Labour law 2

UNIT 1

Q1 Constitutional Values And Labour Welfare

Origin of Concept of Labour Welfare in India

Labour welfare activities arose in colonial India in reply to the
need of cheap labours when; following the abolition of slavery
in 1833, British colonies started importing Indian labours.
British government passed legislations which led to the
development of the concept of labour welfare in colonial India.
The Apprentices Act of 1850 was passed with the objective of
helping poor and orphan children to learn various trades by
apprenticing them to craftsmen. The Fatal Accidents Act of
1853 aimed at providing compensation to the families of
workmen who lost their lives as a result of an ‘‘actionable
wrong.”
It was the Factories Act of 1881 which paved the way for
the foundation of series of labour laws with the objective of
bringing improvements in the working conditions of labours.
The International Labour Organization (ILO) in its founding
year, in 1919, recognised the importance of labour in the
economic and social reconstruction of the world and suggested
some changes in labour welfare schemes operating in India. The
then government of the day, subsequently, enacted the Factories
Act of 1922, which provided for the cap of 60 hours a week and
11 hours a day for both men and woman. The minimum age for
child worker was set at 12.

Definition of Labour Welfare

The concept of labour welfare is a broad concept. It connotes a
condition of well-being, happiness, satisfaction, conservation
and development of human resource.1

The Committee on Labour Welfare, 1969, noted that “labour

welfare includes such services, as facilities and amenities as
adequate canteen, rest and recreational facilities, sanitary and
medical facilities, arrangement for travel to and from work and
for the accommodation of the workers employed at a distance
from their homes and such other services amenities and facilities
as contribute to improve the condition under which workers are
employed.”2
 
Labour Rights and Indian Constitution
Indian constitution provides numerous safeguards for the
protection of labour rights. These safeguards are in the form of
fundamental rights and the Directive principle of State policy.
Articles 14,19,21,23 and 24 comprise of fundamental rights
promised under part III of the Constitution. Articles 38, 39, 39A,
41, 42, 43,43A and 47 form part of the Directive Principles of
State Policy under Part IV of the Constitution, but they are not
enforceable in a court of law.
Article 39, 39A, 41, 42, 43 and 43A collectively can be termed
“Magna Carta of working class in India.”

Let us have a brief overview of these Articles‐

Article 14 commands State to treat any person equally before
the law.
Article (19) (1) (c) grants citizens the right to form association
or unions.
Article 21 promises protection of life and personal liberty.
Article 23 prohibits forced labour.
Article 24 prohibits employment of children below the age of
fourteen years.
Article 39(a) provides that the State shall secure to its citizens
equal right to an adequate means of livelihood.
Article 39A provides that the State shall secure the equal
opportunities for access to justice to its citizens and ensure that
such opportunities are not denied by reason of economic or
other disabilities.

Article 41 provides that within the limits of its economic

capacity the State shall secure for the Right to work and
education.
Article 42 instructs State to make provisions for securing just
and humane conditions of work and for maternity relief.
Article 43 orders the State to secure a living wage, decent
condition of work and social and cultural opportunities to all
workers through legislation or economic organisation.
Article 43A provides for the participation of workers in
Management of Industries through legislation.
 
Principle of equal pay for equal work

The principle of equal pay for equal work is enshrined in Article

39(d) of the Constitution. For the first time, this principle was
considered in Kishori Mohanlal Bakshi v. Union of India3 in
1962. Supreme Court then ruled that it was not capable of being
enforced in a court of law. The Apex court changed its mind in
1982 when in Randhir Singh v. Union of India4, through a 3
judge bench, it held that:
The principle of ‘equal pay for equal work’, which meant
equal pay for everyone irrespective of sex, was deducible from
preamble and Articles 14,16 and 39(d) of the Constitution. The
principle of equal pay for equal work w as held to be applicable
to cases of unequal scales of pay, based on classification or
irrational classification, though both sets of employees(engaged
on temporary and regular basis, respectively) performed
identical duties and responsibilities.

In DS Nakara v. Union of India5 (1983) where the subject

matter was related to pension, not a wage, speaking through the
constitutional bench of five judges, it observed that:
Article 38(1) enjoins the State to strive to promote the
welfare of the people by securing and protecting as effective as
it may a social order in which justice- social, economic and
political shall inform all institutions of the national life. In
particular, the State shall strive to minimise the inequalities in
income and endeavour to eliminate inequalities in status,
facilities and opportunities.Art.39 (d) enjoins a duty to see that
there is equal pay for equal work for both men and women and
this directive should be understood and interpreted in the light of
the judgement of this court in Randhir Singh v.Union of India
(1982).
The jurisprudence developed through these two case laws
was recently applied by the Apex Court in the case of State of
Punjab v.Jagjit Singh6 (2016) where it held that temporarily
engaged employees(daily wage employees, ad‐hoc appointed on
casual basis , contractual employees and the like),are entitled to
minimum of the regular pay scale, along with dearness
allowance(as revised from time to time )on account of their
performing same duties, which are discharged by those engaged
on regular basis, against sanctioned posts.

Q2. Sexual Harassment of women at workplace (Prevention,

Prohibition And Redressal) Act, 2013

Introduction 
Traditionally women in India were conditioned to stay at
home, take care of the young while the men were considered the
breadwinners. With access to education, better facilities,
Increased literacy and the industrial revolution. Women all
around the world left the boundaries of their homes and started
working. Though women had been working always with their
families on farms, as house help, even as babysitters from time
immemorial. 
All these were considered secondary activities and were
seldom recognised. Women worked without any rights and thus
were frequently exploited.
The makers of the constitution recognised this problem and
provided the right to equality to all. Irrespective of gender,
caste, creed or social status. The Sexual Harassment of Women
at Workplace Act, 2013 is a welcome addition amongst the class
of such laws. It has received both widespread praise and flak in
recent times.

Judicial Activism 
In the context of sexual harassment, judicial activism reached its
pinnacle in Vishakha v. State of Rajasthan (Vishakha). The
judgement was unprecedented for several reasons: the Supreme
Court acknowledged and relied to a great extent on international
treaties that had not been transformed into municipal law; the
Supreme Court provided the first authoritative definition of
‘sexual harassment’ in India; and confronted with a statutory
vacuum, it went creative and proposed the route of Judicial
Legislation. 

Gang rape of Bhanwari Devi 

The incident that lead to a public interest litigation being (PIL)

filed in respect of the Vishakha case was the gang rape of a
social worker in Rajasthan. Bhanwari Devi was a satin, a grass-
roots worker and activist, employed in the Women’s
Development Project (WPD) of the government of Rajasthan. In
1992, the Rajasthan government launched a campaign against
child marriages, in connection with which the WPD members
persuaded villagers to abandon the practice, which is still
rampant in Rajasthan. Bhanwari Devi made all possible efforts
to prevent the marriage of a one year old girl, but in vain. What
ensued for her was worse than a nightmare. There was a
complete breakdown of institutional machinery in Rajasthan.
The villagers harassed, threatened and socially boycotted
Bhanwari Devi. Then in September 1992, five villagers raped
her in the presence of her husband. She sought justice, but faced
innumerable hurdles from police authorities. The trial court even
went ahead and acquitted the five accused. This made five
NGOs under the name ‘Vishakha’ to file PIL in the Supreme
Court seeking detailed directions on how sexual harassment of
women at workplace could be prevented using judicial activism.
Reference to international treaties while making the Vishakha
Guidelines 
The Vishakha Guidelines served a great purpose as it
immediately filled the void of lack of legislations in respect of
Sexual Harassment of Women at Workplace. Till 2013 they
were the only set of guidelines applicable across India that were
specific to this issue. 
Due to them being passed by the Supreme Court and it
acting as a court of record it was de facto applicable in the lower
courts as well. But, to frame it was a task the three judge bench
consisting of J.S Verma (then CJI), Sujata Manohar and B.N
Kripal took cognisance of all the international treaties existing at
that point. The Constitution of India does not have a precise
stand on the value of international treaties that have been signed
or ratified by the government, but not implemented via
legislation. In ‘Vishakha, the court moved towards a more
purposeful understanding of fundamental rights in tune with
most of its recent interpretations by affirming that ‘any
International Convention not inconsistent with the fundamental
rights and in harmony with its spirit must be read into these
provisions [The fundamental Rights] to promote the
constitutional guarantee’.
Since there was no law relating to Sexual harassment at
workplace, the court stated that it was free to rely on the
Convention of Elimination of All Forms of Discrimination
against Women (CEDAW– signed by India in 1980) in
interpreting article-14,19 and 21 of the constitution. To justify
the sources the court referred to several sources including the
Beijing Statement of Principles of the Independence of
Judiciary. A decision of the High Court of Australia and its own
earlier decisions. Vishakha was also possibly the first instance in
India where International Covenants had been applied to
municipal and district level courts directly. Since Vishakha, The
Supreme Court has started heavily relying on international
Multilateral treaties, particularly those forming part of the
Universal Declaration OF Human Rights (1948) and others
forming part of International Bill of Rights due to legislative
lethargy in spheres of public importance. Often filling
legislative voids by exercise of Art 141. 

The Guidelines 
The Supreme Court issued a series of ‘guidelines’ (based on
CEDAW) to protect women from sexual harassment at the
workplace. These guidelines were to strictly observed in all
workplaces (whether in the private or private sector) and would
be binding and enforceable in law until suitable laws were
made. 
The Supreme Court set out the following significant guidelines:
1. The employer and / or other responsible people in a
workplace are duty-bound to prevent or deter sexual harassment
and set up processes to resolve, settle or prosecute in such cases.
2. For the first time in India “sexual harassment was defined
authoritatively”. The Supreme Court stated that it includes such
unwelcome behaviour (whether directly or by implication) such
as:physical contact and advances, a demand or request for
sexual favours, sexually coloured remarks, showing
pornography, and any other physical, verbal or non- verbal
conduct of sexual nature. 
3. All employers or persons in charge of workplaces must strive
to prevent sexual harassment and if any act amount to a specific
offence under the Indian Penal Code 1860 or any other law, they
must take appropriate action to punish the guilty.
4. Even if the act is not considered a legal offence or a breach of
service rules, the employer should create appropriate
mechanisms so that the complaint is addressed and redressed in
a time bound manner.
5. This complaint mechanism must, if necessary, provide a
complaints committee, a special counsellor or other support
service, such as assured confidentiality. The complaints
committee should be headed by a woman, at least half of the
members should be women. Also, to pre-empt any undue
influence from senior levels, the complaints committee must
involve a third party (such as a NGO) familiar with the
challenges of Sexual Harassment.
6. The employer must sensitise female employees to their rights
and prominently notify the court’s guidelines.
7. Even if a third party is responsible for sexual harassment, the
employer must take all steps necessary to support the victim.
8. The Central and State Governments should adopt suitable
measures to ensure private sector employees implement these
guidelines. 

Landmark Judgement
The Delhi High Court took cognisance of the false case of
Sexual Harassment filed by women in one of its landmark
judgements Anita Suresh v. Union of India in which Justice
Midha granted exemplary damages to the respondent in the lieu
of false Sexual harassment being filed against them. The court
ordered the appellant Ms. Anita Suresh to pay 50,000 rupees to
the respondents and the bar association of Delhi. 
This helped point out that being falsely implicated of such
heinous crimes has a huge impact on the life of the accused as
he may be innocent, but people start to consider him guilty
beyond doubt. 
Changes in the Sexual Harassment of Women at Workplace
(Prevention Prohibition and Redressal) Act, 2013
The Act recognises the possibility of false prosecution and says
that all the punishments which would have been applicable on
the perpetrator had the accusation be proved would be
conversely applicable on the plaintiff if she files a false case. 

Conclusion
We have certainly come a long way from having no mechanism
for redressal available to a woman to a very potent and robust
mechanism available for redressal. In depth view in the topic
makes us realise that any law cannot be unidimensional. And a
law as revolutionary as sexual Harassment of Women in
Workplace has had huge social implications. What I feel is that
this law is certainly a step in the right direction. What it requires
is public awareness, sensitivity and robust implementation. I
think when any incident happens people should not become
judgemental against the woman or the man. The due process
should be followed.
Q3. Salient features of inter state migration of workers act

INTRODUCTION
Migrant Workmen Act, 1979, is a key piece of legislation
that is enacted by Indian Parliament to regulate the condition of
service of inter-state labourers in Indian Labour Law, with
major focus on to protect workers whose services are
requisitioned outside their native states in India. Whenever an
employer faces shortage of skills among the locally available
workers, they would employ better skilled workers available
outside the state as per the provision created through this act.
This Act is applicable to, every establishment which employed
five or more interstate migrants or who have employed on any
day of the preceding twelve months, as well as to every
contractor who employs or who employed five or more
interstate migrant workmen on any day or preceding twelve
month. Thus, the law requires all the above mentioned
establishments hiring such migrants to be registered, and supra
contractors who recruits such workmen be licensed.

OBJECTIVE AND PURPOSE

The objective and purpose for carving out this legislation
can be traced from the history of the employment system of
interstate migrant labour which was an exploitative prevalent
almost all over India, though rampantly can be witnessed in
Orissa and some other states. The structure wherein the migrant
labour (called dadan in Orissa) were sent for work outside the
state in large construction projects through contractors or agents
(Sardars/ Khatedars) , lends itself to several abuses such as no
fixed working hour, wages not settled every month as being
promised etc.
In Twenty eighth State Labour Ministers conference held in
1976, recommends for setting up of compact committee to
scrutinize all issues and suggest measures for curtailment of
abuses that is prevalent in present interstate migrant
employment, as a result the committee recommended to enact a
separate central legislation for the said issue as the provisions of
Contract Labour Act, 1970 was unable to take care of this
grievance even after several amendment made to it. Thus, led to
formation of Inter State Migrant Workmen (Regulation of
Employment and Conditions of Service) Act, 1979. Thus, major
aim is to regulate the employment of interstate migrant
workmen by specially providing the conditions of service and
for matters connected therewith.

Moreover, the act makes provision for aiding with the onsite
service of interstate workers by contractors / establishment to
overcome only the temporary shortage of required skilled
workers in state. The purpose this enactment is not at all to
fortify interstate migration of workers against the interests of
local workers as the principal employers would have to incur
more cost in deploying interstate workers.

Apart from the inter-state migrant law, there are various other
laws which are applicable to the migrant workers[1]
1. Employees Compensation Act
2. Payment of wages Act
3. Industrial Disputes Act
4. Employees State Insurance Act
5. Employees Provident fund and Maternity Relief Act.

SALIENT FEATURE OF THE ACT

The salient of the act is as under:-

• The proposed legislation will apply to every establishment and

contractors that employed five or more inter- State migrant
workmen are employed or were employed on any day of the
preceding twelve months.
• Every establishment that is recruiting interstate migrant
workmen will be required to be registered with registering
officers appointed under either Central Government or State
Government as the case maybe. Likewise, every contractor who
employ interstate migrant workmen need to obtain a licence
from the specified authority both of the State i.e. home state
(from where belongs) and the host state (where to be employed).
• The contractor is required to furnish particulars regarding the
workmen in the form to be prescribed by rules to the specified
authority of both the state as well as to issue to every workman
employed by him, a pass book containing the details of the
employment.
• The interstate migrant workman will be entitled to a journey
allowance in addition to his wages along with displacement
allowance.
• Several guidelines has been laid down regarding the wages
payable to inter-state migrant workmen which need to paid from
the date of his recruitment.
• There are various amenities which need to be provided to the
workmen that includes provision of suitable residential
accommodation, adequate medical facilities, protective clothing
to suit varying climatic conditions and suitable work
environment / conditions owing to the fact that they have
migrated from another state.
• The provision for appointing an inspector by the appropriate
government to keep check on implementation of legislation in
full-fledged manner.
• The interstate migrant workmen can raise an industrial dispute
arising out of his employment either in the host State or in the
home state after the completion of the contract of employment
as per his convenience. He might also transfer the proceedings
in relation to an industrial dispute pending before an authority in
the host state to the corresponding authority in the Home State
on the ground that he has returned to the State after the
completion of his contract.
• Deterrent punishments have been laid down for the
contravention of the provisions of the legislation.

CRITICAL ANALYSIS
• Owing to the present miserable condition of migrant worker
during the lockdown put forth the failure of migrant workers
welfare mechanism as proper implementation of this law would
have meant a complete data available with state government as
there exist provision regarding registration of these worker, that
would have helped state government to better handle this
situation but it clearly seems almost no state have implemented
this legislation in letter and spirit.
• The major reason why this particular legislation is not so
effective is because of onerous requirement set out in the law
that would make their employment significantly more expensive
than intra-state workmen. As a result this act is yet another law
that provides rent seeking opportunities to enterprising
government inspector while failing to meet its main objective.
• Another consequence of weak implementation is the absence
of government preparedness for implementing such  well-
meaning though impractical law, in order to implement this law
alone, government inspector need not only have to maintain
records of inter-state workmen, but also verify whether all other
requirements regarding wages, allowances, accommodation and
health care are complied with, which is certainly not done.
• Thus , this legislation need to be rationalised enough and made
pragmatic enough so that employers and contractors have
incentives to come forward and register labourers without being
worried about punitive action or impractical social safety
requirements.

SCOPE OF IMPROVEMENT

• The legislation need to be simplified, which appeared to be

onerous for its actual implementation, cost effective for the
employer and contractors as well as incentive must be given to
the employer so that they themselves come forward and adhere
to the provision of this Act.
• These migrant workers should also be provided with the
benefits of Public Distributive System Card as other local
workers to avoid buying food grain and kerosene at higher price.
• Every state government should mandatorily operate an internet
portal indicating the registered principal employers, contractors,
establishments and interstate workmen details including
Aadhaar card data for general public information and
verification. The details of interstate workmen shall be uploaded
by the principal employers and contractors promptly. Non-
compliance by the principal employers or contractors is treated
as violation of the Act and liable for punishment.
• The state government authorities shall conduct mandatory
yearly audit of all employers / contractors in a state regarding
deployment of interstate workers and submit yearly compliance
status or implementation report to the state assembly for their
scrutiny.
• Further, social protection architecture should be developed that
allows for portability of services like PDS, health insurance,
education in order to ensure easy and equal access to migrants.
• There should be equal access to opportunities for resident
home and out of state residents. In policy areas, where migrants
face discrimination on account of their unique circumstances,
special policy initiatives should be framed in order to have
equality with state residents.
• Migrant workers have to be integrated into the larger state
level policies. India’s social and political rights should wean
away from the assumption that people are sedentary and
migration as a phenomenon be accepted so that evolving policy
framework will fully include migrant labour issues during their
formulation.

