1.

Explain the Sailent Features of Contract Labour (Regulation and

Abolition) Act?

LEGISLATIVE FRAMEWORK

The Government of India has been deeply concerned about the exploitation
of workers under the contract labour system. With a view to removing the
difficulties of contract labour and bearing in mind the recommendations of various
commissions and committees and the decisions of the Supreme Court, particularly
in the case of Standard Vacuum Refining Company in 1960, the Contract Labour
(Regulation and Abolition) Act was enacted in 1970. This Act seeks to regulate
the employment of contract labour in certain establishments and to provide for its
abolition under certain circumstances.

Contract Labour, by and large, is neither borne on pay roll or muster roll nor
is paid wages directly. The establishments, which farm out work to contractors, do
not own any direct responsibility in regard to their labourers. Generally, the wage
rates to be paid and observance of working conditions are stipulated in agreements
but in practice they are not strictly adhered to.

The Main Features of the Act

The main features of the Act can be summarised thus:-

The Act applies to every establishment in which 20 or more workmen are

employed or were employed on any day on the preceding 12 months as contract
labour and to every contractor who employs or who employed on any day of the
preceding 12 months 20 or more workmen. It does not apply to establishments
where the work performed is of intermittent or casual nature. The Act also applies
to establishments of the Government and local authorities as well.

The Central Government and the State Governments are required to set up
Central Advisory Board and State Advisory Boards, which are authorised to
constitute Committees as deemed proper. The functions of the Boards are
advisory, on matters arising out of the administration of the Act as are referred to
them. The Boards carry out the functions assigned to them under the Act.

The establishments covered under the Act are required to be registered as the
Principal Employer. Likewise, every contractor to whom the Act applies is
required to obtain a licence and not to undertake or execute any work through
contract labour except under and in accordance with the licence issued.

The Act has provided for establishment of canteens. For the welfare and
health of contract labour, provision is made for restrooms, first aid, wholesome
drinking water, latrines and urinals. In case of failure on the part of the contractor
to provide such facilities, the Principal Employer is made liable to provide the
amenities.

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 The contractor is required to pay wages and a duty is cast on him to ensure
disbursement of wages in the presence of the authorised representative of the
Principal Employer. In case of failure on the part of the contractor to pay wages
either in part or in full, the Principal Employer is liable to pay the same. In case
the contract labour perform same or similar kind of work as regular workmen,
they will be entitled to the same wages and service conditions as regular workmen
as per the Contract Labour (Regulation and Abolition) Central Rules, 1971.

The Act makes provision for the appointment of Inspecting staff, for
maintenance of registers and records, for penalties for the contravention of the
provisions of the Act and Rules made thereunder and for making Rules for
carrying out the purpose of the Act. In the central sphere, officers of the CIRM
have been appointed as Inspectors.

Apart from the regulatory measures provided under the Act for the benefit of
the contract labour, the ‘appropriate government’ under section 10(1) of the Act is
authorised, after consultation with the Central Board or State Board, as the case
may be, to prohibit, by notification in the official gazette, employment of contract
labour in any establishment in any process, operation or other work.

Sub-section (2) of Section 10 lays down sufficient guidelines for deciding

upon the abolition of contract labour in any process, operation or other work in
any establishment and the ‘appropriate government’ while taking action under this
Section will have to take an overall picture of the industry carrying on similar
activities. The guidelines furnished under sub-section (2) oblige the ‘appropriate
government’ to consider, as relevant data, the material to which it must have
regard. The Central Government on the recommendations of the Board has
abolished contract labour system in a number of jobs in different industries and so
far 76 notifications have been issued.

2. Explain the various health and safety ?

A typical Health and Safety Policy that could be adapted to the needs of your
organisation is given below. Of course, tailor making the policy is important.
Safety, health and welfare for the employees and the community at large, has highest
priority and commits itself to :

1. maintaining a healthy and safe work environment, as is reasonably practicable, for all
employees at all times.
2. ensuring that no job is carried out by ignoring or compromising on safety aspects.
3. ensuring that so far as reasonably practicable, all processes are properly supervised
and are safe from risks to health.
4. ensuring that design, construction and maintenance of all plant, equipment and
facilities are such as to ensure that adequate precautions are taken to protect the plant,
machinery and environment and personnel from injuries and risk to health, as is
reasonably practicable.
providing adequate training to all employees for the work they are required to do by
informing them of any hazards to health and safety which may be inherent in the plant
or materials required to be handled.

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 5. recognising that it is the responsibility of the management for the safety of visitors.
The management will ensure, so far as is practicable, that whilst on company
premises, visitors and or other non employees are not exposed to health and safety
hazards and give to such persons any information about the organisations activities
which may be necessary to ensure this. The management would take necessary steps
to disallow visitors on the shop floor or in other areas of factory premises where they
may be exposed to risks to health and safety without being accompanied by an
appropriately qualified employee of the company.
making all efforts to ensure conscientious observance of all National, State and other
statutory requirement for maintaining a safe and healthy work environment and
pollution free premises.

Although, the management understands that the Government legislation and generally
accepted codes of practice that establish minimum standards for safety, health and
environment, the management would maintain and improve upon standards, wherever
possible, by a combination of professional, technical and medical advice available to
the company.

Employers are obliged:

• to ensure the safety and health of workers in every aspect related to the work,
primarily on the basis of the specified general principles of prevention, without
involving the workers in any financial cost;
• to evaluate the occupational risks, inter alia in the choice of work equipment and the
fitting-out of workplaces, and to make provision for adequate protective and
preventive services;
• to keep a list of, and draw up reports on, occupational accidents;
• to take the necessary measures for first aid, fire-fighting, evacuation of workers and
action required in the event of serious and imminent danger;
• to inform and consult workers and allow them to take part in discussions on all
questions relating to safety and health at work;
• to ensure that each worker receives adequate safety and health training throughout the
period of employment.

