every industry/establishment having

training facilities according to syllabus in a designated trade under the

Apprentices Act, 1961 to train a number of apprentices according to ratio of

the trade in their establishment.

Major Compliance:

1) General Obligations:

a) To provide the apprentice with training in his trade in accordance

with Act and rules.

b) To ensure that a qualified person is placed in charge of the training.

c) To carry out obligation under the contract.

2) Registration of contract of apprenticeship:

To send the apprenticeship advisor the contract of apprenticeship within 3

months of date on which it was signed.

3) Payment to apprentice:

To pay to every apprentice during the period of apprenticeship such stipend

at a rate prescribed under the Act.

4) Working hours for apprentice:

a) Total number of hour: 42 to 48 hours per week.

b) Trade apprentice undergoing basic training: 42 hours.

c) Trade apprentice undergoing 2nd year: 42 to 45 hours.

d) Trade apprentice undergoing 3rd and subsequent years: As per the

workers in the trade in the same establishment.

e) No trade apprentice shall be engaged between the hours of 10 p.m. to

5 p.m. without the permission of Apprenticeship Advisor.

f) Graduate or technician apprentice: Normal hours of work of the dept.

5) Health, welfare and safety of apprentice: as per Factories Act.

6) Compensation for injury: as per Workmen Compensation Act.

7) Compensation for termination of apprenticeship: 6 months’ last drawn

stipend by both parties

Note: Apprentices advisors (Inspector) – Labour Minister – Sion Chunabbhati opp.

Priyadarshani Bldg in Mumbai.




The Contract Labour (Regulation & Abolition) Act, 1970

Applicability:

Applicable to: 1) every establishment in which 20 or more workmen are employed or

were employed on any day of the preceding twelve months as

contract labour.

2) every contractor who employs or who employed on any day of the

preceding twelve months twenty or more workman.

Not applicable to: Establishment which carry on work of a casual nature

occasionally.

Effect of non-registration: The principal employer cannot employ contract labour

in establishment.

Major Compliance:

1) It is obligatory on every contractor not to undertake or execute any work

through contract labour without obtaining a valid licence from the licencing

officer.

2) Obligation to provide certain amenities:

A) Provision of canteens

B) Rest Rooms

C) Drinking water and other facilities like latrines and urinals

D) First-aid facilitiesE) Creaches

3) It is obligatory on principal employer to see that wages of the workers are

paid every month on a fixed date and time and on termination of their

employment before the expiry of 2nd working day after termination.

Maintenance of Records:

Form No. XXIV Half yearly Return in duplicate within 30 days by contractor

Register Particulars

Form No. XII Register of Contractor - Maintained by Principal employer for

each establishmentForm No. XIII Maintained by Contractor for each establishment

Form No. XIV Contractor to issue an employment card to each worker within 3

days of employment

Form No. XV A service certificate in case of termination of wokman

XVI-A muster roll, XVII-Register of wages, XX-deduction for damange, XXI –

Register of fines, XXII- Register of advances, XXIII-Register of overtime




Notes: Company has to register every year

1) In a year labour should not work above 240 workig days

2) Every 80 days employer should break labour service – need to update every

80 days with the contractor

3) Contractor should pay minimum wages to the labour

Documents require:

1) License with the contractor & registration of the company

2) Contractor – PF no., ESIC no.,

Offices of Labour Laws in Mumbai:

1) Mumbai – Labour office is at Tardeo – AC Market

2) Thane – Makhmali Talav

3) New Mumbai – Khanda Colony - Panvel




The Employee’s Provident Fund & Miscellaneous Provisions Act,1952

Applicability:

1) Applicable to every establishment in which 20 or more persons are

employed.

2) Every employee drawing wages and DA upto Rs.6500/- will be eligible to

become a member.

Main Compliance:

1) Declaration by person taking up employment in writing that whether or

not he is a member of the fund and his account number, particulars of

the last employer.

2) In case of contractor, it is the responsibility of the principal employer to

ensure that provisions of this act are complied by Contractors.