CONCLUSION
Interstate migration forms a key source of income for the low-
income household in India, and despite its growing trend of
nearly 4.5% annually between states, migrants still face barriers
in their survival in destination States. If one take a look of recent
plight of these migrants due to lockdown, certainly proves that
this act had proved to be inadequate to address the migrant
labourers social and economic marginalisation. What is evident
from this sad episode puts into question the very success of the
Interstate Migrant Workmen (Regulation of Employment and
Conditions of Service) Act, 1979 (ISMW) and the role of the
Chief Labour Commissioner (CLC) i.e. the one liable for its
enforcement. The Act failed to live up to its intended purposes.
Was the CLC’s office consulted when the lockdown was
planned, and did the CLC provide adequate data required in
planning for the lockdown? The exodus of migrant workers in
the millions from urban areas would have definitely been
managed in far better way had this act implemented properly.

Q4 what is bonded labour and what are provisions to prevent

bonded labour system in India

What is bonded labour?

Bonded labour has been defined as well as addressed as a
prohibited practice in several international conventions as well
as a many Indian legislations. It is a system of forced (or partly
forced) labour in which a debtor enters (or presumed to have
entered) into an agreement with the creditor. Owing to this
agreement, following are the end results:
1. Render services to the creditor (by himself or through a
family member) for a specified (or unspecified) period of time
with no wages (or nominal wages).
2. Forfeit the right to move freely.
3. Forfeit the right to appropriate or sell the product or property
at the market value from his (or his family members’) labour or
service.
This definition has been provided in the Bonded Labour System
(Abolition) Act 1976.

The said agreement of bonded labour results into an undeniable

loss of freedom on part of the debtor. However, the scope of
‘loss of freedom’, as used above has not been defined so what
would be the yardstick of this ‘loss of freedom’? The National
Human Rights Commission has elucidated on the scope in the
following manner:
• Loss of freedom of employment or alternative avenues of
employment to sustain a decent livelihood.
• Loss of freedom to earn the minimum wage as notified by the
Government of India.
• Loss of freedom to move from one part of the country to
another.
So speaking in simple words, the system of bonded labour refers
to a system wherein a creditor and a debtor enter into an
agreement of rendering services of the debtor as a mode of
repayment of the said amount. This agreement may lapse with
time or may continue for an uncertain period of time.
This is also referred as a debt bondage or for the lack of a
better word, debt slavery. It is important to understand that not
all the forms of bonded labour are forced but all the forms of
bonded labour involve a certain bondage. It is due to this
bondage, the very Constitution of India abolishes the practice of
bonded labour.
As per Article 23 of the Indian Constitution, traffic in human
beings and other forms of forced labour are prohibited. Based on
this constitutional provision, the Government of India passed
The Bonded Labour System (Abolition) Act, 1976. In this
context, the Supreme Court of India deliberated in the following
words – “We are, therefore, of the view that when a person
provides labour of service to another for remuneration which is
less than the minimum wage, the labour or service provided by
him clearly falls within the scope and ambit of the words
“forced labour” under Article 23.”
As we can observe, the Supreme Court has well interpreted this
constitutional provision and expanded the scope of Article 23 in
this case.

Constitutional Safeguards
Now that we are aware of what exactly is a system of bonded
labour, let us delve further into the constitutional safeguards. In
the Constitution of India, there are a few safeguards which
address the system at hand.

1. Article 21 of the Indian Constitution – This is the most

important and foremost safeguard against any exploitation of
human lives and their liberty. It is part of the Basic Structure of
the Constitution and cannot be amended. It secures the right to
life and right to live with human dignity to every person in
India. So, any practice of bonded labour would be in
contravention of this Constitutional provision since bonded
labour deprives a person of numerous liberties.
2. Article 23 of the Indian Constitution – As discussed above,
the Constitution of India expressly provides for the abolition of
forced labour and prohibits this form of forced labour in the
territory of India. This not only prohibits bonded labour but also
covers the practice of Begar and other forms of human
trafficking in India.
3. Article 39 of the Constitution – This is covered in Part IV of
the Indian Constitution which deals with the Directive Principles
of State Policy is albeit not enforceable but are considered
irrefutable for the purpose of governance. This constitutional
provision directs the State to secure the right to an adequate
livelihood. It also directs the state to formulate its policies with
an object that no citizen is forced out of economic necessity to
enter into avocations which are not suited to them.
4. Article 42 of the Constitution – This is also a Directive
Principle of State Policy which states “The State shall make
provision for securing just and humane conditions of work…”
This means that the state must ensure that every person has a
working condition which are just and humane for them.
However, since it is part of Part IV, it cannot be enforced.
5. Article 43 of the Constitution – This directive directs the State
to secure i.a. – conditions for work ensuring a decent standard of
life.

What are the laws in India?

Apart from the above mentioned constitutional provisions and
safeguards, there are also a few legislations which deal with the
subject at hand. However, the major law governing the practice
of bonded labour is The Bonded Labour System (Abolition) Act
1976. In addition to this, there are a few more legislations in
consonance with this major law in India such as Contract
Labour (Regulation and Abolition) Act 1970, Minimum Wages
Act 1948 and the Inter-State Migrant Workmen (Regulation of
Employment and Conditions of Service) Act, 1979 and even the
Indian Penal Code 1860.
• The Indian Penal Code recognizes the offence of unlawful
compulsory labour and imposes a punishment of imprisonment
for a term extendable to 1 year or with a fine or both.
• The Minimum Wages Act 1948 sets the minimum wage for
certain enumerated occupations and requires that overtime be
paid to whoever working beyond the ‘normal working day.’
• Similarly, the Bonded Labour System (Abolition) Act 1976
prescribes imprisonment for a term upto 3 years as well as a fine
upto Rs. 2000/-. This punishment is for whoever compelling a
person to render their service under bonded labour and whoever
advancing the bonded debt. Every offence under the Act is
cognizable and bailable.

What is the consequence of abolition after 1976 under the Act of

1976?
1. All the bonded labourers are freed and discharged from all the
obligations to render their bonded labour.
2. All of the customs, traditions, contracts, agreements or any
instruments by virtue of which a person (or any member of the
family) is required to render bonded labour to someone will now
be deemed as void.
3. Every obligation of a bonded labourer to repay any bonded
debt shall be deemed to be extinguished.
4. All the decrees for recovery of bonded labour debt which was
not fully satisfied shall be deemed as fully satisfied after the
commencement of the Act.
5. Every property of a bonded labourer which was removed
from his possession or forcible taken from him, shall be restored
to him.
6. Every bonded labourer who has been detained in Civil Prison
shall be released.
7. Freed bonded labourers shall not be evicted from their
homestead.

Supreme Court Cases

From the above stated constitutional provisions, it would not be
incorrect to say that the State is vested with the responsibility of
securing every citizen with a decent standard of living and
ensuring that the prohibited practices like bonded labour are not
practised in India.
Despite these constitutional provisions, can we say that
bonded labour does not exist in India? There have been cases in
India even after the enactment of the Act which the Apex Court
has dealt very deftly.
In the case of Neerja Chaudhury v. State of Madhya
Pradesh, the Supreme Court ruled – “It is the plainest
requirement of Articles 21 and 23 of the Constitution that
bonded labourers must be identified and released and on release,
they must be suitably rehabilitated… Any failure of action on
the part of the State Government[s] in implementing the
provisions of [the Bonded Labour System (Abolition) Act]
would be the clearest violation of Article 21 and Article 23 of
the Constitution.”
As mentioned above, there are a few constitutional
provisions that safeguard the system of bonded labour from
being practised. In this case, the Apex Court did very well by
relating the issue of bonded labour system with the person’s
fundamental right enshrined in Article 21 of the Constitution
and gave a clear thrust to the State to implement Article 21 and
Article 23 of the Constitution.
Also, in the case of People’s Union for Democratic Rights
v. Union of India, the Supreme Court of India delivered the
judgement stating –  “Where a person provides labour or service
to another for remuneration which is less than minimum wage,
the labour or service provided by him clearly falls within the
scope and ambit of the word `forced labour’…”
As seen, the Court has tried to expand the scope of forced
labour and protect the rights of citizens time and again.

The Bonded Labour System (Abolition) Act, 1976  came

as a rescuing chevalier for the labourers who were coerced to
work on bonds. This Act applies to the whole of India and has
an overriding effect as the provisions of this Act will be
consistent notwithstanding any inconsistencies. Section 1,
Section 2 and Section 3 of this Act provides us with the above
stated introduction.

Abolition of Bonded Labour System

It was uninhibitedly made intelligible that after the
commencement of this Act there shall be a total veto on the
practice of bonded labour. Every individual who was
browbeaten to work on bonds will be unchained and set free.
This Act also guarantees to fortify the virtue and rights of
workers to not be forced again as bonded labourers. Section 4
and Section 5 of this act talks about the same.

Further, this Act makes it perspicuous and comprehensive that

any custom, tradition, agreement, etc. based on which a person
or dependant was made to work as bonded labourers, shall be
held nullified and lapsed.

Extinguishment of Liability to Repay Bonded Debt

Liability to repay the bonded debt to stand extinguished

(Section 6)
After the commencement of this Act, the liability of repayment
of the debt would remain suspended and extinguished, hereby,
the creditor can no longer force the worker to pay the debt. And
there shall be no suit in any Court regarding the recovery of the
same. 
Every attachment made before the commencement of this Act
for recovery of the bonded debt would stand vacated and in the
course of the same if any movable property is vested with the
Court or any authority shall be recovered and given back to the
workers. Similarly, the property of the bonded labour or
dependants coercively captured by the creditor shall be given
back and any bonded labour imprisoned shall be released.

Property to be liberated from lien, mortgage, etc. (Section 7)

Any property of the bonded labour which was confiscated by
landlords and was under any mortgage, lien or other
encumbrances shall be reinstated to the labourers and the debt
related to the same shall be discharged. If there is any failure in
returning the property then the labour has the right to procure
profits as may be prescribed by the Court of lowest pecuniary
jurisdiction.
This clause indeed appends more comfort to the labour laws of
our country and indemnify  the property of bonded labourers
from mortgage, lien etc.

Bonded labourers not to be shown the door (Section 8)

A person who was unchained and set free under this Act from
any bonds, shall not be shown the door from residential
complexes or premises that he was residing before the
commission of this Act, by the creditor. If there is any such act
of expulsion noticed, then the executive magistrate in charge of
the subdivision under the jurisdiction of which the residential
complex or premise falls shall pass an appropriate decree to
restore the dwelling to the labourers. This facilitated the bonded
labourers to regain their homes and stay rooted.

Creditor not to accept payment against the extinguished debt

(Section 9)
The creditor by virtue of law is precluded from accepting
payment against any bonded debt which has been withdrawn
through this act. If such an act was committed then the creditor
shall be punished with imprisonment of three years and fine.
In addition to this, the creditor shall have to submit the payment
collected and this would subsequently be paid back to the
bonded labour.

Conclusion
◦ The Bonded Labour System (Abolition) Act of 1976 was a
great milestone in abolishing the age-old system of bonded
labour which was fast catching the society like a forest fire. The
provisions of this Act uphold the dignity and solemnity of
bonded labourers and also restore their property. This Act had
provided them with new wings to fly high with the wind of
rights and a platform to address their grievances. Now with this
Act, the bonded labourers are free and unchained and are all set
to face this accelerating world with its fullest might.
◦
Q5 Fundamental rights and directive principles of the state
policy are the backbone of industrial jurisprudence in India
explain

The Directive Principle of the State Policy is enshrined in

Part IV of the Constitution.  The aim of Part IV of the
Constitution is to direct the legislative and executive organs of
the government while framing the policies. The state shall take
all endeavors to build a nation with facilities of the old home,
employment, schools to educate, fair wages to all, good and
standard life and act. The directive Principle is not enforceable
in any court of law as they are enshrined as the ‘to-do list’ by
the Constitution makers.
Industrialization is the modern trend in almost all
developing nations. The proper conditions between employer
and employee are needed or can say it’s on priority for the
planned, progressive and purposeful development so the society.
No economy can reach its peak if its labor force is not
happy. Post- Independence has witnessed the evolution of new
India with many small scales and large scale industries and
factories. Along with the industrial revolution, the period also
witnessed the mass awakening and responsible being towards
their rights and duties. As a result of which during the 20th-
century a new branch of Industrial Jurisprudence has developed
in our country. Industrial Jurisprudence paved a way for many
labor and industrial legislation not only this many knocked the
doors of High Court and Supreme Court which lead to many
landmark judgments. The principles on which the labor or
industrial legislation laid down should be social justice, social
equality, international uniformity, and national economy.
Labour laws in Fundamental Rights
Part III of the Constitution of India is the benchmark for labor
laws in India. Also, Part III (Article 12 to 35) of the Constitution
covers the fundamental rights of its citizens which includes
Equality before the law, Religion, Sex, caste, place of birth, the
abolition of untouchability, freedom of speech and expression
and prohibition of employment of children in factories.

Article 14
Equality before the law which is interpreted in labor laws as
“Equal pay for Equal work”. It does not mean that article 14 is
absolute. There are a few exceptions in it regarding labor laws
such as physical ability, unskilled and skilled labors shall
receive payment according to their merit.

In the case of Randhir Singh vs Union of India, the Supreme

Court said that Even though the principle of Equal pay for Equal
work is not defined in the Constitution of India, it is a goal
which is to be achieved through Article 14,16 and 39 (c) of the
Constitution of India.

Article 19 (1) (C)

Constitution guarantees citizens to form a union or association.
The Trade Union Act, 1926 works through this Article of the
Constitution. It allows workers to form trade unions.
Trade Unions provide the power to raise voice against atrocities
done to the workers. Unionization brings power to the laborers.
Trade Unions discuss various labor-related problems with the
employers, they conduct strikes, etc.

Article 23
Constitution prohibits forced labor. When the Britishers ruled
over India, forced labor was prevalent all over India. They were
made to work against their will and weren’t paid according to
their work. The Government at that time were infamous for
forced labor and the landlords were also involved in forced
labor.
In current times, forced or bonded labor is an offense which is
punishable under the law. The Bonded Labor (Abolition) Act,
1976 prohibits all kinds of bonded labor and is declared illegal.

Article 24
Constitution prohibits all forms of child labor. Nobody can
employ a child under the age of 14 to work. Child labor was a
massive problem of our country in the earlier times and it still is
happening but at a lower scale. The penalization of article 24 is
severe.

Relevancy of Part IV (Article 36 – 51) on Labor Laws

Part IV of the Constitution of India, which is also known as the
“Directive Principles of State Policy” aims to work toward the
welfare of its citizens. DPSP cannot be enforced in the court of
law, but it provides a guideline to the legislature for making
labor laws in India.

Article 39 (a)
> The State shall, in particular, direct its policy towards
securing; That the citizens, men and women equally, have the
right to an adequate means of livelihood. It means that every
citizen of the country has the right to earn a livelihood without
getting discriminated on the basis of their sex.

Article 39(d)
Constitution says that The State shall, in particular, direct its
policy towards securing; that there is equal pay for equal work
for both men and women. Wages will not be determined on the
basis of sex rather it will be according to the amount of work
done by the worker.

Article 41
Constitution provides “ Right to Work” which means that every
citizen of the country has the right to work and the state with the
best of its abilities will secure the right to work and education.
Article 42
Provides for the upliftment of the working conditions for
workers. It talks about creating a suitable and Humane
workplace. This article also talks about maternity relief, i.e leave
provided to women when they are pregnant.

Article 43
Talks about the “living wage” for its citizens. Living wage not
only includes the “bare necessities of life” but also the social
and cultural upliftment of the person. It also includes education
and insurances for a person.

The State shall constantly try to create opportunities in the fields

of Agriculture and Industries with special reference to cottage
industries.

Constitutional Provisions Regarding labor Laws

The Labor laws of independent India derive their strength,
origin from the Constitution of India and International
Convention and recommendations. The Part III of the
Constitution which is the Fundamental Right guaranteed the
labor force their dignity of work, equal treatment, and savior
from exploitation under Article 16,19,23& 24 whereas, the
Directive Principle of State Policy under Article
39,41,42,43,43A which direct the government to frame the
policies to uplift the condition of workers.
India is also a signatory to many UN conventions and
human rights which to aims to protect the interest of the labor
class in the world.  These include the right to work of one’s
choice, right against discrimination, the prohibition of child
labor, just and humane conditions of work, social security,
protection of wages, redress of grievances, right to organize
trade unions, collective bargaining, and participation in
management
Article 39 of the Constitution
The state shall take the necessary steps in securing:-
• All the citizens, equally, have the right to an adequate means
of livelihood.
• The distribution of material resources should be in a way to
serve the best common good
• The operation of the economic system does not result in the
concentration of wealth.
• Equal pay for equal work
• No exploitation of workers includes men, women, and
children. Abuse in terms of strength, economic necessity and
their age.
• Protection of children from any exploitation and abuse,
children must be given opportunities and facilities to develop in
a healthy manner.
Dhirendra Chamoli v. State of U.P (AIR 1986 SC 172)
Facts:
The writ petition has been file by two employees of the Nehru
Yuvak Kendra, Dehradun name:-Dhirendra Chamoli and Mohan
Singh.
The complaint made in the writ was Nehru Yuvak Kendra
engages number of workers as casual workers on a daily wage
basis and the work done by the daily wage workers is the same
work as is performed by the Class IV employee. The daily wage
workers and Class IV workers do the same work but both are
given different salaries and allowances. 
Judgment:-
“the writ petitions and make the rule absolute and direct the
Central Government to accord to these persons who are
employed by the Nehru Yuvak Kendra’s and who are
concededly performing the same duties as Class IV employees,
the same salary and conditions of service as are being received
by Class IV employees”.