Health and Safety Provisions as per Factories Act

The Factories Act, 1948, has been promulgated primarily to provide safety measures and to
promote the health and welfare of the workers employed in factories. The object thus brings
this Act, within the competence of the Central Legislature to enact. State Governments/Union
Territory Administrations have been empowered under certain provisions of this Act, to make
rules, to give effect to the objects and the scheme of the Act.

Applicability: This Act applies to factories, which qualify the definition of “Factory” under
the section 2(m) of the Act or to those industrial establishments, to whom section 85 have
been made applicable by the State Government, by notification in the Official Gazette. This

3
applies to any premises wherein 10 or more persons with the aid of power or wherein 20 or
more workers without aid of power are/were working on any day in the preceding 12 months,
wherein manufacturing process is being carried on.

Health Provisions

The main focus of Factories Act is towards the Health benefits to the workers. Health
Chapter of the Act contains specification from Section 11 to 20. Detailed information of the
sections of is provided as under:

Section 11: This section basically specifies the issues of cleanliness at the workplace. It is
mentioned in the provision that every factory shall be kept clean and free from effluvia
arising from any drain, privy or other nuisance. This includes that there should be no
accumulation of dirt and refuse and should be removed daily and entire area should be kept
clean.

Section 12: This section specifies on disposal of wastes and effluents. That every factory
should make effective arrangements for the treatment of wastes and effluents due to the
manufacturing process carried on therein, so as to render them innocuous and for their
disposal.

Section 13: This section focuses on ventilation and temperature maintenance at workplace.
Every factory should work on proper arrangements for adequate ventilation and circulation of
fresh air.

Section 14: This section details on the proper exhaustion of dust and fume in the Factory. In
this it is mentioned that factory which deals on manufacturing process should take care of the
proper exhaustion of dust, fume and other impurities from its origin point.

Safety Provisions

Section 17: Under section it has been described that there should be proper arrangement of
lighting in factories. In every part of the factory where workers are working or passing should
be well equipped with lighting arrangement either by natural sources or artificial sources.

Section 21: This section specifies that fencing of machinery is necessary. That any moving
part of the machinery or machinery that is dangerous in kind should be properly fenced.

Section 23: This section prescribes that employment of young person on dangerous
machinery is not allowed. In the case where he is been fully instructed in the usage of the
machinery and working under the supervision he might be allowed to work on it.

3. Explain Legality of Strikes and lockouts?

EXTRACT FROM THE LABOUR RELATIONS ACT:

4
Strikes And Lock-Outs

64. Right to strike and recourse to lock-out

(1) Every employee has the right to strike and every employer has recourse to lock-out if-

(a) the issue in dispute has been referred to a council or to the Commission as required by this
Act, and-

(i) a certificate stating that the dispute remains unresolved has been issued; or

(ii) a period of 30 days, or any extension of that period agreed to between the parties to the
dispute, has elapsed since the referral was received by the council or the Commission; and
after that-

(b) in the case of a proposed strike, at least 48 hours' notice of the commencement of the
strike, in writing, has been given to the employer, unless-

65. Limitations on right to strike or recourse to lock-out

(1) No person may take part in a strike or a lock-out or in any conduct in contemplation or
furtherance of a strike or a lock-out if-

(a) that person is bound by a collective agreement that prohibits a strike or lock-out in respect
of the issue in dispute;

(b) that person is bound by an agreement that requires the issue in dispute to be referred to
arbitration;

(c) the issue in dispute is one that a party has the right to refer to arbitration or to the Labour
Court in terms of this Act;

(d) that person is engaged in-

(i) an essential service; or

(ii) a maintenance service. 13

(i) any arbitration award or collective agreement that regulates the issue in dispute; or

(ii) any determination made in terms of section 44 by the Minister that regulates the issue in
dispute; or

(b) any determination made in terms of the Wage Act and that regulates the issue in dispute,
during the first year of that determination.

66. Secondary strikes

(1) In this section "secondary strike" means a strike, or conduct in contemplation or

furtherance of a strike, that is in support of a strike by other employees against their employer

5
but does not include a strike in pursuit of a demand and referred to a council if the striking
employees, employed within the registered scope of that council, have a material interest in
that demand.

(2) No person may take part in a secondary strike unless-

(a) the strike that is to be supported complies with the provisions of sections 64 and 65;

(b) the employer of the employees taking part in the secondary strike or, where appropriate,
the employers' organisation of which that employer is a member, has received written notice
of the proposed secondary strike at least seven days prior to its commencement; and

(c) the nature and extent of the secondary strike is reasonable in relation to the possible direct
or indirect effect that the secondary strike may have on the business of the primary employer.

67. Strike or lock-out in compliance with this Act

(1) In this Chapter, "protected strike" means a strike that complies with the provisions of this
Chapter and "protected lock-out" means a lock-out that complies with the provisions of this
Chapter.

(2) A person does not commit a defect or a breach of contract by taking part in-

(a) a protected strike or a protected lock-out; or

(b) any conduct in contemplation or in furtherance of a protected strike or a protected lock-

out.

(7) The failure by a registered trade union or a registered employers' organisation to comply
with a provision in its constitution requiring it to conduct a ballot of those of its members in
respect of whom it intends to call a strike or lock-out may not give rise to, or constitute a
ground for, any litigation that will affect the legality of, and the protection conferred by this
section on, the strike or lock-out.

(8) The provisions of subsections (2) and (6) do not apply to any act in contemplation or in
furtherance of a strike or a lock-out, if that act is an offence.

(9) Any act in contemplation or in furtherance of a protected strike or a protected lock-out

that is a contravention of the Basic Conditions of Employment Act or the Wage Act does not
constitute an offence.

