PRESENTATION ON

ACTS
 Flow of Presentation
 Minimum Wages Act
 Workers Compensation Act
 ESIC
 Maternity Benefit Act
 Bonus Act
 PF Act
 Gratuity Act
 Superannuation Act
 What is Act?

 Need to study Act

 MINIMUM WAGES ACT,
1948
 Need of the Act
 Workers Organization were poorly developed
 Bargaining power was low

 Object of the Act

 Fixing minimum wages
 Prevent exploitation of unorganized labor
`
Features of the Act
• Minimum wages fixed by Government
• The Act is not exhaustive
• Revision of wages are done at intervals not exceeding five years
• Act is binding on Employers

 Wages are fixed for

• Minimum Time rate
• Minimum Piece rate
• Overtime rate Sec 3
 Fixing Of Working Hours

• Constitute a normal working day inclusive of one or more

specified intervals.
• Provide for a day of rest in every period of seven days with
remuneration.
• Provide for payment for work on a day of rest at a rate not less
than the overtime rate. Sec. 13
Composition of Committee

 Representation of employer and employee

 In equal number

 Independent persons
 Not exceeding 1/3rd of its total number

 Independent appointed as chairman

Sec 9
 Procedure to make Claims
 Application to the Authority appointed under the act

 Application can be made by employee, legal

practitioner or official of registered trade union

 Application to be made within six months

 Authority can award compensation up to 10 times

 PENALTIES FOR
OFFENCES
OFFENCE PUNISHMENT
For paying less than minimum Imprisonment upto 6 months or
rates of wages with fine upto Rs.500/-

For contravention of any Imprisonment upto 6 months or

provisions pertaining to fixing with fine upto Rs.500/-
hours for normal working day etc.

Sec 20
 WORKMENS
COMPENSATION ACT, 1923
 BACKGROUND OF THE ACT
 Old but important Act

 Introduced as kind of Social Security Scheme

 The Act compensates the workman for

employment injury

 In case of death of workman his dependants

gets compensation
 Applicability of the act
 Who is liable to pay ?
 Who is entitled to receive?
 Kind of injuries
1. Death
2. Permanent Total Disablement
3. Permanent Partial Disablement
4. Temporary Total Disablement
5. Temporary Partial Disablement
 Personal injury caused by accident arose out
of and in the course of employment
 Not necessary workman should be working
in “factory” – Schedule II
 Driver in Government Employment
 Apprentice is a workman
 Injury when gone to fetch water
 Died after drinking water
 Truck driver killed by miscreants to loot
consignment
 Circumstances in which employer is not liable to pay
compensation

 Injury does not result in total or partial disablement not

exceeding 3 days
 Injury is caused by drink or drugs
 Disobedience to towards safety measures
 Amount of compensation
 Injury resulted in Death
 Amount equal to 50% of monthly wages of deceased
workman × figure from 228.5 to 99.37 or amt of
80,000.
 If the monthly wages exceeds Rs.4000, it shall be
deemed to be 4000.
 Injury results in Permanent total disablement
 Amount equal to 60% of monthly wages of deceased
workman × figure from 228.5 to 99.37 or amt of
90,000.
 If the monthly wages exceeds Rs.4000, it shall be
deemed to be 4000.
 Injury results in Permanent Partial disablement

 Only person causing injury as per injury specified in Part-

II of Schedule I mentioned in Sec4(1)(b) is entitled to
receive a percentage as per Injury resulted in
Permanent total disablement.
Time for payment of compensation
 Must pay as soon as it falls due.
 In case of delay beyond one month – has
to pay simple interest rate of 12%p.a (sec 4-
A)
 Payment either in half-monthly or a
lumpsum
 Payment in case of death
 Not directly to his dependents
 Employer has to deposit the amt with
commissioner
The Employees’ State
Insurance Act, 1948
 BACKGROUND OF THE ACT
 1923, Workmens Compensation Act.

 A Social Security Mechanism for industrial workers.

 Confined to Compensation for “injury caused by

accident”.