Payment to be made to PF authorities:

Challan No. Payment Particulars Due Date

A/c No.1 Employee and Employer Pf Due 15th of the Following

month

A/c No.2 Admn and Inspection Charge

1.1 % of Salary

15th of the Following

month

A/c No.10 Pension Fund 15

th

of the Followingmonth

A/c No.21 Insurance Fund

0.5% of Basic + DA


month

A/c No.21 Insurance Fund Inspection and

Admn Charge

0.01%


month




Submission of Returns:

Form No. Particulars Due Date

Form 9 Details of employees on the 1st

day of coverage

Within 1 month of

coverage

Form 2 Nomination Form Immediately on joining

the fund

Form 5 Addition of members 15th of the Following

month

Form 10 Deletion of members 15th of the Following

month

Form 12 Detail of payments made 21st of the Following

month

Form 3A A memberwise ledger cards

posted monthly

31st May Each Year

Form 6A Abstract of Form 3A for the

year

31st May Each Year

Form 5A Return of ownership Once in the beginning

Form 19 Withdrawal of PF in case of

retirement/resignation

Form 13 Transfer of PFForm 31 Loan (minimum service 5yrs)

Settlement:

1) Settlement before completion of 10yrs

Form 19 (PF withdrawal)

Form 10c (Pension withdrawal)

2) Settlement after completion of 10yrs

Form 19 & 10D

3) Death of the Employee

Form 20 & 10D




Working Notes:

PF contribution by Employer & Employee is 12% on the Basic & DA

6,500/- is a standard amount to calculate pension

Salary Employee - 12% Employer - 12%

(Basic + DA) PF A/c Provident Fund Pension

Less than 6,500/- 12% 3.67% 8.33%

6,500/- 12% 3.67% 8.33%

More than 6,500/- 12% (Salary x 12%)

– (8.33% of

6,500)

8.33 % of 6,500

Examples: Amt in Rupees

Salary Employee - 12% Employer - 12%(Basic + DA) PF A/c Provident Fund Pension

1. 2,500 300 92 208

2. 3,500 420 128 292

3. 7,500 900 359 541

4. 20,000 2,400 1,859 541

1. Employee Contribution

PF = 2,500 x 12% = 300

Employer ContributionPF = 2,500 x 3.67% = 92

Pension = 2,500 x 8.33% = 208

3. Employee Contribution

PF = 7,500 x 12% = 900

Employer Contribution

PF = (7,500 x 12%) = 900 – 541 = 359

Pension = 6,500 x 8.33% = 541




The Employees’ State Insurance Act, 1948

Applicability:

1) Applicable to every establishment in which 20 or more persons are

employed.2) Every employee drawing wages and DA upto Rs. 10,500/- will be eligible

to become a member.

3) Monthly Challan – 21st of the next month is the last date of submission

Contribution 6.5% of Basic + DA

1.75% deduct from Employee Salary on Basic + DA

4.75% employer contribution

4) Half yearly return – 6A

5) Company should inform within 48 hours to the Factory Inspector andESIC inspector if any fatal accident (which can be result into death)

If the person fail to inform it is being created as a death or murder against

a Company




The Employment Exchanges (Compulsory Notification of Vacancies)

Act, 1959

Notification of vacancies to employment exchanges: Employer in every

establishment in any sector before filing up any vacancy shall notify that

vacancy to employment exchange. But Acts says about only notification

and doesn’t impose obligation on employer to recruit any person through

the employment exchange.

Act not applicable to:

a) Agriculture Industry

b) Domestic Service

c) Duration is less than 3 months

d) Unskilled office work

e) Staff of Parliament, employment through UPSC or like agency

f) Employment carries a remuneration less than Rs.60/- per month.

Time limit for the notification of vacancies:

a) Local employment exchange: 15 days before the date on which applicants

will be interviewed.

b) Central employment exchange: 4 weeks before the date on which

applicants will be interviewed.

Submission of returns:

a) Quarterly Return: Form No. ER-1 within 30days of due dates.b) Biennial Return: Form No.ERIL within 30 days of due date as notified in

the official gazette




The Equal Remuneration Act, 1976

Main Compliance:

1) No Employer shall pay to any worker at rates less favourable than

those at which remuneration is paid by him to the workers of the

opposite sex for performing the same work or work of a similar

nature.

2) No employer for complying above provision reduce the rate of

remuneration.

3) No discrimination while recruitment against women except where

the employment of women is prohibited or restricted under any

law.

Maintenance of Register: in form no. D relation to the workers employed.




The Indian Fatal Accidents Act, 1985

Object: To Provide compensation to families for loss occasioned by the

death of a person caused by actionable wrong.

Main Provision:

1) In case of a death of a person by wrongful act, neglect or default,

the party responsible shall be liable to an action or suit for

damages.

2) Every such action or suit shall be for the benefit of the wife,

husband, parent and child of the person whose death shall have

been so caused.

3) Not more than one action or suit shall be brought in respect of

same subject - matter of complaint.