Article 41
The state shall take endeavor for securing the right to work, to
education and to public assistance in cases of unemployment,
old age, sickness and disablement and in other cases of
undeserved want.
Article 42
There is a separate legislation Maternity Benefit Act 1961, with
an object to do social justice to women workers. The legislation
includes different kinds of wages to the women workers and
special allowances, benefits to the female wage earners before
and after the childbirth.
The Act provides that the women will be paid maternity
benefit at the rate of her average daily wage in the three months
preceding her maternity leave. This legislation has changed the
scenario of women workers and has brought an end to the
exploitation of women and newborns to a greater extend.

Ram Bahadur Thakur vs Chief Inspector of Plantations

In this case, the woman worker who was employed in the
Pambanar Tea Estate was denied maternity benefit on the
ground that she had worked for only 157 days instead of 160
days. The court held the women worker claim and held that all
the wage less holiday have to be taken into consideration and
the maternity benefit act must be interpreted to advance the
purpose of the Act.

Article 43 and 43 A
Article 42 aims at providing to all workers, agricultural,
industrial or other a wage for securing a standard life and
enjoyment of cultural and social opportunities.
1. The state should also take measures, or make legislation, for
the participation of workers in the management of the industrial
establishment.
Article 43-A was included in part of the Constitution by the
42nd amendment of the constitution. It is also known as the
Magna Carta of the Industrial Jurisprudence.

Conclusion
Constitution of India is the base for all laws in our country. The
labor laws are also made according to the constitution and any
violation of constitutional laws result in the abolition of that
particular law. The Directive Principles of the State policy play
a major role in the making of new labor laws in India.

Q6 The Equal Remuneration Act, 1976

Introduction
In India, the Vedic period gave equal status to men and women,
but this ideology had a tectonic shift over a period. The men
have overshadowed the position of women in the society. At the
time of Independence, the inequality was apparent, and the
constitutional framers had to address this as it chose a
democratic republic as a form of governance. Systems have to
be put in place for the operation of the democratic forces to
ensure equality. 

Constitutional validity
At the national level, certain legislations were enacted by the
British India. But it’s the national leaders, freedom fighters and
intellectuals and the democratic movements sweeping the world
over brought about positive changes in the position of women
and in achieving equality.
• The Preamble of the Constitution provides for Justice and
Equality to all.
• Article 14 equality before law
• Article 15 guarantees a right against discrimination
• Article 15(3) recognizes ‘protective discrimination’ to bring
women at par with men in all possible respects.
• Article 16 provides right to equal opportunity regarding public
employment irrespective of the sex of the person.
• Article 39(a) states that the citizens, men, and women, equally,
have the right to an adequate means of livelihood.
• Article 39(d) “that there is equal pay for equal work for both
men and women”.
• Article 42 requires the state to make provision for securing
humane conditions of work and maternity relief.
The Doctrine of ‘equal pay for equal work’ is not a
fundamental right but a Constitutional right. Equal remuneration
for men and women is the right of an employee without any
qualification. The Act of Equal Remuneration, 1976 was
enacted to comply with the provisions of Directive Principle of
State Policy (DPDP) under Article 39. The Act, being a
beneficial legislation, ensures adequate payment or
remuneration to be made irrespective of the physical strength of
employee and removing the scope of social and economic
injustice merely on the ground of sex, thereby working to
establish a just society in the country.

The salient features of the Equal Remuneration Act, 1976

• The Act is a Central Legislation and applies to the whole of
India.
• The objective of the Act is to provide for protection against
discrimination of women workers on the ground of sex, about
the payment of equal remuneration in the matter of employment.
• Restricting the employer to create terms and conditions in a
contract of service or work of labor contrary to equal pay for
equal work doctrine and the provisions of Equal Remuneration
Act.
• The Act doesn’t make a distinction like employment or the
period of employment and applies to all workers even if
engaged only for a day or few days.
• No overriding effect is given to any agreement, settlement or
contract to the provisions of the Equal Remuneration Act.
• Any settlement or any agreement with the employee that is
detrimental to the employee isn’t allowed.
• The Ministry of Labour and The Central Advisory Committee
are responsible for enforcing this Act.
• Meaning of equality of work: The equality of work is not
based solely on the designation or the nature of work but also on
factors like qualifications, responsibilities, reliabilities,
experience, confidentiality, functional need and requirements
commensurate with the position in the hierarchy are equally
relevant.
• When the employer doesn’t comply with the provisions of the
act, he will be liable to pay fine, imprisonment, or both.
The duties of the employer under the Act

1. Section 4: The duty of the employer to pay equal

remuneration to both men and women workers for same work or
work of similar nature
 No employer shall pay to any worker, employed by him in an
establishment or employment, remuneration, cash or in kind at
rates less favorable than those at which he pays remuneration to
the workers of the opposite sex for performing the same work or
work of a similar nature.
• The rate of remuneration of any worker will not be reduced to
avoid complying with Section 4(1).
• In respect of any establishment, the rates of remuneration
payable before the commencement of the Act for men and
women for same or similar nature work is different only on the
ground of sex, then the highest of the rates will be payable after
the commencement of the Act.
 
2. Section 5: No discrimination to be made while recruiting men
and women workers
For any recruitment or any condition of service after recruitment
like promotions, training or transfer, for the same or similar
nature work, the employer will not make any discrimination
against women except where the employment of women in such
work is prohibited or restricted by or under any law for the time
being in force.
Proviso: the provisions of the Act will not affect the priority
given or reservation for SC, STs, ex-service men, retrenched
employees.

3. Section 8: Maintaining a Registrar

Rule 6 read with Section 8 provides that: The employer has to
maintain proper registers and relevant documents of all the
employees and workers as prescribed by law in Form D. The
Form needs to have:
• category of workers
• Description of work
• No, if men employed
• Number of women employed
• Rate of remuneration
• Components of remuneration.

4. Relevant case laws

The Indian Courts have played a major role in upholding the
doctrine and ensuring proper enforcement of the social
legislations for the benefit of the class of people the legislation
was enacted for.

1. A landmark case in the light of equal pay for equal work was
the Judgment given by the Hon’ble Supreme Court in the case
of Randhir Singh v. Union of India. Here, the Court adopted a
sociological ideology and deviated from strict interpretation to
liberal interpretation for the employees. The court, in this case,
relied on ‘‘socialist’ as envisage in the Preamble to the
Constitution in deciding the case, and it was held that the
principle of equal pay for equal work was deducible from article
14 and 16 of the Constitution of India, may be properly applied
to the cases of unequal scale of pay based on classification,
though those drawing a different scale of pay do identical work
under the same employer.” Here, the court observed that “equal
pay for equal work” is deducible from Articles 14 &16,
understood in the light of the Preamble and Art. 39(d).
 
Class or category of employee:
• M/s Mackinnon Mackenzie and Co. Ltd. v. Audrey D’Costa
and other, 1987
In the given case, a woman employee was discriminated while
payment of salary as the employer contended that the lady was
working as a Confidential Stenographer and is part of a different
class. The court rejected the plea of the employer that the
woman was in a different class. It held, ‘If only women are
working as Confidential Stenographers it is because the
management wants them there. Women are neither specially
qualified to be Confidential Stenographers nor disqualified on
account of sex to do the work assigned to the male
Stenographers. Even if there is a practice in the establishment to
appoint women as Confidential Stenographer such practice
cannot be relied on to deny them equal remuneration due to
them under the Act.’ Therefore, the Court applied the Equal
Remuneration Act to grant equal salary to female stenographers.

• Inder Singh & Others v. Vyas Muni Mishra & Others 1987The
court decided that when two groups of persons are in the same
or similar posts performing the same kind of work, either in the
same or in the different departments, equal pay will be paid to
them by removing unreasonable discrimination and treating the
two groups that are similarly situated, equally.
 
Q8 duties of district magistrate and vigilance committie under
bonded labour

Implementing Authorities
Authorities designated for implementation (Section 10)
There is a hierarchy followed in implementing this Act
from the State government to the officer in charge of
implementation. Placed at the top of the hierarchy is the State
government who confers the District Magistrate with the power
to safeguard the provision of this Act. Further, the District
Magistrate delegates the powers to an officer who will have the
implementing powers at the local level. 
Thereby, this acts as a three-tier system of implementation
which enhances the efficiency of this Act with better wings of
administration.
The onus to ensure credit by District Magistrate and other
(Section 11)
The District Magistrate appointed by the State government and
the officer who is delegated with powers by the magistrate has
the right to protect and cushion the rights of bonded labourers.
This is done so that these labourers don’ t get back to a situation
where they are forced to work on bonds by the creditors.
This includes promoting welfare schemes and measures in
favour of the labour class and developing their skills to face this
accelerating world.

The onus of District Magistrate and officers authorised

(Section 12)
It becomes the delegated duty of the District Magistrate and
officers authorised by the District Magistrate to check on
whether after the commencement of this Act was there any act
of bonded labour committed anywhere within their local
jurisdiction.
If there is a commission of any such forced or bonded labour,
then the respective officers shall take appropriate action to veto
such an Act and also protect the rights and dignity of the bonded
labourers. Also, they shall promote welfare measures which
would become torchbearers of the right, dignity, and voice of
the labourers.

Vigilance Committee
Functions of the Vigilance Committee
The State government is responsible for appointing a vigilance
committee at every district and sub-division as it may think fit
through notifying in the Official Gazette. This is done to have a
proper and well-maintained surveillance system. These
provisions are mentioned under Section 13 and Section 14.
The vigilance committee at the district level:
• Consists of a chairman who shall be a district magistrate or a
person nominated  by him. 
• There should be three members duly belonging to the
scheduled caste or scheduled tribe to mark representation from
these spheres. 
• Two social workers of the district, not more than three
members representing an official or non-official agency relating
to rural development and a person marking representation of a
financial institution of the district are the other members
constituting the committee.
At the sub-division level:
1. The committee constitutes a chairman who is a sub-divisional
magistrate or a person nominated by him. 
2. Three members duly belonging to the scheduled caste or
scheduled tribe, two social workers, not more than three
members representing an official or non-official agency relating
to rural development nominated by district magistrate, a person
marking representation of a financial institution of the sub-
division, an officer mentioned under section 10 are the other
members constituting the committee.

The district and sub-divisional magistrate shall provide the

vigilance committee with procedural and other assistance. The
entire procedure of the vigilance committee cannot be held
nullified merely because there is any default in their
constitution.
The main functions of the vigilance committee include advising
the District Magistrate and other officials concerning the various
provisions of this Act and their implementation, further they
provide for the rehabilitation of bonded labour both socially and
economically. They monitor functions of various banks in their
respective sectors, surveil and conduct surveys of cognizable
offences and defend suits instituted against any bonded
labourers.

Unit 2
Q1 define wages under payment of wages act and permissible
deductions or Payments & Deductions of Wages under Payment
of Wages Act, 1936

Table of Contents
• Introduction 
• Objects and Application of this Act
• Payment of Wages and Deductions from Wages
• Responsibility for payment of wages
• Fixation of wage period
• Time of payment of wages
• Wages to be paid in current coins or currency notes
• Deduction which may be made from wages 
• Deductions which are acceptable according to this act
• Fines
• Deductions for absence from duty
• Deductions for damages or loss 
• Deductions for services rendered 
• Deductions for recovery of advances
• Deductions for recovery of loans
• Deductions for payment to co-operative societies and
insurance schemes
• Maintenance of registers and records [Section 13A] 

Introduction 
With the development of ventures in India, issues identifying
with payment of wages to people employed in the industry took
a bad turn. The mechanical units were revolt making, payment
of wages to their workers at ordinary interims and wages were
not uniform. The mechanical workers had to raise their heads
against their misuse. In 1926, the Government of India kept in
touch with nearby governments to find out the position with
respect to the delays which happened in the payment of wages
to the people employed in Industry. 

Objects and Application of this Act

This Act manages the payment of wages to specific classes
of people employed in industry and its significance can’t be
under-evaluated. The Act ensures payment of wages on
schedule and with no reasonings aside from those approved
under the Act. The Act accommodates the obligation regarding
payment of wages, fixation of the pay period, time and method
of payment of wages, an obligation to look for the endorsement
or approval of the Government for the acts and consent for
which fines might be imposed by him and furthermore fixing of
the fines. 
The Act doesn’t have any significant bearing to people whose
payment or wage is Rs. 24,000/ – or more every month. The Act
additionally gives such that a worker can’t contract out of any
privilege or right is given or conferred to him under the Act. 

According to Section 1(4) of this act, It applies primarily to the

installment of wages to people utilized or employed in any
production line or to people employed (generally than in a
factory) upon any railway by a rail route organization or either
legitimately or through a sub-temporary worker which can also
be a subcontractor, by which an individual is satisfying an
agreement with a rail route organization and people utilized in a
modern or other foundation which are indicated in sub-clause
(a) to (g) of clause (ii) of section 2. 

Wages
According to section 2(s) of the Act, wages mean all
remunerations expressed in terms of money or are capable of
being so expressed.
These are either by way of salary allowances or otherwise.
Further, the remunerations are payable to the person employed
on the fulfillment of the terms of employment, express or
implied. These remunerations include:
Inclusions in Wages
• Any amount which is payable under any award or settlement
between the parties or an order of the court.
• Amounts that the employee is entitled to with respect to
working overtime or on holidays or any leave period.
• Any additional remuneration as per the terms of employment –
bonus, incentive, etc.
• The sum of money that the employee must receive due to the
termination of his employment. Further, this sum is either
payable under law or contract or instrument which specifies the
payment of such a sum. Also, this may or may not include
deductions. It also does not specify the time within which the
firm needs to make the payment.
• Any sum to which the employee is entitled under any scheme
that is framed under any law in force. However, it does not
include:
• Any bonus which does not form a part of the remuneration
payable under the terms of employment. Or, a bonus which is
not payable under any award or settlement between parties or an
order of a court.
• The value of any house accommodation or the supply of water,
light, medical attendance or any service which is excluded from
the computation of wages under an order of the Government.
• The employer’s contribution to any pension or provident fund
and also the interest accrued thereon.
• Any traveling allowance or traveling concessions
• Any sum that the employee receives to defray special expenses
due to the nature of his employment
• Gratuity was payable on the termination of employment in
cases other than those specified in sub-clause (d).

Wages defined under sec 2 (s) of the Act

(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 employments and which are paid or
are 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.

Solved Question for You

Q1. What is the definition of Wages under the Payment of
Wages Act, 1936?
Answer: According to the Act, the definition of Wages is as
follows:
‘Wages include all remunerations which are expressed in terms
of money or are capable of being so expressed. Further, these
are either by the way of salary allowances or otherwise. Also,
the employee receives these remunerations for fulfilling the
terms of employment, either express or implied.’

Payment of Wages and Deductions from Wages

Responsibility for payment of wages
 Responsibilities for payment of ages are mentioned in
Section 3 of the Payment of Wages Act, 1936. Every employer
is liable for the payment of all wages to every one of the
workers that he utilizes or employes for his work. In some other
cases, if the employer names an individual, or on the off chance
that there is an individual capable of the business or is
designated, at that point, such an individual is liable for the
payment of wages. 
Notwithstanding anything contained in sub-section (1), the
business is capable to make the payment of all wages which the
Act expects him to make. Actually, if the temporary worker or
the individual that the employer assigns to make the payment
neglects to do as such, at that point the duty lies with the
employer. Each employer will be answerable for the payment to
people utilized by him of all wages required to be paid. 
• On account of the industrial facility, the administrator of that
manufacturing plant will be obligated to pay the wages to
workers utilized by him. 
• On account of mechanical or different foundations, the duty of
supervision will be subject to the payment of wages to workers
utilized or employed by him. 
• On account of railroads, an individual named by the rail line
organization for determined territory will be at risk for the
payment of wages to the workers. 
• On account of a contractual worker, an individual assigned by
such a temporary worker who is straightforwardly under his
charge will be at risk for the payment of the wage to the
representatives. On the off chance that he neglects to pay wages
to representatives, individuals who employed the workers will
be at risk for the payment of wages.

Fixation of wage period

Each individual who is liable for the payment of wages under
section 3 will fix periods in regard to which such wages will be
payable. No wage period will surpass one month. That implies
pay can be paid on day by day, week by week, fortnightly (for at
regular intervals) and month to month as it were. Payment of
wage period for payment of wages to representatives by
manager ought not to surpass 30 days, for example, one month.
In any case, compensation can’t be paid quarterly, half-yearly or
once in a year.

Time of payment of wages

Each individual employed upon or in: 
Any railway, production line or modern or different foundations
upon or in which the complete number of employed people is
short of what one thousand, must get his wages before the
expiry of the seventh day from the most recent day of the pay
time frame for which the wages are payable. Some other
railway, industrial or mechanical or different foundations, must
get his wage before the expiry of the tenth day from the most
recent day of the compensation time frame for which the wages
are payable. 
•  If the employer ends the work of an individual, at that point he
should guarantee that the fired employee gets his wages before
the expiry of the second working day from the date of the end of
employment. 
• The Appropriate Government can exclude to such a degree and
furthermore subject to such conditions in the request the
individual liable for the payment of wages to utilize or employ
people. 
• The business or the individual answerable for paying wages
must guarantee that the wages are paid on a working day.

Wages to be paid in current coins or currency notes

The employer or the individual answerable for making the
payment of wages must pay in money coins or cash notes or in
both. Further, he can’t pay in kind. Additionally, the employer
can pay the wages by means of a cheque or a direct deposit to
the bank of the representative subsequent after taking a
composed approval from him. Provided that the appropriate
Government may, by notification in the Official Gazette, specify
the industrial or other establishments, the employer of which
shall pay to every worker employed in such industrial or other
establishments, the wages only by giving a cheque or by
crediting the payment in his bank account.