 Need for a Social Insurance Scheme for industrial

workers with added benefits.
 OBJECT OF THE ACT

“To secure sickness, maternity, disablement,

and medical benefits to employees of
factories and establishments and
dependent's benefits to the dependants
of such employees”
 APPLICABILITY OF THE ACT
 The Act applies to –
 All factories other than Seasonal factories.

Factory, as defined under the act,

 Any premises employing 10 or more persons and in which

manufacturing process is carried on with the aid of power.
OR
 Any premises whereon 20 or more persons are employed

wherein the manufacturing process is not aided with power.

 The existing wage limit for coverage under this act is Rs 10,000
pm.
 EMPLOYERS & EMPLOYEES
CONTRIBUTIONS
The following contributions are made to the
ESI Corporation.
 Employers Contribution - 4.75% of wages

 Employees Contribution - 1.75% of wages

 CONTRIBUTION PERIOD AND
BENEFIT PERIOD

Contribution period
1st April to 30th Sept.
1st Oct. to 31st March

Corresponding Cash Benefit period

1st January of the following year to 30th
June.
1st July to 31st December of the year
following
 BENEFITS
1. Sickness Benefit

2. Maternity Benefit

3. Disablement Benefit

4. Dependents’ Benefit

5. Medical Benefit

6. Funeral Expenses
 Sickness Benefit
 Standard benefit rate.

 Insured person (IP) can avail the benefit if he has paid

contribution for more than 78 days in the contribution
period.

 Not available for first 2 days of sickness.

 Max period – 91 days in a year

 Disablement Benefit
 An IP suffering from temporary disablement as a
result of employment injury, can avail of this benefit.

 An IP suffering from permanent disablement is

entitled to receive disablement benefits for the whole
of his life.

 No Condition of payment of any contribution for

receiving disablement benefits.
 Dependents’ Benefits.
 In case of death of an IP due to employment
injury, his widow & children or other relatives
who are wholly or partly dependent on the
deceased insured persons earnings are entitled
to receive the dependents’ benefits.
 Medical Benefit
 Entitles the IP to receive medical treatment
when sick.
 When the benefit is extended to the family of
the insured person, it covers –
i. Husband or wife of the insured employee
ii. Minor legitimate or Adopted children of the
IP dependent upon him.
iii. The dependent parents of the IP
 Funeral Expenses
 This is a payment given to the person who
meets the actual funeral expenditure of the IP.

 Maximum permissible limit – Rs 2500.

 Maternity Benefit
 An insured person can avail of periodical payments
called “Maternity benefits” in case of
i. Confinement, Miscarriage or medical termination
of pregnancy .
Or
ii. Sickness arising out of pregnancy, confinement,
premature birth of baby or miscarriage or medical
termination of pregnancy.
 IP can avail of benefits if contribution is paid for
not less than 70 days in immediately preceding
contribution periods.
 The benefit payable is generally twice the standard
benefit rate or roughly equal to average daily wage.
 Trivia
 Can an insured person avail of two or more
benefits at the same time?
 Is it permissible for a person to draw a benefit
of the same kind under ESIC and also under
any other act?
 Is a Petrol Pump with more than 10 employees
a factory as per the act?
 MATERNITY BENEFIT ACT,
1961
Objective of the Act
 To provide maternity benefit to women worker

 To regulate employment of women worker

before and after the child’s birth

Coverage of the Act
All women employees either employed directly
or through contractor

Conditions for eligibility of benefits

Should have worked for at least 80 days in the
12 months immediately proceeding the date of
her expected delivery Sec. 5.
Cash Benefits
• Leave with average pay for six weeks before the delivery.
• Leave with average pay for six weeks after the delivery.
• A medical bonus of Rs.25 if the employer does not provide free
medical care to the woman.
• An additional leave with pay up to one month if the woman shows
proof of illness due to the pregnancy, delivery, miscarriage, or
premature birth.
• In case of miscarriage, six weeks leave with average pay from the
date of miscarriage.
Non Cash Benefits/Privilege

• Light work for ten weeks before the date of her expected delivery, if she asks for it.

• Two nursing breaks in the course of her daily work until the child is 15 months old.

• No discharge or dismissal while she is on maternity leave.