68. Strike or lock-out not in compliance with this Act

(1) In the case of any strike or lock-out, or any conduct in contemplation or in furtherance of
a strike or lock-out, that does not comply with the provisions of this Chapter, the Labour
Court has exclusive jurisdiction-

(a) to grant an interdict or order to restrain-15

6
(i) any person from participating in a strike or any conduct in contemplation or in furtherance
of a strike; or

(ii) any person from participating in a lock-out or any conduct in contemplation or in

furtherance of a lock-out;

(b) to order the payment of just and equitable compensation for any loss attributable to the
strike or lock-out, having regard to-

(i) whether -

(aa) attempts were made to comply with the provisions of this Chapter and the extent of those
attempts;

(bb) the strike or lock-out was premeditated;

(cc) the strike or lock-out was in response to unjustified conduct by another party to the
dispute; and

69. Picketing 16

(1) A registered trade union may authorise a picket by its members and supporters for the
purposes of peacefully demonstrating-

(a) in support of any protected strike; or

16. See flow diagram No. 7 in Schedule 4.

(b) in opposition to any lockout.

(2) Despite any law regulating the right of assembly, a picket authorised terms of I subsection
(1), may be-

(6) The rules established by the Commission may provide for picketing by employees on
their employer's premises if the Commission is satisfied that the employer's permission has
been unreasonably withheld.

70. Essential services committee

(1) The Minister, after consulting NEDLAC, and in consultation with the Minister for the
Public Service and Administration, must establish an essential services committee under the
auspices of the Commission and appoint to that committee, on any terms, persons who have
knowledge and experience of labour law and labour relations.

(2) The functions of the essential services committee are-

(a) to conduct investigations as to whether or not the whole or a part of any service is an
essential service, and then to decide whether or not to designate the whole or a part of that
service as an essential service;

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71. Designating a service as an essential service

(1) The essential services committee must give notice in the Government Gazette of any
investigation that it is to conduct as to whether the whole or a part of a service is an essential
service.

(2) The notice must indicate the service or the part of a service that is to be the subject of the
investigation and must invite interested parties, within a period stated in the notice-

74. Disputes in essential services' 8

(1) Any party to a dispute that is precluded from participating in a strike or a lock-out
because that party is engaged in an essential service may refer the dispute in writing to

(a) a council, if the parties to the dispute fall within the registered scope of that council; or

(b) the Commission, if no council has

(2) The party who refers the dispute must satisfy the council or the Commission that a copy
of the referral has been served on all the other parties to the dispute.

(3) The council or the Commission must attempt to resolve the dispute through conciliation.

(4) If the dispute remains unresolved, any party to the dispute may request that the dispute be
resolved through arbitration by the council or the Commission.

75. Maintenance services

(1) A service is a maintenance service if the interruption of that service has the effect of
material physical destruction to any working area, plant or machinery.

(2) If there is no collective agreement relating to the provision of a maintenance service, an

employer may apply in writing to the essential services committee for a determination that
the whole or a part of the employer's business is a maintenance service.

(3) The employer must satisfy the essential services committee that a copy of the application
has been served on all interested parties.

(4) The essential services committee must determine, as soon as possible, whether or not the
whole or a part of the service is a maintenance service.

76. Replacement labour

(1) An employer may not take into employment any person-

(a) to continue or maintain production during a protected strike if the whole or a part of the
employer's service has been designated a maintenance service; or

(b) for the purpose of performing the work of any employee who is locked out, unless the
lock-out is in response to a strike.

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(2) For the purpose of this section, "take into employment" includes engaging the I services
of a temporary employment service or an independent contractor.

77. Protest action to promote or defend socioeconomic interests of workers

(1) Every employee who is not engaged in an essential service or a maintenance service has
the right to take part in protest action if-

(a) the protest action has been called by a registered trade union or federation of trade unions;

(b) the registered trade union or federation of trade unions has served a notice on NEDLAC
stating-

(i) the reasons for the protest action; and

(ii) the nature of the protest action;

(c) the matter giving rise to the intended protest action has been considered by NEDLAC or
any other appropriate forum in which the parties concerned are able to participate in order to
resolve the matter; and

(d) at least 14 days before the commencement of the protest action, the registered trade union
or federation of trade unions has served a notice on NEDLAC of its intention to proceed with
the protest action.

4. Scope and importance of trade union act?

The trade unionism in India developed quite slowly as compared to the western nations.
Indian trade union movement can be divided into three phases.

The first phase (1850 to1900)

During this phase the inception of trade unions took place. During this period, the working
and living conditions of the labor were poor and their working hours were long. Capitalists
were only interested in their productivity and profitability. In addition, the wages were also
low and general economic conditions were poor in industries. In order to regulate the
working hours and other service conditions of the Indian textile laborers, the Indian Factories
Act was enacted in 1881. As a result, employment of child labor was prohibited.

The growth of trade union movement was slow in this phase and later on the Indian Factory
Act of 1881 was amended in 1891. Many strikes took place in the two decades following
1880 in all industrial cities. These strikes taught workers to understand the power of united
action even though there was no union in real terms. Small associations like Bombay Mill-
Hands Association came up by this time.

The second phase (1900 to 1946)

This phase was characterized by the development of organized trade unions and political
movements of the working class. Between 1918 and 1923, many unions came into existence
in the country. At Ahmedabad, under the guidance of Mahatma Gandhi, occupational unions
like spinners’ unions and weavers’ unions were formed. A strike was launched by these
unions under the leadership of Mahatma Gandhi who turned it into a satyagrah. These unions

9
federated into industrial union known as Textile Labor Association in 1920.In 1920, the First
National Trade union organization (The All India Trade Union Congress (AITUC)) was
established. Many of the leaders of this organization were leaders of the national Movement.
In 1926, Trade union law came up with the efforts of Mr. N N Joshi that became operative
from 1927. During 1928, All India Trade Union Federation (AITUF) was formed.