Deduction which may be made from wages 

At the time of payment of the salary to personnel, the business
enterprises should make deductions in step with this act
simplest. The employer should no longer make deductions as he
likes. Every quantity paid by the employee to his enterprise is
referred to as deductions.
The following are not referred to as the deduction:-
• Stoppage of the increment of worker
• Stoppage of the promotion of the worker
• Stoppage of the inducement lack of overall performance by
using employee
• The demotion of the worker
• Suspension of the worker
The above-stated movements taken via the company have to
have top and sufficient reason.

Deductions which are acceptable according to this act

Fines
Fine ought to be forced by the employer on worker with the
endorsement of the state government or recommended authority.
The employer ought to observe the guidelines referenced
underneath for and before forcing of fine on the worker.
• Notice leading body of fines on workers ought to be shown in
the work premises and it ought to contain exercises that ought
not to be made by the representative.
• Fine ought not to be forced on the worker until he gives the
clarification and causes for the demonstration or omission he
made.
• The aggregate sum of fine ought not to surpass 3% of his pay. 
• Fine ought not to be forced on any representative who is
younger than 15 years. 
• Fine ought to be forced for one time just on the pay of the
employee for the demonstration or exclusion he made. 
• Fines ought not to be recovered in the method for portions or
payments from the representative. 
• Fine ought to be recuperated or recovered within 60 days from
the date on which fine was forced. 
• Fine ought to be forced on the day act of exclusion made by
the worker or the employee. 
• All fines gathered from the worker ought to be credited to
basic reserve and use to help the employees.
• All fines and all acknowledge thereof will be recorded in a
register to be kept by the individual answerable for the payment
of wages under section 3 in such structure as might be
prescribed, and all such acknowledge will be applied uniquely to
such purposes useful to the people employed in the factory or
foundation as are affirmed by the recommended authority.
• No fines forced on any employee or worker should be
recuperated from him after the expiry of 90days from the day on
which the fines were forced.

Deductions for absence from duty

Deductions can be made by the employer for the
nonattendance from duty by the employee for one day or for any
period. The sum deducted for nonappearance from the duty
ought not to surpass a total which bears a similar relationship to
the pay payable in regard to the pay time frame as this time of
nonattendance does to such wage-period. (For example:-: if the
compensation of a worker is 6000/ – every month and he was
missing for obligation for one month. Finding from the
compensation for nonattendance of obligation ought not to
surpass 6000/-) 
Employees present for the work spot and will not work without
an appropriate explanation will be regarded to be missing from
duty. On the off chance that at least 10 people together missing
for the duty with no notification and without sensible reason, the
employer can make 8 days of wages as a deduction from their
pay.

Deductions for damages or loss 

The employer should offer a chance to the employee to clarify
the explanation and cause for the harm occurred and deductions
made by an employer from the worker compensation ought not
to surpass the worth or measure of harm made by the employee.
[Sec 10 (2)] All such findings and all acknowledge thereof will
be recorded in a register to be kept by the individual answerable
for the payment of wages under area 3 in such structure as might
be endorsed.

Deductions for services rendered 

House-convenience courtesy or administration gave by the
employer ought to be acknowledged or accepted by the worker,
than just the employer can make a deduction from the wage or
salary of the employee. Deduction ought not to surpass a sum
equal to the estimation of the house-settlement pleasantry or
administration provided.

Deductions for recovery of advances

If there should be an occurrence of the advance paid to the
workers by the employer before business started, such advance
ought to be recuperated or recovered by the employer from the
principal payment of the wages/pay to the employee. In any
case, the employer ought not to recuperate or recover the
advances given for the voyaging cost for the worker.

Deductions for recovery of loans

Conclusions for the recuperation of advances conceded for
house-building or different purposes will be dependent upon any
guidelines made by the State Government directing the degree
to which such advances might be allowed and the pace of
intrigue payable subsequently.

Deductions for payment to co-operative societies and

insurance schemes
Reasonings for payments to co-operative societies or deductions
for payments to insurance schemes kept up by the Indian Post
Office or with worker acknowledgement deductions made for
payment of any premium on his extra security strategy to the
Life Insurance Corporation will be dependent upon such
conditions as the State Government may force. 

Maintenance of registers and records [Section 13A] 

Each employer ought to keep up such registers and records
giving such points of interest of people employed by him, the
work performed by them, the wages paid to them, the
deductions made from their wages, the receipts given by them
and such different specifics and in such structure as might be
recommended. 
Each register and record required to be kept up and
safeguarded for a time of three years after the date of the last
entry made in that. It implies for each exchange made inside
employer and worker ought to have 3 years of record.

Conclusion

Q2 Elaboration on the Procedures Contained in The Minimum

Wages Act, 1948

Introduction
India is a labour-intensive country as we have a great amount of
human capital to invest in our industries and other areas of
work. Minimum wage is an indispensable part of any such
country because there is a huge chunk of population which is
dependant on daily wages for their bread and butter.
The concept of minimum wages in India was brought in by Mr
K. G. R. Chaudhary in 1920. After the International Labour
Conference, 1928, the machinery of wage-fixing was brought
into actual policy formulation. The bill regarding the same was
brought in 1946 and by the year 1948, the bill was enforced and
we had saviour rights for all the blue-collar workers. Blue-
Collar Workers refer to those people whose profession requires
them to perform manual labour.
The advent of this Act ensured that sweated labour was
protected from any type of exploitation and their rights are duly
recognized. 
Objective of the Act
There were several objectives that this Act needed to ensure:
1. Minimum wages need to be ensured to all blue-collar workers
in the organized sector.
2. Prohibition of exploitation of labour in the workplace.
3. The Act would empower the government to fix minimum
wages and revise those wages from time to time according to the
economic situation of the country.
4. To ensure the application of this Act to a maximum number
of organized sector employers.

Constitutional Validity of the Act

The Act is constitutionally valid and it can be ascertained from
the following pointers:
1. The Act does not violate Article 19 of the Constitution: The
constitutional validity of the Act was challenged in the cases of
U. Unichonoy vs State of Kerala and Gulmuhommad Tarasaheb
vs State of Bombay. The parties challenged that this law
restricted their Article 19(1)(g), as it puts a restriction on
freedom of trade. But, the court held in favour of the Act. It was
held that, in the absence of any such Act, the employers will pay
wages, arbitrarily.
2. The Act does not violate Article 14 of the Constitution: It was
contended that the Act violates the ‘equal protection of laws’
clause. However, the court ruled that the Act does not violate
Article 14 in the case of Bhikusa Yamasa Kshatriya vs
Sangammar Akola Bidi Kamgar Union.

Salient features of the Act

The act has some salient features, let us have a look at them.
1. The Act specifies for minimum wages for all government
sectors employees, both centre and state.
2. The minimum wages include House Rent Allowances.
Therefore, Minimum Wages is equals to (=) Minimum Payment
+  Special Allowances
3. There are several kinds of wage-fixing mechanisms:
4. Minimum Wage Rate; 
5. Minimum Piece Rate;
6. Guaranteed Time Rate;
7. Time Rate or Piece Rate Applicable to Overtime.
8. Classes of fixing minimum rates of wages :
(a) different scheduled employments;
(b) different classes of work in the same scheduled employment;
(c) adults, adolescents, children and apprentices; and
(d) different localities (zone-wise).

1. There is a standard criteria of fixing minimum wage rate.

Standard family consists of four members where it is considered
that three consumption units are required on one earner.
2. The food requirement must be ascertained by the regular
calorie intake by the family.
3. It is considered that the family requires clothing of 72 yards.
4. The rent is considered to correspond to the minimum area.
5. The expenditure is generally considered to be 20% of the
minimum wage earned.
6. The social expenditure is also considered to be 25% of the
total minimum wage.
7. The minimum wages must be revised within 5 years and the
revised special allowance must be announced every six months.
8. The regional labour commission shall be the authority for
claiming the remedy under Section 20 of the Act. In Gujarat,
Assistant Commissioner of labour shall be the authority.

Application of the Act

The application of the Act can be seen in the provisions. The
provisions clearly mention all the procedures and the enactment
of the laws laid down. Let us look at them one by one.

Fixation of Minimum Rates of Wages, Working Hours and

Determination of Wages and Claims, etc.
Section 3 of the Act mentions all the procedures. Section 3(2)
suggests that the appropriate government shall fix the following
keeping all the considerations in the formulation of policies:
1. Minimum piece rate;
2. Minimum time rate;
3. Overtime rate; This must be a substitution of the rate which
was pre-decided by the employer;
4. Guaranteed time rate system.
The government has to revise the minimum rates. In order to do
that, the following things need to be kept in mind:
1. The rates vary from every locality, Scheduled Employment,
apprentices, children, adolescents and adults.
2. The rates may be fixed, monthly, weekly, daily or hourly.
This time may be fixed for a longer wage period as well.

Fixation of minimum rates of wages

The policy formulation regarding minimum wage happens only
after due deliberation on the following:
1. The minimum wages must be in compliance with the cost of
living index of the employees.
2. The basic wage rate with or without the cost of living
allowance along with the authorised cash value of concessions
pertaining to the supply of essential basic commodities at
subsidized rates.
3. Comprehensive basic wage rate will include the cash value of
the concessions, cost of living and the basic rate.

Minimum rates of wages

The minimum rate of wages is clearly defined in the table given
below:

Procedure for fixing and revising minimum wages

Section 5 of the Act gives the procedure for fixing and revising
the minimum wages. The appropriate government shall appoint
committees and subcommittees that may be able to advise on the
fixation of minimum wages. The appropriate government is also
supposed to publish the minimum wage fixation in the
newspapers so as to inform the stakeholders regarding the
changes implemented. This publication has to be done at least
before two months of the implementation. The stakeholders may
also raise issues if any after the publication. The ascertainment
of the minimum wage is then published in the Official Gazette.
There may also be consultations regarding the revision of
wages, with the Advisory Board. One may wonder, what
constitutes an Advisory Board. Let us know what is it and its
constitution.
Advisory Board
Section 7 of the Act suggests the formation of the Advisory
Board. The government requires advise regarding the living cost
indices, the requirements etc. An advisory board helps with the
same requirements that were mandated under Section 5 of the
Act.
Central Advisory Board
The Act also provides for the formation of a Board of Boards,
for the management and regulation of all the Advisory Boards of
India. This board shall comprise of members elected by the
Central Government and the employees of the advisory boards.
The formation of this board is given in Section 8 of the Act.
Composition of committees

Section 9 of the Act consists of the composition of the

committees. It is mentioned that the committee shall comprise of
members, who are elected by the employees of the scheduled
employment. This committee will also contain the members
from the scheduled employees but that must not exceed one-
third of the total number of committee members.
Correction of errors
The appropriate government is provided with the liberty of
correcting arithmetic and clerical errors. The correction will be
published immediately in the official gazette. The notice will
also be provided to the advisory board. The notice will also be
up for suggestions.

Wages in kind
Minimum wages in this Act will be paid in cash only. However,
if there are any concessions that are provided to the stakeholders
by the government, shall be paid in the prescribed manner
according to this Act. Section 11 of the Act prescribes the
manner.

Payment of minimum rates of wages

The payment shall be made to the employees in order which is
prescribed by law under this Act. However, it is also mentioned
that nothing in this Act can affect the provisions laid down in
the Payment of Wages Act, 1936 (4 of 1936). Section 12 of the
Act fixes the payment of minimum wage.

Fixing hours of normal working days

Section 13 provides for the fixing of normal working hours in a
working day. The fixation of normal working hours includes:
1. The fixed number of working hours will include intervals
from time to time.
2. The fixed period must also include a day of rest in every
seven days.
3. The rest day must also be included in the pay, payment for
not less than the overtime rate.
There are certain exceptions related to those employees whose
work is of nature that is irregular. Such exceptions will be
provided only after the consent of the appropriate government.
 
Overtime
If any employee works for more than prescribed hours then that
person is entitled to excess payment for that period. However, it
is also mentioned that nothing in this Act must be prejudicial to
Section 59 of the Factories Act, 1948. Section 14 of the Act
provides for overtime.

Wages for two or more classes of work

When two or more classes of work are performed by a single
employee, the minimum wage will be altered according to the
time invested in each class of work and remuneration provided
in such work. Section 16 of the Act, this practice is mentioned.
Minimum time-rate wages of piece work
The minimum time rate must be given to those who are
employed on the piece-rate system. The system must not be a
minimum piece rate but only minimum time rate. The minimum
time rate is a system, where the wages are paid on the basis of
the time worked. Section 17 of the Act provides for this clause.
Maintenance of registers and records
The employers are supposed to maintain a record register in
order to ascertain that all the employees are being minimum
wages. This register also needs to be exhibited and must be
available for perusal at all times. The authorities are supposed to
check these registers. Section 18 of the Act provides for this
clause.

Conclusion
The Minimum wages Act, 1948 brought about a revolution in
the employees’ wage systems because the relief provided in this
Act provides for complete protection from exploitation of
manual labour at the workplace.

Q3. Concept of bonus and how it is calculated?

Employers pay bonus as an instrument to motivate their

employees to work to the best of their capabilities. The Payment
of Bonus Act, 1965 provides for the payment of a Statutory
Bonus, which is often confused with the incentive bonus paid by
employers. Unlike incentive bonus, which is an ex gratia
payment, Statutory bonus is a compulsory payment by law.
Payment of statutory bonus under the Payment of Bonus Act is
not a matter of choice of the employer but rather a matter of
right of the employee. 
The minimum quantum of Statutory Bonus payable to an
employee should be in conformity with the rates and
calculations specified under the Payment of Bonus Act. The Act
in no manner expects an employer from payment of a higher
amount of bonus voluntarily to his/her employee. 
This blog discusses the applicability and calculations of
Statutory Bonus.

Applicability of the Act

The provisions under the Payment of Bonus Act, 1965 are
applicable to every factory and establishment which employs 20
or more persons. ‘Establishments’ has the same meaning as
under the Shops and Establishments Act of various states and
includes departments, undertakings, branches etc. 
Once the establishments begin fall under the Act they should
continue to pay the bonus even if the number of employees falls
below 20 subsequently.

Employee’s eligibility to receive bonus 

Only employees who have worked in an establishment for
a period of not less than thirty (30) days in that year shall be
eligible to receive bonus. An employee is deemed to have
worked in an establishment in any accounting year also on the
days on which he/she has been laid off or on leave (with salary)
or he/she has been absent due to temporary disablement caused
by accident arising out of and in the course of his employment
or availing maternity leave.
If the services of an employee are dismissed on account of
fraud, riotous or violent behaviour in the premises of the
establishment or due to an act of theft, misappropriation or
sabotage of the property of the establishment then, under such
circumstances such an employee may be disqualified from
receiving bonus from his employer.  
Any agreements between the employee and employee
regarding the nonpayment of bonus are not valid.

Deductions from the amount of bonus payable 

If during an accounting year an employee is found guilty of
misconduct which has resulted in a financial loss to the
employer then in such case the employer may deduct the amount
of loss suffered from the amount of bonus payable to the
employee in respect of that accounting year only and balance if
any after such deductions shall be remitted to the employee. 

Special Provisions pertaining to startups/ new establishments

Startups and New establishments have been given a respite from
payment of bonus for the first five years. In the first five (05)
years following the accounting year in which the operations of
the new establishment/ startup commence, employer can pay
Statutory Bonus only in the years in which the employer derives
profits. 

Minimum and Maximum Bonus

The Act contemplates that a minimum bonus of 8.33% of the
salary or the wage earned by the employee during the
accounting year or Rs. 100 whichever is higher should be paid
to an employee. 
Since bonus is paid out of the allocable profits of the
establishment, if in a year the allocable surplus exceeds the
amount of minimum bonus payable to the employees, the
employer should pay a higher bonus. It is pertinent to note that
the Act stipulates an upper limit of 20% of the salary or wage
earned by the employee during an accounting year for the
payment of maximum bonus. 

Calculation for Bonus Payable

If the gross earning of your employees is below Rs. 21,000
employers are liable to pay bonus. Calculation of bonus will be
as follows:

• If Salary is equal to or less than Rs. 7000/- then the bonus is

calculated on the actual amount by using the formula: Bonus =
Salary x 8.33/100
• If Salary is more than Rs. 7,000/- then the bonus is calculated
on Rs. 7,000/- by using the formula: Bonus = 7,000 x 8.33/100 
Note: Salary means Basic Salary + Dearness Allowance
Example 1: If Bella’s Salary is Rs. 6000/- than bonus payable to
Bella shall be = 6000 x 8.33/100 = 500 per month (Rs. 6000/-
per year). 
Example 2: If Brandon’s Salary is Rs. 7000/- than bonus
payable to Brandon =583 per month (Rs. 6996/-  per year). 
Example 3: If Bipasha’s Salary is Rs. 15000 than bonus payable
to Bipasha shall be = 7000 x 8.33/100 = 583 per month (Rs.
6996/- per year).  

Payment method and time limit for the payment of bonus 

All amounts payable to the employee as bonus under the
provisions of the Act should be paid in cash. Which means that
the employer cannot guise bonus as perquisites or allowances.
Statutory Bonus should be paid within 8 months of closing the
book of accounts. For instance, the accounting year ending 31st
March 2019 bonus shall be paid before 30th November 2019.

Exemption in Payment of Bonus

In certain circumstances payment of minimum bonus can be
exempted by the appropriate government by taking into
consideration relevant circumstances of concern factory or
establishment which is in losses and may be given for a certain
period only. The relevant factors may be, the reasons for
occurrence of losses to company, reasons and ingenuity in
consecutive occurrence of losses. The factors must be justifiable
and there should not be intention to avoid payment of bonus by
creating fake losses (mens rea). 

Penalty when Bonus is not paid or Act is contravened in any

manner
If any person acts in any manner derogatory to the provisions of
this Act he/she shall be penalised with imprisonment for a term
which may extend to six (06) months or with a fine of Rs. 1000
or with both. 