The Industrial Employment (Standing Orders ) Act, 1946

Applicability: The Act applied to every industrial establishment which

means:

1) Tramway or motor transport

2) Air transport other than for defense purpose

3) Dock-wharf or jetty

4) Inland vessel

5) Mine, quarry or oil fields

6) Plantation :

a) A factory under Factories Act

b) A Railway under Railways Act

c) The establishment who for the purpose of fulfilling a contract

with the owner of any industrial establishment employs workmen.

Certification of standing order:

1) Within 6 months from the date of applicability, the employer shall

submit to the Certifying Officer 5 copies of the draft standing orders

proposed by him for adoption in his industrial establishment.

2) Such standing order should be in conformity with Model Standing Order.

3) Encl: A statement giving prescribed particulars of the workmen employed

and the name of the trade union if any.

Posing of Standing order: The certified standing order shall be prominently

posted in English and in local language on special boards or near the entrance

and in all departments where the workmen are employed.

Payment of subsistence allowance:

1) If any workmen is suspended pending inquiry, the employer shall pay

subsistence allowance to the workers at following rates:

a) 1st 90 days: 50%

b) 91 to 180 days: 75%

c) After 180 days: 100%




The Maternity Benefit Act, 1961

Applicability:

1) To every establishment being a factory, mine or plantation including Govt.

establishment and wherein person are employed for the exhibition of

equestrian acrobatic and other performances.

2) To any establishment in which 10 or more persons are employed or were

employed on any day of the preceding 12 months

Prohibition of employment by workmen during certain period:

During 6 weeks immediately following the day of delivery or miscarriage

Prohibition of work by workmen during certain period:

During 1 month immediately preceding the period of six week before the

date of expected delivery, if the work

which is of an arduous nature or

which involved long hours of standing or

which in any way is likely to interfere with her pregnancy or normal

development of the foetus or is likely to cause her miscarriage or to

adversely affect her health.

Payment of Maternity Benefit:

1) Payment of maternity benefits at the rate of the average daily wages for

the period of actual absence.

2) Average daily wages: Wages paid during the period of 3 calendar monthsimmediately preceding the date of her expected delivery..

3) The workmen must have actually worked for a period of not less than 80

days in the twelve months immediately preceding the date of her

expected delivery.

4) Maximum period entitled: Maximum 12 weeks of which not more than 6

weeks shall precede the date of her expected delivery.

Leave for

1) Miscarriage: 6 weeks immediately following the day of her miscarriage

2) Medical termination of pregnancy: 6 weeks immediately following the dayof her pregnancy.

3) Tubectomy operation: 2 weeks immediately following the day of her

pregnancy.

Nursing Breaks: Every women delivered of a child who returns to duty after

such delivery shall be allowed in the course of her daily work two breaks for

nursing he child until the child attains the age of 15 months




The Minimum Wages Act, 1948

Main Compliance:

1) To make payment of overtime in excess of number of hours constituting

normal working day at the rate fixed under the Act or any other law

whichever is higher.

2) Minimum wages payable shall be paid in cash.

3) If the custom is to pay wages in kind, then wages can be paid in kind.

4) Govt. can authorise supply of essentital commodities at concessional rate.

5) In respect of any scheduled employment, a notification u/s 5 is in force,

then employer shall pay wages at a rate not less than the minimum rate

fixed under notification.

6) Any contract allowing to pay wages less than minimum is null and void.

7) Sri Dharam Motor Services v. Industrial Tribunal, Madrass : A worker

can be asked to work for more than 6 days a week provided he is paid

extra on the overtime rate.




The Payment of Bonus Act, 1965

Applicability: to every factor and other establishment in which 20 or more

persons are employed on any day during an accounting year.

Main Compliance:

1) Minimum Bonus: 8.33% if salary or wages earned during accounting year

or Rs.100 whichever is higher, whether or not the employer has any

allocable surplus in the accounting year.

2) Maximum Bonus: 20% of salary or wages only if allocable surplus exceeds

the amount of minimum wages bonus payable under the act

3) Time Limit: Within 8 months from the close of accounting year.

4) Salary or wage calculation:

Salary or wage exceeding Rs.2500 : Rs.2500

Salary or wages less than Rs.2500 : Actual

Salary or wages: Basic + DA

Maintenance of Registers and Returns:

Sr.No. Particulars Register

1 Computation of allocable surplus Form A

2 Set on and Set off the allocation surplus Form B

3 Detail of amount of bonus due to each of the

employee, deduction u/s 17 and 18 and actualAmount disbursed

Form c

4 Return to be submitted within 30 days after

the expiry of the time limit

Form D




The Payment of Gratuity Act, 1972

Applicability:

1) To every factory and other establishment in which 10 or more persons

are employed.