• No change to her disadvantage in any of the conditions of her employment while

on maternity leave.

• Pregnant women discharged or dismissed may still claim maternity benefit from the

employer.

Exception : Women dismissed for gross misconduct lose their right under the Act for

Maternity Benefit
 Leave for Miscarriage
Leave with wages at the rate of maternity benefit, for a period
of six weeks immediately following the day of her miscarriage

 Leave for Tubectomy Operation

Entitled to leave with wages at the rate of maternity benefit for
a period of two weeks immediately following the day of her
tubectomy operation.
Failure to Display Extract of Act

 Imprisonment from three months to one year

 Fine of maximum of Rs 5,000
The Payment of Bonus
Act, 1965
 BACKGROUND OF THE ACT
 Statutory Right to share in the profits
 OBJECT OF THE ACT

 To maintain peace & Harmony between

Labour & Capital

 To share the prosperity of the

establishment reflected by the profits
earned by contributions.
 APPLICABILITY OF THE ACT
 To every factory & other establishment
employing 20 or more persons
 Who are entitled to be paid bonus?
 Employee drawing salary or wage upto 3500
 Minimum working days are 30 in a year.
 Seasonal Worker can get bonus
 For Calculation only Basic salary & wage s+
DA is considered.
 MINIMUM & MAXIMUM BONUS

 Minimum Bonus Payable

 Bound to pay 8.33% of the salary or wage or

Rs.100 whichever is higher.

 Whether there is any allocable surplus or not.

 Maximum Bonus Payable

 When Allocable surplus exceeds the amount of

minimum bonus payable.

 20% of the salary or wage.
 Available & allocable surplus
 Available Surplus
 Bonus is linked with Profits
 Gross Profit in manner specified in sec 4.
 Deduction of sums referred in sec6
 The balance available is “Available Surplus”
 Allocable Surplus
 It is %age of available surplus calculated acc.
to sec 2(4)
 When Allocable surplus exceeds the mini.
Bonus payable then max. 20% of salary or
wage has to be paid as max. bonus.
 SET ON & SET OFF OF ALLOCABLE
SURPLUS
 SET OFF
 When in an year there is no available surplus,
or the allocable surplus falls short of the amt
of mini. bonus payable then such amt or
deficiency shall be carried forward for being
set off in succeeding year.
 SET ON
 When an allocable surplus exceeds the
amount of max. bonus payable, then such amt
may be carried forward for being set on in
succeeding year, to be utilised for purpose of
payment of bonus.
 TIME LIMIT FOR PAYMENT OF BONUS

 IF THERE IS NOT DISPUTE ABOUT PAYMENT

OF BONUS, THEN IT MUST BE PAID WITHIN
PERIOD OF 8 MONTHS FROM CLOSE OF
A/CING YEAR.

 IF THERE IS DISPUTE THEN IT MUST BE PAID

WITHIN ONE MONTH FROM DATE OF AWARD
IN RESPECT OF SUCH DISPUTE BECOMES
ENFORCEABLE.
 Employees’ Provident
Fund and Miscellaneous
Provisions Act, 1952
 About the Act
 Provide social security to industrial workers
 Provides retirement and old age benefits:
 PF, Superannuation pension, Invalidation pension, Family pension &
Deposit linked insurance
 Wider terminal Benefits in contingencies
 VRS, retrenchment, closure, retirement due to incapacity to work

Applicability of the Act

 Every factory employing 20 or more persons
 Applies to any industry, once enacted continues to operate
 Based on financial position, Central Gov. makes exemptions
 Not applicable to Gov. belonging or set up and Co-operative Societies:
for not less than 50 employees
The Employees’
Provident Funds
Scheme, 1952
 Contribution
By Employer and Employee:
 12% of the employee’s wages and
 10% of wages in case of
 Establishments less than 20 persons
 Sick industrial company
 Loss making companies amounting to entire net worth
 In Jute, Beedi, Coir & other spinning sector, Gum, Brick industry
 Contributions are deducted on Basic+DA+Retaining Allw.
 PF contribution limited for employees earning Rs. 6500+