The Payment of Bonus Act does not apply to the following

sections of employees:
• The employees of Life Insurance company
• Seamen defined under clause 42 of the merchant shipping act
1958.
• Employees who registered or listed under the dock workers
Act 1948 and employed by the registered or listed employers.
• The employees of any industry controlled by Central or State
Government.
• Employees from Indian red cross society or education
institutions, institutions not for profit.
• Employees employed by the contractor on building operations
• Reserve Bank Of India(RBI) employees
• Employees of any financial corporation under Section 3 or
Section 3a of the State Financial Corporation Act (SFC) 1951
• Employees of IFCI, Deposit Insurance Corporation, agriculture
Refinance Corporation.
• Any financial institution is an establishment in public sector
which Central Government notifies.
• The employees of Inland Water Transport Establishment

Eligibility for bonus

Under the present enactment, every employee is entitled to get a
bonus only if he has worked for a minimum period of 30 days. 
The minimum bonus which the employee would get in an
accounting year would be 8.33% of the salary or wages of the
employee or ₹ 100 whichever is more. In cases where the age of
the employee is less than 15 years at the beginning of the
accounting year, this provision would have the same effect
except in the place of ₹ 100 it would be ₹ 60.
The maximum bonus which an employee could get in an
accounting year is equal to 20% of the salary or wages of the
employee in the given accounting year. The employer is bound
to pay the maximum bonus when the allocable bonus has
exceeded the minimum bonus of that accounting year.
The employee would be disqualified for a bonus if he has been
terminated from employment on account of fraud or theft,
misappropriation or sabotage of the establishment’s property or
has displayed violent or unruly behaviour in the premises of the
establishment.

Calculation of bonus with respect to certain employees

Where the salary of the employee exceed ₹ 7000 per mensem or
minimum wages applicable for such employment as fixed by the
government, whichever is higher, such employee would be
entitled for bonus under Section 10 or Section 11 of the Act as if
the salary or wages is ₹ 7000 per mensem or minimum wages
applicable for such employment as fixed by the government
whichever is higher.

Proportionate reduction in bonus

If an employee has not worked for any day in the accounting
year, his minimum bonus which is ₹ 100 (or ₹60) or his salary
or wages subject to 8.33%, whichever is higher would be
reduced proportionately.

Computation of the number of working days

The computation of the working day is an important criterion for
the calculation of the bonus. The employee would be considered
working even on the days when he is on leave but is paid salary
or wages or he is on a maternity leave with salary or wages, or
he met with an accident while in undertaking the employment or
he has been laid off under an agreement or as permitted under
the Industrial Employment Act, 1946 or Industrial Disputes Act,
1947 or any legal provision which is applicable on the
establishment at the given time.

Set on and set off of allocable surplus

The allocable income which is left even after paying the
maximum bonus at the rate of 20% on the salary or wages,
would be carried forward to the next year to compensate in case
there is any shortage in that year. This is called set on.
However, the set off is the complete opposite of set on in which
the profit falls short to pay even the minimum bonus at the rate
of 8.33%. Then, in this case, the set on of the previous year
would be used to pay the bonuses of the given accounting year.
In calculating the bonus, the amount of set on and set off from
the previous accounting year shall be first taken into
consideration. This allocable income would be distributed to the
employees in proportion to their salary or wages in a given
accounting year.

Special provisions with respect to certain establishments

In the first five accounting years, after the establishment has
started selling and manufacturing goods or rendering services, it
has to pay bonuses only in case of profits. 
However, in the sixth, seventh and eighth accounting year, after
the establishment has started selling and manufacturing goods or
rendering services, the bonus shall be paid, taking into account
the set on or set off. 
In the case of the sixth year, the allocable surplus of the fifth and
the sixth year would be taking into account and in the case of
the seventh year, the allocable surplus of the sixth and the
seventh year is taken into consideration. 

Adjustments of customary or interim bonus against bonus

payable under the Act
If the employer has paid any puja bonus or any other customary
bonus or has paid the bonus before the date on which the bonus
becomes payable, then, in that case, the employer has the right
to deduct the amount of bonus from the actual bonus payable,
and the employee shall get the remaining amount.

Deduction of certain amounts from bonus payable under the Act

If the employee is found to be guilty of misconduct due to which
the establishment has to bear losses then such an establishment
has the right to deduct the amount of loss from the bonus that
has to be paid to the employee in that accounting year and shall
be paid the balance if any.

The time limit for payment of bonus

Under the provisions of this Act, the employees must be
awarded the bonus within 8 months from the closure of the
accounting year. However, in cases of disputes (under the
purview of the Industrial Dispute Act), the bonus has to be paid
within 1 month from the time when the settlement becomes
effective. 

Conclusion
The Payment of Bonus Act, 1965 seeks to legally regularise the
practice of paying bonus by different establishment. It offers an
objective way to calculate the bonus based on profit and
productivity. It enables the employees to earn over and above
their minimum wages or salary. This Act provides different
procedures for different establishments like banking companies,
public organisations and also for the establishments which are
not a company or a corporation. Apart from the procedure, this
Act also defines a robust redressal mechanism. 

Q4.Minimum Wages Act 1948- Objectives, Components, Case

law's

What Is The Minimum Wages Act 1948?

The Minimum Wages Act 1948 is a legislative labor law that
stipulates wages for both skilled and unskilled laborers in India.

Development Of The Concept Of Minimum Wage

The living wage is specified as a level of income for a worker
by the Constitution of India that can ensure a minimum standard
of living that includes good health , comfort, education, dignity
and can cater for any emergency. In view of the willingness of
the employer to pay, the idea of a decent wage has been
introduced into the constitution, which is a standard of wage that
is not only capable of keeping a certain work, but can be
improved depending on the ability of the employer to pay.

The Central Consultative Committee appointed a working

committee on fair wages during its November 1948 session in
order to set the concept of fair wages in motion. To provide the
basic needs of the employee and other requirements such as
childcare, medical care and a level of comfort, this committee
introduced the Minimum Wage concept.
In order to give both the central and state governments of India a
degree of competence in the fixing and payment of salaries, the
minimum wages Act of 1948 was implemented. Forced labour is
any salary by the employee at the mandated minimum wage
rate. Wage boards are responsible for annually evaluating the
minimum salaries so that they can include basic necessities such
as food, housing, schooling, clothes, medical care, and
entertainment for the minimum needs of a family of four.

Objectives Of The Minimum Wages Act

• To ensure that the employee can have the basic
• To ensure that the employee can have the basic physical needs,
good health and a level of comfort.
• To ensure a secure and adequate living wage for all laborers in
the interest of the public.
• To ensure that the employee has enough to provide for his
family.
• Ensuring a decent life standard that pertains to the social
comfort of the employee.

Requirements For Review And Fixation Of Minimum Wage

The requirements for the review and fixation of a minimum
wage is under Section 5 of the 1948 minimum wage Act.
The rule provides that:
• Committees and sub-committees shall be appointed by the
appropriate government as it deems fit; to inform it on the
possible review and fixation of the minimum wage rate.
• The government shall notify the persons concerned by making
a publication in one of the national dailies and specify a date not
later than a period of two months from the publication date
before the commencement of the hearing on the matter.
After the government has taken into account the feedback of the
representatives of the persons concerned or the advice of the
committee, the minimum rate shall be reviewed or fixed by
means of publication in the official news media on the basis of
each schedule of employment. The control of a fixation or
review shall not exceed three months from the date on which the
fixation or review was written.

The relevant government shall operate in accordance with the

minimum wages Advisory Board when assessing the pay. The
analysis is limited to the jobs that are on the timetable. Section
27 of the Act, however, empowers the required government to
add some jobs to the timetable.

The prevailing economic conditions, cost of living in a place,

conditions which the work is performed and nature of work to
be performed shall be used as the factors to determine the
fixation of the minimum wage.

Outstanding Components For Fixing Of Minimum Wage

The government is empowered to fix the minimum wage on the
components of:
• Cost of Living Index - the government may fix:
1. Minimum time rate which is the time factor on which the
minimum wage can be fixed.
2. Minimum piece rate which allows the minimum wage to be
fixed based on the pieces of items manufactured by the industry.
3. Guaranteed time rate which is a combination of piece rate and
time rate with reference to time work basis and pieces of items
manufactured by the industry on which the minimum wage is
based.
4. Overtime rate which is minimum wage fixed based on
overtime work performed by employees, irrespective of the time
work or piece rate.

• The Different minimum wage for various industrial areas -

Section 3 (3) (a) of the Act provides that different minimum
rates may be fixed for different:
1. Scheduled employment
2. classes of work in a schedule of employment
• Locations, Adults, children, adolescent and apprentices have
different rates of wages.
• Section 3 of the Minimum Wages Act lays down wage rates on
the basis of the hour, day, month or any other duration of pay
that may be prescribed. On the condition that wages are set by
the month or by any period prescribed, the manner in which
wages are measured shall be indicated on the basis of the period.
In the case of wages which are set on the basis of the duration
indicated in Section 4 of the Payment of Wages Act of 1936, the
minimum wages shall be determined in accordance with the
provisions of the Act.
• The Minimum rate of wages on the basis of a basic rate of
wages featured in other allowances - Section 4 provides that any
minimum rate of wages revised or fixed based on the scheduled
employments under Section 3 may contain:
1. A special allowance and a standard salary rate, known as the
'living allowance cost.' The living allowance cost rate shall be
assessed on a periodic basis in a manner directed by the
appropriate government. The fixed wage is equal to the existing
cost of living in the country and to the number of employees.
2. A basic rate of wages that is not only limited to the cost of
living allowance, cash value based on prices of commodities.
• An all-inclusive rate that is based on the cost of living
allowance, and the value of cash.
• The cost of living allowance and cash value shall be
determined by the approved body in respect of the basic
commodities supplied. The estimate shall be carried out on the
basis of the directives of the relevant government by the
competent agency.

Factors Considered As Irrelevant In Fixation Of Minimum

Wages
The following factors are irrelevant in fixation of minimum
wages:
• The fact that an employer can have business issues.
• The employer 's financial skill.
• Losses that the corporation may have suffered in the
intervening year.
• The employer's reluctance to purchase raw materials.
• The industrial values of the area.
Role Of The Wage Committee
The pay committee or sub-committee set up by the responsible
government shall consist of an equal number of members of
both workers and employers. The chairman of the committee
shall be rendered an individual citizen with no direct or indirect
participation in the schedule of work. Experience and expertise
are the qualifications for one's committee membership.

The government has the power to consider or ignore the advice

of the committee it has named. The committee's object is to
advise; therefore, the government is not obliged to follow all its
recommendations. Irregularities which may have existed in the
committee's constitution would not affect the validity of a notice
which may have been issued by the appropriate government.

The Role Of Advisory Board

Section 7 provides that the appropriate government shall
shoulder the responsibility for inaugurating an advisory board
to:
• Coordinate the obligations of committees and sub-committees
appointed by the government
• Inform the appropriate government on matters related to fixing
and reviewing of the minimum wage.
In the Minimum Wage Act, the procedure for the operation of
the Advisory Board is not prescribed. The board will set up its
peculiar procedure, however. The Central Advisory Board shall
be formed to advise and advise both the Central and State
Governments on the establishment and review of the minimum
wage rates and the function of the Advisory Boards, as provided
for in the Act, by the Central Government.

Consequences Of Non-Compliance With The Minimum Wages

Act
As a culpable crime, non-payment and underpayment of the
minimum wage are considered. As provided for in Section 22 of
the Act, the punishment for a convict can be up to 5 years
imprisonment with a fine of Rs 10000.

Case Laws
• In the case between the State of Madras and P.N. Ram
Chander Rao in 1956, the court ruled that any notification not
specifying the manner and what interval special allowance made
payable to be adjusted is a defect and impaired by an apparent
error of law.
• In the case between Cashew Manufacturers and Exporters
Association v/s State of Kerala in 1999, the high court ruled that
the government is not bound by the Advisory Board's report.
• In the case between S.D. Basha and the State of Madras, it was
held that in a condition where the members appointed into the
committee are bereft of knowledge and experience, such a
committee shall be invalid. A committee with men of no
knowledge and experience is illegal.

Unit 3
Q1 What are the Laws related to child labour in India

INTRODUCTION
“Child” as defined by the Child Labour (Prohibition and
Regulation) Act, 1986 is a person who has not completed the
age of fourteen years. A child of such tender age, is expected to
play, study and be carefree about his life. But as a fact of nature,
expectations hardly meet reality. Children, by will or by force
are employed to work in the harsh conditions and atmosphere
which becomes a threat to their life. Child labour leads to
underdevelopment, incomplete mental and physical
development, which in turn results in retarded growth of
children.
 
DEFINITIONS
 International Labour Organisation (ILO) defines the term child
labour as, “work that deprives children of their childhood, their
potential and their dignity, and that is harmful to physical and
mental development. It refers to work that is mentally,
physically, socially or morally dangerous and harmful to
children, or work whose schedule interferes with their ability to
attend regular school, or work that affects in any manner their
ability to focus during school or experience a healthy
childhood.”

UNICEF defines child labour differently. A child, suggests

UNICEF, is involved in child labour activities if between 5 to 11
years of age, he or she did at least one hour of economic activity
or at least 28 hours of domestic work in a week, and in case of
children between 12 to 14 years of age, he or she did at least 14
hours of economic activity or at least 42 hours of economic
activity and domestic work per week. UNICEF in another report
suggests, “Children’s work needs to be seen as happening along
a continuum, with destructive or exploitative work at one end
and beneficial work – promoting or enhancing children’s
development without interfering with their schooling, recreation
and rest – at the other. And between these two poles are vast
areas of work that need not negatively affect a child’s
development.”

India’s Census 2001 office defines child labor as, “participation

of a child less than 17 years of age in any economically
productive activity with or without compensation, wages or
profit. Such participation could be physical or mental or both.
This work includes part-time help or unpaid work on the farm,
family enterprise or in any other economic activity such as
cultivation and milk production for sale or domestic
consumption. Indian government classifies child laborers into
two groups: Main workers are those who work 6 months or
more per year. And marginal child workers are those who work
at any time during the year but less than 6 months in a year.” 

CAUSES
Major causes of child employment that can be understood
keeping in mind the Indian scenario, are:
• POVERTY:
 In developing countries it is impossible to control child labour
as children have been considered as helping hand to feed their
families, to support their families and to feed themselves. Due to
poverty, illiteracy and unemployment parents are unable to bear
the burden of feeding their children and to run their families. So,
poor parents send their children for work in inhuman conditions
at lower wages.
• PREVIOUS DEBTS:
The poor economic conditions of people in india force them to
borrow money. The Illiterate populations go to money lenders
and sometimes mortgage their belongings in turn of the debt
taken by them. But, due to insufficiency of income, debtors find
it very difficult to pay back the debt and the interest. This
vicious circle of poverty drags them towards working day and
night for the creditor and then the debtors drag their children too
in assisting them so that the debts could be paid off.
• PROFESSIONAL NEEDS:
There are some industries such as the ‘bangle making’ industry,
where delicate hands and little fingers are needed to do very
minute work with extreme excellence and precision. An adult’s
hands are usually not so delicate and small, so they require
children to work for them and do such a dangerous work with
glass. This often resulted in major eye accidents of the children.
LEGISLATION
When in the 20th Century, child labour became so prominent
that news of factory hazards and mishappenings taking innocent
children’s life, flashed all around in the newspapers, then was
the time, a need for legislations and statutes were felt to prohibit
the mal practice of child labour. Today, there are sufficient
statutes condemning and prohibiting child labour such as:

The Factories Act of 1948: The Act prohibits the

employment of children below the age of 14 years in any
factory. The law also placed rules on who, when and how long
can pre-adults aged 15–18 years be employed in any factory.
The Mines Act of 1952: The Act prohibits the employment of
children below 18 years of age in a mine. Mining being one of
the most dangerous occuptions, which in the past has led to
many major accidents taking life of children is completely
banned for them.
The Child Labour (Prohibition and Regulation) Act of
1986: The Act prohibits the employment of children below the
age of 14 years in hazardous occupations identified in a list by
the law. The list was expanded in 2006, and again in 2008.
The Juvenile Justice (Care and Protection) of Children Act of
2000: This law made it a crime, punishable with a prison term,
for anyone to procure or employ a child in any hazardous
employment or in bondage. This act provides punishment to
those who act in contravention to the previous acts by
employing children to work.
 The Right of Children to Free and Compulsory Education
Act of 2009: The law mandates free and compulsory education
to all children aged 6 to 14 years. This legislation also mandated
that 25 percent of seats in every private school must be allocated
for children from disadvantaged groups and physically
challenged children.