The third phase began with the emergence of independent India (in 1947). The partition of
country affected the trade union movement particularly Bengal and Punjab. By 1949, four
central trade union organizations were functioning in the country:

The All India Trade Union Congress,

The Indian National Trade Union Congress,
The Hindu Mazdoor Sangh, and
The United Trade Union Congress
The working class movement was also politicized along the lines of political parties. For
instance Indian national trade Union Congress (INTUC) is the trade union arm of the
Congress Party. The AITUC is the trade union arm of the Communist Party of India. Besides
workers, white-collar employees, supervisors and managers are also organized by the trade
unions, as for example in the Banking, Insurance and Petroleum industries.

Trade unions in India

The Indian workforce consists of 430 million workers, growing 2% annually. The Indian
labor markets consist of three sectors:

The rural workers, who constitute about 60 per cent of the workforce.
Organized sector, which employs 8 per cent of workforce, and
The urban informal sector (which includes the growing software industry and other services,
not included in the formal sector) which constitutes the rest 32 per cent of the workforce.
At present there are twelve Central Trade Union Organizations in India:
All India Trade Union Congress (AITUC)
Bharatiya Mazdoor Sangh (BMS)
Centre of Indian Trade Unions (CITU)

Hind Mazdoor Kisan Panchayat (HMKP)

Hind Mazdoor Sabha (HMS)
Indian Federation of Free Trade Unions (IFFTU)
Indian National Trade Union Congress (INTUC)
National Front of Indian Trade Unions (NFITU)
National Labor Organization (NLO)
Trade Unions Co-ordination Centre (TUCC)
United Trade Union Congress (UTUC) and
United Trade Union Congress - Lenin Sarani (UTUC - LS)

Restrictions on strike action

The Act declared unlawful secondary action and any strike whose purpose was to coerce the
government of the day directly or indirectly. These provisions were declaratory insofar as
such strikes had already been ruled unlawful by Astbury, J in the National Sailors' and
Firemen's Union v Reed.[1]. The Act reaffirmed his judgment and gave it the force of statute

10
law. In addition, incitement to participate in an unlawful strike was made a criminal offence,
punishable by imprisonment for up to two years; and the attorney general was empowered to
sequester the assets and funds of unions involved in such strikes[2].

[edit] Intimidation

Section 3 of the Act declared unlawful mass picketing which gave rise to the intimidation of a
worker[3].

[edit] Political levy

Section 4 of the Act mandated trade union members to contract-in to any political levy which
their union made on their behalf. This resulted in an 18% fall in the income of the Labour
Party, which was heavily reliant upon union funding[4].

[edit] Civil service unions

Section 5 of the Act enjoined civil service unions from affiliation to the TUC and forbade
them from having political objects[5].

A trade union is an organization of employees formed on a continuous basis for the

purpose of securing diverse range of benefits. It is a continuous association of wage
earners for the purpose of maintaining and improving the conditions of their working
lives.

The Trade Union Act 1926 defines a trade union as a combination, whether temporary or
permanent, formed primarily for the purpose of regulating the relations between
workmen and employers or between workmen and workmen, or between employers and
employers, or for imposing restrictive condition on the conduct of any trade or business,
and includes any federation of two or more trade unions.

This definition is very exhaustive as it includes associations of both the workers and
employers and the federations of their associations. Here, the relationships that have been
talked about are both temporary and permanent. This means it applies to temporary
workers (or contractual employees) as well. Then this definition, primarily, talks about
three relationships. They are the relationships between the:

• workmen and workmen,

• workmen and employers, and

• employers and employers.

Thus, a trade union can be seen as a group of employees in a particular sector, whose aim
is to negotiate with employers over pay, job security, working hours, etc, using the
collective power of its members. In general, a union is there to represent the interests of
its members, and may even engage in political activity where legislation affects their
members. Trade unions are voluntary associations formed for the pursuit of protecting the

11
 common interests of its members and also promote welfare. They protect the economic,
political and social interests of their members.

Features of trade unions:

1. It is an association either of employers or employees or of independent workers.

They may consist of :-

o Employers’ association (eg., Employer’s Federation of India, Indian paper

mill association, etc.)

o General labor unions

o Friendly societies

o Unions of intellectual labor (eg, All India Teachers Association)

2. It is formed on a continuous basis. It is a permanent body and not a casual or

temporary one. They persist throughout the year.

3. It is formed to protect and promote all kinds of interests –economic, political and
social-of its members. The dominant interest with which a union is concerned is,
however, economic.

4. It achieves its objectives through collective action and group effort. Negotiations
and collective bargaining are the tools for accomplishing objectives.

5. Trade unions have shown remarkable progress since their inception; moreover,
the character of trade unions has also been changing. In spite of only focusing on
the economic benefits of workers, the trade unions are also working towards
raising the status of labors as a part of industry.

5. What is bonus?
Many companies discover that workers from the factory floor to the highest executive offices
generally consider money to be a powerful incentive to work longer, increase productivity or
improve morale in the workplace. This additional money usually arrives in the form of a
bonus, a supplemental payment not considered a regular part of an employee's salary. A
bonus may be given to employees who reach a specified production goal, for example, or to
sales executives who exceed an established quota. Some companies routinely give bonus pay
to all qualified employees during the Christmas holiday season.

A bonus is often connected directly to performance, such as generating more sales or

motivating a production line to meet or exceed a quota. Knowing there is a tangible financial
reward for increased productivity can be precisely the kind of motivation many employees
need. Employers can use the promise of bonus pay to entice managers to motivate their
subordinates towards a specific goal. Sometimes simply maintaining an accident-free work
environment can result in a performance bonus for supervisors and managers.