 Provident Fund accumulations are invested in Government

Securities, 7-year national saving certificates or post office
time deposit schemes.
 Employees’ Family
Pension Scheme, 1995
 Employees' Pension Scheme

1995
Came into force from 16th November 1995

 Conceived as a Benefit defined Social Insurance Scheme

 Repealed and replaced the erstwhile Family Pension Scheme,

1971

 The new Pension Scheme derives its financial resource by

 partial diversion from the Provident Fund contribution,
 the rate being 8.33% in lieu of 2.33% against the old ceased scheme
 Central Gov. contributes @ 1.16%/Rs 500 towards pension

 Member’s Pension =
Pensionable salary x ( Pensionable service+2)/70
 Eligibility and Benefits
Eligibility
 Minimum 10 years of service
 Attainment of 58 years
Benefits
 Payment of monthly pension under
following contingencies
 Retirement
 Permanent total disablement
 Death during service
 Children pension
 Death after retirement/total
disablement
 Orphan pension
Employees’ Deposits-
Linked Insurance
Schemes,1976
Employees’ Deposit-L.I.S., 1976
 Came into force from 1st August, 1976
 Provides for life insurance benefits
 Applies to employees of all factories/establishments
 Employers contributions
 @ of 0.5% of the pay of the employees and
 @ 0.01% by way of administrative charges subject to a minimum of
Rs.2 per month of the total wages
 Benefits: Death while in service lumpsum to nominee
 Insurance Amt = Avg. Bal in the PF a/c during the preceding 12 months
 Average balance > Rs.35,000 the family will receive 25% of the
amount i.e. excess of Rs.35,000 , Subject to a ceiling of Rs.60,000
 The Payment of
Gratuity Act, 1972
 About the Act
 A deserving reward for a long meritorious service
 Entitlement to an employee after completion of 5 years
 In case of sudden demise, employees heirs get the gratuity
 Rate of Gratuity is 15 days salary for every year of service
 Came into force on 16th September, 1972
 Total amount cannot exceed 3 lakhs and 50 thousands

Object
 Providing uniform scheme to all industrial workers
 Eligibility for Gratuity
 The employer has to pay gratuity to his employees:
 When service is terminated on superannuation or retrenchment
 When employee retires or resigns from service or
 When the employee dies while in service or
 When service is terminated on disablement due to disease/accident

 Gratuity is payable on all emoluments earned, DA+Basic

 24.5.’94 all employees irrespective of wages are eligible

 The rate of gratuity is based on last drawn salary

 Monthly rated wages are divided by 26 working days

 Award, agreement or contract, if better than Act, high rate is applicable for payment of the gratuity
 Forfeiture of Gratuity
 The employee may wholly or partially forfeit the gratuity:
 Riotous or disorderly conduct or any other act of violence
 Any act which constitute an offence involving moral turpitude
 Service terminated, due to damage caused to employer property

Claim for Gratuity

 Employers obligation:
 Inform employee and Controlling Authority in writing
 Pay gratuity amount within 30 days
 Reply within 15 days of receipt of application
 Delay in payment attracts simple interest of 10% p.a.
 Employees obligation:
 Apply within 30 days from the day gratuity becomes payable
 Can apply to the Controlling Authority within 90 days for direction
 Can prefer Appellate Authority within 60 days from the receipt date
 Protection of Gratuity
 Gratuity is not attached to any court
 Inferior scheme, if present, will be superseded by the Act
Offences
 Any person making false statement to avoid payment
 Will be punished with imprisonment upto 6 months or
 Fine upto Rs. 10000 or both
 If employer contravenes or defaults:
 Will be punished with 9 years imprisonment or
 Fine upto Rs. 20000 or with both
Display of abstract of the Act
 Every employer
 must display an abstract of the act and rules there under
 In English or language understood by majority
 At a conspicuous place at or near the main entrance
 SUPERANNUATION SCHEME

 Superannuation is an investment which operates

primarily to provide benefits for retirement.
Superannuation savings are usually made through
trust funds. If these funds meet prescribed
government standards they are eligible for tax
concessions. More over these investments also incur
interests.

Many companies provide this facility to their

employees as retiral benefit.
THANK YOU