HAZARDOUS OCCUPATIONS
Part III of ‘The Child Labour (Prohibition and Regulation) Act
of 1986 provides for the ‘Prohibition of employment of children
in certain occupations and processes’. The Schedule gives a list
of hazardous occupations in two parts, via; A and B
Part A provides that, No child shall be employed or permitted to
work in any of the following occupations:
1. Transport of passengers, goods; or mails by railway
2. Cinder picking, clearing of an ash pit or building operation in
the railway premise.
3. Work in a catering establishment at a railway station,
involving the movement of vendor or any other employee of the
establishment from one platform to another or into or out of a
moving train.
4. Work relating to the construction of railway station or with
any other work where such work is done in close proximity to or
between the railway lines.
5. The port authority within the limits of any port.
6. Work relating to selling of crackers and fireworks in shops
with temporary licenses
7. Abattoirs/slaughter Houses
8. Automobile workshops and garages.
9. Foundries
10. Handling of taxies or inflammable substance or explosives
11. Handloom and power loom industry
12. Mines (Underground and under water) and collieries
13. Plastic units and Fiber glass workshop

Part B provides that, No child shall be employed or permitted to

work in any of the following workshop wherein any of the
following processes is carried on.
1 Beedi making
2 Carpet Weaving
3 Cement manufacture including bagging of cement.
4 Cloth printing, dyeing and weaving.
5 Manufacture of matches, explosive and fireworks.
6 Mica cutting and splitting.
7 Shellac manufacture
8 Soap manufacture
9 Tanning.
10 Wool cleaning
11 Building and construction industry
12 Manufacture of slate pencils (including packing)
13 Manufacture of products of agate
14 Manufacturing processes using toxic metals and substances
such as lead, mercury, manganese, chromium, cadmium,
benzene, pesticides and asbestos
15 All Hazardous prossess an defined in section 2(cb) and
dangerous operations
as notified in ruler made under section 87 of the factories Act
1948
16 Printing (as defined in section 2(k) of the factories Act 1948
17 Cashew and cashew nut descaling and processing
18 Soldering process in electronic industries
19 Incense Stick (Agarbathi) manufacturing
20 Automobile repairs and maintenance (namely welding lather
work , dent beating and printing)
21 Brick kilns and Roof files units
22 Cotton ginning and processing and production of hosiery
goods
23 Detergent manufacturing
24 Fabrication workshop (ferrous and non-ferrous)
25 Gem cutting and polishing
26 Handling of chromites and manganies ores
27 Jute textile manufacture and of coir making
28 Lime kilns and manufacture of lime
29 Lock making
30 Manufacturing process having exposure to lead such as
primary and secondary smelting, welding etc. ( See item 30 of
part B process)
31 Manufacture of glass, glass ware including bangles
fluorescent tubes bulbs and other similar glass products
32 Manufacturing of cement pipes, cement products, and other
related work.
33 Manufacture of dyes and dye stuff
34 Manufacturing or handling of pesticides and insecticides
35 Manufacturing or processing and handling of corrosive and
toxic substances, metal cleaning and photo enlarging and
soldering processes in electronic industry
36 Manufacturing of burning coal and coal briquette
37 Manufacturing of sports goods involving to synthetic
materials, chemicals and leather
38 Moulding and processing of fiberglass and plastics
39 Oil expelling and refinery
40 Paper making
41 Potteries and ceramic industry
42 Polishing, moulding, cutting welding and manufacture of
brass goods in all forms.
43 Process in agriculture where tractors, threshing and
harvesting machines are used and chabt cutting
44 Saw mill all process
45 Sericulture processing
46 Skinning dyeing and process for manufacturing of leather
and leather products
47 Stone breaking and stone crushing
48 Tobacco processing including manufacturing of tobacco,
tobacco paste and handling of tobacco in any form
49 Tyre making repairing, re-trading and graphite beneficiation
50 Utensils making polishing and metal buffing
51 Zari Making (all process)

HOURS OF PERIOD AND WORK

No child shall be required or permitted to work in any
establishment in excess of number of hours prescribed
(Section-7)
The period of work on each day shall not exceed three hours and
no child shall work for more than three hours before he has had
an interval for rest for at least one hour. No child shall be
permitted or required to work between 7 p.m. and 8 a.m.
No child shall be required or permitted to work overtime.
(Section-7).
PENALTIES
Violations under Section-3 shall be punishable with
imprisonment which shall not be less than three months which
may extend to one year or with fine which shall not be less than
ten thousand rupees but which may extend to twenty thousand
rupees or with both. Continuing offence under section (3) shall
be punishable with imprisonment for a term which shall not be
less than six months but which may extend to two years.
Any other violations under the Act shall be punishable with
simple imprisonment, which may extend to one month or with
fine, which may extend to ten thousand rupees or with both.

EFFORTS BY GOVERNMENT OF INDIA TO CONTROL

CHILD LABOUR
The child labour (Prohibition and Regulation) Act 1986
prohibits the employment of children below the age of 14 years
in 16 occupation and 65 processes that are hazardous to the
children’s lives and health. Many states including Haryana have
constituted the child labour rehabilitation –cum-welfare funds at
district level and separate labour cells are being formed to
address the issue. National child labour projects have been
implemented by the central government in states from 1988 to
provide non-formal education and pre-vocational skills. From
2001, Sarve shiksha Abhiyan has been launched to educate poor
and employed children in all states. Ministry of women and
child development has been providing non-formal education and
vocational training. Establishment of Anganwadies is also a big
step by the government for the welfare of children and their
physical, mental and educational development.

CONCLUSION
If awareness about the cons of child labour is spread across the
nation and strict policing of implementation of existing laws are
done, India can combat the issue of Child Labour. Every
individual must understand how important it is for the children
to grow and study, as they are the ones who will shape the future
of the nation.
 
Q2 Explain the objectives of child labour act, 1986

Introduction
The Government of India had promulgated the legislation of
The Child Labour (Prohibition and Regulation) Act, 1986 to
regulate provisions related to child labour practices in India. The
Government made substantial changes in the provisions of the
Act in the year 2016 and from thereon a complete prohibition
has been imposed on the employment of children who are below
the age of 14 years. Many provisions have been made under the
Act regarding the employment for the children who are above
the age of 14 years. 
The objective:
The main object of the Child Labour ( Prohibition and
Regulation) Act, 1986 is to address the social concern and
prohibit the engagement of children who have not completed
14th year of age in certain employments and to regulate the
conditions of work of children has been prohibited in
occupations relating to (i) transport of passengers, goods or
mails by railways (ii) bidi making (iii) carpet weaving (iv)
manufacturing of matches, explosives and fire (v) soap
manufacture (vi) wool cleaning (vii) building and construction
industry. The Government has also prohibited employment of
children in the following occupations or processes: (i)
Abattoirs/Slaughter houses (ii) hazardous processes and
dangerous operations as notified (iii) printing, as defined, (iv)
cashew and cashewnut descaling and processing 9v) soldering
processes in electronic industry. The Act prohibits employment
of child in about 13 occupations and about 51 processes. [1] The
Fundamental Rights mentioned in the Constitution of India (the
law of land) in the Article 24 under Right Against Exploitation
also mentions for prohibition of employment of children in
factories, etc.[2]

The Act provides that no child shall be permitted to work

between 7 p.m. and 8 a.m. and shall not be permitted to work
over time. No child shall work for more than 3 hours before he
has an interval of one hour. Spread over has been fixed at six
hours. A cannot work in more than one establishment on any
day. A weekly holiday is allowed. The Act also provides health
and safety measures for the children. Section 13 of the Act
describes to provide child workers facilities of drinking water,
latrines and urinals, cleanliness, disposal of wastes and
effluents, ventilation and temperature, etc. should be provided
by the employer. Measures for safety from dust and fume,
artificial humidification, fencing of machinery etc., also need to
be provided by the employer.
The employer is required to notify the Factory Inspectors in case
he engages a child for employment. Production of certificate of
age is also required under the rules of the Act.

Rights of Child and the Indian Constitution

According to the Indian Constitution, the rights are ensured to
the citizens of the country. The children are also given rights
under the Constitution as they are considered citizens of the
country. Considering their special status, special provisions are
made for children under the Constitution. The Government can
make special provisions for the protection of the rights of
children. 
The leading amendment made for the protection of the
rights of children is the 86th Constitutional Amendment i.e.
Right to Education. Right to Education was made a
Fundamental Right in order to protect the basic right of children
to receive an education. 86th amendment guarantees the
following:
• The right to free elementary education that was made
compulsory under Article 21 A of the Indian Constitution.
• Right to protection till the age of fourteen years from any kind
of hazardous employment which is provided under Article 24 of
the Indian Constitution.
• Article 39(e) of the Constitution protects children from any
kind of abuse or forced employment which is not suitable for
their age and ability.
• The children are provided with equal opportunities, facilities,
freedom, dignity, and protection under Article 39 (f) of the
Indian Constitution.
• Article 45 of the Constitution ensures early childhood care and
education to the children until the age of 6 years.
Besides the special provisions which are made under the
Constitution, the children also have equal rights as any other
adult citizen of the country. 

Prohibition of Employment of Children in certain occupations

and processes
Child Labour (Prohibition and Regulation) Act, 1986 aims
to eradicate any kind of child abuse in the form of employment
and prohibit the engagement of children in any kind of
hazardous employment, who have not completed 14 years of
age. The Act prohibits the employment of children in certain
occupations and processes. The occupations which are
prohibited are mentioned in the Act under the Schedule in Part
A. The prohibited occupations for children under 14 years are:
• Occupations that are related to the transport of passengers,
goods or mails by railway;
• Cinder picking, clearing of an ash pit or building operation in
the railway premises;
• Working in a catering establishment which is situated at a
railway station and if it involves moving from one platform to
another or from one train to another or going into or out of a
moving train;
• The occupation which involves work related to the
construction of a railway station or any other work where such
work is done in close proximity to or between the railway lines;
• Any occupation within the limits of any port;
• Work which involves the selling of crackers and fireworks in
shops having a temporary license;
• Working in Slaughterhouses.
Prohibited processes for children under the age of 14 years are
mentioned under the Schedule in Part B. They are as follows:
• The process involving the making of Bidi;
• The process which involves carpet-weaving;
• Manufacturing cement or bagging of cement;
• The processes such as Cloth printing, dyeing, and weaving;
• The processes that involve the manufacturing of matches,
explosives, and fireworks;
• Mica-cutting and splitting;
• Any manufacturing process such as shellac manufacture, soap
manufacture, tanning;
• The process of wool-cleaning;
• Work that is related to the building and construction industry;
• Manufacture of slate pencils;
• Manufacture of products from agate;
• Manufacturing processes in which toxic metals and substances
such as lead, mercury, manganese, chromium, cadmium,
benzene, pesticides and asbestos are used;
• Cashew and Cashew Nut descaling and processing;
• Soldering processes in electronic industries.
The Act in total prohibits approximately 13 occupations and 51
processes for the employment of children. Article 24 of the
Indian Constitution includes the provision for the prohibition of
employment of children in factories. The Act also lays down
certain guidelines for employers, which is to be followed in case
the employee is a child of age less than 14 years. According to
the Act, the employer cannot make a child employee work
between 7 p.m. and 8 a.m. and no overtime is allowed for them.
It is not allowed for an employer to make a child work for more
than 3 hours without an interval of at least one hour and in total,
an employer should not make a child work for more than six
hours a day. Adequate provisions must be made by the employer
for the health and safety of the child employees. Basic facilities
such as drinking water, toilets, disposal of waste, ventilation, etc
must be provided by the employer. The employer needs to
notify the Factory Inspector if in case he employs a child for
employment. Production of age certificate of the child employee
is also needed according to the rules of the Act.

Regulation of Conditions of Work of Children

There are certain regulations provided under the Child Labour
(Prohibition and Regulation) Act, 1986 which the employer
needs to follow while employing a child in the establishment.
Proper work conditions are to be provided by the employer.

Application of Part
The provisions of this Part of the Act shall apply to an
establishment or any class of establishments in which the
occupations or processes which are referred to in Section 3 are
not being carried on.

Hours and period of work

As per the Act, no child employee shall be allowed to work in
any establishment in excess of the number of hours that have
been decided on and prescribed for such an establishment or
class of establishment. The number of hours shall be fixed by
the establishment and the child employee must not be allowed to
work for more than three hours without a break of one hour. The
total number of hours of work for a child employee shall not
exceed six hours. Six hours shall also include one hour of
interval. According to the Act, the employer cannot make a
child employee work between 7 p.m. and 8 a.m. and no
employer must permit the child employee to work overtime. If a
child has already worked in an establishment in a day, then such
a child must not be permitted to work in another establishment
on the same day.

Weekly Holidays
Every child who is employed in an establishment shall
mandatorily be allowed a holiday each week. The holiday must
be for a whole day. The day of the week must be decided on
which it would be a holiday for the employees of the
establishment and the notice regarding the same must be
exhibited in a conspicuous place of the establishment. The
notice should be of a permanent nature and should not be altered
more than once in three months.

Notice to Inspector
Notice is needed to be sent to the Inspector within whose local
limits the establishment is situated by the employer of such
establishment if he employs a child employee or by the occupier
of an establishment in which a child is employed or is permitted
to work. The notice to be sent must be in writing. It must
contain the following particulars:
• the name of the establishment and place in which it is situated,
• name of the person who manages the establishment, 
• the postal address of the establishment,
• the details such as the nature of occupation or process which is
carried on in the establishment.
Every employer who permits a child to work in his
establishment is needed to send a notice within 30 days to the
Inspector within whose local limits the establishment is situated.
Where a process is carried on by the occupier with the aid of
Government or it receives assistance or recognition from
Government for it then such establishment shall not be subject
to the provisions of Section 7, 8, 9 of the Act.

Dispute as to age
In case if a question arises between an Inspector and an occupier
on the age of the child who was permitted to work by the
occupier in an establishment then the Inspector can prescribe a
medical authority to decide on the age of such a child in case of
absence of an age certificate.

Maintenance of register
The occupier shall maintain a register which shall include
information with respect to children who are employed or
permitted to work in his establishment. The register which is
made available by the occupier for inspection at all times shall
contain:
• The  name and date of birth of the children who are employed
by the occupier;
• Number of hours and period of work for which the child
employee is made to work;
• The nature of employment and the work which the child
employee is made to do;
• Other particulars which may be prescribed.

Health and Safety

The Government may by giving a notification to the Official
Gazette make rules for the health and safety of the children who
are employed or permitted to work in an establishment or any
class of establishments if the Government feels necessary to do
so. According to the Act the rules which must be followed by
the establishment for the purpose of safety and cleanliness are as
follows:
• The cleanliness of the place of work must be taken care of and
it should be free from any kind of nuisance;
• There must be a proper place for disposal of wastes and
effluents;
• Proper provisions for ventilation should be made and an
adequate level of temperature should be maintained in the place
of work;
• Provisions should be made to reduce dust and fumes;
• Artificial humidification shall be made;
• Lighting must be proper in the place of work;
• Drinking water must be provided;
• Toilets must be made in the place of work for the employees;
• Spittoons should be provided in order to keep the workplace
clean;
• The machines which are in the workplace should be fenced
properly;
• Children must not be allowed to work near machinery which is
in motion;
• Children must not be permitted to work on dangerous
machines;
• Children must be instructed, trained and supervised in relation
to the employment of children on dangerous machines;
• Device for cutting off power should be used;
• Self-acting machines should be used in the workplace;
• Easing of new machinery;
• Proper floors should be made and proper means to access
through stairs shall be made;
• Pits, sumps, openings in floor shall be made;
• Child employees shall not be permitted to lift excessive
weights while working;
• Protection for eyes must be provided;
• Children must not exposed to explosives or inflammable dust,
gas, etc;
• In case fire is used in work, proper precautions must be taken;
• Proper maintenance of buildings and machinery shall be taken.
Miscellaneous
Penalties
When an employer employs a child or permits a child to work in
contravention of the provisions of Section 3, the employer shall
be liable for punishment with imprisonment for a term which
may extend to one year or with fine and the fine imposed shall
not be less than rupees ten thousand and which may extend to
rupees twenty thousand or with both.
Whoever is convicted of the said offence under Section 3
and repeats the same offence again in future then he shall be
punished with imprisonment for a term which shall not be less
than six months and can be extended to two years.
When an employer fails to give a notice as stated under
Section 9 or fails to maintain a register comprising the details of
child employees as required by Section 11 of the Act or if the
employer makes any false entry in any such register, or fails to
display a notice containing an abstract of Section 3, or if the
employer fails to comply with or contravenes any other
provisions of the Act or any of the rules which are made
thereunder, he shall be punished with simple imprisonment
which may extend to one month or with fine which may extend
to ten thousand rupees or with both imprisonment and fine.

Conclusion 
The Child Labour (Prohibition and Regulation) Act, 1986
prohibits children from working in hazardous employment. The
Act provides a minimum age limit for employment as 14 years.
The provision of the Act has helped in reducing the rate of child
employment in India. It has reduced various hazardous risks to
which child employees are exposed at the workplace as well as
the exploitation by laying down the provisions for maximum
number of hours or period of work and various other related
issues. The Act has played an important role in reducing
hazardous employment for children in India. If it is found that
the employer is employing a child in contravention of the
provisions of the Act then, such employer will be liable for
punishment which includes imprisonment or fine or both.

Q3 Explain the essential features of Contract labour act 1970

Introduction

Labour administration is one of the most crucial tasks of an

entrepreneur. In order to progress upon the rigorous labour
regulations, the industry sector in India is largely resorting to
contract/temporary workers. Such labourers are governed by the
Contract Labour (Regulation and Abolition) Act, 1970. It is
found that many of the stipulations made under the act to
safeguard contract labour in India are not followed in practice.
This research paper aims to discuss some of the aforementioned
issues in the light of decided cases by the Courts. It also
attempts at proposing certain reforms to promote the well being
of contract labourers in India. Though the paper is based on
Indian experience, it is relevant for a number of developing
economies across the globe.

CONCEPT OF CONTRACT LABOUR

Contract labour is an expression which is often used to
denote different ways of employing workers otherwise than
under a usual employment contract. In common parlance,
‘contract labour’ refers to labour which is employed to perform
some work, but has no direct employer-employee relationship
with the principal employer i.e. the party for whom the work is
being carried out. The relationship between the employee and
the principal employer is mediated by one or more other parties
who actually employ the workers, pay them and have an
employer-employee relationship with them. These
intermediaries between the ‘principal employer’ and the workers
are the ‘contractors’, whose relation with the principal employer
is governed by a contract between them. Often, the mediation
between the principal employer and the workers is not by one
contractor alone, but a chain of sub-contractors and sub-sub-
contractors. This system of work done for a principal employer
through contractor or a chain of contractors is referred to as
‘contract labour system’.