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Bonus pay could also result from a company's overall financial success. If a company has a
particular good fiscal quarter, employees may receive a bonus as a reward for their hard
work. Employers can often generate a significant amount of good will from their employees
if the company is willing to share the wealth through occasional bonuses. While such bonus
pay is not always possible, the idea that hard work on the factory floor can be recognized by
owners and executives often improves employee morale.

For many people, the most common form of bonus is an end-of-the-year "Christmas bonus."
This form of bonus is often calculated according to an employee's straight salary for a pay
period, adjusted for certain deductions. A holiday bonus is meant to be a gesture of
appreciation from a company to its employees for their hard work throughout the year. For
many employees, this bonus translates into gifts for family members or funding for an
extended vacation. While there are never any guarantees where a bonus is concerned, many
companies do make an effort to provide at least one annual bonus paycheck to their regular
employees.

[An 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.]

BE it enacted by Parliament in the Sixteenth Year of the Republic of India as follows:-

1. Short title, extent and application.-(1) This Act may be called the Payment of Bonus
Act, 1965.
(2) It extends to the whole of India [***].
(3). Save as otherwise provided in this Act, it shall apply to –
(a) every factory; and
(b) every other establishment in which twenty or more persons are employed on any day
during an accounting year.
[Provided that the appropriate Government may, after giving not less than two
months’ notice of its intention so to do, by notification in the Official Gazette, apply the
provisions of this Act with effect from; such accounting year as may be specified in the
notification, to any establishment or class of establishment [including an establishment being
a factory within the meaning of sub-clause (ii) of clause (m) of section 2 of the Factories Act,
1948 (63 of 1948)] employing such number of persons less than twenty as may be specified
in the notification; so, however, that the number of persons so specified shall in no case be
less than ten.]

(4). Save as otherwise provided in this Act, the provisions of this Act shall, in relation to a
factory or other establishment to which this Act applies, have effect in respect of the
accounting year commencing on any day in the year 1964 and in respect of every subsequent
accounting year:

[Provided that in relation to the State of Jammu and Kashmir, the reference to the accounting
year commencing on any day in the year 1964 and every subsequent accounting year shall be
construed as reference to the accounting year commencing on any day in the 1968 and every
subsequent accounting year:]

4[Provided further that when the provisions of this Act have been made applicable to any
establishment or class of establishments by the issue of a notification under the proviso to

13
sub-section (3), the reference to the accounting year commencing on any day in the year 1964
and every subsequent accounting year or, as the case may be the reference to the accounting
year commencing on any day in the year 1968 and every subsequent accounting year, shall,
in relation to such establishment or class of establishments, be construed as a reference to the
accounting year specified in such notification and every subsequent accounting year.]

(5) An establishment to which this Act applies 1[***] shall continue to be governed by
this Act notwithstanding that the number of person employed therein falls below twenty 2[or,
as the case may be, the number specified in the notification issued under the proviso to sub-
section (3)].

2. Definition.- In this Act, unless the context otherwise requires,-

(1) “accounting year” means -

(i) in relation to a corporation, the year ending on the day on which the books and
accounts of the corporation are to be closed and balanced.

(ii) in relation to a company, the period in respect of which any profit and loss account of
the company laid before it in annual general meeting is made up, whether that period is a
year or not;

(iii) in any other case -

(a) the year commencing on the 1st day of April; or

(b) if the accounts of an establishment maintained by the employer thereof are closed and
balanced on any day other than the 31st day of March, then, at the option of the employer, the
year ending on the day on which its accounts are so closed and balanced:

Provided that an option once exercised by the employer under paragraph (b) of this sub-
clause shall not again be exercised except with the previous permission in writing of the
prescribed authority and upon such conditions as that authority may think fit;

(2) “agricultural income” shall have the same meaning as in the Income-tax
Act;
(3) “agricultural income-tax law” means any law for the time being in force relating to
the levy of tax on agricultural income;
(4) “allocable surplus” means-
(a) in relation to an employer, being a company 3[(other than a banking company)] which
has not made the arrangements prescribed under the Income-tax Act for the declaration and
payment within India of the dividends payable out of its profits in accordance with the
provisions of section 194 of that Act, sixty-seven per cent of the available surplus in an
accounting; year;
(b) in any other case, sixty percent of such available surplus;
1[***]

(5) “appropriate Government” means-

14
(i) in relation to an establishment in respect of which the appropriate Government under
the Industrial Disputes Act, 1947 (14 of 1947), is the Central Government, the Central
Government;
(ii) in relation to any other establishment, the Government of the State in which that other
establishment is situate;
(6) “available surplus” means the available surplus computed under section 5;
(7) “award” means an interim or a final determination of any industrial dispute or of any
question relating thereto by any Labour Court, Industrial Tribunal or National Tribunal
constituted under the Industrial Disputes Act, 1947 (14 of 1947), or by any other authority
constituted under any corresponding law relating to investigation and settlement of industrial
disputes in force in a State and includes an arbitration award made under section 10A of that
Act or under that law;
(8) “banking company” means a banking company as defined in section 5 of the Banking
Companies Act, 1949 (10 of 1949), and includes the State Bank of India, any subsidiary bank
as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959) 2[any
corresponding new bank specified in the First Schedule to the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), 3[any corresponding new
bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of
Under takings) Act, 1980 (40 of 1980),] any co-operative bank as defined in clause (bii) of
section 2 of the Reserve Bank of India Act, 1934 (2 of 1934),] and any other banking
institution which may be notified in this behalf by the Central Government;

Time of payment of wages

5- (1) The wages of every person employed upon or in –

(a) any railway, factory or 1*[industrial or other establishment] upon or in which less than
one thousand persons are employed, shall be paid before the expiry of the seventh day,
(b) any other railway, factory or 1*[industrial or other establishment], shall be paid before
the expiry of the tenth day, after the last day of the wage-period in respect of which the wages
are payable: 2*[Provided that in the case of persons employed on a dock, wharf or jetty or in
a mine, the balance of wages found due on completion of the final tonnage account of the
ship or wagons loaded or unloaded, as the case may be, shall be paid before the expiry of the
seventh day from the day of such completion.]