2) Once this is applicable, later on even if employees are reduced to less

than, this Act remains applicable.

Main Compliance:

1) Duty of employer to give notice of application of the Act to controlling

authority.

2) Payment to Gratuity:

a) Eligibility: Continuous 5 years of service

b) In case of death of employee, payment has to be made to minor.

c) Amount of Gratuity:

Normal: Last drawn salary/26*15*no of year of service

Seasonal: Last drawn salary/26*7*no of year of service

Salary: Basic+ DA

d) Maximum amount: Rs.350000

e) Time limit: within 30 days of form due date

3) Duty of employer to determine the amount of gratuity and give notive in

writing to the person to whom the gratuity is payable and to the

controlling authority.

4) Duty of the employer to give notice of opening, change or closure of

establishment

5) Duty of the employer to obtain nominations from the employees.

Ex.

If the salary (Bonus + DA) = 5,000

5000/26 (working days) x 15 (days service) x nos of year service completed




The Payment of Wages Act, 1936

Person Responsible under the Act:

Nature of Employer Person Responsible

Factory Manager under Factories Act, 1948

Industrial Establishment A person responsible to the employer

for supervision and control of the

Industrial Establishment

Railway Railway Administration

Major Compliance:

1) Authorised persons have to fix the wage period which should not be more

than 1 month.

2) Time Limit for payment of wages

Particulars Time limit

Less than 1000 persons Before expiry of 7th working day of

wage period

More than 1000 persons Before expiry of 10th working day of

wage period

Termination of employee Before expiry of 2nd working day of

termination

3) Wages must be paid in current coin and currency note or cheque or

crediting in Bank account (provided for cheque and credit subject to

written authorization)

4) Obligation for imposing fine:

a) Previous approval of authority of State Govt.

b) Notice to be exhibited in premises

c) Opportunity of showing cause against fine to employee

d) Total fine should not exceed 3 % of wages payable

e) Age of employee must be more than 15 yearsf) Fine can’t be recovered in installment and after the expiry of 60

days on which it was imposed.

g) Fine recovered must be applied for purposes beneficial to the

persons employed in the factory.




The Workmen’s Compensation Act, 1923

Employer’s liability for compensation:

1) Employer is liable to pay compensation as per Chapter II in case of

personal injury by accident arising out of and in the course of

employment.

2) In following cases, employer is not liable:

a) if injury doesn’t result in total or partial disablement for a period

not exceeding 3 days

b) if injury has not resulted in death and is caused by accident

because of following :

i) influence of drink or drugs, or

ii) willful disobedience of an order expressly given or a ruled

framed for the purpose of securing safety of workmen, or

iii) willful removal of any safety guard or other device provided

for the purpose of securing the safety of workman.

3) Occupational disease shall be deemed to an injury if it is proved that

a) continuous service

Nature of employment Continous Service

Part A of Schedule III NA

Part B of Schedule III 6 months

Part C of Schedule III CG will specify

b) the disease has arisen out of and in the course of the employment.

4) More than one employer in case of part C, then payment of compensationwill be in proportion as commissioner may decide.

Amount of Compensation:

Particulars of Injury Amount of Compensation

Death from Injury 50 % of monthly wages* relevant factor

or Rs.50000/- whichever is more

Permanent total disablement 60 % of monthly wages* relevant factor

or Rs.65000/- whichever is more

Permanent partial disablementa) Injury in Part II of Schedule I

b) No specified in injury in Schedule I

% specified in schedule

% decided by qualified medical

practioner

Temporary disablement whether partial

or total

Half monthly payment equivalent to 25%

of monthly wages paid as per provision of

Act




Method of calculating wages:

Continuous period of employment

preceding the accident

Wages

Not less than 12 months 1/12th of the payment in last 12 months

Less than 1 month a) Average monthly amount during 12

month earned by a workman on same

work by same employer or

b) if there was no workman, then by a

workman on same work in same locality

In other case where it is not possible to

calculate monthly wages

Total wages earned immediately

preceding the accident/no of day * 30

Reports and Returns:

1) Commissioner may ask statement in the prescribed form within 30 days

of notice about the opinion of employer whether he is or not liable to

deposit compensation.

2) Employer is liable to report about fatal accidents and serious bodily

injuries within 7 days of death or serious bodily injury.

3) SG may direct any employer to send a return specifying the number of

injuries in respect of which compensation has been paid by employer

during the previous year.