Contract Labour (Regulation and Abolition) Act, 1970

defines contract labour as under:

“A workman shall be deemed to be employed as contract labour

in or in connection with the work of an establishment when he is
hired on or in connection with such work by or through a
contractor, with or without the knowledge of the principal
employer.”[3]

Based on the above definitions, the ingredients of contract

labour may be inferred as follows:
• that the person concerned must be a workman;[4]
• that he must be employed in or in connection with the work of
an establishment;[5]
• that the employment may be by or through a contractor;[6] and
• that the employment as such may be with or without the
knowledge of the principal employer.[7]

Salient Features of the Act

Intent & coverage: The Act provides for regulation of the
employment of contract labour and its abolition under certain
circumstances. It covers every establishment in which 20 or
more workmen are employed on any day of the preceding 12
months as contract labour and every contractor who employs or
who employed on any day of the preceding 12 months, 20 or
more contract employee. It does not apply to establishments
where the work is of intermittent and casual nature unless work
performed is more than 120 days and 60 days in a year
respectively. (Section 1)

Advisory Boards: The Act provides for setting up of Central and

State Advisory Contract Labour Boards by the central and state
governments to advise the respective governments on matters
arising out of the administration of the Act. (Section 3 & 4)
Registration & licenses: The establishments covered under the
Act are required to be registered as principal employers with the
appropriate authorities. Every contractor 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 in that behalf by the licensing officer. The licence granted
is subject to conditions relating to hours of work, fixation of
wages and other essential amenities in respect of contract as
prescribed in the rules. (Section 7 & 12)

Facilities to contract labours: The Act has laid down certain

amenities to be provided by the contractor to the contract labour
for establishment of canteens and rest rooms, arrangements for
sufficient supply of wholesome drinking water, latrines and
urinals, washing facilities and first aid facilities have been made
obligatory. In case of failure on the part of the contractor to
provide these facilities, the principal employer is liable to
provide the same. (Section 16, 17, 18, 19 and 20)

Payment of wages: 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. The contract labour that performs same or similar
kind of work as regular workmen will be entitled to the same
wages and service conditions as regular workmen as per the
Rules. (Section 21)

Offences: For contravention of the provisions of the Act or any

rules made there under, the punishment is imprisonment for a
maximum term up to 3 months and a fine up to a maximum of
Rs. 1000. In case of a company, the company as well as every
person in-charge of and responsible to the company for the
conduct of its business at the time of the commission of the
offence shall be deemed guilty. (Section 23, 24 & 25)
Registers & displays: Principal employer and contractor have
the responsibility to maintain registers and records of contract
labours, work performed by them, wages, and other particulars
as specified in the Rules. Notices are also to be exhibited within
the premises regarding hours of work, nature of duty and other
information as prescribed under the Rules. (Section 29)

Abolition of contract labour: After consultation with the Central

Board or State Board, government can prohibit, by notification
in the official gazette, employment of contract labour in any
establishment in any process, operation or other work.
The guidelines for deciding upon the abolition of contract labour
in any process, operation or other work in any establishment are
– (i) Conditions of work and benefits provided to the contract
labour; (ii) Whether the work is of a perennial nature; (iii)
Whether the work is incidental or necessary for the work of an
establishment; (iv) Whether the work is sufficient to employ a
considerable number of whole- time workmen; (v) Whether the
work is being done ordinarily through regular workman in that
establishment or a similar establishment.

APPROPRIATE GOVERNMENT
The jurisdiction of the Central and State Government has
been laid down by the definition of the ‘Appropriate
Government’ in the Act as amended in 1986.[24] With this
amendment, the appropriate government would be the same in
respect of an establishment under the Contract Labour
(Regulation and Abolition) Act, 1970 as also the Industrial
Disputes Act, 1947. It is imperative to refer to certain judicial
decisions for a better understanding of the phrase ‘Appropriate
Government’. Some distinguished judgments that
comprehensively dealt with the issue have been discussed in the
next section of this paper.

WORKMAN
A workman is deemed to be employed as ‘contract labour’ in or
in connection with the work of an establishment when he is
hired in or in connection with such work by or through a
Contractor, with or without the knowledge of the Principal
Employer.[25] Workman means any person employed in
connection with the work of any establishment.[26] The
essential condition of a person being a workman is that he
should be employed to do the work in that industry.[27] The Act
defines ‘workman’ as meaning any person employed in or in
connection with the work of any establishment to do any skilled,
semiskilled or unskilled manual, supervisory, or clerical work
for hire or reward, whether the terms of employment are express
or implied. The following individuals, however do not come
under the ambit of the definition of worker:

-One who is employed mainly in a managerial or administrative

capacity; or
-One who is employed in a supervisory capacity draws wages
exceeding five hundred rupees per mensem or
-One who is an out-worker i.e. a person to whom any articles are
given out by the Principal Employer to be made up, cleaned,
altered etc. for the purposes of the trade or business of the
Principal Employer and the process is to be carried out either in
the home of the out-worker or in some other premises, not being
premises under the control of the Principal Employer.

CONTRACTOR
The Act defines Contractor as a person who undertakes to
produce a given result for the establishment, other than a mere
supply of goods or articles of manufacture to such
establishment, through contract labour or who supplies contract
labour for any work of the establishment.[28] In other words,
Contractor is the person supplying contract labour to an
establishment undertaking to produce a given result for it.[29] It
is noteworthy that sub-Contractors or ‘piece wagers’ also
qualify as Contractors who need to apply for the registration of
the establishment and license.[30]
Contract Labour (Regulation and  Abolition) Act, 1970
The contract labourers are recurrently susceptible to exploitation
by the contractors who act as the link between the workers and
the real employer. With lesser wages and poor working
conditions, the workers are pushed to an over a barrel situation,
with nearly no regulations. Though the government had brought
out legislation timely, their feeble implementation has made it
fall flat time and again. These woeful states of affairs persuaded
to the formulation of the contract labour (regulation and
abolition) Act, 1970 which was a giant leap by the government
in the sphere of contractual labourers.

This Act is aimed at imparting justice to the rights of the

contractual labourers and to fortify the welfare of them. It has
various guidelines regarding protection, rights and basic
amenities prescribed for the welfare of contract labourers.

Objective  and Applicability

This Act mainly deals with resolving the problems woven
around contract labourers, protecting them from exploitation and
securing their rights. Adding on to this it aims at abolishing
contact labourers from perineal works and works where
permanent labourers can be deployed.
On the factor of applicability, it applies to any establishment
with a strength of twenty workmen or more or had twenty
workmen or more on any day in the preceding twelve months.
They apply the same on contractors as well.

Advisory Board
To enhance the enactment of the Act and to guide the
government on important provisions concerning the same
subject matter, an advisory board has been set up. This body
acts as a consultative wing to the central and state governments.
Further, these advisory boards are of two:
1. Central advisory board
2. State advisory board
Central Advisory Board
For the ease of administration and to perform the functions
designated through this Act, the government at the center shall
constitute a board called the Central advisory contract labour
board. This would act as an advisory board to the government of
India in matters relating to the above stated Act.

The composition of the Central advisory board includes, a

chairman, chief labour commissioner and members from
specified areas. There shall be a minimum of eleven and a
maximum of seventeen members on the board, they collectively
advise the central government on major steps related to the
subject matter.

State Advisory Board

Similar to the board which is formed to assist the central
government, the state advisory contract labour board is
constituted to advise and aid in the administration of the state
government.
The state advisory board will consist of a chairman, a chief
labour commissioner in his absence any member nominated by
the state government and members maximum of eleven and a
minimum of nine.
These boards are vested with the power to constitute
committees, the central and the state boards are conferred with
the rights to shape committees for various matters concerning
this Act. The committee constituted should meet at due time and
relevant place, and must be paid an amount as the fee for
attending these meetings. Government officials are exceptions to
this provision of getting fee as cited above as it becomes part of
their delegated duty.

REGISTRATION OF ESTABLISHMENTS AND LICENSING

OF CONTRACTORS
` Section 6 provides for the appointment of registering
officers by the appropriate Government for the purposes of this
Act. If a principal employer falls within the vicinity of this Act
then, such principal employer and the contractor will have to
apply for registration of the establishment and license
respectively with the appropriate authorities.[31] The Act also
provides for temporary registration in case the contract labour is
hired for a period not more than 15 days. Any change occurring
in the particulars specified in the Registration or Licensing
Certificate needs to be informed to the concerned Registering
Officer within 30 days of such change.

From a combined reading of Section 7 and Rules 17 & 18 of the

Contract Labour (Regulation and Abolition) Central Rules, 1971
(hereinafter referred to as the Rules), it appears that the Principal
Employer has to apply for registration in respect of each
establishment. Another important point to note is that a License
issued for one contract cannot be used for an entirely different
contractual work even though there is no change in the
Establishment. The law mandates that every establishment to
which the Act applies has to register with the registering officer.
The government also has the power to prohibit employment of
contract labour in any process, operation or other work in any
establishment.[32]

The Act further stipulates that no Contractor to whom the Act

applies can undertake or execute any work through contract
labour without having a license issued by the licensing officer.
[33] Failure to obtain a licence amounts to a criminal offence
under Sections 16 to 21 of the Act read with Rules 41 to 62 of
the Rules.[34]

THE CENTRAL AND STATE ADVISORY BOARDS

Under Sections 3 and 4 of the Act, there is a provision for the
constitution of Central and State Advisory Contract Labour
Boards to advise the Central/State Government on matters
arising out of the administration of the Act.
In matters relating to the abolition of contract labour system, the
Board normally constitutes a 3 member Tripartite Committee
from amongst members of the Central Advisory Contract
Labour Board representing the employers and workers and a
Government official as Member Convener to study the issue in
detail. The report submitted by the Committee is placed before
the Central Advisory Contract Labour Board and keeping in
view the recommendations of the Board, the Central
Government takes a decision on the matter. At present, 12 such
Committees are functioning either to study abolition of contract
labour system or to consider the requests for exemption from
prohibitory notifications in various establishments.

HEALTH AND WELFARE OF CONTRACT LABOUR

Regarding the facilities to be provided to contract labourers, the

Act stipulates that every Contractor employing contract labour
to whom the Act applies has to provide canteen, restrooms,
latrines, urinals, first aid facilities etc.[35] Section 35 of the Act
empowers the appropriate Government to make rules in respect
of the abovementioned facilities. If any such amenity for the
benefit of the contract labour employed in an establishment is
not provided by the Contractor, such amenity has to be provided
by the Principal Employer and the expenses incurred by the
Principal Employer for doing so can be recovered from the
Contractor.[36] Also, the Courts have ruled that the Government
will be responsible for enforcement of those amenities where
Contractors engaged by it for executing its project fail to
provide the amenities to its workers. The Government’s failure
to perform its its obligation amounts to a violation of Article 21
of the Indian Constitution and labourers can enforce this right by
way of writ petition under Article 32 of the Constitution.[37]

PAYMENT OF WAGES
Every contractor has been made responsible for payment of
wages to each worker employed by him as contract labour. For
ensuring the regular payment of the minimum wages to the
contract labour, the Act provides that the wages to the contract
labour are to be paid in the presence of the authorized
representative of the principal employer, who has to certify that
the wages as per the stipulation have really been paid to the
contract labour.[38] If the Contractor fails to make payment of
wages within the prescribed period or makes short payment,
then the Principal Emplo Employer shall be liable to make
payment of wages in full or the unpaid balance due, as the case
may be, to the contract labour employed by the Contractor but
he can recover the amount so paid from the Contractor.[39] A
Principal Employer is liable to compensate underpaid contract
labour.[40] The contract labour that performs same or similar
kind of work as regular workmen will be entitled to the same
wages and service conditions as regular workmen as per the
Contract Labour (Regulation and Abolition) Central Rules,
1971. This issue has been dealt with extensively in the next
section of the paper.

Unit 4
1. What is contribution and the law relating to contribution
under the epf act

What is an Employee Provident Fund?

Employee Provident Fund EPF is one of the popular
savings schemes launched under the supervision of the
Government of India. The Ministry of Labour regulates EPF
schemes in India. It is the main scheme under the Employee
Provident Fund and Miscellaneous Provisions Act,1952.
Employee Provident Fund Organisation(EPFO) manages this
savings scheme. 
This scheme aims to build a sufficient retirement corpus
for an individual. It inculcates the habit of saving money for the
salaried class employee. The fund includes monetary
contributions from both employer and employee. Each of them
has to contribute 12% of the employee’s basic salary (Basic +
Dearness allowance) towards this fund every month. Once an
individual retires, they receive the entire contribution(of both
employee and employer) as a lump sum with interest. The rate
of return earned is fixed, which is set by EPFO. Also, the
interest accrued is tax-free.
The government of India has mandated contribution in this
scheme. Thus, as the government manages it, it is considered to
be a low- risk investment.

Monthly Contribution – Employer and Employee

As mentioned above, both employer and employee have an
equal contribution towards the employee provident fund. The
actual amount to EPF contribution is calculated based on the
employee’s basic salary and dearness allowance. For most
employees, the PF contribution is 12% of the basic salary. The
below is the given details of employee and employer
contribution towards EPF:
Employee’s contribution towards EPF
The employer deducts 12% of the employee’s salary (basic +
dearness allowance) directly every month for a contribution
towards EPF. This entire contribution goes to the EPF account
of the employee.
Employer’s contribution towards EPF
Similarly, the employer also contributes 12% of the employee’s
salary towards EPF. But, the employer’s contribution has the
following categories.
EPF Contribution Rate 2021
However, in certain circumstances, EPF contribution can be
10%. For instance, this can imply in the following cases –
• If a company has less than 20 employees
• The company incurs losses that are more than its entire net
worth
• If a company is associated with beedi, jute, brick, guar gum or
coir industry
The contribution can also vary in the case of women employees.
In the union budget 2018-2019, new women employees can
make an EPF contribution of 8% instead of 12%. This privilege
is only for the first three years of employment. The primary
reason for this revision was:
• To enable women for higher take-home pay
• To encourage companies to hire more women to bridge the gap
Even though a woman employee contributes 8% towards EPF,
the employer has to maintain its EPF contribution at 12%. Well,
an employee can also add more than 12% towards EPF. This is
the Voluntary Provident Fund (VPF).

Employee’s Contribution towards EPF

In general, the contribution rate for the employee is fixed at
12%. However, the rate is fixed at 10% for the below-mentioned
organizations:

-Organizations or firms employing a maximum of 19 workers.

-Industries declared as sick industries by the BIFR
-Organizations suffering an annual loss much more as compared
to their net value.
-Coir, guar gum, beedi, brick and jute industries.
-Organizations operating under the wage limit of Rs. 6,500.

Employer’s Contribution towards EPF

The minimum amount of contribution to be made by the
employer is set at a rate of 12% of Rs. 15,000 (although they
can voluntarily contribute more). This amount equals Rs. 1,800
per month. It means that both the employer as well as the
employee has to contribute Rs. 1,800 each per month towards
this scheme. Initially, this amount was set at 12% of Rs. 6,500,
which would equal Rs. 780 to be contributed by both the
employer and the employee.

The contribution from both the parties is deposited into the

EPFO (Employees Provident Fund Organisation)
This is a long-term investment fund for the contributors which
helps them continue an independent life after retirement

Section 6 of epf deals with contributions

Employee pension scheme should also be included in this
answer

Q.2 maternity benefit act

Introduction
The Maternity Benefit Act, 1961 is a legislation that protects the
employment of women at the time of her maternity. It entitles
women employees of ‘maternity benefit’ which is fully paid
wages during the absence from work and to take care of her
child. The Act is applicable to the establishments employing 10
or more employees. The Maternity Benefit Act, 1961 has been
amended through the Maternity (Amendment) Bill 2017 which
was passed in the Lok Sabha on March 09, 2017.

Applicability 
Upon reading Section 2 along with Section 3 (e) of Maternity
Benefits Act, 1961 (“Act”), it can be safely concluded that the
Act is applicable to establishments such as factories, (“factory”
as defined in the Factories Act, 1948), mines (“mine” as defined
in the Mines Act, 1952) and plantations (“plantation” means a
plantation as defined in the Plantations Labour Act,1951). 

The Maternity Benefit Act also applies to establishments

belonging to Government and establishments wherein persons
are employed for the exhibition of equestrian, acrobatic and
other performances as per section 2(b). The said Act is also
applicable to every shop or establishment defined under law,
wherein ten or more persons are employed on a day during the
preceding twelve months and which is applicable in relation to
shops and establishments in a particular state.

Eligibility 
A woman must be working as an employee in an establishment
for a period of at least 80 days in the past 12 months to be
entitled to maternity benefit under the provisions of the
Maternity Benefit Act. 
Main Highlights of the Amendment in Material Benefit 
The time of maternity leave which a lady worker is qualified for
has been expanded from 12 weeks to 26 (twenty) weeks. The
Act once in the past enabled pregnant ladies to profit Maternity
Benefit for just 6 a month and a half before the date of
anticipated conveyance and a month and a half after the date of
conveyance. Presently, this period has been expanded to 8
months. The time of maternity advantage of 26 weeks can be
stretched out to ladies who are as of now under maternity leave
at the hour of usage of this revision in the Act. The improved
Maternity Benefit can be profited for the initial two kids.
According to the revision, a lady having at least two enduring
kids will be qualified for 12 (twelve) weeks of Maternity Benefit
of which not more than 6 (six) will be taken preceding the date
of the normal conveyance. A lady who embraces a kid
underneath the age of 3 (a quarter of a year, or an appointing
mother (that is an organic mother, who utilizes her egg to make
an undeveloped organism embedded in some other lady), will be
qualified for Maternity Benefit for a time of 12 (twelve).

Each foundation having 50 (fifty) or more representatives will

be required to have an obligatory creche office (inside the
recommended good ways from the foundation), either
independently or alongside other normal offices. The lady is
likewise to be permitted 4 (four) visits per day to the creche,
which will incorporate the interim for rest permitted to her.

Work from home: If the idea of work allocated to a lady is with

the end goal that she can telecommute, a business may enable
her to telecommute post the time of Maternity Benefit. The
conditions for telecommuting might have commonly concurred
between the business and the lady.
Prior Intimation: Every foundation will be required to give the
lady at the hour of her underlying arrangement, data about each
advantage accessible under the Act. 
The arrangement identifying with “telecommute has been
presented through the Act and can be practiced after the expiry
of 26 weeks’ leave period. In light of the idea of work, a lady
can profit advantage of this arrangement on such terms that are
commonly concurred with the business. The raising of the
maternity profits by 12 weeks to 26 weeks is in accordance with
the proposal of the World Health Organization which gives that
kids must be solely breastfed by the mother for the initial 24
weeks. 
The expansion in the maternity leave can help in expanding
endurance paces of youngsters and solid improvement of a kid.