(2) Where the employment of any person is terminated by or on behalf of the employer, the
wages earned by him shall be paid before the expiry of the second working day from the day
on which his employment is terminated: 2*[Provided that where the employment of any
person in an establishment is terminated due to the closure of the establishment for any
reason other than a weekly or other recognised holiday, the wages earned by him shall be
paid before the expiry of the second day from the day on which his employment is so
terminated.]
(3) The State Government may, by general or special order, exempt, to such extent and
subject to such conditions as may be specified in the order, the person responsible for the
payment of wages to persons employed upon any railway (otherwise than in a factory) 3*[or
to persons employed as daily-rated workers in the Public Works Department of the Central
Government or the State Government] from the operation of this section in respect of the
wages of any such persons or class of such persons:

15
 3*[Provided that in the case of persons employed as daily-rated workers as aforesaid, no
such order shall be made except in consultation with the Central Government.]
(4) 4*[Save as otherwise provided in sub-section (2), all payments] of wages shall be made
on a working day.

Deductions for absence from duty

9- (1) Deductions may be made under clause (b) of sub-section (2) of section 7 only on
account of the absence of an employed person from the place or places where, by the terms of
his employment, he is required to work, such absence being for the whole or any part of the
period during which he is so required to work.

(2) The amount of such deduction shall in no case bear to the wages payable to the
employed person in respect of the wage-period for which the deduction is made a larger
proportion than the period for which he was absent bears to the total period, within such
wage-period, during which by the terms of his employment, he was required to work:
Provided that, subject to any rules made in this behalf by the State Government, if ten or
more employed persons acting in concert absent themselves without due notice (that is to say
without giving the notice which is required under the terms of their contracts of employment)
and without reasonable cause, such deduction from any such person may include such
amount not exceeding his wages for eight days as may be any such terms be due to the
employer in lieu of due notice. 1*[Explanation.--For the purposes of this section, an
employed person shall be deemed to be absent from the place where he is required to work if,
although present in such place, he refuses, in pursuance of a stay-in strike or for any other
cause which is not reasonable in the circumstances, to carry out his work.]

10- Deductions for damage or loss.

2*[(1) A deduction under clause (c) or clause (o) of sub-section (2) of section 7 shall not
exceed the amount of the damage or loss caused to the employer by the neglect or default of
the employed person.
(1A) A deduction shall not be made under clause (c) or clause (m) or clause (n) or clause (o)
of sub-section (2) of section 7 until the employed person has been given an opportunity of
showing cause against the deduction, or otherwise than in accordance with such procedure as
may be prescribed for the making of such deductions.]

6. Payment of gratituty act 1972?

Section: 2
Definitions.

In this Act, unless the context otherwise requires, -

(a) "appropriate Government"' means, -

(i) in relation to an establishment

(a) belonging to, or under the control of, the Central Government,

16
(b) having branches in more than one State,

(c) of a factory belonging to, or under the control of, the Central Government,

(d) of a major port, mine, oilfield or railway company, the Central Government,

(ii) in any other case, the State Government;

(b) "completed year of service" means continuous service for one year;

[2] [(c) "continuous service" means continuous service as defined in section 2A;]

(d) "controlling authority" means an authority appointed by the appropriate Government

under section 3 ;

Explanation : [5] [***]

(f) "employer" means, in relation to any establishment, factory, mine, oilfield, plantation,
port, railway company or shop -

(i) belonging to, or under the control of, the Central Government or a State Government, a
person or authority appointed by the appropriate Government for the supervision and control
of employees, or where no person or authority has been so appointed, the head of the
Ministry or the Department concerned,

(ii) belonging to, or under the control of, any local authority, the person appointed by such
authority for the supervision and control of employees or where no person has been so
appointed, the chief executive office of the local authority,

(iii) in any other case, the person, who, or the authority which, has the ultimate control over
the affairs of the establishment, factory, mine, oilfield, plantation, port, railway company or
shop, and where the said affairs are entrusted to any other person, whether called a manager,
managing director or by any other name, such person;

(g) "factory" has the meaning-assigned to it in clause (m) of section 2 of the Factories Act,
1948 (63 of 1948);

(h) "family", in relation to an employee, shall be deemed to consist of -

(i) in the case of a male employee, himself, his wife, his children, whether married or
unmarried, his dependent parents [6] [and the dependent parents of his wife and the widow]
and children of his predeceased son, if any,

(ii) in the case of a female employee, herself, her husband, her children, whether married or
unmarried, her dependent parents and the dependent parents of her husband and the widow
and children of her predeceased son, if any:

Explanation : Where the personal law of an employee permits the adoption by him of a child,
any child lawfully adopted by him shall be deemed to be included in his family, and where a
child of an employee has been adopted by another person and such adoption is, under the

17
personal law of the person making such adoption, lawful, such child shall be deemed to be
excluded from the family of the employee;

(i) "major port" has the meaning assigned to it in clause (8) of section 3 of the Indian Ports
Act, 1908 (15 of 1908);

(j) "mine" has the meaning assigned to it in clause (J) of sub-section (1) of section 2 of the
Mines Act, 1952 (35 of 1952);

(k) "notification" means a notification published in the Official Gazette;

(l) "oilfield" has the meaning assigned to it in clause (e) of section 3 of the Oilfields
(Regulation and Development) Act, 1948 (53 of 1948);

(m) "plantation" has the meaning assigned to it in clause (f) of section 2 of the Plantations
Labour Act, 1951 (69 of 1951) ;

(n) "port" has the meaning assigned to it in clause (4) of section 3 of the Indian Ports Act,
1908 (15 of 1908);

(o) "prescribed" means prescribed by rules made under this Act;

(p) "railway company" has the meaning assigned to it in clause (5) of section 3 of the Indian
Railways Act,

1890 (9 of 1890);

(q) "retirement" means termination of the service of an employee otherwise than on

superannuation;

(s) "wages" means all emoluments which are earned by an employee while on duty or on
leave in accordance with the terms and conditions of his employment and which arc
paid or arc payable to him in cash and includes dearness allowance but does not
include any bonus, commission, house rent allowance, overtime wages and any other
allowance.

7. Define Terms as used in payment of gratuity act 1972?

Continuous service.

For the purposes of this Act, -

(1) an employee shall be said to be in continuous service for a period if he has, for that
period, been in uninterrupted service, including service which may be interrupted on account
of sickness, accident, leave, absence from duty without leave (not being absence in respect of
which an order [***] treating the absence as break in service has been passed in accordance
with the standing order, rules or regulations governing the employees of the establishment),
lay off, strike or a lock-out or cessation of work not due to any fault of the employee, whether
such uninterrupted or interrupted service was rendered before or after the commencement of
this Act.

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(2) where an employee (not being an employee employed in a seasonal establishment) is not
in continuous service within the meaning of clause (1), for any period of one year or six
months, he shall be deemed to be in continuous service under the employer -

(a) for the said period of one year, if the employee during the period of twelve calendar
months preceding the date with reference to which calculation is to be made, has actually
worked under the employer for not less than -

(i) one hundred and ninety days, in the case of an employee employed below the ground in a
mine or in an establishment which works for less than six days in a week; and

(ii) two hundred and forty days, in any other case;

(b) for the said period of six months, if the employee during the period of six calendar months
preceding the date with reference to which the calculation is to be made, has actually worked
under the employer for not less than -

(i) ninety-five days, in the case of an employee employed below the ground in a mine or in an
establishment which works for less than six days in a week; and

(ii) one hundred and twenty days, in any other case;

Explanation: For the purpose of clause (2), the number of days on which an employee has
actually worked under an employer shall include the days on which -

(i) he has been laid-off under an agreement or as permitted by standing orders made under the
Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial
Disputes Act, 1947 (14 of 1947), or under any other law applicab1c to the establishment;

(ii) he has been on leave with full wages, earned in the previous year;

(iii) he has been absent due to temporary disablement caused by accident arising out of and in
the course of his employment and

(iv) in the case of a female, she has been on maternity leave; so, however, that the total period
of such maternity leave does not exceed twelve weeks.

(3) where an employee employed in a seasonal establishment, is not in continuous service

within the meaning of clause (1), for any period of one year or six months, he shall be
deemed to be in continuous service under the employer for such period if he has actually
worked for not less than seventy-five per cent of the number of days on which the
establishment was in operation during such period.

8. General Provisions ?
Introduction
The Employee State Insurance Act, [ESIC] 1948, is a piece of social welfare legislation
enacted primarily with the object of providing certain benefits to employees in case of
sickness, maternity and employment injury and also to make provision for certain others
matters incidental thereto. The Act in fact tries to attain the goal of socio-economic justice
enshrined in the Directive principles of state policy under part 4 of our constitution, in

19
particular articles 41, 42 and 43 which enjoin the state to make effective provision for
securing, the right to work, to education and public assistance in cases of unemployment, old
age, sickness and disablement. The act strives to materialise these avowed objects through
only to a limited extent. This act becomes a wider spectrum then factory act. In the sense that
while the factory act concerns with the health, safety, welfare, leave etc of the workers
employed in the factory premises only. But the benefits of this act extend to employees
whether working inside the factory or establishment or else where or they are directly
employed by the principal employee or through an intermediate agency, if the employment is
incidental or in connection with the factory or establishment.

In this project I have tried to analyse two important questions i.e. what is ESIC all about?
And whether the ESIC in Delhi is catering to the needs of its employees. The ever expanding
industrial horizon and reciprocal uprising of labour consciousness necessitate the employee
and employer to be conversant with the current labor legislation that govern their
relationship, rights and obligation. The Beginning The Employee State Insurance act was
promulgated by the Parliament of India in the year 1948.To begin with the ESIC scheme was
initially launched on 2 February 1952 at just two industrial centers in the country namely
kanpur and Delhi with a total coverage of about 1.20 lac workers. There after the scheme was
implemented in a phased manner across the country with the active involvement of the state
government.1

Applicability
The ESIC Act applies to non-seasonal, power using factories or manufacturing units
employing ten or more persons and non-power using establishments employing twenty or
more persons. Under the enabling provisions of the act, a factory or establishment, located in
a geographical area, notified for implementation of the scheme, falls in the purview of the act.
Employees of the aforesaid categories of factories or establishments, but drawing wages only
up to Rs 6,500 a month are entitled to health insurance cover under the ESI act. The wage
ceiling for purpose of coverage is revised from time to time; to keep pace with rising cost of
living and subsequent wage hikes. The present ceiling of Rs 6,500 has been effective from 1
January 1997 the appropriate government state or central is empowered to extend the
provision of the ESI Act to various classes of establishment, industrial, commercial,
agricultural or otherwise in nature. Under these enabling provisions most of the state
governments have extended the ESI act to certain specific classes of establishments. Like
shops, Wage ceiling for coverage The monthly wage limit for coverage under the ESI act
would be such as prescribed by the central government in the ESI [central] rules, 1950. The
existing wage ceiling for coverage [excluding remuneration for over-time work] is Rs.6500
per month [rule 50 of ESI central rules, 1950]. An employee who is covered at the beginning
of a contribution period shall continue to remain covered till the end of that contribution
period notwithstanding the fact that his wages may exceed the prescribed wage ceiling at any
time after the commencement of that contribution period. Wage ceiling for purpose of
coverage is revised from time to time by the central government on the specific
recommendation of the corporation, at present the corporation has recommended for the
increase of the wage limit to Rs 10,000 and its implementation is awaited.