Creche Facility Introduced by Maternity Benefit

(Amendment) Act, 2017
In terms of Section 11A of the Maternity Benefit Act, every
establishment to which the Act applies and have fifty or more
employees must establish a Crèche facility within such distance
as may be prescribed through notification. The Creche must be
established either separately or along with common facilities.
The employer must allow women at least four visits a day to the
crèche and it shall also include the interval for rest allowed to
her. Every establishment is required to intimate in writing and
electronically to every woman at the time of appointing her
initially regarding every benefit available under the Maternity
Benefit Act.

India’s Maternity Benefit (Amendment) Act, 2017 (the Act) has

increased the duration of maternity leave from 12 weeks to 26
weeks for two surviving children. In cases where a woman has
more than two children, the leave is limited to 12 weeks only.

Some of the other important provisions of the Act include

the following:

Significance to commissioning and adopting mother –a woman

who adopts a child below three months or commissioning
mothers can avail maternity leave for up to 12 weeks. The
period of maternity leave is calculated from the date when the
child is handed over to the parent;

Provision to work from home – depending on the nature of work

and her employer’s consent, a new mother can now choose to
work from home; and
A mandatory provision of on-site day care services – every
establishment with 50 or more employees is required to provide
for crèche facilities within a prescribed distance. A new
provision under the amended Act permits women-employee to
visit crèche four times during the day, including the regular rest
interval.

Q3 5 Central Powers of Inspectors in Fulfilling the Objectives of

Employees’ Provident Funds and Miscellaneous Provisions Act
1952

Central Powers of Inspectors in fulfilling the objectives of

employees’ provident funds and miscellaneous provisions act
1952 are given below:
Central Powers of Inspectors
1. Require an employer or any contractor from whom any
amount recoverable under Sec. 8-A to furnish such information
as we may consider necessary;
2. At any reasonable time and with such assistance, if any, as he
may think fit enter and search any establishment or any premises
connected therewith and require any one found in charge thereof
to produce before him for examination any accounts books,
registers and other documents relating to the employment of
persons or the payment of wages in the establishment;

3. Examine, with respect to any matter relevant to any of the

purpose aforesaid, the employer or any contractor from whom
any amount is recoverable under Section 8A his agent or servant
or any other person found in charge of the establishment or any
premises connected therewith or whom the inspector has
reasonable cause to believe to be or to have been an employee in
the establishment;
4. Make copies of or take extracts from any book, register or
other documents maintained in relation to the establishment and
where he has reason to believe that any offence under this Act
has been committed by an employer, seize with such assistance
as he may think fit, such book, register or other documents or
portions thereof as he may consider relevant in respect of that
offence.
5. Exercise such other powers as the Provident Fund Scheme
and Insurance Scheme may provide.

The Inspector for the purposes of (i) inquiring into the

correctness of any information furnished in connection with the
Pension Scheme; or (ii) ascertaining whether any of the
provisions of this Act or of the Pension Scheme have been
completed with in respect of an establishment to which the
Pension Scheme applies, exercise all or any of the powers
conferred upon him under clause (a) to (d) discussed above.
The provisions of the Code of Criminal Procedure 1898, shall so
far as may be, apply to any search or seizure under this Act, as
they apply to any search or seizure made under the authority of a
warrant issued under the Code of Criminal Procedure 1898.

Unit 5
Q1. Define unorganised workers and the unorganised workers
social security act

As an unorganised worker play a pivotal role in society, so they

need special attention. Most socially and economically deprived
sections of the society are engaged in informal economic
activities. The government realised the pivotal role performed
by unorganised sector in the economy. Therefore, many
legislations and schemes are initiated by the government for the
benefit of unorganised workers.
Further various social security measures provided by industrial
units to their employees in the form of pension, provident fund
and gratuity. Non-statutory benefits also provided to workers
such as medical facilities, food, canteens etc. These benefits
help in motivating the workers for their active contribution in
the prosperity of the industry and when the workers are fully
satisfied with the conditions of service, then they give their best
efforts for the growth of the society.

Definitions
There are various definitions given by different Commission and
others. But here we will be discussing the most important
definitions.
According to the report of the National Commission on Labour
in 1969.
‘Unorganized workers’ are other groups of workers who are not
covered under the definition and can organise in pursuit of a
common goal due to force such as:-
1. Casual nature of employment.
2. Ignorance and illiteracy.
3. Establishment of small size with the low capital invested per
person employed.
4. Scattered nature of establishments.
5. Muscular strength of the employer operating either singly or
in combination.
National Commission also gives some categories of workers,
which can be categorised as unorganised workers, which are the
following:
• Contract-based worker and it also includes workers engaged in
the construction work.
• Informal(casual) labour.
• Labour engaged in small industry.
• Handloom/ power worm workers.
• Beedi and cigar workers.
• Employed in shops and commercial establishments.
• Sweepers and scavengers.
• Workers in teaberries.
• Tribal labour.
• Other unprotected labour.
These categories are only ‘illustrative’ and are not exhaustive.
According to the Unorganized Workers Social Security
Act,2008
“Unorganized sector means an enterprise which is engaged in
the production or sale of the food or in providing services of any
kind  owned by individuals or self-employed workers and where
the number of worker working is less than 10 in number.”

Unorganised Workers: “unorganised workers” means as

follows.
• A home-based worker.
• Self-employed worker.
• Nature of employment, contract, casual and bonded labour
wage worker in the unorganised sector.
It also includes a worker in the organised sector who is not
covered by any acts mentioned in schedule II of the Act”.
Based on the distinctiveness, the government has classified the
unorganised workforce exclusively in four categories.
• In terms of employment like construction workers, waiver,
fisheries, workers of the paper mill, sawmill etc.
• The labourers which are most in exploited-Head and shoulder
loaders, scavengers, variety of labour works.
• Labourers who are providing service-Hotel boy, Midwives, Air
Hostesses, barber, masseur etc.
Apart from category described above handicrafts, artisans,
cobblers, handloom weavers, physically handicapped self-
employed persons, lady tailors, a rickshaw puller, carpenters,
tannery labour, power loom workers and urban poor, Truck and
Auto drivers also come under the ambit of unorganised labour.

Problems faced by the workers

As being the weaker section of the society they face many
challenges. They are as follows.
• Low wages– Wages is only the factor for which any
person/employer works. As the labourer is getting meagre
wages. As there is the Minimum Wages Act defines the
minimum wage, which needs to be paid to the worker, but the
worker fails to get minimum wages. The Supreme Court of
India ruled that employing workers at wage rates below the
statutory minimum wage levels is considered as the forced
labour and is the infringement of Article 23 of the Constitution
of India even though economic compulsion might drive one to
volunteer to work below the statutory minimum wage.
• No Knowledge about Work Hazardous and Occupational
Safety-The working conditions in the unorganised sector is the
leading cause to have an adverse effect on the health conditions
of workers. Concerning home workers, most of the studies
reported that labourers suffer from health problems.
• The health problems are mostly related to respiratory due to
inhalation of the tobacco dust and body ache, or due to the
peculiar posture that has to be maintained at all times of work.
Unguarded machinery, various toxic chemical coal, dust lime,
dust blaze, the raw material for synthetic generation leads to the
death of many unorganised workers because the working
conditions are more severe and knowledge of occupational
health and safety is negligible.
• Maximum workers are living in deplorable conditions:-They
live in unsanitary conditions and likewise battle with sewer
seepage framework overflowing drainage system, flooding and
storms. They live in a slum area. The facilities such as washing,
urinal, toilets facilities at work are found to be below standard.
It could be said that no such facilities were provided to workers
in the industries.
• Extended Hours of Work:-Long hours of work in the
unorganised sector beyond the labour and regulatory norms are
standard in India. In the agricultural sector, there are no fixed
hours of work as there are no laws to act as guidelines for the
working conditions of agricultural labourers.
• In the case of non-agricultural sectors such as fireworks,
matchmaking, power looms and so on, workers started their
work very early in the morning at 6:00 a.m and continue till the
evening. In the handloom sector, the work is organised in such a
way that wages were based on 12-15 hours of work per day.  A
large number of workers and the labourers are illiterate and as a
result, the employers exploit the labourer by forcing them to
work for extra hours. Due to long working, social isolation of
migrant workers, high level of unemployment, illiteracy and
lack of awareness are the major hurdles in organising
themselves.
• No Knowledge About the Trade Union or Labour Union:-Not
many but most are not aware of the existence of Trade Union
and their rules. The primary purpose of the establishment of the
Trade Union is to settle the dispute that may arise between the
employer and employee. Trade Union means a Trade Union
which is for the time registered under the Trade Unions
Act,1926. Trade Union which can be analysed into the
following ingredients.

Trade Union means any combination whether temporary or

permanent made to regulate the relations between workmen and
employer, workmen and workmen, employer and employees.
While imposing restrictive conditions on the conduct of any
trade or business. But this Act shall not affect.
1. Any agreement between partners as to their business,
2. Any agreement between an employer and those employed by
him as to such employment,
3. Any agreement in consideration of the sale of the goodwill of
a business or instruction in any profession, trade or handicraft.
• High Level of insecurity is common-Social security means
which provide amenities and assurance to the workers. For
instance, the employment of the agricultural sector is irregular
and unassured.  This is due to the availability of work to them
only for about three months and remaining nine months, they
are mostly unemployed and suffer from starvation.
• Seasonal Employment-The workers are employed as a
seasonal employer. They are employed only for a particular
season and remain unemployed during the remaining year.
Employment is only for 3-4 months. In India Mahatma Gandhi
National Rural Workers Employment Guarantee Act,2005 aims
to provide employment security by guaranteeing at least 100
days of work in the most backward districts of the country who
can perform manually.
• Women and children are unprotected and get meagre wages:
Article 39(d)  of Constitution of India talks about Equal pay for
equal work means that all the person should get equal wages
irrespective of their age, sex if they work for the same hours.
The children are forced to work at hotels, dhaba for low wages.
• Children and women are paid low wages as compared to male
despite working for the same hours. Children and female
workers work as household labour at the house of the people
living in the urban area.  Such child labourers are subject to long
working hours and involved in the hazardous sectors such as
carpet weaving, cloth printing, explosives and fireworks,
cigarette making, printing and soldering process in electronic
industries.
• Harassment issues at the workplace for women- Sexual
Harassment is a big issue that occurs at the workplace. A safe
workplace is women’s legal right, but it has been neglected.
They still experience a wide range of physical and psychological
ailments due to eve-teasing and sexual harassment. In spite of
the Act that was enacted in the year 2013 still, the woman is
being assaulted at their workplace.
• Vulnerable Labour Groups:-The study group on the
construction of the First National Commission on Labour as
well Second National Commission (2002) observed that on
quarries, brick-kilns as well as in big construction sites a system
of bondage exists and get extended from one generation to the
next through labour.
• The bonded labour involves a debtor-creditor relationship in
this system, the creditor advances loan to the labourer and put
him in bondage until the loan is returned. The repayment of debt
is so arranged that the servant cannot repay it during his lifetime
before ensuring lifelong service for the master. It is this feature
which differentiates bonded labour from unpaid forced labour.
• Insecurity due to natural disasters:-There are many natural
disasters like floods, droughts, earthquakes, famine etc. which
also have a devastating impact on the informal sectors. Natural
disasters do not wipe out the productive base of the informal
sector, but can also affect the limited household assets of the
owner.

Social security to unorganised workers

Social security is essential for the welfare and provides certainty
to the workers. Social security measures have manifolds benefits
in promoting the workers, increasing the production level of
industry and develop the feeling of surety among the workers. It
was also helpful for eradicating poverty to some extent. Social
security is a fundamental human right (Though not one of the
Constitutional Fundamental Right).
The Planning Commission constituted a working group on
Social Security during the process of the 12th Five Year Plan. In
India out a total workforce of 45.9 crores, 94% is in the
unorganised sector, and the remaining 6% is in the organised
sector.  The workers in the organised sector are covered under
social security legislation like employees Provident Funds,
Miscellaneous Provisions Act,1952 and Employees State
Insurance Act,1948. The working groups of Planning
Commission constituted subgroups in its first meeting to discuss
the issues. Taking the benefits of subgroups the working groups
have formulated its recommendations. It is hoped that these
recommendations would be useful for the formulation of the
twelfth five-year plan.

Unorganised Social Security Act,2008

In the era of liberalisation, globalisation, and privatisation the
country has been a drastic change in the business environment
and nature of employment. These changes created many issues
in social security measures.
In this regard, the issue of social security to the growing sector
of unorganised workers draws more attention in emerging India.
The government enacted much social security legislation for the
welfare of unorganised workers also formulated many schemes.
Unorganised Workers Social Security Act 2008 is one of the
significant activities which is exclusively for the protection of
unorganised workers.
The mechanism under the Act provides a three-tier system for
the implementation of the law.

National social security board

The Union Government constitutes the National Social Security
Board with the union minister for Labour and Employment as
Chairperson, members nominated by The Union Government
consisting of seven each representing workers and employers
from unorganized sector, an eminent person from civil society,
two members from the House Of the People, one member from
the Rajya Sabha and also five each members representing
Ministries from the Central And the State Governments. It is
multiple parties composition who performs the following
functions, as follows.
1. They give a recommendation to the Union Government about
suitable schemes for the unorganised workers.
2. Advise the Union Government on matters arising out of the
administration of the act.
3. To monitor the social security schemes which are formulated
for unorganised workers.
4. Review the registration and issue identity cards to the
unorganised workers.
5. Review the record of functions performed by the State
Government at the state level.
6. Review the expenditure from the funds under various
schemes.
7. Undertake another work as assigned by the central
Government.

State social security board

The State Government at the state level is empowered to
constitute the Social Security Board for the objective of proper
implementation of the Act. Function and Composition of State
Social Security are the same as the National Social Security
Board.
The Social Security Boards, which are entrusted with the
responsibility of implementation of the act, are just advisory in
nature and are not empowered to perform many functions except
monitoring and review.
The Boards are not empowered to take decisions on their own. It
is up to the Government to accept the recommendations of the
board or not. For effective Implementation of any Act and
consistent delivery of social security rights to the workers, a
well-defined administrative mechanism is very essential, which
is missing in the Unorganized Social Security Act itself.

Workers facilitation centres

The Act also provides for the constitution of “Workers
Facilitation Centers” by the State Governments to disseminate
information social security schemes, assist unorganized workers
for the registration and facilitate the enrollment of the registered
unorganized workers for social security schemes, but the Act is
silent about at which level these workers facilitation centres are
to be created.

In  the case of Sanjit Roy v State Of Rajasthan[3],

It was held that payment of wages lower than the minimum
wage to the person employed on famine relief work is violative
of Article 23. Whenever Any labour or service is taken by the
state from any person, who is affected by drought and scarcity
condition the state cannot pay him less wage than the minimum
wages on the ground that it is given help to them to meet famine
situation. The state cannot take advantage of their helplessness.
In the case of Deena vs Union of India[4],
The court held that the labour work that is taken from the
prisoners it without paying sufficient wages is considered forced
labour, and it is an infringement of Article 23 of The
Constitution.
The prisoners have the right to claim the reasonable wages for
their service rendered, and the court must enforce the claim of
labourers.
In the case of Bandhua Mukti Morcha v. Union Of India[5]
The court held that whenever the public interest litigation if
initiated alleging the practice of bonded labour, the government
needs to accept it as the opportunities and to examine the issues
or problem of labour and make efforts to eradicate the practice
of bonded labour and protect the labours. Article 23  of the
Constitution of India, which prohibits the practice of bonded
labour protects and helps the labours to earn for their livelihood.
In the case of Neeraja Chaudhary v. State of Madhya Pradesh[6]
Justice Bhagwati held that it is not sufficient for the Government
to find about the existence of bonded labour, but it is also
necessary that the labourers should be rehabilitated because if
they are not rehabilitated, then they would be driven to despair,
poverty and helplessness.

The prime objective behind the Act was to provide social

security and welfare of the unorganized workers and all matters
that is in connection with it. It defines unorganised worker as –
self- employed worker , home- based worker, or a wage worker
in the unorganized sector and also includes a worker in the
organized sector who is not covered by any of the Acts
mentioned in Schedule II to this Act.

Salient Features Of Aforementioned legislation

1. Enabling Framework for Social Security Schemes
The Act enables the central government to formulate welfare
schemes for unorganized sector workers. These welfare schemes
consist of health and maternity benefits, life and disability
cover, old age protection and any other benefit by the
government. The Act, lists down 11 schemes for the
unorganized sector workers. Further, the Act also enables state
governments to formulate welfare schemes which are related to
provident fund, employment injury benefits, educational
schemes for children, and skill up graduation of workers, funeral
assistance and old age homes. These notified schemes may be
wholly funded by the central or state government or both and it
might require contributions by the beneficiaries of the schemes
or their employers to unorganized sector workers.
• Establishment of State and National Social Security Advisory
Boards
The Act provides for institution of a National Social Security
Advisory Board to recommend formation and implementation of
suitable welfare schemes for the unorganized sector workers.
This national board will consist of an appointed chairperson, a
member secretary, and 31 nominated members. Further, the Act
seeks to establish state level Social Security Advisory Boards.
These state boards will have alike functions as the central board
at the relevant state and district levels. Each state board consists
of an appointed chairperson, a member secretary, and 26
nominated members.
• Provision for Registration and Smart Cards for Unorganized
Sector Workers
The unorganized workers should mandatorily apply for
registration with the district administration. An individual must
be 14 years of age or older and should declare that he is an
unorganized sector worker. Upon registration, the district
administration will issue a smart card which will carry a unique
identification number. If any scheme requires contribution from
worker, then the worker will become eligible for scheme only
on contribution.

Conclusion
The act aims at imparting social security to unorganized workers
and place them in a better position turning away from all
miseries and crisis. But, there is a dire need of removing the
flaws and ambiguities of the legislation as it is the principal law
with regard to unorganised sector. The terms Social Security and
Family must be defined so that  worker and his family can get
benefits that are covered by the ILO Convention on minimum
standards .There is a need to spell out legislative policy and
intent of act.