Bar against recovery of compensation or damages under any other law An insured person or
his dependants shall not be entitled to receive or recover, whether from the employer or any
other person, any compensation or damages under the Workmen’s Compensation act or
Provident Fund act or any other law for the time being in force, in respect of an employment

20
injury sustained by the insured person as an employee under this act.3 If there is any change
in the provident fund act, it doesn’t affect the ESIC Act. The difference between employee
and insured person is that employee is the person who makes the contribution to the scheme
and get benefits and IP’s may or may not be the contributors to the scheme but are entitled to
the benefits by virtue of earlier contribution or insured employment.
Coverage With the implementation of ESI scheme, at just two industrial centres in 1952,
namely kanpur and Delhi, there was no looking back since then in terms of its geographic
reach and demographic coverage. Keeping pace with the process of industrialization, the
scheme today stands implemented at over 679 centres in 25 states and union territories. The
Act now applies to 230 thousand factories and establishments across the country, benefiting
about 8.30 million family units of workers in the wage brackets. As of now, the total
beneficiary population stands at about 32 million.4 Administration
The comprehensive and well-designed social security programme is administered by an apex
corporate body called the Employee State Insurance Corporation. It comprises members
representing vital interest groups that include, employee, employers, the central and state
government, besides, representatives of parliament and medical profession. The corporation
is headed by the union minister of labour, as its chairman, where as, the director general,
appointed by the central government functions as its chief executive officer. A standing
committee constituted from amongst the members of the corporation, acts as an executive
body. The medical benefit council, constituted by the central government, is yet another
statuary body that advises the corporation on matters related to effective delivery services to
the beneficiary population. The corporation with its central head quarters at New Delhi,
operates through a network of 26 regional and sub- regional offices located in various state.
The respective state governments take care of the administration of medical benefit. Except in
case of Delhi and Noida, greater Noida areas of Uttar pradesh, where, the corporation
administers medical facilities directly.5.
9. Explain the factories act?

43. FACILITIES FOR STORING AND DRYING CLOTHING. -

The State Government may, in respect of any factory or class or description of factories,
make rules requiring the provision therein of suitable places for keeping clothing not worn
during working hours and for the drying of wet clothing.

44. FACILITIES FOR SITTING. -

(1) In every factory suitable arrangements for sitting shall be provided and maintained for all
workers obliged to work in a standing position, in order that they may take advantage of any
opportunities for rest which may occur in the course of their work.

(2) If, in the opinion of the Chief Inspector, the workers in any factory engaged in a
particular manufacturing process or working in a particular room are able to do their work
efficiently in a sitting position, he may, by order in writing, require the occupier of the
factory to provide before a specified date such seating arrangements as may be practicable for
all workers so engaged or working.

(3) The State Government may, by notification in the Official Gazette, declare that the
provisions of sub-section (1) shall not apply to any specified factory or class or description of
factories or to any specified manufacturing process.

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45. FIRST AID APPLIANCES. -

(1) There shall in every factory be provided and maintained so as to be readily accessible
during all working hours first-aid boxes or cupboards equipped with the prescribed contents,
and the number of such boxes or cupboards to be provided and maintained shall not be less
than one for every one hundred and fifty workers ordinarily employed at any one time in the
factory.

(2) Nothing except the prescribed contents shall be kept in a first-aid box or cupboard.

(3) Each first-aid box or cupboard shall be kept in the charge of a separate responsible
person who holds a certificate in first-aid treatment recognized by State Government and who
shall always be readily available during the working hours of the factory.

(4) In every factory wherein more than five hundred workers are ordinarily employed there
shall be provided and maintained an ambulance room of the prescribed size, containing the
prescribed equipment and in the charge of such medical and nursing staff as may be
prescribed and those facilities shall always be made readily available during the working
hours of the factory.

10 Minimum wages act?

(1) When a woman absents herself from work in accordance with the provisions of this Act, it
shall be unlawful for her employer to discharge or dismiss her during or on account of such
absence or to give notice of discharge or dismissal on such a day that the notice will expire
during such absence, or to vary to her disadvantage any of the conditions of her service.
(2) (a) , The discharge or dismissal of a woman at any time during her pregnancy, if the
woman but for such discharge or dismissal would have been entitled to maternity benefit or
medical bonus referred to in section 8, shall not have the effect of depriving her of the
maternity benefit or medical bonus:
Provided that where the dismissal is for any prescribed gross misconduct, the employer may,
by order in writing communicated to the woman, deprive her of the maternity benefit or
medical bonus or both.
(b) Any woman deprived of maternity benefit or medical bonus or both, may, within sixty
days from the date on which the order of such deprivation is communicated to her, appeal to
such authority as may be prescribed, and the decision of that authority on such appeal,
whether the woman should or should not be deprived of maternity benefit or medical bonus
or both, shall be final.
(c) Nothing contained in this sub-section shall affect the provisions contained in sub-section
(1).
No deduction from the normal and usual daily wages of a woman entitled to maternity benefit
under the provisions of this Act shall be made by reason only of -
(a) the nature of work assigned to her by virtue of the provisions contained in sub-section (3)
of section 4; or

(b) breaks for nursing the child allowed to her under the provisions of section 11.

22